Who’s funding the candidates?
Barack Obama sparked considerable controversy in recent weeks when he announced that he would not commit to public financing for the general election campaign, despite his earlier pledge to do so. This makes Obama’s the first completely privately-financed general election campaign since the 1970’s.
A public financing agreement would have given each campaign $84.1 million between September and November, accompanied by strict limits on spending. In rejecting public financing, the Obama campaign – which has realized that it has a huge fundraising advantage over McCain — can now spend an unlimited amount of money and is expected to shatter records for spending during a presidential campaign.
The McCain campaign criticized Obama’s decision as self-serving and hypocritical in light of Obama’s attempt to paint himself as a political reformer and his many previous statements praising the public financing system.
In 2007, both Obama and McCain had pledged to accept public funding if they became their parties’ respective nominees. McCain has reiterated that he still plans to accept public funding for his campaign.
In the video on his website explaining his decision to reject public funding, Obama chose not to tell his audience that he would have hurt his electoral chances or that he could raise and spend far more money by not taking public financing — he instead implied that it was more ethical to opt out, and criticized John McCain for participating in a corrupt and “broken” system. But in November 2007, in response to a questionnaire from the Midwest Democracy Network, Obama said:
QUESTION: “If you are nominated for President in 2008 and your major opponents agree to forgo private funding in the general election campaign, will you participate in the presidential public financing system?”
OBAMA: “Yes. I have been a long-time advocate for public financing of campaigns combined with free television and radio time as a way to reduce the influence of moneyed special interests…In February 2007, I proposed a novel way to preserve the strength of the public financing system in the 2008 election. My plan requires both major party candidates to agree on a fundraising truce, return excess money from donors, and stay within the public financing system for the general election. My proposal followed announcements by some presidential candidates that they would forgo public financing so they could raise unlimited funds in the general election. The Federal Election Commission ruled the proposal legal, and Senator John McCain (r-AZ) has already pledged to accept this fundraising pledge. If I am the Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election.“
When he realized he could raise jaw-dropping sums from private donors, I think it’s fair to say that Obama did what any politician would do — he chose to ignore his earlier position and give himself a huge fundraising advantage.
Of course, in doing so, Obama sacrificed some of his credibility as an agent of fundamental political reform. But his campaign denies that Obama is funded by “moneyed special interests.” His public financing video specifically attacks the McCain campaign for being funded by “lobbyists and PACs.”
The non-partisan FactCheck.org took issue with several of Obama’s accusations about McCain, calling his video a “lame excuse” for his decision:
To say that either the McCain campaign or the RNC are “fueled” by money from lobbyists and PACs is an overstatement, to say the least. Such funds make up less than 1.7 percent of McCain’s presidential campaign receipts and 1.1 percent of the RNC’s income.
FactCheck.org notes that it is using the Center for Responsive Politics’ standard definition of lobbyist (”anyone working at a lobbying firm, registered or not, state or federal, and their families as well”) rather than Obama’s narrow definition of a “lobbyist” as only those people “currently registered to lobby at the federal level.” If one uses Obama’s definition of ”lobbyist” — which he is using when he claims to have taken “no money from lobbyists” – McCain and the RNC’s totals would be even lower. By CRP’s definition Obama himself has taken in $161,927 from lobbyists (vs. $655,576 for McCain). Both numbers are, in any case, a tiny fraction of both candidates’ totals.
Obama has said on several occasions that his campaign is 90 percent funded by small donors. This isn’t quite true, either. It is true that Obama presides over the broadest fundraising base of any presidential candidate in history — 1.5 million donors, by the campaign’s count as of May, and undoubtedly more by now. But according to the non-partisan political finance watchdog OpenSecrets.org, donations of $200 or less make up only 45 percent of Obama’s total.
That’s still undeniably impressive — and far more than McCain’s 24 percent from small donors – but hardly the rosy “grassroots-driven” picture that Obama paints. The truth is that both McCain and Obama need wealthy, big-ticket donors to drive their campaigns (even Obama relies on maxed-out individual contributions of $2,300+ for nearly 30 percent of his cash). That’s just a simple fact of American politics.
David Brooks notes that Obama’s pool of donors — while bigger — actually doesn’t look much different than those of previous Democratic candidates. The biggest contributors to Obama’s campaign, according to OpenSecrets.org, are lawyers. (They gave $18 million to Obama, compared to $5 million to McCain’s campaign.) This is typical of most recent election cycles.
Brooks breaks down the numbers:
People who work at securities and investment companies have given Obama about $8 million, compared with $4.5 for McCain. People who work in communications and electronics have given Obama about $10 million, compared with $2 million for McCain. Professors and other people who work in education have given Obama roughly $7 million, compared with $700,000 for McCain.
Real estate professionals have given Obama $5 million, compared with $4 million for McCain. Medical professionals have given Obama $7 million, compared with $3 million for McCain. Commercial bankers have given Obama $1.6 million, compared with $1.2 million for McCain. Hedge fund and private equity managers have given Obama about $1.6 million, compared with $850,000 for McCain.
As for individual companies, Goldman Sachs employees have given the most to Obama’s campaign — a total of $571,330. On McCain’s side, Merrill Lynch employees have been the most generous, giving $235,110 total.
You can view side-by-side comparisons of the biggest donors (by industry and invididual employer) to each campaign and the total amount given on this page.
The reason Obama suggested (with a disclaimer) that he would take public financing is because he wanted to reduce the influence of big money on politics. Given that he is now funded by small donors at an unprecedented level, he is now more accountable to a larger number of people than any politician in recent memory. Therefore, he has remained completely true to the principle he was fighting for, the principle of making politicians accountable to the people rather than corporate interests, even if he isn’t following his initial plan on how to work for that principle.
What is especially funny about all of these “concerned” articles in the media is that they completely ignore, with no sense of irony, John McCain’s violation of public finance laws. McCain opted into public financing for the primaries, used this to secure a loan, and then illegally opted out back out after his fundraising numbers started getting better. The head of the FEC told the McCain campaign that he couldn’t do this: http://www.washingtonpost.com/wp-dyn/content/article/2008/02/21/AR2008022103141.html or see http://www.huffingtonpost.com/daniel-burrell/mccains-public-financing_b_109478.html for the timeline. Yet the violation of public financing law by the media-anointed “straight-talk express” is apparently a non-story to Alex and most other pundits.
Now I’m not particularly surprised that Alex would go with these Republican talking points, but it is a bit sad to see that the media in general is so willing to engage in complete hypocrisy in criticizing the candidates. The best thing that could be said (which still isn’t very good) is that they are noticing Obama’s lead in all of the polls and would like the campaign to be closer as it would be better for business.