President Barack Obama will be raising money among Silicon Valley scions just an hour outside of a newly bankrupt California city.
Obama will attend a pair of $35,800 fundraisers, one in Oakland and one at the Piedmont home of progressive activists Wayne Jordan and his wife, Quinn Delaney. Those events lie just 70 miles from Stockton, the largest city to declare bankruptcy in American history.
The presidential powwow is unlikely to host a large Stockton contingent—the price of admission would eat up 75 percent of an average city resident’s $48,000 salary.
Stockton was the first and the largest of three California cities to enter into bankruptcy proceedings in 2012. Profligate spending doomed the city, according to Gretchen Hamel executive director of Public Notice, a nonprofit group dedicated to fiscal responsibility.
"Obama needs only to look a few miles down the road from his ritzy bay area fundraiser to see the impact of a big spending agenda. Stockton, Calif., is one of numerous municipalities in California and across the country forced to declare bankruptcy under the weight of crushing debt," she said. "The president would be well-served to heed the lessons of these bankruptcies: reform entitlements before they break the bank and balance the budget."
City government went on a "15 year spending binge," according to Reuters, which left it unable to pay off $417 million in retirement benefits to city workers. The pension costs exploded after the city overhauled its healthcare policies, pledging to cover full medical costs of all of its full time employees—many of whom were able to retire at 50.
The area was hit hard by the recession, suffering from the highest foreclosure rate in the nation in 2012. Declining home values decimated tax revenue, but the city’s free-spending habits, including a series of infrastructure projects designed to improve the local economy, were not curtailed. A riverfront overhaul, new sports arena, and revamped city hall produced nearly $150 million in debt the city was unable to sustain. A bank "repossessed city-owned parking garages and a $40 million building the city had bought with plans for an upgraded City Hall" in 2012.
Obama has also staged major fundraisers outside of bankrupt cities in southern California. He raised millions from celebrity donors, including top bundler and DreamWorks CEO Jeffrey Katzenberg, at events in Los Angeles, while neighboring Compton and San Bernadino spiraled toward bankruptcy.
Katzenberg's company is currently under investigation for allegedly bribing Chinese officials.
Jordan, a real estate developer, is Obama’s third most prolific fundraiser, generating nearly $1.4 million for the reelection effort, according to the Center for Responsive Politics. He has been a longtime supporter, raising almost $225,000 in the 2008 campaign. Monday’s fundraiser will be the second at the Jordan house in the 2012 cycle. The couple hosted Obama confidante Valerie Jarrett for a $5,000 a plate dinner in November 2011.