BMW

BMW Direct Candidates Predictably Lose Elections

Kate Klonick | November 6, 2008, 4:33PM

BMW Direct, the notorious direct mail firm famous for striking fundraising deals with loser candidates -- predictably lost two of its high profile races this Tuesday.

We mentioned late last week that a BMW client, Deborah Honeycutt -- a Republican challenging Democratic incumbent Rep. David Scott in Georgia -- looked to be making a small challenge to Scott and had raised almost $4.7 million through BMW Direct, though the vast majority had gone in fees back to the company.

Well Honeycutt lost her race -- by the same margin she'd lost in 2006 -- 38 percentage points. According to FEC records, Honeycutt has spent $4.3 million this election cycle, $47 for every vote she received.

As for BMW's other high-profile loser candidate, the Republican challenger to Jack Murtha in Pennsylvania's 12th District, he lost too. Touted by Michelle Malkin as a "jaw-dropping political miracle" Russell brought in almost $2.5 million through BMW Direct -- but spent more than half of that in payments back to the direct mail firm. While he pulled tighter to Murtha at the end of the race, it was more due to the Congressman's gaffes, than any awe inspired fundraising.

One last thing about Honeycutt -- it looks like she's going to have more to deal with than just a lost election. Scott has filed a federal complaint against Honeycutt for allegedly funding sleazy fliers that called Scott the "worst black congressperson."

Special thanks to TPM Reader BK for the tip.

BMW

Honeycutt Gives Georgia Dem a Run for His Money

Kate Klonick | October 30, 2008, 6:44PM

Remember Deborah Honeycutt? The little-known Republican running for Congress in a Democratic stronghold down in Georgia who used a shady direct-mail company to raise national money for her long-shot candidacy?

Well, Honeycutt -- who lost by 38 points last time around -- is giving Democratic incumbent David Scott a little run for his money.

CQ Politics today changed the race from "Safe Democrat" to "Democrat Favored" after recent polls gave Scott just a five point lead over Honeycutt.

And there seem to be a few familiar factors at work in Honeycutt's rise in this heavily Democratic district.

Scott's campaign alleges that Honeycutt is concealing her party affiliation -- she fails to identify as Republican on her literature and some of her mailers reportedly bear the name "Democrats for Good Government," though Honeycutt denies knowledge of the group -- causing voters to mistake her for a Democrat.

Second and perhaps, most familiarly, Democrats point to her high fundraising numbers. Despite running as a virtual unknown, she's raised $4.7 million through Oct. 15 -- a staggering number compared to Scott's $1 million.

But unlike Scott, Honeycutt has raised her money primarily through direct mail company BMW Direct which gobbles up most of the proceeds in fees. When we wrote about her in July, Honeycutt had raised $1 million in the second quarter -- and spent $736,000 in fees to BMW Direct. The real surprise here is that Honeycutt has manged to do anything with a campaign that's burning through such huge portions of its donations.

BMW

Murtha Challenger's Fundraising Is Less Than Meets The Eye

Kate Klonick and Zachary Roth | October 29, 2008, 3:30PM

Since Democratic Congressman John Murtha made the bone-headed move earlier this month of calling his constituents racists, the GOP has grown hopeful that it might pick up off his southwest Pennsylvania House seat.

The National Republican Campaign Committee last week spent $84,000 to run ads in support of Murtha's Republican challenger, William Russell. That prompted the Democratic Congressional Campaign Committee to go on the air today with an ad supporting Murtha -- one of the most prominent Democrats in the House, and a close ally of Speaker Nancy Pelosi.

There's no doubt that Murtha's comments have given Russell an outside shot -- this week, the respected political analyst Charlie Cook moved the race into his "Likely Democratic" category, after having previously considered it a Democratic lock.

Perhaps most significantly, Russell appears to have been raking in campaign dollars. Over the weekend, the Tribune-Democrat of Johnstown, Penn breathlessly reported: "When it comes to raising money, political newcomer William Russell continues to outpace his opponent, longtime U.S. Rep. John Murtha."

But it may turn out to be a steeper climb for Russell than the GOP, or some in the press, know.

As we reported in July, Russell is a client of BMW Direct. That's the Republican consulting firm whose business model appears to consist of tapping national lists of GOP donors to raise a lot of money, via direct-mail appeals, for long-shot candidates (which is exactly what Russell was before Murtha's gaffe). Then, BMW charges the candidate nearly the sum total of what it raised, for expenses related to the fundraising effort itself.

For instance, we noted in July, based on FEC filings, that Russell had raised $669,534 from April through June. That's an impressive amount -- until you consider that, after paying expenses to BMW and its various affiliates, Russell came out only $27,431 ahead.

