Funding Liberty! Table of Contents
Funding Liberty!
Chapter 21
Finale
December 2000
In December, the Browne campaign received $43,369, and spent $63,521, leaving it with $309 in the bank. In addition to individual donations, the campaign received $6,890 from Seabreeze Travel. The filings disclose payments to Staff members, their firms, and other familiar destinations.
Last but not least, Art Olivier received $466.40 for his expenses.
Art Who?
Art Olivier was the Party's Vice Presidential candidate.
During the campaign, Harry Browne was reimbursed for expenses such as travel and hotel rooms. Reimbursements to Browne were well over $10,000. An effectively deployed Vice Presidental candidate should have done as much travelling, as much speaking, and should have had miscellaneous expenses on the same order as the Presidential candidate. In fact, Olivier received less than 4% of what Browne did. According to my highly placed sources, it was only with the strongest direct efforts that Olivier was able to get any money at all for travel.
Libertarians have no legal path to support a Vice Presidential candidate directly. Federal law requires that Vice Presidential campaign to use the Presidential campaign's bank accounts as its depository accounts. Those accounts are totally under the control of the Presidential candidate and his campaign. To support a Vice Presidential campaign, you must donate to the Presidential Campaign and hope that the Presidential Campaign cares about supporting its Vice President.
Federal Law interfaces poorly with the way the Libertarian Party conducts its affairs. In the Libertarian Party, the delegates choose the Vice President. Party By-Laws allow the Presidential candidate to appear and express his opinion on who the Vice Presidential candidate should be. Recent Libertarian Presidential candidates have had the wisdom to remain silent while the National Convention selected their running mates. On the other hand, once the Vice Presidential candidate was selected, the Libertarian Presidential campaign has sometimes ignored them. Olivier received under $500 for his campaign expenses. Browne's 1996 running mate Jo Jorgensen received only a few thousand dollars.
Libertarians could not directly pay Olivier's expenses by giving Olivier or a Vice Presidential campaign committee any money. Under Federal Law, Vice Presidential candidates may not have their own campaign committees. Federal Law was written by political parties in which the Presidential candidate chooses the Vice Presidential candidate for the direct benefit of his own campaign. Federal Law was written by political parties that view the Vice Presidential campaign as an important part of their national effort. To say that the Browne Campaign didn't care about the Vice Presidential campaign is the grossest understatement imaginable.
What about other financial aspects of the campaign finale? At the end of 2000, questions arose as to the financial condition of the Browne Campaign. Was the campaign in debt? The last of Browne's loans to his own campaign had been paid off. The FEC reports for periods ending in November and December both show that there were no debts outstanding.
However, in the December 10, 2000 LibertyWire, Browne announced that he had previously said that the debt was around $100,000, but that fundraising had reduced it by $12,000. Browne continued by reporting that Willis and Yanik had between them forgone $20,000 in back pay, and that creditors and staff members were still owed $68,000. Browne's remarks were not obviously compatible with FEC reports listing debts and unpaid bills of the campaign. Nor did they agree with FEC filings showing what Willis and Yanik had actually been paid. These amounts approximately agreed with other statements as to what they should be paid.
Browne’s remarks were also not obviously compatible with FEC regulations. If an individual actually forgives a debt from a campaign, the sum being forgiven is an individual donation. Individual donations were in 2000 legally limited to $2000 per person for the primary and general elections, not the $20,000 that Browne had claimed Willis and Yanik had given his campaign via debt forgiveness. Fortunately, the internal evidence indicates that Willis and Yanik had done nothing improper. Writing in the January 20 Liberty Wire, Willis asserted that his salary had been set in late 1999 at $62,000 per year, but that he had only been paid 'a little over' $50,000 for the entire year 2000. FEC reports indicate that he had actually been paid approximately $60,000 for the year, just as he had been promised in late 1999, and had not forgone collecting part of his salary.
