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Russell’s fundraising strategy comes under scrutiny
Few congressional hopefuls have raised the kind of money Republican Bill Russell has raked in during this election cycle. Since losing his bid for the 12th Congressional District in 2008, Russell has pulled in a whopping $2.8 million.
The problem, though, is that it’s cost him almost that much to raise the money in the first place, thanks to his use of a voter-contact firm that has come under increasing scrutiny for the rates it charges. And as he prepares this week to ask GOP insiders to make him their candidate for the special election to finish out John Murtha’s term, many are wondering how he can possibly put together a well-funded race when so much of his money goes right out the door. That pitch will be particularly difficult considering that his main opponent for the nomination, wealthy businessman Tim Burns, is expected to pour significant sums of his own money into the race.
Between late 2008 and the end of last year, Russell, a former Army Lieutenant Colonel, has paid more than $2.5 million to the company, Base Connect, according to campaign finance data. Russell raised over $895,000 in the fourth quarter of 2009, spending $719,000 on the firm’s services. The rate of spending—the “burn rate” in campaign jargon—has political insiders furrowing a skeptical eyebrow.
Veteran strategist Bill Pascoe called it “subprime political fundraising” on his blog. “Keeping 82 cents out of every dollar you gross isn’t fundraising,” he wrote, “it’s highway robbery.”
A high-level Republican insider was equally scathing in his assessment.
“Russell is the creation of a direct-mail campaign by a company that has had to change their name several times after totally burning out their reputation,” he said. “They find guys like [John] Murtha who they can build these national mail campaigns around, and they make everyone sign a contract that generates revenue for everyone but the candidate.
In a recent interview, Russell defended his use of Base Connect, which used to be called BMW Connect. He said the fragmented media markets in the southwestern Pennsylvania district make a direct-mail campaign preferable, especially considering the demographics of the 12th District.
“We have an older population,” Russell told pa2010.com, “and oftentimes the best way to reach them is not through television or Internet campaigns, but through direct-mail. These services may be expensive, but they offer the best return on investments.”
But the real issue for Russell is that, as he acknowledged, his campaign doesn’t even own the voter and donor contact list being compiled by Base Connect. That means every time he wants to tap his donors, he has to do so through Base Connect and its heavy fees.
And as the high-level party insider noted, Russell’s initial success came from pitching the candidate as the anti-Murtha.
“Now that Murtha has passed away, how does Russell change his identity?” he asked. “And how does the direct mail campaign continue to function? It’s a little tricky to see how he does that.”
The firm itself is clearly drawing increased scrutiny. As this article was being reported, skeptical stories were published by both Talking Points Memo and the Capitol newspaper Roll Call. The TPM report referred to it as a “notorious” firm “still fleecing longshot candidates.”
In an interview with Roll Call, a Base Connect executive defended the company, noting that it allows candidates with potential upside to get their campaigns rolling without any upfront investment.
“None of these candidates have we ever asked, ‘Oh, by the way, we need a check for $40,000 or $50,000 or $100,000 to get this program started,’” chief operating officer Michael Centanni told the newspaper.
Russell, for his part, did not substantively address how he could possibly raise the kind of money needed for a high-profile special election with so much of his gross receipts going to Base Connect. But he said that even without big financial returns, the direct-mail effort itself would yield name-recognition and, eventually, votes at the polls.
“Such speculation misses the point,” Russell insisted, “and any accusations that companies like Base Connect are more concerned with turning over a profit than with winning elections is grossly unfounded.
“If you look at the 2008 campaign we ran,” he added, “we raised $3 million from direct-mail fundraising, $1.2 million of which went into television, radio and newspaper. I have no regrets whatsoever about Base Connect.”
March 9, 2010 at 11:45 am
Tags: Bill Russell, PA-12, Tim Burns
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GOPHAWK
Mar 9th, 2010
This is a scandal … not a Russell scandal but a scandal of a peripheral scam company living off the naivete of desperate candidates and the unwise credulity of little old ladies in order to use the one to get their hands on the Social Security checks of the other. Russell should turn state’s evidence on these crooks and an attorney general or district attorney should raid the offices of this company.
David Diano
Mar 9th, 2010
The following statement does not make sense:
“That means every time he wants to tap his donors, he has to do so through Base Connect and its heavy fees.”
The candidate MUST have a list of his own donors (names, addresses, amounts, and employer) in order to file campaign finance reports with the FEC.