A new look at FEC records suggests that during the July-September quarter, Russell actually walked away with an impressive haul, even after BMW took its cut. But it also shows that he was still paying the firm an unually large amount for coordinating a fundraising appeal. In that quarter, Russell raised a total of $1,592,451, but paid BMW $585,834.33, leaving him with just over a million.

And in the first half of October, Russell raised $302,938, but after paying BMW and its affiliates, was left with $81,571.

In other words, since April, Russell has technically raised over $2.5 million. But after paying BMW Direct for helping raise money, he was left with just over $1.1 million.

To be sure, $1.1 million is certainly nothing to scoff at for a little-known congressional candidate. But given that Murtha has spent over $2 million -- which presumably went to actual campaign activities, rather than self-financing fund-raising efforts -- it's less impressive than some Republicans, and some in the press, may want to believe.

And of course, whether or not Russell pulls it off, BMW will get its cut.

BMW

BMW Direct Re-Surfaces With Ties to Anti-Obama Ads

Kate Klonick | September 24, 2008, 5:02PM

Remember BMW Direct, that sketchy direct mail company that raised money for down ballot candidates, but kept most of it in "fees"?

Well, they're back.

This morning, the New York Times ran a story mentioning BMW Direct, whose COO is also chairman of the Freedom's Defense Fund -- a PAC which has been running ads with "racial overtones" in a pivotal swing county in Michigan.

Well here at TPMmuckraker, we've been talking about BMW Direct and its office-and- employee-sharing PAC since early July:

BMW Direct, a direct-mail fundraising firm, has been raising money for groups called Freedom's Defense Fund and The Madison Project.

It's not clear what Freedom's Defense Fund supposedly does. It shares an address at the same office as BMW Direct. It does not appear to have a Web site.

So we already knew that Michael Centanni was working overtime to be Chief Operating Officer of BMW Direct while he was holding down a job as the chairman of the Freedom's Defense Fund, but we weren't quite sure what it was that the FDF did exactly.

Well, it looks like they're funding targeted, swift-boat like TV campaigns against Obama in the small swing county of Macomb, Michigan.

If Macomb seems familiar, that's because it's a highly visible battleground in a swing state. As the Times describes, Macomb is populated with "white, unionized auto workers who believe Democrats [have] abandoned them for, in part, the poor and African-Americans."

And just a few weeks ago, the county was thrust into the spot-light when the Macomb GOP chair told the Michigan Messenger they'd be using foreclosure lists as a way to challenge voters on election day.

BMW

BMW Direct Mailer For Georgia Republican Lands On Iowa Doorstep of Weekly Standard Reader

Andrew Tilghman | August 11, 2008, 12:11PM

Take a look at the latest fundraising pitch from Deborah Travis Honeycutt, a little-known Republican running for Congress in a Democratic stronghold down in Georgia.

Or, we could say, the latest pitch letter drawn up by her Washington-based direct mail fundraising firm, BMW Direct.

That's the company we told you about earlier this summer that mounts massive nationwide fundraising efforts targeting self-styled conservatives on behalf of long-shot GOP candidates.

They're very successful at raking in money. But the catch is that not much of that cash ever gets to the candidates' campaigns because almost all of it -- sometimes upwards of 90 percent -- is eaten up in costs related to the direct mail campaign itself. That helps BMW Direct pay the rent on its downtown Washington office, but doesn't help candidates mount much of a ground campaign in home districts.

A TPM reader out in Iowa sent us this copy of the letter he received recently, where Honeycutt clearly underscores her race.

"I am the Democratic Party's worst nightmare," Honeycutt writes in her eight-page letter on small-sized campaign stationary. "Because I am a black Republican woman and I'm running for a seat in the U.S. House of Representatives."

"Self-appointed black leaders like Jesse Jackson and Al Sharpton have used their influence with black people in the Democratic Party to gain great personal influence. They've sold us out for 30 pieces of silver, and I intend to say so!"

That echoes a line from one of BMW Direct's former clients, Ada Fisher from North Carolina, who also cited Jackson and Sharpton in one of her letters.

The TPM reader who sent us Honeycutt's mailer said he's convinced, based on the way the mailing address was written out, that his household's contact information was originally provided by the Weekly Standard magazine, to which his wife subscribes.

So far, BMW Direct has helped Honeycutt raise about $2.6 million so far this election cycle, putting her among the nation's top fundraisers.

BMW

Malkin's "JAW-Dropping Political Miracle" Provides Big Fees For BMW Direct

Andrew Tilghman | July 24, 2008, 12:41PM

The Devil is in the details, as they say.

Conservative columnist Michelle Malkin was breathlessly celebrating in yesterday's New York Post about how much money Republican Congressional candidate William Russell has been raising this year.

