Funding Liberty! Table of Contents
The ancient philosopher Archimedes is said to have written 'give me a long enough lever, and a place to rest it, and I shall move the world'. Archimedes is sometimes also associated with the law of buoyancy: Dense objects sink like rocks.
Project Archimedes was the campaign promise of National Chair David Bergland. As laid out by former National Director Perry Willis, Project Archimedes was supposed to increase Party membership from nearly 28,000 in mid- 1998 to 100,000 or more by the 2000 National Convention. Bergland had promised that if elected he would launch the Project. He was elected. The Project was launched.
To reach its goals, Project Archimedes needed to attract 6000 new members in its first two months, and 6000 or more members every two months thereafter. Project Archimedes failed. Not only did membership not grow 6000 in two months, but membership has never grown by 6000 from the 27,938 it had reached on June 27, 1998. Indeed, after four years of Project Archimedes Party membership is smaller than it was in Summer 1998.
When Bergland became National Chair, party membership was already increasing-up 5000 in the first half of 1998. Project Archimedes was launched. Membership growth immediately slowed. In the second half of 1998, about 600,000 Archimedes letters were mailed (source: December 1998 LNC Minutes) and membership grew by fewer than 2200. In 1999, another 1.7 million or so letters were mailed (We know the number because Willis was paid in total for about 2.3 million letters, of which 600,000 were mailed in 1998). In the first half of 1999, membership grew by another 2300, from 30,065 to 32,377. Tripling the number of letters mailed had almost no effect on the net number of new recruits, raising the question of whether the program was at all effective in recruiting new members. Membership growth then crashed to a halt, and has never reached 33,500. The situation grew worse in the New Year. From November 30, 1999 to December 31, 2000, National Party membership fell by more than 650. For the first time in recent memory, the National Party failed to expand its ranks during a Presidential election year. Party membership went into a steep decline, falling to 24,498 in areas with affiliated parties by the end of July, 2002.
Did Project Archimedes succeed? At the 1998 National Convention, David Bergland debated Gene Cisewski. I have the video tape. One of the issues was the cost of Project Archimedes. Cisewski estimated that the cost of Project Archimedes was over $100 per new member. Bergland responded that Cisewski was wrong, that 'the data is there' and that 'the cost per new member is $19.46'. The number was repeated, several times. Bergland put this against the average amount received from a new member in a year, namely $57, to show that the program would be rapidly successful.
Based on the record, $19.46 is obviously false as a cost per new member. Even if one resorts to basically dishonest approach of charging against Project Archimedes nothing but the cost of mailing prospective new members, as though the staff, office,... effort tied up in the project cost nothing, it is difficult to get under fifty cents per letter for postage, printing, and list rental. That $19.46 would then cover the cost of mailing no more than 40 letters. To get a new member by mailing letters, the LNC would have needed a return rate on letters mailed through to membership of 2.5%, which is absurdly high. The actual numbers that I have seen reported were under 1%.
So where did the '$19.46 per new member' come from? While listeners did not at the time understand what they were being told, Bergland gave the truth away when he answered the next question. Asked "Should the Libertarian National Office remain neutral in the contest for the Presidential nomination of the Libertarian Party?", Bergland answered "The national staff should remain neutral in the nomination period. That Policy is already in effect. It has been for a long time...That's what it should be. That's what it has been. And it's been complied with."
The policy had not been complied with. How could Bergland not have known? National Director Perry Willis had worked pre-nomination for the Browne campaign, and he was not alone on the National Staff in doing so. Bergland was Browne's campaign co-chair. Sharon Ayres, with whom Bergland shared a residence, had been Browne's campaign manager. Bergland, by his own admission, knew considerable details of the campaign’s finances. He was able to verify, after all, that the funds given to Ayres were substantially expense reimbursements. Ayres received e-mail from Willis about campaign operations. How could non-compliance have been hidden from campaign co-chair David Bergland?
Bergland indeed gave the truth away when he answered the second question.
His answer to the second question was told in his best, lawyerly style.
It was clear and unambiguous.
It was also clearly, inescapably stated by Bergland to amplify his chances of becoming National Chair, made to give Browne and Willis the best shot at the 2000 Presidential nomination.
And his '$19.46 per new member'? That was a politician's campaign promise, too.
As we shall learn later in the chapter, the actual cost per new member was at least as high as Cisewski had estimated.
Did Project Archimedes succeed?
In one word: No.
The National Party never reached 50,000 members, let alone some larger number. With respect to Browne's image of member-donors, most members that the Party did recruit never donated to the Browne campaign. The National Committee never adopted a formal numerical objective for the Project, so it's hard to say exactly how badly the Project failed. David Bergland promised 100,000 members by July 2000. One can find Libertarian sources that mention recruiting 600,000, 200,000, 100,000, or at least 50,000 members, either by the start of 2000 or by the National convention in July 2000. No matter which objective you choose, Project Archimedes never came close.
In 1999 there was an abortive effort in some circles to count donors as well as members in the nominal total number of new recruits. In 2000, one largely stopped hearing suggestions that donors should be counted. It is perhaps not coincidental that while the number of members remained roughly constant in 2000, the count of members plus donors fell from 1999 to 2000.
Project Archimedes also had a financial objective. It was supposed to be self-financing. Dues and donations of the new members were to pay for fresh mailings in perpetuity. A revolving fund, an "endowment", would provide the capital locked up at any time by freshly-mailed recruiting letters that had not yet generated memberships.
