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Obama’s Flip-Flops on Money in Politics: A Brief History

Critics say the president’s plan for a new nonprofit group to push his second-term agenda opens the door to influence by corporations and other big donors.

President Obama at the Inaugural Ball on Jan. 21. In a reversal this year, the inaugural committee accepted corporate donations. (Alex Wong/Getty Images)

When President Obama told supporters that he would morph his campaign into a new nonprofit that would accept unlimited corporate donations, the announcement set off a familiar round of griping from campaign finance reformers.

The creation this month of Organizing for Action, which will promote the president’s second-term agenda, appears to be the fourth reversal by Obama on major money-in-politics issues since 2008.

“No big bank or corporation will donate million-dollar checks to OFA without the expectation that it will impact which issues they engage on, and that’s very troubling,” said Adam Green of the Progressive Change Campaign Committee.

The Washington Post noted that in reorganizing his campaign as a tax-exempt social welfare group, the president is embracing a structure that has been criticized for allowing anonymous money into politics.

Conservatives who’ve been attacked by the Obama camp for their reliance on such “dark money” groups called out the president’s “brazen hypocrisy.” Neither the White House nor Organizing for America responded to requests for comment.

Here’s a brief history of Obama’s other shifts on money-in-politics issues going back to 2008:

  • Public financing

In November 2007, then-Sen. Barack Obama pledged to take part in the presidential public financing system for the general election, calling himself “a longtime advocate for public financing of campaigns.” Under the system, created in the wake of Watergate, a candidate receives taxpayer money ($84 million in 2008) and cannot accept most private donations or spend beyond the amount of the government grant.

Less than a year later, in June 2008, Obama reversed himself and announced he was opting out of the system. He maintained he still supported the system in principle but said it should be reformed.

Obama became the first candidate to decline general election public financing since the creation of the system and went on to raise a then-record $745 million for the cycle. He outspent John McCain, who did accept public money, by four-to-one. Obama’s 2008 decision generally takes at least some of the blame from campaign finance observers for killing the system.

Neither Obama nor Mitt Romney accepted public financing in the 2012 race. The Obama campaign raised $782 million for the cycle.

  • Super PACs

When the U.S. Supreme Court issued its 2010 Citizens United decision, opening the way for the creation of super PACs financed with unlimited corporate or individual money, Obama became the ruling’s biggest critic.

“Last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests — including foreign corporations — to spend without limit in our elections,” Obama said in his State of the Union address a few days after the decision. “I don't think American elections should be bankrolled by America's most powerful interests, or worse, by foreign entities.”

That criticism turned into a pledge not to use the new funding vehicles. In July 2011, Obama campaign spokesman Ben LaBolt told the Washington Post: “Neither the president nor his campaign staff or aides will fundraise for super PACs. Our campaign will continue to lead the way when it comes to transparency and reform.”

Seven months later, the campaign reversed itself and embraced a super PAC founded by former White House aides called Priorities USA Action. “[O]ur campaign has to face the reality of the law as it currently stands,” wrote campaign manager Jim Messina in a blog post.

With the blessing of the campaign, top Obama aides, such as then-Chief of Staff Jack Lew and confidantes like Rahm Emanuel, were dispatched to solicit super PAC donations from Democratic millionaires and billionaires. Priorities USA ultimately spent more than $60 million to help re-elect the president.

  • Inaugural festivities funding

After Obama’s victory in 2008, his inaugural committee abided by what it called “an unprecedented set of limitations on fundraising as part of President-elect Obama’s pledge to put the country on a new path.” That meant taking no corporate money and no individual contributions in excess of $50,000 to pay for the myriad parties and balls that end up costing tens of millions of dollars.

The second time around, Obama reversed the policy. The inaugural committee organizing this month’s inaugural festivities accepted corporate money and imposed no limits on giving. A spokesperson cited the need to “meet the fund-raising requirements for this civic event after the most expensive presidential campaign in history.”

  • Unlimited special interest spending

Just a few months ago, the Obama campaign sent me a memo on the president’s campaign finance record, highlighting his repeated denunciations of special interest money in politics.

“That’s one of the reasons I ran for President: because I believe so strongly that the voices of ordinary Americans were being drowned out by the clamor of a privileged few in Washington,” he said in May 2010, decrying the way Citizens United “gives corporations and other special interests the power to spend unlimited amounts of money — literally millions of dollars — to affect elections throughout our country.”

In 2012, the Obama campaign specifically called out social welfare, or 501(c)(4),  groups that spent hundreds of millions of dollars of anonymous money on political ads.

That’s why campaign finance reformers are so angry: Organizing for Action is a 501(c)(4) that will advocate for the president’s second-term agenda.

The group has said that despite its status, it will voluntarily disclose donors. But it’s not clear whether that will involve full, prompt disclosure of who is giving and how much, or simply providing a list of names at some point.

A spokeswoman for the new group told NBC this week the disclosure issue is “still being worked out.”

Unnamed Democratic officials have told media outlets that the group will take corporate money (though not donations from registered lobbyists). Indeed, at a meeting this month at the Newseum in Washington, Obama campaign aides pitched top Democratic donors, reported Politico, which obtained a ticket to the event.

The meeting was sponsored by a trade association founded by Fortune 100 companies, including UnitedHealthcare, Microsoft, Wal-Mart, and Duke Energy.