Never heard of him? You're not alone. Russell is challenging Rep. John Murtha for his Pennsylvania House seat, which is considered among the safest Democratic seats in the country.

Malkin was pointing out Russell's "JAW-dropping political miracle" in campaign fundraising. Indeed, Russel has raised almost $1 million so far this election cycle, a huge pull no doubt.

But guess who helps Russell run his massive, nationwide direct-mail fundraising efforts? Our old friends over at BMW Direct.

Russell is perfect for BMW Direct, which often raises tons of cash for candidates who look good on glossy mailers but ultimately spends nearly all the money raised on expenses related to the fundraising effort itself.

Lt. Col. William Russell is a clean-cut Army veteran who served in Iraq, the Gulf War and at the Pentagon on 9/11, according to a campaign Web site.

Malkin claims there's been a "great media wall of silence around Russell's upstart campaign." OK, let's break that silence and take a close look.

In the most recent quarter Russell raised $669,534, almost all from out-of-state donors who presumably are on BMW Direct's list of self-styled conservatives with a good track record of responding to direct-mail fundraising.

At the same time, he spent $442,990, almost all of it on expenses related to the direct mail effort and paid to BMW Direct and its affiliates (some of which share the same downtown Washington office).

The only expenses that appear to be spent on an actual campaign totaled about $20,000 for Web site design, a low-budget video and a campaign consultant based in Pennsylvania rather than Washington.

He reports having $269,953 in cash on hand. But he also reports debts totaling $242,521 -- almost all for direct mail expenses to BMW Direct and its vendors.

So that leaves him only about $27,431 ahead -- not much for a guy who's raised a total of nearly $1 million this election cycle.

Meanwhile, Malkin suggests that Murtha is in trouble since he only "scraped together a measly $119,000." But Murtha isn't running a direct mail campaign with BMW Direct, so he actually has money left over to spend on things like renting a campaign office back in the 12th District.

BMW

Fronting Costs Is Unusual For Direct Mail Firm

Andrew Tilghman | July 14, 2008, 1:14PM

We talked to a lot of people in the direct-mail fundraising business last week, trying to get a sense of how BMW Direct's business compares to others in the same field.

We've told you about how the conservative Washington political firm has a pattern of raising tons of money for longshot candidates, but spending most of that money on the direct mail campaign itself. Not much money gets back to the candidates. A lot of it goes to vendors that -- whaddya know? -- are run by people tied into BMW Direct.

When we asked BMW Direct to explain how millions could be eaten up in fees, the company emphasized that they front all the money in the first place.

"That's the risk we take every time we take on a client," said Jordan Gehrke, the firm's director of development. "If we bill a client a flat creative fee (because that's the only thing BMW makes money on, not printing, not postage, no percentages) and not enough money comes back to cover the costs of the package, then the client doesn't pay us."

That sort of no-money-down deal with candidates is unusual, according to others in the business.

"Most of the fundraising firms require the candidate or the campaign to put the money up front for the printing, postage, etc.," said Jeff Zenk, owner of Chinook Consulting, a Seattle-based political firm that does direct mail.

"And that is a huge risk to take -- especially when you are dealing with an unknown commodity," Zenk said.

That risk not may be as big for this particular firm. BMW Direct comes to the table with a proven track record -- and time-tested donor lists -- that show it can raise money for long-shot candidates by going to reliable GOP donors with nationwide mailings.

One candidate, Brian Chavez-Ochoa, a little-known Republican who tried to take on House Speaker Nancy Pelosi (D-CA) in 2006, was encouraged to get into the race by BMW Direct. Chaves-Ochoa ultimately dropped out of the race months before the election.

BMW Direct had tallied up its fees and Chavez-Ochoa's final FEC reports show he was about $13,000 in debt to BMW Direct and other mail service firms. But he told us in a recent interview that they've never seriously asked him to pay it back.

To be sure, the process of raising all that money is good for BMW Direct's affiliates.

Take, for example, Scott Mackenzie, the firm's "Client Accounting / FEC Compliance" official. He works in BMW Direct's office building in downtown Washington and shares a receptionist with the firm. And he serves as the treasurer for a handful of campaigns that work with BMW Direct.

Mackenzie has in the past two election cycles served as the designated treasurer for candidates and PACs including:

-- Deborah Travis Honeycutt of Georgia
-- Duane Sand of North Dakota
-- Russell Williams of Pennsylcania
-- Alexandria Coronado of California,
-- Bill Spadea of New Jersey,
-- Brian Chavez-Ochoa of California,
-- Charles Morse of Massachusetts
-- Black Republican PAC
-- The Madison Project

We asked Mackenzie whether he thought there was any conflict of interest in overseeing campaign accounts that cut checks to his colleagues here in Washington.

