BMW Direct, the GOP fundraising firm known for taking long-shot candidates for a ride while raking in big bucks off their campaigns, has re-emerged under a new name — but with a similar modus operandi. And this time around, even some Republicans are crying foul, with one consultant accusing the firm of engaging in “sub-prime fundraising.”
One 2010 client of BMW Direct — now rechristened as Base Connect — is William Russell, the retired lieutenant colonel who is running for the Pennsylvania Congressional seat of the late John Murtha. Russell’s campaign raised over $895,000 in the fourth quarter of last year, according to federal disclosure records. But it paid over $719,000 of that amount — about 80 percent — to Base Connect, and other companies associated with it, which ran the company’s direct-mail fundraising program. For the year as a whole, Russell’s campaign raised over $2.8 million, but spent over $2.6 million — much of it again going to Base Connect — leaving it with cash on hand of just $211,000.
Those numbers were first noted last week in a blog post by Bill Pascoe, a veteran Republican consultant, who declared, very slightly inflating Base Connect’s take: “Keeping 82 cents out of every dollar you gross isn’t fundraising, it’s highway robbery. You might as well call it subprime fundraising.”
Three GOP consultants who spoke to TPMmuckraker agreed that the percentage of dollars raised that Base Connect and its affiliated companies keep is far more than standard. One said most direct-mail fundraising firms take no more than a third. “Anything more than half doesn’t pass the laugh test,” he said, adding of Base Connect: “They have an awful reputation.” Another put the standard rate at no more than 20 percent. “They’re not serving the interests of the candidate,” he said. A third, choosing his words carefully, said that Base Connect’s approach is “not a business practice that I endorse.” Base Connect’s president and CEO, Kimberly Bellissimo, did not respond to a request for comment.
The day after Pascoe’s blog post appeared, Erick Erickson, the influential GOP strategist who founded RedState.org, tweeted: “If you are a GOP candidate using BMW Direct a/k/a Base Connect, you might be denying yourself a RedState endorsement.” And one consultant said he’d heard that the National Republican Campaign Committee was urging candidates not to work with the firm, though that could not be confirmed. (The NRCC did not immediately respond to a request for comment.)
As we’ve written in the past, Base Connect’s business model appears to involve using direct-mail appeals to a well-honed lists of national Republican donors to raise a lot of money on behalf of long-shot candidates — for instance, Deborah Honeycutt, a black Republican who has challenged Rep. David Scott (D-GA) in the last two cycles, both times losing by 38 points. The firm then charges the candidate nearly the sum total of what it raised, for expenses related to the fundraising effort itself. Each campaign not only allows the firm to turn a hefty profit, but also helps it further hone its master list for future use.
Russell isn’t the only GOP candidate who may be getting taken for a ride this cycle. The AP reported last month that the campaign of another Base Connect client, Rep. Joseph Cao (R-LA), had a similar financial profile to Russell’s, spending around 75 percent of the money it raised on fundraising, leaving it with just $315,00 cash on hand. Cao, a freshman who represents a heavily Democratic district, is considered highly vulnerable this year, and his financial situation only makes things seem bleaker.
But its inflated compensation for fundraising isn’t the only Base Connect business practice that’s causing concern in Republican circles. Scott Mackenzie is listed on federal disclosure reports as the treasurer for Russell’s campaign — as he has been for several other Base Connect clients in the past. In fact, as we reported in 2008, Base Connect’s website lists Mackenzie as a staffer with the firm, and also lists his own firm, Mackenzie and Company — which works out of the same Washington building — as a Base Connect “strategic partner.” The arrangement effectively allowing Mackenzie to oversee campaign accounts that cut checks to his colleagues. Another “strategic partner,” Legacy List Marketing, is run out of the same Washington office as Base Connect, as is an officially independent PAC, Freedom’s Defense Fund, which recently commissioned a Zogby poll that showed Russell leading his GOP primary. As one Republican consultant put it to TPMmuckraker last week: “The issue is: how many sides of the table are they on?”
Of course, if a candidate agrees up front to Base Connect’s way of working, it’s difficult to claim there’s any deception going on. But there’s evidence that at least some of the firm’s candidates were taken for a ride. When one long-shot 2006 House candidate, Charles Morse, found out that 96 percent of the funds raised in his name went to pay BMW Direct and its affiliates, he called it “craziness,” adding: “I am really amazed. It is really way above and beyond what I was made aware of.” Another long-shot BMW Direct client, Ada Fisher, called the firm, in a complaint to the FEC examined by TPMmuckraker, “the biggest fraud and embezzlement in the system.” And of course, the real victims are the ordinary conservative donors, most of whom likely won’t suspect that 80 or 90 percent of their donation is going not to the candidate they’re aiming to support, but rather to Base Connect.
There is one other figure on whose behalf Base Connect is currently working, who may not be such an easy mark, though. The firm recently tapped its donor list for contributions to the Hannah Giles Legal Defense Fund.