News Release

Obama Bypassing Public Finance * Overview * Obama’s Finance Chair


Ritsch is communication director of the Center for Responsive Politics, which operates the web page featuring in-depth information on money in politics. He said today: “When Obama said over a year ago that he would aggressively pursue an agreement to take public financing, he probably didn’t think that he could raise nearly $300 million in the primaries. And I think, more significantly, he probably didn’t expect John McCain to be his opponent. He was thinking maybe Mitt Romney, Rudy Giuliani, people who hadn’t really expressed any support for public financing or even for John McCain’s campaign finance reforms, the McCain-Feingold bill. …

“A significant issue is the 527s and the role they might play this year. The Federal Election Commission decided and ruled that the Swift Boat Vets and some other groups that were active in 2004 behaved illegally, that they were explicitly, overtly and expressly advocating for or against a candidate and that they should have only been able to do that using limited campaign dollars as a campaign or a political action committee could do. Now, they didn’t reach that decision until almost two and a half years after the election was over, and they fined these groups what amounted to about 1 percent of their overall receipts. So it wasn’t a particularly strong deterrent.

“Obama, when you look at the number of donors he has, and he claims almost 1.5 million donors, the vast majority, 90 percent or more, maybe 98 percent, have given him small amounts, maybe less than $200. By our measure, though, when you look at the amount of money that those small donors account for, it’s still the minority of the money. Forty-five percent of his money comes from donors who have given less than $200, 55 percent comes from people who have given more than $200, and 30 percent comes from those who have given $2,300 or more — $2,300 being the maximum contribution you can give for the primary. So he’s still fueled in large part by bigger donations. But if you look at his donor base, it is far more vast than any candidate has ever amassed. His bigger donations early on helped him get the larger number of smaller donations later.”

The Chicago Sun-Times reports that “Warren Buffett headlines a $28,500-per-person event July 2 in Chicago for Obama at the home of Obama finance chair Penny Pritzker,” who has been credited by many for helping Obama break fundraising records.

Bernstein wrote the piece “Obama’s Sub-Prime Conflict” for

Bernstein said today: “Throughout the 1980s, I covered the S&L post-deregulation meltdown, including the Keating Five Senate influence-peddling hearings, which had the current Republican presidential hopeful, John McCain, as one of the senators at the center of a scandal that is all too reminiscent of the current sub-prime mortgage meltdown.

“At the time, I reported on the lack of enforcement against the go-go bankers, who had run up a $500 billion debt, which taxpayers were forced to pick up, and which led to perhaps the largest movement of capital from the working- and middle-class to the rich in modern history –up until the current sub-prime tsunami hit Wall Street.

“So I was impressed by Obama’s get-tough talk, regarding how he was going to deal with the sub-prime cons, and their Wall Street partners, who have been busy running a national scam to suck the lifeblood out of the American dream, by draining the grassroots wealth from the hard-working people, house by house.

“But it turns out Obama’s National Finance Chairperson, billionaire Penny Pritzker, is one of those 80s/90s go-go bankers, who bought a failed S&L for a song, turned it into a sub-prime factory for securitized bonds, to sell on Wall Street, and ran a sub-prime predatory shop for eight years under the radar, from 1993 to 2001. Pritzker bridged the gap between the two scandals: Specifically targeted by the Pritzker operation were poor and working class people of color.

“In a Feb. 9, 2001, letter to the Office of Thrift Supervision, banking expert Bert Ely warned about Superior Bank of Chicago’s insolvency, and expressed his doubt that its owners would take the action necessary to stanch the flow of losses at the federally insured bank. ‘Superior’s owners contributed to the bank’s perilous state,’ Ely stated, ‘by pioneering a new strategy of marketing sub-prime loans to borrowers with dubious credit and then bundling the loans into securities for sale to investors, largely through Wall Street investment houses.’

“The Obama campaign has already been rocked by its first major sub-prime scandal, with the swift resignation of Jim Johnson from the VP search committee after it was revealed that the former Fannie Mae CEO received favorable loan terms from Countrywide, a mortgage lender under investigation by the FBI that Obama has criticized sharply on the campaign trail.

“In the wake of the Johnson resignation, the FBI has arrested two hedge-fund executives, and hundreds of front-end brokers involved in sub-prime operations. Repeated interviews with the FBI spokespeople in Chicago and Washington, D.C., have yielded little information about who’s next on the arrest list.

“What is crystal clear, is that the FBI is investigating the very same type of sub-prime-to-Wall-Street operations that Penny Pritzker, as chair of the board of the failed Superior Bank in Chicago, led the charge on. One high profile supporter and major donor to the Obama campaign, told me he worries that Pritzker’s sub-prime past could end up being a ‘big weight’ on Obama’s hopes for the future, ‘despite her extraordinary talent as a fundraiser.'”

For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020, (202) 421-6858; or David Zupan, (541) 484-9167