"I don't work for BMW. I work with BMW. Because that is a company that's involved in raising money for these campaigns," Mackenzie said.

"I have a close working relationship with them, but I'm not part of this company," he said in a telephone interview.

Well, it's easy to get confused about that, since the BMW Direct Web site lists him on the "Our Staff" page.

But, in fact, Mackenzie bills himself out as Mackenzie and Company, listed on FEC documents as "consulting -- compliance."

BMW Clients have paid Mackenzie and Company more than $80,000 so far this election cycle. And a whopping $43,620 came from the campaign of Deborah Travis Honeycutt, a little-known Republican from Georgia running in a Democratic stronghold in suburban Atlanta.

Mackenzie has been handling political money for a long time. He worked for Ronald Reagan's campaigns in the 1980s and later worked on Jack Kemp's 1988 bid for the GOP presidential nomination. He later signed on with Pat Buchanan in 1992 and served as Buchanan's campaign treasurer in 1996.

According to a 1996 New York Times story, Mackenzie and Buchanan's sister, Bay Buchanan, set up a company in Virginia that the campaign used to buy advertising. The company, WTS Inc., received $1.46 million from the campaign during the 1996 election cycle.

Buchanan was known as a master of direct-mail fundraising campaigns.

BMW

Fundraisers Sought To Continue After Election Seeking to Cover "Debt"

Andrew Tilghman | July 8, 2008, 2:17PM

Dr. Ada Fisher lost the 2006 bid for a North Carolina Congressional seat by a wide margin -- 34 points.

But that didn't discourage her fundraisers, BMW Direct, a Washington-based political firm.

Just a few days after Fisher lost to Rep. Mel Watt (D-NC), an official from the fundraising firm emailed the candidate about mounting a post-election money drive -- and maybe signing on for another race.

Ada,

Attached is a debt reduction letter. We still owe outside debt to vendors and this will go to pay it off.

I would also like to set up a time to speak with you about running again. With more time to mail, I think we could do even better.

Timothy

That's an email from Timothy Webster, a founder of BMW Direct, and it was provided to TPMmuckraker by Fisher. She wasn't very happy with the firm, which raised more than $400,000 on her behalf but, after taking out the costs of its own direct mail effort, only provided her campaign with about $30,000.

She also provided us with a draft copy of a "debt reduction letter" drawn up by BMW Direct.

Fisher told us she's not sure whether she ever signed off on the letter and agreed to let BMW send it out.

Read more to see the letter's full text.

Late Update: Jordan Gehrke, BMW Direct's director of development, said in a written response to a query from TPMmuckraker: "To the best of my knowledge we did no debt reduction letters for Dr. Fisher."

Read more »

BMW

Direct Mail Letter Rails Against "So-Called 'Black Leaders'"

Andrew Tilghman | July 8, 2008, 11:21AM

We've gotten our hands on an interesting mailer sent out by BMW Direct, the Washington political firm that raises campaign cash and spends most of the money on its own direct-mail efforts.

This one was sent out on behalf of Dr. Ada Fisher, a black Republican who ran for a North Carolina Congressional seat back in 2006.

It refers to the black leaders Al Sharpton and Julian Bond, the chairman of the NAACP, rallying opposition to their "liberal policies" that are "harming America."

With Fisher's photo in the top corner, the letter reads: "We need proud conservative Republicans to bring our message to the African American Community...Ada you're just what the Republicans need!"

Click on the letter to see a full-size version.

BMW

North Carolina Republican says Fundraising Firm "Screwed Me"

Andrew Tilghman | July 7, 2008, 7:33PM

Dr. Ada Fisher doesn't have much good to say about BMW Direct, the Washington political firm that raised money on behalf of her 2006 bid for a North Carolina House seat.

"They sort of -- what shall I say? -- screwed me," Fisher said in a recent interview.

BMW Direct raised more than $400,000 for Fisher during the last election cycle, but only about $30,000 made it back to her to use in her campaign against U.S. Rep. Mel Watt (D-NC). Sound familiar?

Fisher complained that she never understood where the money raised on her behalf was going. She did not know that many key vendors used by BMW Direct were owned or operated by BMW staffers.

"They make it seem like each of these people is a private entity. But as you listen more and more and you get smarter, you realize they all work together," Fisher said.

BMW Direct and its staff operate a handful of companies out of a downtown Washington office building -- data processors, donor-list rentals, mail services, etc.

Fisher said BMW Direct urged her to "hire" its FEC compliance officer, Scott Mackenzie in Washington, to serve as her campaign treasurer, as he has done on other long-shot campaigns. But she refused, she said, and had a friend serve as treasurer.

