Let me start by saying this post is not meant to suggest that Sarah Palin didn’t run her PAC well, or that Palin is a bad manager. Palin has done amazing things with her PAC. Her ability to raise money from small donors and energize the base is phenomenal. She has gotten people to give money who have never donated to a political candidate before — and that is a great thing. However, the argument that the folks at Conservatives 4 Palin make that Palin will run a better presidential campaign than Mitt Romney because she spent a smaller percentage of the money she raised in her PAC is completely ridiculous.
Money raised to cash-on-hand ratio as measure of fundraising efficiency?!
C4P: The best way to compare the efficiency and effectiveness of different PACs is to compare their respective cash-on-hand/total receipts ratios. I believe the ratio is an extremely significant number because it tells you who knows how to spend money and how to save money effectively and efficiently. Under this metric, Governor Palin has clearly operated her PAC better than how Clinton, Obama, Romney, and Pawlenty have operated their PACs.
There are many reasons this argument makes absolutely no sense:
Political campaigns are not businesses. Unlike a business, there is no reason to SAVE money in a campaign. A surplus doesn’t mean a profit for shareholders. In fact, if a campaign ends up with a big surplus post-election day, it usually means the candidate did a poor job of running their campaign. You want to use every single penny in a campaign — a dollar the day after the election is a lot less valuable than a dollar the day before the election. Extra money means you should have bought another ad, sent out more mailers, bought more signs, hired another college kid to knock on doors, etc. The only legitimate reason to have leftover money post Election Day is if you KNOW you are going to win by a landslide. (Or lose by a landslide and the candidate loaned money to the campaign and wants the money back.)
Many smart campaigns actually plan on having a deficit post-Election Day. This is not a strategy I personally like, but a lot of smart managers do it. Like I said before, a dollar the day before an election is a lot more valuable than a dollar the day after. If the election is close and spending more money will make a difference, there is a legitimate argument to be made that going into debt is a good idea. If you win, it will be easy to raise money post-election to retire your debts. If you lose, it will be harder to raise the money to retire debt, but still possible with time. And, if you can’t raise the money to retire the debt — well, there is not a lot your creditors can do about it. Leftover leadership PAC money can’t be transferred to a candidate account. It isn’t like Palin or Romney will be able to use this money for their presidential campaigns.
The fact Palin has so much leftover money makes me think she didn’t know how to spend it properly. Palin hasn’t ever run a massive campaign. She tends to like advisors who also haven’t run massive campaigns. There are a lot of things campaigns spend money on that aren’t obvious to someone who hasn’t done it before. This could end up being a good thing for Palin if she is able to bypass some traditional pitfalls of campaign spending — but it could also hurt her if she skimps on important things. What’s important to spend money on in a campaign? Well, that depends on who you ask. The TV ad guys will tell you TV is the only thing that moves poll numbers. Direct mail vendors will swear you will lose if you don’t have a robust mail program. Your political director will tell you that you need more feet on the ground. Your volunteers will inform you that you’re losing votes left and right because you haven’t sent out enough bumper stickers… The answer is that no one really knows. Campaigns are more art than science.
However, things that are good predictors of how a potential candidate will run a Presidential campaign include:
How they’ve run a presidential campaign before. It is likely that Romney will run his Presidential campaign similarly to how he ran it in ’08. I was on his campaign in ’08. It was the best financially run campaign I’ve ever worked on. Money wasn’t wasted, expenses were accounted for, budgets were created and followed. You can bet the same will be true of his ’12 campaign. After Romney dropped out of the primary, I started working for McCain. It wasn’t the best financially run campaign I’ve ever worked on. McCain ran a fly-by-the-seat-of-your-pants campaign in 2000, and it was similarly run in ’08 — whether he had money or not at the time. (Note: I am not implying Palin had anything to do with the ’08 McCain budgeting and finances.)
The personality of the candidate. Do they focus on the big picture or details? Do they want to drill down through layers of policy, or just skim over the facts and let the staff sort out the details? Do they prefer an organized top-down style of management or are they okay with the chaos of a more Tea Partyesque bottom-up approach?
Previous executive experience. For Romney, you can get a pretty good idea of how he will run a campaign based on his work at Bain, on the 2002 Olympics, and as Governor of Massachusetts. For Palin, you can look at her time as Governor of Alaska and Mayor of Wasilla.
How they run their personal finances. Candidates who are okay with debt in their personal lives are likely going to be okay with debt on their campaign. Candidates who are very careful with money in their personal lives are likely to be very careful with campaign money.
Who their campaign manager is. The truth is, presidential candidates are really busy. They aren’t often at campaign headquarters. They don’t have a lot of time to go over campaign budget numbers. Who they hire as their campaign manager has a huge impact on how their campaign is run.
C4P: How someone runs and manages a multi-million dollar PAC tells you something about how that person would run a political campaign. After all, operating a PAC tests your ability to convince other people to give you money and tests your ability to handle their money as effectively and efficiently as possible. The experience one receives from running and managing a PAC is probably the closest experience one gets to running a campaign as the two experiences share similar mechanics and dynamics.
Both Romney and Palin have raised an impressive amount of money through their leadership PACs. They both gave a lot of help to candidates in 2010. I would say both PACs were well run financially. The fact that Romney may have spent more money on overhead and staff just means he will have an easier time getting a full-fledged Presidential campaign off the ground in no time at all. Palin will have to start more slowly. The money left over in their PACs will make very little difference in the long run, and certainly can’t be used to predict how they will run their potential presidential campaigns.
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Written by MRC guest contributor, Audrey Perry.
