Saturday, November 20, 2004

Hillary Inc.HILLPAC.com - Hillary Inc.

HILLPAC.com - Hillary Inc.: "Hillary Inc.

By Eliza Newlin Carne, National Journal

Hillary Rodham Clinton insists that she's not running for president. But at an early-October Washington luncheon for Democratic women, it was easy to see why people refuse to believe her. The moment Clinton slipped through a side door into the Mayflower Hotel ballroom where she was scheduled to speak, several hundred women dropped their forks and leaped to their feet, whooping and applauding in a standing ovation.

After graciously thanking the event's many organizers, Clinton quickly launched into a full-throated assault on President Bush and congressional Republicans. "We're not just fighting to get back on the right track that we were [on] when the Clinton administration ended its stewardship of this country," she roared, her words all but drowned out by applause. "We are literally fighting to save the advances of the 20th century."

Clinton has been giving a lot of fiery speeches like the one she delivered that day to the packed Mayflower audience, which had gathered to celebrate the 10th anniversary of the Democratic National Committee's Women's Leadership Forum. Whether stumping for her Democratic colleagues, collecting checks for her party, raising money for her Senate campaign, or rallying liberal activists, Clinton routinely draws standing-room-only crowds. She also tends to walk away with a thick wad of campaign contributions.

Having kept a relatively low profile during her first two years in the Senate, Clinton has swept back onto the national stage in recent months. The success of her multimillion-dollar leadership political action committee, HILLPAC; her elevation to a Senate leadership post; her outspoken attacks on the Bush administration; and especially the publication of her best-selling book, Living History, have dramatically ramped up her visibility and fundraising prowess.

Of course, Clinton's growing celebrity has fueled lots of breathless speculation about her presidential aspirations. Many political types remain convinced that she will run in 2004, despite her repeated assertions to the contrary. Clinton may or may not be gearing up to follow in her husband's footsteps to the White House. But one thing isBut one thing is clea clear: She has already replaced Bill Clinton as her party's most sought-after fundraiser.

"She's more of a star than the other 99 of us combined," Sen. Mark Dayton, D-Minn., declared in an interview. Dayton is one of the dozens of Senate, House, state, and local Democrats who have benefited from Sen. Clinton's largesse. And the Democratic Party desperately needs powerhouse fundraisers like Clinton these days. Democrats backed the 2002 campaign finance law, but its restrictions have left them badly strapped for cash.

The new law banned the soft money, or unregulated contributions, from labor unions and corporations that for years had filled the bulk of Democratic Party coffers. Now, both parties may raise only hard money, or regulated contributions, which can't exceed $2,000 per election from an individual donor. Collecting such low-dollar donations has long been a GOP forte, and Democrats are getting trounced. At last count, Republican Party committees had raised more than twice what the Democratic committees had raised in this election cycle.

Clinton, for one, has responded with an elaborate network of campaign accounts to collect hard money. She aggressively uses direct-mail solicitations and the Internet to round up small checks. Her political money organization boasts a multiperson staff with offices in Washington and New York City.

She also hosts up to five private fundraisers per month at the Clinton family's posh mansions in Chappaqua, N.Y., and off Embassy Row in northwest Washington. Like Bush, she is building a team of fundraising loyalists -- she calls them "Hill Raisers" -- to recruit donors and bundle checks for her. And she has turned Living History, which earned her an $8 million advance, into a productive political fundraising tool.

Although most Democrats applaud Clinton's emergence as a party rainmaker, some acknowledge that she is venturing into risky territory. Clinton remains a highly polarizing figure, inspiring angry conservatives to write almost as many checks for Republicans as she rounds up for Democrats. While plenty of Democrats are begging her to come raise money in their states, some would rather she stayed away.

The ethical problems that earned the Clintons such notoriety at the White House may come to dog Hillary Clinton's massive fundraising operation, particularly as it attracts more scrutiny. As a candidate in 2000 and as a senator, Clinton has moved vast sums of money around in a complicated array of interlocking and sometimes controversial campaign accounts -- leadership PACs, nonfederal accounts, joint committees with the Democratic Senatorial Campaign Committee. The new campaign finance law has already banned some of these activities; others remain controversial and may soon face restrictions from the Federal Election Commission.

