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Romney Fundraising Advantage Fueled by Loyal Cadre of Donors

Friday, 24 Feb 2012 07:48 AM

 

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(For 2012 campaign news, see ELECT.)

Feb. 24 (Bloomberg) -- Thomas Stemberg, co-founder of Staples Inc., last month cut his 17th check to support Mitt Romney’s quest for the presidency. He wrote his first one nine years ago.

Stemberg, now managing general partner at the Cambridge, Massachusetts-based Highland Consumer Fund, is one of 40 donors who have been underwriting Romney’s White House ambitions for almost a decade. Since 2004, they have made a combined $11 million in donations as a down payment on Romney’s political future. Stemberg’s stake, so far, is $100,000.

“Virtually every place he has been, the people who were with him have stayed with him,” said Stemberg, whose efforts to start Framingham, Massachusetts-based Staples were aided by an investment from Bain Capital LLC, a Boston-based private equity firm that Romney co-founded.

The size and endurance of the Romney operation provides insight into the determination, organization and business-like efficiency the former private equity investor has brought to his campaign.

During the past nine years, the contributions have been deposited in two federal leadership political action committees founded by Romney, his two presidential primary accounts, a friendly super-political action committee and five smaller PACs based either in early primary states, such as Iowa, or in states where there are no limits on donations.

Early Money, Preparation

The earliest donations in 2004 through 2006 helped Romney expand his political network beyond Massachusetts in preparation for his first primary bid in 2008. The cash allowed him to travel to meet with party activists and donate money to other Republicans --including influential state legislators, governors and state parties.

From 2006 to 2008, Romney’s committees gave $388,000 to 91 candidates in Iowa, $72,750 to 81 candidates in South Carolina, and $48,750 to 43 candidates in New Hampshire, according to the National Institute on Money in State Politics, a research group based in Helena, Montana.

Paying For Staff

They also paid the salaries of staff members who have since moved to Romney’s presidential campaign, such as current campaign manager Matt Rhoades and campaign press secretary Andrea Saul, Federal Election Commission records show.

Besides Stemberg, Romney’s long-time donors include J.W. Marriott Jr. and his brother, Richard, fellow members of the Church of Jesus Christ of Latter-day Saints who have given a combined $2 million to keep Romney’s presidential hopes alive.

Edward Conard, a former Bain associate; and Peter Karmanos Jr., executive chairman of Compuware Corp., based in Michigan, where Romney’s father, George, served as governor, are also early financiers with combined giving of almost $1.4 million.

Major contributors can also be found in Massachusetts, where Romney governed the commonwealth for four years; on Wall Street, thanks to Romney’s background in finance at Bain; and in Utah, where he was chairman of the Salt Lake City committee for the 2002 Winter Olympics.

Biggest Money Raiser

They’ve helped Romney and the super-PAC backing him raise more money than all of the other candidates for the Republican presidential nomination. Through Jan. 31, Romney raised more than $63 million for his campaign and Restore Our Future, the super-PAC supporting him, took in almost $37 million -- $6.6 million, of which, came from his 40 core supporters.

Former Pennsylvania senator Rick Santorum, his closest rival, has raised $6.7 million. Romney has raised more than nine times that sum, disclosure records show.

‘Had a Dream’

“Mitt had a dream and a goal and he went after it in 2004,” said Trey Hardin, a senior vice president with Vox Global in Washington and a Republican strategist who isn’t supporting any of the presidential candidates. “That’s what’s involved or required to be in the big time these days: Looking way ahead, starting things years in advance, building that foundation, developing those relationships and raising that money.”

Romney broke new ground in 2004 when he established both a federal account and state committees in Alabama, Iowa, Michigan, New Hampshire and South Carolina, all operating under the name Commonwealth PAC. Many of those state PACs allowed donors to contribute more than the federal maximum of $5,000 a year.

After losing the 2008 primary race to Arizona Senator John McCain, Romney reconstituted the network under the name Free and Strong America PAC. Romney’s donors gained a new way to back his candidacy financially when the Supreme Court’s Citizens United decision led to the creation of super-PACs, which can take in unlimited donations.

Financial Advantage

“Romney already held a financial advantage over the other candidates,” said Anthony Corrado, a government professor at Colby College in Waterville, Maine. “What the super-PAC has allowed him to do is build on that by accessing Romney’s network of wealthy donors.”

A look at Stemberg’s donations illustrates how the operation works.

His first check was written in 2004 for $1,700 and donated to Romney’s federal Commonwealth PAC. In 2006, he gave the federal committee the legal limit of $5,000 and donated $15,000 to the Iowa committee, $10,000 to the Michigan outlet, and $5,000 to the New Hampshire arm. The majority of the state committee proceeds were transferred to the federal committee to underwrite the headquarters operations.

Stemberg Donations

When Romney announced his first presidential bid in 2007, Stemberg contributed $2,300, the maximum allowed under federal law. Romney’s federal and state committees sat idle during the primary race because he couldn’t legally use them to support his candidacy.

After Romney withdrew from the primary and re-opened his state and federal committees, Stemberg donated the maximum $5,000 annually to the federal committee from 2008 to 2011. He also gave $5,000 to the New Hampshire committee in 2009. A year later, he contributed $10,000 to Romney’s Alabama committee and $3,500 to the South Carolina account.

When Romney entered the 2012 primary race, Stemberg donated the maximum $2,500 and, thus far, he’s given $20,000 to Restore Our Future.

Marriott Millions

A similar, steady stream of giving applies to the donations of Marriott, chairman of the Bethesda, Maryland-based hotel chain Marriott International Inc., who has given $954,844 to Romney since 2006. Last month, he gave $250,000 to Restore Our Future, bringing his PAC donations total to $750,000.

His brother, Richard, chairman of Bethesda-based Host Hotels & Resorts Inc., has given more than $1 million, including $750,000 to Restore Our Future and more than $90,000 to the Alabama PAC.

Romney’s first name is Willard, named for the Marriotts’ father, the first John Willard Marriott, a friend of George Romney’s.

The presidential hopeful also has received support from his former colleagues at Bain. Conard contributed $4,500 to Romney’s Commonwealth PAC in 2004. He’s now donated more than $1.1 million to support Romney, including $1 million to Restore Our Future. Conard initially set up a corporation, W Spann LLC, to make the $1 million donation, though later said he wrote the check and asked the committee to identify him as the donor.

Karmanos, the executive chairman of Detroit-based Compuware, has given $256,300 to Romney, including donations to his PACs in New Hampshire, Iowa and Michigan. He contributed the maximum to Romney’s 2008 and 2012 White House runs. He was a fundraiser for the 2008 campaign, according to Public Citizen, a Washington-based advocacy group.

“I wanted to help him jump start his campaign for national office,” Karmanos said. “He’s always talked about among my friends and business associates. I’m concerned about my country and issues like energy, education and health care. I really think he has the ability, both intellectually and from understanding how to compromise, to actually attack those problems.”

--With assistance from Gigi Douban in Montgomery, Alabama. Editors: Jeanne Cummings, Robin Meszoly

To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net.

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net.

© Copyright 2014 Bloomberg News. All rights reserved.

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