GOPHAWK
Mar 9th, 2010
David, this mail house is just a scam. Like other scammers who prey on the elderly with a good cause like needy children or animal rescue, these guys developed an emotionally resonant story (an honest military man running against a corrupt, entrenched pol). This is their scam: Find an entrenched incumbent who meets the “bad guy” side of the equation and then find an idealistic candidate to use as the front. Like other scam outfits, they have to change their name and location as people wise up but they keep on going. Russell has got to turn them in.
Mancini
Mar 9th, 2010
Diano:
Its you whom makes no sense.
A candidate doesnt need a list of donors, he just needs money. This company is like a political loan shark, or payday loan operation.
I also suppose you think candidats also need to list their blood type too.
Again, candidates need money, moola, cash, they dont need frickin lists. So – follow me now, cause heres where it gets tricky – money, follows lists, because list are information, and they give the candidate the access to the money.
Believe me, I seen a lot of candidates waste time trying to keep track of donors, but they really need to pay attention to getting money instead.
Keep dispinsing bad advice Diano.
Adam
Mar 9th, 2010
Basically, Russell is helping Base Connect scam little old ladies who think they’re donating to a conservative cause but instead all their money goes to some company. Either Russell is complicit or dumb. Either way, who would want him as their Congressman?
flynnbw
Mar 9th, 2010
Plus he’s not from the area.
Nic
Mar 9th, 2010
David is right. Any candidate that take money has to report name, address and other info to the FEC Quarterly. This info can all be seen online at fec.gov
The real concern here is that this shows a person that is not a strong manager and entered in to a bad business deal. (and allowed the bad business relationship to go on for some time) We have enough people in Washington that have no idea how business works. We do not need another one.
Tim Burns built and sold a business. Form what I understand build a very successful business in very short period of time. This means he understands budgets, payroll issues and how to make things work efficiently. This is what we need in Washington.
Dan Hirschhorn
Mar 10th, 2010
Hey David,
Sorry it took me so long to chime in on your question. You make a good point.
Allow me to clarify what John Manganaro was reporting, but with the caveat that we’d have to go and double-check this, so take this with just a grain of salt:
Of course Russell knows who his donors are. As others on this string have pointed out, any of us can look up that information (with the exception of donors who contribute less than $200 and are therefore not itemized).
My understanding, though, is that the donor list itself is essentially the property of Base Connect under the contract it signs with clients. In other words, Russell has agreed not to do mass-contact of these donors unless it is done through Base Connect.
Again, me and John will need to go back and make sure this is accurate. But I’m pretty sure it is.
Hope that helps.
Dan Hirschhorn
mdog
Mar 10th, 2010
Folks: Again you are a bit out of touch. Bill Russell is a formidable candidate. He has a passionate team. They supply alot of free labor to GOP call centers. The NRCC gave Russell 200k last election. Russell hasn’t changed his fund-raising tactics. Isn’t their hypocriscy the real scandal. If the powers that be weren’t so scared of Russell they wouldn’t suddenly be getting religion and spreading these stories. Let’s face the GOP race in teh 12th offers 2 Murtha haters.
Concerned Conservative
Mar 10th, 2010
‘Veteran strategist’ Bill Pascoe is shilling for Burns…the connection is easy to find…why do you think someone from New Jersey is so concerned about this race and writing nothing but hit-pieces on Russell? This is just typical old politics being played…Russell’s character is hard to attack…the carpetbagger angle didn’t really work last time…so you go after his fund-raising in an effort to shut it down. Tell us John, who this “high-level Republican insider” is…unless you name names it’s all just BS and biased on your part. Would you prefer all of our candidates to be independently wealthy like Tim Burns?
Concerned Conservative
Mar 11th, 2010
Again, me and John will need to go back and make sure this is accurate. But I’m pretty sure it is.
Hope that helps.
Dan Hirschhorn
Great reporting there…so we’re quoting a blogger who’s quoting a blogger who’s quoting maybe somebody connected to maybe a liberal newspaper going under…which mean’s you need to believe us but we’re not liable…at least we don’t think…because we actually heard it somewhere else…but we have no interest in the race either…
PA-12: Republican Waterloo « Red Dog Report
Mar 26th, 2010
[...] write in campaign by loyal supporters. Despite the Colonel’s strengths, there are some drawbacks. Most notably, the Russell campaign has not worked well with the Pennsylvania Republican Party. [...]
PA-12: Republican Waterloo? « Red Dog Report
May 19th, 2010
[...] write in campaign by loyal supporters. Despite the Colonel’s strengths, there are some drawbacks. Most notably, the Russell campaign has not worked well with the Pennsylvania Republican Party. [...]