Funding Liberty! Table of Contents
Funding Liberty!
Chapter 19
The Political Scam of the Century
In late October, the Browne Committee treated the Libertarian party to the political scam of the century. There do not appear to have been criminal acts committed. Everything it did appears to have been perfectly legal, protected by First Amendment guarantees on political free speech.
Recall how we got here. At the start of July, the Libertarian Party of the United States gave Harry Browne its most valuable intangible asset. It gave Harry Browne its nomination as its candidate for President of the United States.
Browne worked hard for the nomination. His campaign spent huge amounts of money to win it. Browne's promised plan for the general election campaign was to run a large-scale media effort to put the Libertarian message before the American public. Browne did discuss alternative strategies. His campaign ridiculed the local organization strategy of Donald Gorman, under which the Presidential candidate would flit from place to place talking to local media and generating publicity for local candidates who actually had a chance to win.
There can be absolutely no doubt that Browne had promised to contest the election as vigorously as he could, within the limits of his campaign plans. There can be absolutely no doubt that Browne had promised that his campaign would be based on large-scale media buys, not on local appearances. Unfortunately, there can also be absolutely no doubt that Browne did not keep his promises, even within the limits of his meager resources.
During the campaign, Browne in fact spent his money doing local appearances, appearing at hotel after hotel to press the flesh with the Libertarian faithful. Invitations to these appearances at first came with an aside: 'Business attire requested.' These were fundraisers, not rallying points for students, workers, farmers, housewives, software developers, or most of the rest of the American public.
Browne also promised he would not follow the Gorman plan by campaigning with down-ticket candidates. He kept that promise. In California he did not even notify the Party's U.S. Senate candidate, Gail Lightfoot, as to when he would appear in California. According to Lightfoot, she was unable to coordinate her campaign plans with his so that they could appear together. Curiously, when Browne passed through Massachusetts to address the 60,000 attendees of the Freedom Rally, a marijuana re-legalization demonstration, he had no difficulty coordinating his appearance with that of Massachusetts Libertarian Senate hopeful Carla Howell.
It is interesting to contrast Browne's campaigning methods with those followed by the Green Party and its Presidential candidate, Ralph Nader. Nader campaigned in all fifty states, raising $5 million by October 10 and nearly $8 million by election day. While Browne ignored Lightfoot, the Winter/Spring 2001 Green Pages (The Green Party equivalent of LP News) shows Nader campaigning with the Green Party's California Senate candidate, Medea Benjamin. My California activist friends report large numbers of Nader lawn signs billing both candidates. Like Browne, Nader did public appearances, but Nader's were in large public facilities and not hotel dining rooms. Nader's Portland, Oregon appearance drew 10,579 attendees, filling the house at $7 a ticket. Browne's events were close to break-even; the Nader campaign did significant fundraising via major public events.
Based on Browne's strategic commitment, the National Party did its own fundraising. It spent a half-million dollars to put Browne on the ballot in 49 of the 50 states and the District of Columbia. The National Committee tried at great expense to put Browne on the ballot in the 50th, spending resources that might not have been needed if Browne had only agreed to travel to Arizona and talk to the Arizona Libertarian Party. From July to November, the National Committee spent more than $200,000 of its own money running Browne's TV advertisements. Those dollars were resources raised by all Libertarians, resources that could have been used to support almost any Party candidate. For example, those dollars could have been spent to assure maximum support for the Party's three Congressional candidates in West Virginia, perhaps saving the Party's ballot status in West Virginia. That status will be extremely expensive to recapture. The resources went instead to support Browne.
Browne didn't even pretend to return the Party's favor. The Browne campaign could have asked its volunteers to help with ballot access petitioning. It didn't. Of course, there is some question as to how many volunteers Browne actually had, but at several dollars a signature every volunteer mattered. Browne and his campaign didn't try to help the National Party.
And now we come to the--perfectly legal--political scam of the century.
In the October 26 LibertyWire, Brown's Campaign announced that they were 'about to file a lawsuit to have the Federal Election Commission...declared unconstitutional'. Once again, they were about to file. Once again, they needed money: To file the suit, which was too late to have any effect on the race, Browne needed to raise $100,000 as soon as possible. Browne's email newsletter LibertyWire covered the fundraising, which rose from $15,000 on October 27 to $95,000 on November 6.