There is controversy about the financial outcome of Project Archimedes. Some supporters want to claim that the Project was financially successful. It was not. I quote from the Libertarian Party of Massachusetts e-mail list. Massachusetts libertarian activist (and co-founder of the gay/lesbian gun rights action group Pink Pistols) Doug Krick asked: "Does anyone know if the project cost the LP money in the long haul, or did it pay for itself?"
The answer was provided on 14 June 2000 by Mark Tuniewicz, Libertarian Party National Treasurer, writing (note signature block) in his official capacity as the Party's Treasurer. Tuniewicz's answer to Krick appeared on the Massachusetts Libertarian email list email@example.com, a list since silenced by the LPMA for publishing URLs leading to newspaper articles that were critical of LPMA candidates. Tuniewicz wrote:
"The fast answer is 'it depends'. Certainly, the project has fallen below most people's expectations.
Initially, Archimedes was supposed to more than pay for itself—-meaning that every mailing would more than recoup its cost based on the contributions and memberships from that mailing.
This was expanded to include an estimate of what we normally receive as an average contribution per member for the year following receipt of a new membership, the rationale being that those are additional revenues that we never would have had, so should be included as part of the mailing's return calculation.
More recently, I think some are looking at TWO years worth of returns.
I think that there's a point at which stretching out those incremental dollars becomes meaningless, though one could approach it on a discounted cash flow basis.
Right now, using the original definition, Archimedes mailings do not pay for themselves. [Emphasis added. GP] But has the project been useful? I think so. We would have been at a substantial membership decrease nationally if we didn't do direct mail.
The moral of the story is: Archimedes in and of itself is not the answer. Direct mail is just one part of the equation for our success, and we do ourselves a favor by not overly focussing on just one approach.
As of the start of 2000, Project Archimedes was a double failure.
Failure one: National Party membership never reached even 50,000, let alone 100,000 or 200,000. Membership climbed from 27,000 in 1998 to 33,000 members in mid-1999. Membership growth then stopped.
Failure two: Project Archimedes was not self-financing. As witness the above letter from the National Treasurer, the new members did not pay for the cost of recruiting them, even counting the year's income from those members. Perhaps with two years' income a membership would pay for itself. But two years' income from a member (including donations) is more than $100—the cost per member honestly estimated by Gene Cisewski in the 1998 debate.
The two failures were not independent. Project Archimedes did not pay for itself on a short time scale. To say it a different way, Project Archimedes locked up capital for a much longer time than originally anticipated. Perhaps that money would eventually be returned as donations and dues, but 'eventually' was a long way away. Meanwhile, that capital was gone, unavailable for funding more Archimedes mailings or any other more constructive Party activity. By locking up capital, Project Archimedes inflicted a million-dollar opportunity cost on the Party. The million dollars spent on Archimedes was not available to be spent on something better. Running Project Archimedes at full tilt required more money than the party had.
On the brighter side, it had been anticipated that many new members would not renew their memberships after their first year. The wave that had swept party membership up from 27,000 to 33,000 might have receded, taking Party membership with it. Perhaps because the Browne 2000 Presidential campaign did bring some new members, during 2000 there was no significant change in Libertarian Party membership. Only during 2001 did the tide begin to go out.
Project Archimedes could have had another financial function, consistent with Federal Election Commission Regulations. The law in place in 1998 limited how much money an individual donor can give to a political party. The limit had two parts. An individual could give to the National Committee $20,000 per year of "hard" money, money that can be used to assist candidates for Federal office. An individual could give far more "soft" money, money that can be used for party-building but cannot be used to support Federal candidates. Because the Libertarian Party had a legitimate membership structure, money spent on Project Archimedes was unambiguously 'soft money'.
Suppose one had an extremely wealthy contributor, a Libertarian billionaire who gave the Party vast sums. This soft money could be used to run a membership recruitment campaign. The first $20,000 per year that each new recruit gives to the Party is lawfully hard money, money that can be spent to support Federal candidates. Project Archimedes therefore functioned to convert large soft-money donations into smaller hard-money donations. If Project Archimedes failed to break even financially, the conversion would not be 100% efficient, but via this path the donations of a few Libertarian billionaires could be converted into extensive aid for the Party's candidates.
This process suffered from one modest obstacle. There is absolutely no evidence that there are any Libertarian billionaires who give to the Party. In 2000, the three largest donations to the Party were for $50,000, $20,000, and $15,000. The conversion mechanism might exist in principle, but in reality there were almost no large soft money contributions waiting to be converted via Project Archimedes into hard money.
Project Archimedes failed. This failure was a serious challenge for National Chair David Bergland. Bergland had campaigned for Project Archimedes, worked through his campaign staff to extend his term through 2002, and run on the slogan 'Performance, not Promises'. If he ran again in 2000, running for re-election to obtain the four years in office his 1998 supporters had tried to get for him by changing the By-Laws, his opponents would hurl at him the critique 'Promises, not Performance'. Bergland chose not to run.
Where did the failure of Project Archimedes leave the Browne campaign? In 1997, Browne had announced two major targets, two goals that had to be reached before he ran for office. He wanted a much larger National party, one with 200,000 members. He wanted a million-dollar campaign warchest by the start of 2000.
Browne completely missed the first target. Party membership climbed by 6,000, not 60,000 or 160,000.
What about the second target? What about the million dollars of cash in the bank that the Browne campaign needed for its January 2000 launch? We turn now to Browne’s financial situation. We begin with Browne's claims that he was in the process of raising one million dollars as a warchest with which to launch his campaign.
Forward to Chapter 10
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