Illustration: Robert Risko
On the night of March 23, 2011, four political operatives arrived for dinner at Scarpetta, a posh Italian restaurant in Beverly Hills' Golden Triangle. They wore DC power suits but ditched the ties—their one concession to LA fashion. For a bunch of hacks more at ease on Capitol Hill than Rodeo Drive, they blended in well enough. Bill Burton and Sean Sweeney had spent their adult lives climbing the rungs of Democratic politics, including a stint together in the Obama White House; pundit and consultant Paul Begala had advised Bill Clinton in the 1990s; Geoff Garin had been a top pollster for some 30 years. A hostess led them through the Mediterranean-themed dining room, all dark woods and tan walls lit by golden glass lamps, then up a flight of stairs to a private room. Awaiting them was the man they hoped would be their bell cow.
That was the term Begala, the Texas-raised funnyman of the group, used to describe a megadonor who leads his rich friends to bankroll a candidate or cause. Their dining companion, Jeffrey Katzenberg, the CEO of DreamWorks Animation, raised millions for the Obama campaign in 2008, and the fate of their project—and, potentially, the presidency—hinged on convincing him to raise millions more in 2012. They wanted him to take the lead in funding a new super-PAC to support president Obama's reelection.
Burton, Sweeney, Begala, and Garin didn't like super-PACs, which can raise and spend unlimited amounts. Nor did the president, who had ripped them as a "threat to our democracy." Nor did Katzenberg, who felt that the 2010 Citizens United decision was a huge blunder. And yet here he was, listening to a pitch that Begala had rehearsed on the flight to LA. It was hard to think of a presidential election, Begala said, with more at stake. With the economy on the mend, health care reform on the books but not yet enacted, the wars in the Middle East winding down…
"I know all that," Katzenberg interrupted. "Tell me your business plan." At 60, Katzenberg, who stands 5-foot-5, cut a lean and fit figure ("On background, he's incredibly buff," says a friend of his), his clean-shaven face taut and tanned, with a disarming, horsey smile. What remained of his graying hair was trimmed to a fine stubble. He wore a V-neck sweater over a T-shirt, slacks, and sneakers—his Hollywood CEO uniform—and he grilled the four operatives with the same intensity he would a potential business partner. What was their fundraising target, and how would they reach it? How would they spend their money—on broadcast, cable TV, online? Who would be their research director? Their ad maker? How much would they pay themselves? What was their strategy?
The answer to that last one was simple: Destroy Mitt Romney. The Republican primaries were nearly a year away, but the four politicos believed that Romney would end up the nominee, so they would focus on him and ignore the rest of the field. They would attack him using the same approach employed by Swift Boat Veterans for Truth and other groups in 2004. "Just as the conservatives took away Kerry's war record," Begala said, "we're going to take away Romney's strongest asset: his business record."
Katzenberg, who is worth an estimated $800 million, liked what he heard. By the end of dinner, he pledged $2 million to the super-PAC, later named Priorities USA Action, and promised more money down the road—no strings attached. He also offered to tap his network of wealthy friends and colleagues. And he picked up the tab.
Begala had found his bell cow. "It was the most important meeting of the entire campaign," he told me recently. "If you tell people, 'Jeffrey's behind this, Jeffrey's helping us,' man, that really helps."
Jeffrey Katzenberg and Steven Spielberg Prensa Internacional/ZUMA Press
Katzenberg's investment paid off big for Obama. Priorities zeroed in on Romney's time at the private equity firm Bain Capital, cutting a series of ads depicting him as a real-life C. Montgomery Burns. In one, a union worker recounted how he was ordered to build a stage at his Indiana paper factory; days later, Bain executives strode across it to announce they were closing the plant and firing everyone. It was rated the most effective ad of the campaign; as Republican message maker Frank Luntz would say, "That ad alone has killed Mitt Romney in Ohio."
Katzenberg gave $3.15 million to Democratic super-PACs during the 2012 cycle—almost 30 times more than his total reported giving in 2008. (There's no telling how much he might have given to other groups that don't disclose their donors.) He steered millions more to Priorities—his friend and business partner, Steven Spielberg, gave $1 million, for instance. He hosted numerous fundraisers for Obama and raised more for the president than anyone else in California. All told, Katzenberg gave or raised more than $30 million to reelect Obama, helping Hollywood make up for Wall Street's plummeting financial support of the president. And that's not counting the funds he marshaled for other Democrats, such as Sen. Elizabeth Warren (D-Mass.) and California Gov. Jerry Brown.
