Monday, March 26, 2007

The Enemy Within

The Democrats' most dangerous opponent in '08 may be their own campaign consultants, who charge far more than GOP strategists -- and deliver far less


2008 has the makings of a banner year for Democrats. The wave of discontent that swept the GOP from Congress last November is growing, and the Iraq debacle will make it difficult for Republicans to retain the White House. But there is one group of powerful Washington insiders who have a proven ability to derail the Democrats. Working behind the scenes, these top-tier operatives humiliated Mike Dukakis in a tank, muzzled Al Gore on the environment and portrayed John Kerry -- a lifelong crusader for gun control -- as a rifle-toting Rambo. Year after year they have made sure that the Democratic message comes across as little more than a fuzzy, focus-grouped drone about child tax credits, prescription-drug plans and the "fight for working families."

And here's the depressing news: The Democrats pay them millions to do it.

The insiders are the political consultants hired by the Democrats to poll voters, shape strategy and devise campaign ads. With the exception of Bill Clinton, who brought in his own team of outside-the-Beltway mavericks, these top advisers have paved the way to Democratic defeat in every presidential election since 1980. "The political consultants," says longtime Gore policy staffer Elaine Kamarck, "have not served our presidential candidates well." Larry J. Sabato, director of the Center for Politics at the University of Virginia, is even more blunt. "Forget what Shakespeare said," he advises. "First, kill all the consultants."

The party's campaign strategists operate under contracts that would make Halliburton blush. While their GOP counterparts work for a flat fee on presidential campaigns, Democratic media consultants profit on commission, pocketing as much as ten percent of every dollar spent on TV ads. It's a business model that creates "an inherent conflict of interest," concedes Anita Dunn, who served as a strategist for Bill Bradley in 2000. The more the candidate spends on TV advertising, the more the consultant cashes in. And that compensation is hidden from public scrutiny: Federal campaign reports reveal only what a campaign spends on ads, not how much the consultants skim off the top.

"Consulting," says former Gore campaign chair Tony Coelho, "is a business that can turn into a racket." Over the past two presidential elections, Rolling Stone estimates, that racket has cost the Democrats at least $10 million more in consultant fees than it did the Republicans. Even top GOP advisers, who usually counsel that greed is good, are amazed by the exorbitant fees. "If you want to elect your candidate, you ought to be able to work for a reasonable rate -- not try to haul off a sack full of profits," says Mark McKinnon, the lead media strategist for George Bush in both 2000 and 2004.

Overpaying consultants, McKinnon adds, may even have cost Democrats the White House. "Their consultants are getting ten percent -- that's outrageous." He laughs. "That's money that could have been spent on other parts of the campaigns. It might have captured 500 more votes in Florida for Gore in 2000 -- or maybe helped Kerry win Ohio in 2004."

Democratic consultants stand to walk away with an even bigger payday in 2008: The campaign could easily cost at least $2 billion, more than twice the '04 bill. And if the party continues to pay strategists a commission for every TV ad, much of that money will wind up wasted. "The consultants will be spending more money on bigger ad buys, trying to catch the few people who watch ads today," says Chris Lehane, a strategist on the Clinton and Gore campaigns. "It's a crazy, illogical position."

But as long as that's where the money is, that's what the consultants will do. "There's little impetus to try anything new," says Joe Trippi, who orchestrated Howard Dean's insurgency in 2004. "You can't get a ten percent commission on a million people viewing something for free on YouTube."

Top consultants interviewed by Rolling Stone refuse to reveal how they will be compensated in 2008. But when the dust settles, party insiders warn, those who write checks to the Democrats won't be happy with the results. "Donors will be shocked at how their money is spent," says Coelho, "and who walks away with multimillions."

Ask any consultant and they'll tell you they get too much credit when a candidate wins -- and too much blame when he loses. The candidate is the one who has the vision, sets the strategy and makes the decisions. "Consultants don't come to meetings with weapons," jokes Dunn, the former Bradley adviser.

