The Consultant Racket

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THE PLANK MARCH 27, 2007

The Consultant Racket

When I die, I'm hoping I can come back as a Democratic consultant. Tim Dickinson describes the nifty little racket they have going in a long Rolling Stone article:

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.

It's worth reading on to see how badly this has crippled the Democratic Party. In 2000, Gore's top consultants pocketed some $5 million, compared to $500,000 for Bush strategist Mark McKinnon. That's money that could have been usefully spent elsewhere. In 2004, while the Bush campaign was employing data-mining to "micro-target" voters through cable TV and the internet, Bob Shrum's main tactic was to air the same ads on network television over and over and over again, and grab a cut. There's little incentive to innovate ("You can't get a ten percent commission on a million people viewing something for free on YouTube," one points out.).

Shrum, of course, has "mercifully been put out to pasture," but Dickinson reports that the next generation of Democratic consultants may not be much better. Someday, the insane commissions may become less common--at least one strategist thinks candidates "are moving to fixed fees"--but it doesn't seem to have happened yet. I'd still like to know, though, why Republicans are so much better at reining in their consultants. Threats? Horse heads in the bed? What?

Update: Oops. As Noam points out, this story is so 2003. See also Amy Sullivan here.

--Bradford Plumer

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