"It's hard to think of any other donor going back to the [1990s] or even further who did what he did," says Bill Allison of the Sunlight Foundation. "He's like soy sauce in Chinese food: He's everywhere."
The deep-pocketed kingmaker is a recurring character in American politics. William McKinley might have lost the 1896 presidential election without businessman Mark Hanna, the former US senator and master fundraiser. Harry S. Truman won his first Senate race, in 1934, thanks largely to "Boss Tom" Pendergast, the ruthless Missouri power broker later thrown in prison for tax evasion. Today, conservatives love to demonize George Soros, the liberal financier who gave a record $24 million to elect John Kerry in 2004. But Soros, a longtime supporter of campaign finance reform, didn't raise a dime for Obama in 2012 and didn't give to the Priorities super-PAC until very late in the campaign. Katzenberg, who shuns sleep, guzzles Diet Coke, and says his parents "didn't raise me to sit on the sidelines," gave early and often. "No one in the United States did what Katzenberg did," a fellow Obama fundraiser says. "He is in a class of one."
Jim Messina, Obama's campaign manager, hails Katzenberg for his role in reelecting the president: "He's one of the best, if not the best, fundraisers out there."
If the Katzenberg story has a prequel, it is the story of Lew Wasserman, the canny, irascible, and ruthless mogul who in the 1950s and '60s transformed the Music Corporation of America (MCA) from a middling talent agency into a mighty studio. Wasserman, a lifelong Democrat, saw the advantages to having friends in power, so he built Hollywood's first real political machine, a network of performers, business partners, and studio bosses who gave generously to his handpicked candidates. By the 1990s, he was one of the Democratic Party's all-time biggest donors. Wasserman and his wife, Edie, spoke of US presidents like they were cousins—Jack and Jimmy and Ronnie and Bill; once Wasserman slept in the White House when he couldn't find a DC hotel room. And when he saw a headline that read something like, "Lew Wasserman Controls Hollywood. Does He Control Washington Too?" he offhandedly said, "Of course I do."
Wasserman withdrew from politics in the late '90s, leaving a gaping hole in the Democrats' fundraising machine. The entertainment industry still rallied behind Al Gore in 2000 and Kerry in 2004. But the marquee donors of that period—movie producer Steve Bing, Power Rangers creator Haim Saban—couldn't get Hollywood to fall in line like Wasserman could. After a ban on unlimited, undisclosed donations to parties—so-called soft money—went into effect following the 2002 campaign, showbiz donations to Democrats fell off. (The industry's Republican giving, paltry as it was, held steady.)
Then came Citizens United, dismantling limits on political giving and paving the way for super-PACs—and a new kind of kingmaker arose. So, in 2012 megadonors like Katzenberg and casino tycoon Sheldon Adelson demonstrated just how far some 1-percenters were willing to open their wallets. "There's now a whole range of opportunities for donors that didn't exist before Citizens United," says Bill Allison. And that's not even accounting for the fact that the Supreme Court could lift what restrictions remain on individual giving, allowing donors to give millions directly to campaigns and parties.
Katzenberg is savvy about which candidates he backs and when he gives, often cutting checks before other donors who are wary of placing the wrong bet. He relishes the nitty-gritty of politics—he's the rare contributor willing to spend hours on the phone pitching rich people when others would rather stab themselves in the eye. "I don't know anyone—anyone—in Hollywood that says, 'Give me a donor list,'" says Donna Bojarsky, a political and philanthropic adviser in Los Angeles. "Except Jeffrey." And he's not bashful: "Jeffrey has no problem asking you for, like, way too much money," Will Smith quipped at an Oscars ceremony honoring Katzenberg.
"Jeffrey has no problem asking you for, like, way too much money," joked Will Smith.
Obama officials say they respect Katzenberg not only for his fundraising, but also because he has no specific "ask"—no ambassadorship to Switzerland, no regulatory tweak, no nights in the Lincoln Bedroom. Even so, being Hollywood's liaison to Washington has its perks: Obama takes Katzenberg's calls, and he and his political adviser, Andy Spahn, visited the White House almost 50 times between them during Obama's first term. (Not all of Spahn's visits had to do with Katzenberg.) It has also left him well positioned to advocate for his industry's and his company's interests in China's booming film market.