The $95,000? The $95,000 did not go to the Browne campaign. The money went to the U.S. Justice Foundation, East Valley Parkway, Escondido, California and apparently in some manner to Real Campaign Reform, with web address www.RealCampaignReform.org. For the last few weeks of the campaign the Browne Campaign focused on raising money for Browne's foundations, not on raising money for his campaign. Given the speed of the Federal Court system, the Foundation could do nothing substantial before the 2000 election. What was the hurry? Cynics noted that under Federal Law the Browne 2000 Campaign could not legally pay Browne a penny beyond his expenses. However, a non-profit foundation is not a Federal political campaign committee. A foundation could legally pay not only Browne's campaign staff but also Browne himself in perpetuity.
Before your very eyes, you have just seen the Browne campaign commit the political crime of the century. Browne took a valuable intangible asset, the Libertarian Party's Presidential nomination. He converted that asset to his own private purposes, using it to raise money for his post-election activities. The author has never heard of another Presidential campaign still weeks from the general election that used its status to raise money for a candidate's foundation, to be operated after the election. Browne undoubtedly did nothing illegal. The conversion was political free speech, Constitutionally protected.
Nonetheless, Browne had been given the nomination so he could run for office. In late October, well before Election Day, he quit. Gave up. Fled the fray. The illusion of a campaign appeared on the Internet, but:
Browne's FEC filings show that on October 18 his campaign stopped buying TV ads. Browne TV ads were purchased between October 18 and Election Day because the National Party spent more than $97,000 of its own money to run them. For the election campaign as a whole, Browne had spent more than $109,000 to run TV ads. The National Party, despite being starved for money, despite an interest in supporting other campaigns, had spent nearly twice as much, more than $209,000.
Browne substantially ceased to campaign—in terms of his media-based campaign plans—well before election day. Browne's surrender was a surrender with few precedents in American history. Even Bob Dole, facing an insurmountable Clinton lead in the polls in the 1996 election, spent the last days and hours before election day in a flurry of campaign appearances. Dole did everything he possibly could, so no one could ever say that he had let his party down. Browne did rather the opposite. Weeks before the general election, Browne effectively terminated the campaign he had promised to run.
Oddly, Browne's Campaign kept paying Polaris Productions for more ads, even though no ads were being broadcast by his campaign.
A variety of bits of camouflage were deployed to mask what was being done. The October 30 LibertyWire ran a statement from former LNC Chair David Bergland, who had done so much to secure Browne the nomination—after Browne had secured for Bergland the National Chairmanship. Bergland opened his remarks "I am happy to contribute $1,000 to the Harry Browne and the Libertarian Party lawsuit against the FEC....".
Bergland's statement was deficient in one minor attribute, namely factual accuracy. There was no Libertarian Party lawsuit against the FEC. The Party was not involved in Browne's litigation. In fact, Browne was not involved in the 'Harry Browne...lawsuit', because there was no lawsuit, not in October, not in November, not even in November 2001.
Browne justified his lawsuit by complaining about FEC regulations. As a free speech issue, Browne had a point. Browne's political complaints were of less merit. Browne said that if he listed major donors on his FEC report, the donors were potentially subject to harassment by duopoly party supporters. This issue has already been litigated, successfully, by one of the Socialist Parties, which made the essentially same complaint and proved it in Federal Court. As a result of the Socialist Party suit, the Supreme Court has already ruled that if a party's donors are demonstrably being harassed, that Party is exempt from the donor reporting requirement. All Browne had to do to gain exemption from the reporting requirement was to demonstrate significant harassment.
The author has been active in Libertarian party politics for years, has repeatedly run for Federal office as a Libertarian, and has never had any of his donors harassed. In all my years of activity, I have once heard a report of harassment of donors in a remote part of the country. I have twice heard credible reports of a local police force threatening a Libertarian activist, both times in western Massachusetts. If such harassment exists, it is not common.
