A Response to Claims that Sarah Palin has Run Her PAC Better than All Others

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.

    Romney’s PAC Leads 1st Quarter Fundraising

    The first quarter fundraising results are in and the first gold medal for the invisible primary goes to Mitt Romney! In fact, his PAC brings in more in the time period than Pawlenty’s, Palin’s and Huckabee’s respective PACs combined.

    I have been curious to see how this quarter’s results would turn out since there were so many asterisks involved with last years results. Last year there were a number of factors that skewed the outcome (though Romney still led) that is just wasn’t possible to compare apples to apples. BUT this quarter, all the PAC’s are established and the playing field is level.

    Without further ado, the results:

    1st Quarter Fundraising by PAC

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    Note: my numbers do not show that Mitt’s PAC also raised an additional $157,000 from their affiliate state-based PACs of the same name. That puts Mitt’s actual total at $1.6 million. I’ll include that in my numbers next time around.

    My analysis:

    • Romney is far and away the leader in fundraising, but the others do have some limitations with their responsibilities for their respective jobs and public office. In any case I think Romney would still lead. An important reason to address this is that powerful fundraising will be vital in the general election.
    • Not shown in the results is the fact that Romney brought in a HUGE $950,000 in March alone, boosting his quarter total. Two possible reasons for this boost could be his constant touring through the month on his book tour as well as his “Repeal the Bill” campaign. Though he has not had any official fundraisers (that I know of) in March, his public profile was raised substantially during the period which could have resulted in more contributions. In all he did 27 Official Book Tour events in March as well as dozens of media appearances and interviews.
    • Romney disbursed far more than any candidate in the quarter, again due to his extremely busy travel schedule etc., for his book tour in March. He also has a much larger political organization to support. The good side to this is that if he decides to announce next year for office the transition will be easy because the team will be in place.
    • Though Romney’s burn rate is the highest, he still has more cash on hand than the other PACs, and still took in more than was distributed for the overall period. That’s what the money is there for - to be used.
    • Romney’s total contributions to other candidates for federal office is the highest - all of which was given in the month of May as part of his “Repeal the Bill” campaign.
    • Pawlenty impresses me with his ability to out raise Palin and Huckabee, especially given their much higher name recognition.
    • Palin’s PAC has announced that they will focus more on fundraising this quarter so look for better numbers from her next time around.
    • Huckabee’s percentage of funds given to other candidates is noble, but he is still needs to find some way to boost his overall fundraising numbers. He may get lot done on little fundraising for the primaries, but that is not going to work for the general election, should he win the nomination. One can argue that it is not as necessary for him to raise funds now and he can do so when the primaries start, but the other candidates will his the ground running with their networks leaving Huckabee in a game of catch-up. The time to build those networks is now.

    That’s it. Let me know what you think. For the analysis I did for last years numbers you can see the post I did on Feb. 5th by clicking here.

    Good work Romney and congratulations to the Free and Strong America PAC!

    ~Nate Gunderson

    Source(Full FEC filings): Romney , Pawlenty , Palin , Huckabee

    UPDATE: The Free and Strong America Releases a list of federal candidates they supported financially this quarter. You can find the press release by clicking here.