How much does it cost to become president?

I guess the going rate is around half a billion dollars...

Disclaimer: GOP fundraising/campaigning has set new records for sleaze in the last decade, but the Dems are not far behind. Yet another reason to justify more choice of political parties and more campaign oversight/transparency. I could have wrote another email investigating questionable practices by the McCain campaign (and I'm sure they're many, such as: http://online.wsj.com/article/SB120873412746529713.html?mod=googlenews_wsj), but more and more it's looking like he should not and will not be our new president. Actually considering Obama's sound, moderate positions on many issues, consistently poor decision making by the McCain-Palin camp, and the turbulent economic climate, it's a shock to me that the race is even this close (media spin, and/or voter prejudice?).

So I chose to focus on Obama instead, not only because he is the presumptive winner, but also because he has made a point to convince people that he is above the typical Washington money game, and his heavy small-donor support suggests a truly populist, democratic effort to get him elected. He calls his campaign a "movement" actually, which is a really big word. I want to determine if it's true that his campaign has held itself to higher standards. Because if it turns out to be dubious or false, that may shed light on what to expect or not to expect from an Obama administration.

It's amazing how Obama, a reformer who claims to reject Washington lobbyists, was also able to out-raise George W. Bush, a lobbyist's wet dream. An LA Times article from last year that I've already forwarded described how Obama's campaign has evaded the spirit of this chastity: instead of taking registered federal lobbyists' money directly, he takes from corporate "consultants" or state lobbyists instead, and lobbyists also offer to corral private donors on Obama's behalf. Amidst their terrible business troubles and threat of layoffs/buyouts, can we really believe that Lehman/Merrill Lynch employees just decided to give $10M to Obama and $7M to McCain out of generous patriotism? In fact, the financial sector is the top corporate donor group for both campaigns, which may have contributed to their Senate voting to get those charitable but controversial bailout packages passed quickly.

But it is also true that Obama has been amazingly popular for small donations from students, overseas/enlisted Americans, and first-time campaign contributors. Hence his campaign statement that "the average donation is under $100". Though averages can be a deceptive statistic, and over half his money comes from donations exceeding $1,000. One side of him is quite populist, though the other side is big money politics-as-usual. It's true that an unprecedented number of donors (over a million) have contributed to Obama, maybe because they really believe in his message and want him in the White House to make change, or maybe for other reasons. But Obama's impressive army of small online donors might be misleading, as this statement from Paul Lukasiak on a Time.com blog describes:

It turns out that Obama's contributor numbers were WAY inflated, because they included anyone who bought a bumper sticker, or a keychain with his name on it, or paid $5 to hear him talk. Yet he represented these people as if they had simply handed over cash for nothing in return, and the media went all ga-ga over his "stunning" ( the word one reporter used to describe it) contributor base. Basically, he made the mainstream media look like idiots.

As the NYT put it, Obama seeks to "transform grass-roots enthusiasm into more useful forms of support", like bragging about how many donors he has. He is technically correct in doing this, but it's convenient compliance. The Obama camp defended its inclusion of these customers as "donors" because it's the law; they run their merchandising operations internally, and most other candidates outsource them to private vendors. They have to declare a $15 shirt buy as a $15 campaign contribution, even if it cost them $5. Obama's website makes this explicit: "All purchases made on the Obama Store are 100% contributions to the campaign and count toward your overall contribution limit." It's a clever, legal, but somewhat manipulative strategy. I guess that's politics.

Though it's sad that the Obama campaign even charges $5-25 for people to attend his rallies. Not the black-tie dinners with VIPs, but just the informal public gatherings we see on TV. I guess most candidates might do the same, but isn't he supposed to be working for us? He claims to understand the economic struggles of America's middle class, so why would he add to them? Also, this new wave of "small donations" under $200 may open up the door to creative fraud, because they don't have to be reported to the FEC unless requested. I know in a huge national campaign you can't verify every penny real-time, so some irregularities will occur, even to the most conscientious candidate. A recent audit found that seemingly imaginary people had given over $10,000 to the Obama campaign (they have since returned the money). This is well above the $2,300 personal spending limit for the general elections, but they gave it in many increments of $10-25 (the much-celebrated small online donation), and apparently Obama's website lacks even the simplest controls that cut off donors after they've reached their legal maximum.

