The summer before the 2010 congressional elections, the Democrats’ prospects began to look alarmingly weak. On July 28th, President Barack Obama flew to New York City for two high-priced fund-raisers aimed at replenishing his party’s war chest, largely with money from Wall Street. For a busy President, such events could be a chore. And Obama had never been a Wall Street type. In 1983, Obama, then a recent college graduate who wore a leather jacket and smoked cigarettes, took a job on the periphery of New York’s financial sector: for a year, he worked for Business International, a firm that produced economic trade reports for multinational companies. According to Obama’s mother, he told her that this foray into the corporate world amounted to “working for the enemy,” as David Maraniss recounts in his new biography, “Barack Obama: The Story.” By the time that Obama ran for President, in 2008, his relations with the financial industry had grown warmer, and he attracted more donations from Wall Street leaders than John McCain, his Republican opponent, did. Yet this good feeling did not last, despite the government’s bailout of the banking sector. Many financial titans felt that the President’s attitude toward the “one per cent” was insufficiently admiring, even hostile.

Many rich Democrats oppose the very idea of Super PACs, and refuse to support them. Illustration by Barry Blitt

The planning for the fund-raisers seemed to underline this estrangement. Obama’s first event was a 6 P.M. dinner at the Four Seasons. About forty contributors, many of them from Wall Street, had paid thirty thousand dollars each to dine with him. Some of the invitees were disgruntled supporters who felt unfairly blamed for the country’s economic problems, and they wanted to vent about what they considered Obama’s anti-business tone. But the President did not have enough time to hear them out—or even share a meal—because after only an hour he was scheduled to leave for the second fund-raiser, at the downtown home of Anna Wintour, the editor of Vogue. At the Four Seasons, the President could spend about seven minutes per table, each of which accommodated eight donors. This was fund-raising as speed-dating.

The President’s staff knew that Obama wouldn’t have a moment to eat properly that day, and that it would be hard for him to do so while being the focus of attention at the fund-raisers. So time was set aside at the Four Seasons for Obama to grab a bite, in a “ready room,” with Reggie Love, his personal aide, and Valerie Jarrett, his close friend, senior adviser, and liaison to the business community. This arrangement, however, inadvertently left the impression that Obama preferred his staff’s company to that of the paying guests.

“Obama is very meticulous—they have clockwork timing,” one of the attendees says. “After a few minutes at each table, a staffer would come and tap him on the shoulder, and he’d get up. But when people pay thirty thousand they want to talk to you, and take a picture with you. He was trying to be fair, and that’s great, but every time he started to have a real conversation he got tapped.”

The attendee appreciates that such events must get tiresome for Obama. “Each person, at each table, says to the President, ‘Here’s what you have to do . . .’ At the next table, it’s the same.” Even so, he noted that Bill Clinton—who set the gold standard for the art form known as “donor maintenance”—would have presided over the same event with more enthusiasm: “He would have stayed an extra hour.” After that Four Seasons dinner, the attendee adds, “people were a little mad.”

Top Obama donors began grumbling on the first day of the Administration. “The swearing-in was the beginning of pissing off the donors,” a longtime Washington fund-raiser says. “During the inaugural weekend, they didn’t have the capacity to handle all the people who had participated at the highest levels, because there were so many.” One middle-aged widow, from whom the fund-raiser had secured fifty thousand dollars, got four tickets to the swearing-in, but none of them were together. “She was so offended!” the fund-raiser says. “And I got no credit, by the way, for bringing her in. Important donors need to be cultivated so that they’re there four years later.”

As the Washington fund-raiser sees it, the White House social secretary must spend the first year of an Administration saying, “Thank you, thank you, thank you.” Instead, the fund-raiser says, Obama’s first social secretary, Desirée Rogers—a stylish Harvard Business School graduate and a friend from Chicago—made some donors feel unwelcome. Anita McBride, the chief of staff to Laura Bush, says, “It’s always a very delicate balance at the White House. Do donors think they are buying favors or access? You have to be very conscious of how you use the trappings of the White House. But you can go too far in the other direction, too. Donors are called on to do a lot. It doesn’t take a lot to say thank you.” One of the simplest ways, she notes, is to provide donors with “grip-and-grin” photographs with the President. “It doesn’t require a lot of effort on anyone’s part, but there’s been a reluctance to do it” in the Obama White House. “That can produce some hurt feelings.”

