1
Where the Money Goes: Party Spending in Congressional Elections
Robin Kolodny Associate Professor Department of Political Science Temple University 1115 W. Berks Street Philadelphia, PA 19122 [email protected]
David A. Dulio Center for Congressional and Presidential Studies American University 4400 Massachusetts Avenue, NW Washington, DC 20016 [email protected]
Paper prepared for presentation at the Annual Meeting of the Midwestern Political Science Association, Palmer House, Chicago, Illinois, April 19-22, 2001.
[DRAFT – Please do not quote without permission.]
This research was generously supported by a grant from The Pew Charitable Trusts to American University’s Center for Congressional and Presidential Studies and Campaign Management Institute. Thanks to Jim Thurber and Candy Nelson for their support. 2
The media and academics are obsessed with campaign fundraising in the United States.
Indeed, the current debate on campaign finance legislation in Congress is focused primarily on
limiting the inputs to the campaign finance system: how soft money can be raised (or whether it
can be raised at all), and limits on hard dollar contributions. Any discussion of how money is
spent has mainly been in the context of regulating electioneering activity, such as limiting the use
of issue advocacy broadcasts by parties and interest groups. The topics of how the vast amounts
of money being raised is spent and where that money goes, fall well below the radar.
We all assume that campaigns are expensive, but that the increased amounts of money in
the system has more to do with corporations and wealthy individuals wanting to buy better and
better access than an increased rise in the cost of campaigning. We call this the “supply side”
focus of congressional campaign finance. Our interest in this paper is the “demand side” of the
issue. More specifically, what is the money spent on, and who is paid for these goods and
services? This is a large question which cannot be answered fully either in this paper or possibly
ever, but we undertake a detailed examination of direct party campaign spending in 1998 to give
a partial, but not insignificant, answer.
Our purpose is to ascertain what political parties spend their money on (this is a multi-
faceted concept to be sure). Though we detail the various avenues of party spending below, we
come to this question with specific hypotheses about political consultants political parties. We
examine the extent to which the parties are spending on campaigns through political consultants
and what those consultants are expected to do for candidates. Coming out of our previous
research on consultants (Kolodny and Logan 1998; Kolodny 2000; Dulio 2001) we expect parties to rely on consultant services because of their belief that consultants provide campaign 3
services that parties no longer can. We also expect that parties spend their money on the most
competitive races.
This examination is only one part of what should be a comprehensive examination into
where campaign money goes. In the next section, we set up the question of campaign spending
by who does the spending in political campaigns. We then move to the issues that specifically
concern the political parties.
What Candidates Spend
Candidates obviously spend the vast majority of their campaign receipts on direct
election expenses.1 We know that in the aggregate candidates for Congress spend about three
quarters of a billion dollars each election cycle.2 We also have self-estimates from House
candidates of how much of the money they spend on campaigns goes to specific functions (see
Herrnson 2000). Specifically, 39.9% goes for campaign overhead (staff salaries, fundraising,
travel), 7.1% is dedicated for campaign research (polling and opposition research), and 52.4% is
devoted to campaign communications (television and radio ads, direct mail, campaign
literature).3 More specific figures and more explicitly defined categories of expenditures may be
obtained by looking at actual FEC reports for each candidate who runs for federal office.
However, this information is not currently indexed by the FEC in any manageable form prior to
the early-1990s, and though we have made an effort to catalogue it, we are unlikely to have
1 We do know, however, that members contribute to the campaigns of other members, though the extent to which they do this depends on how competitive their own race is (see, for example, Pearson 2001). 2 The recent totals for House and Senate candidates are: $765 million in 1996; $740 million in 1998; and $683 million in 2000 (this figure is incomplete as the FEC has only reported data through October 18, 2000 thus far. 3 Paul S. Herrnson has completed extensive candidate surveys asking them to indicate what percentages of their funds have gone to specific functions (Herrnson 1998 and 2000). The percentage totals reported here are taken from the 1998 Congressional Campaign Study, and the reports are aggregated from self-estimates among those responding to the survey. Dwight Morris and Sara Fritz have also compiled comprehensive data on congressional candidate spending in the 1992 cycle, although it is not as detailed (see Morris and Gamache 1994). 4 comprehensive data any time soon (this data collection involves reading each candidate’s individual reports over the election cycle which can be anywhere from two to 500 pages).
What we do know is that candidates spend a great deal of their campaign funds on either television advertising (including both the production of TV and radio ads and the buying of the time to broadcast them) or direct mailings (again both production costs and mailing expenses such as postage and mailing labels) depending on the expense of the candidate’s media market and/or the extent to which the media markets actually saturate the district. Some estimate that some campaigns spend upwards of 65% of their total budget on television advertising (Herrnson and Patterson 2000). Candidates do have overhead and fundraising expenses they must cover, but it is usually only a modest proportion of the money spent (see Herrnson 1998 and 2000 for an estimate).
What Interest Groups Spend
Long the subject of controversy because of political action committees (PACs), today interest group spending is mainly in the area of issue advocacy (independent expenditures are used less) and is the topic of much scrutiny (Dwyre and Farrar-Myers 2000). Since interest groups are not required to disclose the sources of their issue advocacy spending, we cannot ascertain anything other than what they volunteer about their campaign activities. However, we do know that groups spend a considerable amount of money on communicating their messages through television and radio advertisements as well as direct mail campaigns (Magleby 2001).
We also know that interest groups hire political consultants to do their independent expenditure work (Dulio and Kolodny 2001), and that anecdotal accounts by consultants indicate a considerable client base from issue advocacy work. 5
What Parties Spend
Though we do not purport to have data on how candidates or interest groups spend, we
do offer an examination of how parties spend. Before we do that, we should point out that
campaign spending by candidates, interest groups, and parties is largely channeled through
political consultants. This observation alone demands consideration. Though we believe
campaign spending was not always channeled through consultants, we believe consultants have
been the brokers of campaign spending starting in the 1960s, rising through the 1970s and 1980s,
only to truly take off during the 1990s. The word “channel” is important here. We do not mean
to say that political consultants pocket enormous sums of money for general strategic advice.
