Clinton spends a bundle on consultants

I’ve seen a few “where did she go wrong” pieces about the Clinton campaign this week, with various observers, who are convinced that the race for the Democratic nomination is over, hoping to identify the Big Mistake.

I still think this is premature. But if we assume the worst about Clinton’s chances, it’s probably fair to say some of the campaign’s spending decisions look questionable in retrospect.

“We didn’t raise all of this money to keep paying consultants who have pursued basically the wrong strategy for a year now,” said a prominent New York donor. “So much about her campaign needs to change — but it may be too late.”

The high-priced senior consultants to Mrs. Clinton, of New York, have emerged as particular targets of complaints, given that they conceived and executed a political strategy that has thus far proved unsuccessful.

The firm that includes Mark Penn, Mrs. Clinton’s chief strategist and pollster, and his team collected $3.8 million for fees and expenses in January; in total, including what the campaign still owes, the firm has billed more than $10 million for consulting, direct mail and other services, an amount other Democratic strategists who are not affiliated with either campaign called stunning.

Howard Wolfson, the communications director and a senior member of the advertising team, earned nearly $267,000 in January. His total, including the campaign’s debt to him, tops $730,000.

The advertising firm owned by Mandy Grunwald, the longtime media strategist for both Mrs. Clinton and Bill Clinton, the former president, has collected $2.3 million in fees and expenses, and is still owed another $240,000.

Consider this tidbit: Clinton paid “her communications director twice as much in one month as Obama paid his communications director in a year.” For a campaign that’s experienced financial trouble, and whose message has struggled to connect of late, that’s rather astounding.

Kenneth P. Vogel presented the numbers this way:

Hillary Rodham Clinton started the year flush with cash, but by the beginning of this month, she’d blazed through most of it — spending $11 million on ads, $3.8 million on messaging guru Mark Penn and $1,300 at Dunkin’ Donuts, to name just a few expenditures — leaving her campaign woefully unprepared for an extended battle for the Democratic presidential nomination.

About $15 million — or more than half of the New York senator’s January spending — went to a cadre of high-priced consultants. Though much of the cash went through the campaign media buyer for ad time, the considerable payments to outside consultants mark an increase in a pattern that has irked campaign insiders. From the beginning of the race through the end of last month, Clinton paid the consultants $33 million — nearly one-third of the $105 million spent by the campaign.

Let’s also not lose sight of the practical effect of these expenditures. Clinton effectively ceded the 10 contests following Super Tuesday — all of which she lost by wide margins — in large part because she couldn’t afford to compete in them, and have resources left for Ohio, Texas, and Pennsylvania.

Four years ago, John Kerry’s consultancy fees were pretty exorbitant, and I’d hoped we’d never see a repeat of the situation. And yet, here were are.

One of these cycles, the consultancy racket will fall apart. It won’t come soon enough.

This is the campaign that should kill the consultancy racket. The difference between Kerry and Hillary is that he won the primary. She has paid an exorbitant amount for advice which I personally feel has been horrible. Imagine how much better the strategy could have been if the strategists had taken $8 million instead of $33 and freed the rest up for something that actually helped the campaign in their hour of need. If this doesn’t put a stake in Penn’s reputation then I don’t know what will.

  • Well- the strategy took her pretty far. She beat all the candidates except Obama. If Obama wasn’t in the race she would have won. Of the ten or so Dems that started the race, she came in second. That’s not bad.

  • No wonder they could work a free month every once in a while.

    Candidates should work like tv networks and commission pilots which they may or may not purchase. A little competition would work wonders. Don’t buy pigs in polks as they say although I don’t know what the means exactly.

  • Hillary Rodham Clinton started the year flush with cash, but by the beginning of this month, she’d blazed through most of it — spending $11 million on ads, $3.8 million on messaging guru Mark Penn and $1,300 at Dunkin’ Donuts, to name just a few expenditures — leaving her campaign woefully unprepared for an extended battle for the Democratic presidential nomination.

    I have to ask … just how bad does Mark Penn have to screw up before they can stop calling him a freaking guru? I long to see the day he’s referred to as “discredited hack” or “ridiculously expensive failure” Mark Penn.

  • Speaking as an advertising professional, running a small but spirited creative firm in Southwest Virginia, I have just one question:

    How can I get me some of that Clinton money?

