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Liberal fat cats wimp out.

IN EARLY JUNE, a small group of Barack Obama's top fund-raisers gathered for an urgent meeting in a bar on Chicago's Michigan Avenue. They had been summoned to town for a briefing from campaign manager Jim Messina to the several dozen moneyed men and women who make up Obama's finance committee. But, in a classic example of Citizens United-era subterfuge, a handful of the attendees slipped away from the Renaissance Blackstone Hotel in the South Loop and headed to the bar. Over drinks, they met with Bill Burton and Paul Begala, leaders of the super PAC that is supporting Obama, Priorities USA Action, which is forbidden by law from coordinating with the campaign. Burton and Begala pleaded for help. “They said, ‘Don't you know some billionaires you can send us to?’" says one of the finance committee members. “I tried to think of a couple.”

With every passing week, Democratic insiders are becoming more and more panicked that, by November, their Republican opponents will have buried them under a mountain of money. After raising only $10.6 million through April, Priorities has picked up the pace somewhat, raising more than $9 million since. But the GOP money machine—that is, American Crossroads, the super PAC co-founded by Karl Rove; Americans for Prosperity, the group backed by the billionaire Koch brothers; and the U.S. Chamber of Commerce—has vowed to spend $1 billion combined before Election Day. Meanwhile, the Mitt Romney–affiliated super PAC, Restore our Future, has reported more than $60 million so far, a tally that doesn’t even include a recent $10 million donation from casino mogul Sheldon Adelson.

One might think this juggernaut would jolt Democratic donors into opening their wallets. Instead, it has prompted an outbreak of soul-searching. “So, is this how far we’ve stooped? Is this what we’ve come to?” Burton recalls a wealthy Chicago supporter telling him when he came calling on behalf of Priorities. It turns out that the Democrats’ biggest problem this cycle isn’t financial, but existential.

reason that Democratic super PAC fund-raising is lagging, and it can be gleaned from a cursory glance at the Forbes 400. “We’re not as rich as they are. It’s that simple,” says John Morgan, a personal injury attorney from Florida whose firm gave Priorities $50,000 and whom I reached as he waited on the tarmac for a flight to the French Open. “We don’t have billionaires who are willing to spend ungodly sums of money,” adds the fund-raiser who met with Burton and Begala in Chicago. “All we can turn up are people who give $38,500”—the maximum donation allowed to the campaign and party committee combined—“and that’s to have dinner with Anna Wintour.”

Affluent liberals do exist, of course, but many of those who supported Obama in 2008 have been conspicuously absent this year. Some are miffed loyalists who felt slighted early in the administration, when, as one Democratic insider put it, “the White House was more of a ‘you’re with us or against us Rahm place’ rather than a ‘we’re all in this together’ Obama place.” There is speculation that this category includes Penny Pritzker, the billionaire Hyatt Hotels heiress who led Obama’s 2008 fund-raising effort but who has only given the maximum $5,000 to Obama’s campaign alone and nothing at all to Priorities.

Meanwhile, many of the Wall Street types who supported Obama last election have switched sides in a well-documented fit of pique. Democrats have been working hard to make inroads into Silicon Valley to make up for the shortfall. But so far, the political spending of tech tycoons has remained nanoscale, focused narrowly on industry issues rather than a broader engagement with electoral politics. And, although Democrats can still depend on Hollywood, most liberal Tinseltowners prefer see-and-be-seen fund-raising, like glitzy dinners with the president. (The exceptions have included the $2 million that Priorities received from Jeffrey Katzenberg and the $1 million from Bill Maher.)

That leaves a rump of wealthy do-gooders—the core of bundlers who each raised hundreds of thousands of dollars from their associates for the 2008 campaign. Their efforts, combined with the contributions of countless small donors, helped Obama set a fund-raising record. But while the dollar amount was eye-popping, the breadth of the donors gave it an egalitarian sheen, a crucial distinction to many of the bundlers. This wasn’t Bill Clinton–era soft-money spending in exchange for an overnight stay in the Lincoln Bedroom; it was that rare happy moment where principle and financial dominance converged. “Obama brought in a new crop,” says a former Democratic fund-raiser. “The first time these people got involved in politics, when they went out and raised money, it was for their brand new guy, a brand new brand. The audience [Priorities is] selling to is people who’ve never been through the soft-money world.”

This time around, rather than simply rally their friends and colleagues around an inspiring cause, these donors are also being asked to cut massive checks. And because many of them share Obama’s disdain for the excesses of a broken campaign finance system, the exercise has prompted considerable squeamishness. One bundler who has raised more than $800,000 told me there was “an aversion to the super PACs, to the whole idea of them” in the bundler’s circle. “It’s left a really bad taste in people’s mouths.” “I think it’s awful,” says another bundler who has raised more than $600,000 for the campaign this year. “There’s too much money being spent on these elections to begin with. Why would anyone want to give $5 million to a super PAC to elect a president? It’s incomprehensible. There are a lot of other things you can give your money to.” Such as? Hospitals and investigative journalism, offered the bundler.