So BMW Direct raised the money on her behalf, processed it and then doled out information and cash at its own pace.

Just a day or two before FEC filing deadlines, the firm would send Fisher large files of fundraising data for her to copy and submit under her name.

"We'd fill out the FEC forms based on the information they gave us. They would just tell us: This is how much money you raised," Fisher said.

Fisher's biggest complaint was that the fraction of money she did actually receive came too late. The firm never told her how much money to expect and was unable to plan for the fall campaign.

In late September 2006, she received her first check from BMW Direct for $5,000 and several similar checks followed in October.

"By that time, it was too late," she said.

But according to BMW Direct, Fisher's case was a unique.

Jordan Gehrke, BMW Direct's director of development, agreed that the fundraising efforts for Fisher were not as successful as those of other clients.

That's because she contacted the firm later than most candidates, after the election cycle was underway, Gehrke explained. That shortened the window of time for fundraising, which is critical for direct-mail efforts.

"In Fisher's case, we started eleven months before the election. She was an attractive candidate, and we believed her appeal would enable her to outperform the usual time window," Gehrke said in a written response to questions from TPMmuckraker.

"We firmly believed in her candidacy, and we think we would have been very successful if we had had another six months. For all kinds of reasons, fortune had its say, and things did not work out as we hoped."

The fees -- which in Fisher's case took up more than 90 percent of the total money raised -- are clearly explained to all clients from the outset, Gehrke said.

"We have a very clear contract. We take a lot of time going through this stuff with our clients yo make sure they understand the process....Nothing gets paid without the clients' approval," he said in an interview.

Even if a candidate loses a race, Gehrke said, the direct mail effort is still a valuable way to build a candidates name recognition and shape perceptions about the Republican Party.

"Is it worth it? Yes. If she doesn't win this year, maybe she ends up turning it into a state senate seat a few years later and then runs for congress again," Gehrke said. "Going into a district where Republicans have not traditionally competed and having a black doctor on the ballot is a way of saying this is not your father's Republican Party. This is what building a party is about. This is what expanding your coalition is about. The point is, it has value."

BMW

New FEC Reports Show GOP Firm Still Making Big Bucks From Georgia Race

Andrew Tilghman | July 7, 2008, 2:25PM

It was a spectacular 2nd quarter for Deborah Travis Honeycutt and her campaign's direct-mail firm, BMW Direct.

We told you last week about how the conservative Washington firm was raising big bucks for the Georgia Republican but eating up almost all of that money in fees. Interestingly, Honeycutt doesn't complain about the firm's tab.

Now Reader BK points out new FEC disclosures filed Saturday showing the firm raised almost $1 million on Honeycutt's behalf during the second three months of 2008, but spent at least $736,000 of that on fees related to a massive nationwide direct-mail campaign.

That brings Honeycutt's total raised so far this election cycle to almost $2.6 million, according to the FEC report (even though she has no challenger for next week's primary election). That puts her among the biggest fundraisers nationwide in this election cycle.

Yet despite the astounding sum of cash, her campaign in suburban Atlanta remains oddly low profile.

While she raised almost $1 million during the second quarter, she spent less than $50,000 in her home state -- including a $4,962 filing fee, $6,000 on "mobile truck advertising," $3,400 in canvassing fees, $2,250 on a local public relations consultant, office rent of $167 per month and a handful of travel expenses. She also gave $5,850 to her campaign manager and husband, Andrew Honeycutt, for expenses listed as "consulting -- campaign strategy."

Honeycutt now has about $290,000 cash on hand and about $175,000 in unpaid debts for direct-mail services.

She's facing Rep. David Scott, a three-term incumbent from an overwhelmingly Democratic district.

In 2006, she lost to Scott by 38 points. Maybe she'll do better this year.

BMW

Fundraising Firm Says Big Fees Are Standard

Andrew Tilghman | July 3, 2008, 12:10PM

Raising millions in campaign cash on behalf of someone else and spending almost the same amount on the fundraising process itself is just part of the business, according to staffers at the firm BMW Direct.

The company recently explained to ProPublica that even if a candidate doesn't actually keep much of the money, it's building a "donor file."

"One of things you do when you go out prospecting is build a donor file and that costs money," Scott Mackenzie, a consultant for BMW Direct and Chavez-Ochoa's campaign treasurer, said. "Once you build a house file and start mailing to the list, that's when you start making the money."
...
"We don't feel it's right that all these candidates should run unopposed," said Mackenzie, and direct mail is the "only way if a candidate doesn't have name recognition or personal finances to run their campaigns."

"We like working with people who are long shots," Jordan Gerhke, the firm's director of development, said. If not for the firm's efforts to help little-known candidates, only "a bunch of millionaires" would be able to afford a run, he said.

