Obama’s new quest for fat cat money

 

President Obama has committed a blatant act of hypocrisy. Let’s call him on it.

The latest White House creation is a non-profit group called Organizing for Action, which aims to convert the Obama campaign apparatus (two million volunteers, 17 million email subscribers, 27 million Twitter followers) into a “grassroots” machine that will gin up citizen support for the president’s policies. This melding of politics and governance is unprecedented. OFA is being financed by heavy hitters who have been tasked with hitting up big donors – hence, the hypocrisy.

There once was a time when Obama routinely assailed the influence of big money in politics – as he said in 2010, “You can’t stand by and let the special interests drown out the voices of the American people” – and routinely denounced secret donations, which he called “a threat to democracy.” But not anymore. Today, he openly favors what he once fervently opposed. Charles Spies, a Republican lawyer who advised Mitt Romneys super PAC, is correct when he describes Obama’s flip flop as “breathtaking hypocritical.”

Obama originally vowed to cleanse Washington’s money-saturated political culture; now he is exacerbating that culture. He used to denounce the tactics of people like Karl Rove; now he’s mimicking Karl Rove.

Rove infamously set up his political advertising operation, American Crossroads GPS, as a social welfare non-profit; as the proprietor of a 501(c)4 group, Rove was free to rake in unlimited donations from fat cats, who were free to give as much as they wanted. And thanks to a federal tax code loophole that benefits these non-profits, Rove wasn’t required to disclose the donors’ identities. Back in 2010, Obama didn’t like that loophole. He said “the American people deserve to know” the donors’ identities.

But today, Obama’s new grassroots group is set up as a social welfare non-profit, a 501(c)4 that can rake in unlimited donations from fat cats, with no requirement that the fat cats be identified. The one-time critic of big-money groups now has his very own. Ex-Obama campaign aides are launching OFA, and anticipating a price tag of $50 million. Rich donors and special interests will kick in a huge share of that money. Next week, at a “founders summit,” any donor who pays $50,000 or more will have the opportunity to mingle with OFA’s founders. Which is another way of saying that money buys access.

In the spirit of self-regulation, the new Obama team is promising to voluntarily disclose the identities of its donors, even though the tax code doesn’t require that they do so. That’s all fine, as far as it goes. But the Obama team won’t disclose how much OFA money those identified donors have ponied up.

This is actually an old pattern for Obama – deploring the money chase, then enabling it. When he was a candidatein 2008, he originally signaled that he’d abide by the traditional public financing rules that required him to fund an autumn campaign with a capped amount of federal bucks. Then came the flip flip. He became the first presidential nominee to dump the public financing rules – and instead run a privatized autumn campaign, raising and spending far more money than would have been possible under the federal cap.

And in early 2012, after having repeatedly denounced the pernicious influence of big-money super PACs, Obama gave his blessing to White House alums who wanted to raise big money for their own super PAC. Obama allies defended the move at the time, insisting (with some justification) that they needed to battle the Koch brothers, Shelden Adelson, and other Republican super PAC donors, on an even playing field.

But what’s happening now is unprecedented. OFA is a brand new manifestation of the permament campaign, and, in the words of veteran Washington watchdog Fred Wertheimer, “it’s an unprecedented and dangerous vehicle for raising money from corporations and other special interests who may be seeking government decisions.”

He got that right. It’s naive to believe that someone who donates five figures to OFA, or some bundler who raises six figures for OFA, will expect nothing in return. Indeed, OFA will be a great vehicle for those who expect something in return. They can’t lavish unlimited donations on the Democratic party, because party donations are capped by law. They can’t lavish the Democratic congressional candidates either, because those donations are capped by law. But now they can get on the White House radar by sharing their bottomless largesse with OFA. In Philadelphia parlance, this is a novel wrinkle on the concept of pay to play.

Just imagine how Democrats would’ve howled if Karl Rove had converted President Bush’s 2004 campaign apparatus into a grassroots group that agitated for Bush’s policies with the help of uncapped fat cat donations. Yet now we have Obama surpassing Rove. Obama the erstwhile reformer has created a whole new playing field for the rich – and rest assured that the next Republican president will tap his donors for the same game.

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