Still, Clinton's colleagues are watching -- and emulating -- her grassroots fundraising techniques. The 2002 campaign finance law has unquestionably drained the major party committees of both cash and influence. The new power centers are now outside interest groups and individual officeholders, such as Clinton, who can motivate low-dollar donors by virtue of their ideological appeal or their celebrity. With its vast staff, budget, and campaign coffers, Clinton's political organization has begun to assume a quasi-party status.

"I think we'll see her playing a particularly prominent role in this coming election year," said Tony Corrado, a professor of government at Colby College in Waterville, Maine. "Now that you have parties that can no longer raise soft money, there's going to be a lot more pressure on candidates to raise money on their own."

And if Clinton ever does run for president, she'll have a full-blown fundraising infrastructure at the ready. She'll also be able to call in all the chits on the $1.5 million in direct contributions that she has made to state, local, and national candidates as well as to party committees since her election to the Senate.

"She's doing well by doing good," said Ellen Malcolm, head of the Democratic women's PAC, EMILY's List, and president of a new liberal mega-PAC known as America Coming Together. "She's being very helpful to other Democratic candidates and organizations in their fundraising, and at the same time, building her own connections with donors across the country."

Queen Of The Hill
Building personal connections is an art that Clinton perfected during her years as first lady, when she and her husband developed a nationwide fundraising team that revolved around Hollywood celebrities, business executives, and prominent female activists. Many have gone on to become devoted fundraisers for Hillary Clinton, including New Yorkers John Catsimatidis, CEO of the Red Apple Group, and Alan Patricof, a venture capitalist who was finance chairman of her 2000 Senate race.

Another longtime Clinton loyalist is Susie Tompkins Buell, a California philanthropist and major Democratic donor who co-founded and co-owned the Esprit clothing chain. In September, Buell flew to New York for a kickoff dinner at the Clintons' Chappaqua estate to officially launch the fundraising drive for the senator's 2006 re-election campaign. Buell is also a founding member of Clinton's leadership PAC, HILLPAC.

"There's a very strong personal dimension there," Ann Lewis, the national chairwoman of the DNC Women's Vote Center, said of Clinton's fundraising style.

When she ran for the Senate in 2000, Clinton took full advantage of her White House contacts and also cashed in on New York's status as a leading power center for Democratic donors. She drew the bulk of her contributions from lawyers and law firms, the securities and investment sector, and the entertainment industry. But Clinton also struck out into uncharted territory, drawing large crowds to fundraising events in such cities as Cincinnati, Omaha, and Tulsa, a tactic that Democrats had until then largely overlooked.

"She changed the way we think about what we can do, and made the party look at medium-sized cities and small cities," said DSCC Executive Director Andrew Grossman. She "made people say, 'Look, there's money in these cities that we can raise, and we should do it.' "

For her 2000 campaign, Clinton ultimately raised more than $30 million, an amount she put up against the $40 million that her Republican opponent, then-Rep. Rick Lazio, had amassed, in part by appealing to anti-Hillary conservatives around the country. She also showed some of the same creative, aggressive fundraising instincts that made Lincoln Bedroom overnighters and Asian donors' contributions the subject of investigations during her White House years.

Clinton augmented her Senate campaign account by setting up a controversial joint fundraising committee with the DSCC. Dubbed "New York Senate 2000," that committee netted some $10.5 million in 2000, the bulk of it in unregulated, unlimited corporate and labor contributions. It was hardly the only joint committee of its type in the 2000 election, but it was one of the most lucrative. At the time, campaign finance watchdogs denounced such joint committees for letting federal candidates raise soft money for their campaigns, something that was illegal both before and after the 2002 campaign finance law took effect.

After the election, in which she beat Lazio 55 percent to 43 percent, Clinton started out cautiously in the Senate, deferring to more-senior members and concentrating on securing federal funds for New York. Yet she lost no time in setting up her leadership PAC, HILLPAC, which quickly became one of the top three such organizations in the Senate. Leadership PACs allow members of Congress to raise money for noncampaign purposes, such as making contributions to colleagues. They're controversial because they allow members to collect contributions far larger than those permitted for lawmakers' campaigns, and are often used to fund travel and self-promotion.

Since its inception in 2001, HILLPAC has raised $4 million and doled out more than $1 million to candidates and party committees. In 2002, HILLPAC was outdone only by the leadership PACs run by Sen. Tom Daschle, D-S.D., and Rep. Nancy Pelosi, D-Calif., in the amount of money contributed to candidates.

