In fine print, a proliferation of large donors

By Michael Luo and Griff Palmer

updated 3:40 a.m. ET Oct. 21, 2008

Much of the attention on the record amounts of money coursing through the presidential race this year, including in Senator Barack Obama’s announcement on Sunday of his $150 million fund-raising haul in September, has focused on the explosion of small donors.

But there has been another proliferation on the national fund-raising landscape that was not fully apparent until the latest campaign finance reports were filed last week: people who have given tens of thousands of dollars at a time to help the candidates.

Enabled by the fine print in campaign finance laws, they have written checks that far exceed normal individual contribution limits to candidates, to joint fund-raising committees that benefit the candidates as well as their respective parties.

Many of these large donors come from industries with interests in Washington. A New York Times analysis of donors who wrote checks of $25,000 or more to the candidates’ main joint fund-raising committees found, for example, the biggest portion of money for both candidates came from the securities and investments industry, including executives at various firms embroiled in the recent financial crisis like Bear Stearns, Lehman Brothers and AIG.

The joint fund-raising committees have been utilized far more heavily this presidential election than in the past. Mr. Obama’s campaign has leaned on wealthy benefactors to contribute up to $33,100 at a time to complement his army of small donors over the Internet as he bypassed public financing for the general election. More than 600 donors contributed $25,000 or more to him in September alone, roughly three times the number who did the same for Senator John McCain.

And Mr. McCain’s campaign, which had not disclosed most of these donors until last week, has taken the concept to new levels, encouraging deep-pocketed supporters to write checks of more than $70,000, by adding state parties as beneficiaries of his fund-raising.

All told, each candidate has had about 2,000 people give $25,000 or more to his various joint fund-raising committees through September.

“What we’re seeing is an emphasis on the high-end check that we have not seen since the days of soft money,” said Anthony J. Corrado Jr., a campaign finance expert at Colby College in Maine.

The Times examination of donors who wrote checks of $25,000 or more through September found some notable differences in the industries from which Mr. Obama and Mr. McCain drew their largest contributions.

Compared with Mr. Obama, Mr. McCain drew a slightly larger percentage of his big-donor money from the financial industry, about a fifth of his total. The next biggest amount in large checks for Mr. McCain came from real estate and then donors who identified themselves as retired. With his emphasis on offshore drilling, Mr. McCain has also enjoyed heavy support from generous benefactors in the oil and gas industry, a group Mr. Obama drew relatively little from.

After the financial arena, Mr. Obama drew the most in checks of $25,000 or more from retirees and lawyers — Mr. McCain collected significantly less in large donations from lawyers — followed by those in real estate.

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Mr. Obama also drew a significant amount from big givers in the entertainment industry, who contributed relatively little to Mr. McCain. In contrast, donations from the private equity and hedge fund industries accounted for a significantly greater amount of the giving from Mr. McCain’s largest donors, compared with Mr. Obama’s.

Certain companies were especially generous to a particular candidate. Three top executives of Merrill Lynch, for example, wrote checks of $28,500 each to Mr. McCain; among them was the chief executive, John A. Thain. A dozen employees at Goldman Sachs wrote checks of $25,000 or more to Mr. Obama.

Donations to these joint fund-raising committees have surged this election cycle, taking in nearly $300 million this year through September — with Mr. McCain collecting slightly more than Mr. Obama — compared with $69 million in 2004. Campaign finance watchdogs call it a worrisome trend, saying the heavy emphasis on such arrangements brings candidates one step further into the embrace of major donors.

“This is subverting the whole notion of candidate contribution limits,” said Steve Weissman, associate director for policy at the Campaign Finance Institute.

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