To critics, though, [the small donation] can be an invitation for fraud and illegal foreign cash because donors giving individual sums of $200 or less don't have to be publicly reported. Consider the cases of Obama donors "Doodad Pro" of Nunda, N.Y., who gave $17,130, and "Good Will" of Austin, Texas, who gave more than $11,000—both in excess of the $2,300-per-person federal limit. In two recent letters to the Obama campaign, Federal Election Commission auditors flagged those (and other) donors and informed the campaign that the sums had to be returned. Neither name had ever been publicly reported because both individuals made online donations in $10 and $25 increments. "Good Will" listed his employer as "Loving" and his occupation as "You," while supplying as his address 1015 Norwood Park Boulevard, which is shared by the Austin nonprofit Goodwill Industries. Suzanha Burmeister, marketing director for Goodwill, said the group had "no clue" who the donor was. She added, however, that the group had received five puzzling thank-you letters from the Obama campaign this year, prompting it to send the campaign an e-mail in September pointing out the apparent fraudulent use of its name.

"Doodad Pro" listed no occupation or employer; the contributor's listed address is shared by Lloyd and Lynn's Liquor Store in Nunda. "I have never heard of such an individual," says Diane Beardsley, who works at the store and is the mother of one of the owners. "Nobody at this store has that much money to contribute."

This summer, watchdog groups asked both campaigns to share more information about its small donors. The McCain campaign agreed; the Obama campaign did not. -Newsweek (emphasis was mine)

So now what is their clever excuse and legal loophole to justify the refusal?


http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2008/06/20/MNPH11C2CD.DTL
http://www.nytimes.com/2008/06/20/opinion/20fri1.html?ex=1371614400&en=d7529a3544511a83&ei=5124&partner=permalink&exprod=permalink

The articles above are old, but it said that through April, Obama already raised $265M (Newsweek says he has reached $458M by this month, NPR gives $605M), which contributed to his decision to break his agreement with McCain and forgo federal public financing for the general election. That money pool comes from the $3 donations that we have the option of making when we file our federal tax returns. Public financing caps spending at $84.1M per candidate for the general election, though at the time, Obama's camp predicted that they could raise 3-4X that amount, and they were right with $100M to spare. Obama is the first Dem candidate to do this since the program's inception in 1976 (enacted in response to Watergate and the huge amount of corporate cash secretly funneled to Nixon's campaign). Bush, Kerry, and Dean have declined public financing during the primaries, but not in the general election.

Obama's official justification for this move is that the public financing system is "broken", and that he needs much more cash than that to defeat the GOP-perfected, 527-led smear and misinformation against him. While that may be partially true, if he wins the presidency on this strategy, it may signify the end of public financing and even more uncontrolled spending than the 2008 cycle in the future. Is that a good thing for America and the change we need? Public financing does seem to leave a candidate at a disadvantage against an opponent who opts out, but McCain didn't, and Obama didn't bother trying to reform the system during his time in the Senate. Several attempts at overhaul have failed in Congress, possibly blocked by public financing opponents who want to render the system obsolete and ripe for termination.

http://www.clcblog.org/blog_item-57.html (a detailed analysis of public financing and how it could be improved)

Anything to win, right? When you are fighting a dirty opponent, some people think that you also have to get a little dirty, or your opponent will eat you alive. Just a few compromises to your principles here and there, when absolutely necessary, won't hurt anyone, right? In a general election, viable candidates have to move towards the center and amass the big bucks anyway. Win first, and then you atone by doing extra good when in office. But history has shown time and again that it doesn't work that way. Once you start to compromise, deceive, and rationalize, it just snowballs from there. President 44 will have to deal with a number of complex problems where consensus will be difficult, if not impossible, to achieve. Sometimes compromise may be the only solution, but other times it's just a convenient, tempting way to get faster results by circumventing your conscience.

"I'm afraid he learned to go along," says [Alan] Dobry, the Hyde Park political activist. "There's a fellow I know, another committeeman, 'Bull Jive' Taylor. [He] used to say to me, 'Alan, why don't you go along? Everything would be so much easier. Everything would be so much smoother.' And I think Barack learned to go along. It may get him elected president, but it doesn't make me happy." -NPR story on Obama's experiences in Chicago politics

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Barack Obama's campaign is trying to further pad its fundraising lead in the closing weeks of the election, asking supporters Monday for their help in adding 100,000 new donors to the campaign [during the week of Oct. 13]. In a fundraising e-mail from Obama, the Illinois Democrat says the cash infusion is needed to combat Republican efforts to "distract voters and distort the truth." - TheHill.com

Obama recently announced that he pulled in another whopping $150M from Sept. donations (632,000 new donors, though I don't know how many of those are Doodad Pros). That's $5M/day. Heck, his campaigners should work in Las Vegas or Madison Avenue with such skills in getting people to part with their money for nothing in return. His one-month haul (of course a campaign record, blowing away his previous Aug. record of $63M) is almost double the public financing maximum. He's blowing McCain away, though of course the GOP nominee gets more cash from party fundraising too.

