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Obama Tells Wall Street Donors He Backs Super PACS Out of Need

President Barack Obama told a gathering of Wall Street donors that Democrats can’t unilaterally stop accepting money from big-dollar political- action committees, according to two people at the event.

Obama told about 80 donors at a fundraising dinner in New York yesterday that he didn’t want to run for re-election at a disadvantage to Republicans, according to the people, who described the president’s comments on condition of anonymity because the event was private.

Obama was holding his first fundraiser targeting the financial services industry since he asked Congress in his 2013 budget to increase taxes on the wealthy and impose $61 billion in new fees on banks. He told attendees at the $35,800-a-plate fundraiser that he is aware his administration has lost some of its popularity among bankers and hedge fund managers.

“So many people in this room were active in 2008,” the president said before reporters were ushered out of the event. “So many of you have had to defend me from your co-workers over the last three years.” The remark drew laughter from the audience.

Obama’s remarks on political funding follow his campaign’s decision last month to reverse course and encourage top donors to contribute to the independent political-action committees, known as super-PACs, backing his re-election.

Supreme Court Ruling

Obama reiterated his objections to a Supreme Court ruling that allows unlimited contributions from individuals, corporations and unions. His comments came in response to a question from one of the donors about the Supreme Court case, Citizens United v. Federal Election Commission, and he took the opportunity to clarify his new position, said the people.

The event included many of Obama’s top Wall Street donors, such as Blair W. Effron, partner and co-founder of Centerview Partners LLP; Marc Lasry, managing partner and founder of Avenue Capital Group; Mark Gallogly, a managing principal of Centerbridge Partners; James Rubin, managing director of BC Partners; Robert Wolf, UBS AG’s chairman for the Americas; and Antonio Weiss, global head of investment banking at Lazard Ltd.

The president’s hosts also included Ralph Schlosstein, chief executive officer at Evercore Partners Inc. (EVR), and his wife, Jane Hartley, co-founder of the economic and political advisory firm Observatory Group LLC, who were assured last month by Jim Messina, Obama’s campaign manager, that the president won’t demonize Wall Street in his pursuit of another four-year term.

‘Three Tough Years’

Americans have been through “three tough years and so this is going to be a close election,” Obama said. “Nobody is under any illusion that this isn’t going to be a tight race for us.”

The event was one of four Obama held in New York in a $5 million fundraising drive for his re-election campaign and the Democratic National Committee. Obama brought in $140 million for his campaign through the end of January, Federal Election Commission reports show.

His first fundraiser last night was a reception at the home of lawyer Victor Kovner and his wife, Sarah, according to a campaign official who wasn’t authorized to discuss the matter publicly. About 100 people were participating, with tickets starting at $5,000, the official said.

After the dinner, Obama headed to a fundraising gala hosted by Deepak Chopra, Paulette Cole, Russell Simmons, Jean-Georges Vongerichten, Reshma Saujani and Phil Suarez, with approximately 900 people, the official said. The Roots, Ben Folds and Ingrid Michaelson were the performers, and Aziz Ansari emceed the event. Tickets for the gathering started at $1,000.

White House Decorator

The evening was capped by a fundraiser at the Manhattan apartment of interior designer Michael Smith, who was chosen by first lady Michelle Obama in 2009 to be the White House decorator. About 40 guests agreed to pay $10,000.

Smith also was the designer who worked on a $1.2 million redecoration of the downtown Manhattan office of former Merrill Lynch & Co. Chief Executive Officer John Thain. The remodeling was done in 2008 as the company was firing employees amid $56 billion in losses. It became a symbol of Wall Street excess and drew criticism from Obama. Thain later said he reimbursed the company.

Obama’s previous fundraiser with the financial services industry was on Sept. 19. So far this election cycle, he hasn’t been able to match the success he had four years ago in getting money from Wall Street.

$1.4 Million in Revenue

In Obama’s fiscal 2013 budget, he called for $1.4 trillion in new revenue over 10 years from Americans at the top of the income scale, proposing higher taxes on wages and investments and limiting itemized deductions. He would tax long-term capital gains at 20 percent, up from 15 percent now, for individuals making more than $200,000 and families making more than $250,000.

His budget also calls for big financial institutions to pay $61 billion over 10 years in a “Financial Crisis Responsibility Fee” to help fund the bank bailout program and a home-mortgage refinance initiative.

At a gala event last night where tickets cost $1,000, Obama was interrupted by an audience member urging him not to start a war in Iran. “Nobody has announced a war yet, young lady,” he said. “You’re jumping the gun a little bit there.”

He said his administration has kept many of its promises, including ending the war in Iraq and the military’s “Don’t Ask Don’t Tell” policy that barred gays and lesbians from serving openly.

He also touted the death of the leader of al-Qaeda. “Osama Bin Laden will never again walk the face of the earth,” he said.

To contact the reporters on this story: Hans Nichols in New York at hnichols2@bloomberg.net;

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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