Rules of the Game: Dissecting Super PAC Consulting
As super PACs gear up to spend hundreds of millions of dollars on this year’s elections, the well-paid political consultants who are cashing in on the outpouring of unrestricted money are getting some long-overdue scrutiny.
Expensive elections have always translated into fat paychecks for the political professionals who create and place ads, conduct polls and contact voters. But in the super PAC era, consultants are scooping up record sums while facing few accountability rules and little oversight. That’s pointed up ethical gray areas and potential self-dealing.
In January, Roll Call reported that some super PAC organizers are pulling double duty as political consultants to the super PACs, collecting hundreds of thousands of dollars in ad placement commissions and consulting fees.
These include Larry McCarthy, a board member for Restore Our Future, the leading super PAC backing presumptive GOP nominee Mitt Romney. McCarthy’s firm, McCarthy-Hennings Media, has done more than $400,000 worth of work for the super PAC so far. McCarthy, best known as the man behind the “Willie Horton” ad that helped derail Michael Dukakis’ presidential bid in 1988, could not be reached for comment.
Some of the best-paid consultants to super PACs have close ties to the people who run the super PACs. Last year, one of the top four consultants to the Democrat-friendly super PAC known as Majority PAC, for example, was married to the group’s then-executive director, Monica Dixon. Asked about that relationship, a Majority PAC strategist said Dixon played no role in hiring her husband’s firm, the Dixon/Davis Media Group. Dixon has since left Majority PAC.
More recently, the Los Angeles Times and nonprofit news organization Pro Publica have turned up other suspect arrangements. The Times first reported the leading super PAC backing erstwhile GOP hopeful Rick Santorum was launched by former Santorum aide Nick Ryan, who happens to run a consulting firm that’s been paid close to $2 million by the super PAC.
Ryan formed the firm, Global Intermediate, late last year, a couple of months after launching the pro-Santorum super PAC, the Red, White and Blue Fund. Since then, his firm has been paid $1.9 million, according to a Pro Publica database — more than one-third of the $5.1 million that the super PAC had spent as of late March. Ryan could not be reached for comment. Responding via email, Red, White and Blue Fund spokesman Stuart Roy said Ryan’s firm ran a highly effective phone and mail operation for the super PAC: “We won 11 states on a very tight budget.”
Pro Publica also disclosed that the bulk of the millions of dollars paid out by Winning Our Future, the super PAC backing former Speaker Newt Gingrich (Ga.), has been handled by four little-known consulting firms that work exclusively for the super PAC and were formed at about the same time.
The four firms — Media Advantage, Marketel Media, Intelimarc Inc. and Empire Creative — have bare-bones websites or no website at all. Together, they’ve received $13.8 million of the $15.4 million that Winning Our Future has spent, according to Pro Publica.
The super PAC’s organizers “wanted people with integrity, who were loyal to Newt, and who had experience — who had the skills we were looking for,” said Rick Tyler, a senior adviser to Winning Our Future. Media Advantage and Empire Creative are run by longtime GOP consultant Ken Kurson, Tyler said. He added that Marketel Media is run by Sam Hassell, an Internet marketing specialist who’s worked for a conservative advocacy group. Hassell also runs Intelimarc, according to Pro Publica.
Not all super PAC money lines the pockets of consultants themselves, of course. When media firms place ads, the bulk of the super PAC’s money ends up in the hands of the TV and radio stations running the messages. Political consultants keep only a percentage as commission.
Nor does anyone suggest that consultants with close super PAC ties are breaking the law. Unlike political candidates, who are barred from using campaign money for personal use, super PACs operate in a largely rules-free zone. Super PAC organizers, moreover, stress that the industry polices itself because reputation is the coin of the realm and bad actors are quickly driven from the business.
Still, some consultants worry that the boom in unrestricted money spells danger for their industry. Unlike candidate campaigns and even political party committees, which tend to run on passions and volunteers, super PACs appear largely driven by one thing: money. Unhampered by the contribution limits that constrain candidates, they are also arguably less accountable to voters.
“Donors should beware,” said Paul Ryan, associate legal counsel at the nonpartisan Campaign Legal Center. “To the extent that a donor is going to make a contribution to a super PAC, he should know full well that there are no restrictions on what the super PAC can do with the money — other than the prohibition on making contributions to the candidates or coordinating expenditures with candidates.”
Twice since 2009, the Federal Election Commission has recommended that Congress extend the ban on candidates using campaign funds for personal use to all political committees, including PACs and super PACs. The FEC pointed to a “growing problem” in the area of “unauthorized disbursements” by such committees. Given the confluence of big money and lax oversight at super PACs, that problem appears only likely to grow.