The dominant analysis of Obama’s historic fundraising effort is that small donors carried the day. His campaign certainly inspired record-smashing levels of small donor support, but the feel-good story of Obama lifted to victory by a $5 army obscures the crucial role that traditional fundraising mechanisms and networks played in Obama’s campaign.
After all, Obama took in more money from Wall Street in the first quarter of 2007 than any other presidential candidate, an early boost from high finance that is often overlooked. This paved the way for consistently high Wall Street fundraising numbers. How did this come to pass?
The focus of today’s installment of the “Quiet Names” series, Michael Froman, was a key player in this aspect of Obama’s successful fundraising effort. After serving as a bundler and informal adviser to the campaign, Froman scored a spot on the board of the Obama-Biden Transition Project – a select group of advisors charged with shaping the new administration – and was recently appointed to a joint post at the NEC and NSC.
Though he was not the campaign’s top fundraiser, a strong case can be made that he played a more important role in the early growth of Obama’s Wall Street-based fundraising machine than any other individual affiliated with the campaign.
In the world of campaign finance, a “bundler” is someone who can gather campaign contributions from individuals in their social networks. Froman was not the top bundler for the Obama campaign – he raised $200,000, as compared to the $500,000 that several others raised (the campaign website originally listed him at $500,000) – but there are signs that he was a top bundler of bundlers. That is, he made important introductions for Obama, linking him to networks that could produce big fundraisers for the campaign.
Froman was well-positioned to make these introductions because he was both close to Obama and firmly embedded in Wall Street’s Democratic networks. In the lingo of social network analysis, this is “betweenness centrality,” and it translates into significant social power.
A closer look at Froman’s career explains how he arrived in this rather extraordinary position.
Froman met Obama at Harvard Law School in their second year, when both were editors of the Law Review. Froman also graduated from Princeton with Michelle Robinson, in 1985, though it’s unclear whether they knew each other there.
Froman and Obama were in touch sporadically in the years following graduation, until Obama decided to run for the US Senate. At that point, Froman offered Obama his services, and the two have been close ever since. According to a Marin Independent Journal article on Froman, “it was when Obama decided to run for the U.S. Senate that their friendship was cemented.”
After law school, Froman had successfully attached himself to Robert Rubin, one of the top rainmakers in the Democratic Party. He first served in a joint post at the National Security Council and the National Economic Council, which Rubin headed up at the time. When Rubin was appointed Secretary of the Treasury in 1995, Froman went there to serve as Deputy Secretary for Eurasia and the Middle East, and later became Rubin’s chief of staff.
And when Rubin left the Treasury for Citigroup, Froman followed him there, initially as chief of staff, later as head of CitiInsurance and managing director of Citi Alternative Investments.
It is hard to underestimate Rubin’s importance in Democratic circles on Wall Street. His star has fallen somewhat in recent months, following his resignation from Citigroup, but few individuals deserve more credit for bringing Wall Street cash to the Democratic party – or moving the party towards policies that supported market-fueled growth over a strong welfare state.
So the fact that Michael Froman introduced Barack Obama and Robert Rubin is quite significant. This was an extraordinarily valuable connection for Obama to make, and opened up access to Wall Street fundraising circles that would have otherwise been the exclusive domain of Hillary Clinton.
Rubin initially refused to offer a public endorsement in the Democratic primary, saying that he would not choose sides. It was a strong sign that he did not necessarily favor another Clinton presidency. He eventually endorsed Clinton in November 2007, just as Citigroup, where he was a top executive, had fallen on desperate times. It is unclear what prompted his about-face. Either way, the Rubin network continued to play a big role in the Obama campaign.
Froman introduced Obama to other heavy-hitters, as well. In April 2007, New York Magazine ran an article titled Money Chooses Sides; How Barack Obama Struck Fundraising Gold. Needless to say, the article does not quote a lot of $5 donors; it focuses on the connections Obama made on Wall Street, and Froman plays a key role, bringing on Orin Kramer, a hedge fund manager who is one of the top Democratic fundraisers in New Jersey – and was formerly a “Clinton stalwart.”
The article describes Froman as a member of Obama’s “embryonic New York finance team,” along with Jim Torrey, Brian Mathis, and Jamie Rubin (son of Robert Rubin). Aside from Froman, none of them appear to have played as big a role in the Transition or received appointments in the new administration. According to the New York Times, Jamie Rubin was a headhunter for the Obama’s economic team (along with Froman), though this was never reported on the Transition website.
Despite his importance to the Obama fundraising effort, Froman hasn’t gotten much attention in the press. The longest and most informative piece on Froman can be found in his hometown paper.
But the leverage that Froman brings to his new post in the Obama administration makes him a prime candidate for further public scrutiny. Later this week, I will take a closer look at his work at Citigroup, the agenda he brings to the White House, and the policy implications for the rest of us.