  • It’s time for a law that denies consultants the opportunity to profit from their placement of advertising. Do that one thing and you drive out almost all of the slimeballs.

    Looking at the Hillary campaign, one cannot fail to be reminded of how the French prepared for World War II.

  • What a shameful waste of money. I know of a lot of essential and worthy non-profits that have been hurt by government cuts and the recession that would be ecstatic to receive a small percentage of Penn’s take.

  • Hi – I’ve tried googling Mark Penn; keep on getting references to Hillary’s campaign or directly to his company’s web site.

    What IS it exactly about him that had earned him the title ‘guru’? On the sole basis of Bill Clinton’s successful campaign?

  • About half way down CB’s first link (LATimes) you’ll find this killer quote and several more intersting grafs:

    Each campaign has spent heavily on mailings and fundraising. But though Obama holds his share of high-end events, much of the money fueling his campaign has arrived via the Internet.

    The Net. That’s the nub of the hub. When Barack talks “from the ground up” he is not bloviating. Any book written to explain this election cycle must have this as its central theme. Dean may have been the first one there, but Barack might just be the first one to ride the Web into the Oval Office.

  • Hannah – I agree. The amount of money that flies around is just sickening to me. Knowing that candidates all over the country will be spending 100s of millions combined so they can be elected overwhelms me with sadness.

    They can raise millions in just a week or even in a few days or even overnight in some cases. Incredibly sad, really.

  • Its not just the consultancy racket… its also the add-on fees these consultants make from advertisements (especially TV spots).

    However, its been easy to hate Senator Clinton’s advisers from the very get-go. The only way she could have picked a sorrier bunch would have been to hire Bob Shrum.

  • Don B said:

    The amount of money that flies around is just sickening to me. Knowing that candidates all over the country will be spending 100s of millions combined so they can be elected overwhelms me with sadness.

    And yet, the amount of money being spent on the US election is next to nothing compared to what the S. Koreans routinely spend on theirs (with a much smaller country and population). iirc S. Korean politicians spent over $1 billion on their last election cycle.

  • Well- the strategy took her pretty far.

    Only winning matters. The strategy failed. Just like Mitt’s.

  • if this is how she manages her campaign budget, how would she manage the national economy?

    This is the question no one seems to be asking. And I wonder about something else: If Mark Penn is her idea of competency, what caliber of people would she appoint to key cabinet positions if elected? Thinking about it makes me shudder.

  • Only $1,300 on Dunkin Donuts? Campaigns usually run on coffee, maybe they should have had a few more cups. Then they would be the ones “fired up and ready to go!”

  • Like CB, I had hoped that Kerry’s campaign doing the exact same thing (substituting Schrum for Penn) would put an end to this nonsense.

    Or maybe I had hoped that when people saw how Trippi wasted bazillions of net-fueled donations on extravagances in Iowa, it wouldn’t happen again. (Oddly, I think the buying snow shovels just in case was a Trippi thing, too.)

    But no. Old Democratic habits die hard, apparently. Maybe the reason the lesson didn’t take is that both the primary loser and winner (Dean and Kerry) made similar mistakes.

    Maybe after Kerry, Dean and Hillary, this will finally come to an end.

  • On February 22nd, 2008 at 11:29 am, Ken said:
    if this is how she manages her campaign budget, how would she manage the national economy?

    This is the question no one seems to be asking. And I wonder about something else: If Mark Penn is her idea of competency, what caliber of people would she appoint to key cabinet positions if elected? Thinking about it makes me shudder.

    This attack strikes me as a bit unfair, or at least unrealistic, unless you are willing to claim that the country has been better off with Republican rule for most of my lifetime.

    So we would not have been better off with a President Gore because he ran a lousy campaign? We would not have been better off with a President Kerry because he ran a lousy campaign (and had the exact same financial issues)? Or a President Dukakis? Or Mondale?

    Maybe Dean is a lousy DNC Chair (with that obviously failing 50 state strategy and all) because his campaign went broke despite setting internet fundraising records?

    Almost by definition (they lost) the Democrats have run worse campaigns than the Republicans; does anyone really think the Dems couldn’t have run the country better than the Republicans have?

    There are a lot of differences between running a campaign and running a country. Unless you are a Republican, where the perpetual campaign is all you know and so you try to superimpose it on running a country. That of course has been the root of the problem.

