Bloomberg News

Obama Joins Romney Sharing Secrets With Donors at Closed Dinners

July 12, 2012

Obama Joins Romney Sharing Secrets With Donors at Closed Dinners

The presidential SUV outside of George Clooney's house May 10, 2012 in Studio City, California. Photographer: Mandel Ngan/AFP/Getty Images

Mitt Romney has been accused of being inconsistent about health care, abortion, gun control, and whether the American car industry should have been rescued.

When it comes to raising money from wealthy executives and financiers in sumptuous private settings, he is unswerving and highly skilled, as demonstrated by his estimated $3 million take from a trio of events on July 8 in the Hamptons. The highlight of Romney’s Long Island beach jaunt was a $50,000-per-person dinner at the home of billionaire David Koch.

We don’t know what Romney told guests at Chez Koch, because, like most fundraisers he attends at supporters’ homes, it was off-limits to all but those opening large wallets, Bloomberg Businessweek reports in its July 16 issue. As usual, journalists were kept at a safe distance, and the campaign wouldn’t release Romney’s remarks. It’s safe to assume he revealed something -- in substance or tone -- that he wouldn’t want the public to hear. Why else the secrecy?

President Barack Obama is almost as tight-lipped about the lavish dinners he headlines. His handlers allow reporters to witness boilerplate opening remarks before herding them to the curb. Yet Obama is so determined to make sure there’s no record of his less formal comments that campaign workers confiscate guests’ phones and put them in plastic bags before some fundraisers, including one held on May 14 at the New York home of Blackstone Group LP (BX:US) President Tony James.

Hollywood Pals

Like Democrats before him, the president tends to draw the most attention when he pals around behind closed doors with liberals in the entertainment industry, such as George Clooney, who hosted a $40,000-a-head Obama event at his Hollywood home on May 10, and Sarah Jessica Parker, who had 50 people over to her Manhattan townhouse for a similarly priced supper in mid-June.

There are many aspects of our money-soaked political culture to worry about. One that we seem to be getting awfully comfortable with is the off-the-record fundraiser, which consumes an increasing amount of presidential candidates’ time and energy.

Raising money under a cloak of silence suggests that candidates have one version of their pitch that they offer ordinary voters and another, more candid one the public isn’t allowed to hear. That’s the appeal of events limited to mega- donors, and it isn’t a good thing, says Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington.

“What,” she asks, “do they tell their big donors that they don’t tell the rest of us?”

Straying From Script

Obama and Romney are too sophisticated to engage over shrimp cocktail in an explicit quid pro quo to kill a regulation or promote someone’s cousin to a judgeship. The more likely scenario, one that must keep their aides awake at night, is that in a relaxed setting among people who have shown their friendship in cold, hard cash, the candidate will stray from the usual script and inadvertently say what he really thinks.

That’s what happened during Obama’s first run for the White House, when he told guests at a closed-door San Francisco fundraiser that some small-town voters are “bitter” and “cling to guns or religion.” That comment, which Obama later tried to retract, became public because a donor gave an audio recording of the speech to a news website.

Now Obama takes precautions. At a March 30 fundraiser at Maine’s Portland Museum of Art, the president asked the 130 supporters in attendance not to post video of the private session.

Secret Musings

In April, Romney was overheard at a private backyard fundraiser in Palm Beach, Florida, musing about eliminating the U.S. Department of Housing and Urban Development and killing the mortgage-interest deduction on second homes -- ideas he hasn’t backed publicly. Those are the kinds of things voters are entitled to know from a presidential candidate even without paying tens of thousands of dollars.

There may be a reasonable explanation why Obama and Romney don’t want the public to hear what they’re telling donors. If so, they aren’t saying what it is.

Instead, Obama spokeswoman Katie Hogan provides a written statement: “The Obama campaign has and will continue to allow press into any fundraising event where the president is delivering remarks to supporters, no matter the venue.” That’s true, as far as it goes. Only after the press is shooed from the room, though, does the main event begin.

More Events

The need to raise more and more cash means the number of fundraising events has increased dramatically, according to Brendan Doherty, a political scientist at the U.S. Naval Academy and author of the new book, The Rise of the President’s Permanent Campaign.

As of July 9, Doherty had tracked 177 Obama fundraising appearances during the third and fourth years of his presidency. The comparable number for George W. Bush was 86, or less than half. For Bill Clinton it was 70; for George H.W. Bush, 24; and for Jimmy Carter, 25. Ronald Reagan’s total in 1983-84: three.

“The rising costs of campaigns, combined with contribution limits that are low relative to the costs of campaigns, have led presidents to spend more and more time raising money -- out of necessity,” Doherty says.

The 2012 race for the White House is the first since the public-financing system was enacted after Watergate in which both candidates have shunned taxpayer money in favor of funding their operations with individual donations. Even as spending by super PACs and other outside groups has increased, the campaigns are devoting more of the candidates’ time to raising cash.

Controlling the Money

“Each campaign still wants money they can directly control, and that money they have to raise themselves,” says Doherty.

The Romney campaign not only keeps what their man says at fundraisers a secret; it refuses to say how many he attends.

“We won’t get into that,” says Andrea Saul, a spokeswoman. It’s evidently enough to clobber Obama in the race for dollars.

An ace investor fundraiser during his years heading Bain Capital LLC, Romney has proved just as adept as a political rainmaker. In June, for the second straight month, he and his party raised more than Obama and the Democrats: $106 million versus $71 million. At that pace, Romney is on track to raise $800 million or more by Election Day.

That means the challenger could outspend an incumbent himself known for his buckraking. On July 10 the Obama campaign sent an urgent e-mail to supporters: “We’re getting outraised -- a first for a sitting president, if this continues,” it read. “We can win a race in which the other side spends more than we do. But not this much more. So I need your help. If you believe that regular people should decide elections, then please chip in $3 or more today.” It was signed, “Barack.”

That week, Obama headlined two $40,000-a-plate events at Washington’s Mandarin Oriental Hotel. The $3 regular people weren’t invited.

To contact the reporter on this story: Paul Barrett in New York at pbarrett17@bloomberg.net

To contact the editor responsible for this story: Wes Kosova at wkosova@bloomberg.net


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