$60,000 per year for 2000 was an enormous sum for a Libertarian campaign. $60,000 was still a far cry from the $123,000 in 'fundraising commission' that Carla Howell's Massachusetts Senate campaign, according to its initial FEC Reports, paid or owed campaign CEO Michael Cloud for 2000.
The discrepancy between the Browne Campaign's FEC Reports and Harry Browne's end of year fundraising was raised at the December National Committee meeting by Regional Representative Richard Schwarz. According to the December National Committee minutes, "Schwarz noted that Browne had recently attempted to raise about $100,000 to pay off campaign obligations. He said that this debt is not reflected in the latest FEC filings. He asked Willis to explain this. Willis said that the FEC reports need to be amended to reflect outstanding vendor debt." As of Summer 2002 no such amended reports have been filed.
Willis's remarks are important for another reason. One might imagine a campaign claiming that there were legal reasons why actual campaign debts would not appear on their FEC filings. Your author is not aware of a valid legal reason for not including debts in the filings, but there might be such a reason. Even if there were not such a reason, at this point readers should have no difficulty imagining a political campaign that made such a claim, if that claim were to the campaign's advantage. However, when Willis was asked by the National Committee, he agreed that debts had to be revealed on the filings, and that the failure to list them had been a technical error. It remains to be explained why as of this writing the listing was never corrected.
So much for the December 2000 debt statements.
Now go back to April 2000. On April 24, 2000, Willis claimed that the Browne campaign was in debt by more than $80,000. Between April 24 and the end of the month, only a small fraction of that alleged debt could have been paid off. According to the FEC reports, at the end of the month almost no debt remained. Based on Willis's own statement to the National Committee that all debt was required to appear on the FEC filings, and the lack of filed amendments (as of this writing) to the April and December 2000 FEC Financial Disclosures as filed under penalty of perjury, there is an inescapable conclusion: The Browne Campaign's claims in April and December 2000 of massive debt do not correspond to actual debt. Those claims appear instead to have been fundraising schemes.
The December 10 LibertyWire also spoke to Browne's much-promised lawsuit, reporting "there is still work to be done before the suit will be completely ready." This statement is a bit different than earlier statements that the suit was about to be filed. The campaign further floated the promise "If, for any reason, the case isn't filed, all that money will be refunded."
In finer detail, payments for expenses and salary to associates of the campaign included
Jim Babka $3,643
Harry Browne $2,782
Robert Brunner $1,375
Laura Carno $1,944
Michael Cloud $1,000
Robert DeVoil $2,695
Robert Flohr $1,359
Stuart Reges $1,125
Jennifer Willis $1,000
Steve Willis $2,500
Perry Willis $ 500
Stephanie Yanik $3,500
Total $22,423
or 35% of expenses. For several of the associates, pay continued even though the Campaign had ended.
Payments to firms connected to long-time associates of the campaign included
Optopia $2,196
New Media $7,101
Total $9,297
Payments to long time associates and their firms amounted to very nearly 50% of all expenses. Other campaign expenses for the month included
Liam Works $10,000
Polaris Productions $10,000
Accumail $ 1,705
The Firm MultiMedia $ 1,000
January-March 2001
In the first quarter of 2001 the ongoing Browne campaign received $99,634, including refunds from the Fox Theater, the National Press Club, and the campaign's long-time landlord. The Campaign spent $94,410. Recall that these numbers are for a quarter, not for a month. One of my sources not connected with the campaign indicates that the campaign's associates received three months' severance pay at the campaign's end. The source had not been aware that severance pay was a common feature of American political campaigns.
The January 21 LibertyWire reported that the Browne campaign still owed $41,000 to a single creditor "His business faces bankruptcy unless we can pay him in the next two weeks." Perry Willis appealed to supporters to contribute yet more. In the February 8 LibertyWire, Willis explained why the campaign was in debt: the campaign had spent its last weeks before the general election raising $100,000 for the lawsuit, money that was therefore not available to the campaign. A $41,000 creditor does not appear in the December FEC filing, but Willis acknowledged to the LNC that that filing was erroneous. Between the January announcement and the end of March, a few creditors were paid: On January 29, Liam Works received $6000. Polaris Productions received $12,500, but most of that was in March. Web Commanders received another $6,000, but again $4,000 of that was in March. No creditor was paid $41,000 during the Quarter, let alone 'in the next two weeks' from January 21. This unknown party does not appear to have been paid $41,000, but none of the parties paid by the Browne campaign appears to have gone out of business.
