[Harpers] Barack Obama Inc.: The birth of a Washington machine

By Ken Silverstein

In July, on a typically oppressive summer day in Washington, D.C., roughly a thousand college students from across the country gathered at a Marriott hotel with plans to change the world. Despite being sponsored by the Center for American Progress, a moderate think tank founded by one of Bill Clinton’s former chiefs of staff, John Podesta, the student group—called Campus Progress—leans decidedly farther to the left. At booths outside the main auditorium, young activists handed out pamphlets opposing nuclear power, high pay for CEOs, excessive profits for oil companies, harsh prison sentences for drug users, and Israeli militarism in Gaza and the West Bank. At one session, Adrienne Maree Brown of The Ruckus Society—a protest group whose capacious mission is to promote “the voices and visions of youth, women, people of color, indigenous people and immigrants, poor and working class people, lesbian, gay, bisexual, gender queer, and transgendered people”—urged students to “break the fucking rules.” Even the consummate insider Podesta told attendees, with unintended ambiguity, “We need more of you hanging from trees.”

Around noon, conference participants began filing into the auditorium; activists staffing the literature booths abandoned their posts to take seats inside as well. The crowd, and the excitement, building in the hall was due entirely to the imminent arrival of the keynote speaker: Illinois Senator Barack Obama. Having ascended to political fame through a stirring and widely lauded speech at the 2004 Democratic Convention, Obama, the U.S. Senate’s only African-American member, is now considered to be the party’s most promising young leader—especially among those who, like the student organizers present, are seeking to reinvigorate its progressive wing. In terms of sheer charisma, Obama is certainly the party’s most magnetic leader since Bill Clinton, and perhaps since Robert F. Kennedy.

The senator was running a bit late; but when he finally glided into the auditorium, escorted by an assortment of aides, he was greeted by a tremendous swell of applause as he took to the stage. Dressed in a brown jacket and red tie, Obama approached the podium, flanked by two giant screens enlarging his image, and began a softly spoken but compelling speech that recalled his own days, after his graduation in 1983 from Columbia University, as a community organizer in poor neighborhoods of Chicago. “You’ll have boundless opportunities when you graduate,” he told the students, “and it’s very easy to just take that diploma, forget about all this progressive-politics stuff, and go chasing after the big house and the large salary and the nice suits and all the other things that our money culture says you should buy. But I hope you don’t get off that easy. There’s nothing wrong with making money, but focusing your life solely on making a buck shows a poverty of ambition.”

Obama complained of an American culture that “discourages empathy,” in which those in power blame poverty on people who are “lazy or weak of spirit” and believe that “innocent people being slaughtered and expelled from their homes halfway around the world are somebody else’s problem.” He urged the assembled activists to ignore those voices, “not because you have an obligation to those who are less fortunate than you, although I think you do have that obligation . . . but primarily because you have that obligation to yourself. Because our individual salvation depends on collective salvation. It’s only when you hitch yourself up to something bigger than yourself that you realize your true potential.”

It was a rousing speech, and Obama is probably the only member of Congress who could have delivered it with any conviction or credibility. When he left the stage and headed toward the hotel exit, he was trailed by a pack of autograph seekers, picture takers, and glad-handers.

Despite its audience and ostensible subject matter, however, Obama’s speech had contained just a single call for political action. This was when he had introduced Mark Pike, a law student who then came bounding across the stage in a green one-piece mechanic’s outfit. As part of a campaign called “Kick the Oil Habit,” Pike was to depart directly from the conference and drive from Washington to Los Angeles in a “flex-fuel” vehicle. “Give it up for Mark!” Obama had urged the crowd, noting that Pike would be refueling only at gas stations that offer E85—which Obama touts as “a clean, renewable, and domestically produced alternative fuel.”

Although the senator did not elaborate, E85 is so called because it is 85 percent ethanol, a product whose profits accrue to a small group of corporate corn growers led by Illinois-headquartered Archer Daniels Midland. Not surprisingly, agribusiness is a primary advocate of E85, as are such automobile manufacturers as Ford, which donated Pike’s car. The automakers love E85 because it allows them to look environmentally correct (“Live Green, Go Yellow,” goes GM’s advertising pitch for the fuel) while producing vehicles, mostly highly profitable and fuel-guzzling SUV and pickup models, that can run on regular gasoline as well as on E85. 11. Since producing most domestic ethanol requires large amounts of fossil fuel, and regular gasoline provides about 30 percent more mileage per gallon than E85, it’s arguably preferable from a conservation standpoint to drive a standard gasoline car rather than a flex-fuel vehicle. Obama had essentially marshaled his twenty minutes of undeniably moving oratory to plump for the classic pork-barrel cause of every Midwestern politician.


