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    Money Talks

    Staving Off Gantt

    By Dwight L. Morris
    September 23, 1996

    Although he may not top the $17,957,151 he spent on his 1990 campaign, North Carolina Republican Senator Jesse Helms is well on his way to running the most expensive campaign of 1996. Between January 1, 1991 and June 30, 1996, Helms spent $8,454,155 on his bid for a fifth term – more than twice as much as the average Senate incumbent spent on his or her reelection effort during the 1990, 1992, and 1994 election cycles.

    Helms did not have to face the voters between January 1, 1991 and December 31, 1995, but that did not mean he wasn't spending money. During this five-year period, Helms pumped $6.9 into his permanent campaign operation, including $5.6 million he invested in a nationwide direct-mail fund-raising operation that periodically reached out to more than 200,000 past contributors. Solicitations by him sought to expand upon this phenomenal contributor database – simply referred to as "The List" by many in the direct-mail business.

    Basic campaign overhead expenses during the off-years amounted to $612,314, including $312,363 for staff salaries and payroll taxes. Travel expenses, including $4,901 paid to corporations for the use of their private jets, amounted to $38,521. The campaign invested $30,310 in computers, software and other office equipment. Basic telephone service cost $26,855; cellular telephone service added $3,710. The campaign also paid $25,000 in fines for violations of federal election laws and $127,021 in legal bills.

    The hefty legal bills were occasioned in part by the need to deal with federal charges that the Helms '90 campaign had conspired with officials of the North Carolina Republican party to violate the civil rights of the state's black voters. According to the Justice Department, the Helms campaign and the state Republican party illegally mailed 125,000 postcards to registered voters in 86 predominantly black precincts, informing these potential voters that they were not eligible to vote and warning them that they could face criminal prosecution if they tried. While maintaining that it had no knowledge of the mailings, the Helms campaign tacitly accepted responsibility by agreeing to sign the Justice Department's consent decree outlining the infractions.

    Arthur J. Finkelstein & Associates of Irvington, N.Y., and Public Opinion Strategies of Alexandria, Va., collected $25,856 and $20,000, respectively, for conducting and analyzing off-year polls. Carolantic Communications, an ad-placement firm, received payments totaling $47,000 during the first two years of the election cycle.

    As in past campaigns, Helms entrusted the management of this massive off-year undertaking to firms long associated with the National Congressional Club – initially formed in 1972 by Carter Wrenn and attorney Tom Ellis to help Helms pay off the debts incurred during his 1972 Senate campaign (Ellis' law firm also handled the dispute with the Justice Department). Between January 1, 1991 and December 31, 1994, Computer Operations & Management collected $615,673 for maintaining Helms' contributor database and processing the returns. Discount Paper Brokers collected $182,397 just for supplying the paper used in the mailings. Campaign Management Inc. received payments totaling $1,272,530 for coordinating the campaign's various fund-raising activities and to cover the cost of day-to-day operations of the National Congressional Club, including office rent, staff salaries, and other overhead expenses. PEM Management, a firm owned by Wrenn, collected $400,415 for writing the direct-mail solicitations.

    However, in 1994, Helms abruptly ended his political partnership with Wrenn and Ellis. Told that their services would no longer be required (the dispute appears to have arisen because Ellis and Wrenn, who sit on the board of a private school, both voted to suspend-with-pay a teacher who just happened to be Helms' daughter), Wrenn and Ellis changed the name of the National Congressional Club to the National Conservative Club and took the entire operation with them. That move deprived Helms not only of the services of PEM Management, but also of the services once provided by Computer Operations & Management, Discount Paper Brokers, and Campaign Management.

    Despite the fact that much of the campaign's leadership changed, Helms' election-year outlays have largely mirrored his off-year spending. During the first six months of 1996, Helms invested another $930,561 in his direct-mail fund-raising effort, which accounted for 60 percent of the $1,555,562 he spent. Basic overhead expenses amounted to slightly less than $312,000, or roughly 20 percent of the total outlays during this six-month stretch.

    Lacking any primary opposition, Helms spent $212,184 to produce and air television and radio commercials through June 30, which accounted for 14 percent of his 1996 spending. Getting a jump on his general election rematch with Harvey B. Gantt, who is black, Helms' early commercials revisited the racially divisive themes that carried him to victory in 1990, accusing the former Charlotte mayor of favoring racial quotas in hiring. The ads also accused Gantt of opposing voluntary prayer in the public schools and of favoring the extension of health insurance benefits to homosexual partners.

    Including the off-year payments to Carolantic Communications, broadcast advertising outlays account for only 3 percent of Helms' spending for the first five and one-half years of this election cycle. Nevertheless, while Helms devoted just 28 percent of his 1990 budget to broadcast advertising, that still amounted to more than $5 million. With $2,013,707 in the bank at the end of June and a constant fund-raising operation working to bring in more, one can expect a similar closing push from the incumbent in the weeks ahead.

    A proven fund-raiser who managed to spend $7,761,711 against Helms in 1990 – 57 percent of which was invested in television and radio commercials – Gantt will not go quietly.

    In the primary, Gantt faced millionaire physician and businessman Charles Sanders, the former CEO of Glaxo Inc. Gantt eventually took 53 percent of the May 7 primary votes, but the bitterly contested fight for the Democratic nomination forced Gantt to spend $2,715,153, all but $475,970 during the first six months of 1996. While overhead had consumed $523,319 of his budget through June 30, and fund-raising had eaten up another $893,778, Gantt sank nearly $900,000 into his pre-primary broadcast advertising effort.

    With $946,061 in the bank at the end of June, and a fund-raising operation fueled by a nationwide network of Democrats who would love to get rid of Helms, Gantt should have more than enough money to remain competitive. Given the high proportion of Helms' money that is siphoned off to pay for direct-mail solicitations, Gantt should come close to matching the incumbent's advertising outlays down the stretch.

    This article originally appeared on the PoliticsNow Web site.

    © Copyright 1998 The Washington Post Company

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