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As the 2010 campaign draws to its raucous close, the Republican Party's biggest donors are slowly beginning to choose sides, with some still looking for a strong alternative to a populist conservative movement that makes them uneasy.
The big New York, Texas, California and Florida donors who traditionally play a key role in choosing the GOP nominee lined up behind George W. Bush in 2000 and, largely, John McCain in 2008.
This year’s early favorite appears to be Mitt Romney, donor sources confirmed to POLITICO, who has already lined up quiet commitments from more than a dozen top names, among them billionaire David Koch and his wife, Julia, financier and former Goldman Sachs partner Lewis Eisenberg, New York Jets owner Woody Johnson and Ogilvy Government Relations Chairman Wayne Berman.
Romney is already raising copiously for his political action committee and has the help of his longtime campaign finance adviser, Spencer Zwick, who’s currently assisting Meg Whitman’s gubernatorial campaign in California — a role that also provides the former Massachusetts governor with a toehold in a major state.
But other big donors remain unsure of Romney. His 2008 run showcased his strengths and drawbacks, high among them the government-run health care plan he supported while in Massachusetts.
Some in the big-donor class claim to welcome the tea party’s energy, but many are nevertheless nervously eyeing Sarah Palin, who posted big numbers this quarter with a surprisingly small number of maximum donations — a sign that she could be poised to, like GOP Senate nominees Sharron Angle in Nevada or Christine O’Donnell in Delaware, capture an Internet cash wave that has largely favored Democrats so far.
“Most long-standing donors are worried about a candidate, or multiple candidates, coming forward who are too extreme,” said a major Republican donor with long ties to the party. “You’ve got a lot of people that don’t want to support the tea party movement.”
Then there are the donors who feel somewhat burned by the Washington establishment this year, after they maxed out to candidates backed by the National Republican Senatorial Committee, a handful of whom lost to tea party challengers.
Rick Wilson, a Republican strategist based in Florida, said much will depend on the tea party's durability as a political force. “Major donors may want to ride the conservative wave if it means being with the [primary] winner ... though they've usually gone for more moderate Republicans,” he said.
With the presidential election two years away and the focus still on 2010, many donors are waiting on the sidelines and plan to stay there into next year, a contrast to the past three presidential races, when establishment money was largely lining up before the cycle began.
McCain rolled out a list of backers in December 2006 on the same day as a big PAC event for rival Rudy Giuliani, designed to underscore his organizational prowess and create the whiff of the inevitable.
“In 2008, there was kind of an arms race on raising money [a year earlier] that I don’t know will exist this time,” said Mike DuHaime, who managed Giuliani’s presidential run in 2008 and worked for the Republican National Committee during the Bush years. “I think a lot of donors may be waiting for the field to settle out more. At this stage of 2008, most people had a pretty good idea who the top-tier candidates were.”
“I don’t think you’re going to see the early intensity you saw in 2007,” he said.
Among the big fish whom candidates have courted is Paul Singer, the Elliott Management hedge fund investor who has become one of the biggest GOP donors of the 2010 cycle.
“He’s being wooed by everybody,” said a source familiar with Singer’s thinking. “But he's telling everyone that he's not making any decisions about who he's with until 2010 is over.”
To date, Romney is far and away the leader in the committed heavy-hitter category, posting a $1.7 million haul this past quarter. Largely shut out of the big-money chase by McCain and Giuliani in 2008, he’s making up for lost time.
Koch, the libertarian billionaire who’s also been funding some tea party activities this cycle, recently hosted a meet-and-greet for Romney at his home in the Hamptons with about 150 people, according to several attendees.
Romney also has commitments from some of the biggest names in Republican donor circles. In addition to Koch, Berman, Eisenberg and Johnson, he’s got on his side Donald and Muffy Miller, hedge fund titan John Paulson, Related Companies Chairman Stephen Ross, Skybridge Capital founder Anthony Scaramucci, hedge funders David and Ginny Knott, Bush Ranger Patrick Durkin and former Securities and Exchange Commission Chairman Richard Breeden.
Former Ambassador John Rood, who lives in Florida and is backing Romney, said the former Massachusetts governor has effectively built on momentum from his fundraising base in 2008.
“Others have been through Florida, but I haven’t seen anywhere near the same outreach through their PAC’s or their teams, so to speak,” he said. “I don’t see anybody at the level that Mitt Romney is.”
Complicating the picture, there are others in the prospective field with ties to the big-money establishment.
