Journalism in the Public Interest

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Today's Reporting

Breaking on the Web: July 1, Second P.M. Edition

3:54 pm EST

New White House Iraq Report: 15 of 18 Benchmarks Satisfactory - AP
Witnesses to ’88 Kansas City Fire Say Fed. Investigator Pressured Them to Lie - Mike McGraw, The Kansas City Star
Inside IndyMac’s Irresponsible Lending - Michael Hudson, Center for Responsible Lending
Another Congressman Goes Through K Street’s Revolving Door - Nick Penniman and Ted Roach, American News Project
McCain Heads to Colombia, Where Adviser Has Ties - Larry Rohter, The New York Times
DoJ Presses UBS to Name U.S. Clients - Evan Perez, The Wall Street Journal
Video Shows Woman Dying on NYC Hospital Floor While Staff Watches - David B. Caruso, AP
Watchdog Group Files Complaint About Sen. Coleman’s Cheap Rent - Andrew Tilghman, TPMmuckraker

Breaking on the Web: July 1, P.M. Edition

2:49 pm EST

Pakistani Ambassador: U.S. Diplomacy in Muslim World a ‘Complete Failure’ - Jon Ward, The Washington Times
Inmate Killing Highlights D.C.’s Jail Troubles - Derek Kravitz, Washington Post
Court Dismisses Syrian Rendition Suit - Alan Feuer, The New York Times
Pentagon Announces Charges in USS Cole Bombing - AP
McCain Has Taken Contradictory Stances on Energy - Noam N. Levey, Los Angeles Times
RAND Releases Delayed Iraq History - Michael R. Gordon, The New York Times
Iraq Sues Companies Over Oil-for-Food Kickbacks - Christine Kearney, Reuters
After Deaths, U.S. Inspects KBR’s Electric Work in Iraq - James Risen, The New York Times
Is the GOP Cooking the Books To Avoid Recession Until After Election Day? - James Galbraith, Mother Jones
Parties Wrangle over Applicants for Citizenship in Election Year - Tom Curry, MSNBC
Pentagon Fights EPA on Hazardous Waste Cleanups - Dina Cappiello, AP
Oil and Gas Drilling on Public Lands Reaches New High - Democracy Now!
Medical Helicopter Crashes Stir Concern - Barry Meier, The New York Times
GAO Pushes For More Coast Guard Contracting Oversight - Gautham Nagesh, NextGov
Follow-on to Spooky Total information Awareness? - Jonathan Landay, Warren Strobel and Nancy Youssef, Nukes & Spooks
FBI’s Expansion of Face-Scan Technology Worries Privacy Advocates - Erik Sofge, Popular Mechanics
First Responders Recruited as Terror Watchers - Bruce Finley, The Denver Post

D.C. Fundraising Firm Takes Big Cut of Contributions

by Paul Kiel, ProPublica - July 1, 2008 11:26 am EST

If you want somebody to raise hundreds of thousands of dollars on your behalf and spend almost all of it, the Washington, D.C. direct-mail fundraising firm BMW Direct is the company for you. That, at least, is the track record laid out in yesterday's Boston Globe piece, which focuses on the firm's habit of consuming through fundraising costs more than 90 percent and as much as 96 percent of the money it has raised for Republican candidates and committees.

Credit: Flickr User: Tracy O/BMW Direct Case in point is the doomed candidacy of Charles Morse, who ran against Rep. Barney Frank (D-MA) in 2006. Despite the fact that Morse dropped out after winning only 145 votes in the Republican primary, BMW Direct continued raising money through its mail solicitations. 75 percent of contributions to Morse's campaign came from small donors out of the state, and the overwhelming majority listed retired as their occupation, according to CQ Money Line.

$200,000 of the more than $700,000 the firm raised for his campaign came after he'd dropped out of the race. When contacted by the Globe, Morse was "really amazed" at that total -- and the fact that the firm had continued raising money in his name after he'd dropped out. Unwitting donors to his defunct candidacy contacted by the paper were no happier. 96 percent of contributions to Morse's campaign were consumed by the firm or its affiliates and contractors.

It's not the first time the firm has come under scrutiny. Earlier this year, Roll Call reported ($) that 95 percent of the $1.1 million donated over the past four years to Freedom's Defense Fund, a political action committee operated by the firm, has gone to expenses. To both the Globe's and Roll Call's queries, representatives from the firm explained that a lot of money is spent early on in a campaign compiling a donor list. One firm representative faulted Morse for dropping out to reap the benefits. A firm executive told Roll Call that Freedom's Defense Fund would be spending "a lot more money" on actual political activities this November. We shall see. TPMmuckraker reports on another of BMW Direct's clients, Deborah Honeycutt, who was trounced by 38 points in 2006 bid for Georgia's 13 District seat and suffered from a similarly high overhead. Honeycutt has refused to comment on her dealings with the firm.

It's hard to tell just how unique BMW Direct's practices are, but there is a precedent. The Washington Post reported last summer on a number of political action committees run by Linda Chavez, a former Reagan administration official, and her family. "Of the $24.5 million raised by the PACs from January 2003 to December 2006, $242,000 -- or 1 percent -- was passed on to politicians," the paper reported. Chavez closed down the groups a few months later.

While it's clear that spending such a high percentage on costs is beyond the industry norm -- a campaign finance expert at the Campaign Legal Center told the Globe that the average direct-mail fundraiser takes about 30 percent to cover costs -- doing so doesn't seem to violate any rules. Which means that it's up to reporters to highlight such practices so that donors might make an informed decision on whether to give.