President Obama's Blue Room meeting was 'totally precedented,' a spokesman said. Donor meeting at W.H. draws fire

A meeting President Barack Obama hosted in the White House for his key political backers from Wall Street is under fire from good government advocates and a Bush administration ethics official who say the session appeared to bring activity related to campaign fundraising onto White House grounds.

White House spokesmen say the March 7 meeting in the Blue Room between Obama and about 20 Wall Street executives involved discussion of policies affecting the financial industry. However, the gathering, which was first reported last week by The New York Times, has drawn scrutiny and criticism because the Democratic National Committee extended invitations to the session.


“It’s obvious that the DNC is going after these people for money, not just for their thoughts,” said Richard Painter, who served as White House ethics counsel for President George W. Bush from 2005 to 2007. “I think that violates the spirit, if not the letter, of the Hatch Act,” the federal law limiting political activity and fundraising by federal employees. “If that had been run by me, I would have said, ‘No. Have the meeting someplace else.’”

At a briefing for reporters Friday, White House press secretary Jay Carney defended the meeting.

“This was not a fundraiser,” Carney said. “It is wholly understandable why the president would want to consult with business executives about their ideas about what to do in terms of economic policy and business policy going forward, including financial-sector policy. … Obviously, he would want to talk to his supporters about that, as well.”

Carney called the meeting “totally precedented” and said the Democratic and Republican parties have regularly sponsored and arranged invitations to events such as White House Christmas parties.

In May 2001, the Republican National Committee held a reception on the lawn of Vice President Dick Cheney’s residence for top party donors and other officials. Former Presidents George H.W. Bush and Ronald Reagan also held events in the residence for donors, press reports say.

Still, critics said policy discussions are different than social events.

“This is no picnic. This not the Easter egg roll. This is not where they put up the Christmas tree,” Painter said. “This is bringing in donors and doing donor maintenance.”

“There’s a pretty clear line — or there should be a clear line,” said Meredith McGehee of the Campaign Legal Center, which presses for tighter controls on campaign finance. “I don’t have a problem with the president inviting Wall Street people to the White House to discuss policy, but why does it need to be DNC-sponsored? I think that’s what raises the eyebrows. Even if it’s not a fundraiser, it’s a cultivation.”

The House Oversight and Government Reform Committee, headed by Rep. Darrell Issa (R-Calif.), has scheduled a hearing for Tuesday to examine “the challenges of separating politics from policy” under the Hatch Act.

Painter, who’s set to testify, said the Blue Room session “is going to come up” at the hearing. He said he expects the main focus of the session to be a report that the Office of Special Counsel released this year accusing the Bush administration of repeatedly violating the Hatch Act in 2006 by scheduling Cabinet members’ official travel to coincide with political fundraisers and discussing political strategies at official meetings.

Issa did not respond to a request for comment on the White House meeting. When Democrats pressed the Bush administration on similar issues in 2007, Issa often defended the Bush aides and said political discussions were common in offices on Capitol Hill.

Former White House Office of Political Affairs Director Patrick Gaspard and White House counsel Bob Bauer were invited to attend Tuesday’s hearing but declined, Hill sources said.

Carney said Friday the White House is “very transparent” about its DNC-related events. The session did not appear on the president’s public schedule, but the guest list is scheduled to be unveiled this week in accordance with Obama’s groundbreaking policy of disclosing nearly all White House visitors about three months after their visits.

By press time, the White House did not respond to questions about DNC members and the White House staff who attended the event.

“This was an event with the president’s political supporters in the residence. All presidents have meetings with their supporters,” White House spokesman Eric Schultz told POLITICO on Monday. Asked why the DNC sponsored the event, Schultz said: “Because there was a nexus with the DNC, the event was organized by officials at the DNC, and the DNC picked up the $68 tab.”

Two attendees at the event who spoke with POLITICO on condition of anonymity said the event was clearly related to the campaign.

“It was policy-focused, but everyone knew why they were there,” said one attendee.

Asked whether fundraising came up at the meeting, the participant said: “There may have been a question about the campaign, but it was much more policy focused. No one was under any illusions that he wasn’t hoping to get our support, but there was never any ‘ask’ or discussion of expectations.”

The same attendee said he was invited to the event by DNC finance official Brad Thompson. The DNC referred questions about the event to the White House.

At least on the surface, Obama’s Blue Room event seems to have parallels to dozens of so-called coffees President Bill Clinton and Vice President Al Gore held in 1995 and 1996. Most of those events also were organized by the DNC.

Clinton aides initially said the events were not fundraisers, and there was no specific donation required for admittance. Documents later emerged showing the DNC had fundraising goals for some events and that some donors were told they could get invited for $50,000.

“Anyone in politics is aware of what happened with the use of the White House for fundraising purposes during the Clinton administration, and one would assume no one would want to go anywhere near that again,” said Fred Wertheimer of Democracy 21, another group pressing for tighter campaign finance rules. “If this was arranged by the DNC and involved a substantial number of donors and/or fundraisers, then it’s the kind of meeting that should not take place in the White House.”

“It’s not a policy function if the DNC sponsored it. … It looks bad,” said a White House official from a previous administration who asked not to be named. “Given the past history, it has the optics of having the White House used by an organization that has no purpose other than politics. This is ultimately for fundraising purposes and not platonic friendship.”

The rules for fundraising-related events at the White House are complicated. Virtually all White House officials are prohibited from soliciting political funds on or off the grounds of the residence. The president and vice president are permitted to ask for money, though not in federal facilities regularly used for official purposes. In addition, senior officials are permitted to speak at fundraisers, though they are not permitted to engage in fundraising themselves.

According to a Justice Department opinion dating to President Jimmy Carter’s era, the White House residence — which includes the Blue Room — is exempt from the general ban on soliciting campaign funds in federal buildings. The Clinton White House concluded that three other rooms in the White House complex fall outside the ban: the wardroom outside the Navy Mess, the Roosevelt Room across the hall from the Oval Office and the Indian Treaty Room in the Eisenhower Executive Office Building.

Congressional Republicans also have faced criticism for holding private meetings with Wall Street donors or potential donors. Senate Minority Leader Mitch McConnell took flak for holding a meeting with Wall Street executives in New York amid a series of votes on financial regulatory reform in April 2010. The head of the Republican Senatorial campaign committee, John Cornyn of Texas, also attended the session.

Obama was among those who challenged McConnell and Cornyn over the event.

“The Senate Republican leader, he paid a visit to Wall Street a week or two ago. He took along the chairman of their campaign committee. He met with some of the movers and shakers up there. I don’t know exactly what was discussed,” Obama said at a fundraiser in California last year. “All I can tell you is when he came back, he promptly announced he would oppose the financial regulatory reform. He would oppose it. Shocking.”

“We’re all involved in politics, as is the president,” McConnell told CNN at the time. “It doesn’t mean that we can’t discuss issues with people that we meet around the country who are deeply concerned about what we’re doing.”

Painter noted that he praised Obama when the White House announced in January that it was shuttering the White House Office of Political Affairs and moving its staff to the Democratic National Committee and to the president’s reelection campaign in Chicago.

“When the president moved the whole political affairs office out of the White House, I said he did the right thing, [but] a lot of people were saying, ‘It’s just a facade. … They’re going to leave people behind in the White House screwing around in partisan politics,’” he said. “Now it looks like that’s exactly what’s going on here, and it undermines what I thought was a very productive step.”

Abby Phillip, Jake Sherman and Maggie Haberman contributed to this report.