Mississippi Gov. Haley Barbour, a former Republican National Committee chairman and current Republican Governors Association head, has a massive donor network forged over many years. His close friend, Indiana Gov. Mitch Daniels, is also said to be considering running and has his own ties into the world of Bush supporters, having served as the president’s budget director.
“There isn’t a donor in the country who doesn’t know Haley,” said one veteran GOP donor, adding that the same is true, to a lesser degree, of Daniels.
South Dakota Sen. John Thune and Minnesota Gov. Tim Pawlenty, who’s taken part in RGA activities and is also stepping up his travel to court moneymen, are also considered candidates whom older-guard donors could back. Pawlenty can already point to William Strong, the Chicago banker, who is behind him.
The RGA in the last two cycles has stepped up its outreach to major individual donors, who have helped power the group to unprecedented fundraising heights, including a $31 million third quarter.
Texas Republican Bob Perry, a Bush backer and a Swift Boat Veterans for Truth funder, has given more than $5.5 million to the RGA this cycle. He’s also given to Pawlenty and is among the ambidextrous donors this year who are investing with the RGA but also with other possible candidates. Singer, the hedge fund investor, has given the RGA $2 million this year alone.
The group’s executive roundtable, which allows donors who give $25,000 or more to participate in regular events with GOP governors, has grown from 15 members to more than 500 thanks to the big-donor Rolodexes of Barbour and RGA finance chairman Fred Malek.
Daniels has also been flying to New York frequently, as well as bringing donors to dinners in Indiana for non-overt discussions about his future.
Palin is an unknown factor in all this. Many Republicans don’t believe Palin will ultimately run, given that she’s making so much money speaking, through her books and in private life. She appears to have done the least to court big donors, but she also is likely to have the least need to do so.
She’s focused on building a nationwide list of small donors, with her Sarah PAC filing a recent report that showed expenditures of $205,000 on direct-mail solicitations and $38,000 on Internet fundraising in the most recent quarter.
During that time, her PAC received almost 25,000 contributions with an average donation of around $50 and only 10 maximum donations of $5,000 — a possible reflection of the unease with which many establishment big donors regard Palin.
Tim Crawford, the treasurer for Palin’s political action committee, brushed off those concerns.
“We’re happy with the outpouring of support for the governor from small and large donors,” he said.
“But remember, we’re a federal PAC, so we can only get $5,000. We don’t have an organization that is asking people for hundreds of thousands of dollars,” he noted, in what could be a reference to former House Speaker and potential 2012 rival Newt Gingrich.
Gingrich is raising early, but in a different way, snaring $3.8 million through his nonprofit, registered under the 527 tax code, that can accept unlimited contributions.
Wilson predicted that Internet fundraising will be a major factor for whoever emerges as the leading contender and will ultimately make the traditional donor and bundler class less important this time.
“Angle, [Massachusetts Sen. Scott] Brown, they were previews,” he said. “The person who catches fire — be it a Palin or Daniels or Romney or candidate X, they're going to ignite this online fundraising explosion. That is a lot easier to do if your message is right than a lot of high-dollar fundraising dinners,” he said.
Some donors bluntly said that they are focused right now on taking back the House and, possibly, the Senate and aren’t appreciative of any 2012 pushes.
“Every responsible Republican is focused on Nov. 2, 2010, right now and is not thinking too much of 2012,” Malek told POLITICO. “Any candidate who got too aggressive about 2012 at this point would be looked upon as not serving the Republican cause very well.”
Others said they’re underwhelmed by the emerging field and are still holding onto improbable hope that someone like New Jersey Gov. Chris Christie or former Florida Gov. Jeb Bush will decide to run.
New York City Mayor Michael Bloomberg, who could decide to pursue an independent presidential bid, is another whose name surfaces in discussions. While he’s unlikely to run and wouldn’t need financial backing, there is interest by some donors in supporting him. (His vast wealth would also help them avoid having to write early checks.)
“The question is, what is Bloomberg going to do?” said John Catsimatidis, a former Democratic-donor-turned-GOP-giver, who added that a lot of New Yorkers who traditionally give are watching the mayor, for whom a path would only be conceivable if the Republicans nominate someone like Palin, or if President Obama doesn’t move toward the center.
“The Republicans have to pick somebody who’s capable of getting 51 percent of the vote,” Catsimatidis said. “People like Sarah Palin and Newt Gingrich are only capable of getting 41 percent of the vote.” Clarification: An earlier version of this story said eight Republican Senate candidates lost primaries to tea-party-backed candidates. Correction: The original version of this story misspelled the name of Elliott Management.
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