Presidential hopefuls are reining in their costly consultants

Democrats put a cap on big fees for advertisements

Email|Print| Text size + By Christopher Drew
New York Times News Service / December 25, 2007

It was the spring of 2004, and Senator John Kerry had just secured the Democratic presidential nomination. But as huge sums of money began pouring into his campaign, his top strategists had more on their minds than just getting ready for a tough race against President Bush.

Behind the scenes, they were fighting over the lucrative fees for handling Kerry's television advertising. The campaign manager, Mary Beth Cahill, became so fed up over the squabbling that she told the consultants - led by Robert Shrum, one of the most prominent and highly paid figures in the business - to figure out how to split the money themselves.

Though the final tally has never been publicly disclosed, interviews and records show that the five strategists and their firms ultimately took in nearly $9 million, the richest payday for any Democratic media consultants up to then and roughly what the Bush campaign paid its consultants for a more extensive ad campaign.

Shrum and his two partners, Tad Devine and Mike Donilon, walked away with $5 million of the total. And that was after Cahill, in the closing stages of the race that fall, diverted $1 million that would otherwise have gone to the consultants to instead buy more advertising time.

Questions about how the Kerry campaign could have become such a bonanza for one small group of advisers and whether the fees squandered money that could have been used for courting voters are still reverberating inside Democratic circles today, as the 2008 campaign moves into high gear.

With more money than ever on the line this time around, resentment has been building, donors and political operatives say, at how, win or lose, presidential elections have become gold mines for the small band of media consultants who dominate campaigns.

As a result, the Democratic presidential hopefuls are seeking to impose more controls on the consultants. In doing so, they are moving more into line with their Republican counterparts, who, by and large, have kept tighter rein in the past on the how they handle the media teams that shape the candidates' messages, produce their television ads, and buy the air time.

The three leading Democrats - Senators Hillary Rodham Clinton and Barack Obama and former senator John Edwards - are clamping down. They are following the Republican presidential nominees in paying their media advisers flat fees or placing a cap on their payments rather than making payments based on a percentage of what they pay television stations to broadcast their commercials.

Even with the changes, media consultants in both parties will be paid handsomely in the 2008 campaign, and their business continues to be one of the largest and most lucrative in politics.

Beyond the internal pressures to limit payments to consultants, the Internet is reducing reliance on expensive television advertising time, diminishing the control of consultants over their candidates' images and threatening more fundamental changes.

Already, the shift in the way consultants are being paid is far-reaching. The old approach allowed the fees to shoot up with increases in advertising in hotly contested races.

Critics say it also provided a built-in incentive for the consultants to run more ads, a concern that has led to infighting in many races.

In interviews, aides said Clinton and Edwards had negotiated flat fees with their top consultants. Obama has capped what his consultants can earn, which will convert their more traditional percentage deal into a flat fee once his ad spending passes a certain threshold, his aides say.

"That is a startling change in the way major Democratic presidential candidates operate," said James A. Thurber, a professor at American University in Washington who has studied political consultants. Like other consultants, Shrum, who with his partners earned about $3 million of the $7 million in fees paid by Al Gore's presidential campaign in 2000, defended the fees he earned.

"I don't make any apologies for the fact that I managed to make a career out of something I love to do," Shrum said.

Shrum, who is not involved in the 2008 race, has been criticized for favoring the same populist themes in both the Gore and Kerry losses. But he and other Democratic consultants say the work has become even more difficult as the presidential campaigns get longer, as the audiences become more fractured, and as attacks and counterattacks force them to churn out more ads.

They also said that they often had to pay subcontractors to help, and that Republican consultants could afford to charge less because they earned more doing similar work for corporate clients.

Leaders in both parties say the presidential nominees could each spend more than $200 million on television ads next year. That compares with $177 million for Bush, who also paid about $9 million in fees for his reelection campaign in 2004, and $150 million for Kerry in that race.

"Flat fees are definitely the way to go, because they remove any question of a conflict of interest in making the ad buys and they keep the fees from drifting higher," said Leslie Kerman, a Democratic campaign finance lawyer who has long pushed for lower fees.

But, she said, the top consultants, who revel in the combat of politics and their celebrity status, will still take home at least three times as much as pollsters and other political consultants.

"Democratic campaigns tend to treat media consultants like rock stars, and the consultants will still want to be paid like rock stars," she said.

Hillary Rodham Clinton, Barack Obama, and John Edwards are now paying their media advisers flat fees rather than making payments based on a percentage of what they pay TV stations to broadcast their commercials.


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