Obama picks money man for Downunder role

By Peter Huck

They call them 'bundlers' - high-value presidential fundraisers who are rewarded with diplomatic posts abroad. And the man chosen as the next United States ambassador to New Zealand is no exception.

Former Chicago White Sox baseball outfielder Mark Gilbert is in line to become the next US ambassador New Zealand. Photo / AP
Former Chicago White Sox baseball outfielder Mark Gilbert is in line to become the next US ambassador New Zealand. Photo / AP

When the next United States ambassador to New Zealand, Mark Gilbert, takes up his post - assuming the Senate confirms his appointment - he will be the latest beneficiary of an Obama administration trend that alarms US diplomats. The post in Wellington for the Barclays Wealth executive from Florida is regarded as a reward for Gilbert's services as a major "bundler" since 2007.

According to Democratic internal financial documents revealed by the New York Times, Gilbert bundled or gathered cheques worth at least US$3.36 million ($4 million) from friends and business colleagues, helping bankroll President Barack Obama's election campaigns and the Democratic National Committee.

"Gilbert was a professional athlete who went into a business career," says Michael Beckel, a reporter with the Centre for Public Integrity, who has investigated the bundlers' world. "And ever since Obama's star began rising, Gilbert has worked behind the scenes to help Obama raise money."

As a member of Obama's national finance team for the 2008 and 2012 national elections, and also the 2009 inauguration, Gilbert - whose business record also includes stints as a senior vice-president at Goldman Sachs and as an investment banker at Drexel Burnham Lambert - was a key bundler.

He also served, from 2009, as the DNC's deputy national finance chair.

"He has actively worked to help keep money flowing to the Obama fundraising machine," says Beckel.

Rich supporters are always welcome in politics. But prize bundlers like Gilbert, able to turn to extensive contacts who "can help bring in scads of cash" again and again, are better.

Gilbert is far from alone in helping Obama. The US election process is like an arms race, as candidates seek ever more money. Obama and Mitt Romney both broke the US$1 billion threshold in their 2012 campaigns, a dizzying fundraising benchmark for future contenders.

And though much is made of Obama's grassroots fund-raising prowess, reaching out to little people who pony up a few dollars, the Times list shows big money still shouts and Obama is heavily dependent on rich donors.

Though a few celebrity bundlers stand out, including Vogue editor Anna Wintour [US$5.4 million] and Hollywood producer Jeffrey Katzenberg [US$6.6 million], the financial services, high-tech and legal worlds dominate. Terry McAuliffe [US$2.2 million], Bill Clinton's confidante and a Beltway moneyman, was elected Governor of Virginia this week.

There is nothing illegal about bundling funds from donors. The term joined the political lexicon in the post-Watergate era, when the newly created Federal Election Commission reined back individual donations.

"Under US law there are limits on how much one person can directly donate to a candidate," explains Beckel. "But there are no limits on how much one person can ask other people to give the legal maximum. So one person can go out and ask for donations and then deliver those cheques in one bundle to a candidate."

The presidential campaign ceiling is US$5200; split equally between the party primary contests and the national election.

There is no disclosure rule for bundlers [lobbyists who bundle must report to the FEC], but presidents may reveal details. Obama listed his bundlers. So did George W. Bush. We also know about the bundling prowess of Bill Clinton and Ronald Reagan. The exception to this [limited] transparency was Romney - no fan of fiscal disclosure - who, says Beckler, "was the first presidential candidate in recent history who did not disclose a list of his bundlers".

So why do people become bundlers? "People give for any number of reasons," says Sheila Krumholz, executive director at the Centre for Responsive Politics. "Some expect nothing more than good governance. Or believe in the candidate." But others seek political access, raising funds in the hope this will translate into government contacts or appointments.

Gilbert declined to comment to the Herald. The US State Department says it is standard practice "that our ambassadorial nominees don't engage with the press prior to confirmation". But it is no secret that many bundlers have become US ambassadors. Indeed, Obama has turbocharged appointments.