BMW even recruits some of those longshot candidates. For example, ProPublica found Brian Chavez-Ochoa who briefly ran against Rep. Nancy Pelosi (D-CA) in 2006. How did this obscure candidate get into the race?

"I was asked by a group in D.C. to put my hat in the ring, so I did," he told ProPublica. That group was BMW Direct, which proceeded to raise -- and spend -- more than $220,000 on his behalf.

It may not be new, but that doesn't mean donors like it.

BMW

Georgia Campaign Doesn't Complain About Hefty Fundraising Fees

Andrew Tilghman | July 2, 2008, 7:25PM

We finally heard back from someone at the campaign of Deborah Travis Honeycutt. A couple days ago, we reported that a Washington-based fundraising group raked in more than $500,000 for the little-known Republican running for Congress in suburban Atlanta.

That money came from a nationwide direct-mail effort targeting self-styled conservatives who want to help defeat Democratic lawmakers.

But only about $17,000 of that amount was spent in her district. Most of the rest went to fees paid to the fundrasing firm, BMW Direct, and its affiliates and vendors.

That didn't seem to bother her campaign manager, Michael Murphy.

"We've been very pleased with them. BMW Direct has been able to help us raise resources and tap into a thirst in the country for the principles and platforms that she stands on," he said.

Murphy was unable to say what that campaign money raised was spent on. The three campaign staffers are volunteers, and so far the main activity has been "pressing the flesh," he said.

Murphy couldn't say exactly how much was ultimately given to the campaign. Those details were handled by Andrew Honeycutt, the candidate's husband and "campaign executive," he said. (Andrew Honeycutt has not returned our calls)

"I just work with the resources we have," Murphy said in the interview today.

"All I can say is we've been very pleased with BMW Direct."

FEC

Veterans' Charity Dumped Fundraising Group Over Exorbitant Fees

Andrew Tilghman | July 2, 2008, 7:21PM

Thanks to help from TPM Reader BK, we uncovered some congressional testimony from last year about BWM Direct, the Washington direct marketing firm that raises money for GOP candidates, among others, but doesn't give them much of it.

The House oversight committee held a hearing on December 13, 2007, about veterans' charities. The legislators heard a complaint from Bonnie Carroll, the executive director for the Tragedy Assistance Program for Survivors, or TAPS, a group that provides support to families of fallen combat troops.

Carroll had this exchange with Rep. Elijah Cummings (D-MD) at the hearing on Dec. 13, 2007. She doesn't identify the firm during the hearing, but in a phone interview with TPMmuckraker this week she confirmed she was referring to BMW Direct:

Mr. CUMMINGS. Well, Let me ask you this. How much money did you make under the telemarketer? How much money did you make?

Ms. CARROLL. If I could just defer to our CFO here.

Mr. CUMMINGS. Sure.

Ms. CARROLL. It is upset,ting to say that our income was approximately $50,000 to their total of $500,000.

Mr. CUMMINGS. Wait a minute. Let me get this right. I know I didn't hear that right. Let me get this right. They got $500,000, and you got $50,000?

Ms. CARROLL. Yes, sir, that is correct.

Mr. CUMMINGS. Jiminy Christmas.

Ms. CARROLL. And we terminated that very quickly, and it was a regrettable experience.

Carrol provided us with this data on how their deal with BMW played out between 2005 and 2007:

In 2005, the firm raised $371,375 and spent $366,375, giving TAPS a net of $5,000.

In 2006, the firm raised $187,394 and spend $176,310, giving TAPS a net of $11,084.

In 2007, the firm raised $3,187 and took no expenses out, giving TAPS a net of $3,187.

In total, BMW Direct raised $561,956 on behalf of TAPS, spent $542,685, giving TAPS a net of $19,271.

Let's do the math. That's...3.5 percent. So all those people who thought they were giving money to support widowed wives of slain combat troops, less than a nickel on the dollar actually did.

While TAPS was disappointed with how much money they ultimately received, Carroll said BMW Direct didn't misrepresent itself from the outset. "BMW was forthright," she said, and was not "raising false expectations on either instantaneous or total economic returns."

We also talked to the National Black Republican Association, which used to have BMW Direct raising money for its Black Republican PAC. Frances Rice, the group's chair, said they stopped working with BMW Direct last year. The two parties had a "disagreement over strategy." Rice declined to elaborate.

BMW

Washington Fundraising Firm Drains Some Campaign Coffers, Not Others

Andrew Tilghman | July 2, 2008, 3:17PM

After taking a hard look at the candidates who work with BMW Direct, the conservative Washington political firm that appears to keep a lot of the money it raises on behalf of other people, we've found an interesting pattern.

The firm appears to have two different types of clients.

