By Dan Eggen and T.W. Farnam
Washington Post Staff Writers
Saturday, November 20, 2010; A01
Major Democratic strategists, still reeling from a barrage of midterm spending by conservative groups, are planning a similarly well-funded campaign by liberal organizations aimed at reelecting President Obama in 2012.
The fledgling discussions - including a conference of top Democratic donors that wrapped up in Washington this week - underscore a dramatic shift in strategy by Obama and his aides, who quashed plans for major outside groups in 2008 in order to rely on their own record-breaking donor efforts.
But many chastened Democrats now say they must fight fire with fire by encouraging the formation of counterweights to the GOP-leaning independent groups that dominated the airwaves this fall. One of the leaders, American Crossroads, says it plans to continue running ads against the Democratic agenda for the next two years.
The change in Democratic strategy illustrates the extent of the fundraising earthquake that has shaken the U.S. political world this year. A series of court decisions effectively wiped away decades of campaign-finance restrictions, helping groups operating outside the political parties spend an estimated $500 million on attack ads and other election-related activities, most of it favoring Republicans.
The apparent change of heart is particularly notable for Obama, who has long advocated strict campaign-finance limits and has sharply criticized the Supreme Court for allowing unlimited political spending by corporations. The shift is reminiscent of Obama's pragmatic decision to forgo public financing in 2008 to outpace Republican nominee John McCain, who agreed to spending limits in exchange for federal matching funds.
Obama adviser David Axelrod, who will leave the White House in the coming months to focus on the president's reelection bid, said in an interview: "I don't think we can put the genie back in the bottle" when it comes to campaign spending by outside groups.
"We're going to continue to urge all of our supporters to participate through our campaign," Axelrod said. "But it's unrealistic to think that you're going to have this deluge of spending on behalf of Republican candidates and not engender a reaction on the Democratic side. It's a natural thing."Call for transparency
The one line in the sand from the White House point of view, Axelrod and others said, is transparency: Any groups that arise to help Obama's reelection effort should disclose their donors, although it's unclear how such a plea could be enforced. The groups would have an incentive to avoid full disclosure so they could court donors who want to stay anonymous. And the approach could put Democrats at a disadvantage because many of the largest conservative players - such as the U.S. Chamber of Commerce and Crossroads GPS - are nonprofit groups that do not have to reveal their funders.
Democratic allies have not always been so outgunned: In 2004, liberal political groups outspent their GOP-aligned opponents by nearly 3 to 1. Many activists who attended this week's conference of Democratic donors said there is a growing consensus that a similar effort will be needed in 2012.
"The will to compete effectively and aggressively could not be greater," said Rob Stein, founder of the Democracy Alliance, a group that funds liberal causes and the conference sponsor. "All options are on the table as we figure out how best to compete and play on even terrain."
Stein also welcomed what he called "an affirmative signal" from the White House to move ahead on multiple fronts. "The system is broken, but it's what we have to work with," he said.
The group, founded after Democratic losses in 2004, is backed by wealthy philanthropists such as hedge-fund manager George Soros and Rob McKay, a venture capitalist.
Another prominent liberal activist, Media Matters founder David Brock, has announced plans to launch an independent "527" group - named for a portion of the tax code - that can spend unlimited money but must disclose its major donors. Brock made similar preparations in 2008 until Obama urged him and others to stand down.
Obama has spent much of the past two years railing against the outsize role played by monied interests in Washington politics, including unusually blunt criticism of the Supreme Court's ruling in Citizens United v. Federal Election Commission, which allowed unfettered corporate spending on elections. Republicans have blocked Democratic attempts since the ruling to impose broader disclosure requirements for political spending.
The weak economy and a lack of enthusiasm among well-heeled donors led to a dramatic fall in financial strength for the two political parties this year, accompanied by a rise in the clout of conservative interest groups. Both parties raised less for congressional races in 2010 than in previous cycles, a rare decline in the world of political fundraising.
At the same time, outside interest groups reported spending $270 million for congressional candidates through October, double the amount spent in 2008 and five times the 2006 figure, according to Federal Election Commission data. (The actual totals are much higher because many types of spending go unreported.)
Conservative groups, which outspent their liberal rivals 2 to 1 this year, said they will start their 2012 campaign within weeks. American Crossroads and its affiliate, Crossroads GPS, plan to begin airing a new crop of issue advertising in December that "will help frame the issues debate" for the campaign to come, according to spokesman Jonathan Collegio.
"We fully expect that many of our loudest critics will be imitating our efforts over the next two years, but we're not just sitting and waiting for 2012," he said.
Challenge to compete
Tony Podesta, a major Democratic lobbyist and fundraiser, said the party's supporters will face a challenge in raising enough money to compete with Republicans, who enjoy strong support from business groups and corporate tycoons. Obama's push for Wall Street regulation and other policies have also dampened enthusiasm among many wealthy Democrats, he said.
"As a practical matter, there are lots of people who were very involved in 2008 who will need an enormous amount of persuasion to give again," Podesta said.
Enduring rifts within the progressive coalition could also complicate Democratic efforts. Soros, for example, told activists during the Democracy Alliance conference that liberal groups should focus on pressuring the Obama administration to pursue climate change legislation and other liberal priorities, according to participants.
The remarks left the impression that Soros - a major funder of Democratic and liberal causes - might keep his money out of electoral politics in 2012. Soros spokesman Michael Vachon said Soros still supports Democrats but cautioned against attempting to outspend GOP groups. "I think it's unwise for Democrats to get into a money race with the right," he said. "Ultimately, those on the right are acting in their own economic self-interest."
Whatever help emerges from outside groups, Axelrod said, Obama's reelection bid will be modeled on his successful 2008 effort. Obama's first presidential campaign declined contributions from corporate political action committees, relying heavily on small- and medium-size donors to raise nearly $750 million.
"Our aspiration is to replicate what we did last time and run the largest grass-roots fundraising operation ever," Axelrod said. "Hopefully, the specter of this massive amount of secret money being spent will encourage more participation at the grass roots from people who want to fight back."