Obama’s Inaugural Fundraising Lays Groundwork for Legacy

A U.S. Army band rehearses in front of the U.S. Capitol Building ahead of President Obama's second oath of office on Monday, Jan. 21. Close

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A U.S. Army band rehearses in front of the U.S. Capitol Building ahead of President Obama's second oath of office on Monday, Jan. 21.

President Barack Obama has mused about his legacy, inviting presidential historians to dinner and urging speechwriters to pen addresses with historical sweep.

Now, he’s beginning to prepare for it, starting by embracing a new sponsor: Corporate America.

The former Illinois senator who in 2008 campaigned for president pledging to curb the role of money in politics has decided to accept unlimited corporate dollars for his second inauguration. His shift from four years ago, when he banned company funding, marks an early strategic step toward building the organization that will finance his presidential library, foundation and other post-White House aspirations, advisers say.

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“With a two-term president, you have the luxury of planning time,” said Skip Rutherford, who helped raise $165 million for former President Bill Clinton’s library and works as dean of the University of Arkansas Clinton School of Public Service. “I would not be surprised if the Obama foundation would probably incorporate some time this year.”

For his second inauguration, Obama plans to raise $50 million from individuals and corporations. Financing his career after leaving office will cost orders of magnitude more: The price tag of his presidential library alone could easily exceed $500 million, according to presidential library experts.

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Aides, who asked for anonymity to discuss strategy, say raising that amount of money will be impossible unless they build bridges to corporate donors -- and give their exhausted, long-time political campaign supporters a break.

Individual Cap

Along with refusing corporate donations for his first inauguration, Obama capped individual gifts at $50,000.

The decision to accept unlimited corporate money “is a step backwards,” said Fred Wertheimer, president of the Washington-based campaign finance overhaul advocacy group Democracy 21. “They saw no reason to do that in 2008 and they have no justifiable basis for doing it in 2012.”

Obama’s acceptance of company cash for his swearing-in festivities excludes donations from lobbyists or political action committees.

Still, that hasn’t stopped lobbyists from making their presence known: mCapitol Management, which paid $2.4 million to lobby the federal government during the first nine months of 2012, and Barnes and Thornburg, which spent $2.1 million on lobbying, are among the sponsors of the Illinois State Society’s black-tie inaugural gala on Jan. 19.

Obama’s List

After financing the most expensive campaign in presidential history -- Obama, an allied super-political action committee and the Democratic National Committee collected $1.1 billion -- many of his contributors are feeling tapped out. Aides concluded that accepting corporate dollars for the inauguration would give their wealthiest supporters a needed break, in order to collect their donations later.

Following a first term marked by tensions with the business community, advisers also argue that reaching out to companies now helps the president’s fundraising operation build the corporate connections needed later for a foundation.

A list of donors posted by the Presidential Inaugural Committee includes AT&T Inc. (T), Microsoft Corp. and Southern Co. (SO)

Tim Leljedal, a spokesman for Atlanta-based Southern Co., said it gave $100,000 for inauguration activities. “This is always a very special time for our country and we are pleased to participate,” he said in an e-mail.

Kathryn Stack, a spokeswoman for Redmond, Washington-based Microsoft, declined comment. Michael Balmoris, a spokesman for Dallas-based AT&T, didn’t return a phone call.

Updated List

The inaugural committee will release an updated list of donors tomorrow. Already, inaugural volunteers have been spotted around Washington carrying plastic bags emblazoned with the presidential committee’s logo on one side and AT&T’s familiar blue circle on the other.

Other companies are hosting inaugural balls and related events, including the event held by Vice President Joe Biden’s home state, Delaware, along with Maryland and New York.

Sponsors of the three-state affair include Fluor Corp. (FLR), the Irving, Texas-based engineering and construction firm leading a project to replace the New York Thruway’s Tappan Zee Bridge, and BAE Systems PLC, the London-based defense contractor that employs more than 2,000 people in New York.

Comcast (CMCSA) Corp. and Chevron (CVX) Corp. each contributed $25,000 to sponsor a gala for Pennsylvania delegates, and AT&T Inc. and News Corp. (NWSA) are among the $10,000 sponsors of the California State Society’s inaugural luncheon and fashion show.

‘Personal Relationships’

“You need to be able to tap into those corporate donors,” said Don Wilson, former archivist of the U.S. and director of both the George H. W. Bush Presidential Library Foundation and the George R. Ford Presidential Library. “Often, it’s from personal relationships.”

Presidential libraries have ballooned into full-fledged institutes, with affiliated university programs, multiple policy initiatives and architecturally conceived campuses. The libraries are constructed and endowed with private funds, before being taken over by the federal government.

Foundations, foreign governments and the country’s biggest companies increasingly are financing the operations. Clinton, who disclosed all donors for his library and foundation in 2008, listed Alltel Corp., the Bank of America Foundation, Hewlett Packard Foundation and Cisco (CSCO) as among contributors.

The George W. Bush Foundation has raised $415 million over the past five years to build and begin programs at the library, museum and George W. Bush Institute on the campus of Southern Methodist University in Dallas, Texas. Clinton collected $165 million for his 30-acre library campus on the banks of the Arkansas River in Little Rock, Arkansas.

Legacy Costs

That’s only a portion of post-presidential budgets. Former presidents also need to raise money for any other work they want to do -- like policy programs, charitable foundations, or, in the case of Clinton’s Global Initiative, annual meetings of world leaders. Since its founding in 2001, the Clinton Foundation has collected billions of dollars in commitments to support work around the world on climate change, childhood obesity, economic inequality and global health.

“In Obama’s case, as in Clinton’s case, the opportunities may change over time,” Rutherford said. “I don’t think what President Obama will do in 2013 will necessarily be the last thing he does.”

Post-presidential fundraising can resemble a campaign operation. Typically, presidents tap a former aide to lay the groundwork for the operation early in their second term. The foundation responsible for Clinton’s library started in early 1997. George H.W. Bush selected longtime friend and former Commerce Secretary Don Evans to begin scouting locations.

Foundations Attractive

The apolitical nature of the foundations make them attractive to corporate sponsors. The George W. Bush Presidential Center has started programs on education, global health and economic growth.

Carol Reed, a Dallas political and corporate consultant, helped Dallas-based Highland Capital Management, an alternative investment management firm, decide to donate $3 million to the Bush foundation because of its public policy initiatives.

“Their two areas of interest are mostly education and health care,” she said. “We try to do things that are within those parameters.”

While planning for Obama’s library has barely begun, competition for a campus is well under way. The University of Chicago and University of Hawaii -- colleges in his home town and childhood home -- have been campaigning for the venue.

The Hawaii legislature passed a resolution calling on Obama to choose the state, and a committee of government and civic leaders is holding a fundraiser this month to raise money for a professional proposal to show the president.

The University of Chicago, where Obama spent 12 years as a law professor, is widely considered the frontrunner.

The competition goes well beyond boasting rights: The Clinton library attracts hundreds of thousands of visitors a year and has helped revive downtown Little Rock, bringing an estimated $2.5 billion in new projects to the area.

“A lot depends on what Obama does in his post presidency,” Rutherford says.

To contact the reporters on this story: Lisa Lerer in Washington at llerer@bloomberg.net; Jonathan D. Salant in Washington at jsalant@bloomberg.net

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

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