For some candidates -- the little known longshots who are challenging incumbents -- the firm raises considerable amounts of money with nationwide mailings and spends almost all of that money on its own direct mail campaign. The monies raised by BMW go into the campaign's accounts then are quickly expended with various fees back to BMW or its affiliates, usually by the end of the same FEC reporting period.

For other candidates -- ones who are already in office and have a substantial campaign operation -- the firm appears to charge less in fees and does not allow expenses to eat up all the money pulled in. These candidates actually have some cash on hand at the end of the reporting period.

For example, take a look at Rep. Geoff Davis, the Republican from Kentucky. According to his most recent quarterly FEC report, he spent a lot of money on direct mail expenses -- $88,674.56 -- during the first quarter. But that was less than 60 percent of his total expenses. Davis also appears to have other normal campaign activity, where he is paying people in his home district for "administrative support," rent, catering campaign events, and paying mobile phone bills. (And $1,521 worth of tickets to the Kentucky Derby.)

And most importantly, while most of his campaign contributions were from outside his district -- presumably the haul from a nationwide direct mail campaign -- he actually had money left over at the end of the quarter - a net gain of $73,750.62. It's also very clear that Davis. a two-term incumbent from a district with a lot of Democrats, has an established campaign in place. That additional money added to his overall war chest for a total of $724,286.

Another client who appears to do routine business with BMW Direct is Rep. Virgil Goode (R-VA). He's actually facing a tough race this year. Goode spent $69,852 on direct-mail related expenses in April and May. But he took in a total of $136,909, including a lot donations from inside his own state. And Goode still has more than $600,000 on hand.

The upstarts don't fare as well with BMW Direct. We've already told you about Deborah Travis Honeycutt down in Georgia. There are a few others like her.

For example, Duane Sand, a little known Republican from North Dakota. His filings show he raised more than $300,000 during the first quarter and also spent more than $300,000. In the end he had less than $40,000 on hand. Almost all of his money came from out of state. And his expenditures show that more than 90 percent of his expenses were related to the direct-mail campaign, or $360,681.77 out of the total expenses of $389,501.01 spent for the quarter.

It's the same with Russell Williams, a retired Army lieutenant colonel and Republican running for office in Pennsylvania. He's challenging Rep. John Murtha (D-PA). During the first quarter, he only held on to about 13 percent of his money, raising $222,071.09 and spending $193,606.89, almost all of that money going to direct-mail expenses. Russell's campaign treasurer is Scott Mackenzie of BMW Direct.

Typically, direct-mail fundraisers take at least 30 percent of the fees raised. So even for the office holders, BMW Direct looks pricey. But at least they actually get some return on the deal. Some of those longshots aren't so lucky.

FEC

Fundraising Firm BMW Direct Takes Down Web Pages

Andrew Tilghman | July 1, 2008, 3:03PM

Are the people over at BMW Direct getting defensive?

The conservative Washington fundraising firm took down several pages from their Web site this afternoon, in particular those listing the names of people involved with the company and their list of clients.

However, we've had our eye on this firm for a while now, and we've got photos of those pages. So in case you're looking for any info about the shop, here you go (click to enlarge):

Below the fold pictures after the jump.

Late Update: BMW Direct restored their Web site pages about one day after this post.

Read more »

FEC

Experts Say Proving Violation By Direct-Mail Firm Would Be Difficult

Andrew Tilghman | July 1, 2008, 9:17AM

The Boston Globe reports again today about BMW Direct, the conservative political fundraising firm in Washington.

Despite calls for an investigation, specialists in campaign finance rules said it would be difficult to prove that a direct-mail firm violated federal rules by keeping most of the hundreds of thousands of dollars it raised on behalf of little-known GOP candidates running nearly invisible campaigns against high-profile Democrats.

The practice may fall somewhere between the jurisdiction of Federal Election Commission rules and local consumer protection statutes, which are enforced by states, specialists said.

"These people have found the loopholes," said Scott Harshbarger, the former Massachusetts attorney general who served for three years as national president of Common Cause, an advocacy group that monitors election fund-raising.

FEC

Conservative Fundraising Firm Takes Hefty Cut From Other Candidate's Haul

Andrew Tilghman | June 30, 2008, 8:28PM

During the first quarter of 2008, BMW Direct, a conservative political firm in Washington, helped raise more than $500,000 for an obscure Republican longshot running for Congress in Georgia.

But in a replay of the firm's modus operandi in a Massachusetts race, as chronicled by the Boston Globe, most of the money raised by BMW Direct in the Georgia race has come from out-of-state contributors and been spent on supposed campaign-related services provide by the firm and its affiliates.

