A political action committee run out of a prominent downtown Washington, D.C., Republican direct-mail firm has during the past three cycles spent more than 95 percent of $1-million-plus it raised on expenses — much of it paid to in-house vendors.

[IMGCAP(1)]BMW Direct, which has raised money for GOPAC, Reps. Robin Hayes (N.C.) and Geoff Davis (Ky.), and other House and Senate Republicans, is listed on campaign finance records as the home of Freedom’s Defense Fund, a PAC operated by the fundraising firm’s chief operating officer, Michael Centanni.

Since the Freedom’s Defense Fund was created in 2004, the group has raised roughly $1.1 million, according to CQ MoneyLine, primarily from small contributions solicited through the mail, Centanni confirmed in an interview Tuesday.

“Our average donation is $25 or $30,” Centanni said. “It’s an expensive proposition. … Forty percent of your costs are to the postal service.”

But of the seven-figure haul raised by the PAC, campaign finance records show that roughly $50,000 was actually given to candidates during the past four-plus years since the PAC was registered.

Meanwhile, the more than $900,000 left over was paid to vendors like the direct-mail firm Patriot Partners, which Centanni confirmed is run by Kimberly Bellissimo, his business partner and BMW Direct’s president.

Bellissimo declined to discuss the arrangement, but Centanni said Tuesday that Patriot Partners operates out of BMW’s downtown office space. He also offered a keyhole look into the opaque — and often lucrative — world of GOP direct-mail firms: BMW Direct is paid a per-piece flat fee by committees, while Patriot Partners finances the committees’ postage “so they can get their mail out.”

Another group that operates out of the same office, Legacy List, rents address files of potential donors.

Centanni defended the in-house arrangement and the PAC’s seemingly high operating expenses, arguing that “Freedom’s Defense Fund doesn’t pay any rent. … We don’t have payroll, and we try to keep our costs low.”

And despite the fact that only 5 cents for every dollar the PAC raises actually goes to Republican candidates or causes, Centanni said it provides a vehicle for less-heeled donors “to be part of the process.” He also said to check back with the group in November, when he expects expenses to dwindle and predicted that three cycles of donor mining will finally pay off.

“We will be spending a lot more money … on contributions to candidates,” he said.

But will the group have the cash? As of April 1, Federal Election Commission records show that the Freedom’s Defense Fund had $21,000 in the bank, while carrying $122,686 in debt.

And still outstanding: $24,340 to BMW Direct, $13,183 to Legacy List and $29,472 to Patriot Partners.

Thanks, Boss. Rep. Patrick McHenry (R-N.C.) recently gave Michael Aaron Lay $10,000 to beat back voter fraud charges brought while the former campaign aide worked for the now-Member.

According to recent Federal Election Commission filings, McHenry gave Lay $5,000 out of his political action committee, More Conservatives PAC, in two payments during February and March.

The contributions were labeled “legal expense donation[s].” McHenry had given Lay another $10,000 in July 2007.

Roughly one year ago, Lay was indicted for allegedly “illegally cast[ing] his ballot in two 2004 Congressional primary runoffs in which McHenry was a candidate.” According to local news accounts, Lay was given probation in the case last summer.

McHenry eventually won that 2004 primary runoff by 86 votes.

“I’m glad the charges against Aaron were dismissed,” McHenry said in a statement.

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