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Obama’s New Social Secretary Julianna Smoot Has Strong Ties to Norman Hsu and Was Obama 2008 Fundraising Chief; UPDATE: Single Biggest Hsu Donation Went to Smoot’s DSCC in 2005

February 27th, 2010 by AHFF Geoff

New White House Social Secretary Julianna Smoot (photo by Lynn Sweet) Has Close Ties to Convicted Democratic Fundraiser Norman Hsu

The latest weekend firing by the Obama Administration (Van Jones, Gregory B. Craig) is the White House Social Secretary, Desiree Rogers. Rogers left last night under a cloud of scandal for her mishandling of Obama’s first State Dinner (with India) as the famous “party crashers”, the Salahis, somehow gaining entry uninvited. This resignation of a White House Social Secretary in the wake of scandal is yet another “unprecedented” development, courtesy of the Obama Administration. Other firsts from the Rogers tenure include the first claim of executive privilege made on behalf of the White House Social Secretary, as ludicrously stated by chief Obama spokesman Robert Gibbs at the height of the party crashers scandal. Without question, the Rogers tenure was the most scandal ridden tenure of any White House Social Secretary in American history. But enough the now departed Desiree Rogers, and time to analyze the past and present of the new White House Social Secretary, Julianna Smoot.

Left-leaning Politico journalist Ben Smith laments the appointment Obama’s chief fundraiser, Julianna Smoot, as the the new White House Social Secretary:

The promotion of Julianna Smoot to White House Social Secretary is good news for wealthy donors to President Obama’s campaign, for whom Smoot — the chief campaign fundraiser — is friend and point of contact.

Smoot, who had been working in the relative obscurity of the U.S. Trade Representative’s office, will now be the key gatekeeper to the kind of social functions from which donors have complained that this administration, unlike President Clinton’s, has barred them.

But the choice to unite money and access in the person of Smoot — a career political fundraiser whose efforts were downplayed by a campaign eager to focus on small donors — cuts against both President Obama’s broader message of change and against the talking points of her departing predecessor, Desiree Rogers.

Rogers told Lynn Sweet that she saw her role as turning the White House into the “people’s house,” and Michelle Obama praised her in a statement for “welcoming scores of everyday Americans through its doors, from wounded warriors to local schoolchildren to NASCAR drivers.”

Smoot may have the same goal, but her credentials and relationships point in the opposite direction: To ensuring access and satisfaction for the ultra-wealthy elite who will, incidentally, be called on to finance President Obama’s next campaign.

A White House official says appointing a fundraising staffer Social Secretary isn’t “outside the norm” because one of President George W. Bush’s Social Secretaries, Lea Berman, had been such a staffer, though not one of Smoot’s centrality.

As Ben notes, Smoot was Obama’s chief fundraiser for the 2008 campaign and she is a longtime veteran of Democratic fundraising, working for such liberal luminaries as John Edwards, Tom Daschle, Chuck Schumer, Harry Reid, Dick Durbin, Jay Rockefeller (all mentioned in today’s White House press release except, of course, John Edwards and Tom Daschle) and others. A 2007 article from the Washington Post outlines the critical role Smoot played in making the Obama presidential campaign a “serious contender” for the presidency, as she created the “fundraising juggernaut” that netted Obama $75 Million by September 2007, earning her the moniker from WaPo of “the $75 Million Dollar Woman”:

On a frigid day in early January, Barack Obama rode the three blocks from the Capitol to a nondescript, four-story, white-brick building where he had rented a spartan office suite.

Obama pulled out a folding chair and sat down with Julianna Smoot, the veteran Democratic fundraiser he had hired to raise the millions of dollars he would need for a presidential bid. Smoot thumbed through a thin list of potential donors that Obama had gathered during his 2004 Senate bid in Illinois and as he helped other politicians raise money for elections in 2006. She frowned.