Clinton also launched a new vehicle to raise soft money, setting up a nonfederal (state) arm of HILLPAC dubbed "HILLPAC-N.Y." Registered with the Internal Revenue Service as a tax-exempt 527 political committee, HILLPAC-N.Y. raised $356,000 in 2002, much of it in $5,000 and $10,000 contributions from labor unions and corporate executives. HILLPAC-N.Y. doled out $85,000 to state and local candidates in New York, and $240,000 to Democratic Party committees all over the country.

When the new campaign finance law took effect in November 2002, banning federal officeholders from collecting soft money, HILLPAC-N.Y. drained its accounts. But unlike most lawmakers who had operated nonfederal PACs, Clinton has yet to officially close down HILLPAC-N.Y. She appears to be hedging her bets, possibly in the event that the Supreme Court upholds a constitutional challenge to the new law. "HILLPAC still wants to contribute nonfederal money to some of the New York races," said one Democrat familiar with Clinton's fundraising activities.

Clinton and her staff are not eager to discuss her fundraising activities. She declined to be interviewed for this story, and her staff answered questions grudgingly, repeatedly referring this reporter to public campaign finance records.

Book Party
The new campaign finance law hasn't stopped Clinton from exploring new and different ways to raise campaign cash. If anything, she appears to have found an even better vehicle for raising money: Her best-selling book, Living History.

The autobiographical memoir, in which Clinton for the first time describes the emotional tumult that she felt during the Monica Lewinsky scandal, has sold some 1.4 million copies in the United States since its publication in June. It is entering its 17th week on the New York Times best-seller list, and has also emerged as a best-seller internationally.

The publication of Living History marked a turning point for Clinton as a senator, because it ended her early attempts to stay out of the limelight. The book has brought a tsunami of publicity and media attention. Clinton, who has personally signed thousands of copies, has used her book tour to reintroduce herself to Americans on her own terms. She has also begun a major media offensive, appearing on such shows as CBS's Early Show, CNN's Inside Politics, and NBC's Today to deliver blunt criticisms of the Bush administration's national security and economic policies.

The book has not only fattened Clinton's personal bank account by some $8 million, with royalties still to come, it has also proved a surprisingly effective political fundraising tool. While touring the country in recent months to promote the book, on publisher Simon & Schuster's tab, Clinton has headlined events that netted more than $1 million for her Senate colleagues and for the DSCC.

At a breakfast in Seattle in August for Sen. Patty Murray, D-Wash., at which Murray gave out her annual "Golden Tennis Shoe" awards for community service, Clinton drew an extraordinary 1,600 people. "They had to open up an overflow room to accommodate everybody," said Murray spokesman Todd Webster. "It was just a really energetic and excited crowd." The event raised $200,000 on Murray's behalf. The previous year, Murray's Golden Tennis Shoe event, which featured not Clinton but then-Sen. Jean Carnahan, D-Mo., drew 650 people and raised only $112,000.

Clinton's success at such events reflects both her personal magnetism and her appeal to the Democratic base, which responds to her unabashedly liberal, anti-Bush attacks and to her passionate defense of education, the environment, social welfare programs, and abortion rights. "It is a values-based fundraising," noted Lewis of the DNC. "People do not go into [contributing to Hillary Clinton] because they are wishy-washy about the Clintons."

It's the same kind of ideology-driven approach that has helped former Vermont Gov. Howard Dean so dramatically out-raise his fellow Democratic presidential contenders. "One of the things that has driven the Dean Internet fundraising, and Dean's small-dollar fundraising, has been the strength of his message and his forceful presentation of it," said Anita B. Dunn, a partner with the Democratic political consulting firm of Squier Knapp Dunn. "And in the post-McCain-Feingold era, raising small dollars, in particular, will be much more a function of perceived message than of perceived influence."

Like Dean, Clinton has set out to turn the Internet into a core fundraising tool. Both HILLPAC and her Senate re-election campaign account, which she has dubbed "Friends of Hillary," have their own Web sites (www.hillpac.com and www.friendsofhillary.com), with multiple gimmicks to attract donors.

The Friends of Hillary site offers a catalog of rewards for donors, who are invited to become "Hill's Angels." Donate $25, and you'll get a "Hill's Angels membership card" and a "commemorative" Living History bookmark. Up the ante to $75, and you'll get all that, plus a Living History coffee mug. For $500, you'll get the full "Living History Gift Package," complete with mug, pen, bookmark, and "a personally inscribed copy" of the memoir.

