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    Money Talks
    Financial Iceberg Not Sinking Moseley-Braun's Campaign

    By Dwight Morris
    Special to washingtonpost.com
    Monday, June 8, 1998

    With a little more than six months of campaigning to go, freshman Sen. Carol Moseley-Braun (D-Ill.) should be sitting on a huge war chest as she prepares to defend her seat for the first time. Instead, she is living what can only be described as a campaign finance nightmare. But she may awaken to find herself and her campaign surviving just fine.

    Key Race: Illinois Senate
    Since taking the oath of office in January 1993, Moseley-Braun has raised nearly $1.1 million from political action committees. She has also raised more than $2 million from individuals who have given her at least $200, including more than $1 million from people who do not reside in Illinois. In all she has raked in more than $4,886,749 over the past five years – more than enough, one would think, to pay off her $631,109 campaign debt from 1992 and build a comfortable nest egg for 1998.

    But nothing could be further from the truth. While Moseley-Braun is clearly dedicated to fund-raising and used a $116,871 infusion from the Democratic National Committee to pay off 19 percent of her debt in 1993, she had only $590,585 in the bank at the end of March. Respectable, but hardly impressive: Only three of the twenty-nine incumbents seeking reelection this year had smaller cash reserves.

    Digging a Financial Hole
    So where did all the money go? The heart and soul of Moseley-Braun's financial nightmare is the $1,969,655 she has spent on overhead over the past five years – not including the payments she made toward the debts listed on her campaign's 1992 year-end report. That overhead includes:

  • $230,725 for staff salaries – $44,600 of which went to her former fiancée and campaign manager, Kgosie Matthews, during the first six months of 1993.
  • $75,654 in payroll taxes
  • $137,316 for office rent and utilities
  • $83,120 for basic telephone service and another $14,711 in cellular telephone charges
  • $43,340 for computers and other office equipment
  • $119,045 for travel, and
  • $36,829 for meals unconnected to fundraising or constituent entertainment.

    Dwarfing all those payments is the $1,188,376 she has spent on lawyers and accountants.

    The Federal Election Commission, unimpressed to say the least with Moseley-Braun's 1992 accounting, launched a full audit of her campaign's books. That audit racked up bills from three accountants totaling $558,174.

    Prior to his 1996 dismissal, Moseley-Braun paid $167,628 to Earl Hopewell, her campaign's accountant throughout most of the 1992 campaign. Hopewell then sued the campaign and sought damages of $170,000, but he opted to settle when the operation coughed up another $120,000. The firms of Washington, Pittman & McKeever of Chicago and Vedolino & Lowery of Foxborough, Mass., collected $172,770 and $97,526, respectively, for helping to clean up the mess.

    Fighting Hopewell's lawsuit and dealing with the FEC audit proved to be just the tip of Moseley-Braun's legal iceberg. She filed a formal complaint against her 1992 direct-mail fundraising consultant, accusing the firm of "breach of contract and unjust enrichment" and demanded a full accounting of their outlays and receipts.

    In addition, the campaign filed suit against its landlord, Kezios Properties, seeking to remain in office space that it had occupied rent-free for five months in 1993 while trying to negotiate a new lease. Not to be outdone, the landlord counter-sued for $174,195 in unpaid rent. A court awarded Kezios Properties $56,020.

    Finally, the campaign refused to pay one of its 1992 vendors, Bonzai Engineering Consultants, $41,805 in disputed charges for computer work. While Bonsai did not pursue its claim after November 1995, the committee decided to sue, seeking damages in excess of the disputed bill.

    As a result, there was enough work to keep a dozen attorneys employed in some capacity. Since Jan. 1, 1993, the bills for all this legal wrangling have totaled $630,202.

    Spending Money to Raise Money
    Moseley-Braun has also pumped $1,704,843 into fund-raising, which accounts for 42 percent of her total spending to date. At one point or another, a dozen event planners have toiled on her behalf. The bills from Washington, D.C.-based firms included:

  • Campaign Finance Consultants: $192,949
  • Jane Scott Brown & Associates: $174,101
  • Susan Torricelli: $30,176, and
  • Fundraising Management Group: $18,500

    In Chicago, Moseley-Braun has paid four event consultants a total of $229,655, with the Haymarket Group leading the way with a $108,783 bill. She also paid event planners in Pompano Beach, Fla., Sherman Oaks, Calif., Philadelphia, and Hermosa Beach, Calif., a total of $143,167.

    Moseley-Braun has always done well bringing in donations of less than $200, and she invested more than $620,000 in direct-mail fundraising solicitations to collect roughly $1.8 million of them. She paid $512,117 to A B Data of Milwaukee as part of that effort, and Gordon & Schwenkmeyer charged $105,744 for telemarketing.

    Facing a Moneyed Opponent
    In all likelihood, Moseley-Braun will need every penny she can raise. Her November opponent, conservative state Sen. Peter Fitzgerald (R), spent $7,433,629 to win the Republican primary – $475,808 more than Moseley-Braun spent to win her seat in 1992. Of that impressive total, Fitzgerald loaned the campaign or personally guaranteed bank loans for $7,026,986. In the tradition of many millionaire candidates, he is clearly content to spend whatever it takes.

    Freed from the expense of raising money – he had raised just $399,670 from individuals through March 31 – Fitzgerald will be able to pour a much larger percentage of his funds into television and radio advertising than will Moseley-Braun. In the primary, 70 percent, or $5,200,479, of Fitzgerald's outlays went into advertising created and placed by Stevens, Reed, Curcio & Company of Alexandria, Va. In other words, he spent roughly $3.8 million more than Moseley-Braun spent on broadcast advertising during all of the 1992 campaign, when she devoted just 21 percent of her spending to such ads.

    To clinch the Republican nomination, Fitzgerald also spent $526,757 on a persuasion mailer designed by Karl Rove & Associates of Austin, Tex. –more than twice as much as Moseley-Braun spent on persuasion mailers during the 1992 campaign.

    Proving the Naysayers Wrong?
    Fortunately for Moseley-Braun, money does not always buy victory. He still has a long way to go before topping California Republican Michael Huffington, who spent more than $27 million of his own money on an unsuccessful bid to oust Democratic Sen. Dianne Feinstein in 1994. More importantly, Fitzgerald carries much of the same ultra-conservative baggage that helped sink the candidacy of Moseley-Braun's 1992 opponent, Chicago attorney Richard Williamson.

    Thus, despite a virtual Mt. Everest of financial problems to scale, Moseley-Braun's campaign may follow the pattern exemplified by last week's California primaries: unlimited funds and advertising don't necessarily mean a majority of votes, and experience does matter in voters' eyes. Once considered extremely vulnerable to a challenge from a moderate Republican, she now seems poised to weather the inevitable advertising barrage and win a second term.

    © Copyright 1998 Campaign Study Group

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