Big donors were particularly offended by Obama’s reluctance to pose with them for photographs at the first White House Christmas and Hanukkah parties. Obama agreed to pose with members of the White House press corps, but not with donors, because, a former adviser says, “he didn’t want to have to stand there for fourteen parties in a row.” This decision continues to provoke disbelief from some Democratic fund-raisers. “It’s as easy as falling off a log!” one says. “They just want a picture of themselves with the President that they can hang on the bathroom wall, so that their friends can see it when they take a piss.” Another says, “Oh, my God—the pictures, the fucking pictures!” (In 2010, the photograph policy was reversed; Rogers left the Administration that year.)

Creating a sense of intimacy with the President is especially important with Democratic donors, a frustrated Obama fund-raiser argues: “Unlike Republicans, they have no business interest being furthered by the donation—they just like to be involved. So it makes them more needy. It’s like, ‘If you’re not going to deregulate my industry, or lower my taxes, can’t I at least get a picture?’ ”

Democrats involved in the 2012 campaign say that the President and his White House staff have markedly improved their donor-maintenance skills. In June, Obama spent an evening attending a successful forty-thousand-dollar-a-head fund-raiser, along with Bill Clinton, in the Upper East Side town house of Marc Lasry, the billionaire C.E.O. of Avenue Capital Group. (Clinton is expected to help at other such events.) But if Obama hopes to catch up with his Republican opponent, Mitt Romney, in the 2012 money race, he will need to get a lot more rich Democrats to empty their pockets.

In the past, a President’s ability to charm the super-rich might not have mattered much. A decade ago, however, wealthy Democrats and Republicans began circumventing limits on direct campaign contributions by making enormous donations to political groups that were technically separate from campaigns but effectively served as their proxies, often by funding negative ads. In 2004, the outspoken liberal financier George Soros gave $27.5 million—then a record amount—to groups opposing President George W. Bush. The strategy provoked widespread censure. (The Republican National Committee accused Soros of having “purchased the Democratic Party.”) Richard Hasen, an election-law expert at the University of California at Irvine, says that “a legal cloud hung over” such efforts to sway elections. But in 2010 the Supreme Court, in the landmark case Citizens United v. Federal Election Commission, ruled that groups could make “independent expenditures” without limits, because such spending amounted to “political speech.” Subsequently, a lower court ruled, in Speechnow.org v. Federal Election Commission, that individuals could pool unlimited resources in order to support or criticize candidates, as long as these efforts were not explicitly coördinated with official campaigns. Since then, the number of indirect gifts has soared, giving rise to the “Super PAC,” and very wealthy Americans have begun wielding increasingly disproportionate power in U.S. politics.

As Politico reported recently, a pool of only twenty-one hundred people has given a total of two hundred million dollars to the 2012 campaigns and their Super PACs—fifty-two million dollars more than the combined donations of the two and a half million voters who have given two hundred dollars or less. In other words, the top .07 per cent of donors are exerting greater influence on the 2012 race than the bottom eighty-six per cent. And this accounts only for publicly disclosed donations: much of the money raised during this election cycle consists of secret gifts to “nonprofit public-welfare” groups that claim to have no overt political agenda.

Obama’s 2012 campaign has held a record number of fund-raisers, but it has focussed on collecting the relatively small sums of money that can be contributed directly to a federal candidate’s campaign. This year, the limit on such “hard” donations is five thousand dollars per candidate, and thirty thousand eight hundred dollars to a national political party. Obama has consistently led Romney in direct donations, though the gap is narrowing. Romney, however, has overwhelmingly outpaced Obama in the kind of “mega” donations that have flourished since the Citizens United ruling. By the end of July, the two biggest Super PACs allied with Romney, Restore Our Future and American Crossroads, had raised about a hundred and twenty-two million dollars. The most prominent Super PACs allied with Obama, Priorities USA Action and American Bridge 21st Century, had raised only about thirty million.

By August, at least thirty-three American billionaires had each given a quarter of a million dollars, or more, to groups whose aim is to defeat Obama. At this point in the campaign, most of that money is funding attack ads in swing states like Colorado and Virginia. Federal-election reports indicate that twenty-seven of those billionaires have given large donations to Restore Our Future, which was founded by former Romney aides, and to American Crossroads, which was conceived by the Republican political operative Karl Rove. News reports have linked six of the billionaires to nonprofit social-welfare groups that aren’t required to identify contributors. Earlier this month, one of those groups, Americans for Prosperity—which was founded, in part, by the billionaire industrialist brothers Charles and David Koch—purchased a reported twenty-five million dollars in advertising time; the spots are now airing on television stations in eleven swing states. Though Americans for Prosperity is purportedly nonpartisan, its ads attack Obama for presiding over a growing federal deficit.

According to ProPublica, Americans for Prosperity and another conservative group have accounted for more than eighty per cent of spending by social-welfare nonprofits in the 2012 election cycle. Conservative social-welfare groups have already spent some seventy million dollars on television ads, whereas liberal groups have spent only $1.6 million.

