Dec 11, 2013
Creating PACs and Then Spending Their Money
Posted on Mar 17, 2013
By Kim Barker, Pro Publica
One Republican consultant, who would not be identified, said that PACs that raise and spend money like Russo, Marsh in the end hurt the efforts and reputation of conservatives, while often failing to have any truly reliable influence on election night.
After the 2012 elections – and despite critical news stories in several publications – the PACs got back to work. The Campaign to Defeat Barack Obama changed its name to the Conservative Campaign Committee just after the election, and emails this week from the group have asked people to send money for ads supporting Larry Grooms, who is running in a Republican primary for a U.S. House seat in South Carolina.
“Any entity that raises money under the banner of a certain cause and then doesn’t spend money on that cause raises serious questions,” said Hogan Gidley, a consultant with Grooms’ campaign, adding that the campaign wasn’t affiliated with the Conservative Campaign Committee and that he wasn’t familiar with the inner workings of the group.
Of the donors who give to such committees, Gidley said, “They should hold the groups’ collective feet to the fire and make sure the money is going to its stated purpose.”
But it spent only 10 percent of its money directly on elections—$259,500 in contributions to political committees and candidates, and $681,000 on independent expenditures, most of which were funneled through Russo, Marsh and Associates.
The PAC spent almost half its money on fundraising, often using the Russo, Marsh firm or affiliated consultants. That fundraising ratio — spending almost $1 to earn $2 — is very high in the world of political action committees.
And the PAC also let its consultants live rather large: $3,500 for “PAC Election Night Headquarters” at a casino-resort in Las Vegas, $3,200 for meals and a meeting at a Mediterranean restaurant in Boston in February 2011, more than $1,000 for parking at LaGuardia Airport in New York in May 2011.
Barely one-third of the $3.9 million spent by The Campaign to Defeat Barack Obama went to truly focused efforts at electing candidates, but its consultants traveled comfortably: More than $4,500 to stay at Caesars Palace in Las Vegas in June, more than $8,200 to stay at the Paris Las Vegas Hotel in July.
Individual consultants, including current or former Russo, Marsh employees, did very well.
Joe Wierzbicki, who works at Russo, Marsh and Associates, pulled in almost $528,000 from two of the PACs. Most of that came from the Our Country Deserves Better PAC, which describes Wierzbicki on its website as “PAC coordinator” but neglects to mention he is a senior account executive at the Russo, Marsh firm.
Ryan Gill, who has also worked for the pro-military PAC and a related charity, was paid almost $592,000 from the two PACs, mostly from the Campaign to Defeat Barack Obama, for strategic consulting, fundraising commissions, travel reimbursement and on-line ads supporting several candidates.
In July alone, the Campaign to Defeat Barack Obama paid Gill about $5,300 on July 2, $2,300 on July 3, $4,100 on July 6, and $12,000 on July 9, calling the payments “fundraising salary.” Then he was paid $5,000 for “PAC strategy consulting” on July 20. He was also paid $7,400 for online advertising to promote certain candidates. And he was reimbursed almost $12,300 for travel.
Until last year, Callahan, the former Russo, Marsh employee, was the executive director of the pro-military charity. Callahan then helped form a business called Frontline Strategies & Media.
Two of the PACs paid Frontline Strategies about $386,000, for fundraising commissions, consulting and website maintenance.
Callahan is also the founding chief executive officer of a company called DonationSafe, which the three PACs paid $450,000 for credit-card processing fees.
In responses to emailed questions, Callahan said he had to pay multiple employees for Frontline who “are dedicated full time to those accounts.” He said the PAC payments help cover his employees’ salaries, “along with all the other costs that come from running a business.”
The PACs linked with Russo, Marsh and Associates frequently attach themselves to popular causes or candidates or topics in the news. In past weeks, for example, they’ve sent emails praising Republican Sens. Rand Paul and Ted Cruz, while asking for donations.
This month, the Conservative Campaign Committee — formerly the Campaign to Defeat Barack Obama — has sent out emails, asking supporters to pony up $35,000 for a radio ad campaign backing Grooms in South Carolina. One email urged supporters to volunteer for Grooms and to give money to support him — not to Grooms’ actual campaign, but to the PAC. That email also linked to the proposed radio ad and to two TV ads that were actually put out by Grooms’ campaign—a nuance that would likely be lost on many supporters, who would probably think that the PAC was somehow involved in the TV ads.
“So many of you have told us how much you want to see real action taken to stop Barack Obama’s radical agenda,” said another email, sent March 6, with the subject line of “Time Sensitive: Your attention required.” “That’s why it’s so important for Larry Grooms to win this election—we need his voice and his vote in Congress to defeat Obama’s aggressive push for socialism.”
It won’t be clear until July how much the PAC raised. But it’s already reporting some of what it spent. The cost of sending out the two emails was $1,670, and it was paid to Russo, Marsh and Associates.
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