“It wasn’t much to work with,” Smoot recalled. “But that was how we started. He asked me what he should do, and I said, ‘Start calling. And don’t forget to ask for their credit card numbers.’ “

That was the beginning of a fundraising juggernaut that, perhaps more than any other single factor, helped transform Obama into a serious contender for the presidency. By the end of September, the senator from Illinois had raised more money for his primary bid than any other candidate in either party — more than $75 million. He did it not simply by using the new possibilities of the Internet, for which he has received considerable attention, but by creating almost overnight a network of “bundlers” — a core group of motivated supporters with the Rolodexes to bring along friends and associates.

From all appearances, as described in Ben Smith’s article today and the WaPo’s 2007 piece, amongst other sources, the new White House Social Secretary Smoot is the insider’s insider, with close personal contacts with many if not most major Democratic donors and folks known as presidential “bundlers”, who bundle up maximum donations from others to the candidate and are central to modern presidential fundraising. As chief fundraiser, Smoot oversaw the creation of the Obama bundlers task force in 2007, the 100 top bundlers who went on to form the core of Obama’s fundraising effort, going from the meeting at Obama’s “spartan” office in DC to a spacious 11th floor office in downtown Chicago in less than a year:

Obama’s campaign offices are spread across the entire 11th floor of a Chicago high-rise. The finance team’s desks are scattered around a Ping-Pong table. Tabloid headlines — “Record Haul for Obama,” “Run for the Money” — are taped to the walls.

As the summer wore on, Smoot sat in the middle, tracking dozens of events around the country on her laptop. In a rolling series of phone calls with her regional fundraisers, she pushed and prodded them to hit their goals, then updated her spreadsheets so she could keep tabs on the quarter’s target.

Imprisoned former Democratic fundraiser Norman Hsu (seen here with Hillary Clinton) Has Again Popped Up in National News as his Ties to Obama's New Social Secretary, Julianna Smoot, are Revealed

Smoot apparently has little problem with associating with unsavory characters, such as now-imprisoned Democratic fundraiser Norman Hsu. The two were quite close, has mutual “respect” for each other as Hsu served as one of Smoot’s “most reliable donors from her tenure as finance chair for the Democratic Senatorial Campaign Committee.” Smoot aggressively pursued Hsu on behalf of the Obama campaign, as noted by the 2007 WaPo “$75 Million Dollar Woman” piece:

Smoot knew Obama was not alone in pursuing potential fundraisers. Some were getting daily calls from presidential candidates. One potential bundler contacted by Smoot was Norman Hsu, one of the most reliable donors from her tenure as finance chair for the Democratic Senatorial Campaign Committee. Hsu would later become mired in scandal as a top bundler for the Clinton campaign, but he was regarded at the time as a prime target because of his reputation for producing a steady flow of campaign cash.

In an interview — before it was reported that Hsu was a fugitive trying to outrun a 15-year-old conviction for running a Ponzi scheme — he recalled his call from Smoot. She asked what he thought of Obama’s bid and whether he might consider helping. “I told her, ‘You’re asking for an unbiased opinion from someone who is very biased.’ She knew I was loyal to Senator Clinton. I told her she was asking the wrong person. We both respected each other well enough not to talk about it after that.

The NY Daily News detailed the various campaign fundraising crimes that Hsu was convicted of after his May 2008 trial, and at his sentencing (he received 24 years in jail), presiding Judge Victor Marrero declared that “Hsu’s dishonest use of political campaigns to perpetuate his fraud strikes at the very core of our democracy.” CNN reports on the sentencing:

NEW YORK (CNN) – A former Democratic fund-raiser who contributed to the presidential campaigns of Hillary Clinton and Barack Obama was sentenced Tuesday to 292 months, or more than 24 years, in prison for fraud including campaign finance violations, U.S. Attorney Preet Bharara announced.

