Campaign spending is expected to top $6-billion (U.S.) in 2012 as the price of winning the Oval Office or a seat in Congress keeps going up. Three factors help explain the election inflation: Barack Obama’s bundlers, Mitt Romney’s Wall Street fans and Karl Rove.
President Barack Obama raised almost $140-million for his own re-election bid in 2011, his campaign revealed in a Jan. 31 filing. He has raised a similar amount on behalf of the Democratic National Committee. While Mr. Obama is on track to become the first $1-billion presidential candidate, his campaign has dismissed suggestions he will spend that much, though he should easily surpass the nearly $750-million he spent in 2008.
While the Obama campaign touts its reliance on small donors – more than 500,000 of them in the fourth quarter of 2011 alone, with an average contribution of $55 – the really serious money is brought in by the President’s army of über-connected bundlers. They hit up friends and business associates to the tune of $2,500 a pop – the maximum amount individuals can contribute directly to a candidate.
So far in this election cycle, a total of 445 bundlers have raised $75-million for the President. But a much smaller group of elite bundlers are part of the $500,000 club, having raised at least that much for the President. They include Hollywood moguls such as Dreamworks CEO Jeffrey Katzenberg and producer Harvey Weinstein. Desperate Housewife Eva Longoria raised between $200,000 and $500,000 for Mr. Obama.
One name the President probably wishes he could remove from the list is Jon Corzine, the former New Jersey governor now embroiled in scandal over the bankruptcy of the derivatives firm he led. He raised more than $500,000 for Mr. Obama.
ROMNEY’S HEDGE-FUND MONEY
The front-runner for the Republican presidential nomination has bundlers, too. He just doesn’t release their names. Mr. Romney directly raised $57-million for his primary campaign in 2011. And while he may not match Mr. Obama in direct fundraising for the 2012 election, he will be able to count on outside groups spending millions on his behalf.
Restore Our Future, the main Super PAC supporting Mr. Romney, raised more than $30-million in 2011. Unlike candidates, Super PACs have no restrictions on the amount of money they can take from individuals. They can also accept money from corporations.
Mr. Romney’s Super PAC got $1-million each from at least half a dozen powerful hedge-fund managers including John Paulson, Paul Singer and Julian Robertson. It also got $1-million from Mr. Romney’s former Bain Capital colleague Edward Conard and $1-million from heirs to the Marriott hotel fortune.
Super PACs supporting Republicans raised about four times more than Democratic Super PACs in 2011. Mr. Obama has frowned on them, but Priorities USA, the Super PAC that supports him, got $2-million from Mr. Katzenberg and $100,000 from Steven Spielberg.
Once dubbed Bush’s Brain for the strategic skills he brought to the White House of George W. Bush, Karl Rove has spent the better part of the past two years raising money to oust the current occupant of the Oval Office. His American Crossroads and Crossroads GPS together raised $51-million in 2011 and plan to spend as much as $300-million this year, largely to defeat Mr. Obama and incumbent Senate Democrats.
Dallas billionaire Harold Simmons gave $7-million to American Crossroads. The Super PAC also got $100,000 from media mogul Sam Zell and $500,000 from Kenny Troutt. Mr. Troutt became a billionaire when Canada’s Teleglobe bought his Texas-based long-distance company in the 1990s in a transaction Teleglobe’s shareholders soon regretted.