Indeed we argue the opposite. This is due to the fact that media and direct mail consultants pay
for significant expenses out of the sums given to them by candidates, parties and interest groups
including broadcast time, television ad production, printing and mail production costs, and
postage. The implications of consultant brokerage of congressional campaigns will be
considered later.
Currently, political parties have four ways to spend money in congressional races: direct contributions, coordinated expenditures, independent expenditures, and soft money spending and transfers. The first two types of spending are due to the 1971 Federal Election Campaign Act
(FECA) and its Amendments in 1974. In order to shore up the role of the political parties,
campaign finance reform legislation in the 1970s recognized the special role that parties play in
election campaigns. While contributions from individuals and multi-candidate committees to candidates were tightly restricted, lawmakers recognized that the party-candidate relationship was not necessarily a corrupt one, but one that might be healthy for democracy. So, while individuals were limited to contributing $1,000 in each election (normally a primary and a 6
general election), and multicandidate committees limited to $5,000 in each election to federal
candidates, political parties could make contributions as PACs did ($5,000 per election) but were
entitled to spend additional monies beyond that in the form of coordinated expenditures.
Coordinated expenditures are monies spent by the political parties on behalf of their candidates with the candidate’s knowledge and consent. For races in the US House of Representatives, the
formula for calculating the amount of coordinated expenditures is $10,000 times the consumer
price index (CPI), a measure of inflation. In 1998, the amount of allowable coordinated
expenditures in the House was $32,500 (source: FEC, www.fec.gov). For the Senate, the
coordinated expenditures are calculated by population, with a minimum of double the amount for
a house district race.
The law allowed both the national party committees and the state party committees to
spend the coordinated expenditures, effectively doubling the amounts (for the House this figure would be $65,000). Through “agency agreements,” these monies were often spent by the four congressional campaign committees instead of the original committees designated in the laws
(Kolodny 1998). What entity actually spent the monies is not actually relevant in this analysis
(especially since the party committees have engaged in a shell game in recent years, transferring hard money for coordinated expenditures to state parties in some cases, spending the money
through the national committees in other cases, and leaving the rest to be spent by congressional
campaign committees). What is relevant is what the coordinated expenditures were used for.
Independent Expenditures
Though campaign finance law defines independent expenditures as spending carried out without the candidate’s knowledge and consent (the definition of independence), political parties
won the right to spend in this way from the Supreme Court. In Colorado Republican Federal 7
Campaign Committee v. Federal Election Commission (1996), the court found that it is possible for political parties to spend in a way that does not benefit a particular candidate, but rather the party as a whole. The particular case referred to the Colorado Republicans’ spending against
Democratic Senator Tim Wirth before his Republican opponent was determined. Starting in
1996, the parties had the legal authority to conduct independent expenditure campaigns. Though independent expenditures use hard dollars and must be fully disclosed, they are not limited. The
National Republican Senatorial Committee and the Republican state and local party committees experimented with significant independent spending in 1996, the parties largely abandoned it by
1998, but the Democratic Congressional Campaign Committee gave it another try in 2000.
The reason independent expenditures have had a spotty history is that parties have had a hard time carrying out activities that are truly “independent” of their candidates (Dwyre and
Kolodny 2001). One of us carried out a detailed examination of recent DCCC independent expenditures in the 2000 cycle and found that the entire $ 1.9 million was spent on phone banks in 38 close races in the last few days before the election. The phone banks were conducted through a handful of political consultants whose firms are dedicated largely to making political get-out-the-vote (GOTV) calls, and represent an ideal way to spend “independently” since parties can appeal to voters in terms that do not imply or require coordination (Dwyre and
Kolodny 2001). A cursory examination of independent expenditures in 1996 and 1998 indicates that parties spent this money on issue advocacy ads for or against (mostly against) candidates in key competitive races using political consultants that were not being used by the candidate in question. We do not have systematic data on independent expenditure spending at the moment, but because of the inconsistent way in which the money has been spent, we are sure it would not reveal significant trends at present. 8
Soft Money
While American campaign finance regulation originally intended for political money to be raised and spent under tight legal limits, several important court decisions and executive agency interpretations have changed the role of political money in the US. Some time around the late 1970s, a series of amendments to the campaign finance laws and interpretations by the
Federal Election Commission (the law’s enforcement agency) created a new category of funds
known as “soft money.” These funds, used for “party-building” purposes instead of explicit
campaign costs for candidates, were not subject to the strict limits imposed by the law. This
meant that the political parties could now raise funds from previously “illegal” sources and spend
those funds in unlimited amounts (Kolodny 1998; Goidel et.al. 1999). When soft money was
first discovered, the national party organizations spent it to free up their “hard” dollars that could
be spent on direct election costs from significant overhead expenses, including items such as the cost of maintenance of the physical building, office furniture and office equipment. Next, the national parties moved to extend the definition of “party-building” to the state level. Through a
Byzantine series of matching formulas between the national and state parties, states are now the
arena in which large sums of soft money are spent for the overall good of the party. According
to Sarah Morehouse, soft money spent in the states is used for “supporting volunteer and grass-
roots party building activities such as voter registration and identification, certain types of
campaign material (slate cards), and voter turnout programs and issue advertising” (Morehouse
2000, 7). Ray La Raja shows that over $100 million of soft money was spent for media expenses
in the 1996 election (a presidential year) and over $40 million was spent in the 1998 election
cycle. (La Raja 2000). 9
In order to make the most compelling case for linkages between parties and political
consultants, we would need to have a detailed analysis of which firms were paid to do the issue
advocacy campaigns that were paid for by political party soft money on behalf of candidates.
We have strong anecdotal evidence that not only are consultants hired to perform nearly all of this work, but also the parties literally cannot conduct issue advocacy campaigns themselves.
