At GOP convention, some worry about unlimited funds

August 30, 2012, 11:34 PM UTC

By Tory Newmyer

FORTUNE — The very-rich gathered in Tampa for the Republican National Convention are having a different experience altogether from the ranks of the journeyman delegates and other assorted political hacks here. Think skybox suites, breakfasts with Ann (as in, Romney), and private briefings from campaign Svengalis and former cabinet secretaries.

It’s just another way the explosion of unlimited contributions in the post-Citizens United world is reshaping the campaign. Team Romney has moved aggressively to exploit the new rules, in part by perfecting the art of cultivating their most generous sponsors — a fact not quite on display here. The effort caught President Obama’s reelection operation flat-footed and helped secure a potentially critical edge in the fight for the White House.

But that doesn’t mean all of Romney’s boosters are happy with the new normal. Fred Malek, a veteran GOP operative and private equity investor, calls this contest “unlike anything I’ve ever seen. You’re going to have probably as much spent independently on this campaign as you do by the campaigns themselves.” And that’s not necessarily a positive development. “Anything that makes it an unlevel playing field is probably not a good thing,” he adds, though he notes Democrats weren’t complaining four years ago when they had the upper hand, an advantage he chalks up to labor union largesse.

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We’re sitting in Malek’s suite on the 9th floor of the Westin Tampa Harbour Island, one of two hotels the Romney campaign reserved for it’s top bundlers, a roster that includes him. Malek also cofounded the American Action Network, a tax-exempt group closely affiliated with the Karl Rove-led Super PAC. But he acknowledges the system needs a tune-up, if not a wholesale overhaul: “Would it be a good thing to have government financing, where everybody has the same amount and a certain period of time? Maybe so,” he said. “Is this the best system? Probably not. I’d be very receptive to hearing arguments for what we could do better. And I suspect Congress will feel the same way and start to address it.”

It’s a notably frank assessment from someone who’s spent decades as a top Republican moneyman. It’s also one I’ve heard expressed privately by others, who worry the process is spinning off its axis, even if it’s conferring a Republican advantage as it goes.
Malek, a former president of Marriott Hotels, these days heads Thayer Lodging Group, a private equity firm that invests in hotels. He says he doesn’t believe carried interest should be taxed as regular income because “we’re putting our money up alongside investors and we’re not getting a return until investors get their return and a preferential interest.” But he wouldn’t oppose the change if Romney calls for it. (Romney still hasn’t declared his position.) “I’m not one of those Republicans who thinks we can’t pay a little bit more,” Malek says.