In an election season, when Americans of all political persuasions can allow themselves to imagine—even if for just a few unguarded moments—how matters in this country might improve if its leaders did, it is worthwhile to consider the path so far of Senator Barack Obama. A man more suited to the tastes of reform-minded Americans could hardly be imagined: he is passionate, charming, and well-intentioned, and his desire to change the culture of Washington seems deeply held and real. He managed to win a tremendous majority in his home state of Illinois despite rhetoric, and a legislative record, that marked him as a true progressive. During his first year in the state senate—1997—he helped lead a laudable if quixotic crusade that would have amended the state constitution to define health care as a basic right and would have required the Illinois General Assembly to ensure that all the state’s citizens could get health insurance within five years. He led initiatives to aid the poor, including campaigns that resulted in an earned-income tax credit and the expansion of early-childhood-

education programs. In 2001, reacting to a surge in home foreclosures in Chicago, he helped push for a measure that cracked down on predatory lenders that peddled high-interest, high-fee mortgages to lower-end homebuyers. Obama was

also the driving force behind legislation, passed in 2003, that made Illinois the first state to require law-enforcement agencies to tape interrogations and confessions of murder suspects. Throughout his campaign for the U.S. Senate, Obama called for social justice, promised to “stand up to the powerful drug and insurance lobbies” that block health-care reform, and denounced the war in Iraq and the Bush White House.

Since coming to Washington, Obama has advocated for the poor, most notably in the aftermath of Hurricane Katrina, and has emerged as a champion of clean government. He has fought for restrictions on lobbying, even as most of his fellow Democrats postured on the issue while quietly seeking to gut real reform initiatives. In mid-September, Congress approved a bill he co-authored with Oklahoma’s arch-conservative senator, Tom Coburn, requiring all federal contracts and earmarks to be published in an Internet database, a step that will better allow citizens to track the way the government spends their money.

Yet it is also startling to see how quickly Obama’s senatorship has been woven into the web of institutionalized influence-trading that afflicts official Washington. He quickly established a political machine funded and run by a standard Beltway group of lobbyists, P.R. consultants, and hangers-on. For the staff post of policy director he hired Karen Kornbluh, a senior aide to Robert Rubin when the latter, as head of the Treasury Department under Bill Clinton, was a chief advocate for NAFTA and other free-trade policies that decimated the nation’s manufacturing sector (and the organized labor wing of the Democratic Party). Obama’s top contributors are corporate law and lobbying firms (Kirkland & Ellis and Skadden, Arps, where four attorneys are fund-raisers for Obama as well as donors), Wall Street financial houses (Goldman Sachs and JPMorgan Chase), and big Chicago interests (Henry Crown and Company, an investment firm that has stakes in industries ranging from telecommunications to defense). Obama immediately established a “leadership PAC,” a vehicle through which a member of Congress can contribute to other politicians’ campaigns—and one that political reform groups generally view as a slush fund through which congressional leaders can evade campaign-finance rules while raising their own political profiles.

Already considered a potential vice-presidential nominee in 2008, Obama clearly has abundant political ambitions. Hence he is playing not only to voters in Illinois—a reliably Democratic and generally liberal state—but to the broader national audience, as well as to the Democratic Party establishment, the Washington media, and large political donors. Perhaps for this reason, Obama has taken an approach to his policymaking that is notably cautious and nonconfrontational. “Since the founding, the American political tradition has been reformist, not revolutionary,” he told me during an interview at his office on Capitol Hill this summer. “What that means is that for a political leader to get things done, he or she ideally should be ahead of the curve, but not too far ahead. I want to push the envelope but make sure I have enough folks with me that I’m not rendered politically impotent.”