  • Kos has a post up noting that what all that Clinton money bought was a conventional swing-state-only, 50%+1 campaign, one that would do nothing to build the party or pave the way for future victories. This kind of “strategy” was what gave us the Bush administration and the GOP congress.

    If my favorite thing about this coming election cycle will be kicking the R’s out of the White House, my second favorite thing has been watching Mark Penn do a face-plant. May he never again run a national campaign.

    Hillary herself, in a lot of ways, is a pretty impressive person. However, she hired these guys and signed the checks. Just about by definition she deserves whatever she’s getting from them. Personally, I’m just glad that, unlike 2004, none of my cash is going to these consultants (I didn’t contribute to Hillary’s campaign).

  • To repeat something I said yesterday, because it is even more obviously relevant now:

    Beginning in all future cycles, new party rule – call it the Inverse Consultant Primary. Anyone who hires Bob Schrum, Mark Penn, Donna Brazile, Jim Jordan, Joe Trippi (did I miss anyone obvious?) is automatically disqualified (and hopefully early enough that no one sends contributions for them to misspend in their own enrichment).

  • Meanwhile, Barack Obama needs just 40,000 more donations to put him at 1,000,000 total donors to his campaign.

    Help put him over today, everyone! A $10 contribution is a real deal, compared to the $7500 plus interest each one of us owes for our share of the war in Iraq.

    Spread the news, too!

  • The whole consultancy thing reminds me of Rove saying that he had “THE math” to win the 2006 elections. For some reason, campaigns superstitiously believe that there are certain people who can pull rabbits out of hats and turn elections based solely on micro-targeting, opposition research and catchy expressions. There is some truth to that but campaigns still largely succeed due to plain old hard work in building a solid and competent organization, spending money judiciously and mobilizing a large group of people on the ground. It’s not magic.

    While Hillary is throwing money at Mark Penn to come with magic messaging incantations to turn the election around, Obama has set-up enthusiastic boots-on-the-ground operations in states that Hillary hasn’t even given any thought to. That’s what’s so impressive about Obama is he seems to know how to get things done.

  • Democrats seem to have a way of losing control of their message by hiring the same hacks over and over again, and then losing over and over again. It isn’t so much the definition of insanity as it is the definition of stupidity to do the same thing over and over and expect a different result. Would you go to a surgeon who loses all his patients? Bad airline pilots are self-extinguishing. Why aren’t incompetent political consultants?

    I would have thought Clinton was smarter than buying into he same old same old. The DLC hacks who have infiltrated the party apparatus and have made a comfortable living losing elections have to go. Howard Dean is working wonders, but obviously there is much left for him to do.

  • I think people on this site episodically generated much better (and more diverse and bubble-free) advice about what she needed to do, for, what’s that word again?, free.

  • Hillary’s campaign is one that is bogged down in the top heavy style that relies on far too many consultants. Most of them have proved worthless, including her beloved Mark Penn.
    This is why many are wondering if this is her managing style, what kind of executive would she be?
    The stories of money mismangement and overspending, the infighting, the lack of planning, makes people wonder if she is as competent as her image projects.
    At the same time she has been out manouvered by the so called rookie. Obama is spending alot but, it is going for ads and his on the ground organizing. He has run a very professional, efficient campaign with a lack of drama.
    Running a campaign is a very good indicator of the kind of white house and executive someone would be.

  • Well- the strategy took her pretty far. She beat all the candidates except Obama. If Obama wasn’t in the race she would have won. -Haik Bedrosian

    I would credit name recognition, not strategy. It was the strategy that killed her, or Obama probably wouldn’t have had an opening in the first place.

  • Well- the strategy took her pretty far. She beat all the candidates except Obama.

    Haik – First off, she came in a distant third in Iowa. That’s why that was such a crushing defeat. It wasn’t just that she lost; she lost BIG. And that was the big election they were counting on and the thing that helped Barack the most.

    Secondly, she had HUGE name recognition and got lots of free publicity in the media about how she was going to win. Coming in second isn’t any good when months of polls said you were going to cruise to first. So the idea that these guys led her to second would make sense if she was a no-name who did well. The fact that they took the best known candidate and spent all that money and didn’t win doesn’t say much.