The Obama gang are hoarding and celebrating when I think they should be giving the money back. Hasn't Obama been the one saying for the past few months that families are hurting and the economy is in trouble? He has enough money to run 3 presidential campaigns! He should tell all those well-meaning families to keep their hard-earned money and use it to pay the bills or save for the uncertain future. Isn't that better for America? Obama has legitimately complained about, blamed Bush-McCain for, and vowed to fix the sad state of neglected schools, the high costs of gas/food/college/health care, home foreclosures, decaying infrastructure, not enough armor for our troops, etc. Some of his money can be legally given to such causes, as long as he or his family are not salaried employees of the recipient organizations. If he cares about America and the suffering of the needy, then he should give some of his war chest away, which actually helps people, instead of yet more silly ads and merchandise (well, I guess those expenditures do help our economy too, but it's redistribution instead of new wealth creation). Shouldn't he "spread" his wealth around if he expects us to? Wouldn't that be good PR as well?

But he's keeping it, and actually has the gall to ask us for more, which really bothers me. He has more money than he could possibly spend by Nov. 4, unless he plans to finance the Iraq War. And what happens with the leftovers? It is legal for him to refund the donors (the Obama economic stimulus package), pay off outstanding bills, or give to a registered charity or political party. It's also permissible for him to contribute to a few other campaigns (and I'm sure he will, to try to increase the Dem majority in Congress), under certain constraints of course. What is totally illegal since 1989 is using the money for a candidate's personal expenses, though as you would expect, abuses have happened.

http://wiki.answers.com/Q/What_happens_to_campaign_contributions_if_the_candidate_quits
http://www.nytimes.com/2007/02/24/nyregion/24retire.html?_r=1&oref=slogin

But it looks like Obama is planning to spend most of it on himself. And where is the money going? TV ads of course. Excluding the huge 30-minute prime time chunk he purchased on 3 major networks (FOX, NBC, CBS) for Oct. 29, important enough to reschedule the World Series baseball championship (America's so-called past-time) on that night, Obama is also rich enough to compete in some red states that previous Dems had written off, like North Carolina, Missouri, and Indiana. He is outspending McCain 2-to-1 on ads in those and other battleground states like OH an FL. In just 24 hours, he spent $3.3M on TV ads (what some primary candidates raise in a month), and is projected to, or already has, broken Bush's record of $188M spent overall. So far he has outspent McCain 4-to-1, according to the NY Daily News (http://www.nydailynews.com/news/politics/2008/10/20/2008-10-20_obamas_allout_blitz_drowns_out_mccain_wi.html). David versus Goliath? The often victimized and down-and-out Dems are now looking like the GOP: bullies with deep pockets. I know that Obama's collective ads are much less negative than McCain's (which the front-runner can afford to do), but really I feel scared for America if simplistic, manipulative content like this actually affects voting decisions:

http://www.youtube.com/watch?v=H-ae409tJEI (even Joe Biden denounced this now-infamous ad, but Obama defended it on national TV)

The aggressive fundraising and spending would seem more reasonable if he is down or the polls are neck-and-neck, but in terms of electoral votes, he has quite an impressive lead on McCain! This is like the dominant 2007 Patriots running up the score on the Dolphins. I know that history is not on Obama's side and he can't afford to be complacent, but so much of his campaign strategy is based on trust in polling, so why the paranoia now? I think he should do everything that is reasonably possible to try to win, but not go overboard. $200M spent on TV time is way overboard. Are voters really that cheaply persuaded? What does that say about our democracy and politicians like Obama if they think that some robo-calls, junk mail, and 30-second TV pitches will move a state from red to blue? One can make the argument that mass-media campaigning is deleterious to the electoral process. It's just repetition, message control, and sensory overload to the point of psych warfare to me. I am sure some worn-down voters in battleground states are downright sick of all this bombardment, and can't wait to be left alone after election day.

It all comes back to the whole "buying elections" cliche: in 75% of open-seat Congressional races, the bigger spender won. I can only imagine a similar trend holds for presidents, but it's not that simple. As the papers below describe, money alone doesn't win elections, and there is definitely diminishing returns when it comes to campaign spending. As long as Congressional candidates pass a certain funding threshold ($1M for challengers, $0.5M for open-seat races), additional spending hardly affects their prospects of winning. For presidential hopefuls, the first million spent is much more important than the 50th, mainly because of the front-loaded primary process and the need for candidates to quickly get known nationally. So the data suggest it might not even help Obama to spend another few million this month. I guess David Axelrod didn't read that paper or doesn't care. Plus for a candidate committed to fighting climate change and irresponsible consumption, I can't begin to imagine the carbon footprint and trash amassed by his campaign. Well, win first and do good later, right?


http://www.scribd.com/doc/2383850/Does-Money-Buy-Elections
http://www.fairvote.org/reports/monopoly/richie2.html

Other resources:

http://www.sourcewatch.org/index.php?title=Barack_Obama/Campaign_Financing#_note-52