Audrey Perry is a campaign and elections lawyer who worked as Deputy General Counsel for Romney in ’08. Her main tasks were getting Mitt on the ballot in all 50 states (and of course DC, Guam, Virgin Islands, American Samoa, Northern Mariana Islands and Puerto Rico), and counting lots and lots of delegates. After Romney dropped out of the race, she worked as counsel for McCain-Palin where she tried to get campaign staff to abide by the McCain-Feingold campaign finance law, insisted all yard signs have proper disclaimers, and tried to shut down ACORN in Las Vegas. She has also worked for Congress, Steve Poizner, the FEC and other various law firms and campaigns. Audrey blogs about politics and the law at www.legallypolitical.com.
Audrey,
Thank-you for your post. It was helpful to get an informed, inside view of how campaigns and PACs operate. I also appreciate the objective perspective on both Palin and Romney. Emotions in both camps can run pretty high – it’s nice when someone can take a step back and give us a professional viewpoint!
Thank you for this post. I am a grass roots supporter of Mitt Romney, and it is nice to see how the business side of a campaign is run.
Great post Audrey and welcome to MRC!!
A hearty welcome to MRC, Audrey!
You’ve presented an informative rebuttal; I especially enjoyed your first-hand testimonial:
Romney 2012.
C4P is making me sick with some of their recent claims about Romney not coming to Palin’s aid in the media and that Palin runs a better PAC than Romney. Hopefully supporters don’t believe this rubbish! Great post!
“Political campaigns are not businesses. Unlike a business,
there is no reason to SAVE money in a campaign. A surplus doesn’t
mean a profit for shareholders. In fact, if a campaign ends up with
a big surplus post-election day, it usually means the candidate did
a poor job of running their campaign.” Excellently said.
Her last interview with greta was so bad that to avoid commenting on it is an act of charity. But that has noting to do with this topic. Good for her that her pac is successfull.
Zeek
@Mark F.
Hey Mark, >> “claims about Romney not
coming to Palin’s aid in the media” <<
“claims?” Really? Did Mitt Romney come to
Palin’s defense when the media accused her of being an
accessory in the Tucson massacre? Oh, no he didn’t! He sat
there and watched in silence (just like the other so-called men in
the GOP) as the press attempted to conduct the most obscene
political lynching I’ve ever seen. The complaints at C4P
are not without merit.
C4P seems to be an echo chamber. Are they really coming up
with anything worthwhile over there?
The most important point in selecting a nominee is not how well the person will run the campaign but how well the person will run the country. Obviously, we all want a GOP nominee who will run a competent campaign because an incompetent campaign is unlikely to win. However, the first question needs to be who will be the best president.
The most important point about running a PAC is whether the manager is supporting good candidates or promoting good ideas effectively. I don’t mind funneling some support through a PAC, but I often prefer to give directly to candidates whom I support. If a PAC is supporting a large number of candidates who may be nominally conservative but who don’t support my position on some key issues, I’m not as likely to feel good about that PAC. If the PAC is producing papers and speeches that I find counterproductive to our cause, I’m not going to feel good about the PAC.
Looking at some of the major candidates’ PACs from this point of view and judging by websites, I’d rank Mrs. Palin’s PAC among the weakest. Her website doesn’t list any of the candidates that she supports and doesn’t have any position papers or commentary. Mike Huckabee’s PAC doesn’t focus much on policy but he supports some good people. He has a neat map that allows people to see whom he supports in each state, but the map does make getting an overview more difficult. Tim Pawlenty’s PAC website seems to have more content than HuckPAC’s. His contributions seem more obviously aimed at positioning himself for a presidential run. For instance, he gave to John McCain and Rick Perry. Do either of these guys really need PAC contributions from Tim Pawlenty? He gives to some good folks, but he seems to be grasping for endorsements. Mr. Romney’s Free and Strong America PAC has good content, and he is giving to good people as well. The PAC more obviously focuses on what Mr. Romney is thinking about things. I think Mr. Romney’s thoughts are pretty educational, so I like seeing them published. Maybe someone who didn’t like his thoughts as much would see them as needless fluff and not effective advocacy for the best direction for the country.
Another measure that would be important is “wins per dollar received.” I care less about how much is spent by election day than I do about the total number of wins. If a PAC doesn’t spend every dollar but ends up with plenty of wins, I’m happy. If a PAC spends according to what the campaign experts recommend but loses, I’m not as happy. This measure has to be balanced against other factors. A PAC could artificially inflate this number by giving only to candidates who will get easy wins in safe districts. Inflating the numbers this way only makes a PAC look silly.
I agree that overhead versus dollars spent on candidates/advocacy could be a good measure of efficiency. If an organization is bloated to the point that a dollar given to the PAC is only a dime given to candidates is a less effective PAC than one that gives eighty or ninety cents of every dollar to the candidates. However, the cash on hand is not necessarily a measure of low overhead. If a PAC takes in money but doesn’t do anything, low overhead is meaningless.
Just wondering, has anyone responded on the C4P site itself on the article this post responded to?
I’m not registered over there, so I haven’t.
Noelle. They won’t let you. If you put anything factual, they will ban you. i don’t bother. It’s just a waste to present facts over fiction.
Question – how many FEC deficiency notices has each PAC received? Reporting errors tend to reflect a PAC that is not well-run, and SarahPAC has received quite a few in only 2 years of existence.
@Noelle Noelle, I’ve put this post in front of the author at C4P many times. No response. However, they were discussing it on their comment boards: http://conservatives4palin.com/2011/01/governor-palin-speaks-tonight-in-reno-at-the-annual-safari-club-international-hunters-conventionopen-thread.html
I was impressed with this comment on the same topic:
Looks like she came to our site and was impressed with our tone compared to the writers on C4P…. whattaya know?!