Another donor who had contributed a six-figure sum to Priorities was already experiencing serious buyer’s remorse. “I’m very much against people who give; everyone who gives to it has made a mistake,” lamented the donor. “I should not have given [the money] I gave.” I asked whether the stratospheric sums being raised by Republicans required wealthy Democrats to set aside these sorts of qualms. After all, Obama himself adopted this logic when he grudgingly endorsed Priorities’ efforts in February. “I understand the argument, that the bad guys are using this. But it’s a question of moral standing,” the donor explained. “We should have said, ‘This is bad for America,’ and we should have appealed to the American people. . . . Our side gave into panic for short-term gain.” The fund-raiser who met with Burton and Begala in Chicago essentially agreed: “With the benefit of hindsight, they should have said no to going [the super PAC] route—it’s disgusting. I think they’re shocked at how unsuccessful they’ve been.”

To be sure, not all Democratic donors are so agonized. John Law, director of a California real estate firm, sent $100,000 to Priorities late last year. After doing so, Burton was “like my new best friend,” Law jokes, “because no one else was giving.” Law is no fan of super PACs either, but for him the calculation was an easy one. “I want the president to win,” he says. “It’s that simple.” Unfortunately, Law is a mere mortal by super PAC standards. “I’m not a multi-billionaire,” he says. “A hundred grand is a sizable contribution for me. I can’t write a million-dollar check.”

There are a tiny number of liberals capable of single-handedly reversing Priorities’ lackluster fortunes. But financier George Soros has shown no signs of supporting Priorities; his adviser Michael Vachon told me that this year his boss was “more focused on Europe.” Meanwhile, Progressive Insurance chairman Peter Lewis, who gave $25 million in 2004, is currently concentrating on marijuana-law reform, and his adviser Jennifer Frutchy told me that he won’t be contributing to Priorities. “He finds the idea of giving one’s fortune to denigrate opponents with negative advertisements rather repulsive and doesn’t really want to be a part of corrupting the electoral process more than it already is.”

WEALTHY LIBERALS have constructed an elaborate rationale to explain why wealthy conservatives are more willing to cut big checks. Said one top Obama campaign fund-raiser: “For Republicans, if you say that God created Earth for the purpose of facilitating capitalism and how capitalists use their money will create the best outcomes for society, . . . then they’re not going to have inhibitions about spending their money that way.” Plus, they add, conservative mega-donors can view their contributions as a sound investment. “Since Shelly Adelson genuinely believes there shouldn’t be any estate tax, one-time payments to insure against adverse outcomes are expenditures with higher economic returns than are available in traditional investment markets,” says the fund-raiser.

There is some truth to this argument, but greed isn’t the only motivating factor at work. Yes, hedge fund and private equity managers benefit from the Republicans’ preservation of the carried-interest loophole, but many big donors also genuinely believe that the president is, in the words of hedge fund manager Paul Singer (a $1 million donor to Romney’s super PAC), putting the country on a course “for mass poverty and degradation of freedom.” “We tend to entirely rationalize it,” says Robert McKay, chairman of Democracy Alliance, a liberal fund-raising network. “But they are ideologues and are very committed to a cause.”

By and large, wealthy liberals are not zealous. Instead, they tend to get discouraged. When I pressed Frutchy on why Lewis wasn’t willing to replicate his spending in past campaigns, she told me: “There’s no question he thinks it’s extremely important to get Obama reelected. But on the other hand, he spent tens of millions dollars in the 2004 election for advertising, and that didn’t work.” Morgan, the Florida personal injury attorney, sounded plaintive, rather than proud, about his giving. “I’m about ready to say, ‘Everything I’m doing goes against my financial interests—taxes, Obamacare,’ ” he says. “If these fools want to vote for these people, . . . let them have it.’”

Of course, Election Day is still more than four months away, and it’s possible that many wealthy Democrats will eventually change their minds. Michael Kempner, a public relations executive who has raised more than $700,000 for Obama this year and given $50,000 to Priorities, predicts more people will contribute to the super PAC once they’ve done their share of bundling. “Those who are not believers in super PACs, when it comes to crunch time, they’ll be there,” he says. Steve Rosenthal, who oversaw the Democrats’ outside-spending effort in 2004, was hopeful that a healthy fear might kick in as Election Day nears: “Maybe the bell will go off over the summer, where they’ll start to say, ‘Oh shit, [Obama] can lose this thing.’ ”

But by then, it could be too late. For one thing, super PACs must reserve airtime for ads in advance; if Priorities fails to amass sufficient cash soon, it may be unable to counter the coming onslaught of Republican ads. Meanwhile, conservative groups are already unleashing attacks in must-win Obama states, such as Michigan, with little response from the other side. “For folks to think the president can will his way to victory is wrong,” Burton told me. “If the president and the people supporting him don’t have the resources they need, the president will lose.” 

This article appears in the July 12, 2012 issue of the magazine.