When President Barack Obama visited California in February, he had a private dinner with Apple (AAPL) Chief Executive Officer Steve Jobs, Facebook founder Mark Zuckerberg, and other technology chieftains. The stated purpose of the meal was to solicit job-growth ideas.
The President returned to the Golden State on Apr. 20 with something different on the menu: campaign cash. Facing a 2012 re-election bid at a time when Republican fundraisers are eager to take advantage of relaxed campaign spending restrictions, Obama is on an early tour of his most important money markets, from Chicago to Silicon Valley to Hollywood to Wall Street. While his campaign is downplaying speculation that it could be the first to raise $1 billion, it's nonetheless building up a cash stockpile as the GOP, with the field wide open, gets off to a slow start. Former governors Tim Pawlenty of Minnesota and Mitt Romney of Massachusetts are the only two major Republican candidates who have announced exploratory committees, even as Obama's campaign prepares to open offices in battleground states.
Though some big-name Democratic donors, including actor Matt Damon and hedge fund manager Daniel Loeb, have expressed disappointment in Obama's Administration, fundraisers say the President remains popular and his events are selling out. After headlining an Apr. 20 town hall meeting at Facebook headquarters in Palo Alto, Calif., Obama was scheduled to host a series of San Francisco fundraisers, including a dinner at the home of Marc Benioff, chairman of Salesforce.com (CRM). That event, which was expected to attract about 60 donors, had an admission price of $35,800 per person, with $5,000 going to Obama's campaign and the rest to the Democratic National Committee to support his reelection.
Wade Randlett, a fundraiser and co-founder of San Francisco biofuel startup Nextfuels, says Obama is helped by the fact that there are no Republicans in the current field of candidates who are "strong on business issues and moderate on social issues." Randlett raised between $200,000 and $500,000 for Obama in 2007 and 2008, and plans to match that performance this cycle. "When you see what the other side is offering, it's really just a no-brainer for the Bay Area." The California events were expected to yield as much as $5 million for Obama and the DNC, according to a Democratic source who could not speak publicly because he was not authorized to share the information. That's roughly twice as much as Obama raised on Apr. 14 at three events in Chicago, where he kicked off his fundraising drive.
Another money-raising swing is planned for Apr. 27 in the New York area, a trip that will include another $35,800-per-person event, this time at the home of Jon Corzine, the former Goldman Sachs (GS) CEO and New Jersey governor. The fundraising effort will be the first test of whether Wall Street donors will be as generous as they were in 2008, when Obama received more money from employees of the securities and investment sector than from those of any other industry, according to the Center for Responsive Politics. After last year's financial regulatory overhaul and Obama's "fat cat" rhetoric, some former Wall Street supporters have cooled toward the President, says Dan Gerstein, a Democratic strategist in New York. "He's paid a heavy price in the banking sector," says Gerstein. "He's alienated a lot of people with his rhetoric."
Jim Messina, Obama's campaign manager and a former deputy White House chief of staff, has tried to dampen predictions that the President will raise $1 billion for 2012. Still, he's put together an aggressive fundraising schedule. Top bundlers, who solicit money from a wide circle of donors, have been asked to collect at least $350,000 this year alone. Four years ago members of Obama's national finance committee were asked to raise $250,000 for the entire election.
The higher bar has been set in part because Democrats don't know whether Obama will be helped or hurt by Republican efforts to handicap labor, a big source of Democratic money. The governors of Wisconsin and Ohio have signed bills making it harder for unions to collect dues. Anthony J. Corrado, a professor who studies political fundraising at Colby College in Maine, says the move could backfire. Unions are going to have "a very strong incentive" to counterbalance Republican attacks by donating heavily to Democrats. At the same time, the Supreme Court's 2010 Citizens United decision makes it easier for political groups to "take corporate and labor union money and do ads specifically advocating the election or defeat of the candidates," Corrado says. He predicts the 2012 Presidential election will be a "proxy" battle between corporations and unions.
Obama will have a larger pool of potential backers than he did four years ago, when the drama of a marathon primary battle with Hillary Clinton helped fuel his fundraising but also split the field of donors. At the same time, some of Obama's top bundlers in 2008 will be officially barred from fundraising because they're now enjoying the perks of their past performance. Boston philanthropist Alan D. Solomont, former media executive Charles Rivkin, and technology lawyer John Roos each raised more than $500,000 for Obama's 2008 campaign. They're now serving as ambassadors to Spain, France, and Japan, respectively.
The President also lacks the aura of a historic quest to become the first black President. "There was a certain type of excitement that went around the first go-around," says Lester N. Coney, an executive vice-president at Mesirow Financial who was one of Obama's top 2008 fundraisers. "He's never going to be able to capture that again."
The bottom line: Obama's 2012 campaign is asking top bundlers to increase their goals by at least 40 percent, to $350,000 this year.