Monday, March 26, 2012

A look at the campaign finances in Ohio's CD-9

We were having a discussion the other day about the upcoming November election pitting incumbent Democrat Marcy Kaptur against Republican Samuel 'Joe the Plumber' Wurzelbacher and Libertarian Sean Stipe in Ohio's newly-drawn 9th Congressional District.

Eventually the discussion boiled down to money. The group had few expectations of Stipe, but questions about Wurzelbacher and Kaptur.

Will Wurzelbacher be able to compete financially with Kaptur?

The general consensus was no.

Will Wurzelbacher's celebrity status as 'Joe the Plumber' lead to more contributions - or will his status be enough to overcome Kaptur's fundraising?

Again, the consensus of the group was no. In fact, with the district leaning even more Democratic as a result of the redrawing, the bigger question of the group was who would be Kaptur's replacement.

But I wondered ... just how much of an advantage would Kaptur have financially? So I decided to look at the campaign finance reports for the three. The most recent reports are the pre-primary filings which went through Feb. 15th.

Marcy Kaptur, Kaptur for Congress

Since Ohio lost congressional seats, two Republican and two Democrat districts were combined, so Kaptur faced long-time Cleveland-area incumbent Dennis Kucinich in the Democratic primary. Her fundraising and expenditures clearly reflect that this was her most costly primary challenge.

She started 2012 with just over $700,000 cash on hand. As of the end of 2011, for this election cycle, she'd raised $277,553.01. Not surprisingly, $216,000 of that was from political action committees (PACs) and other candidates.

When a candidate receives a contribution that is more than $200, they must itemized the donation and include the contributor, address, employer and occupation. As of her year-end report, Kaptur had received just under $14,000 in non-itemized contributions. That means that her reported $52,600 in individual contributions were all over $200. Not surprisingly, there are a number of individual contributions from lawyers, union employees as well as employees of companies impacted by her work on the all-powerful Appropriations Committee and its subcommittees of defense, agriculture and transportation/housing.

Her pre-primary report shows her raising another $89,002 but spending $372,684, clearly reflecting the television advertising she purchased.

As of the pre-primary, she'd raised $366,555.01 and spent $479,993.42 this election cycle, leaving her with $422,910.87 on hand.

Another requirement of the Federal Election Commission (FEC) is that donations of $1,000 or more received after the pre-primary filing but before the election must be reported within 48 hours of receipt. This is called the 48-Hour Notice Report. Between Feb. 21 and March 5, Kaptur reported another $104,300 in donations via these reports. And remember, that was just contributions over $1,000.

The only unusual donation listed, at least to those of us in the Toledo area, is a $500 contribution from a Clear Channel government affairs employee in Washington, DC. This is unusual only because of her long-time refusal to come on the local Clear Channel talk radio station 1370 WSPD.

Her expenditures were routine for a campaign - postage, phone, campaign fundraising expenses, printing, yard signs, etc. She spent just under $275,000 to a single firm for 'campaign advertising' which is probably the television buys, though it could include other types of ads (radio, newspaper) as well.

Kaptur did hire 10 campaign field workers throughout the new district and, as of the pre-primary report, had paid out $26,000 to them at a stipend of $2,500/month.

Samuel Wurzelbacher, Joe for Congress 2012

Not surprisingly, Samuel 'Joe the Plumber' Wurzelbacher didn't raise anywhere near the amounts that Kaptur did. This is partly due to his status as a first-time candidate versus hers as an incumbent, as well as his lack of a high-profile primary race.

Wurzelbacher's campaign is Joe for Congress 2012. As of the end of the year, he'd raised just over $50,000. Unlike Kaptur, the majority of his donations - 76% - come from donors giving under $200. He had only one itemized donation from within the district but did receive $2,000 from the Frost for Congress campaign (Westlake, OH) and $2,500 from the Move America Forward PAC.

As of the pre-primary, Wurzelbacher raised another $11,219.40, with 51% of that being from itemized donations (over $200), but most of that was the result of a single $2,500 donation from Herman Cain. The Western Representation PAC also donated $2,500. Wurzelbacher did not file any 48-Hour Notice reports.

Wurzelbacher's campaign finance filings do show some internal issues, perhaps due to his first-time candidacy status. Wurzelbacher was originally listed as the campaign treasurer. On December 14, the campaign filed to name Nick Marvet the treasurer. But on Feb. 24th, the FEC sent a 'failure to file' notice because the campaign had not filed the pre-primary report by the deadline. On Feb. 28th, the campaign filed again naming Wurzelbacher the treasurer.

