Fundraising -- with no names attached
When Sen. Hillary Rodham Clinton (D-N.Y.) laid out the financial goals for her budding presidential campaign in a private meeting at her Washington home earlier this week, a key element in her fundraising plan was a time-honored technique that relies on supporters who promise to round up big dollars -- in this case, as much as $1 million each.
Instead of going through the slow, expensive process of obtaining contributions one at a time, the technique -- known in fundraising parlance as “bundling” -- relies on well-connected individuals such as lobbyists and other insiders to canvass blocs of potential donors from businesses, unions and other groups. These canvassers then present the candidate with bundles of checks that add up to significant amounts.
Clinton is not alone in embracing the technique, which over the years has proved both lucrative and efficient. Sen. Barack Obama (D-Ill.) and other Democratic hopefuls are using it too. So are Sen. John McCain (R-Ariz.), a front-runner for the GOP presidential nomination, and most of his Republican rivals, including former Massachusetts Gov. Mitt Romney and former New York City Mayor Rudolph W. Giuliani.
But there’s a potential problem as the candidates seek to raise tens of millions of dollars for their campaigns: Should they make public the names of their heavy-hitting money collectors -- and thereby reveal to whom they might be beholden if they win the White House?
Or should they try to avoid questions that could cause more problems -- especially considering that revelations of corruption and legislative favors for contributors became an issue in last year’s congressional elections?
The candidates’ responses have been mixed -- with each looking for an answer that reduces vulnerability without sacrificing money.
Obama, for example, about whom the public knows relatively little, is running as an idealistic candidate and has made a flat promise to disclose the names of bundlers and other top contributors. Clinton, the fundraising leader among Democrats, said she would comply with the law -- which appears to be silent on the subject of disclosing bundlers’ names.
And McCain, who like Obama is cultivating an image as a reformer, said he would name his top fundraisers who agreed to meet certain dollar goals, but would not track whether they actually hit the targets. Officials in the Giuliani and Romney campaigns said they had not yet considered the disclosure issue.
Two Democratic candidates, former Iowa Gov. Tom Vilsack and Delaware Sen. Joseph R. Biden Jr., said they were still considering the question.
“Our campaign is 8 days old; we don’t really have a policy on this, nor do we have people who would be in that category at this time,” said Biden campaign spokesman Larry Rasky.
Rasky added that Biden generally supported disclosure and had voted for a proposal in the Senate that would require lobbyists to reveal bundling activities.
Former Sen. John Edwards (D-N.C.) said he would not track bundled contributions and thus could not disclose them. Sen. Christopher J. Dodd (D-Conn.) plans to disclose any bundling activities, according to a spokeswoman.
For most candidates for federal office, whatever they decide about disclosure, bundling has become a fact of life.
In 2004, the Bush campaign called fundraisers who brought in $100,000 or more “Pioneers.” The bundling technique developed by Bush and his political lieutenant, Karl Rove, allowed his campaign to raise $36 million in six months in 1999, when the legal limit for individual contributions was $1,000. Bush disclosed the identity of all Pioneers and other bundlers.
The Bush-Rove technique, which effectively encourages competition among those who want to help a campaign financially, has since become the gold standard of modern presidential campaigning, one that allows candidates to quickly raise millions.
Craig McDonald, who led research into bundler activities for an organization called Texans for Public Justice, argues that it also sabotages a basic principle of campaign finance reform.
Under present law, he said, “a person is only supposed to get a maximum of about $2,300 in clout” with any candidate. “Bundling totally undermines that. We now have individuals receiving clout for providing hundreds of thousands beyond the legal limit.”
Benjamin Ginsberg, former counsel to the Bush-Cheney campaigns, has long argued that the bundling approach is inevitable because recently passed campaign finance laws have curbed political parties’ ability to raise and spend money.
“The decline of state parties and the rise of bundlers is a natural byproduct of McCain-Feingold,” said Ginsberg, a Republican election-law expert now backing Romney, speaking of the law that prescribes rules for fundraising.
The chase for dollars has begun in earnest, a year before the first primaries or caucuses. In part, that is because the numerous candidates hope to impress potential supporters and ward off competition by generating large amounts of money by the time they file their first Federal Election Commission disclosure reports at the end of March.
McCain, who co-wrote the campaign finance law with Sen. Russell D. Feingold (D-Wis.), said he planned to name top fundraising volunteers who agreed to reach certain goals -- as yet unspecified -- as national or state chairmen or co-chairs.
By not tracking those fundraisers’ activities to see whether they actually met the goals, McCain would not feel obligated to favor big donors if he became president, suggested a McCain aide. The aide asked not to be identified because he was not authorized to discuss such details.
In addition, the aide said, McCain will provide the public a chance to track fundraising lieutenants who opt to participate in a new Web-based fundraising effort that will effectively credit individuals who get their friends and associates to provide donations.
The campaign’s finance structure “is intentionally set up so that it doesn’t create a public competition giving more access to those that raise more money,” he said.
But some critics suggested that McCain’s approach of tracking bundling pledges but not results would not significantly address the problem.
When Romney launched his fundraising efforts last month, he set a series of categories for those who rounded up significant early dollars.
Those who brought in donations of $250,000 or more in the first 30 days were labeled “first ballot chairmen.” A volunteer bringing in $100,000 was called a vice chair. And membership could be earned by anyone credited with bringing in $50,000.
Romney spokesman Kevin Madden said the campaign would designate categories for fundraising captains. The names and size of the categories had not yet been determined. “We are still gearing up,” Madden said.
Staff writer Dan Morain in San Francisco contributed to this report.
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