The question, though, is just how effective—let alone reformist—Obama’s approach can be in a Washington grown hostile to reform and those who advocate it. After a quarter century when the Democratic Party to which he belongs has moved steadily to the right, and the political system in general has become thoroughly dominated by the corporate perspective, the first requirement of electoral success is now the ability to raise staggering sums of money. For Barack Obama, this means that mounting a successful career, especially one that may include a run for the presidency, cannot even be attempted without the kind of compromising and horse trading that may, in fact, render him impotent.


The walls of Obama’s office on the seventh floor of the Hart Senate Office Building are decorated with images from the canon of liberal icons. There are photos of Martin Luther King addressing a civil rights rally, Gandhi sitting cross-legged, and Obama with Nelson Mandela; a painting of Thurgood Marshall, and, above a framed pair of red boxing gloves signed by Muhammad Ali, the famous photo of a scowling Ali standing over Sonny Liston after knocking him out during their second fight, in Lewiston, Maine.

When I interviewed him this summer, I had my eleven-year-old daughter in tow, because her outing with a friend had fallen through just as I was leaving home. Obama, who is married and has two young daughters of his own, asked her a few questions; when she told him she was starting seventh grade in the fall, he told her that at her age, “I was such a terror that my teachers

didn’t know what to do with me.” He draped his gray jacket over his leather desk chair and urged her to have a seat. For the next hour, she contentedly twirled on the chair while we spoke across the room, Obama on a tan sofa and me on a chair to his right.

I asked Obama how he was adjusting to Washington and the city’s peculiar political culture. “I have not had to partake of the culture much,” he replied. “My family lives in Chicago, and I’m usually here Tuesday through Thursday. I rarely meet lobbyists; it’s one of the benefits of having a good staff.” Nor has he had to devote much time to fund-raising. “The first $250,000 that I raised was like pulling teeth,” he recalled. “No major Democratic donors knew me, I had a funny name, they wouldn’t take my phone calls. Then at a certain point we sort of clicked into the public consciousness and the buzz, and I benefited from a lot of small individual contributions that helped me get over the hump. . . . And then after winning, the notoriety that I received made raising money relatively simple, and so I don’t have the same challenges that most candidates do now, and that’s pure luck. It’s one of the benefits of celebrity.”

Obama sat with his arms and legs crossed, one foot tapping the air. Progressive candidates generally have a harder time raising money, he said, and at times some of them will “trim their sails” on behalf of the people who are financing them. “When I say that,” he was hasty to add, “I want to make sure I’m not saying all the time. I’m just saying there are going to be points where donors have more access and are taken more into account than ordinary voters.” The solution he supports is some form of public financing for campaigns, combined—since big donors “are always going to find a way to get money” to candidates—with some reduction in the cost of running for office; for example, by providing candidates with free political advertising.

Personally, though, Obama felt that he had not trimmed his own political sails to make himself palatable to the political center. His primary obstacle, he said, is simply that the G.O.P. controls the White House and Congress. “My experience in the state legislature is instructive. The first seven years I was there I was in the minority, and I think that I passed maybe ten bills; maybe five of them were substantive. Most of the bills that I did pass were in partnership with Republicans, because that was the only way I could get them passed. The first year we were in the majority party I passed twenty-six bills in one year.” While Washington “moves more slowly than the state legislature,” Obama said he had no doubt that if the Democrats controlled Congress, it would be possible to move forward on important progressive legislation.

The alternative, until then, is to be opportunistic and look for areas where he can get enough Republican support to actually get a bill passed. That, he said, “means that most of the legislation I’ve proposed will be more modest in its goals than it would be if I were in the majority party.” Obama gave an example: although he is a strong supporter of raising fuel-economy standards, proposals to do so have gone nowhere for years. In 2005, Congress overwhelmingly rejected an amendment to the energy bill that would have required cars, minivans, and SUVs to get 40 miles per gallon on average by 2016. This year, Obama and Indiana Republican Richard Lugar introduced a bill that would require fuel-economy targets to rise 4 percent annually unless federal regulators specifically blocked that step. Obama recruited as co-sponsors four senators who had voted against the 2005 amendment—

Democrat Joe Biden of Delaware and Republicans Norm Coleman of Minnesota, Gordon Smith of Oregon, and Arlen Specter of Pennsylvania—and although this bill might not pass either, it has a better chance than past efforts.