    And finally, I’ve always believed that this election was Hillary v. Not Hillary. Just like in 2004, it was Dean v. Not Dean, and Dean looked so good because all the Not Deans were splitting the same voters before Iowa; I think that if it wasn’t for Obama, it would have been someone else. They might not have beaten her, but they would given her a good fight. The main difference between Dean in 2004 and Hillary now is that Hillary had more supporters which have carried her further. But that isn’t due to anything these overpaid consultants did. That’s because her supporters really like her. Unfortunately for her, the Not Hillary group was also sizeable, and Barack has been able to add to it big time.

    So overall, I have to say that these guys were WAY overpaid. This election was Hillary’s to lose and I think they lost it for her.

  • Beyond the amounts that were spent, the thing that is so shocking about this story is that Hillary was in financial trouble by IOWA!

    Not a single vote has been counted yet and your campaign has already blown through $100 million and is in financial straits? WTF?

    They pulled this in NY too. Blew $30 MILLION on a campaign against nobody.

    Obama, please send her packing quickly. Hillary CAN’T be put in charge of the federal budget. All her political leech friends would bankrupt the country while accomplishing nothing, OR they would charge 5X as much for everthing that they did accomplish.

  • ***$1,300 at Dunkin’ Donuts***

    There’s a joke about “why there’s never a cop around when you need one” that has to do with donuts. Seems to me that the same thing applies to the Clinton campaign now….

  • Governing and campaigning may be different animals, but how one manages a campaign — and chooses advisors does say something about how a candidate might govern. Clinton’s management of her campaign shoots her “ready on day one” line right out of the water.

  • Steve:

    Hillary Clinton’s campaign spending should not be a surprise to anyone.

    Have you forgotten about this piece this piece from the NYT back in 2006?

    Everything that’s happening now was foreshadowed then. $30 million blown on her Senate re-election campaign — more than anyone else that year — and she had no real competition.

    Key quote:

    Throw in $17 million in advertising and fund-raising mailings, and what had been one of the most formidable war chests in politics was depleted to a level that leaves Mrs. Clinton with little financial advantage over her potential rivals for the 2008 Democratic presidential nomination — and perhaps even trailing some of them.

    Granted, some people thought this was a clever way for her to build a secret launching pad to the White House, but I never did. I thought it showed a penchant for lavish spending and a misguided expectation that there would always be more if/when she needed it.

    $13,000 in flowers might not seem like a lot compared to the $30 million total. But take a minute and try to imagine how many flowers that would actually be, because it’ll give you a glimpse into the mindset you’d need to have in order to spend like that.

    It’s not the mindset of a lean and agile on-the-ground campaign team.

  • Does anyone know how much of Obama’s spending has gone to consultants? — David, @24

    I don’t know about any other comparisons but I think this one (from LATimes, via CB):

    Clinton paid “her communications director twice as much in one month as Obama paid his communications director in a year.”

    might be an indication of Obama’s overall philosophy. It seems to dovetail with everything else he’s been doing in this campaign — take care of the pennies (or delegates from small states) and the dollars will take care of themselves (and the accumulated individual delegates will, eventually, match in numbers those from the big states)

  • I’m sure the highly paid consultants earned this idea:

    And, you know, lifting whole passages from someone else’s speeches is not change you can believe in, it’s change you can Xerox. And I just don’t think…

    OBAMA: Come on.

    (CROSSTALK)

    CLINTON: No, but, you know, but, Barack, it is.

    Because, you know, if you look — if you look — if you look at the YouTube of these videos, it does raise questions.

    If evoking laughter is what these consultants are paid to do, then I think job well done!

  • Clinton suffers from the same affliction that haunts most corporations: branding experts deliver branding excellence, but there’s no connection to whether or not it accomplishes anything. Her experts focused almost exclusively on media and ‘messaging,’ while Obama has focused on operations, face-to-face, etc. If Clinton loses, her gurus will somehow come out of it smelling like roses, with lots of money in their pockets, and then move on to ‘help’ the next candidate…just as the consultants in the corporate world do…

    It fascinates me how there’s no direct connection between ‘effort’ and ‘results’ in how gurus are remunerated and judged.

    I’ve written a bit about this at DIM BULB if you’d like to check it out: http://dimbulb.typepad.com/my_weblog/2008/02/its-good-to-be.html

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