Traditionally, commissions to the media buyer ran as high as 15 percent, with some of that kicked back to campaign staff. But as total ad spending has skyrocketed, this commission structure has been refigured. Recent practice, according to a 2012 New Yorker article by Jane Mayer, is to pay seven percent of the ad buy to the media consultant, two percent to the pollster and one percent to the campaign manager.
It’s also become more common for consultants to accept a smaller commission or a flat fee. Karl Rove, a founder of American Crossroads and its super PAC, Crossroads GPS, told the Washington Post that his group gave only a 3 percent. Rove, a paid contributor to Fox News, also said he took no salary at Crossroads because donors had complained to him that “consultants set these things up, pay a commission to fundraisers, hire themselves to do the work and pay themselves too much.”
That appears to be common practice in many of the new independent entities, although in the absence of subpoena power it’s impossible to know for sure. The information these groups must report to the IRS or the FEC is significantly less than what the campaigns file, and the amount of money in play is enormous. The New York Times reported that the flow of cash through just the 501(c)4 “social welfare” organizations rose from $5.2 million in 2006 to $310.8 million in 2012.
Salaries are generous, where they exist. When he was ousted from FreedomWorks in an ideological struggle, Dick Armey received an $8 million severance, paid out at $400,000 a year for 20 years, to compensate for lost income. John Murray, a former aide to Representative Eric Cantor, founded a 501(c)4 called YG Network and paid himself $638,000 in 2012, though the organization handled less than $10 million in grants. But many 501(c)4 list no paid staff for 2012, despite revenues in the tens of millions. The big payoffs likely came when, like Sean Noble, the principals steered contracts to their private firms and those of close associates, who could turn around and pay them a consulting fee.
One particular suite of offices in Alexandria, Virginia, epitomizes the tangled web of easy money and overlapping personnel. RedState’s Erick Erickson charged that the fifth floor of 66 Canal Center Plaza is where the Republicans’ 2012 campaign efforts were “bled to death by charlatan consultants making millions off the party, its donors and the grassroots.”
Suite 555 housed no fewer than 11 separate organizations, both for-profit and non-profit, working for the Romney campaign, the Romney super PAC, the Republican National Committee, American Crossroads, and assorted smaller entities. The ringmaster was Carl Forti, a legendary operative who was political director of Romney’s 2008 campaign and then became a strategic adviser to his 2012 super PAC, Restore Our Future, while also serving as political director of Rove’s Crossroads GPS and running a consulting firm, the Black Rock Group—all out of Suite 555. Meanwhile, Forti’s partner in Black Rock, Michael Dubke, was also on the premises running Crossroads Media, the private firm that got more than $161 million in media business from its suite mates.