Katzenberg and Adelson have cast themselves as leading men in a new campaign finance picture, where small groups of wealthy donors wield even greater power, cutting monster checks that reshape the parties' primaries. "It'll be wealthy people getting together and picking horses and riding those horses through a primary process and maybe upending the consensus of the party," says a Democratic strategist. "We're in a whole new world."
Adds Paul Begala: "Every Democrat who has presidential ambitions is now going to beat a path straight for Jeffrey's door. Or they're too dumb to be president."
Katzenberg has made a president before. On February 10, 2007, Obama announced his first presidential bid. Ten days later, some 600 guests crowded into a ballroom at the Beverly Hills Hilton for the first major fundraiser of Obama's campaign, including Tom Hanks, Denzel Washington, Eddie Murphy, and the studio chiefs from Universal, Paramount, Disney, and 20th Century Fox. At one point, Obama adviser David Axelrod wound up standing behind Jennifer Aniston. "I probably lost my ability to fix my place in time as a result," he recalls. Later that evening, a handful of donors who'd raised $46,000 each gathered at the home of DreamWorks cofounder David Geffen for an intimate dinner with the Obamas.
Obama was the star of the show, but the night's other breakout was Katzenberg, who, with Geffen and Spielberg, had had the political savvy to bet on the young senator. Katzenberg and Spahn had hoped to raise a half million dollars that night; as the demand for tickets soared, they doubled their target. The final haul was $1.3 million, an eye-popping sum that infuriated Hillary Clinton and her campaign aides, who had believed that Spielberg, Katzenberg, and Geffen—SKG in showbiz parlance and former Bill Clinton donors all—would choose her. Clinton's campaign even demanded Obama return Geffen's $2,300 donation after the mogul bad-mouthed Hillary to the New York Times' Maureen Dowd. Unfazed, Obama went on to raise $25 million in the early months of 2007, proving he could compete with Clinton in the so-called money primary.
For decades, Katzenberg had been a reliable, if less recognized, Democratic donor. Now, he had stepped onto center stage, signaling to Hollywood's donor class which way SKG was leaning. "What put Barack Obama on the map was that first-quarter fundraising total," says Rufus Gifford, the campaign's head fundraiser. "The February event was a huge part of that."
Katzenberg's personality was central to the event's success. He knows how to navigate Hollywood's minefield of egos, eschewing mass emails to potential donors in favor of personal calls—which few can refuse. Those who give receive a handwritten thank-you note. Meanwhile, Spahn, his consigliere, counts among his friends Axelrod and former White House chief of staff William Daley (Spahn calls him "Billy"); Spahn and Rahm Emanuel, another ex-Obama chief of staff, appeared in each other's weddings. "There are a lot of people Jeffrey can get to that political candidates or their campaigns can't," says John Emerson, a Los Angeles banker who co-chaired Obama's Southern California fundraising team. Other industry players "assume that he's researched the candidates, knows the issues, and there's a level of due diligence."
Even so, being Hollywood's liaison to Washington has its perks: Obama takes Katzenberg's calls, and he's welcomed at the White House.
Katzenberg is a political operative's dream, with little interest in attention for himself—through Spahn, he declined multiple requests to be interviewed for this story—and no ideological litmus tests. He didn't complain when Obama the lofty-minded candidate gave way to Obama the pragmatic politician. And even as the Priorities super-PAC struggled to get traction, and at least one donor called Katzenberg to try to convince him the project was a waste of money, he stuck with it.
A few days after Katzenberg's $2 million donation showed up in Priorities USA Action's monthly disclosure records, a New York Times editorial scolded the group for "abandoning the high ground" and choosing to "raise millions of their own secret dollars." The Times singled out Katzenberg by name.
Begala shuddered as he read it at his suburban Maryland home. He knew big donors hated seeing their name in print, let alone in the Sunday Times. Katzenberg was the CEO of a publicly traded company, with a reputation to worry about. What if the piece scared away their bell cow? He had to call Katzenberg and do damage control.
Begala stepped outside. If the call got nasty, he didn't want the kids to hear.
"Did you see the editorial?" he asked.
"What editorial?" Katzenberg said.
"The one in the Times."
"Oh yeah, I read it last night."
"That kind of thing doesn't bother me."
Begala felt both stunned and relieved. "He's the first donor I've ever met who could shake off a really tough editorial in the Sunday New York Times," he later told me.
Katzenberg had been called a lot worse.