"Reformers" Compromising For Cash

Obama, McCain Both Relying On Those They Criticize To Help Fund Campaigns

(The Politico) By The Politico's Jeanne Cummings.

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Donning the white hats of campaign finance reformers, Republican John McCain and Democrat Barack Obama are positioning themselves as the presidential candidates least likely to be bossed around by special interests if they win the Oval Office.

But the reality of presidential-level fundraising is driving both camps into the arms of the very lobbyists who are the agents of those interests. McCain, whose disappointing first-quarter fundraising total has rocked his standing in the GOP primary lineup, abandoned all pretense of being the untainted one after assigning an overhaul of his campaign finance operation to two well-connected Washington lobbyists, including one who has been singled out for helping clients secure the very budget earmarks that the senator rails against on the campaign trail.

Obama's moves have been more subtle. He has vowed not to take money from federally registered lobbyists. But that leaves wide latitude for his lobbyist friends in Illinois to pony up cash, and his campaign is informing Washington lobbyists that they'd be happy to take checks from their spouses or clients.

"It's very depressing to see the extensive use of lobbyists as the only way to be competitive," said Joan Claybrook, president of Public Citizen, a nonpartisan group that tracks political giving, who has worked with McCain, Obama and other contenders to push through reforms. The federal fundraising program designed in 1974 to eliminate the need for big outside contributions "has failed," she added. "I'm sure there are alternatives, but they may not allow the candidates to be competitive."

Indeed, to candidates under pressure to raise unprecedented amounts of cash for the 2008 primaries, Washington's lobby community and its network of donors is too tantalizing to ignore. According to analysis by the Center for Responsive Politics, the nation's capital ranked third among prime donation destinations in the 2004 presidential cycle, doling out nearly $165 million to candidates. California topped the list by generating $241 million in campaign checks. New York came in second with nearly $179 million in donations. In 2006, a nonpresidential year, Washington took over the top spot by forking over more than $180 million to congressional lawmakers — even though the District of Columbia does not have equal representation in Congress to the 50 states.

To get a notion of just how outsized the lobbyist community's role is in all that giving, consider these numbers: In July 2004, California ranked No. 1 in population with nearly 36 million residents, New York came in third with slightly more than 19 million, while Washington was home to 553,523 people, just passing the least-populated state, Wyoming, with 506,529 residents, according to census figures. (Residents of the Equality State donated $4 million to candidates in 2004.)

Lobbyists don't just give generously to candidates; they also serve as conduits for others. That is why the campaigns of Democrat Hillary Rodham Clinton, Republican Mitt Romney and others actively recruited supporters from the community. Republican Rudy Giuliani's campaign benefited from an event hosted in part by James F. Miller, who once lobbied alongside former lobbyist Jack Abramoff, the center of a scandal last year.

What separates Obama and McCain from the rest is that they have used the issue to define their campaigns and their candidacies. Like Obama, Democrat John Edwards has pledged not to accept donations from lobbyists and political action committees, or PACs.

Obama invited special scrutiny of his fundraising the day he announced. "As people have looked away in disillusionment and frustration, we know what's filled the void. The cynics and the lobbyists and the special interests who've turned our government into a game only they can afford to play," he said.

His decision to refuse PAC and lobbyist money is a departure from his Senate race two years ago. Then, he accepted nearly $130,000 from lobbyists and $1.3 million from PACs, according to the Center for Responsive Politics. Soon after arriving in Washington, however, he sought a lead role in advocating ethics reform and reducing the influence of special interests.

To adhere to that, Obama announced the no-federal-lobbyist-money rule. But it seems his fundraisers, under pressure to keep pace with the Clinton camp, have decided to follow the letter of that rule rather than embrace its full spirit. Thus, a current lobbyist can't give, but a former lobbyist — even a recent one — can. Of course, there is the spouse exemption, even if the money comes from a joint account.

The policy has rubbed some lobbyists the wrong way. One reports getting a call from an Obama representative that seemed to be a solicitation for a donation. When the lobbyist cut him off and pointed out that he was registered, the fundraiser said he was aware of that but "your spouse can contribute, and we want to reach out to your network," the lobbyist recalled, adding that he was "pretty taken aback."

The fuzzy lines also were evident last week when Obama headlined a fundraiser at Union Station. Invitations were forwarded around town to many lobbying shops, even though most of the folks who work in them are banned from giving. Among the event's chairs and hosts were four former lobbyists, including recent advocates for big oil and power companies.

Bill Burton, an Obama spokesman, acknowledged that the system is imperfect. "It's a symbolic step, but nobody is claiming it solves the problem," he said.

McCain's return to presidential fundraising has been equally awkward. He is one of the namesakes on the 2002 McCain-Feingold campaign finance reform law that banned corporations and unions from giving unlimited donations to the political parties and imposed limits on television advertising and other political activities by interest groups in the last weeks of a campaign. That law infuriated some conservative advocacy groups, which haven't forgiven McCain or rallied around his campaign waving their checkbooks. His bottom line also is hurt by the fact that the candidate himself does not like making calls and appearances for cash.

The ironic consequence is that a McCain campaign that aims to revive the maverick, reformist image of the senator's maiden presidential bid in 2000 now is more dependent on the aid of his lobbyist fundraisers than are some other presidential contenders.

Tom Loeffler, a former congressman from Texas, and Wayne Berman, a former official in the administration of George H.W. Bush, are the two lobbyists charged with creating a new McCain fundraising apparatus modeled after the bundling operations that fueled George W. Bush's campaigns. Loeffler and Berman earned Ranger status on the Bush team, which meant they generated at least $200,000 in donations to the Bush-Cheney operation.

"John McCain has known Tom Loeffler for over 25 years, and their relationship is based on mutual friendship, respect and credibility," said Danny Diaz, a McCain spokesman.

Friendship aside, Loeffler represents an awkward pick for McCain, given that his lobbying history has been the target of conservative anti-pork organizations long aligned with the senator. In a speech to Citizens Against Government Waste last month, McCain criticized the practice of quietly slipping pet projects into huge spending bills and took a shot at his own party for allowing it to happen. "I think the Republican Party lost the last election because of our failure to control spending and the earmarking which led to corruption, which led to a member of Congress going to jail," he said.

McCain's speech coincided with the release of the organization's new book, "The Congressional Pig Book," which highlighted earmarks. Among the entries: the Loeffler firm's roster of Texas municipal clients, including Houston and San Antonio, which received $40 million in earmarks between 2003 and 2006 for roads, rivers and technology projects.

By Jeanne Cummings