Campaign 2008: Cranking Up The Money Machine
In the scramble to raise millions for the 2008 Presidential election, Jan. 24 was a pivotal day.Even as Senator John Kerry (D-Mass.) choked back tears during his announcement from the Senate floor that he would not seek his party's nomination, the cell phones and BlackBerrys of his fund-raisers across the country began buzzing.
Campaign aides and allies of Senators Hillary Clinton (D-N.Y.) and Barack Obama (D-Ill.) seized on the announcement and began dialing the 150 or so Kerry loyalists who had raised millions for his 2004 Presidential bid. "Everybody had their lists of Kerry people, and they were calling immediately," says John Roos, chief executive of Palo Alto (Calif.) law firm Wilson Sonsini Goodrich & Rosati, and a Kerry fund-raiser who now supports Obama.
Kerry's loss has primarily been Obama's gain. The newcomer has secured commitments from 27 of the 41 former Kerry backers who have thus far declared allegiance to a new candidate, says a Kerry fund-raiser who is not aligned with either Clinton or Obama. Clinton has nabbed the other 14. None of the backers has yet joined any of the other Democratic hopefuls. "Senator Kerry told people that they ought to follow their own conscience," says Jay Dunn, national finance director for Kerry's political action committee.
Pinning down fund-raisers early is one sign of a campaign's viability. Obama's success has surprised some, given his relative inexperience and Clinton's deep ties to the Democratic Party.
Clinton's Senate campaign has $14 million on hand, which the senator is free to transfer to her Presidential campaign; Obama has only about $755,000. Clinton and Obama set up Presidential exploratory committees in January, but they don't have to disclose contributions until they formally enter the race.
A spokesman for Clinton says fund-raising has been strong at all levels. An Obama spokesman says the senator is grateful for the support he's received.
Although most fund-raisers stuck with Kerry until January, they had been courted by Clinton and Obama for months. Mark Gorenberg, a venture capitalist at Hummer Winblad Venture Partners in San Francisco and Kerry's 2004 California fund-raising chair, met with both contenders in January and chose Obama. "I found him to be extremely charismatic, a natural leader in the same sort of way that John Kennedy was or Bill Clinton was," Gorenberg says. David Geffen and his DreamWorks partners Steven Spielberg and Jeffrey Katzenberg will hold a Beverly Hills soirée for Obama on Feb. 20. Billionaire financier George Soros has endorsed the Illinois senator.
Kerry's former New York finance director, Hassan Nemazee, was also wooed by both and says he's backing Clinton because "she's readiest to be President on Day One." Other Clinton supporters:Steven Rattner, managing principal of private equity firm Quadrangle Group, and Hollywood legend Elizabeth Taylor. Spielberg also will host a Clinton fund-raiser.
One key difference between Clinton and Obama is in their relationships with the financial set. Clinton has been on the national stage for 14 years. "In New York City, there are at least 100 people making fund-raising calls to their friends" on Clinton's behalf, says Alan J. Patricof, co-founder of private equity firm Apax Partners Inc. He chaired Clinton's senate campaign and supports her now.
Obama is the unproven investment. That didn't faze former Kerry fund-raiser Alan D. Solomont of Solomont Bailis Ventures, a Newton (Mass.) private equity firm. "I had to choose between IBM (IBM ) and a startup," he says. "But you know, look at Apple Computer (AAPL )."
By Eamon Javers