One of the strange twists of party issue advocacy campaigns (or party independent expenditure campaigns) is that the parties cannot coordinate with their candidates in any way about the contents of the party strategy. Though at first glance that seems like a tall order, the use of party- loyal consultants easily eliminates any conflicts of interest. Indeed, consultants have told us that the large physical geography of the US allows them to work on direct candidate campaigns
(perhaps paid in part by the parties) in one region of the country and accept contracts for issue advocacy and independent expenditure work in another region. Thus, we would not expect to find substantially different consultants receiving hard and soft money in the aggregate, but would expect to find distinct flows of money in particular states and regions.
Why Study Political Party Spending on Political Consultants
Examining party spending on political consultants comes out of a sparse, but growing literature on the role of consultants in elections (Sabato 1981, Medvic 1997 and 2001, Kolodny and Logan 1998, Thurber and Nelson 1995 and 2000, Dulio 2001) Many students of political parties view the contemporary political consultancy industry with suspicion and believe that consultants are agents outside the party who try to bring commercial methods to the political process. Critics would argue that this forces political parties, who fear their very existence is in jeopardy, to adopt market-oriented approaches recommended by these outsiders. The result is 10 believed to be parties that chase public opinion, not lead it and parties that are willing to do whatever it takes to hold power, no matter how compromised that power may be.
We offer an alternative scenario. What if political parties choose consultants because the modern demands of campaigns exceed their abilities? Specifically, what if party staff cannot efficiently provide the types of specialized services candidates need to make their case to the voters? How are parties to survive? We argue that political consultants are necessary for parties to compete in the digital/telecommunications or post-modern campaign age. Furthermore, the political consulting industry in the US is better understood as a response to the inadequacy of party staff to provide the level of services necessary for the party to remain competitive than a deterioration of the party as a consequence of the rise of candidate-centered campaigning (Dulio
2001). A corollary argument is that these political marketers should not be considered outsiders to the party at all, but instead as an extension of the party staff. Indeed they are independent contractors for the party and their proliferation is a consequence of downsizing in party bureaucracies and not a disintegration of party integrity. In addition, many political consultants got their start at one of the six national party committees (Kolodny and Logan 1998; Thurber,
Nelson, and Dulio 2000).
The Institutional Capacity of Political Parties
Our contention is that parties have a hard time transcending their original organizational roots, or in wholly reinventing themselves. Both major parties were created in the early- or mid- nineteenth century as cadre parties but with their primary focus on voter mobilization, not voter persuasion. While mobilization of voters is still obviously needed (that the party/candidate who gets the most voters to the polls pulling their lever wins the elections), what it takes to accomplish voter mobilization has changed. In earlier campaign eras, voter identifications were 11
formed as a result of group identifications. Social arrangements were sufficiently
compartmentalized that voters did not experience the significant cross pressures they do today.
But if parties were established in an era when voter mobilization meant approaching voters at the most local unit, then we have a sense of how their institutional structure was formed and what its boundaries might be. American parties are organized to identify where voters are at the local level and to respond to their needs so that they will vote. Although we may say that the strength of so-called political machines (where parties controlled tangible goods like jobs) has declined, the model on which party machines were formed still endures. That means that parties know where their supporters live, select leaders at the precinct or ward level to find out how to get those voters to the polls, and proceed accordingly. If that is the institutional form that endures, what do parties do when voters change their fundamental ways of life? What happens when they move to new neighborhoods in the suburbs without political traditions? When they get their information from a wide variety of sources (including free and paid media via newspaper, radio and TV as well as the internet), their jobs based on merit, and their “public” services from privatized sectors of formerly governmental functionaries? Since residential patterns have changed, the public became more educated and the professions became standardized, the party’s role as social caretaker disappeared. This is why the party had to shift the method of its vote-maximizing efforts.
The above-named elements comprise the era of campaigning we are now in, what has been called the “telecommunications” age (Farrell 1996) or post-modern campaigning (Norris
1997). Farrell distinguishes eras of campaigning by changes in the following variables:
campaign organization, campaign preparations, agencies/consultants, sources of feedback, use of
media, campaign events, and targeting of voters. What is clear from the “telecommunications 12 revolution” is that the above named factors focus on central concepts of contemporary business- speak such as “market segmentation” and “downsizing.” Indeed, Farrell describes a contemporary campaign arena that focuses on increasingly specialized appeals to specific sectors of the electorate. Hence, a straight party mobilization approach (just getting identifiers to the polls) is ineffective. The clear implication is that voters are not party identifiers but choosers between parties (Aldrich 1995). This means that the party mobilization approach mentioned above is ineffective. Voters must be persuaded first, and then deployed. And because of the fundamental changes in political and social life, the persuasion must take the form of very specific, targeted appeals based on a constellation of individual issue concerns, not just those of major group affiliations. This environment calls for the expertise of specialists who can help the party or candidate persuade the greatest number of voters come election day. At question are the implications this “telecommunications revolution” has for the conduct of campaigns and the parties.
Campaigns require specific and repeated appeals for votes. This means conducting public opinion polls to assess the issue location of the electorate, specific appeals in the form of direct mail or media advertising, and a way to raise the substantial funds to produce the aforementioned goods. The shift of campaign environments produces enormous changes in the definition and execution of political communication.
Post-Modern Campaigning Exceeds Party Institutional Capacity
The change in the campaign environment and the shift in the relationship between parties and voters may simply mean that the parties have to adapt their strategy and tactics (Kolodny
1998). However, our normal expectation is that the party organization will change tactics within its traditional structure. As one observer of consultant use in Britain found, changes in the 13
relationship in the traditional party organizational structure sound a warning bell about the health
of parties to most observers (Wring 2000). The idea that the party structure cannot serve
electoral needs on its own unnerves some. Party use of political consultants is worrisome for this
reason. Does the presence of consultants necessarily signal political parties’ inability to cope
with contemporary campaign demands (as Sabato (1981) would argue)? Or does the presence of
consultants signal a change in party strategy from a model of omnipotence to one of market
segmentation and downsizing? Further does the use of consultants by parties signal party weakness or party strength by husbanding scarce resources (money and staff in particular) and hiring temporary or piecemeal workers? This alternative scenario finds change in internal party
arrangements to be neither a sign of party weakness or strength, but merely an admission that
traditional party structures are inadequate to maintain a truly viable electoral position.
