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Campaign ads enrich advisers

Although commissions are standard practice for ad agencies handling everything from soap to soup, the commission system has grown increasingly controversial in the political advertising business.
Joe Trippi, former campaign manager for presidential hopeful Howard Dean, at a speech Monday in San DiegoLenny Ignelzi / AP

To Joe Trippi's way of thinking, television advertising, and lots of it, was as good a way as any to sell Americans on a candidate named Howard Dean.

Last June, seven months before voters in Iowa would begin selecting the Democratic nominee for president, Trippi, Dean's campaign manager, gave the go-ahead for a $300,000 wave of TV spots touting the former Vermont governor's candidacy. It was just a warm-up. In mid-August, Dean took his ads to President Bush's home state, Texas, with a $100,000 buy. Two weeks later, the campaign spent $1 million on commercials in six states, including Wisconsin and Washington, even though the primaries in those states were half a year away.

And so it went. As contributions to Dean flowed in over the Internet, some of the money flew right back out into advertising. When Dean's momentum began to stall before the Iowa caucuses on Jan. 19, Trippi poured on the ads with an intensity that shocked rival campaigns. With time on Iowa's most popular TV stations sold out, Dean's campaign resorted to buying spots on Iowa's WB affiliates, whose audience is barely above voting age.

Trippi resigned from Dean's faltering campaign when Dean brought in Roy Neel, a former top aide to Al Gore, to be chief executive. Trippi's departure came when Dean was sinking in the polls and had burned through most of his $41 million war chest.

It also raised a question: Did Trippi's aggressive ad strategy pose a conflict of interest?

Unique among presidential campaign managers, Trippi enjoyed a dual role. He was both the head of Dean's campaign and a partner in Trippi, McMahon & Squier (TMS), the Alexandria firm that still handles Dean's media buying and has been associated with his political career since 1992.

Trippi has said repeatedly that he received no salary for his year-long role in Dean's campaign. But that is not to say he left Dean's campaign empty-handed. Under an arrangement that is traditional in political campaigns, Trippi's firm receives commissions each time Dean's campaign buys a radio or TV ad. Through the end of January, according to one person close to the campaign, these commissions had added up to about $700,000 for TMS.

Built-in rewards
Although commissions are standard practice for ad agencies handling everything from soap to soup, the commission system has grown increasingly controversial in the political advertising business. As a flood of political donations slosh into local and national campaigns, commissions give media advisers a built-in incentive to spend more of a candidate's money on commercials. The compensation formula, in effect, rewards consultants for increasing the cost of elections, which in turn fuels the candidates' constant hunt for donations.

By advising a candidate to spend more on commercials, a media adviser -- or, in Dean's case, the campaign manager -- can increase his or her fees. That, says James A. Thurber, a professor of political science at American University who studies the political consulting business, "is a conflict of interest in my book, and a serious one."

Peter Fenn, a veteran media consultant, says Dean's free-spending ways "have to raise questions. They went through $41 million with only two states voting. And they got, what, 300,000 votes? Do the math on that."

Trippi, in an interview, reacted vigorously to the suggestion that his role presented any conflict. He points out that neither he alone nor his partners at TMS made spending decisions unilaterally. Major decisions, such as large ad buys, were put before a committee of half a dozen senior staff people, including Dean and Bob Rogan, his deputy campaign manager.

"I could have been outvoted every time," says Trippi, who is now working for MSNBC as a commentator. "From the very beginning, I made it very clear that I did not want to know about, nor did I care, what the financial relationship between the governor and [TMS] was. . . . As far as I was concerned, I did this campaign because I believed in the governor. Money was the furthest thing from my mind. I told the governor money was not important to me, and I didn't want to know about it."

According to Federal Election Commission records filed by Dean, TMS received $7.1 million in 2003, most of it money devoted to ad buys. In January, according to news accounts, the firm handled an additional $6.25 million in advertising in Iowa and New Hampshire, the first two states to vote.