But in a political era driven by media and technology, consultants have become kings of the campaign hill. "TV is so important that they're elevated to the top hierarchy," says Lehane. "They're in the room with the candidate when the doors are closed." The consultant then brings aboard a pollster who will back up his advice with hard data, selling the candidate on the kind of campaign they can "prove" appeals most to swing voters. "Candidates fall for what look like hard numbers," says Sabato, author of The Rise of Political Consultants. "But in fact they're not hard at all: The pollsters manipulate the questions and interpret the data, and too many candidates go along with it."

Which is precisely what happened in the last two presidential elections. In 2000, the chief Democratic consultant was Bob Shrum, a veteran known for orchestrating no fewer than six losing Democratic presidential bids. Shrum advised Gore to downplay his trademark issue -- the environment -- because it didn't rate as a top issue for enough voters. "They took his best gun and threw it in the river," says McKinnon, the Bush strategist. For his catastrophic counsel, Shrum's firm demanded fifteen percent of the ad buy, but Coelho knocked it down to ten percent. "They were not happy about it," he recalls. "So they pushed advertising expenditures even more." The consultants pocketed an estimated $5 million -- compared to $500,000 for McKinnon -- even though their ads were terrible. "The Republican spots were far more original," says Coelho. "We paid our consultants millions and got retread Mondale ads."

The 2004 campaign played out like a bad sequel. The Kerry team, once again headed by Shrum, advised the candidate to focus on prescription-drug benefits rather than national security and counseled Kerry not to respond to the Swift Boat attack ads. "The consultants turned him into Generic Democrat," says Jonathan Winer, a longtime Kerry counselor. "And Generic Democrat will always lose." Shrum's team spent an estimated $130 million for advertising -- roughly triple Gore's ad budget -- receiving a commission of 4.5 percent on top of a payment of $2.5 million. Once again, the ads were a disaster: While Bush's team used data-mining to microtarget voters with cable TV and Internet appeals, Shrum relied on network television. "The Bush campaign did everything a sophisticated Fortune 100 company would do," says Lehane. "The ads Kerry ran were so unfocused that they not only didn't help him, they actually helped Bush."

In the wake of such costly failures, Shrum has mercifully been put out to pasture -- but the track records of those vying to replace him hardly inspire confidence. Barack Obama's top strategist, David Axelrod, got his start helping the last presidential candidate from Illinois -- Sen. Paul Simon -- lose to Mike Dukakis in 1988. John Edwards has hired Harrison Hickman, who served as a top pollster for Gore in 2000. And Stanley Greenberg, another Gore pollster who worked closely with Shrum, is helping Sen. Chris Dodd burn through his campaign war chest.

"If you fail regularly in the commercial world, you don't get hired anymore," says Bill Hillsman, the consultant who engineered the long-shot victory of Sen. Paul Wellstone in Minnesota and helped the unknown Ned Lamont topple Sen. Joe Lieberman in Connecticut. "But if you fail regularly in the political arena, it has no bearing on your future income stream. You seem to get hired more and more -- simply because other people have hired you."

The only candidate with winning consultants on her team is Hillary Clinton, who is relying on pollster Mark Penn and media consultant Mandy Grunwald, both of whom are veterans from Bill's presidential victories. But stripped of their charismatic frontman, neither Grunwald nor Penn has made much of a splash in presidential politics. In 2004, the pair teamed up on the failed "Joementum" candidacy of Lieberman, who never rose above a second-place finish in Delaware. And so far they have only contributed to the impression that Clinton is the most scripted and poll-tested of all the candidates. In the online video Grunwald created to unveil Clinton's candidacy, Hillary engages viewers in a teleprompted "chat" from the deep-cushioned confines of her living room sofa. "It's such a put-on," says Sabato. "Her consultants said, 'Act natural.' And that's exactly what she did: She acted natural. Primping the pillows. It was hilarious."

