Cashing in on the Clinton campaign
Where do all those little-guy donations go? Ask top strategist Mark Penn, as he exits with millions in consulting fees.
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It should have been easy to predict, in retrospect, that Mark Penn would get himself into trouble for moonlighting while he served as Hillary Clinton‘s chief strategist. After all, his firm had billed only $14 million for his work on the campaign. How’s a guy supposed to live on that?
Actually, for Penn, who resigned Sunday night, Clinton’s campaign for the White House has been about as effective an economic stimulus program for himself as anything his clients have ever proposed for the nation. Clinton paid Penn a total of $8.9 million for direct mail, according to CQ MoneyLine. She paid Penn for polling, at $2.8 million. She even paid Penn $160,000 for consulting about polling, which presumably involved his telling her what an excellent pollster she’d hired. By Feb. 29, she also owed Penn’s firm another $2.5 million for “consulting/polling,” federal records show. March expenditures won’t be revealed for another few weeks — but through February, Clinton spent nearly 9 percent of the $138 million she’s burned through in the race on Penn’s firm alone.
Penn is this year’s glaring example of a problem that has dogged American politics for years: the runaway costs of campaign consultants. But at a time when both Democratic presidential campaigns are boasting about riding a tide of small-dollar donations from everyday folks, out-of-control consultant fees seem to be an even more egregious waste of cash, undermining rhetorical claims that every supporter’s dollars count.
Strictly speaking, all that Clinton money didn’t go to Penn himself, but to Penn, Schoen & Berland Associates, which Penn runs. It’s a branch of the public relations firm Burson-Marsteller, which Penn also runs, and which the government of Colombia hired to promote a free-trade deal that Clinton, like many of her supporters, opposes — which is what led to Penn’s resignation. It remains unclear how much money Penn got directly from the campaign. But considering he bought his Georgetown home for $5.1 million in 2003 (after which he proceeded to irritate his neighbors by building an underground garage), it’s safe to say that his personal bank account hasn’t suffered from his campaign work.
Getting rich off free-spending campaigns is, of course, a time-honored tradition in politics, and it isn’t just Mark Penn who does it. Consultants typically take a percentage of the money a candidate spends on whatever service it is they provide. Media consultants make more whenever they convince their clients they need to cut another ad, pollsters make a profit on each survey, and so on. Penn’s counterpart as chief strategist on Barack Obama’s campaign, David Axelrod, has seen at least $1.2 million paid to his Chicago-based firm, where David Plouffe, Obama’s campaign manager, was a partner until he left to go work for the campaign. (Plouffe makes $12,000 a month in salary.) Obama has paid his chief pollster, Joel Benenson, $635,000 so far. Bob Shrum made at least $6 million for not getting John Kerry elected president four years ago. Raise your hand if you think you could have accomplished the same job for less.
Campaign finance experts say most people who give to candidates figure it’s being spent on TV ads. What few of them know is how much of the “TV ad” budget winds up paying for a consultant’s beach house. It’s just about impossible to figure that out from public filings the way things stand now — the Federal Elections Commission is far more concerned with where political money is coming from than where it’s going. Candidates disclose in broad categories how they spend their cash — like “media,” “polling,” “consulting,” etc. It’s up to the operatives to decide how much detail to provide, and most provide none at all. So the public is left with rough metrics to go by.
“We all know that these guys are making this much money,” said Democratic election lawyer Leslie Kerman. “You can tell by the houses they buy and the vacation homes. They’re all talkers. They don’t talk about how much money they make, but they talk about what they buy with all the money they make.”
The Clinton team seems to have been loose with the purse strings even by current standards. With less money to spend, Clinton has paid her top officials more than Barack Obama has paid his, winning fewer elected delegates in the process. Besides Penn, there’s Clinton’s communications director, Howard Wolfson. He appears to have set up a consulting firm for the sole purpose of working for Clinton, called Gotham Acme, which has taken in more than $700,000 since the race started. No other client has paid the firm a cent since 2003. (Meanwhile, John McCain‘s team has probably made the least money of any successful candidate’s team in history; his senior advisors — mostly well-compensated lobbyists in their day jobs — worked without salary for months after his campaign’s near-collapse last summer. Some are still not getting paid now.)

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