Bush 'Bundlers' Take Fundraising to New Level
As chairman, president and chief executive of Safeway Inc., the world's 11th-largest grocery chain, Steven Burd is the nexus of a wide network of subordinates and suppliers, as well as friends in corporate suites. And that is why he will play a critical role in President Bush's effort to raise the largest amount of money ever spent on a presidential campaign -- not by giving a lot of money himself, but by finding a lot of people to give relatively little.
In the jargon of political fundraising, Burd is a bundler.
At two Bush fundraising events in California last month, Burd filled 10 tables with Safeway suppliers, including rice farmers, strawberry growers and a cheese manufacturer, plus representatives of Breyers ice cream, Sunkist produce and Del Monte canned goods who paid $2,000 to hear Bush talk. Each donor wrote a four-digit "solicitor tracking code" assigned to Burd on his check so that the Safeway CEO will receive credit from Bush campaign officials and they can keep a running tally of his efforts. The possible rewards, depending on how much money he can bring in, include cocktails with campaign architect Karl Rove, dinner with Commerce Secretary Donald L. Evans and photo opportunities and sessions with the president.
Bush did not invent bundling, an old practice in fundraising designed to give a collection of small donors more bang for their buck by combining their efforts. But the Bush campaign has refined it and made it the central focus of its money strategy because of the McCain-Feingold campaign finance law and its goal of reducing the role of mega-donors in political campaigns.
Under the law, large "soft money" contributions from corporations, unions and individuals are banned and the limit on legal "hard money" contributions from individuals to candidates was raised from $1,000 to $2,000 -- rules that at least initially were thought to have leveled the playing field for traditionally outspent Democrats. But the quick success and ambitious goals of Bush's fundraisers, who have said they want to raise $170 million but expect to easily surpass that, show the law can work to the decisive advantage of the Republican Party. The GOP can solicit a greater number of $2,000 donations as a result of wide support in a corporate community eager to repay the Bush administration for its pro-business policies. Democrats, in contrast, have depended on trial lawyers and wealthy liberals who do not have large constituencies to draw on.
Bush campaign officials have tried to play down the role of $2,000 donors and the network of affluent fundraisers backing the president. In interviews, the officials stress that the Republican Party has added more than 800,000 small direct-mail donors over the past 30 months. In fact, however, donors who give the maximum or close to it and the people who solicit them have provided the bulk of the money for Bush's campaigns.
Internal campaign documents show that the bundling organization is dominated by corporate CEOs, lobbyists, energy company executives, venture capitalists and investment bankers who can reach tens of thousands of subordinates, customers and subcontractors. The biggest source of new bundlers has been the universe of doctors, corporate defense lawyers and others who favor the Bush administration's proposal to limit lawsuits and to limit the amount that can be recovered for medical malpractice -- legislation that is part of the broad Republican effort known as tort reform.
In New York, the campaign can draw on the chairmen and chief executives of Merrill Lynch and Co., Bear Stearns Cos. and Goldman Sachs Group Inc. In Georgia, top executives at Coca-Cola Co., the Southern Co. and AFLAC insurance are on board. In Florida, sugar barons, real estate developers and the chairman of Wackenhut Corrections Corp., a major federal and state prison contractor, have all joined the Bush bandwagon. And in Washington, the elite of the Republican lobbying community, 116 strong, signed up to raise a minimum of $20,000 each to help win four more years for Bush.
Becoming part of the Bush money machine starts with a pledge card and a commitment to raise a specific amount, from $20,000 to $250,000 or more. A highly successful innovation of Bush's first campaign, which raised a record $101 million, was the designation of "Pioneer" for someone who raised at least $100,000. That designation is also available this campaign, with the promise -- in writing -- of benefits that include "a special Pioneer event with the President," special events at the Republican National Convention in New York and "regular reports" from top campaign officials. But becoming a Pioneer will be tougher.
Last time, Pioneers were given credit for checks collected by people they recruited. Aspiring Pioneers this time around receive credit only for the checks they personally collect. The credit system has touched off fierce jockeying for the contributions of well-known Republicans. Longtime party strategist Rich Galen said that before last month's Bush reception in Washington, he was inundated with requests from Bush fundraisers to write their number on his check.
"I hadn't heard from some of these people in years," he said. Galen chose the number of one longtime friend for his own check, and the number of a second friend for the check written by his wife.
In addition, Pioneer will no longer be the top designation. Those who produce at least $200,000 will be awarded the status of "Ranger," evocative of the Texas Rangers, the baseball team Bush once owned.