I asked Obama a question about pork-barrel spending. Did he feel pressure to deliver federal money for home-state interests? “Pork is in the eye of the beholder,” he said. “The recipients don’t tend to think it’s pork, especially if it’s a great public-works project.” He said he felt “pretty good” about projects he had sought in last year’s transportation bill and “unashamed” about getting them in. House Speaker Dennis Hastert had praised Obama for his efforts in helping win Illinois its $6.2 billion in the massive, earmarklarded 2005 transportation bill. (Illinois’s most extravagant project funded by the bill was the Prairie Parkway, a controversial regional highway that would run through Hastert’s district and, in fact, has significantly increased the value of real estate he owns along the proposed route.)

An aide came in and told Obama that Congressman David Dreier was on the phone to discuss legislation to aid the Democratic Republic of Congo, a country that Obama was planning to visit as part of a trip to Africa. After taking the call at his desk, Obama returned to the couch and took up the pork-barrel question again. He gave as an example President Bush’s Clear Skies Initiative, which he described as a difficult decision. After examining the legislation, he determined that it would significantly weaken the Clean Air Act, yet the administration claimed it would help the coal industry, a major economic force in southern Illinois. In the end, he opposed it because he decided it would have been more beneficial to western coal producers, not those in Illinois. “That kind of vote is a tough vote, not so much on the merits as it is on the politics,” he said. “I then have to spend a lot of time working that through with my constituents in southern Illinois, explaining to them why I did not think it was actually good for them.” Even so, he took heat at home, with one southern Illinois newspaper editorial saying that he was less interested in looking out for the interests of the state’s coal industry than he was in voting with the interests of Barbara Boxer and Hillary Clinton.

And what if he had determined that the Clear Skies Initiative would have aided Illinois coal? I asked. In that case, Obama said, “It would have been more difficult for me. . . . If I thought that it would have significantly helped Illinois coal but would have been a net minus for the environment, then you’ve got your classic legislative dilemma.”

Obama said that the “blogger community,” which by now is shorthand for liberal Democrats, gets frustrated with him because they think he’s too willing to compromise with Republicans. “My argument,” he says, “is that a polarized electorate plays to the advantage of those who want to dismantle government. Karl Rove can afford to win with 51 percent of the vote. They’re not trying to reform health care. They are content with an electorate that is cynical about government. Progressives have a harder job. They need a big enough majority to initiate bold proposals.”


Before he addressed the 2004 convention, Obama was virtually unknown nationally, and even in Illinois his was far from a household name. Just four years earlier, he had been defeated by a significant margin when he tried to unseat Chicago-area Congressman Bobby Rush in the Democratic primary. But following the speech, which was universally hailed—even the National Review called it “simple and powerful,” conceding that it had deserved its “rapturous critical reception”—Obama became a national celebrity. Less than two months later, he won election to the Senate with 70 percent of the vote.

If the speech was his debut to the wider American public, he had already undergone an equally successful but much quieter audition with Democratic Party leaders and fund-raisers, without whose support he would surely never have been chosen for such a prominent role at the convention. The early, if not overwhelming, favorite to be the Senate nominee from Illinois had been Dan Hynes, the state comptroller, who had twice won statewide office and had the support of the state’s Democratic machine and labor unions. But by September 2003, six months before the primary, Obama was winning support from not only African Americans but also Chicago’s “Lakefront Liberals” and other progressives. He was still largely unknown in Washington circles, but that changed the following month when Vernon Jordan, the well-known power broker and corporate boardmember who chaired Bill Clinton’s presidential transition team after the 1992 election, placed calls to roughly twenty of his friends and invited them to a fund-raiser at his home.

That event marked his entry into a well-established Washington ritual—the gauntlet of fund-raising parties and meet-and-greets through which potential stars are vetted by fixers, donors, and lobbyists. Gregory Craig, an attorney with Williams & Connolly and a longtime Democratic figure who, as special counsel in the White House, had coordinated Bill Clinton’s impeachment defense, met Obama that night. “I liked his sense of humor and the confidence he had discussing national issues, especially as a state senator,” Craig recalled of the event. “You felt excited to be in his presence.” Another thing that Craig liked about Obama was that he’s not seen as a “polarizer,” like such traditional African-American leaders as Jesse Jackson and Al Sharpton. “He gets respect from his adversaries because of the way he treats them,” Craig said. “He doesn’t try to be all things to all people, but he has a way of taking positions you don’t like without making you angry.”