Political Consultants v. Political Party Staff
Political consultants are normally thought to have a detrimental effect on political parties
because it is assumed that if candidates have an individual relationship to consultants, that such
relationship will squeeze the role of parties, making them irrelevant to candidates. Repeated
references to the candidate-centered US political environment further confirm this notion. If
candidates rely on consultants hired by the campaign directly, then they ostensibly have no use
for more general party advice, themes, or strategy. Larry Sabato (1981) asserts that the use of consultants implies party weakness, sometimes deliberately by the consultants who feel their contribution is much greater than that of the parties.
The debate over the consultant / party relationship can basically be boiled down to a
dichotomy where the two are either allies or adversaries (Kolodny and Logan 1998). The
adversarial school of thought finds that the goals of the consultants are at such odds with the 14
goals of the parties that the only possible result of consultant success is party decline. The allied
school of thought finds that if political consultants are trained by the parties (that is, they began
their political careers as party employees), then their work does not go against the goals of the
party, but instead reinforces it. As such, they are allied.
The allied view of consultants argues that consultants use their contacts in the party they worked for and related party organizations to obtain clients and to facilitate the servicing of their clients (Kolodny and Logan 1998). They may even be hired by the party organization to do work for the party generally or to do work for specific candidates. Though the allied view sees consultants in the US as independent contractors for the party (specifically in areas that exceed their institutional capacity like media ad production, polling and direct mail targeting), this analogy may not go far enough. Indeed, political consultants may be more properly viewed as part of the party “network,” as party-connected actors that are surrogates for the larger permanent staffs that the parties once had.
There is precedent for viewing political consultants as part of a party network. Mildred
Schwartz (1990) makes this case in her 1990 study of the Illinois Republican party. Schwartz puts consultants under the category of “advisor” in her analysis and explains that advisors “are persons regularly consulted by their clients, but not necessarily paid for their advice” adding that
“[w]hether paid or not, the road to becoming an advisor is often prior service in government, where contacts are established and reputations acquired that may then be converted into an advising service” (Schwartz 1990, 39-40). She notes that advisors have three main areas of competence for the party network: political issues, media use, and campaigning. Schwartz also finds that advisors work primarily with one party and its candidates (Schwartz 1990, 39). As part of her analysis of the party network, Schwartz measures the centrality of each unit 15
associated with the party under study, or how frequently a particular component of the network is
called upon by other entities in the network. Schwartz concludes that advisors are the third most
central component of the party network (out of 23 components which include mostly party
officials and elected officeholders) behind only financial contributors and interest groups in the
number of contacts they had with other components of the party (Schwartz 1990, 55). Later,
when looking at the cohesiveness of sub-groups within the party, Schwartz finds that: “The largest subset, located in the middle of the matrix, consists of seven actors: state senator, state representative, senator, governor, advisor, interest group, and financial contributor. This is the party core—the actors whose identities and activities define the Republican Party.” (Schwartz
1990, 75)
Schwartz concludes her study by stating that she finds no evidence of party decline due to the influence of the unofficial wing of the party, of which advisors are a significant part. She does not agree that “party has been superseded just because candidates make direct contacts with the unofficial wing” (Schwartz 1990, 261). This leads us to the important point that candidates seldom make contacts with advisors or consultants without the party acting as an intermediary or acting as the symbolic commonality that causes them to do business. Herrnson makes this point by describing American parties in the 1980s as intermediaries engaged in making linkages between their candidates and the resources that matter to them (Herrnson 1988). Indeed, it has been a long-standing practice of US political parties to deliver information to candidates about which outside consultants will best help their race (Herrnson 1988). After all, the geography of the US makes it almost impossible for candidates to identify all the appropriate outside political talent for their races, especially since modern technology allows many central campaign functions such as polling, telephone voter contact, or television ad creation to be done from any 16
location. Therefore, party committees have always had this linkage role, especially when it came
to identifying national resources (such as hiring political consultants) to the candidates in their
local constituencies (Kolodny 1998).
Where is there empirical evidence for this assertion that consultants can not only assist
parties with their goals, but even make them stronger? The above-mentioned survey of
consultants asking their background and training (Kolodny and Logan 1998) was followed by a more extensive survey by James A. Thurber and Candice J. Nelson that confirmed the earlier findings (Thurber, Nelson and Dulio, 2000). In 1998, a survey of US state party executive directors was conducted to ascertain their approach to political consultants. The parties said that they routinely hired consultants themselves for some specialized functions (such as direct mail design and delivery and polling) and also recommended that candidates use consultants for
additional functions they could not provide (such as media ad development and placement).
However, they still found themselves best at providing grassroots organization, local information
about the political landscape and mores, voter mobilization and fundraising. For the most part,
consultants concurred in this assessment of their strengths and weaknesses (Kolodny 2000).
This survey data was accompanied by open-ended comments on the party/consultant relationship that included one state party executive director referring to consultants explicitly as sub-contractors. In addition, the emphasis on valued consultants by parties was on those who
“produced” something tangible that the parties found hard to do cheaply or efficiently. Such
products include public opinion polls, direct mail pieces, and media ads (Kolodny 2000, 127-9).
Still, additional evidence of this party-consultant “contractor” relationship is needed.
