Politics & Policy

PAC Man

Post attack prompts fundraising freeze.

Last Monday’s Washington Post contained a top-front page attack on Linda Chavez’s family for running a number of PACs that appear to raise money, pay vendors, and then spend little on candidates and independent expenditures in key races. The money is instead plowed back into fundraising, pays legal fees and FEC fines, and modest salaries to members of Chavez’s family. The gist of the report is contained in two sentences:

Of the $24.5 million raised by the PACs from January 2003 to December 2006, $242,000 — or 1 percent — was passed on to politicians, according to a Washington Post analysis of federal election reports. The PACs spent even less — $151,236 — on independent political activity, such as mailing pamphlets. 

A direct-mail vendor tells National Review Online that the mailing list for one of the PACs in question –the Latino Alliance — has been frozen by the owners and is temporarily unavailable to rent or buy.

The PACs analyzed by the Post include the Pro-Life Campaign Committee (PLCC), Stop Union Political Abuse (SUPA), the Latino Alliance, and the Republican Issues Campaign, which are run by members of Chavez’s family (Chavez herself does not take any salary from the PACs).

Christopher Gersten, Chavez’s husband who runs the PACs, pointed out that both PLCC and the Latino Coalition have consistently been at or near the top of their respective categories (pro-life PACs and Hispanic PACs) in dollar amounts given to candidates. In the case of the pro-life PACs, this is a bit misleading. For example, PLCC ($14,432) gave more to candidates than National Right to Life PAC (only about $7,000), but the latter was also spending more than $2.7 million on independent expenditures. PLCC reported no independent spending in its FEC filings that cycle.

“I consider myself an ally of Chris,” said Susan B. Anthony List president Marjorie Dannenfelser, who says she has worked with Gersten in the past. “What he does well is to form coalitions to influence campaigns in a positive manner.” Asked about PLCC’s practice of putting nearly all of its proceeds back into fundraising, she said only, “That’s not the model that we work on.”

This is very true — SBA List PAC spent about 85 percent of the funds it raised in 2005-2006 on candidates and campaigns. By contrast, PLCC spent just 0.3 percent of its $2 million take on pro-life politicians and independent political expenditures during the 2006 cycle (and 1.7 percent of its $5.8 million take in 2004).

“All telemarketing has very high overhead, for whatever cause, left or right,” said Gersten. He adds that the PAC’s other activities also help to promote the cause — not just donations to candidates, but also the fundraisers a PAC can organize for candidates and the phone calls it makes. “Making millions of phone calls a year promoting pro-life values makes a huge difference,” he said. “That has to be counted, the value of making those calls.” Gersten adds that PLCC is doing good for the pro-life cause by identifying new voters and potential future donors — by taking raw voter files and sorting voters by their views on abortion.

Gersten also cited a December 2006 report from New York’s then Attorney General Eliot Spitzer that many nonprofits — including the Heritage Foundation, National Right to Life (not its PAC), and Citizens Against Government Waste — have engaged in telemarketing campaigns in which they received just pennies on the dollar. (In all three cases, the report shows very large dollar amounts of pledges that had not yet been collected. Depending on the terms of these charities’ contracts, this could change the final numbers.) These are nonprofits, of course — not precisely comparable organizations — but like PACs, Gersten said, they sometimes use large pledge drives to prospect future donors, even if they receive little money from the drive itself.

Four other conservative fundraising professionals, two of whom work for PACs in the conservative world, were contacted for this story. All were surprised by how little of the money going to Gersten’s PACs ended up going to politicians and independent political activity in 2006. “It seems incomprehensible to me that 99.7 percent of a PAC’s money would go to expenses,” says one fundraiser with several years’ experience working for federal campaigns.

Asked about PLCC’s efficiency in political fundraising and spending, Club for Growth PAC executive director David Keating replied, “That’s about as below par as you can get. You’d never get off the golf course…It’s actually kind of hard to believe that the number could be that low.”

Last week’s Post piece was surprising for the fact that it received top-front placement. It also did very little in the way of articulating any defense of these organizations, and there are some legitimate explanations. It is not as though Chavez’s family is making tons of money from the PACs, and none of the activities described in the Post piece were illegal. I had a chance to speak with Mrs. Chavez, who was on vacation, and she also sent a written response to the Post piece, from which I excerpt below.

She explains the PACs’ high overhead costs, and how much goes to her:

The telemarketing firm’s contract gives us only 5% of the proceeds collected, so the assertion that we raised 24.5 million is misleading at best.  The PACs never received 95% of the funds raised by telemarketing.  These contracts are fairly standard in the fund raising business…. In addition to the modest salaries paid for running the PACs (a point even the Washington Post acknowledged), we also must pay fees to accountants, attorneys, and the companies who actually do the electronic filing.  I took a small salary and health insurance from one of the PACs when it was first getting started and Chris was in the government and could not administer it. I presently take no salary from any of the PACs…

She explains how FEC fines for late filings have cut into the PACs’ effectiveness:

Since the FEC also has levied Draconian fines for administrative errors (in the case of the PLCC, reports were filed on paper after the switch to electronic filing went into effect, for example, plus some of the reports had incomplete information on donors, e.g. employer’s name lacking, etc., and some of the data provided by vendors was also incomplete, necessitating amended filings, all of which led to very large fines).  When you look at the amount that actually came into the PACs accounts, we gave about 25% to candidates, an equal amount went to the FEC.  

She also explains that the PACs do more besides just distribute money:

The Post also failed to mention that these PACs do more than simply write checks to candidates. We host fundraisers for candidates, leveraging our contributions by raising other money… Even the letters and phone calls we make to solicit contributions are a form of voter contact. We promote our issues and educate the public on important policy issues through those letters and phone calls.

The episode still offers a lesson to conservative donors: consider the efficiency of the PACs and campaigns that you patronize. According to FEC reports, National Right to Life PAC raised $3.1 million in 2005 and 2006. They spent $2.7 million on independent expenditures and candidate contributions.

Susan B. Anthony List’s PAC raised $292,000 and spent $248,399 on such activities in the same cycle.

And PLCC, run by Chris’s son Pablo Gersten, raised $1.95 million and spent $14,432 on candidates and independent expenditures during the same period. It is true that the other two organizations benefit from having cooperating educational foundations that can pay for staff and many other bills, but the ratio is still exceptionally low.

It may be that PLCC is finding new donors who would not otherwise give instead of competing with other pro-life causes. Maybe the telemarketers’ calls soliciting money even energize fervor for the pro-life cause. “It’s possible that these people are doing some good just by making a living and being spokesmen for the cause,” said Keating of Club for Growth. “But there has to be a better explanation than that.”

  – David Freddoso is an NRO staff reporter.

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