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Obama Campaign Worker Discussed PAC Donations

By John Solomon
Washington Post Staff Writer
Friday, November 30, 2007

Democratic Sen. Barack Obama's presidential campaign helped recommend several of the donations his political action committee made in recent months to politicians in key primary states as the campaign was working to secure endorsements, campaign officials said yesterday.

The acknowledgment alters the campaign's original account of how donations were directed and raised questions among some legal experts about whether the presidential committee was using Obama's leadership PAC to benefit his campaign. The Obama campaign said it is confident it complied with the law.

Obama's Hopefund Inc. distributed more than $180,000 in donations to political groups and candidates in the early presidential voting states of Iowa, New Hampshire and South Carolina and more than $150,000 to federal candidates in other states with primary dates through mid-February. The donations accounted for nearly three-quarters of the money the PAC has given out since this summer.

An Obama campaign spokesman last week said that "there is no connection" between the PAC donations and the presidential campaign.

But Bob Bauer, the private counsel for both Obama's campaign and Hopefund, said yesterday that campaign workers were involved over the summer in identifying and recommending possible recipients when Hopefund was deciding how to spend its remaining money. In particular, Bauer said, senior campaign strategist Steve Hildebrand was consulted "multiple times" on potential donations.

Hildebrand was a paid consultant at Hopefund last year and is now a deputy campaign manager.

"He was being paid in part to help us identify targets of opportunity, and to the extent there was any one person who had an overview of what we were trying to accomplish, it was Steve Hildebrand," Bauer said. Asked if other campaign officials also made recommendations, Bauer added, "I have no doubt."

Bauer stressed that Hopefund also solicited input from others, including the fundraising committees for Democratic House and Senate candidates. The PAC also processed requests directly from local candidates. In the end, Bauer said, his law firm made the final decisions and dispatched the donations.

Obama stopped raising money for Hopefund when he announced his presidential bid in January, but he has stood out from some of his rivals by continuing to make donations from Hopefund as the primaries approach. Most other presidential candidates shuttered their PACs.

Bauer said he is confident that the PAC and the campaign complied with rules the Federal Election Commission enacted in December 2003 governing how leadership PACs can operate when their candidate is running for office. "There's not even a remote question about whether this is legal," he said.

Campaign law experts, however, said they were less certain. They noted that the 2003 rules state that any leadership PAC expenditure coordinated with the politician's campaign should be treated as "in-kind contributions" subject to a limit of $5,000. The rules define a coordinated expense as any made in "cooperation or concert with or at the request or suggestion" of a campaign.

"I think this is something the commission should look at. If the money was, in fact, used to help the campaign, was requested by the campaign and coordinated with the campaign, then it could be considered an in-kind contribution," Lawrence Noble, the FEC's retired chief counsel, said.

Former FEC chairman Scott E. Thomas, a Democrat who served on the commission when the 2003 rule was approved, said the FEC at the time was focused more on how to keep PACs from subsidizing presidential campaigns by picking up the costs of polling, salary and other goods and services.

"He is clearly pushing the envelope, no doubt," Thomas said. "I would clearly recommend the commission take another look at this to see if there is some reasonable line that can be drawn so presidential campaigns aren't directing donations from the PAC a few months before the primaries."

While PAC donations went to politicians who endorsed Obama's presidential bid, campaign spokesman Bill Burton said, "Hopefund did not make contributions to obtain presidential endorsements and the campaign never expected or instructed staff to recommend a contribution because it would win an endorsement."

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