17
What Party Coordinated Expenditures Tell Us
Recall that coordinated expenditures are spent by a party on behalf of a candidate with that candidate's knowledge and consent, with priority logically given to competitive races
(Glasgow 2000). The coordinated modifier means that the party and candidate consulted on what was the best use for the money, though fundamentally it is the party’s money. They write the check, and therefore they have the final say. Herrnson explains that coordinated expenditures
“typically are for campaign services that a Hill committee or some other party organization gives to a candidate or purchases from a political consultant on the candidate’s behalf…[they] often take the form of polls, TV commercials, radio ads, fund-raising events, direct-mail solicitations or issue research.” (Herrnson 2000, 93) Beyond Herrnson’s brief statement, little else has been ascertained about how the coordinated expenditure money has been spent. Normally, coordinated expenditures have been seen as a way for the party to help a candidate “pay the bills” furthering the idea that candidates are in the driver’s seat and parties are just another source of campaign money. In this next section, we explore in detail how coordinated expenditures were spent in 1998 elections for the US House and Senate to answer the following questions: How much do the parties spend on political consultants for their candidates?; How does their outlay for political consultants compare to other coordinated spending?; What types of services are the parties likely to spend their money on for candidates?; and How does this square with the discussion of party institutional capacity?
Data and Methods
We compiled comprehensive data for the 1998 congressional elections through several sources.
In building a data set we first examined every individual payment made by the national political 18 party committees4 and the federal campaign committees of the state parties in coordinated expenditures in the 1997-98 election cycle. This data is available from the Federal Election
Commission, though it is not summarized for each individual candidate (i.e. the FEC provides each report filed by the candidate or party and summary tables that aggregate all coordinated monies over the course of the election cycle). Each individual payment is recorded with the date, amount, vendor paid, and candidate on whose behalf the payment was made. We coded each of these by the broad functions of campaign expenditures. Though the data was organized by each individual payment, we created variables corresponding to several aspects of how candidates campaign – polling, television and radio advertising, fundraising events, direct mail, and opposition research – that included a summary amount for each type of campaign activity made by party committees on behalf of individual candidates.
Second, we used data supplied by the FEC that contained a number of pertinent variables for each candidate’s campaign activity. These included the candidate’s total campaign receipts and total disbursements, their opponent’s total receipts and spending, and party affiliation.5 We also created a candidate quality variable for all challenger candidates based on Krasno and
Green’s (1988) eight-point measure.
Finally, we included a variety of additional measures to assess the competitiveness of the campaign including the number of campaign consultants the candidate hired, whether any of those consultants the candidate hired were also paid by a party organization or committee,
4 They are: Democratic National Committee (DNC); Democratic Senatorial Campaign Committee (DSCC); Democratic Congressional Campaign Committee (DCCC); Republican National Committee (RNC); National Republican Senatorial Committee (NRSC); and National Republican Congressional Committee (NRCC). 5 The spending variables were measured in total aggregate dollars for the entire campaign. Candidates’ party affiliation was coded as 0=Democrat and 1=Republican. 19 whether the candidate’s opponent hired a consultant, and the margin of victory the incumbent officeholder enjoyed in 1996.6
Party Money Spent on Congressional Elections
In the 1998 cycle, candidates spent a total of $740 million dollars for both the US House and US Senate. The political parties, on the other hand, spent $30 million dollars in coordinated expenditures for congressional elections. Though that amount seems trivial in comparison to the candidates’ expenditures, coordinated expenditures do not include the whole of party money spent – an additional $275 million was spent in soft money expenditures. However, since soft money is not spent in coordination with the campaigns, it does not give us insight into the party- candidate-consultant relationship the way coordinated expenditure data does. Also, the $30 million is mainly concentrated spending in the most competitive races, whereas $740 million dollar figure includes spending by candidates whose election results are almost never in question
(they are headed for either certain victory or certain defeat). In 1998, only 38 candidates for the
US Senate received coordinated money from their party (19 Democrats and 19 Republicans).
However, in House races 141 Republicans and 262 Democrats found party coordinated money coming into their campaigns. As will be discussed below, the Democratic party’s spending habits in House races (mainly the DCCC) are a bit out of step with the other party committees. One reason for the high number of House candidates receiving coordinated contributions is because nearly every Democratic incumbent received a $200 contribution for party sponsored research.
6 The variables that measure professionalization were created by utilizing Campaigns & Elections magazine’s “Winners and Losers of ’98,” which is a list of all campaign consultants who were active in the 1998 election cycle and their clients. From this we were able to build a list of all major party candidates and the consultants they hired during the 1998 election cycle. This allowed us to create a dichotomous variable indicating whether the candidate’s opponent also hired a consultant. To build the variable measuring whether the candidate hired a consultant that was paid by their party, we simply matched the list of all the consultants that were paid by the party with coordinated expenditure money with the list of consultants the candidate hired. This variable was also coded 0 / 1. For the margin of victory variable, a simply absolute value of the difference in the two-party vote total was used. 20
With those caveats, the data on party coordinated expenditures in is quite enlightening.
Table 1 shows the total amount of coordinated expenditures broken down by party and chamber.
The coding of the expenditures included three categories: amount spent on consultants, amount
spent on activities provided by the parties themselves7, and amount spent on all other outlays. Of
the nearly $30 million dollars spent on coordinated expenditures, almost $27 million, or 90.1%
was paid to political consultants. Significantly, there is almost no difference in spending on
consultants by political party as Democrats spent $13.2 million (88.7% of their total outlays) and
Republicans spent $13.7 million (91.5% of their total outlays). There is more of a difference in
how party money was spent by chamber, with just under one third of the total coordinated
monies being spent on House elections and two-thirds being spent on Senate elections, attesting
to both the more competitive and the more expensive nature of Senate elections compared to
House races.
Of the House expenditures, 77.4% were spent on consultants, which is significantly less
than the 96% of Senate expenditures for consultants. Part of the reason for this discrepancy is
the 11.2% of House expenditures spent by the Democratic Congressional Campaign Committee
(DCCC) on in-house activities for candidates. None of the other five party committees8 spent funds in this manner, though they routinely used to do this in the 1980s. These party-provided activities by the DCCC (media, research and fundraising services) are now bought from consultants by the remaining five committees (that is, the congressional and presidential committees) in the 1998 congressional elections, leading us to believe that the DCCC will shortly follow their lead.
7 This line is comprised entirely of services the DCCC provided for Democratic candidates to the US House of Representatives. 21
[Table 1 about here]
What is Coordinated Expenditure Money Spent On?
