President Obama raised most from private equity, hedge funds in 2008

President Obama raised far more cash from hedge fund and private equity donors than any other candidate in the 2008 election cycle.

According to an analysis by the nonprofit group Open Secrets, Obama took in nearly $3.5 million from large private-equity donors that year — nearly twice what his general-election rival, Sen. John McCain (R-Ariz.), pocketed.

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The data bring into focus the thin line Obama must walk in attacking presumptive GOP presidential nominee Mitt Romney’s background in the industry, which has sparked criticism from allies including Newark, N.J., Mayor Cory Booker.

Obama is working hard to make the case that Romney’s background in private equity does not qualify him to be president. In fact, Obama and his campaign, in a series of ads, have sought to turn that background into a weakness by highlighting companies that failed after their purchase by Bain Capital, the private equity group founded by Romney.

The danger for Obama is that he’ll turn off the backers who helped his campaign in 2008. It’s a risky strategy, especially in an election year in which Obama will have to compete not only with the Romney campaign but with GOP super-PACs expected to play an outsize role in political attack ads this fall.

Obama sought to draw a distinction between the role of private equity and the role of a president at a Monday press conference following the NATO summit. It was the first time Obama broached the topic, and his message was that a background in private equity led one to focus on creating wealth, not jobs.

People who work in private equity “do good work” and “there are times where they identify the capacity for the economy to create new jobs,” Obama said.

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But, he added: “Their priority is to maximize profits, and that’s not always going to be good for communities or businesses or workers.”

As president, Obama said his job is “not to simply maximize profits.”

“Your job is to make sure everyone has a fair shot,” he said. “If your main argument on how to grow the economy is that ‘I know how to make a lot of money for investors,’ then you’re missing what this job is about.”

Bain was not happy with its portrayal in the latest Obama attack ad, and released a statement defending itself on Monday.

“Despite political attacks that emphasize the few companies that have struggled, the facts are that during Bain Capital’s ownership, revenues grew in 80 percent of the more than 350 companies in which we have invested,” a Bain spokesman said.

Romney is doing well in fundraising from the financial sector. According to Open Secrets, Romney has already outraised Obama in this cycle $2.5 million to $650,000 from hedge funds and private equity firms.

And in 2008, when he failed to make it out of the GOP primary, Romney still nearly matched McCain, who had the benefit of a full general election fundraising cycle, in contributions from hedge funds and private equity, pulling in more than $1.3 million in the truncated amount of time.

This story was updated at 10:39 a.m.