Browne claimed that the $1000 limit on donations was a major handicap for our party. Browne proposed that if the limit were removed, we would be far better off. However, if the limit were removed for us, it would equally be removed for every other Party. Libertarians may well feel that the campaign contribution restrictions are a restraint on freedom of speech, but they are a restraint that strikes equally at Republicans, Democrats, and Revolutionary Socialists. There are very few donors who come close to giving maximum contributions to their state parties, and even fewer who approach the hard-money limit to which the national party is subject. Browne gave no evidence that removing the restriction would give the Libertarian Party a competitive advantage. Removing the restrictions would be a forward step for liberty. It would not be a forward step for the Libertarian Party.
Browne indicated that he would also oppose the filing requirement on disbursements. Why? You cannot hide significant spending from your opponents. Your opponents will find your advertising on the air far before the FEC Filings reveal it. The record of this book is totally clear:
Hiding disbursements and debts has only one important effect. Hiding disbursements allows crooked campaigns to hide corruption, waste, and nepotism from their donors. Hiding debts allows crooked campaigns to claim poverty whether there is poverty or not. Hiding spending and cash balance reports allows crooked campaigns to spin tall tales of impending doom to prospective contributors. Hiding disbursements is about protecting campaign scam artists.
Further evidence that a purpose of hiding spending reports is to hide financial issues from long-suffering Party members comes from the February 13, 2001 Minutes of the LNC Executive Committee. Discussing the National Party's decision to file only two half-year reports with the FEC in 2001, National Director Steve Dasbach said 'regarding detailed transaction statements, the only purpose that some people seem to have in receiving this information is to dig up some sort of claimed 'dirt'." Dasbach is quoted as then saying "that he sees no reason to provide more than what the FEC requires, given the LP Platform's position that the reporting requirements should not be imposed by government."
In his statement, Dasbach uses Libertarian opposition to government-mandated disclosure as a reason why the Party should not voluntarily disclose its finances to its members. This argument is rather analogous to a proposal that most Libertarians might find surprising, namely that since the Party Platform is opposed to government welfare programs, we should be opposed to voluntary private charity.
Browne claimed that the litigation had to begin immediately. His claims were specious. It was true that the campaign would end on November 7, 2000. At that point, Browne would no longer be a candidate. However, Browne was litigating against acts that were capable of repetition. Come 2004, there would be another Presidential campaign. Whatever the FEC had done in 2000, it would be able to do the same thing in 2004. Under totally orthodox legal doctrine, because Browne was affected in 2000, and because the deeds that affected Browne could be done again, Browne would continue to have standing to sue in 2001 whether he was a 2004 candidate or not.
On November 6, having milked LibertyWire donors for a claimed $95,000, the Browne campaign announced that "some of our coalition partners" had had to "reevaluate their funding plans", which was expected to result in "less financial support for our lawsuit". Once again, the Browne campaign had raised money from donors. Once again, it discovered doubtless to its great surprise that it would be unable to keep its promises as to how the money would be spent. Nonetheless, claimed the campaign, "we are going ahead with plans to file in later November..."
No such filing occurred in 2000 or 2001.
A New Campaign Strategy
Throughout October and on to Election Day Browne's campaign also continued to raise money for its own coffers. After October 18, the Browne campaign launched a new campaign strategy, a strategy not announced to its donors and volunteers.
To understand Browne's new strategy, start with how FEC regulations affect Federal Campaigns.
Federal Election Laws create an artificial line at October 18. The last FEC report available to the public before Election Day reveals campaign finances through October 18, 2000. Spending after October 19 is not seen by the public until the next FEC report, which is filed in mid-December. A campaign manager's policies on handing out money may change radically on October 19. No matter what the manager does, the public won't learn while it still matters. The public will then have four years to forget what happened.
We are right before the election, the few weeks when many Americans pay attention to political campaigns. In states in which one party or the other had the election wrapped up, advertising for the Democratic-Republican candidates had ended. One Party knew it had locked up the election in that state; no further spending was needed. The other Party knew it had lost the election in that state; no further spending could change the outcome. There was no competition for media time at the Presidential level in those states. TV ads in these states would reach into marketplaces that the Democratic- Republicans shunned. Here was an opportunity for outreach advertising.