Table 2 shows the distribution of coordinated money by expenditure type (which includes
5 categories for this preliminary analysis: media advertising, polling, fundraising, other
campaigning activity (phone banks, direct mail production, get-out-the-vote, and opposition research), and overhead). Virtually all of the money spent by parties was spent on advertising or campaign activity. Less than 5% of the party money was spent on the last three functions
(polling, overhead, and fundraising). One explanation for this expenditure pattern is in the timing of the party spending. The bulk of the party expenditures were made in the last two months of the election cycle. That is because the parties wait to see how viable candidates are before they invest. So, individual campaigns would be expected to be conduct their own fundraising operations and pay for their own overhead for most of the campaign (which are somewhat fixed expenses) while the big expenses associated with voter outreach (such as television ads and direct mail) come at the very end of the campaign cycle, close to election day.
Since the party committees say that they are interested in investing in only the most winnable races (Herrnson 1988; Kolodny 1998), such spending at the last moment and on the most determinative expenses is logical. This explanation also accounts for the small amount of money spent on polling. While we know that political parties have preferred pollsters whom they expect their candidates will hire (Luntz 1988) they apparently are not paying for their services out of their own coffers. Since most polls are commissioned early in the cycle, such minimal spending is logical.
8 They are: Democratic National Committee (DNC); Democratic Senatorial Campaign Committee (DSCC); Democratic Congressional Campaign Committee (DCCC); Republican National Committee (RNC); National Republican Senatorial Committee (NRSC); and National Republican Congressional Committee (NRCC). 22
[Table 2 about here]
Of the remaining 96% of coordinated expenditures, 72.7% is spent on advertising and
23.2% is spent on all other campaign activities. The portion spent on advertising, which is $21.7
million dollars (and 68% of all coordinated expenditures) includes the cost of broadcast time,
explaining its large number relative to other expenditures. Likewise, expenditures for direct mail
often (but not always) include production costs and postage. Table 3 shows who received the
coordinated money by groups, as in Table 1, and by purpose. Political consultants received
almost 94% of all advertising expenditures and almost 81% of all other campaign activity
expenditures. It is impossible to know from these figures just how much of this money went to
political consultants as compensation for their services and how much was passed through them
to pay for broadcast time or other production costs. The issue of bottom line to consultants is
beside the point of this paper however. We are interested in the extent to which consultants are
connected to the political party network and this data reveals that consultants are the primary
means through which parties purchase campaign products for the good of their candidates.
Along the way, we have discovered that consultants have become the prime contractors for both
parties and candidates for campaign services and products, hiring sub-contractors (such as buyers
for media time and printers for direct mail) for the parties’ and candidates’ indirect use.
[Table 3 about here]
What Types of Candidates Receive Party Spending?
It seems logical and almost too easy to say that the political parties would invest scarce resources in the most competitive races. As a preliminary test of this common sense hypothesis,
we conducted a difference of means test on a number of different variables that can be seen as
indicators of the competitiveness of a race for both House and Senate campaigns: the candidate’s 23 total spending, the opponent’s total spending, the electoral competitiveness of the district, and the most final measure – the candidate’s percentage of the vote in the general election (see
Tables 4 and 5). Using an figure that is roughly half of the legal amount parties can spend in coordinated money ($30,000) as a cutpoint for the analysis, we find that the parties invest in
House candidates who spend more, whose opponents spend more, and whose districts are the most competitive. Moreover, candidates who received coordinated money from the party were involved in the closest races. When we break this number down by incumbents and challengers, the results are even more compelling.
[Table 4 about here]
Table 5 includes a similar analysis for Senate candidates, which shows similar trends.
Rather than use a dollar figure as a breakpoint in the analysis – recall that the limits in Senate races are not constant across states but are a function of state population – we calculated the percentage of the maximum parties spent on a candidate and compared those who received 50% or more of the maximum allowable contribution to those who received less than 50% of the maximum allowable contribution.
[Table 5 about here]
The trend among Senate candidates is similar to those in the House. Here again, parties spent more (on a percentage basis) on candidates who campaign in states that have been competitive in the past. This is seen across a number of different measurements of competitiveness including the margin of victory in previous races and the amount spent by each candidate in the race. Furthermore, those incumbents who received more than 50% of the maximum allowable contribution received, on average, 51% of the vote on election day, compared to the 66% that to those who did not get more than 50% of the maximum party 24 contribution garnered. Challenger and open seat candidates showed similar trends. Challengers who received more than 50% of the maximum allowable spending received 47% of the vote on election day, compared to only 32% for those candidates who did got less than 50% of the maximum legal coordinated contribution. Open seat candidates who were the recipients of 50% or more of what parties were allowed to spend garnered 51% of the vote, compared to the 46% the open seat candidates who got less than 50% of the allowable contribution.9
Table 6 shows the results of regression analyses for incumbent, challenger, and open seat candidates in 1998 House races. As one would expect, the more competitive the district candidates campaigned in received more help in the form of coordinated money from the parties
– this held for all types of candidates. Additionally, incumbents whose opponents hired a consultant of any type received greater levels of coordinated party help. This relationship did not hold for challengers or open seat candidates, likely because their opponents (incumbents and other open seat candidates) hire consultants with relative uniformity (Dulio 2001). Moreover, the more money the candidate and his or her opponent spent during the campaign was positively related to party coordinated spending for all candidate types. There was no relationship between the strength of an incumbent’s opponent and the amount of party coordinated spending on behalf of that incumbent. The stronger an open seat candidate’s opponent, the more coordinated money the party funneled into that race, although the relationship is not highly significant.
