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    Money Talks

    A Diversionary Tale

    By Dwight L. Morris
    August 19, 1996

    Most campaign finance reform efforts are targeted towards decreasing the influence of special interests and leveling the playing field between incumbents and challengers – last year's gift ban being good example of this.

    Yet, there is one aspect of financing rarely gets public attention: the diversion of campaign funds towards other efforts by candidates who are running for re-election. It's a problem worth focusing on – as the following comparison between the campaigns of Majority Leader Dick Armey (R-Texas) and two-term Rep. Cynthia McKinney (D-Ga.) suggests.

    Through June 30, Armey and McKinney had spent $517,834 and $472,389 on their respective 1996 reelection bids. From the amounts spent, it would seem that both were engaged in equally difficult contests. But nothing could be further from the truth.

    On December 13, 1994 – just five weeks after her election to a second term – McKinney heard a three-judge federal panel rule that the Georgia legislature had violated the U. S constitution when it specifically set out to craft her majority-black 11th District. Once the District map was redrawn, McKinney's constituency changed from one that was 64 percent black to one that was 33 percent black. Virtually overnight, she moved from the list of safest House seats onto the list of most vulnerable incumbents. Even before she could begin worrying about potential Republican opponents, she had to dispatch three white men in the Democratic primary, including state senator Ron Slotin.

    McKinney went right to work. Having spent nothing on television advertising and just $21,433 on radio commercials during the 1994 campaign – a modest total that represented only 9 percent of her spending – McKinney poured $207,750 into pre-primary television and radio commercials created and placed by William B. Fletcher Consulting of Nashville, Tenn. She paid the Parker Group of Birmingham, Ala., $39,560 for phonebanking. She spent $43,870 on campaign mailers and flyers which, among other things, urged voters to "annoy Newt Gingrich" by returning her to Congress. She spent $6,147 on yard signs and posters; $1,643 on T-shirts and caps; and $1,592 on bumper stickers. In all, McKinney spent $316,487 on direct voter contact, which accounted for 67 percent of her total spending for the first 18 months of the election cycle.

    Armey's campaign to date has been the polar opposite of McKinney's. Representing a district in which more than 60 percent of the registered voters are Republicans, Armey has never received less than 68 percent of the vote in any of his five reelection campaigns. In 1994 he secured 76 percent of the votes, and in 1996 is facing Democrat Jerry Frankel, a urologist with no prior political experience who's publicly stated his intention to spend no more than $20,000 on the race.

    Frankel has been so invisible that last week Armey's campaign manager, Jim Wilkinson, told a local reporter "I don't know him. I don't think our office has even heard of him yet." The Texas primary was held on March 12. Wilkinson, a 25-years-old with little more political experience than Frankel, also was quoted as saying, "It's really great working on this campaign. I get down to Austin a lot and get to hear some really good music."

    Nevertheless, through the first 18 months of the election cycle Armey reported spending $517,834. Not surprisingly, virtually none of that money has been spent on actual campaigning.

    Armey has poured 78 percent of his money into fundraising. He has paid Dan Morgan & Associates of Arlington, Va., his fund-raising direct-mail and event consultant, $89,856, which amounts to 17 percent of his total spending. Orion Direct, a fund raising direct mail house in Great Falls, Va., has received $241,093 for printing, folding & mailing the fund-raising appeals. Preferred Lists of Falls Church, Va., has been paid $33,977 for providing the names of potential donors to the campaign.

    This prodigious effort is particularly impressive when compared with his fund-raising outlays for 1994 and 1992. For all practical purposes, he has already matched his spending on direct-mail solicitations during the entire 1994 election cycle, when he paid his direct-mail vendors and list management firms $242,363 and $40,091, respectively. In 1992, he spent just $46,467 on such appeals.

    Through the first 18 months of the 1996 cycle, Armey has held four fund raisers in the Washington D.C. area to attract political action committee donations. The Capital Hill Club has been the sight of three events: a $7,567 reception in May, 1995; a $4,105 reception this past February; and a $5,367 event in May. B&B Caterers of Washington, D.C., was paid $5,086 for catering the fourth event in February, 1995. He has only held one event in Texas-a much more modest $2,658 reception at the Alolphus Hotel in Dallas in August 1995.

    The effort has been well worth it. Armey has already raised $907,080 since January 1, 1995-$444,853 from PACs, $191,224 from individuals who've anted up $200 or more, and $271,002 in smaller, individual contributions. While his campaign bank account had a healthy $627,869 at the start of 1995, by June 30, it had climbed to $1,072,544-a 71% increase.

    Basic overhead accounts for 16 percent of Armey's spending to date, with salaries and taxes totaling $28,880 and $20,843 respectively. He has spent just $2,530 on actual campaigning, $2,500 of which was his filing fee. In contrast, a single purchase of "gifts for supporters" cost the campaign $2,838.

    Freed from the need to campaign, Armey has already written a check to the National Republican Congressional Committee for $15,000. He has pledged another $250,000 to the NRCC, although the check had not been written as of June 30, the cutoff date for the most recent Federal Election Commission filings. The Christian Coalition has received $1,000.

    In essence, Armey has turned his campaign treasury into a giant slush fund from which he funds a number of activities virtually unrelated to his own reelection. That is something none of the reform measures proposed over the past several years attempt to deal with.

    This article originally appeared on the PoliticsNow Web site.

    © Copyright 1998 The Washington Post Company

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