As of September, reports the CPI, 22 bundlers who raised at least US$15.6 million for Obama since 2007, have been appointed US ambassadors.

Besides Gilbert, they include Bruce Heyman, a former Goldman Sachs executive who raised more than US$750,000 and is nominated as ambassador to Canada, and Rob Barber, a Boston lawyer who bundled upwards of US$600,000 and is nominated for Iceland. At one point Wintour was on Obama's short list as his British ambassador, inciting derisory press coverage.

This trend does not sit well with everyone. Critics cite two concerns: that bundlers, unlike trained diplomats who rise on merit, are not necessarily up to the job as US ambassadors; and that the process is yet another brick in the wall when it comes to public contempt for despised "politics as usual".

The American Foreign Service Association, the trade union for US diplomats, is clearly opposed. "Now is the time to end the spoils system and the de facto 'three-year rental' of ambassadorships," says the AFSA website. "The United States is alone in this practice; no other major democracy routinely appoints non-diplomats to serve as envoys to other countries."

It says 85 per cent of ambassadors posted to Europe and Japan, and almost 60 per cent elsewhere, including Brazil, Russia, India and China, during the past three decades, "have been political".

Retired ambassador Thomas Pickering, a foreign service veteran, has likened this growing practice to simony, selling offices in return for favours. The White House insists being a bundler neither guarantees a job nor precludes donors from getting one.

Standards for foreign service are laid down by the Foreign Service Act of 1980, designed to maintain a diplomatic cadre. It says ambassadorships "should normally be accorded to career members of the service", who possess "clearly demonstrated competence" - including foreign languages and a wide knowledge of the nations to which they are sent - and that "contributions to political campaigns should not be a factor" in postings.

Yet, though Obama and his Secretary of State John Kerry cite diplomatic soft power as key to US success, there is a wide gulf between words and practice. The AFSA fears bundlers might bungle.

In 2011 Cynthia Stroum, the US Ambassador to Luxembourg - a venture capitalist and major bundler for Obama in 2008 - resigned after an official report found she had been "aggressive, bullying, hostile and intimidating" - perhaps attributes of some business spheres - presiding over a "dysfunctional" embassy.

"It stands to reason that if you're appointing people whose primary qualification is political fundraising, you're not getting the best and the brightest in terms of foreign policy," says Krumholz. "There's little chance they would be sent to the riskier zones. Or be rewarded with a hardship post. But we never know when a cushy diplomatic post will become critical."

Whether bundlers have the diplomatic skills to cope with issues like the ongoing NSA spy scandal, and damage to America's reputation, is moot. Conversely, a background in high finance and perhaps the President's ear, rather than a career in the foreign service, might arguably help in trade talks.

In this scenario, Gilbert might bring special talents to bear on the Trans-Pacific Partnership talks, which Obama sees as part of his foreign policy legacy. The same might be said for appointing bundlers with legal and fiscal chops to posts in Europe, also entering complex trade talks with the US.

Despite AFSA concerns, there are no signs bundling has hurt the Obama administration. Republicans are less likely to score points, given their own bundling record. Nonetheless, the practice feeds disillusionment with the President, already stoked by accusations US drone attacks amount to war crimes [not helped by claims Obama told aides he is "really good at killing people"], the international furore provoked by US spies snooping on allies in Europe and elsewhere, and disgust at the extreme partisanship that has polarised the Government.

A Pew Research Centre poll, held last month, found just 19 per cent trusted the Government to do the right thing most of the time.

The deeper damage, not entirely Obama's fault, but worsened on his watch, is that bundling - and the potential for conflicts of interest - is yet another turn-off for voters alienated by a self-regarding political elite. "Bundling causes people to question the integrity of government," says Krumholz.

"That's not to say it is the most egregious problem. But these things add up."

Meanwhile, short of a major scandal, it's business as usual as candidates and their bundlers contemplate the next election season.

- NZ Herald

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