Finally, one last relationship deserves special note. We have established elsewhere
(Dulio and Kolodny 2001) that there is an elite group of consultants active in House races, many of which were hired by party committees during 1998. Challengers, the least likely candidates to hire professional consultants (Medvic 1997 and 2001; Herrnson 2000), who hired consultants
9 Here we are not arguing that receiving more than 50% of allowable coordinated contributions results in victory or a higher percentage of the vote, but simply that the races are more competitive. 25 that were also on the party payroll received more in coordinated party contributions than did those who did not hire consultants with these party ties. This relationship did not hold for incumbents or open seat candidates. As noted above, incumbents and challengers hire consultants with greater frequency than challengers. However, upon examining the lists of who incumbents and challengers hired it was also discovered that incumbents and challengers routinely turn to those consultants that were also hired by the party. This uniformity in hiring likely diminishes this relationship.
[Table 6 about here]
We expected to find distinct patterns of party coordinated spending for candidates.
Indeed, if parties were following a seat-maximizing strategy, we would expect to find the most capital-intensive expenditures made in races considered most competitive. An expected hierarchy of spending might be: broadcast/mass media investments in the most competitive races, direct mail investments in the next most competitive races (with the difference between media and mail spending depending on the cost of the media market), polling in less competitive races early on, in-house spending for marginally competitive races, events/fundraising for less competitive races, and research would be for hopeless candidates. In fact, none of these relationships were uncovered. In this sense, party spending seems to be truly coordinated – that is, parties use these monies to buy services from consultants that the candidates say they need or are in the middle of purchasing on their own.
Trends in Party Spending
We realize that coordinated spending in the 1998 cycle gives only a snapshot of where party money goes. We have preliminary data for party spending by the House campaign committees (the DCCC and the NRCC) that gives us a sense of trends for the 1992, 1994, 1996, 26
and 1998 cycles. It appears that though party spending on consultant services was significant in
1992, since 1994 parties changed to spending virtually all their money this way. We believe that
1994 marked the return to true competitiveness in the House of Representatives, and the shift to
post-modern campaigning could no longer be denied. Parties, understandably, gave up trying to
keep up at that point and switched their strategy entirely toward consultants for the provision of
campaign services, at least in coordinated spending.
Figure 1 illustrates three trends in House campaigns. First, parties have become more
reliant on political consultants, as seen in the increasing percentage of coordinated payments
going to outside professionals. The second trend – national party committees have completely
moved away from coordinated spending on House candidates – is tied to the third – the House
campaign committees (DCCC and NRCC) increased their coordinated spending in 1994 and
1996 but have since scaled back. It is naïve to think that parties would spend less on their
candidates in an election cycle where control of the House was up for grabs. We believe parties
have begun to shift their strategy from coordinated money to soft money (and specifically issue
advertisements). We also believe that parties have continued to look to consultants for help in
this area. We assume that parties have always spent soft money for issue advocacy via
consultants, but since this only began in 1996 after the coordinated trend was established, we get
more information from studying coordinated expenditures.
[Figure 1 about here]
Implications and Conclusions
We have begun to assess the role of political consultants in the future of political parties.
Rather than seeing the proliferation of consultants as a sign of party decline, we argue that their presence is actually a next step in party evolution. If political parties are meant to contest 27
elections with the hope of gaining power (by winning office), then the parties must help their
candidates remain electorally viable in whatever way they can. We believe this is further
evidence of a consultant/party partnership (see Dulio and Kolodny 2001). If the contemporary campaign environment is so segmented that consultants become the subcontractors of campaign services, then consultant use by parties and candidates is a rational response to this market segmentation. It seems that maintaining niche specialists is what the party does to retain its efficiency in achieving its immediate electoral goals of winning control of governmental institutions.
Consultants are not going to disappear from the party payroll. The method and type of
funds parties use to pay consultants may change substantially, however. While we have
hypothesized that party spending has slightly shifted away from coordinated spending to soft
money spending (and soft money transfers to states), this may change after the Supreme Court’s
decision in the Colorado II case (the left-over portion of the Colorado Republican Federal
Campaign Committee v. Federal Election Commission (1996) case which ruled that parties
could spend unlimited amounts in the form of independent expenditures). The Court is
deciding whether the current limits on coordinated spending are constitutional. If the Court
rules that parties cannot be limited in the amount they can spend on behalf of, and in
coordination with, a candidate, coordinated spending will likely increase. If the ban on soft
money that is part of the current reform legislation before Congress becomes law and survives a
sure constitutional challenge, the only avenue for parties to spend large sums of money will be
through coordinated spending.