The return of so many of Bill's top guns also runs the risk of making Hillary sound like a stand-in, lip-syncing the same old lines. She promises to fight -- as her husband did -- for people who "work hard and play by the rules," and has trotted out his chestnut, "There's nothing wrong with America that can't be fixed by what is right with America." Such lack of innovation, says Sabato, is part of the problem with drawing from the same small pool of consultants year after year. "They've all worked on dozens of campaigns together," he says. "They have formula campaigns, formula ads. They even transfer slogans."

Axelrod, who is advising Obama's campaign, insists that he doesn't plan to package his candidate based on polls. "We will rise or fall based on who Barack Obama is," he says. "We're not going to reinvent him." In reality, though, Axelrod's emphasis on authenticity is itself a formula -- the same one he used twenty years ago to try and sell Paul Simon. In a voice-over for one of Axelrod's spots in 1988, the famously dowdy Simon intoned, "The public-relations specialists tell me, 'Get rid of the bow tie, get rid of the horn-rimmed glasses, change your views to accommodate public-opinion polls.' My bow tie is . . . my declaration of independence. You'll have to take me for what I am."

In addition to repeating old messages, consultants are likely to push the Democrats to buy TV ads that accomplish little -- except driving up the commissions for consultants. "There's no market incentive for the consultant class," says Lehane. "It pays whether they win or lose." When a Democratic candidate asks why their campaign isn't getting traction, says Hillsman, the answer from consultants will be the same as always: "You're not spending enough on TV advertising."

The single-minded emphasis on television could be more disastrous than ever next year, given the GOP's ability to target voters at the micro level. "Our strategic targeting remains primitive," admits Dunn, the former Bradley consultant. Lehane is even more incensed by the lack of technological sophistication. "People are not getting their information the same way they were five years ago, yet the consultants have been very slow to react," he says. "Why aren't campaigns doing what Google and Yahoo do: using algorithms to analyze e-mail lists and figure out what moves people on a daily basis? If you had this conversation with a consultant in Washington, they'd say, 'What do you mean, algorithm?' "

In fact, the ads that work today are almost never the ones a candidate pays to keep on TV -- they're the ones that earn free airtime when they're covered on CNN or spread virally on YouTube. "Earned media like the Swift Boat ads are the ones that change things, because people talk about them," says Markos Moulitsas, founder of the influential Daily Kos blog. Hillsman, considered a maverick among consultants, has had success selling candidates the way Apple sells Macs: with memorable, creative, even funny spots. Last summer, one of his commercials for Lamont became the second-most-viewed video on YouTube.

Yet consultants insist on airing the same spots over and over -- even though ads wear out their welcome after they have been seen ten or twelve times. "They really do believe that you can annoy someone into voting for your candidate," Hillsman says. "Viewers are seeing political ads as often as thirty times in the same market. It's asinine! Not only do the ads stop having any positive effect, you actually get a backlash against it."

The only solution, say Democratic veterans, is to take a page from the GOP playbook and eliminate the commissions that motivate consultants to go ad-crazy. "Our candidates need a Karl Rove," says Kamarck, the former Gore staffer. "Somebody who is on their side -- not in it for fifteen percent of the media buy." Based on recent discussions, Dunn believes that commissions will be increasingly rare. "Candidates are moving to a fixed fee," she says.

But fixed fees are only an improvement if they're negotiated down. For her work on Hillary Clinton's re-election campaign last year, Grunwald received an estimated fee of nearly $1 million -- double what consultants on Senate campaigns typically make from commissions. Penn also pocketed some $1 million for his role in helping Clinton spend $30 million -- more than any other Democrat -- for what was essentially an uncontested election.

Those figures suggest that, commission or no commission, consultants will continue to find ways to bleed the Democrats dry. In recent weeks, Clinton has raised $1 million in small-dollar donations online. If the past is prelude, that money won't cover what Clinton will shell out for a single consultant in 2008. Win -- or lose.

Posted Mar 20, 2007 2:22 PM

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