Four years later, Barack Obama raised a third of his record-breaking $745 million campaign haul from small donors, while Ron Paul raised 39% from small dollars on the Republican side. Much of Paul's campaign was financed by online "money bombs," when enthusiastic supporters generated millions of dollars in brief, coordinated bursts. The amount of money raised in small donations by Obama, in particular, raised hopes that his campaign had found a way to break the death grip of big donors on American politics.
In retrospect, the small-donor utopianism surrounding Obama seems naÃ¯ve. Despite all the adulatory media attention about his small donors, the candidate still raised the bulk of his money from big givers. (Typically, these days, incumbent members of Congress raise less than 10% of their campaign funds from small donors, with those numbers actually dropping when you reach the gubernatorial and state legislative levels.) Obama's top contributors included employees of Goldman Sachs, JP Morgan Chase, and Citigroup, hardly standard bearers for the little guy. For obvious reasons, the campaign chose to emphasize the small donors over the big ones in its narrative, as it continues to do in 2012.
Interestingly enough, both Obama and Paul actually raised more money from small donors in 2011 than they did in 2008, 48% and 52% of their totals, respectively. But in the super PAC era that money no longer has the same impact. Even Dean doubts that his anti-establishment, Internet-fueled campaign from 2004 would be as successful today. "Super PACs have made a grassroots campaign less effective," he says. "You can still run a grassroots campaign but the problem is you can be overwhelmed now on television and by dirty mailers being sent out... It's a very big change from 2008."
Obama is a candidate with a split personality, which makes his campaign equally schizophrenic. The Obama campaign claims it's raising 98% of its money from small donors and is "building the biggest grassroots campaign in American history," according to campaign manager Jim Messina. But the starry-eyed statistics and the rhetoric that accompanies it are deeply misleading. Of the $89 million raised in 2011 by the Obama Joint Victory Fund, a collaboration of the Democratic National Committee (DNC) and the Obama campaign, 74% came from donations of $20,000 or more and 99% from donations of $1,000 or more.
The campaign has 445 "bundlers" (dubbed "volunteer fundraisers" by the campaign), who gather money from their wealthy friends and package it for Obama. They have raised at least $74.4 million for Obama and the DNC in 2011. Sixty-one of those bundlers raised $500,000 or more. Obama held 73 fundraisers in 2011 and 13 last month alone, where the price of admission was almost always $35,800 a head.
An increase in small donor contributions and a surge of big money fundraisers still wasn't enough, however, to give Obama an advantage over Republicans in the money chase. That's why the Obama campaign, until recently adamantly against super PACs, suddenly relented and signaled its support for a pro-Obama super PAC called Priorities USA.
A day after the announcement that the campaign, like its Republican rivals, would super PAC it up, Messina spoke at the members-only Core Club in Manhattan and "assured a group of Democratic donors from the financial services industry that Obama won't demonize Wall Street as he stresses populist appeals in his re-election campaign," reported Bloomberg Businessweek. "Messina told the group of Wall Street donors that the president plans to run against Romney, not the industry that made the former governor of Massachusetts millions."
In other words, don't expect a convincing return to the theme of the people versus the powerful in campaign 2012, even though Romney, if the nominee, would be particularly vulnerable to that line of attack. After all, so far his campaign has raised only 9% of its campaign contributions from small donors, well behind both Senator John McCain, 21% in 2008, and George W. Bush, 26% in 2004.
In the fourth quarter of 2011, Romney outraised Obama among the top firms on Wall Street by a margin of 11 to 1. His top three campaign contributions are from employees of Goldman Sachs ($496,430), JPMorgan ($317,400) and Morgan Stanley ($277,850). The banks have fallen out of favor with the public, but their campaign cash is indispensable among the political class and so they remain as powerful as ever in American politics.
In a recent segment of his show, Stephen Colbert noted that half of the money ($67 million) raised by super PACs in 2011 had come from just 22 people. "That's 7 one-millionths of 1 percent," or roughly .0000063%, Colbert said while spraying a fire extinguisher on his fuming calculator. "So Occupy Wall Street, you're going to want to change those signs."
Ari Berman is a contributing writer for the Nation magazine and an Investigative Journalism Fellow at The Nation Institute. His book, Herding Donkeys: The Fight to Rebuild the Democratic Party and Reshape American Politics (Picador) is now out in paperback with a new afterword. Follow him on Twitter @AriBerman.
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Copyright 2012 Ari Berman