Meanwhile, only three billionaires have contributed at least a quarter of a million dollars to Priorities USA, the largest pro-Obama Super PAC. George Soros has given money to the Super PAC American Bridge, which produces opposition research for liberal candidates. Warren Buffett, America’s second-richest man, is one of Obama’s most high-profile supporters, but he has declared that he will not support Super PACs, saying, “I don’t want to see democracy go in that direction.”

This imbalance has caused alarm among Democratic strategists, and Obama has warned—perhaps with some exaggeration—that, unless wealthy supporters make large gifts, he will become the only sitting President in recent history to be outspent in a campaign. In June, The Daily Beast obtained a recording of a fund-raising call that Obama made from Air Force One, in which he told potential donors not to be surprised if a couple of Republican billionaires “wrote twenty-million-dollar checks” to buy “all the TV time,” leaving Democrats “flat-footed in September or October.”

It’s not easy for Obama to play the current money game, since he has repeatedly called it an unethical contest. He reserved some of the harshest words of his Presidency for the Citizens United ruling, saying that he couldn’t “think of anything more devastating to the public interest.” Indeed, advocates of campaign-finance reform think that it’s perverse to fault Obama for being insufficiently solicitous of billionaires. Meredith McGehee, the policy director of the Campaign Legal Center, says, “The whole question of whether the President’s donors are happy just boils down to how corrupting this whole system is. That the President, with all the other things on his plate, has to worry about keeping high rollers happy is just sad.” She adds, “We’re heading toward plutocracy, pretty clearly.”

David Axelrod, the senior strategist of Obama’s 2012 campaign, warns that the Citizens United decision may have permanently tilted the playing field away from not just Obama but all future Democratic candidates. “The Supreme Court is saying that campaign spending is a matter of free speech, but it has set up a situation where the more money you have the more speech you can buy,” Axelrod says. “That’s a threatening concept for democracy.” He adds, “If your party serves the powerful and well-funded interests, and there’s no limit to what you can spend, you have a permanent, structural advantage. We’re averaging fifty-dollar checks in our campaign, and trying to ward off these seven- or even eight-figure checks on the other side. That disparity is pretty striking, and so are the implications. In many ways, we’re back in the Gilded Age. We have robber barons buying the government.”

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Arnold Hiatt, the former chairman of Stride Rite shoes, has been one of the most consistent liberal donors in recent decades, and also one of the most vocal proponents of public campaign financing. Though he is sympathetic to Obama’s fund-raising challenges, he also thinks that the campaign may have miscalculated. “The people who have the wherewithal have not been cultivated,” he says. “Citizens United didn’t come along until quite late. I think Obama thought he wouldn’t need those people.”

As Hiatt sees it, “Obama is in a bind.” Throughout his career, the President has supported campaign-finance reform. Not only did he speak out against the Citizens United ruling; he initially declined to encourage supporters to donate to Priorities USA. By the end of 2011, however, Obama’s campaign managers had realized that Super PACs opposing the President posed a lethal threat. At Obama’s campaign headquarters, in Chicago, Jim Messina, the campaign manager, wrote “$800,000,000” on a whiteboard, and told Axelrod that the Republicans’ indirect-donation network was capable of raising at least that amount to defeat Obama.

In February, after considerable debate, during which some advisers urged the President to stick to his principles and preserve his opposition to Citizens United as a political issue, the campaign bowed to the new economic reality and announced that it would begin encouraging donations to Super PACs that supported Obama’s candidacy. Campaign officials even promised to send Administration members to speak to potential Super PAC donors—though Obama would not do so himself.

“We concluded we couldn’t play touch football if they were playing tackle,” Axelrod says, adding that the eight-hundred-million-dollar figure now looks quaint. He says that Republican spending in the Presidential race, including that of outside groups, may exceed $1.2 billion.

Hiatt worries that Obama’s reversal may be too little, too late. “He said he’d accept money from Super PACs, but he’s done nothing to encourage it,” Hiatt says. “It’s cost him dearly.”

Hiatt is a member of the Democracy Alliance, a group of wealthy liberal donors led by Rob McKay, an heir to the Taco Bell fortune. In November, Hiatt asked the President to speak to the group, but Obama declined; the White House said that he was too busy. In June, 2011, the Federal Election Commission announced that candidates could be “featured guests” at Super PAC events, but such interactions remain a legal gray area. Hiatt believes that Obama was concerned that giving the speech would violate the spirit of campaign-finance law, which bars candidates from “coördinating” with outside fund-raising groups.