For "Hill Raisers," those who commit to rounding up checks for Clinton, the rewards are more personal. This month, those who managed to raise $1,000 were invited to participate in a live online chat with Clinton. The Friends of Hillary Web site also touts its "Young Voters for Hillary Rodham Clinton" program, which has the hip-sounding name, "YvHRC." The program rewards donors at various levels with everything from membership pins to conference calls with the senator.

Clinton "is picking up on a lesson we've learned at EMILY's List, which is that you can create a tremendous amount of financial power by combining many small contributions," Malcolm observed. Clinton's Web presence reflects an attempt "to build a personal connection in a mass-market, technological world," Malcolm added.

Clinton's Web activities also enable her to collect valuable names and addresses for direct-mail appeals. Clinton has been in the vanguard of the Democrats' new love of direct mail. In the first six months of this year, HILLPAC collected $717,745, a good percentage of which -- $168,435 -- went for direct-mail activities with the fundraising consulting firm of O'Brien McConnell & Pearson.

Clinton routinely signs direct-mail appeals for the DSCC, and she has even made candidate recruitment calls for the committee. "She's opening people's eyes" to new fundraising approaches, said the DSCC's Grossman.

Not all of the attention swirling around Clinton is positive, of course. She arguably has replaced Sen. Edward Kennedy, D-Mass., as the conservatives' favorite liberal to bash. The National Republican Senatorial Committee features a "Stop Hillary Now" logo on its Web site, complete with online contribution options and links to negative news reports about her.

Some Senate Democrats, most notably in the South, fear that Clinton could prove a lightning rod, attracting attacks from their opponents. "There are two sides of that coin when she goes in to help a candidate," noted NRSC spokesman Dan Allen. Polls show Clinton teetering between public approval and disapproval. A USA Today/CNN/Gallup poll in June found that 43 percent of Americans held a favorable opinion of her, with 43 percent unfavorable.

Clinton's media and fundraising blitz also has its dangers. While New Yorkers have a well-known taste for larger-than-life politicians, some may tire of all the presidential talk. A September Marist poll found that close to 70 percent of New Yorkers said that Clinton should not seek the White House in 2004, a 15-point jump from an April poll that had asked the same question.

Plenty of Hillary-haters are poised to pounce on the least sign of ethical transgression on her part. Although Living History has proved relatively noncontroversial, a few high-profile book deals have gotten lawmakers in hot water. In the mid-1990s, when then-House Speaker New Gingrich, R-Ga., accepted a $4.5 million book offer from publisher Rupert Murdoch -- far less than Clinton's Simon & Schuster take -- the resulting firestorm forced Gingrich to decline the advance. In the 1980s, a book controversy helped bring down House Speaker Jim Wright, D-Texas.

Already, Clinton's fundraising has been the target of some half-dozen complaints to the FEC, though none has prompted the agency to act. The highest-profile of these involves claims by Hollywood executive Peter F. Paul that for Clinton's 2000 Senate campaign, he spent $1.9 million on a fundraiser that she failed to report.

"Our view is that we reported what he told us," said Sen. Clinton's campaign treasurer, Harold Ickes, who is a former Clinton White House adviser. "If he's now changing his position, we have to know what it is. But the FEC has not pursued it so far."

Leadership PACs such as HILLPAC, moreover, have become increasingly controversial, particularly in light of the 2002 campaign finance law. Although they are still commonly known as "leadership" PACs, close to 200 House members and senators now operate them. In July, the FEC voted to place new limits on leadership PACs connected to presidential candidates. Responding to complaints that presidential leadership PACs enabled candidates to skirt spending limits, the FEC commissioners ruled that funds such PACs spent to provide polling and staff, for instance, for someone who eventually became a presidential candidate should count as an "in-kind" donation to that person's campaign.

Those rules won't apply to Clinton, of course, unless she declares herself a presidential candidate. But the FEC is also considering restricting or even banning all congressional leadership PACs, which allow lawmakers such as Clinton to hit up donors for amounts that far exceed the $2,000-per-election limit for individuals.

Will She Or Won't She?
Clinton, in the meantime, is merrily setting up new accounts. She established a new joint fundraising committee this year with the DSCC, becoming the only senator not up for re-election in 2004 to operate such an account. Dubbed the "Clinton-DSCC Victory Fund," the committee has pulled in only $58,000 thus far, but it is poised to raise much more. The new campaign finance law allows the joint committee to raise as much as $29,000 from any single donor, with $4,000 going to Clinton's campaign committee and the rest going to the DSCC.