The Rangers and Pioneers recruit other Bush supporters as vice chairs, sponsors and host committee members for specific events. These people raise smaller amounts, perhaps $20,000 or $50,000, depending on the event. At the base of the pyramid are the people who write the checks, usually at the behest of an aspiring Ranger or Pioneer.
In an indication of how Bush's network has grown, 17 people signed up to raise $200,000 each as "general chairs" for his June 23 cocktail party at a Manhattan hotel. That amount qualifies each of them as a Ranger. Nine of those prospective Rangers represent new blood for the Bush campaign. The other eight were Pioneers in 2000 and have doubled their commitment from $100,000 to $200,000.
In the 2000 campaign, nearly 60 percent of the money Bush received was in $1,000 donations, the maximum allowed then. He received 59,279 $1,000 donations, or $59.3 million of his $101 million total. The 59,279 donors more than tripled the number of any competitor, according to the Campaign Finance Institute, which is affiliated with George Washington University. Al Gore, who was second in the competition for $1,000 donors, had only 19,298 when running as a sitting vice president. The crucial importance of drawing on a network of colleagues or subordinates was also apparent in that campaign.
Charles M. Cawley, CEO of MBNA, the world's largest independent credit card issuer, for example, was a Bush Pioneer. MBNA employees gave Bush a total of $240,675, according to an analysis by the nonprofit Center for Responsive Politics. Similarly, members of Vinson & Elkins -- the law firm of Pioneer Joe B. Allen -- gave $202,850. Les Brorsen, another Pioneer, is chief lobbyist for Ernst & Young, where employees gave Bush $179,949.
Rove, who remains on the White House payroll for the campaign and has been an energetic promoter of Bush's fundraising events, helped recruit bundlers by holding "pre-sale events" in New York, California and Texas. Before Bush's reception in Los Angeles, Rove chatted up bundlers during a dinner at the ranch of David H. Murdock, the billionaire chairman of Dole Food Co. Attendees said Rove went from table to table, asking for ideas and sharing insights about Bush behind the scenes, then spoke to the group about the campaign's political plans.
The mechanics of the money collection are being run by one of Bush's most loyal political aides, Jack Oliver, who is deputy finance chairman of Bush-Cheney '04 Inc. and who was the chief fundraiser of Bush's last campaign. In between, Oliver stayed in touch with donors as deputy chairman of the Republican National Committee.
Oliver and the Bush campaign have tapped into existing money organizations created by past and present Republican governors, including Bush's brother Jeb Bush in Florida, George E. Pataki in New York, Ohio's Bob Taft, and former California governor Pete Wilson.
The single factor virtually all such donors have in common is that they, their clients, their corporations, their suppliers and their subcontractors are major beneficiaries of the Bush administration's tax-cutting and deregulatory policies.
Almost all of the top Bush fundraisers are in the top 1 percent of the nation's incomes, and many are in the top one-tenth of the top 1 percent. Consequently, they are among those who benefit the most from administration legislation reducing the top income tax rate, the capital gains rate and the elimination of taxation on dividend income.
For instance, four of the chairs for the $2,000-a-person cocktail party in New York were E. Stanley O'Neal, chairman and CEO of Merrill Lynch; James E. Cayne, chairman and CEO of Bear Stearns; Henry A. McKinnell Jr., chairman and CEO of Pfizer Inc., the world's largest drug company; and Henry M. Paulson, chairman and CEO of Goldman Sachs. McKinnell, O'Neal and Paulson committed to raising $200,000 each, and Cayne agreed to raise $100,000.
Looking at salaries and bonuses in 2002 ranging from McKinnell's $5.3 million to Cayne's $10.2 million, Citizens for Tax Justice estimated their 2003 tax savings resulting from Bush-sponsored tax cuts will range from $300,000 to $610,000, and become significantly higher as the decade progresses, particularly if their pay packages grow.
In some instances, the bundlers' employers have also benefited from White House policies. Take Dwight H. Evans, who was on the host committee for a June 20 Bush fundraiser at the Ritz-Carlton Lodge at Reynolds Plantation in Greensboro, Ga. Evans is the executive vice president and president of the external affairs group for the Southern Co., which describes itself as "a super-regional energy company." Southern's holdings include five electric utilities: Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. Evans's responsibilities include directing environmental policy, regulatory affairs and legislative affairs.
Few companies have done as well during the current Bush administration as the Southern Co. The Environmental Protection Agency has curtailed tough regulatory requirements governing improvements at old power plants, and the electricity industry strongly supports the administration's Clear Skies Initiative to change the pollution reduction goals in the Clean Air Act. The administration backs a wide range of subsidies and insurance protections for nuclear energy producers.