A Consultant Comes in from the Cold

Forget Enron. Nevermind the Wall Street executives who are raking in high salaries while the economy tanks. Right now, the real "masters of the universe" in the corporate marketplace are political consultants. But as the California recall proves, their success comes at a cost to democracy.

The California election is a perfect example of a disturbing national trend. From presidential campaigns to the candidacies of Austrian-American action heroes, consultants have replaced political parties as the gatekeepers of credibility. A candidate for high office is evaluated less for what he says and more for who he has saying things for him. When a candidate signs with a top consultant it gives him a boost with the media, donors and political leaders. From then on it's the consultants who supply most of the quotes to reporters, trying to outdo each other with vitriol and wit. Then it's high fives all around, while consultants laugh all the way to the bank.

Media consultants make money not just from thinking up ads, but also from fees they tack on to buying the film stock, hiring the crew, paying for the crew's lunch, duplicating the campaign commercials, and placing the ads on the air. It's not the cost of campaigns that's out of control -- it's the mark-up.

Professional media buyers and ad agencies make commissions -- usually 15 percent -- for placing orders with TV stations and networks. The unexpected statewide election in the country's biggest media market was a windfall for consultants who usually spend off years like this working for corporate clients. Before the courts threw the date of the election in doubt, the short campaign promised to be one of the biggest earners for consultants. Between the start of the campaign and the original Oct.7 election date, the estimate was that $100 million or more would be spent on airtime. If the election is delayed until March, all bets are off.

But say all the candidates and committees running ads in California spend $200 million on airtime. That's a profit of at least $25 million on the "buy," which does not require much heavy lifting. Mostly, media buyers spend their days making phone calls, sending out tapes, and taking their clients to nice restaurants (which get billed as "campaign expenses").

More and more campaign strategists today also look for a piece of the media buy. Dick Morris wrote that when President Clinton questioned why Morris wanted to fire a media buyer, Morris told the president, "It's my way or the highway." Morris wanted two bites of the apple -- one for thinking up the media strategy and another for placing the ads. Nice work if you can get it.

Back in the 1970s, political reformers targeted airtime as a place to economize on campaign costs. A federal law was enacted requiring stations to give candidates the lowest "unit rate" -- the cheapest price for broadcast time available, including any discount offered by stations to their best customers.

Sounds great -- but then a loophole opened that could be called the "consultants protection act." If a commercial advertiser, or another candidate, is willing to pay the regular rate, you and your puny political rate get bumped. To avoid getting preempted in this manner, candidates can pay as much as five times more than the political rate.

I once helped a client who lost a race for Congress in a mid-size media market where TV time was affordable to an insurgent campaign, thanks to the lowest unit rate. There wasn't much competition for time on the morning news show I had bought. Funny, though, the consultant working for our opponent in the primary felt it necessary to pay the higher rate. Less value for the candidate, but a bigger commission for the consultant.

Making political time cheap and non-preemptable would of course have two direct consequences: Campaign costs would fall, and consultants would drop like flies. Sen. Charles Schumer (D-NY) tried to add a provision to the McCain-Feingold campaign finance bill closing the consultant's loophole, but it died as fast as you could say, NAB.