The February 8 LibertyWire, in a message from Perry Willis, reported again on the FEC lawsuit, which still had not been filed. According to Willis, the effort needed $250,000 to prepare to file, and would need another $250,000 to try the suit, all of which had to be on hand before the papers were filed. If single large donors were not available, the money would need to be raised via direct mail methods. The creditor debt was again mentioned in the March 8 LibertyWire, which reported that monthly pledges of $7,000 a month together with a direct mail appeal were expected to settle the problem.
For the quarter most spending went to long-time campaign associates and their firms, including
Jim Babka $8,517 (salary)
Harry Browne $1,000 (travel office supplies phone)
Robert Brunner $5,375 (travel office supplies salary)
Laura Carno $3,452 (salary)
Robert DeVoil $5,726 (printing office supplies & data entry)
Robert Flohr $3,785 (salary)
Jennifer Willis $2,800 (salary)
Steve Willis $7,012 (phone office supplies salary)
Perry Willis $4,075 (campaign management)
Stephanie Yanik $4,700 (administrative services)
TOTAL $46,442
or 49% of expenses. When payments to long-connected firms are included
Optopia $ 220 (phone travel insurance office supplies)
Web Commanders $8,000 (Internet services)
TOTAL $8,220
the fraction rises to almost 58%. Payments to other vendors include
Polaris Productions $14,500 (video production)
Liam Works $10,000 (books, videotapes mail processing)
Accumail $ 4,801 (postage and mailing services)
The Firm MultiMedia $ 3,000 (media services and advertising)
Cardservice Intl $ 1,520 (credit card charges)
Call Center $ 1,000 (phone answering)
A $41,000 payment is not evident.
April-June 2001
For the second quarter of 2001, the Browne campaign took in $17525 and disbursed $22961. The campaign reported a range of expenses, including
Harry Browne $1,500 (travel office supplies phone)
Laura Carno $1,240 (salary)
Steve Willis $1,000 (phone, office supplies)
Liam Works $6,000 (media objects)
Mt Vernon Printing $3,954 (printing)
Polaris Productions $3,000 (video production)
Web Commanders $3,000 (Internet services)
Ameri Net $1,800 (computer services)
The Firm Multimedia $1,000 (media services)
Even adding these amounts to the prior quarter, a $41,000 total payment to Willis's single creditor is not evident.
Putting It All Together
So how did the Browne campaign spend its money during the 2000 Campaign?
If we look over the full life of the campaign, a certain pattern of disbursements emerges. For the four-year period through March, 2001, Perry Willis received $174,000 for his services. Stephanie Yanik, who shares his address, received $81,000 for Administrative Services. Willis's Firm Optopia was also paid $87,000 for various purposes. Steve and Jennifer Willis received a further $86,000. The extended Willis family and their firm thus received more than $427,000 over four years, a bit less than a fifth of all campaign spending.
Jack Dean and Web Commanders received $124,000 over four years. For the four year period, other employees received substantially lower amounts, such as $76,000 to Jim Bakba, $73,000 to Robert DeVoil, and $57,000 to Stuart Reges. Many of these persons were only on the payroll for shorter periods.
Optopia is described as having supplied travel, insurance, and other services to the Browne campaign, so disbursements to Optopia were not all direct income to its owners. In the 1996 campaign, disbursements to PrimePay covered payroll service and payroll taxes. For the 2000 campaign, no conduit for transmitting payroll taxes is specified in the FEC reports. This would be entirely legal if the campaign dealt only with independent contractors rather than having paid staff, or if the taxes were passed through a financial agent.
