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Investigation: Warren Spent 80 Percent of Campaign Millions Outside Massachusetts

Wednesday, September 26, 2012

 

The highly-contested Senate race between Republican Senator Scott Brown and Democratic hopeful Elizabeth Warren has broken spending records for a Massachusetts contest. However, much of that money has gone out-of-state to national firms and consultants.

Of the $15,946,480 disbursed by the Warren campaign, $3,205,617, or just over 20 percent, was paid out in the Bay State, according to reports filed with the Federal Election Commission through August 17 of this year.

Economic Impact on Massachusetts

The Warren and Brown campaigns have spent a combined $22 million outside of Massachusetts in a race where jobs and the economy are the top issues on many voters’ minds. Meanwhile the state’s economy has struggled, and statewide seasonally adjusted unemployment rose slightly to 6.3 percent in August.

The $22 million Brown and Warren spent in other states could enable the hiring of 400 workers with at an average income of $54,740 – equal to the annual mean wage across all occupations in Massachusetts – according to Richard Wolff, a professor emeritus of Economics at UMass-Amherst and a visiting professor at the Graduate Program of International Affairs at the New School University.

“The spending of their incomes by these 400 newly hired workers would in turn stimulate the hiring of 2.5 times 400 or a nice, neat 1000 workers whose personal, family and community lives would be transformed in the process,” he said.

"The final impact on incomes for Massachusetts residents would be a multiple on the 20, say $60 or $70 million."

Warren has made the question “Whose side do you stand on?” a central part of her campaign in recent weeks, arguing that her opponent sides with millionaires and billionaires while she sides with the working families of Massachusetts. Yet nearly 80 percent of her campaign funds have been funneled out of the Commonwealth, substantially reducing the potential economic benefit to the voters she is trying to win over.

Victor Matheson, an associate professor of Economics at College of the Holy Cross, said the high proportion of out-of-state spending in the Massachusetts Senate race may be more a result of economics than of politics.

"The Warren and Brown campaigns are businesses like everything else," he said. "They're looking to spend their money in the most cost effective way possible."

With the overlap between state economies in the U.S., some of the money spent in other states is likely to eventually end up in Massachusetts, as with Somerville’s Grossman Marketing Group handling the printing for Mission Control, a Connecticut firm Warren spent with, while other in-state transaction, such as ad buys from local television affiliates, will be funneled out to corporate headquarters elsewhere.

At the same time, said Matheson, "The more money you spend here within the state, the greater portion of that money sticks in the state."

In Worcester, Miles Press, Inc. a printer in Central Mass for over 40 years and who has printed for numerous political campaigns said they have received little political work.

"We've done a lot in the past. This year's been kind of quiet for us," said Production Manager Jim Doray, who has been with the company for 31 years. "I don't know where it's all going."

Bill Miller, president of New England Professional Systems (NEPS), a mailing house in Holliston, said his company has worked on a number of State Representative and State Senate races and even some work for a Congressman from Rhode Island, but NEPS has never landed any of the national-level races.

"I do believe that some of the major candidates, and certainly the national committees, will select one or two major mail companies," Miller said.

"The RNC or DNC will select a printer or mailer, and they'll funnel all those political mailings to them."

Printing Industries of New England president Tad Parker said that Democratic candidates face some restrictions when it comes to choosing a printer, as they are required to work with union shops, but that there are a number of alternatives in the Commonwealth.

"Historically, the printing has stayed within the state," he said.

Where Warren's Money Went

The Warren campaign spent $266,686 on media production services with Grunwald Communications, a campaign media firm based in Washington, D.C. and headed by former Hillary Clinton advisor Mandy Grunwald.

The campaign's media buying, totaling $6.8 million through mid-August, has been handled by the Fairfax, VA company Media Strategies & Research. The company's president Jon Hutchens also has ties to Clinton, having served as a campaign staffer during her 2000 Senate run in New York.

Trilogy Interactive, LLC, with offices in California, Chicago and Washington, D.C., worked on both the Clinton and Joe Biden presidential campaigns in 2008. The company has provided $1.1 million in Internet consulting services to the Warren effort this election cycle.

Located in Mansfield Center, CT, Mission Control, Inc. bills itself as one of the top Democratic mail firms in the country. The company's website boasts of its print advertising work in 13 of the 31 seats Democrats wrested from Republicans in the 2006 elections.

"There probably is no firm in Massachusetts that could do everything we do," said Mission Control's Director of Financial Operations Bernadette Hennessy, noting that most of the other leading Democratic firms are located in Washington.

While the Warren camp commissioned $54,775 in printing work through Mission Control, Hennessy said that all of the printing and mailing is done in Massachusetts through Grossman Marketing Group in Somerville, to which the Warren campaign paid $185,660.

For direct mail services, Warren's campaign paid out nearly $2.5 million to Rapid Returns, a creative direct mail company that also works online and with social media to boost campaign fundraising efforts. The company, which operates out of San Francisco and also has a presence in Wisconsin, is headed by Heather Colburn and Mitchell Lester, both of whom worked for EMILY's List prior to becoming consultants.

EMILY's List, a Washington-based PAC focused on electing pro-choice women Democrats to office, was an early supporter of Warren and has helped raise funds for the candidate while also providing $69,105 in direct mail and related services.

The Rise of National Consultants and Strategists

A large portion of Warren's out-of-state spending went toward the campaign's media efforts, from printing and direct mail campaigns to Internet consulting services and media production and buying. Most of the companies in question have histories of working for Democratic campaigns across the country.

"A lot of these politicians now, whether it be in Massachusetts or anyplace else in the country, tend to use strategists that are located in Washington and Virginia," said Jean Publicover, president of Konjolka Media, a Boston-based media planning and buying agency.

"As more and more politicians use the same strategists, that arm that used to be done locally is really being consolidated."

Konjolka has previously worked on presidential, senatorial and congressional races, as well as issue advertising and contests for offices such as state Attorney General.

Publicover said her company has seen a decrease in the amount of political work on offer in recent years, but Konjolka is not an exclusively political agency, and its diverse client base has kept business on track.

"I do think that it's interesting that with so many politicians talking about taking jobs out of the country they don't mind taking them out of their own state," Publicover said.

"There's plenty of qualified people in the state, whether it be doing strategy or doing creative or doing media."

Perspectives on the Payouts

At the same time, Wolff pointed out, much of the money being spent by the two campaigns did not originate in the Commonwealth, coming instead from outside donors and special interest groups.

"This has very little to do with Massachusetts," he said. "Most of the money coming in is concerned about how one important Senator is going to vote."

Clark University Political Science professor Robert Boatright said he did not believe the ratio of in-state to out-of-state spending had much significance in terms of a political analysis of the race.

"It can be useful to track state-by-state expenditures for presidential candidates, since that gives you a sense of how much of a ground game they have developed, but it doesn't tell you much when you're looking at a Senate race."

Since the records only track disbursements through mid-August, the snapshot they provide is of a relatively early stage in the campaign when both candidates were investing heavily in things like polls, advertising and voter lists, which lend themselves to national spending.

The numbers may be shifting now with less than 50 days to go, but the next set of reports will not be available until after all the votes are cast. 

PLEASE NOTE: Tomorrow - GoLocalWorcester.com breaksdown how Scott Brown's campaign spent their funds - instate versus out-of-state.

 

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