Although the records do not disclose how much the firm received in commissions and fees, one source close to the company said it worked on a 7 percent commission, at the low end of a range that can go as high as 15 percent. As of last week, the Dean campaign owed TMS about $400,000, this person said.

The connection between Trippi and TMS is the sort of arrangement "that has always angered me," said Nancy Todd Tyner, a Las Vegas-based campaign organizer who is president of the American Association of Political Consultants. "If you have a media guy running the campaign, it's only prudent that the campaign question every media expenditure." Dean's campaign "would have to ask, why are we choosing TV ads over direct mail, or TV over grass-roots [organizing]? If I were the candidate, I would certainly want to explore it, and I'd be justified in doing so."

She adds: "It's interesting that the media guys are always pushing do TV. You never hear the media people say, 'I was up all night thinking about how we need to do another piece of direct mail.' "

Under Trippi's direction, Dean started his commercials months before any other candidate and kept at it longer and in more states than his rivals. Each time an opponent came on the air to match Dean, Dean seemed to increase his pace.

The media director of another campaign, who spoke on the condition of anonymity, vividly recalls the run-up to Iowa: "We were relatively toe-to-toe with them until the last three weeks, when they started throwing money at Iowa stations. They were buying everything. . . . There really was no rhyme or reason to it."

The heavy ad buying, however, did little to help Dean, who finished a distant third in Iowa behind Sens. John F. Kerry (Mass.) and John Edwards (N.C.). After his distant second-place finish in the New Hampshire primary Jan. 27, Dean suspended media purchases to conserve money for a last stand in the Feb. 17 Wisconsin primary.

'Just ludicrous'
Trippi defends the media strategy by saying it was part of a bold campaign to introduce Dean to voters and emphasize his credentials as an outsider. "We knew exactly what we were doing when we spent $100,000" in Texas, he says. "We raised $1 million because we had the guts to go on [TV] against President Bush. Those ads paid for themselves. . . . We were doing something totally and completely different. For people to suggest there was some other motive is just ludicrous."

Dean's early ad blitz was reminiscent of a similar blizzard of TV commercials aired in early 1996 by President Bill Clinton's reelection campaign. Clinton had raised a then-record amount of money through such aggressive fundraising tactics as inviting contributors to stay in the Lincoln Bedroom in the White House. The campaign justified the ad expenditures as a preemptive strike against Clinton's Republican challengers, but many suspected that the ads had little political effect and merely lined the pockets of a cadre of media strategists who were advising the president.

Thurber, the university professor, says abuses of the commission system tend to arise more often in congressional races than in presidential campaigns. Congressional elections often pit well-financed incumbents against lesser-known, and poorer, challengers who have little chance of winning; during the last election cycle, Thurber identified 39 such incumbents. "One could argue that all the [incumbents'] ads in those races are being run by people who know they're going to win by a wide margin, and thus were unnecessary," he says. "It doesn't seem very rational."

Bill Carrick, a Los Angeles adman who handled the recent failed presidential campaign of Rep. Richard A. Gephardt (Mo.), says that working for a presidential candidate can be "a lousy economic proposition" given the amount of work involved, the likelihood of having to drop other clients and the relatively low chances of winning. The odds of financial success improve, however, if a candidate lasts through the primaries and wins the nomination. "If you're successful, you can end up being as famous as James Carville and get to go around giving speeches," he said.

Media consultants such as Carrick say that although some disreputable practitioners may pad bills, other forces work against such behavior. Because ad strategists tend to make more money the longer a candidate stays in a race, it is self-defeating to spend wildly early on, they say. Moreover, winning is the best calling card of all: A successful campaign tends to burnish a media consultant's reputation and put the consultant in demand for the next election cycle.

Indeed, the success of just a few dozen firms has enabled consultants to fight off periodic attempts to scrap the commission system and go to salaries and other conventional forms of compensation.

"If you want to get the best media consultant, this is the way it's done," said Tyner, the head of the political consultants organization. "The choice is to pay his fee or lay awake at night worrying that he's going to work for your opponent."