2/13/08

Jumbo gov't-unions thick with The Inevitables

As Sen. Hillary Clinton faces a money crunch, several of her top fund-raisers are considering using independent organizations to wage their own campaigns on her behalf.

At least two sets of Clinton fund-raisers are speaking with lawyers to figure out how to create independent entities to support Mrs. Clinton in Ohio, Texas and other primary contests. Susie Tompkins Buell, the founder of the Esprit clothing company, says she is deciding whether to start her own entity to fund commercials for Mrs. Clinton, or whether to donate to existing groups, such as abortion-rights group Emily's List, that are already spending money on Mrs. Clinton.

It's not certain that any of the efforts by the Clinton fund-raisers will get off the ground. Campaign-finance law makes it difficult for campaign insiders to fund independent efforts to elect candidates.

Still, the discussions highlight two financial facets of the 2008 presidential campaign. First, wealthy Americans are increasingly funding their own independent political operations to back candidates they support. Second, some of Mrs. Clinton's financial backers worry that she is falling behind in the fund-raising race.

"We're just trying to figure out things to do to help," Ms. Buell said. "We all feel very passionate about it, so the question is, what is the best thing we can do to get her across the finish line?"

Another Clinton fund-raiser, who didn't want to be named because he hasn't made a final decision, said he may pump as much as $500,000 into television, radio and newspaper ads for Mrs. Clinton.

Howard Wolfson, a spokesman for the Clinton campaign, declined to comment. By law, Mr. Wolfson isn't allowed to speak with anyone who might start an independent campaign on Mrs. Clinton's behalf.

Mrs. Clinton set a record by raising $115.7 million for her primary campaign in 2007. But 50% of her donations have come in increments of $2,300 -- the maximum allowed by law -- according to an analysis by the nonpartisan Campaign Finance Institute. In contrast, 66% of the donations to Mr. Obama have come in smaller increments, meaning that those people can contribute more to Mr. Obama before they reach the legal cap of $2,300 per election.

After Mrs. Clinton depleted most of her campaign cash by last week's Super Tuesday contests, she announced that she lent her campaign $5 million of her own money.

The Clinton campaign said it raised $6.4 million in the 48 hours after Super Tuesday, but that fell short of the $7.2 million that Mr. Obama said he hauled in during the same period.

Top fund-raisers for Mrs. Clinton began discussions of starting an independent campaign after Mr. Obama upset Mrs. Clinton in the Iowa caucuses in early January. Ms. Buell discussed the idea with other longtime Clinton fund-raisers, including Steven Bing and Haim Saban.

Ms. Buell said one issue nagging her efforts is a 2002 law that forbids coordination between people who work for an election campaign and people who manage outside political efforts. That law would require any Clinton fund-raiser who started an independent campaign for Mrs. Clinton to sever ties with the campaign.

Even then, the Federal Election Commission may decide that any entity started by a Clinton fund-raiser would violate rules that prevent coordination between a candidate's formal campaign and outside entities that spend money on his or her behalf.

"It's a risky, highly regulated, uncertain area of campaign-finance law," says Jan Baran, a campaign-finance lawyer with Wiley Rein LLP.

Ms. Buell and the Clinton fund-raisers are often included on conference calls with campaign aides in which strategy is discussed. Ms. Buell said that she might not be willing to leave the campaign. "You have to weigh out what is the most beneficial" to the Clinton campaign, she said.

Some Clinton backers also worry that any new independent organization will be compared to the Swift Boat Veterans for Truth, the group founded in 2004 to attack Sen. John Kerry's record in Vietnam. Other Clinton fund-raisers say that Mr. Obama campaigns against special interests and will surely point out any help that Mrs. Clinton gets from any outside political organization.
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Still, at least one Clinton backer is looking at launching an independent effort. The fund-raiser who didn't want to be named says he is talking with his lawyers to figure out how he could set up an organization to fund TV, newspaper and radio ads for Mrs. Clinton. This person says he would put up as much as $500,000 and might seek money from others. The ads would run in at least some of the big coming primary states, such as Texas, Ohio and Pennsylvania.

This person says he feels he has done all he can for the campaign from the inside. He has donated the maximum $2,300 allowed by law for the primary to Mrs. Clinton, and he has tapped out his fund-raising network. He says Mrs. Clinton must win in Texas, Ohio and Pennsylvania to secure the nomination, but he worries that her campaign will not be able to afford to fund the ads she will need.

So far in the 2008 campaign, outside groups have spent $5.2 million on behalf of Mrs. Clinton and $1.5 million for Mr. Obama, according to disclosure statements filed with the Federal Election Commission. About half of the money spent on Mr. Obama's behalf comes from two related San Francisco-based organizations called Vote Hope and powerpac.org.

A spokesman for those organizations says that they plan to spend a total of $4 million for Mr. Obama's campaign. The Obama campaign has said it doesn't want any group spending money on its behalf.

Mrs. Clinton has received strong backing from two large labor unions, the American Federation of State, County and Municipal Employees and the American Federation of Teachers, which have spent $2.5 million and $1.5 million, respectively, on her behalf.

Mrs. Clinton also has the backing of Emily's List, which backs female Democrats who support abortion rights. The group has spent $963,000 for Mrs. Clinton in 2008, according to the forms.

Ms. Buell said that one option under consideration by Clinton fund-raisers is to pour money into existing groups that are already spending money to support Mrs. Clinton. Emily's List is one such group.

Documents released by the Internal Revenue Service last month show that a handful of top Clinton fund-raisers gave large donations to Emily's List last year. Mrs. Buell donated $100,000 to Emily's List in 2007, after giving the group $50,000 in the previous four years.

In mid-December, Mr. Bing made his first-ever donation to Emily's List, giving it $250,000. On the same date, another Clinton fund-raiser, Chicago investor J.B. Pritzker, chipped in $100,000.

In all, a half-dozen top Clinton fund-raisers donated a total of $575,000 to Emily's List in 2007. The same group of Clinton donors contributed a total of $228,000 to the organization in the four years from 2003 to 2006.

(online.wsj.com)

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