President Obama incurred the scorn of some his liberal friends this week when he publicly aligned himself with the corporate-funded super-PACs working to re-elect him. But he deserves praise for this move. It was a rare moment of honesty from a campaign that has otherwise obfuscated about special-interest money, lobbyists, and small donations.
Last year, Obama campaign alumni formed a super-PAC called Priorities USA, which is not bound by the contribution limits that restrict how much the president’s campaign or the Democratic National Committee can raise from individuals. Priorities USA can raise money directly from corporations.
At the time, Obama claimed he opposed super-PACs, but former aides from his campaign and administration, such as Deputy White House press secretary Bill Burton, were running Priorities USA. This week, though, Obama effectively called on his supporters to give to Priorities USA and announced that his Cabinet secretaries would headline the super-PAC’s events. This was no reversal, but a frank admission of what we already knew: Obama has his own super-PAC, just as Mitt Romney, Newt Gingrich, Ron Paul and Rick Santorum have theirs.
Priorities USA was always an unofficial arm of the Obama campaign, and now Obama is a step closer to dropping the fiction that he is not coordinating with it — a fiction that Republican presidential candidates have almost abandoned, too.
Obama’s recent candor raises the hopes that his campaign will quit its false claims about being powered by small donations. Even in his announcement of Obama support for the super-PAC, Obama campaign manager Jim Messina cited “an average donation of $55” and said “98 percent of all our donations are $250 or less.” These numbers are meaningless and misleading.
Getting many small donations doesn’t signify much when an overwhelming majority of your money comes in very large donations. For instance, Texas real estate developer Enrique Flores gave a $3 gift to Obama for America on Nov. 22 last year, according to campaign filings on record with the Federal Election Commission, bringing Flores’ total to $5,000.
Similarly, former Al Gore aide Susan Liss, who directs the Brennan Center’s “Democracy Program,” where she inveighs against the corrupting influence of money in politics, gave two $10 gifts to the DNC on Dec. 30, according to FEC filings. Those brought her total DNC giving to $10,000 for the year.
In truth, almost all of Obama’s money comes from big donors. The Democratic National Committee, which pockets most of the money when Obama speaks at high-dollar fundraisers, raised more than 85 percent of its money in December from donors who have given the DNC $10,000 or more.
Individual campaigns are limited by law to $5,000 from each donor. Of all the itemized contributions in last year’s fourth quarter to Obama’s campaign committee, Obama for America, 79 percent came from donors who have given the campaign $1,000 or more.
So Obama’s cooperation with a super-PAC does not reflect any dramatic shift away from big donors.
Welcoming corporate money into the Obama re-election effort is not a huge change, either. For instance, Perennial Strategy Group, is a K Street “government relations” firm incorporated as a limited liability corporation. Until last summer, Perennial was registered as a lobbying firm. In December, Perennial, as a corporation, gave the maximum $35,800 to the Obama Victory Fund, which distributes its money between Obama for America and the Democratic National Committee.
Because it’s an LLC, Perennial can be treated by both the Internal Revenue Service and the FEC as a partnership, meaning it can donate as a company, with the donations ultimately attributed to the various partners.
Officially teaming up with Priorities USA allows Obama to raise money from companies incorporated as corporations — not just as LLCs. That’s a legalism more than a dramatic shift.
Finally there’s some gnashing of the teeth that lobbyist cash is sullying Obama’s re-election effort. Priorities USA raises money from registered lobbyists, while Obama’s campaign and the DNC supposedly ban lobbyist cash.
But Obama’s “ban” on lobbyist donations has always been a sham. For instance, Siemens Vice President for Federal Lobbying David McIntosh is an Obama donor, as are many other corporate VPs for “public policy” or “public affairs” who simply don’t register as lobbyists. Some of these donors deregistered just in time to donate to Obama.
Obama’s rules about lobbyist donations, like federal laws about maximum campaign contributions, never served to keep out corrupting money, they mostly obscured who was a lobbyist and who was giving how much. By openly embracing his super-PAC, Obama is finally being a bit more honest about who is investing in his re-election.
Timothy P.Carney, The Examiner’s senior political columnist, can be contacted at [email protected]. His column appears Monday and Thursday, and his stories and blog posts appear on washingtonexaminer.com.
