Head of the Donor Class

Obama bundler heads secretive, massive group of liberal billionaire donors

July 24, 2012

One of Barack Obama’s largest campaign bundlers is also the leader of a secretive Democratic money machine.

Kelly Craighead, who has pledged to raise at least $500,000 to Obama’s reelection campaign, serves as president and managing director of the Democracy Alliance, a group of wealthy Democratic donors founded in 2005 with seed money from left-wing billionaire George Soros.

The Alliance serves as a clearinghouse that connects donors to endorsed organizations—such as the Center for American Progress and the pro-Obama Super PAC Priorities USA—without threat of disclosure. The Alliance is not listed in any phonebook, and does not disclose its donors or endorsed organizations.

"This helps the donors dodge disclosure laws, and grants them anonymity," said campaign finance expert John Samples. "By giving to a group like Democracy Alliance, it reduces your risk in an election year if your company may have business with the government and doesn’t want to lose that under a potential Romney administration."

Craighead has no need for anonymity. She served as a top aide to former First Lady Hillary Clinton and later worked for her U.S. Senate campaign.

Nor has Craighead avoided shadowy political groups or fundraising practices. She became embroiled in a federal investigation into Clinton’s fundraising during the 2000 campaign. Federal authorities later indicted Clinton campaign Financial Director David Rosen for lying about the campaign’s fundraising costs.

Rosen allegedly doctored records to hide $700,000 in costs in connection to a $1.2 million celebrity gala—a move designed to free up cash for the campaign. A prosecution witness testified that Craighead knew Rosen had manipulated the costs and did nothing to fix the error.

Craighead never took the stand, though she was on the witness list. A jury acquitted Rosen, who moved to Illinois where he managed the campaign finances of Obama ally Gov. Pat Quinn before joining Eudora Global, a consulting firm founded by Vice President Joe Biden’s son, R. Hunter Biden.

Calls to Rosen’s office were not returned.

The investigation had little impact on Craighead’s rise among elite Democratic fundraisers. In 2004, she helped establish the fundraising base that enabled Media Matters to become one of the nation’s most lucrative political groups.

Her contributions to the leftwing media watchdog were more than financial. Soon after she joined the staff at the Democracy Alliance, the group began pumping millions into Media Matters, providing a $6 million boost over the Alliance’s first two years.

Craighead’s role in the Alliance has only grown. As managing director, she helps direct each Alliance member’s $200,000 annual membership commitment to a number of progressive groups and Democratic Super PACs.

The move to fund Super PACs has caused some controversy. The Alliance was founded to build up grassroots progressive groups and campaign infrastructure to boost Democratic organization in swing states and districts.

The group announced a new direction in February when it decided to work more closely with Democratic Super PACs and well-funded organizations such as Media Matters and the Center for American Progress. The push to concentrate aid on elite groups tied to the White House reportedly alienated an Alliance’s founder, billionaire Peter Lewis.

Democracy Alliance did not respond to multiple emails requesting comment.

Craighead’s ties to the Obama campaign mirror those of the Alliance, which has focused more on election year politics, rather than progressive policies, according to Jacob Laksin, coauthor of The New Leviathan: How the Left-Wing Money-Machine Shapes American Politics and Threatens America's Future.

"Initially it was supposed to dispense money to progressive groups; but as it’s emerged over the years, it’s an engine for the Democratic Party," Laksin said. "The focus is on spending money on groups that are specifically aimed at electing Democrats."