“Norman Hsu betrayed the trust of his victims by stealing their money with false promises of fake returns in order to finance a luxurious lifestyle…Today’s sentence underscores our commitment to stop swindlers like Hsu in their tracks and bring them to the bar of justice,” Bharara, U.S. attorney for the Southern District of New York, said in a statement.

The sentencing breakdown includes 240 months in prison for wire and mail fraud charges and 52 months in prison for charges of campaign finance fraud. Judge Victor Marrero, who issued the sentence Tuesday afternoon at a Manhattan federal court, said in a statement, “Hsu’s dishonest use of political campaigns to perpetuate his fraud strikes at the very core of our democracy.”

Hsu, 57, was convicted in May on four counts of campaign fraud – one for each year from 2004 to 2007.

Earlier this year, Hsu also was found guilty on 10 counts of mail and wire fraud surrounding his investment practices.

He was indicted in 2007 after an investigation into his two investment companies.

When he was convicted in May, prosecutors said that Hsu not only swindled investors out of at least $20 million but also told some investors to make campaign contributions to the candidates he supported, and suggested that their investments could be jeopardized if they didn’t do as he asked.

Hsu has pleaded guilty to orchestrating the Ponzi scheme.

Obama’s campaign at the time of the public disclosure of Hsu’s alleged criminal wrongdoing (after initial hesitation), decided to donate the funds raised by Hsu for Obama for his first national campaign, the 2004 run for the Illinois Senate seat to charity. Democratic Underground reported in 2007 that “Obama’s team scored a significant hit by helping to place a story in several newspapers revealing that Norman Hsu, a major Clinton donor, had skipped town after having pleaded no contest to a charge of grand theft” while TalkLeft pointed out out at the time that Obama’s campaign had criticized Clinton at the time for risking her “independence” by taking shady donations:

Tuesday, Barack Obama’s spokesperson said the Senator would not give up the donations received from Norman Hsu.

… spokesman Jen Psaki said Obama, who has criticized Clinton for taking contributions that could undermine her independence, had no plans to return Hsu’s donations.

Today, he’s had a change of heart.

A spokesman for Senator Barack Obama, the Illinois Democrat who is a rival of Mrs. Clinton for the party’s presidential nomination, said Mr. Obama intended to give away $7,000 that Mr. Hsu contributed to his committees.

Interestingly, the Newsday story quoting Jen Psaki used by Talkleft above is no longer an available link. Considering the return of the money raised by Hsu after the explicit Obama campaign acknowledgment to the Washington Post in September 2007 that Hsu brought a “major fundraiser” to Obama in the mid-2000′s, Hsu’s links to Obama were not insubstantial, making the choice of Smoot, who herself is closely tied to Hsu, an odd choice by Obama. Hsu received the longest prison sentence for campaign finance crimes in recent history, according to our searches, between the time Obama’s campaign returned some Hsu money in September 2007 and the appointment of Julianna Smoot today.  Indeed, as Obama has railed against the “broken” Washington lately over the stalling of his health care plan (and as that battle heats up), the appointment of this fundraiser Smoot, who made Obama into a “serious contender” by using her stellar insider connections in 2007, and considering her not so stellar insider connections folks like Hsu, must be disappointing to those who are true believers in Obama’s “hope and change” mantra as well to centrist fans of good governance.

Regardless, it is clear that, even from the left-leaning point of view, Obama’s appointment of Julianna Smoot represents “good news for wealthy donors to President Obama’s campaign” and a sign of increased influence in the White House of the “wealthy elite” who will fund Obama 2012.    Considering the spate of stories last week about the beginning of the campaign operations of Obama 2012, perhaps Smoot’s appointment is unsurprising as she’ll likely serve as a hub for the prior donor network that she established back in 2007 that jumpstarted the Obama 2008 campaign.   This move by Obama appears to contradict his 2008 campaign rhetoric about lessening the influence of big money on the White House, his recent condemnation of the Supreme Court decision on corporate donations, and other Democrats recent comments, like those of NY Dem Rep. Anthony Weiner), which bemoaning the influence of large big money in politics.   Indeed, Ben concludes his piece by noting that the Smoot appointment “cuts against both President Obama’s broader message of change” and the Rogers and Obama talking points about increased “openness” in the White House to all Americans, not just the wealthy few.  Smoot’s deep ties to Norman Hsu certainly punctuate this point of view, and Obama has been under fire from watchdog groups for failing to curb “big money” influence in DC even before the Smoot appointment.