Word about Obama spread through Washington’s blue-chip law firms, lobby shops, and political offices, and this accelerated after his win in the March primary. Mike Williams, vice president for legislative affairs at The Bond Market Association and a member of an African-American lobbying association, had been following the race in Illinois and was introduced to Obama through acquaintances in Washington who had known him at Harvard Law School. “We represent Wall Street firms,” Williams said in recounting his first conversation with Obama. “A big issue for us since 2000 is predatory lending. He worked on that issue in Illinois; he was the lead sponsor of a bill there. I talked to him about that. He had a different position from ours. There’s a perception out there that the Democrats are anti-business, and I talked to him about that directly. I said, There’s a perception that you’re coming at this from the angle of consumers. He was forthright, which I appreciated. He said, I tried to broker the best deal I could.” Williams still had his differences with Obama, but the conversation convinced him that the two could work together. “He’s not a political novice and he’s smart enough not to say things cast in stone, but you can have a conversation with him,” Williams said. “He’s a straight shooter. As a lobbyist, that’s something you value. You don’t need a yes every time, but you want to be able to count the votes. That’s what we do.”

Williams subsequently set up a conference call between Obama and a group of financial-industry lobbyists. That, too, went well, and in June of 2004, Williams helped organize “a little fund-raiser” for Obama at The Bond Market Association. “It wasn’t just the financial community. There was a broad cross-section,” he said of the 200 or so people who turned out. “There was overwhelming support, not just people from associations giving $2,000 but from individuals who just wanted to meet him, giving smaller contributions.”

Tom Quinn, a senior partner at Venable and widely considered one of the top lobbyists in town, got a call from Williams and attended the fund-raiser. “I’m on the list. Pretty much everyone in political fund-raising circles knows me,” said Quinn, who works closely with the Democratic National Committee and has been a party power broker since the late 1960s, when he worked on the presidential campaign of Hubert Humphrey. “Every day I get ten or fifteen solicitations. I contribute if I like the candidate and think they have a chance to win.” He was impressed when he heard that Obama had been president of the Harvard Law Review—“That jumped out at me. It showed he had absolute intelligence”—and even more impressed after meeting him. “He’s got a nice personal touch and the ability to kid around a little bit too,” he said. “He’s got star quality.” Quinn contributed $500 to Obama at The Bond Market Association event, and later made calls to people he knew and asked them to donate money as well.

Robert Harmala, also a big player in Democratic circles and a colleague of Quinn’s at Venable, attended the association’s event as well. He had been invited by Larry Duncan—an African-American lobbyist for Lockheed Martin, a Venable client—who helped Williams organize the affair. Harmala liked what he saw and continued to be impressed by Obama. “There’s a reasonableness about him,” he said. “I don’t see him as being on the liberal fringe. He’s not going to be a parrot for the party line.” Like Quinn, Harmala donated $500 to Obama and made calls to a number of political donors (“Some usual suspects in California whom I’ve worked with before”) and urged them to support Obama’s campaign. Other fund-raisers were soon organized—one at the Four Seasons Hotel, another at a Dupont Circle restaurant, yet another at the Clintons’ home off Embassy Row. “He was hitting his stride. There were people clamoring to help,” said Williams. “It wasn’t just one person who put the events together and it wasn’t all about raising money—people wanted to meet him and talk to him.”


It’s not always clear what Obama’s financial backers want, but it seems safe to conclude that his campaign contributors are not interested merely in clean government and political reform. And although Obama is by no means a mouthpiece for his funders, it appears that he’s not entirely indifferent to their desires either.

Consider the case of Illinois-based Exelon Corporation, the nation’s leading nuclear-power-plant operator. The firm is Obama’s fourth largest patron, having donated a total of $74,350 to his campaigns. During debate on the 2005 energy bill, Obama helped to vote down an amendment that would have killed vast loan guarantees for power-plant operators to develop new energy projects. The loan guarantees were called “one of the worst provisions in this massive piece of legislation” by Taxpayers for Common Sense and Citizens Against Government Waste; the public will not only pay millions of dollars in loan costs but will risk losing billions of dollars if the companies default.

In one of his earliest votes, Obama joined a bloc of

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