Raising money won't be as easy this time around, some of the president's donors warn. Team Obama's 2012 cash challenge

Bracing for a half-billion-dollar onslaught of outside GOP cash in 2012, President Barack Obama’s advisers are quietly working to bring back together the major donor base that produced a record-breaking fundraising haul in his first run for president.

In the past few months, Democratic National Committee aides have contacted several of Obama’s earliest financial backers to brainstorm about when and where to host the first money-raising events. Several big donors said they expect the Obama 2012 operation to open its doors this spring, with a string of fundraisers to generate the early cash needed to rebuild the president’s high-tech campaign operation.


But already some of Obama’s top financial backers are warning the White House: Raising money won’t be as easy this time around.

“They are getting organized in Chicago to start a massive two-year campaign, which I believe will be successful, but has extraordinarily large challenges in some of the major states,” said Philadelphia philanthropist Peter Buttenweiser, who hosted one of the first Obama presidential fundraisers in 2007 and is in talks to organize an early one for the re-election.

Obama’s team is running into resistance in at least one key fundraising hub — New York City, where some of Obama’s biggest 2008 backers have bitterly protested last year’s passage of financial reform legislation and what they perceived as an unfair bad-mouthing of bankers during the debate.

Obama was scheduled to go to New York this week to meet with about 25 large bundlers and supporters – and maybe clear the air – but that event was canceled after the Tucson shootings at the congressional event of Rep. Gabrielle Giffords (D-Ariz.), according to one prominent New York fundraiser.

In other places, such as Pennyslvania, top donors say Obama has to get in line behind other candidates who need the cash more urgently. And some donors are worried that the party has been slow off the mark in responding to the latest onslaught of GOP fundraising, millions of dollars raised from secret donors by a variety of Republican outside groups, including two associated with former Bush advisers Karl Rove and Ed Gillespie.

Wealthy donors and the Democratic operatives anxious to start up competing outside organizations that can blunt the Rove groups are growing frustrated as they await more specific direction from the Obama team about what form those efforts should take and who should lead them.

In interviews, several said two developments could quickly set things in motion: Creation of an outside group by an obvious Obama insider, or a major donation from a high level Obama supporter, such as Chicago fundraiser Penny Pritzker, to an existing group.

So far, neither of those things has occurred even as the GOP groups ready themselves for the race. “We are stumbling around,” said one Democratic fundraiser and activist.

To be sure, it’s early, and Obama and his team have proven to be prodigious fundraisers. In 2008, the president raised $745 million and became the first nominee in modern history to decline public funding and finance his campaign entirely with private money.

Simply duplicating that record-breaking sum would be a feat, particularly when Obama’s candidacy won’t be softly wrapped in the inspirational and historic themes of his first race, but he’ll run on an ambitious record of legislative accomplishments – victories that haven’t yet been embraced by his liberal base but have energized his Republican adversaries.

Among the fundraising meccas that could prove most vexing is New York City, which ranked as the top metropolitan fundraising source for Obama’s presidential campaign three years ago, producing $42 million in donations, according to the Center for Responsive Politics, a nonpartisan tracker of political money.

A good chunk of that cash came from hedge fund investors who were drawn to Obama’s pledges to usher in a new way of doing things in Washington. Although the White House sent senior aides, such as Axelrod, Valerie Jarrett and Austan Goolsbee, to try to assuage the angst, not everyone has been mollified.

Daniel Loeb, founder of the Third Point Management hedge fund, wrote a scathing December rant to fellow Obama Wall Street bundlers – fundraisers who tap their own networks of friends to drive cash to the campaign — suggesting the perfect holiday gift for each of them: A book about battered wives who can’t leave their abusive husbands.

“I am sure, if we are really nice and stay quiet, everything will be alright and the President will become more centrist and that all his tough talk is just words,” Loeb wrote. “I mean when I am alone with him – at $30,000 a plate fund raisers – he’s really nice and once I got invited to the White House!”

The one piece of Obama’s fundraising apparatus that has been managed closely since his inauguration is his online, small donor base. That list of supporters has been maintained by Organizing for America, which was a wing of the 2008 campaign that moved into the Democratic National Committee.

Hari Sevugan, a DNC spokesman, would not comment on the size of that list today. However, DNC campaign finance reports suggest it remains potent. The committee raised $16 million in October — and 97 percent of the contributions were from small donors.

But a billion dollar presidential re-election bid is unlikely to be launched or sustained for long exclusively with small donors. Even in 2008, Obama’s eye-popping online giving was matched with larger donations generated by roughly 700 big and small bundlers.

Rebuilding that half of his financial operation is critical to his prospects and talk of it dates back to before the midterms when the president hosted a string of late summer DNC fundraisers.

Attached to each of those large events was a smaller gathering where Obama had private time with his biggest bundlers and talk inevitably turned to 2012.

“We recognized in the midterm elections in 2010 that those outside groups were a big factor and we will have to deal with” that new threat, said Kirk Rudy, a deputy DNC finance chairman and an Obama fundraiser in Austin, who attended a Texas meeting.

Major bundlers from Hollywood, Chicago, and New York were among those who gathered for dinner in a private banquet room at the Mandarin Oriental Hotel in Washington before another DNC fundraiser.

Stewart W. Bainum, head of Choice Hotels, said that after a briefing by David Plouffe, who will soon replace Axelrod as a senior presidential adviser, the president spent about an hour taking questions and going from table to table to talk with his high-dollar donors and to field any concerns.

Bainum and the DNC now are discussing the possibility of an early fundraiser in Maryland. “At some point the pressure will be on me to start doing something for them. We’ll be supportive,” said Bainum. “We are high on the guy. Nobody is perfect. He’s done a great job in my view, given my values.”

Another attendee at the Mandarin meeting said that although it wasn’t an official re-election event, the message to get ready was clear.

“They weren’t handing out marching orders and jobs and titles. It was designed to make sure that they were hearing and communicating with their supporters and getting feedback from them,” the donor said.

“Were they doing that with an eye toward — ‘These are our troops in the re-election?’ Of course they were,” he added. “There are a few pieces on the chess board that need to be put in place before it is time to go.”

Like Bainum, Buttenweiser is considering organizing a fundraiser in the Philadelphia area. But he’s told Obama’s team that it must wait until the re-election committees of Democratic Sen. Bob Casey and others are on solid financial ground.

“In the most important states for the president to win, in every one of them, there is someone up for re-election,” said Buttenweisser, noting Senate contests in Pennsylvania, Ohio and Florida.

Unlike 2008, Democrats no longer hold the governor’s office in any of those states. So, in Pennsylvania, Casey “offers more to President Obama than the reverse. Anything we can do to strengthen Sen. Casey’s re-election, not only does that, but also helps lay the groundwork for President Obama’s re-election.”