Clinton's fundraising operation has a powerhouse staff headed by her trusted longtime aide, Patti Solis Doyle, who was her scheduler in the White House and a key adviser in her 2000 campaign. Solis Doyle oversees both HILLPAC and Friends of Hillary, and acts as a commander-in-chief of sorts for the senator's many fundraising activities. HILLPAC itself has four staff members operating out of a town house in southeast Washington, and three more posted in a Manhattan office.

To conservatives, Clinton's money machine furnishes clear evidence that she has set her sights on a White House bid in 2004. In his book Hillary's Scheme: Inside the Next Clinton's Ruthless Agenda to Take the White House, right-leaning Web journalist Carl Limbacher details a long list of reasons why Clinton's denials of presidential aspirations are not to be believed. Even mainstream journalists such as William Safire of The New York Times have suggested that former Gen. Wesley Clark, the newest entrant into the Democratic presidential race, is nothing but a stalking horse for Clinton.

Many Clinton allies, inspired in part by wishful thinking, also believe that she will run. "Draft Hillary" committees unconnected to her campaign have cropped up, and fans have routinely shown up at her book tour appearances to promote her as a presidential candidate. One fan even set up an unauthorized presidential committee for her at the FEC.

For her part, Clinton is adamant that she has no plans to run in 2004, although she has made no such promise for 2008. Clinton recently removed from her Web site some gushing e-mails from admirers urging her to run, after the messages attracted media attention. Whether playfully or purposefully, however, the Clintons have kept the buzz going. At last month's Chappaqua dinner to launch her 2006 campaign, Sen. Clinton reportedly remarked that she'd like all the guests present to stay on board "for my next campaign, whatever that might be."

Democrats close to Clinton do not expect her to suddenly enter the race. "I take her at her word. I don't think she's going to get in, [in] 2004," Malcolm said. But, she added, "I certainly think she will be on everybody's radar screen to run for president in the future."

Whatever transpires in the 2004 election, the continual speculation about Clinton's presidential plans only enhances her appeal to donors and activists. "Whether she's going to run or not, the people around her have done a very good job of capturing that attention, so that she's always in the game," said one Democratic operative. "I think the presidential speculation is a very useful tool for her on a national level."

Even if she is not a candidate, Clinton is positioned to play an influential strategic role in 2004, in both the presidential and the congressional contests. The Clintons have stated publicly that they are not officially endorsing Clark. But Clark reportedly has said that both Clintons encouraged him to run.

Hillary Clinton, moreover, has close ties to a long list of former Clinton administration officials who are raising millions of dollars for new liberal organizations. These groups have set out to take over some of the research and get-out-the-vote functions that the Democratic Party may not have enough money to do effectively under the new campaign finance law. These include ex-Clinton Chief of Staff John Podesta, who is launching a think tank called the American Majority Institute, and Ickes, who is raising money for Malcolm's new America Coming Together PAC as well as for a Democratic media fund.

"She's not just raising money," said Simon Rosenberg, president of the New Democrat Network, a PAC for centrist Democrats, speaking of Clinton. "Her allies are constructing and leading the infrastructure that will be the next Democratic Party."

Clinton's Senate colleagues have also begun to rely more heavily on her political insights and connections. In January, she was tapped to head the Senate Democratic Steering and Coordination Committee, an unusually senior post for a junior senator. The committee's role is to reach out to local, state, and national Democratic-leaning groups. Clinton has hosted a series of meetings with groups representing Native Americans, Hispanics, women, the Jewish community, environmentalists, and labor leaders -- meetings that have been well attended by both senators and activists.

"She's done a superb job of reaching out to constituency groups nationwide," said Dayton. "An invitation from Hillary Clinton is one that gets a very, very positive response."

Dayton has seen for himself how the former first lady's national and international stature leaves so many average Democrats starry-eyed. He has taken hundreds of Minnesotans through security in the Capitol building and up to the Senate visitors' gallery. "Ninety-eight percent of the time, the person they most want to see, and the only person they want to see on the floor, is Senator Clinton," Dayton recounted. "She really has a national prominence beyond anyone else in the Senate today."

Little wonder that Clinton can't seem to shake the rumors that she's running for president. She may never make it back to the White House. But at a time when Democratic candidates need campaign checks more desperately than ever, her ability to raise money has thrust her to the top of her party's hierarchy nonetheless."

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