Of the firms supplying Browne 2000, Polaris Productions got $267,000 for making the video ads, groups generally associated with direct mail fundraising got $285,000, advertising and publicity pointed mostly at nonmembers got $177,000, and $104,000 went to extra copies of TV tapes for donors and supporters. From the millions raised by the campaign, well under ten cents on the dollar went to delivering the campaign message to nonmembers. It remains peculiar that the investment in making the TV ads was far larger than the money spent in having them broadcast. Most campaigns make very different arrangements in this part of their budgets. A series of Party members with experience in making television ads and longer events have chimed in with their production costs. Without exception, their costs were lower, sometimes substantially lower, than the costs reported by the Browne campaign for similar videos. A mechanism for advising future campaigns on video production pricing issues might be beneficial to the Party.
The following table shows the finer details. I give pre-convention spending, post-convention spending, the full-year total for 2000, and the total for all four years of the campaign. Numbers are rounded to the nearest thousand. I've dropped some of the least-paid employees from the list. In some cases, payments to people were either payroll or salary. In other cases, the payments include expense reimbursements.
Browne 2000—People and Their Firms
Person Before After Year 1997-2001
Convention Convention Total
Jim Babka $25,000 $26,000 $51,000 $76,000
Eric Brunner $12,000 $14,000 $27,000 $32,000
Laura Carno $ 4,000 $22,000 $22,000 $25,000
Robert DeVoil $24,000 $21,000 $45,000 $73,000
Debra Greeson $11,000 $11,000 $22,000 $38,000
Stuart Reges $15,000 $ 8,000 $22,000 $57,000
Jennifer Willis $10,000 $13,000 $23,000 $31,000
Steve Willis $17,000 $23,000 $40,000 $55,000
Perry Willis $28,000 $32,000 $60,000 $174,000
Stephanie Yanik $17,000 $13,000 $30,000 $81,000
New Media $11,000 $23,000 $34,000 $34,000
Optopia $15,000 $42,000 $57,000 $87,000
Jack Dean; Web
Commanders $ 8,000 $20,000 $28,000 $124,000
Browne 2000 – Vendors
Vendor Before After Year 1997-2001
Convention Convention Total
Mailing Houses $34,000 $ 17,000 $ 51,000 $169,000
Copy Right $35,000 $ 69,000 $104,000 $104,000
Firm MultiMedia $23,000 $100,000 $123,000 $127,000
Mailing Lists $14,000 $ 14,000 $ 17,000
Newman Comm $25,000 $ 25,000 $ 50,000 $ 50,000
Publishing Houses $24,000 $ 16,000 $ 40,000 $ 69,000
LNC $ 9,000 $ 5,000 $ 13,000 $ 13,000
Mount Vernon $25,000 $ 18,000 $ 43,000 $102,000
W.J.Olson $25,000 $ 10,000 $ 35,000 $ 35,000
Polaris $70,000 $ 80,000 $150,000 $267,000
The list of vendors shows where Browne 2000 put its actual effort for the campaigning year. This was a video-based campaign, one of the first such in our Party's history, with $150,000 going to Polaris Productions for TV ads, $104,000 to Copy Right for video tape copying, the tapes apparently largely being for the Libertarian multitudes, and $127,000 through The Firm Multimedia for air time and related support. $127,000 for post-nomination TV ads may not sound like much for a major campaign, but it is nearly 20 times what the Browne campaign reported spending on media ads during the 1996 campaign.
The Libertarian National Committee independently spent more than $209,000 on ad time for the Browne Campaign, in good part in the weeks before the election in which the Browne Campaign had stopped buying ad time. Something like $108,000 went for address lists, printing, and mailing, including a direct mail fundraising effort seen by most LPUS members. A publicity firm received $50,000, the ill-fated FEC lawsuit had $35,000, and various specialty publishers of Browne's books got $40,000.
That's all, folks. That's where the money went.