Obama’s comment on the Smoot appointment touches these familiar claims, saying that Smoot shares the Obamas’ commitment “to creating an inclusive, dynamic and culturally vibrant White House.”   In response to Ben Smith’s article, an anonymous White House official played the familiar “Bush did it” card by defending Smoot’s appointment as not “outside the norm” because a Bush social secretary, Lea Berman, had been a low-level fundraiser. Of course, Berman was a not the central, chief fundraiser for Bush, like Smoot was in for Obama and as Smoot apparently will be for Obama 2012.  Further, the White House Social Secretary’s job has never been filled by the top fundraiser of the President’s campaign, creating another “unprecedented” development from the Obama White House. We can only hope that Obama is correct in his assessment of Smoot, and that Smoot’s appointment does not signal an increase special interest and wealthy donor influence in the Obama White House as we approach the 2010 and 2012 elections.   If Smoot couldn’t sniff out an ongoing campaign finance criminal enterprise that Hsu was engaging in as he served as one of Smoot’s “most reliable donors from her tenure as finance chair” of the DSCC for the 2006 election cycle, a reasonable question can be asked as to whether Smoot should be in charge of access of other bundlers and everyone else to the Obama White House.

UPDATE: No reporting yet on the close ties between Smoot and Hsu by the mainstream media.   While we do not have the resources to truly investigate the long term ties between Hsu and Smoot, one interesting fact turned up in our research: the single biggest donation that Hsu made during the years for which he was convicted of campaign finance crimes (2004-2007) was $26,700.00 to the Democratic Senatorial Campaign Committee (DSCC) in June 2005, at a time when Smoot was the Finance Chair of the DSCC:

HSU, NORMAN
NEW YORK,NY 10016 COOL PLANETS 6/9/05 $26,700 Democratic Senatorial Campaign Cmte (D)

The next biggest donation to anyone by Hsu, ever, was less than half of the $26,700.00 donated by Hsu to the DSCC while Smoot was the DSCC finance chair. That explains why Hsu was described by the Washington Post in 2007 as “one of the most reliable donors from her tenure as finance chair for the Democratic Senatorial Campaign Committee” and why Smoot tried a hard sell on Hsu to pull him away from Clinton and to Obama in early 2007. A reasonable inquiry remains to be made as to why Smoot, who apparently could not discern that one of her “most reliable donors” Hsu was in fact engaged in criminal violations of campaign finance laws, is fit to be in charge of all access to the White House. Further, aside from the Hsu issue, considering Smoot is a career fundraiser and insider’s insider, putting her in charge of White House access could be seen a case of letting the fox guard the hen house.

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8 Responses to “Obama’s New Social Secretary Julianna Smoot Has Strong Ties to Norman Hsu and Was Obama 2008 Fundraising Chief; UPDATE: Single Biggest Hsu Donation Went to Smoot’s DSCC in 2005”

  1. Janney says:

    Seems strange to me that Obama would put his main fundraiser in charge of access

  2. A_Nonny_Mouse says:

    You’ve got to understand, when it comes to Washington politics, CA$H (especially in large amounts) has absolutely MAGICAL powers. The mere possession of a big bunch o’ dollars can transform the BEARER of such cash into the epitome of uprightness and probity (so long as there are no witnesses to whatever-transaction-may-or-may-not-have-transpired).

  3. AHFF Geoff says:

    Yea i hear ya Mouse, but shouldn;t the media at least report the facts about Smoot and her shady past dealings?

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