Obama Embraces 'Dark Money'

Obama-backed 501(c)4 begins wooing corporate donors

February 4, 2013

The creation of the dark-money group Organizing for Action is a sign President Barack Obama has no intention of repudiating the role of corporate money in political life during his second term, campaign finance experts suggest.

Advocates for reform, which Obama has previously claimed to support, are disappointed by his reversal.

"Organizing for Action marks a complete retreat for President Obama from his pledge to try to change the way we finance elections," said Craig Holman, a government-affairs lobbyist at Public Citizen, a nonprofit organization opposed to corporate money in politics. "It makes a total mockery of any effort to try to limit corporate money."

Organizing for Action, which will replace Obama’s Organizing for America campaign apparatus, will attempt to channel the grassroots energy from the 2012 election into support for the administration’s policy agenda. OFA already has started wooing corporate donors, according to Politico, and will not be required to disclose its funding sources as a 501(c)4.

Politico reported that corporate representatives were asked for contributions at OFA’s unveiling event in January. A spokesperson for Walmart stressed that the company was invited to the event by a group called Business Forward, not Organizing for America.

"That was part of actually a Business Forward event that our executives, vice president, participated in," said a spokesperson for Walmart. "It was a request from Business Forward, not necessarily this OFA organization."

The spokesperson declined to comment on whether Walmart would consider contributing to OFA. Asked whether Walmart executives would have still attended the event if they had known it was for OFA, the spokesperson said, "That’s a hypothetical at this point."

While Obama has said he opposes unlimited and secret corporate campaign funding, he endorsed a Super PAC founded by his former staffers during the election.

"I had been counting on, after the elections, Obama would finally start stepping up to the plate and start getting tough on campaign financing," said reform advocate Holman. "I did not accept the fact that he needed to run a Super PAC to get elected in 2012 ... I didn’t buy the argument—but at least it’s an argument."

"Now that he’s gone through the election, he’s reversed himself on taking corporate money for the inauguration," Holman said. "He’s now reversed himself on taking corporate money for nonprofits."

Supporters of campaign deregulation see OFA’s embrace of corporate cash as a vindication of their arguments.

Bradley A. Smith, chair of the Center for Competitive Politics, said OFA’s decision to reach out to companies like Walmart and Boeing was an acknowledgment from the president that undisclosed corporate money is not necessarily a corrupting influence in politics.

"Obama shows through his actions what he really believes," said Smith. "When he takes these contributions he [shows he] understands ... this is not necessarily corrupting."

Smith, who says he is not concerned about politicians being corrupted by corporate donations, says he is more uneasy that corporations may feel blackmailed into giving money to OFA in order to access federal perks.

"If [they] want to get [their] green subsidies or waivers from Obamacare, then they might feel that it would be a good idea to give to this group," he said. "That to me is more of a worry than the idea that they might gain access to the president or change his opinion."

Smith also said there is something "a little bit unsettling to people about the idea of the sitting president having sort of a populist organization separate from his party. ... [It] sounds third-world, Chavez-like to some people."

Both Smith and Holman said OFA’s promise to not accept money from lobbyists was meaningless if it was going to accept corporate donations.

"[President Obama] may not take money from lobbyists, but that becomes quite insignificant when all the corporations that hire the lobbyists can make unlimited contributions to this entity," said Holman.

The White House and Organizing for Action did not return requests for comment.

OFA plans to use its corporate donations to finance a massive health care campaign. Politico reported the group plans to run radio and TV ads and team up with Enroll America, another pro-Obama organization that is hiring up to 100 new staffers to support the effort.

However, OFA leadership downplayed big-money contributors on a conference call with grassroots activists on Jan. 30 and told local volunteers they would be responsible for funding for their own "chapter" groups.

"We’re not talking about fundraising in terms of going to big shiny dinners and calling up a bunch of folks with big checks," former Obama for America senior advisor Dan Kanninen, who is now assisting the Organizing for Action transition effort, said during the call. "We’re talking about small dollar stuff, at the grassroots, from the community, that can pay for the basic infrastructure that can keep this thing running."

While the OFA leadership said they were not currently accepting resumes, they promised the volunteers they would be the "first to know" if paid positions opened up in the future.

"We don’t know yet how big the organization is going to be here at headquarters," Kanninen said on the call. "We don’t know yet what kind of opportunity there will be down the road for you. But we certainly encourage you to stay in touch and involved because they will eventually present themselves."