Private consultants see huge election profits

Some of the biggest winners in the most expensive election in U.S. history weren’t the politicians, but the private consultants who brought in tens of millions of dollars in fees for advertising, fundraising and other campaign activities.

In the presidential race alone, the two main media firms working for President Obama and Republican challenger Mitt Romney earned profits for handling more than half a billion dollars of campaign advertising, according to disclosures and ad tracking data. Neither company is required to report how much it received in compensation for that work, but their combined cut could easily be $25 million or more at standard industry rates.

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The presidential campaign produced financial winners on both sides of the aisle.

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Other big earners were the digital strategy companies, telemarketing firms, air charter services, pollsters and consultants who saw a spike in business in a presidential contest that cost at least $2.6 billion. The surge in spending was a financial boon for everyone from the specialized producers that make political commercials to the local television stations that broadcast them.

“Those numbers are eye-popping,” said campaign finance lawyer Kenneth Gross. “This was the first presidential election since Watergate where both candidates rejected federal funds and competed to gather private contributions. It meant there were no holds barred in spending on the general election.”

The expenditures come to light in the midst of a post-election debate about the outsize role of money in 2012, which featured the first presidential contest impacted by court decisions that allowed corporations and unions to spend unlimited funds on elections.

Many of the biggest recipients of money on both sides have close ties to the candidates and do not have to reveal how much they made from the campaign because they are employed by private consultants.

Much of Romney’s operation, for example, appears to revolve around a close-knit group of insiders at American Rambler Productions, which took in more than $160 million through mid-October, records show. The company — named in honor of the American Motors car championed by the candidate’s father — provides compensation to key Romney advisers Eric Fehrnstrom, Beth Myers, Stuart Stevens and Russell Schriefer.

Federal Election Commission records, which do not disclose salaries, show that the Romney campaign paid American Rambler $131 million for broadcast ads, $9.7 million for online costs, $7.7 million for production, $5.1 million for strategy and $2.4 million for communications.

One person familiar with the campaign’s operation, who spoke on condition of anonymity in order to discuss financial arrangements, said the Rambler advisers were compensated under a negotiated contract and that none received commissions based on a percentage of media purchases. The person declined to provide further details.

Another top vendor, Targeted Victory, received $64 million for online advertising and was co-founded by Romney digital director Zac Moffat.

The Romney campaign’s fundraising was handled by a pair of limited-liability corporations, SJZ and Victory Group, both controlled by finance chairman Spencer J. Zwick. The campaign paid the companies more than $22 million over the course of the race; the person familiar with campaign operations said the money included “compensation to over 60 finance consultants.”