Surprisingly Efficient Money Machine Still Running
Instead of resting on its laurels, the finance team that raised more than $200 million for Democratic presidential nominee John F. Kerry will remain in place through November with hopes of raising another $80 million for the national party, battleground state committees and a special legal and accounting fund.
“I’ve got 97 more days, but who’s counting?” said Louis B. Susman, Kerry’s national finance chairman, as he sat in a private skybox overlooking the podium at the FleetCenter and spoke of his plans for the rest of the campaign.
The move is the latest sign of the Democrats’ surprise ability this year to nearly erase what had been a given in U.S. politics: a clear GOP advantage in fundraising.
It’s also part of the reason 1,400 fundraisers were invited to the convention. Indeed, the door to Susman’s box Wednesday night opened so often with strangers armed with passes that at one point he asked some to leave. “It’s bedlam,” he said. “You take care of a fundraiser, and he wants to take care of his law partner and his friends.”
Now that Kerry is the party nominee, the campaign can no longer raise and spend private money. Instead, it will rely on a $75-million public grant to get through November. But the Democratic National Committee and state political parties can spend unlimited individual donations on voter registration and outreach, as well as advertising, as long as it isn’t coordinated with the Kerry campaign.
As Kerry’s lead strategist on fundraising, Susman said he hoped to bring in $50 million for the DNC, $20 million for the state committees and another $10 million for Kerry’s legal and accounting compliance fund.
Some members of the Kerry team already are raising money for the DNC. Many sported new buttons at the convention Thursday that read “Kerry Edwards Victory Fund Trustee.”
Susman, vice chairman of Citigroup Global Markets in Chicago, first began raising political money in 1968. But nothing in his past prepared him for 2004.
His finance team broke every goal it set, raising more money than anyone expected.
Early this year, the Kerry campaign downplayed the idea of even breaking $100 million. At last count, it had raised $208 million.
And the money continued to pour into the campaign -- $8 million was contributed over the Internet on Wednesday and Thursday.
Among donations of $200 or more, one out of every five Kerry dollars came from California, where his camp had raised $22.7 million as of the end of June.
Another $15.7 million was raised in New York, according to an analysis of campaign data by Dwight L. Morris & Associates.
“I’ve raised money for a long time. I’ve never seen anything like it,” Susman said. “It was almost a perfect storm.”
A fierce emotional reaction against the Bush administration, he said, combined with a sense that Kerry could win, helped his team quickly amass extraordinary amounts of money.
“It just kept gaining momentum. Whatever my goal was, we did more,” he said.
It wasn’t always that way.
Although Kerry got off to a fast start, raising $7 million in the first quarter of 2003, by the end of that year the campaign was nearly bankrupt. So Kerry took out a mortgage on his Beacon Hill home, infusing the campaign with $6.4 million in cash.
Susman noted that at the time, Kerry was 20 points behind in the polls against Howard Dean, who had revolutionized grass-roots fundraising through the Internet. “Things looked bleak,” Susman said.
If Kerry had lost the primaries, he said, he also stood a significant chance of losing a “substantial part of his net worth.”
The campaign equivalent of a Hail Mary pass worked.
Kerry went on to win the Iowa caucuses, the first contest in the Democratic race, and effectively secured the nomination March 2.
Susman said one key to the team’s later success was the loyalty of the finance team. “In November and December, in our dark days, not one of our fundraisers flipped,” he said.
But by March, Bush had a $100-million cash advantage.
Susman gathered 30 people at the Plaza hotel in New York, formed a leadership cabinet and announced a 20-city fundraising tour, beginning in California. He hoped to raise $15 million on the tour, and perhaps hit $105 million by the time the convention opened.
So many people showed up at one fundraiser in San Francisco that fire marshals shut the place down. “I’ve never had that happen,” Susman said.
At another fundraiser at investment banker and former supermarket magnate Ron Burkle’s Beverly Hills home, at which James Taylor performed, “people were angry at me because they couldn’t get in,” Susman said.
The finance team kept adding people in each city -- by the end, 564 fundraisers had collected more than $50,000 each in individual contributions of $2,000 or less. Of those, 158 were from Californians and 105 were from New Yorkers.
The very top fundraisers got special ties and scarves emblazoned with American flags and “JK04".
And the team hired Josh Ross, an Internet-savvy business executive with political experience, to take over its online fundraising. He helped raise $75 million, shattering grass-roots fundraising records.
Susman said the online giving was crucial to the explosion in money for the campaign.
Also key was Kerry’s decision to opt out of the public financing system for the primaries. Had he not done so, the campaign would have had to stop fundraising once it reached $45 million.
“You will never see a major candidate accept matching funds,” Susman said. “In the primaries, it’s finished.”
No one expected that the 2004 presidential race would turn into a story about fundraising success on the Democratic side.
Party insider Harold M. Ickes, a member of the DNC executive committee, was so worried about changes to the campaign finance law that banned corporate and union contributions to political parties -- a Democratic mainstay -- that he helped set up a network of independent groups known as 527s to raise “soft money” last year.
But to everyone’s surprise, individual donations poured in not only to the Kerry campaign but to the DNC as well.
The DNC has already amassed $125 million, and has about $60 million in cash on hand. America Coming Together, one of the 527s launched by Ickes, has had fundraising success as well, with $80 million already raised and a goal to collect $125 million by November.
“I was wrong on two fronts,” Ickes said. “Nobody predicted that our candidate would not take federal matching funds. And nobody predicted the motivation that George Bush would give Democrats and progressives. It’s phenomenal.”
Campaign finance expert Anthony Corrado, who teaches at Colby College in Maine, said he didn’t know if the fundraising successes of the Kerry campaign would be repeated.
“We have a president who is so polarizing -- with the antiwar issue in particular spurring Democrats -- and the expectations of a close race. That drives party fundraising,” Corrado said.
* (BEGIN TEXT OF INFOBOX)
Although corporations canÕt give money to federal candidates, employees at these 10 businesses and institutions are Sen. John F. KerryÕs largest contributors. Individuals are limited to contributions of $2,000. The amounts collected from employees (in donations of $200 or more), as of June 30:
University of California*: $400,971 Harvard University: $217,310 Goldman Sachs Group LP, investment banking: $185,750 Skadden Arps, lobbying firm: $169,677 Time Warner Inc.: $144,689 Citigroup Inc.: $143,804 UBS Financial Services, Inc.: $142,050 Robins, Kaplan, Miller & Ciresi LLP, law firm: $141,000 Microsoft: $126,893 Piper Rudnick, lobbying firm: $112,653 Stanford University: $112,645 U.S. government: $111,284 *All nine campuses
Source: Dwight L. Morris & Associates