Consulting firms double-dipping in political candidates rake in more than $1B

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A new report shows that consulting firms appointed by candidates and party committees are raising large sums of money by working together for independent political groups in the same race.

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Why this matters: Citizens United’s decision of the Supreme Court allowed unlimited campaign spending by groups that do not coordinate with candidates or national parties. For major political vendors working in high-profile races, this means a huge new revenue stream.

  • Those vendors can work for both campaigns and supporting political groups with whom they are legally barred from coordinating, as long as they install internal firewalls separating that work.
  • For party committees and firms attempting to buy big ads and send messages for high-dollar campaigns, that means an entirely different pool of potential customers—with lots of cash on hand.
  • President Biden and congressional Democrats are pushing for legislation that would restrict the practice.

By numbers: A new report from the Public Citizens Group finds wide overlap in vendors employed by “regulated” political entities – such as campaign and party committees – and “unregulated” groups, including super PACs and 501(c)(4) nonprofits, often referred to as “dark-money”. It’s called a group.

  • The report found that vendors who worked for both categories of groups in the same race during the 2018 and 2020 election cycles, either on their own or collectively through affiliated firms, earned about $1.4 billion for that work. was paid.
  • Much of this was for ad-purchasing services, meaning firms didn’t just pocket the money. Yet the sum reflects the scale of seller overlap.
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Between the lines: Public Citizen says the arrangement raises potential legal red flags.

  • ,Political consultants are well positioned to harmonize messaging and spending strategies between Super PACs and regulated political committees, thus facilitating coordination, regardless of whether the leader of the Super PAC is the leader of the campaign or party. Do not communicate with,” the report said.
  • A network of seven affiliated firms, which the report calls the Slaters Lane entities, are at the center of an ongoing lawsuit accusing the National Rifle Association and a pair of GOP campaigns using those vendors to circumvent coordination rules. To have done.

Be smart: Such an end is a concern around federal campaign finance laws, but firms operating on both sides of the campaign-super PAC divide are generally careful to erect internal firewalls.

  • While there is a clear legal incentive to do so, it also allows them to plunge into a pool of resources that must by law be allocated independently of each other.
  • It is common for sellers to rely on affiliated but legally separate entities for their campaign work and their Super PAC work.
  • Democratic firm GMMB established a pair of ad-buying affiliates, Waterfront Strategies and Great American Media, “to keep clear lines between employees and different projects in full compliance with all regulations,” according to Eric Conrad, a spokeswoman for the business. – Federation.
  • Together, the GMMB companies received approximately $450 million from campaigns and party committees during the 2018 and 2020 cycles. He pulled in another $483 million from independent spenders working in the same race.
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What are they saying: “GMMB, Waterfront and Great American Media are separate companies with a strict firewall policy designed by a legal advisor to follow the letter and spirit of the law,” Conrad told Nerdshala in an email.

  • “In addition, the concerned staff undergoes training conducted by a legal advisor to ensure careful compliance with the regulations.”
  • Other vendors identified as the most prolific double-dippers either declined to comment or did not respond to Nerdshala’ comment requests.

big picture: Super PACs can raise and spend an unlimited amount of money, including corporations, unions, and nonprofits. But they typically pay higher rates for TV commercials, and coordination restrictions can make them cumbersome political vehicles.

  • Their unique characteristics mean that salespeople working with groups employ different strategies than they do with campaigns or party committees.
  • Vendors large enough to do both, or who have affiliate firms with specialized expertise, are willing to capitalize on both ends.
  • Of the $1.4 billion in share-seller payments identified in the Public Citizen report, nearly all — about $1.3 billion — went to the 10 highest-paid firms.

looking ahead: Broad election reform legislation currently in the Senate would dramatically restrict the share-seller system.

  • Under the Freedom to Vote Act, Super PACs would be barred from paying a vendor for expenses in support of a candidate if the vendor had worked with that candidate during the previous two years.

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