Mitt Romney consultants benefit from campaign

February 27, 2012

Spencer J. Zwick, who started his career a decade ago as a 22-year-old aide to Mitt Romney, now serves as the Republican presidential candidate’s finance chairman.

But Zwick isn’t employed by the campaign. Instead, he works through SJZ Inc., a Boston company he formed that has taken in nearly $5 million for “fundraising consulting” from Romney this election season.

Zwick is among a close-knit group of senior Romney advisers who have created or work at firms that have collected millions of dollars in consulting fees from the campaign. In some cases, they also are bringing in money from the super PAC aiding Romney’s run for the White House, according to recent campaign disclosures.

Although many candidates hire firms created by former staff members, the extent of the Romney campaign’s reliance on such companies is unusual for a major presidential bid, experts say. Many of the firms Romney uses are run by former aides from his 2008 campaign.

The arrangement not only benefits several of those close to the former Massachusetts governor but also makes it harder to determine how he is spending his donors’ money, because salaries and other details about outside operations are kept under wraps.

Romney campaign officials, who spoke on the condition of anonymity, said their use of consultants is no different than that of numerous other candidates, including President Obama.

Most political campaigns hire consultants to produce ads, run polling and perform other specialized work. Obama, for example, has a clutch of longtime advisers, such as David Axelrod, who run outside consulting shops that do business for the campaign.

But a number of Republican political strategists with no preferences in this presidential contest said Romney’s heavy use of consultants for fundraising is particularly rare in a national race.

Romney has paid Zwick’s firm $4.6 million for fundraising consulting, for example, compared with the $75,000 Obama reported for the same type of expenditure.

“The bottom line is that a lot of consultants are making a lot of money from Mitt Romney, with mixed results,” said one unaffiliated GOP campaign finance lawyer, who spoke on the condition of anonymity to be candid.

A more conventional approach was used by George W. Bush, who kept most of his top aides in house and even required famed GOP political adviser Karl Rove to sell his consulting shop before coming on board.

“That was the model that Bush followed, that [Robert J.] Dole followed,” said Michael Toner, a campaign finance lawyer who worked on the Bush team. “It was seen as cost-effective. You have really smart people working directly for the campaign who are 100 percent focused on the presidential race. Consulting costs can be minimized, and you have exclusive control.”

Many campaign strategists nevertheless say they remain impressed by Romney’s organization, which has outraised the rest of the GOP field and has been helped by a well-funded super PAC. The campaign has employed uncommon fundraising strategies such as telethon-type events, in which chief executives and other wealthy supporters compete to raise as much money as possible for the campaign in a single day.

“They’re doing some very intriguing things, including some that are being used at this level for the first time,” said Dan Morgan, a congressional fundraising consultant in Northern Virginia. “If I look at who’s raising the most money and who’s spending the most money, it’s obviously working for them. Overall, they seem to be doing it very well.”

Compared with 2008, when Romney used $42 million of his own money to keep his effort afloat, he has run a notably leaner campaign with less overall spending. But this race has turned out to be tougher than envisioned, forcing the campaign to burn through most of the $64 million it has raised.

Romney has spent $300,000 more on fundraising efforts than Obama has and has brought in less than half as much money, records show. He has relied primarily on wealthy donors who have already given the maximum allowable contributions for the primary, and he has had trouble raising smaller donations.

Zwick and other Romney consultants did not respond to requests to comment on their work. One senior campaign official, who spoke on the condition of anonymity, defended the use of consultants with close connections to the campaign and disagreed that the practice was more pronounced this year.

“We are very happy with our fundraising totals,” the official said, adding that “Obama is the president and is able to raise more money in coordination with the” Democratic Party.

A big chunk of Romney’s outside operation is housed 20 miles north of Boston in an office building in Beverly, Mass., which is listed as the address for four firms doing work for the Romney campaign, disclosure records show.

The largest is American Rambler — named for the automobile that Romney’s father helped develop — which several former aides created in early 2011 to handle advertising and other media work. Staff members include senior adviser Eric Fehrnstrom and several others who worked on Romney’s 2008 presidential campaign, according to records and news reports.

American Rambler has taken in $15.4 million from Romney for media buys, polling and other costs through Jan. 31, including about $11 million for broadcast ads and $1.5 million for “strategic consulting,” according to disclosure documents filed with the Federal Election Commission. As with all such vendors, no information is revealed about salaries or other internal costs.

That lack of information has prompted watchdog groups to criticize campaigns for their use of consultants.

“It makes it very difficult to follow what a campaign is spending money on and who is doing the fundraising,” said Bill Allison, editorial director at the Sunlight Foundation, which favors greater disclosure of political spending. “If there are important people working for this firm who get favors down the line during a President Romney administration, you will never know about that.”

The campaign declined to say how much Rambler employees are paid. “American Rambler handles RFP’s media buys, so the majority of the money it receives is for that purpose,” the senior campaign official said, referring to Romney for President.

Red Curve Solutions, another Romney vendor at the Beverly address, has been paid about $973,000 for software and compliance costs, records show. The firm was founded in 2008 by Bradley Crate, who worked for Romney at the Massachusetts governor’s office and during the 2008 campaign.

Two other firms in Beverly have billed the campaign a total of more than $200,000 for charter jet services, and both were created by former Romney aides, records show.

Romney has devoted about 15 percent of his expenditures through January to items labeled as consulting, which do not include advertising, mailings and other pass-through costs, according to a Washington Post analysis of FEC records. That compares with about 10 percent for his GOP opponents — Newt Gingrich, Rick Santorum and Ron Paul — and 4 percent for Obama, the analysis shows.

Some of those consultants also work with Restore Our Future, a pro-Romney super PAC that was founded by three former Romney aides and is allowed to raise and spend unlimited amounts of money to help the candidate. The campaign and the super PAC are forbidden to directly coordinate with each other but are free to share vendors and raise money together.

Many of the consultants closest to Romney have histories with him that stretch back to the governor’s mansion or earlier. Zwick, for example, began as a personal assistant to Romney at the 2002 Winter Olympics in Salt Lake City, then went on to become a senior gubernatorial aide, co-founder of an equity fund with one of Romney’s sons and, in his late 20s, a top fundraiser for Romney’s 2008 campaign.

Zwick said in a recent statement that Romney’s fundraising operation is the only one that can go the distance. “We know there is a long road ahead and we will remain steady,” he said.

Staff writer T.W. Farnam and research editor Lucy Shackelford contributed to this report.

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