28
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31 32
Table 1: Total Coordinated Expenditures for the US House and Senate by Party and Chamber Total House Total Senate Sum Total of Total Democratic Total Republican Expenditures Expenditures Party Coordinated Expenditures Expenditures (Democrat and (Democrat and Expenditures (House and Senate) (House and Senate) Republican) Republican) Amount Spent on $26,958,051 $13,204,082 $13,753,969 $7,355,354 $19,602,697 Political Consultants (90.1%) (88.7%) (91.5%) (77.4%) (96.0%)
Amount Spent for $1,063,428 $1,063,428 $0 $1,063,428 $0 Party Provided (3.5%) (7.1%) (11.2%) Campaign Activities
Amount Spent on all $1,895,076 $609,350 $1,285,726 $1,079,999 $815,077 other outlays (6.3%) (4.1%) (8.5%) (11.4%) (4.0%)
Grand Total $29,916,555 $14,876,860 $15,039,695 $9,498,781 $20,417,774
33
Table 2: Coordinated Spending by Purpose and Consultant Use Total Spent Total Amount to Consultants Percent to Consultants of Overall Total All Advertising $21,740,846 $20,425,017 68.3% (72.7%) (75.8%)
Campaign Activity $6,943,074 $5,623,173 18.8% (23.2%) (20.9%)
Polling $900,679 $900,679 3.0% (3.0%) (3.3%)
Overhead $248,637 $5,182 0.1% (1.0%) (0.2%)
Fundraising $83,319 $4,000 0.1% (0.1%) (0.1%)
Grand Total $29,916,555 $26,958,051 90.3%
34
Table 3: Coordinated Expenditures for House and Senate by Purpose and Vendor Type Campaign Activity Overhead (including Fundraising Expenses (Research, Direct Mail, rents, (including all overhead All Advertising Telemarketing) Polling travel, and salaries) for fundraising) Amount Spent on $20,425,017 $5,623,173 $900,679 $5,182 $4,000 Consultants (93.9%) (80.9%) (2.1%) (4.8%)
Amount Spent for Party $795,29410 $217,87511 0 0 $50,25912 Provided Activities (3.7%) (3.1%) (60.4%)
Amount Spent on all $520,535 $1,102,026 0 $243,455 $29,060 other Vendors (2.4%) (15.9%) (97.9) (34.9)
Grand Totals $21,740,846 $6,943,074 $900,679 $248,637 $83,319
10 This number is entirely for DCCC in-house media services (mostly the use of their in-house production facility). Thus it applies only for Democrats in the House of Representatives. 11 This number is entirely for DCCC in-house research services. As above, this number applies only to Democrats in the House of Representatives. 12 This number is entirely for DCCC in-house fundraising services. It applies as in the two previous notes. 35
Table 4. Party Coordinated Spending and the Competitiveness of House Campaigns. Amount of Party Candidate’s Total Opponent’s Total Candidate’s General Coordinated Money Spending Spending Competitivenessa Election Percent All Candidates $$30,000 (N=138) $943,919 $940,488 11.84% 47.5% < $30,000 (N=621) $392,340 $335,740 32.88% 55.31% t=11.81; p=0.000 t=14.317; p=0.000 t=-14.50; p=0.000 t=-6.661; p=0.000
Incumbents $$30,000 (N=44) $1,150,602 $714,637 11.68% 54.84% < $30,000 (N=621) $578,349 $280,254 22.39% 73.2% t=6.832; p=0.000 t=11.082; p=0.000 t=-10.23; p=0.000 t=-16.67; p=0.000
Challengers $$30,000 (N=61) $734,111 $1,061,717 11.35% 41.49% < $30,000 (N=237) $103,152 $625,207 22.02% 30.30% t=9.602; p=0.000 t=6.534; p=0.000 t=-9.686; p=0.000 t=12.924; p=0.000
Open Seats $$30,000 (N=32) $1,067,118 $455,947 8.00% 48.97% < $30,000 (N=36) $498,076 $504,756 22.27% 46.97% t=5.149; p=0.000 t=3.972; p=0.000 t=-4.002; p=0.000 t=0.625; p=0.268 a For incumbents and challengers competitiveness is measured as the margin of the seat in 1996 and for open seats it is measured as the margin in the 1996 presidential race in that district.
36
Table 5. Party Coordinated Spending and the Competitiveness of Senate Campaigns. Percentage of Party Candidate’s Total Opponent’s Total Competitiveness Candidate’s General Coordinated Money Spending Spending (margin in last race) Election Percent All Candidates $50% (N=23) $6,779,364 $6,957,134 8.8% 50.00% < 50% (N=44) $2,107,814 $1,972,280 20.5% 47.70% t=3.902; p=0.000 t=3.874; p=0.000 t=-4.148; p=0.000 t=776; p=0.220
Incumbents $50% (N=11) $8,188,823 $7,116,042 5.90% 51.18% < 50% (N=18) $2,632,112 $321,881 23.222% 66.06% t=2.991; p=0.006 t=3.982; p=0.001 t=-4.426; p=0.000 t=-7.365; p=0.000
Challengers $50% (N=7) $7,161,382 $9,898,653 4.14% 47.00% < 50% (N=21) $1,615,472 $3,155,905 20.09% 32.38% t=2.997; p=0.003 t=2.487; p=0.023 t=-4.501; p=0.000 t=6.179; p=0.000
Open Seats $50% (N=5) $3,143,729 $2,489,411 8.20% 51.60% < 50% (N=5) $2,288,177 $2,942,459 10.60% 46.00% t=0.666; p=0.262 t=-0.346; p=0.369 t=-0.505; p=0.313 t=0.681; p=0.261
37
Table 6. What Types of Candidates Receive Coordinated Contributions Incumbents Challengers Open Seats Did the candidate hire a 469.65 15,409.68**** -800.07 consultant that the party paid in (1,500.75) (2,642.09) (8,346.07) 1998
Competitivenessa -89.938*** -148.59**** -2.48.05* (36.323) (47.65) (196.12)
Did the opponent hire a 9,072.12**** 1,824.18 7,566.01 consultant (2,289.33) (2,356.99) (8,886.85)
Opponent Quality -300.63 ______b 1,518.80* (371.621) (1,202.93)
Candidate’s Total Spending 0.002045**** 0.02608**** 0.02467**** (0.001) (0.003) (0.007)
Opponent’s Total Spending 0.001728**** 0.0005691 0.01593*** (0.003) (0.002) (0.006)
Party 3,220.52 -11,280.1**** -7,615.28* (1,427.88) (1,794,59) (5,590.14)
Constant 2,599.95 11,189.55**** -5,615.37 (2,153.06) (3,442.89) (12,180.74)
Adj. R2 = .385 Adj. R2 = .586 Adj. R2 = .438 F7,376 = 35.312; F6,287 = 70.103; F7,60 = 8.463; P = 0.000 P = 0.000 p=0.000 N = 383 N = 293 N = 67
Note: Numbers in parentheses are standard errors. a For incumbents and challengers competitiveness is measured as the margin of the seat in 1996 and for open seats it is measured as the margin in the 1996 presidential race in that district. b No opponent quality variable is included for challenger candidates because they all face incumbents.
Figure 1. Coordinated Party Spending by Party Committees in Hosue Races, 1992-1998 39
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000 Dollars
3,000,000
2,000,000
1,000,000
- DCCC DNC NRCC RNC DCCC DNC NRCC RNC DCCC DNC NRCC RNC DCCC DNC NRCC RNC 1992 1992 1992 1992 1994 1994 1994 1994 1996 1996 1996 1996 1998 1998 1998 1998 Party Committees and Year
Total Coordinated Spending Total Payments to Consultants