NY TIMES article

(from the NY Times.)

April 6, 2007
Romney Used His Wealth to Enlist Richest Donors
By DAVID D. KIRKPATRICK

WASHINGTON, April 5 — Mitt Romney, the multimillionaire founder of a giant private equity firm, knew he did not need other people’s money to mount a presidential campaign. But as they began planning a campaign more than two years ago, Mr. Romney and his advisers wanted to avoid the fate of two other millionaires, Steve Forbes and Ross Perot, whose self-financed campaigns went down as quixotic indulgences.

“By Mitt or anyone else self-funding, you don’t have a lot of people making investments in you,” said Spencer Zwick, 28, the campaign’s fund-raising director and a close aide whom the candidate sometimes calls his sixth son. “To be credible, you have to show that you have raised resources from around the country.”

Instead of tapping his own money directly, Mr. Romney embarked on an effort to leverage his personal fortune into donations to his Republican primary campaign.

He spent $6 million of his own on the campaign that made him governor of Massachusetts in 2002. Then he almost immediately began parlaying his own wealth, a network of his fellow Mormons and financiers, and his fund-raising role for the Republican Governors Association, into a national operation that quietly has signed up some of the biggest supporters of President Bush. Thus, although he remains the least known of the Republican front-runners, he has already locked up some of the most important donors.

At the start of the first quarter of this year, for example, Mr. Romney lent his campaign $2.35 million to pay for an elaborate demonstration of just how fast he could raise money from others. He rented the Boston convention center, furnished it with more than 400 laptop computers, loaded each with custom software and had more than 400 telephone lines installed.

He invited 400 wealthy supporters, including dozens of chief executives he knew through business connections, to a reception at an adjacent hotel. The next day each sat down before a personal-contact list loaded into an assigned laptop, with dozens of technical support staff and campaign finance advisers standing by to assist. Reporters watched from the sidelines for hours as Mr. Romney’s supporters raised $6.5 million.

“It was a great show,” said Ron Kaufman, a White House political director under the first President Bush.

Mr. Kaufman said he walked out thinking, “That was the most impressive thing I have ever seen.”

By the end of the first quarter, Mr. Romney had brought in more than $20 million, vaulting ahead of his better-known rivals for the Republican nomination, Senator John McCain of Arizona and Rudolph W. Giuliani, the former New York mayor. Mr. Romney’s campaign calls the money evidence of his broad appeal.

“His message sells,” Mr. Zwick said.

Mr. Romney’s financial support is deep but narrow. He amassed $20 million from fewer than 33,000 donors, according to figures disclosed by his campaign. By comparison, Mr. McCain raised $12.5 million from nearly 50,000 donors while Senator Barack Obama, Democrat of Illinois, raised $25 million from more than 100,000. Their average contributors each gave about $250; Mr. Romney’s gave more than $600.

Mr. Romney’s backers note that he raised the money despite very low name recognition nationwide. .

“It is why he is a viable candidate for president,” Mr. Kaufman said, asserting that it helps demonstrate the candidate’s management skills.

Mr. Romney has not always avoided putting his money behind his political career. When he left his private equity firm, Bain Capital, in 1998 to take over the foundering Salt Lake City winter Olympics, he threw in $1 million to start the turnaround.

In addition to the $6 million he spent on his 2002 campaign for governor, Mr. Romney last year dipped into his own pocket to contribute to Republican candidates for governor in potentially pivotal states — $3,500 in South Carolina, $2,000 in Iowa and $1,000 in Minnesota. (In Utah, he also gave $10,000 to the campaign of Gov. Jon M. Huntsman Jr., whose father is a major donor to Mr. Romney’s campaign; and $3,400 to the unsuccessful Michigan campaign for governor of Richard DeVos, a big conservative donor.)

But soon after he was elected governor of Massachusetts, Mr. Romney turned into a fund-raising machine, setting up a series of federal and state political action committees that together let individual donors give far more than the federal campaign spending limits.

To fill them, Mr. Romney turned in part to connections in the tight-knit world of wealthy fellow members of the Church of Jesus Christ of Latter-day Saints.

Of the roughly 450 people who have given the $5,000 maximum allowed annually to his federal political action committee, about a quarter are from Utah, the center of the Mormon church. And of his top eight donors, four — J. Willard Marriott Jr. and his brother, Richard Marriott, the hotel executives; Jon M. Huntsman Sr., the plastics mogul; and L. E. Simmons, the software chief executive — are Mormons who each gave more than $100,000, according to data compiled by the National Institute on Money in State Politics.

In addition, Mr. Romney tapped many of the financiers with whom he used to make deals as Bain Capital’s founder. More than 70 of the donors who contributed the maximum to his federal political action committee came from the investment business. They included several top executives of Bain and the giant buyout firms HM Capital Partners; Thomas H. Lee; Kohlberg Kravis Roberts and Co.; and The Blackstone Group. Stephen A. Schwarzman, Blackstone’s billionaire co-founder, gave about $50,000 to Mr. Romney’s various funds.

His biggest PAC donor, Peter Karmanos Jr., the chairman of Compuware, said he is both a family friend and a business connection, according to a company spokesman, who declined to elaborate. Mr. Romney’s brother, G. Scott Romney, sits on the Compuware board, and Mr. Karmanos gave about $250,000 to Mr. Romney’s committees.

Beginning in 2002, Mr. Romney also steadily climbed the fund-raising ladder of the Republican Governors Association, becoming its chairman in 2006 and impressing some of the major conservative donors he met through the association, according to Mr. Kaufman.

For example, Mr. Romney and Mr. Zwick, the campaign fund-raising director, visited with Bob J. Perry, the Texas homebuilder who was one of President Bush’s top supporters, a little less than two years ago.

“He asked in that first meeting, ‘Mitt, are you going to run for president?’ ” Mr. Zwick recalled.

Mr. Perry eventually gave $2.05 million to the governors’ association and more than $100,000 to Mr. Romney’s political action committees. Mr. Perry was impressed that Mr. Romney was “a strong leader and not a career politician,” said Anthony Holm, his spokesman.

About the same time, Mr. Romney met Carl H. Lindner Jr., the founder of the American Financial Group and patriarch of a family that is among the biggest conservative donors in the country. Mr. Romney visited Mr. Lindner’s Cincinnati home to give a speech at a fund-raiser for a local campaign, and the two millionaires found that they had much in common, Mr. Zwick recalled.

Since then, Mr. Zwick said, Mr. Romney and his wife, Ann, have traveled to spend time socially with Mr. Lindner and his wife, Edyth, and with their son Craig and his wife.

Mr. Lindner gave $150,000 to the Republican Governors Association under Mr. Romney, and about $245,000 to Mr. Romney’s political action committees.

More than 20 major Bush donors have given also to Mr. Romney, including Ambassador Sam Fox; Ambassador Mel Sembler; the real estate developer Robert Congel of New York; and Ted Welch of Tennessee, an investor.

In all, Mr. Romney helped the Republican Governors Association raise $26 million and his political action committees raised a total of $8.8 million to build support for his presidential campaign.

Some of the association expenditures may have dovetailed with Mr. Romney’s fund-raising in his campaign for the presidential nomination. The association directed $1 million to the campaign for governor of Mr. DeVos at the same time Mr. DeVos himself was giving $2 million to the association. He lost the election and is not yet supporting a candidate.