2012 Election The Most Expensive In History
ROBERT SIEGEL, HOST:
Among the many distinctions of the 2012 election season was that it was the most expensive in history. President Obama and Mitt Romney each raised around a billion dollars and outside groups spent another billion or more. We know that a lot of that money went to pay for advertising, but what about the people who placed the ads or produced them or think up the strategy behind them?
What about the consultants? Was this a very profitable year to be behind the scenes of a presidential campaign? Well, joining us now are two reporters who've looked into money and consultants in the 2012 campaign. Melanie Mason writes about money and politics for the Washington bureau of the Los Angeles Times and the Chicago Tribune. Welcome to the program.
MELANIE MASON: Thank you.
SIEGEL: And Tom Hamburger writes about politics for the Washington Post. Good to see you here.
TOM HAMBURGER: Thanks, good to be here.
SIEGEL: As a rule, do we know how campaign consultants are paid? Don't they get a commission or at least get a commission for placing advertising on radio and television?
HAMBURGER: Robert, there's a standard, an industry standard, which had been around for years, which made this a very lucrative field, which ran at about 10 percent. That is 10 percent of these very high-priced ad buys would go to the consultant as a fee for buying the time.
SIEGEL: If you bought $200 million worth of advertising, 20 million bucks to the consultant?
HAMBURGER: Not bad.
MASON: But what we've seen is because these elections have gotten so expensive, that campaigns have gotten a little bit more aggressive in negotiating the terms of that take, so instead of a 10 to 15 percent, you may see a commission in the single digits. It's also possible, and there've been reports that some of these campaign consultants got a flat rate as opposed to a commission of every buy that they bought.
That was a way for the campaign to perhaps save a little bit of money.
SIEGEL: Let's hear about the two campaigns and what they spent and what we think they spent on all their consultants. Tom Hamburger, the winning Obama campaign, what do we know about it?
HAMBURGER: Well, the Obama campaign spent - this is just on media consulting, Robert - about $550 million on advertising buys, almost all of it television. Then there were allied groups that spent almost an equivalent sum. This is a staggering figure. It's how we get to the billion dollars. And there were a small number of consultants that received most of the benefits.
SIEGEL: And the benefits, even if they were very low, do we have any idea what percent they might have gotten if there was a percent?
HAMBURGER: We do, we do. The Obama campaign relied - this cycle as it did in 2008 - on a Washington-based firm called GMMB. Greer, Margolis are the two founders of the firm. And the campaign sent about $450 million worth of advertising contracts to that one Washington-based firm. Now, the firm's principal, I talked to him today, Jim Margolis, said, please point out that we didn't keep all that money.
SIEGEL: They bought advertising.
HAMBURGER: They bought advertising.
SIEGEL: That's what we hope, huh?
HAMBURGER: They bought advertising, they produced ads, and so there was a significant overhead. And I said, well, so is it 10 percent? No, no, no, no way. How about five? That would be way too high. Didn't want to get more specific. So they, you know, they'll have a good Christmas party this year, but we don't know exactly how much they made.
SIEGEL: Okay. And Melanie Mason, the Romney campaign, what do we know about what they spend on consultants?
MASON: Well, what the Romney campaign did this year as opposed to his campaign in 2008, 2008, his campaign was known for being very heavy on outside consultants, a lot of strategists and a lot of infighting and turf battles. So this time around he kept a very close circle of consultants really doing the bulk of the spending. And so what my colleagues and I did at the Los Angeles Times is we actually analyzed, of the firms that were connected to Romney's top staffers or that had recently employed his top staffers, they had been paid more than $130 million through the middle of October for the services that they were providing. That was nearly a third of all of the campaign spending.
SIEGEL: But did that include money that they were then spending, say, to buy commercials or was that their fee for doing what they were doing?
MASON: A little bit of both. I mean, a great example would be American Rambler, which is a company that was founded by some of the top strategists in the Romney campaign. We know that American Rambler was paid $24 million for their services, which included polling, strategy, consulting, things like equipment.
In addition to that, they were paid $130 million through the middle of October for placing media buys. We didn't include that in our total of money paid to Romney firms because that money went almost right out the door to local television stations and radio stations for these ads.
SIEGEL: Who also had a good year?
MASON: Had a very good year.
SIEGEL: Under the commission system, to the extent that it still exists, if I'm the consultant, it may be a good idea regardless to buy television advertising time. But it's also in my interest to buy television time.
HAMBURGER: That is a very important point, is that there's a conflict of interest at the heart of all of these campaigns, which is those who are advising the candidates on how best to succeed, generally recommending television advertising, we know, have an economic stake often in those expenditures.
SIEGEL: So when a presidential election year comes around, if this past cycle is going to be the model, it's not as if people are saying, I'm going to have to take a break from my day job and sacrifice for the party that I love. This is a booming business to get in on a presidential election year.
HAMBURGER: It is a booming business. It's boosted the economy of Washington, D.C., and its consultant class. And win or lose, the consultants are winners and big winners.
MASON: I think one of the other things that's worth noting is that consultants have typically been sort of a boom/bust cycle. In election times, they spend a lot of money and then things die down. But what you've seen now is that in the era of the permanent campaign, this is a lucrative business that is lucrative after November 6.
SIEGEL: It's not seasonal work anymore.
MASON: Not anymore.
SIEGEL: Melanie Mason of the Los Angeles Times, Chicago Tribune, Tom Hamburger of the Washington Post, thanks to both of you.
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