* Many opposed the Supreme Court decision creating such
* Key liberal donors, Obama bundlers staying on the
* Facing massive Republican fundraising effort
By Alina Selyukh
WASHINGTON, April 6 Two months after U.S.
President Barack Obama reluctantly embraced fundraising for
big-money "Super PACs," many major Democratic donors still have
not given to such political groups because they are dismayed by
how PACs are being used in the presidential campaign.
Billionaire investor George Soros and insurance executive
Peter Lewis - who together have donated more than $50 million to
Democratic political groups since 2004 - are among scores of
donors close to the Obama campaign who remain on the sidelines
as PACs that can receive unlimited donations seek to load up
before the November election.
Their reluctance helps explain why Priorities USA Action,
the Super PAC that supports Obama, has struggled to keep
fundraising pace with rival Republican groups that have already
spent tens of millions on the presidential race.
Many of the Democratic donors are alarmed that PACs, or
political action committees, have been focused almost
exclusively on spending tens of millions of dollars on ads to
attack presidential candidates.
Nearly all of that spending has been by Republican-backed
groups in the bitter race for that party's nomination - most of
it by Restore Our Future, a PAC that supports likely Republican
nominee Mitt Romney and has overwhelmed rivals Rick Santorum and
Newt Gingrich with negative ads.
Obama, who opposed a 2010 Supreme Court decision lifting
donation limits on PACs that operate independently from
campaigns, was reluctant to embrace such groups. He changed
course after seeing the cash being amassed on the Republican
side and impact of the pro-Romney group's ads.
But many wealthy Democrats who would be potential donors to
the pro-Obama PAC - including Lewis, chairman of the insurance
giant Progressive Corp. - are turned off by the tactics
of PACs in the presidential race.
"The Super PACs are nearly all about advertising, and he is
loathe to contribute toward that," said Lewis adviser Jennifer
Frutchy. "He is not currently planning to contribute to any
Super PACs, congressional or presidential."
Lewis has contributed $5,000 to Obama's re-election campaign
and $30,800 to Obama's joint fund with the Democratic National
Committee, the maximum amounts allowed for an individual.
He has also given $200,000 to American Bridge, a Super PAC
that is largely focused on opposition research, not advertising.
Soros spokesman Michael Vachon said the financier is "not
focused" on this presidential election. Soros plans to donate to
Obama and congressional campaigns but is undecided about giving
to Super PACs, Vachon said.
"Like many people, he's alarmed by the (Supreme Court)
decision and the growing role that money is playing in the
election," Vachon said.
Last year, Soros gave $100,000 to Majority PAC, which helps
Democratic Senate candidates, and $75,000 to House Majority PAC,
which focuses on putting Democrats in the House of
In the 2004 elections, Soros was the biggest donor to the
Super PACs' predecessors, so-called "527" groups. The tax-exempt
organizations were forbidden from "expressly advocating" for the
election or defeat of specific candidates.
Such groups typically focused on registering Americans to
vote and encouraging them to turn out for elections, said
campaign finance specialist Anthony Corrado, a political science
professor at Colby College in Maine.
"One of the problems with the Super PAC strategy is that it
is largely a vehicle for financing negative advertising, and
many donors don't want to invest into that type of activity,"
"That individuals who are identified as major donors to
progressive causes are reluctant to give to Super PACs is an
indication of the challenges that Priorities USA faces in terms
of competing with the Super PACs that will oppose them."
OBAMA BUNDLERS STAY AWAY
Obama's campaign still has a significant fundraising
advantage over Romney's: The president has raised $120 million
for his campaign and nearly $129 million for the fund used
jointly by him and the Democratic National Committee.
But Restore Our Future and other Republican PACs could help
Romney close that funding gap - and drive what most everyone
involved expects to be a nasty ad war leading up to the Nov. 6
The pro-Romney PAC had raised nearly $43 million by the end
of February - and spent $40 million on ads, almost all of them
attacking Santorum or Gingrich.
Priorities USA, the pro-Obama PAC, had raised about $10
million together with its nonprofit arm by the end of February,
according to senior adviser Bill Burton.
Because of the Obama campaign's success in fundraising - it
collected $750 million in the 2008 campaign - and the
president's reluctance to accept Super PACs, even some of those
on the Obama campaign's finance committee have not donated to
Only nine of Obama's more than 400 "bundlers" - those who
have rounded up at least $50,000 for the president's campaign -
have given to Priorities USA, according to a Reuters analysis of
Federal Election Commission filings.
At Priorities USA, Burton acknowledges that ideological
concerns routinely come up in conversations with potential
Democratic donors to the PAC.
"It is in the cocktail of issues that are obstacles to this
Super PAC," Burton said.
Conservative activists, such as former George W. Bush
presidential adviser Karl Rove, embraced Super PACs from the
start, giving Republicans a head start in organizing a massive
effort to unseat Obama and hold or win seats in the U.S. House
of Representatives and Senate.
Beyond Restore Our Future, Romney's campaign will get the
benefit of millions to be spent by groups overseen by prominent
Republicans such as billionaire oil magnates David and Charles
Koch, whose money helped fuel the conservative Tea Party
movement in 2010, and Rove, whose American Crossroads group has
said it plans to spend more than $250 million on the 2012
presidential and congressional races.
The billionaires bankrolling Republican presidential Super
PACs - Las Vegas casino tycoon Sheldon Adelson, Houston
homebuilder Bob Perry and investor Harold Simmons - have also
indicated plans to help Romney.
On the Democratic side, the organization so far is much less
unified and deep-pocketed.
Last month, the pro-Obama Priorities USA, Majority PAC and
House Majority PAC created a single fundraising organization
dubbed Unity 2012.
Members said the move was in part to ease donors'
frustration with being prodded by multiple outside groups,
giving them a single place to direct their checks. But for now
the entity appears to be nothing more than a joint bank account
as the PACs are still negotiating whether and how they may go
beyond the shared account and help each other raise money.
On their own, as of the end of February, the Senate-focused
Majority PAC had raised $2.5 million and House Majority PAC had
raised $3 million.
People familiar with the state of Democratic fundraising say
more and more donors are accepting the importance of resisting
Republican Super PACs in the congressional races. Democrats lost
a House majority in 2010 and are trying to make gains there
while protecting a narrow majority in the Senate.
"Where you're going to see the biggest movement is the
Senate Super PAC," said Heather Podesta, a Democratic lobbyist
and influential fundraiser.
"While the giving looks flat at this point, it will rise
exponentially. ... Democrats have been reluctant to adapt to the
changes, but they are turning the corner."
(Additional reporting by Alexander Cohen; Editing by David