What was the new Campaign strategy? On October 18, the Browne Campaign stopped buying TV ads. Instead of outreach, the Campaign dramatically increased payments to its long-term associates and their companies. Exact amounts appear in the Table at the end of the Chapter. The Campaign did spend another $30,000 to produce television ads, but did not air them. What did the Campaign get for its advertising money? The new ads were seen by the producers, the campaign staff, and perhaps the party faithful at fundraising events. They were not seen by the American people that they might have influenced.
Debts
The FEC Filing covering October 19 through to the General Election and out to November 27 was dutifully filed on December 14. The report shows income of $265,000, disbursements of $270,000, and closing cash on hand of twenty thousand dollars. According to the report, the Committee owed no remaining debts and obligations. This absence of outstanding obligations is contrary to representations made in December by the Browne Committee to the Libertarian National Committee and to Libertarians everywhere. These representations claimed significant debt during the same period. We'll return to the debt question.
Payments to the campaign's associates amounted to almost 21% of spending. Payments to firms long associated with the campaign raised that total to 27%. Harry Browne had been receiving amounts typically around $1000 a month to cover his expenses. For this month he was paid $11,500 for travel, office supplies, and other costs. Of course, this reporting period ended several weeks after election day. The candidate had nearly a month after elections to sit down, collect his receipts, and put everything in order. It is not surprising that the candidate's reported expenses rose when he had time to report them.
People paid during the period, and the purposes of the salary, include: Jim Babka, $4483 as salary. Sue Babka, $233 as salary. Laura Carno, $9745 as salary. Michael Cloud, $8507 in travel and fundraising commissions. Robert Flohr, $2939 as salary. Ryan Goldfinger, $78 for payroll. Debra Greeson, $3019 as salary. Penny Nicolai, $924 as salary. Jennifer Willis, $1346 as salary. For 'campaign management', Perry Willis received $12,282. Stephanie Yanik received $3500 for 'administrative services'. Optopia Productions received $1696 for phone, travel, insurance, and office supplies.
Mixed reimbursements were reported for: Harry Browne, $11,500 for travel, office supplies, and phone. Robert Brunner, $3050 for travel, office supplies, and salary. Robert DeVoil, $3212 for printing, office supplies, and data entry. William J Olson PC Trust Account, $10,000 for legal services. Stuart Reges received $2185 for phone, office supplies, and payroll. Steve Willis was given $7811 for phone, office supplies, and salary, including payments of exactly $4000 and $2500.
In tabular form, payments to associates were
Jim Babka $ 4,483
Sue Babka $ 233
Robert Brunner $ 3,000
Laura Carno $ 9,744
Michael Cloud $ 8,507
Robert Devoil $ 3,212
Robert Flohr $ 2,939
Ryan Goldfinger $ 78
Debra Greeson $ 3,019
Penny Nicolai $ 924
Jennifer Willis $ 3,146
Steve Willis $ 7,811
Perry Willis $12,282
Stephanie Yanik $ 3,500
Total $55,848
In addition, there were payments to firms associated with people having long ties to the campaign:
Optopia $ 1,696
Web Commanders $15,551
TOTAL $17,425
Other expenses included
Hotels and Events $62,669
Polaris Productions $30,000
Seabreeze Travel $24,619
Mount Vernon $18,207 (printing)
William Olson $10,000 (legal services)
Cardservice $ 5,095
Telecomm Services $ 3,983
Newman Communications $ 3,500 (publicity)
Accumail $ 3,230
Finally, Harry Browne was repaid $1500 of his loans to his own campaign. According to the FEC reports, these were the last debts owed by the campaign. FEC reports show that at the start of December, the Browne Campaign had paid off all of its debts, and was debt-free.
Having reached election day, Harry Browne and his staff had given the Libertarian Party a political campaign that had raised large sums of money for private foundations and associations, some associated with his campaign staff. He had given the Libertarian Party a campaign that had spent almost half its income on campaign staffers and their firms. All this might, have been forgiven, though, if Browne 2000 had shown sign of electoral improvement over Browne 1996. What actually happened? That's in our next chapter.