On July 2, the State Elections Enforcement Commission voted to dismiss complaints against twenty-one 2020 Democratic campaigns for state representative and senate candidates over “campaign-in-a-box” concerns raised by auditors, but SEEC officials indicate they will be updating campaign regulations to address the issue in future elections.
Campaign-in-a-box is a term used to describe when a campaign committee will turn over most or all of their taxpayer-funded citizen election program grant money to a consultant who then takes care of practically everything – mailers, radio and television advertising, sub-vendors, door-knocking, etc. It’s a common practice and generally two or three consultant companies will rake in millions during election season by contracting with numerous campaigns at once.
But the use of consultants can obscure what should be a transparent process: essentially, the consultant company makes the purchases and bills the campaign committee, but it is ultimately the consultant who has the receipts and knows how much money went where and for what purpose.
“It’s been an ongoing issue,” said SEEC spokesman Joshua Foley. “It’s basically vendors who take a large portion of a campaigns grant money and exercises a lot of control over it. When people get grants, we carefully scrutinize every contribution to make sure they’re qualified for a grant but then at the other end they have to spend that money and its public funds, so we have to scrutinize how money is being spent.”
“The campaign treasurer has a legal obligation to report it, but the consultants don’t have that legal obligation, so that’s part of our problem,” Foley said.
Furthermore, with a single consultant managing numerous campaigns simultaneously, there exists the potential for CEP money dedicated to one candidate who may have an easy race to be used for another candidate who may be facing a more difficult election.
“That is a concern,” Foley said. “The real issue is that when the documentation isn’t provided, what happens is opaque, so it could be anything.”
A SEEC investigation released in 2019 that looked into nine 2016 campaigns in which most of the CEP money went to consultants “concluded that the patterns of inadequate documentation and disclosure extend beyond a single committee and result, in large part, from the committees’ interaction with consultants.”
The investigation noted that the use of campaign consultants had “ballooned” from $2.8 million in 2014 to $4 million by 2016. The nine campaigns investigated received $726,806 in CEP funds and spent $738,109 on consultants.
The SEEC found the contract language with consultants was vague and not only didn’t meet the standards for disclosure, but also resulted in one campaign being charged wildly different rates for the same vaguely worded service. In one instance, a campaign was charged more than $10,000 for “direct field management,” while another campaign was charged only $1,000. In some cases, SEEC found the consultant company would unilaterally raise their fees or tack on additional costs that drove up their bill.
In other instances, a consultant had billed the campaign committee more for the purchase of mailers than the consultant actually paid. Former Rep. David Arconti’s campaign was billed $2,136 for mailers, when SEEC’s investigation revealed the consultant only paid $1,300. In some other cases, the consultant paid more for mailers than was billed to the committee, essentially painting the whole campaign finance process a giant mess with little rhyme or reason.
Although SEEC took no formal action against the campaign committees, they did issue a declaratory ruling regarding secondary payees. Ultimately, it is the campaign treasurers who have the most to worry about in these cases, as they are the party responsible for overseeing taxpayer dollars.
In this latest case, the SEEC looked at twenty-one campaigns that spent a combined $489,352 on campaign consultant companies Blue Edge Strategies run by long-time campaign consultant Michael Farina; CCM & Company run by Christian Murray, and finally Nutmeg Strategies run by Greg Gerrantana.
Of the audited campaigns, CCM received the bulk of the contracts, consulting on thirteen campaigns, followed by Blue Edge, which consulted for five. Farina’s previous consulting company, Vinci, was named as one of the consulting groups in SEEC 2016 campaign investigation to which committees had failed to properly document payments.
Acting SEEC Executive Director Clare Kimball indicated that although auditors had referred these 21 campaigns for investigation due to campaign-in-box concerns, previous answers provided by campaign treasurers to the auditors had proven sufficient.
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