New financial regulations are pending in Congress, but both political parties get a lot of campaign contributions from the people they intend to regulate -- Wall Street.
The financial sector donates millions to both Republican and Democratic candidates. And during the last couple of election cycles, Democrats have outstripped Republicans, who have traditionally been thought of as more business-friendly. Those political realities have made for interesting dynamics as the negotiations on financial regulation continue.
President Barack Obama answered questions on this topic in an interview with CNBC's John Harwood on April 21, 2010.
"In the 2008 campaign, you got a lot of money, about $1 million from employees of Goldman Sachs," Harwood said. "Your former White House counsel Greg Craig is apparently going to represent Goldman Sachs. In light of this case, do either of those things embarrass you?"
"No," Obama said. "First of all, I got a lot of money from a lot of people. And the vast majority of the money I got was from small donors all across the country. And moreover, anybody who gave me money during the course of my campaign knew that I was on record again in 2007, and 2008, pushing very strongly that we needed to reform how Wall Street did business. And so, nobody should be surprised in the position that I'm taking now because it is one that I was very clear about in the course of the campaign."
What jumped out at us in this exchange was Obama's statement, "the vast majority of the money I got was from small donors all across the country." We've seen that statement repeated elsewhere, but the evidence doesn't back it up.
Campaign contributions are public record, so there's verifiable data on how much political candidates receive and who gives it to them. Obama did raise a lot of money from small donations collected over the Internet, and several groups have analyzed the information to determine how much that was. While Obama got more money from small donors than his opponents, they did not account for the majority of his funds.
We're setting the bar for a small donor as someone who gives $200 or less. The Federal Election Commission rules say that someone who gives this amount does not need to publicly disclose their name, address, occupation and employer.
In the general election, Obama got about 34 percent of his individual donations from small donors, people who gave $200 or less, according to a report from the Campaign Finance Institute. Another 23 percent of donations came from people who gave between $201 and $999, and another 42 percent from people who gave $1,000 or more.
His numbers for the primary were similar. He got about 30 percent of his money from donors who gave $200 or less. Another 28 percent of donations came from people who gave between $201 and $999, and 43 percent from people who gave $1,000 or more.
These numbers were compiled by the nonpartisan Campaign Finance Institute, and included in a report Reform in an Age of Networked Campaigns, which was published jointly with the Brookings Institution and the American Enterprise Institute.
During the campaign, Obama ended up opting out of the public financing system for presidential candidates, because the system limits how much money candidates can raise, and Obama realized he could raise much more money outside of the system. (Read more details from our previous report, 'Parallel public financing'? Only partly.)
Obama was bothered about opting out of the public financing system, because he believed it would undercut his moral authority in arguing for campaign finance reform, according to Obama's campaign manager, David Plouffe, who wrote about the decision in his campaign memoir, The Audacity to Win. So the campaign considered opting out of the federal system but limiting contributions to $250.
"The idea sounded appealing," Plouffe writes. "But when our finance staff ran the numbers, it became clear this option would produce the worst of both worlds: we would not raise enough money to justify the pummeling we would take."
Obama supporters like to counter that Obama raised more money from small donors than any previous candidate for president, which is true. But Obama still needed large donors to fund his campaign. Obama implies that he won the presidency without much money from large donors, and the evidence does not support that. In fact, even if we set the bar for small donors higher -- if we stipulated that everyone who gave less than $1,000 was a small donor -- that still means 43 percent gave more. And the interviewer, John Harwood, was correct when he said Obama got about $1 million from employees of Goldman Sachs; the nonpartisan Center for Responsive Politics puts the number at $994,795.
Obama's skill at raising money from small donors for the 2008 campaign was significant. But Obama was also skilled at raising money from large donors. His statement was, "the vast majority of the money I got was from small donors all across the country." That's not the case. Only 32 percent of his general election money came from people who gave $200 or less. We rate his statement False.