Social welfare groups are formed to promote the common good and may be involved in politics. Under IRS rules, they are not supposed to be primarily engaged in campaigns.

It’s unclear whether Organizing for Action will get involved in electoral politics as other such nonprofits have in recent years. The group’s spokeswoman told NBC it will run “issue” ads to support Obama’s agenda — but that’s a category of political advocacy that has been open to wide interpretation.

It’s obvious that If Obama had stuck to utilizing his “what should be” principles of campaign financing, he’d have lost in a landslide. He had to utilize “what is” in order to compete.

The real question is how the *@&^!! do we change it? Anyone who can fog a mirror realizes effective campaign finance/lobby reform is at the heart of finding measures to resolve the corrupting forces which continue to rot out our political system.

oh for Christ’s sake Justin.  Grow up and give it a break and what’s with the sinister finger in the camera picture.  Some times flip flops are good.  This is one of those times

It never fails to amaze me how people are willing to put up with this crap as long as it’s Obama doing it. Any other good flip flops? Like Gitmo, habeas corpus, rendition, public option, war crimes/torture investigations, wall st. investigations, undeclared wars, any of it? Any at all? Bueller? Bueller?

S.S.D.D.  politics-as-usual in the Last Days of the American Empire.

He’ll magnificently deserve to become “Obama the Great” when faceless super-wealthy guys will lose the indirect-gun-power of traditionally running the global political shows in 2020.

This president is teflon. The press got him elected. And they are keeping him insulated from criticism. It appears the chocks and balances of this once great system have fallen. The US is on target to follow much of europe due to politicians buying power with handouts. RIP a once great country.

Shay, nice theory, but nobody stopped Bush, either.

The system (“machine” might be a better term) got them both elected and gave them their scripts.  Whatever they believed in before they got into office, now they believe what the big donors tell him to believe.

If Gore, Kerry, McCain, or Romney had won, the script would be the same.  Honestly, Obama won because the people believe in the principles behind his campaign platform, and I imagine it’s better to vote for empty promises than accept that the system has become a mockery, used to divide us while Washington and Wall Street laugh their way to the offshore bank.

I’ve said it before and I’ll say it again:  Use your votes wisely and boycott the big parties.  Refuse to vote for anybody who accepts large, anonymous, corporate donations.  Refuse to vote for anybody who tries to win by outspending, as if we can be tricked if only we see enough commercials.  Refuse to vote for anybody whose campaign wants to monitor your actions.

The easiest way to exterminate vermin is to scare it out of their hiding places.  And the easiest way to scare power-brokers into the open is to force them to claim victory under bad conditions.  If we can drive a “victorious” to only winning, say, 40% of the electors, that’ll send a powerful message.

James M. Fitzsimmons

Jan. 31, 2013, 11:51 a.m.

The fact that you have published this article demonstrates that good faith reporting exists, at least outside of the mainstream media. Our future as a decent country in which to live depends to a significant degree upon objective reporting about politicians and their self serving behavior. The alternative is to live in a fantasy as our country goes down the tubes.

How about stimulus money going to Acorn?  This President is as corrupt as any other President has ever been.  However, after viewing the interview with Barrack and Hillary, it is clear that no critical reporting on him will be done.  Afterall the cover-up brought down Nixon, not the crime, so without a Woodward and Bernstein, nothing will happen on Ben Ghazi either, except for the media fawning over Hillary.

“Use your votes wisely and boycott the big parties.”

You have it right, John. I have voted Libertarian since I could vote(1980). What I don’t understand is, now that we have the Internet, why does it cost hundreds of millions of dollars to put on any political campaign? Something sure smells fishy.

Aileen Cheetham

Feb. 2, 2013, 9:23 a.m.

Can you put a ” Vote Button” by the comments please, just because it eases my frustration and also gives a snapshot of what matters to how many people too?

The Electoral System is a really big industry it seems.
Wish the poor, unemployed, uneducated and homeless got the same backing for AID and JOBS, globally too

Alison Hartson

Feb. 5, 2013, 12:40 a.m.

Whether or not you think Obama was justified to flip-flop on this issue, we all know that money in politics is turning our democracy on its head and sending us straight to oligarchical rule. Someone asked, what can we do about this, suggesting that we are helpless. BUT! there are thousands of people rallying behind the movement to overturn Citizens United and amend our constitution in order to save our republic. If you are interested in actually creating change, you CAN help and be a part of the next huge movement in our nation. Please follow me on Twitter @Alison_Hartson and/or do some internet research (99rise, WolfPac, SB 52 CA DISCLOSE Act, etc. etc. etc.). There is so much happening right now from the grassroots level, but the only way we can change this corruption is if each of us stands together, stops the cyclical banter about a situation we agree is corrupt, and demand that politicians represent the voices of millions, not the millions of dollars by few. This is a bi-partisan issue. This is an American issue. Will you join me?

Nice thinking and wishfulness!
Lets reciprocally join in.

I really like how when Bush did something bad every liberal and democrat was up in an uproar, but now that Obama does those same things its all of a sudden acceptable. I hated Bush for the unethical abuse of power and I’ll hate Obama for the same things. The reason this nation is on the downturn is people don’t keep the politicians they support in check so they can do whatever they want.

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