A half a million dollars in a single quarter is a substantial haul for even well-financed, high-profile candidates, let alone someone like Deborah Travis Honeycutt, who ran for the seat in 2006 and lost by 38 points.

BMW Direct, which has a track record of raising a lot of campaign money and then directing most of it to affiliates or vendors, uses glossy direct-mail campaigns targeting conservatives across the country, urging them to chip in to help defeat liberal lawmakers and push hot-button right-wing issues.

Honeycutt lists BMW Direct's Washington office as her campaign address, and the firm's FEC compliance officer, Scott Mackenzie, is listed as her treasurer, according to her most recent FEC filing.

Honeycutt's campaign has brought in more than $1.7 million so far this election cycle. It has also spent more than $1.5 million.

For the most recent quarter, the campaign raised $620,016.72 in mostly small donations from across the country, according to her most recent FEC filing. And she spent $537,622.68 during the first quarter, most of which was to cover the costs of the direct mail campaign.

Only a small fraction of the money went to pay for a campaign on the ground. The total money spent in Georgia was $16,695. That covered expenses listed as political field work, public relations and media.

However, more than $314,000 went to BMW Direct and its affiliates who all work in the same downtown Washington office building. That's not including the other large payments to other Washington-area firms for direct mail-related expenses.

For example, Honeycutt's FEC report shows a payment to BMW Direct affiliate Century Data Systems Corp. for $7,430.85 for "data processing" on Feb. 4, 2008. The campaign cut a $23,569 check to the affiliate Legacy List Marketing for "list rentals" on Feb. 21, 2008. And a $19,544 check on March 7 for "direct mail fundraising" went to a company called Patriot Partners, which shares an office address with Legacy List Marketing.

This is the second time Honeycutt's run for the seat, and last time she also worked with BMW Direct. In the 2006 cycle, she raised $1.1 million from donors across the country. But most of the money went to BMW Direct and its affiliates and vendors. That campaign didn't get much attention and she lost to the incumbent, Rep. David Scott (D-GA) by a wide margin, 31 percent to Scott's 69 percent.

Now she's at it again. Honeycutt is outraising and outspending Scott by about four times. But the district is rated "Safe Democrat" by Congressional Quarterly.

We called the BMW Direct office this afternoon and a receptionist said there was no one available to take our call. We also put in a call down to Honeycutt's campaign in Georgia, but have not heard back from them.

FEC

DC-based Fundraising Firm Raises Campaign Cash, And Keeps A Lot of It

Andrew Tilghman | June 30, 2008, 12:11PM

The Boston Globe found an exceptionally good story this weekend nestled inside an anonymous office tower in downtown Washington.

They drilled down into the details of a company called BMW Direct, which bills itself as a "full service creative agency" for national political candidates and conservative groups.

Here's what the Globe found: the firm mounts massive nationwide direct mail fund-raising efforts, urging self-styled conservatives to contribute to help defeat "ultra-liberal" lawmakers by pushing hot-button right-wing issues such as getting the U.S. out of the United Nations, cracking down on immigration, outlawing abortion, and protecting gun laws.

And here's the catch, according to the Globe: The firm takes most of that money to pay for its own fund-raising expenses.

The Globe looked at the example of Charles A. Morse, a little-known Republican from suburban Boston who tried to run against longtime Rep. Barney Frank (D-MA) in 2006. The Washington firm took control of Morse's campaign. A BMW Direct staff member became the campaign treasurer and signed the Federal Election Commission filings for the candidate.

In short, Morse had no idea how much money was being raised -- and spent -- in his name. The firm raised more than $700,000 for Morse, mostly from donors across the country who were told defeating the Massachusetts liberal was critically important.

Ultimately, Federal Elections Commission records show, $30,000 was devoted directly to Morse's campaign expenses in the Fourth Congressional District. And Morse said he was shocked when told by the Globe how much BMW Direct had raised and spent in the name of his candidacy.

"That is craziness," he said. "I am really amazed. It is really way above and beyond what I was made aware of."

Morse didn't get enough votes in the primary to qualify for the general election, but BMW Direct kept on raising money in his name anyway.

On the firm's Web site, BMW Direct's list of clients includes the Black Republican PAC, Black Republican Freedom Fund, Republican National Hispanic Assembly, Bob Barr Leadership Fund. the RNC Senate Fund and Citizens Committee to Defeat Hillary Clinton (Project).

BMW Direct also raises money for Veterans for Victory, a Texas-based group that touts its efforts to publicize Sen. John Kerry's "disgraceful military record."

During the 2006 congressional election campaign cycle, Veterans for Victory's committee raised almost $1 million and actually donated about 3 percent of that to candidates, according to the Globe.

With people like BMW Direct on the job, it is really a surprise that the GOP is having fund- raising problems this year?