Wurzelbacher's expenses show some interesting items. His campaign hired and paid several different fundraising firms a 15% fee for the donations they garnered on his behalf. This is a standard amount for political fundraising.

He also paid a campaign manager $9,500, less than what Kaptur spent on her field reps.

Wurzelbacher's largest expense on his reports is his own salary - roughly a third of his total expenditures so far. He's paying himself $3,842 bi-weekly (after taxes) for a total expended as of the pre-primary of $20,210. As this is a salary, he's also paying taxes and unemployment insurance on himself.

While this is certainly permissible, it is unusual and many donors tend to think twice about contributing to candidates who are paying themselves a salary from the campaign funds.

There was one other filing item that was of interest. On March 9th, the FEC requested more information from the campaign. The first financial report showed a starting balance of $7,000. The FEC requested the documentation for that amount. The Joe for Congress 2012 campaign was given until April 13th to respond with the information.

On Saturday, as I was doing the research, I did send an email to the Wurzelbacher campaign to ask about the change in treasurer as well as the salary. Again, it is certainly permissible for a candidate to pay himself a salary, but I wanted to know if donors were being told about the salary when, or prior to, their donating.

I had planned to publish this post Sunday morning. However, I received a note back from the campaign on Saturday afternoon telling me they'd forwarded my request for more information to the right party.

I understand how campaigns are, so I waited and on Sunday morning, I received a reply from a gentleman indicating he was the general consultant for the campaign, telling me that "Joe has been on a missions trip lately and he does not campaign on Sunday's, so he's been tough to get a hold of recently. We will get you an approved statement first thing in the morning for your blog post."

So again I waited. At 8:53 a.m. I received the following:

Thanks for your patience on this. To clarify, the monthly salary is $3842/month.

Also, here is a statement from Joe in regards to your two questions below:

"I'm a blue-collar worker, just like the majority of voters in the 9th District. As a common working man, I don't have a bank account with millions of dollars that I can pump into a campaign. Currently, I'm campaigning full time, and the FEC has provisions in place that allow everyday Americans to run for office and be provided a reasonable salary. This monthly salary has been reported upon in the press and been approved by the FEC."

"Since before the primary, we had made the decision to revamp and relaunch our campaign. We are currently in the middle of that process and are excited about where the campaign is headed."

As I replied to the campaign, this doesn't answer the question: Are donors told that the candidate is receiving a salary from the funds raised either when, or prior to, donating?

Additionally, while the campaign states that Wurzelbacher is being paid $3,842 per month, his filings show otherwise, as I'd detailed in my email to them. The following is a list of the salary payments:

$1,000 on 11-10-11
$3,842 on 12-15-11
$3,842 on 12-31-11
$3,842 on 1-2-12
$3,842 on 1-3-12
$3,842 on 2-7-12

While the statement provided doesn't explain, it does address the issue of the treasurer and all campaigns, but especially first-time ones, go through organizational transitions.

But when your campaign finance reports show that you're paying yourself $3,842 twice each month, responding that you're taking $3,842 once a month requires further explanation.

So, I itemized the payments for them in an email and asked them to clarify. When I get a response, I'll share it here.

Sean P. Stipe, Sean Stipe for Ohio

Sean Stipe is the Libertarian candidate in OH-9. He was uncontested in his primary and did not meet the monetary threshhold for filing with the FEC.

Summary

It is not surprising that Kaptur gets higher-dollar donations, and more of them, than Wurzelbacher. She is an incumbent and sits on the appropriations committee. The question is whether or not her pre-primary support for a highly-contested primary race will carry over into the general election.

Will her supporters and donors look at the district, which is now even more favorable to a Democrat, and decide she doesn't need the money - at least, not as much as other candidates in swing, or targeted, districts?

Will they think that Wurzelbacher is a serious threat to her?

Will Wurzelbacher's celebrity status be more of a challenge than the money her last opponent, Rich Iott, brought to the race?

While Wurzelbacher didn't need a lot of money for the primary, will he be able to capitalize on his celebrity and raise anywhere near the quarter of a million that Kaptur has on hand?

Will the fact that he pays himself a salary negatively impact his fundraising?

***
SIDE NOTE:


Over the weekend, several of us were talking and I asked about the salary issue. While one person didn't have a problem, the other five did. But the one who didn't have a problem with it wanted to know if he was paying all his withholding taxes. I informed her he was - and unemployment insurance as well.

She then questioned whether or not Wurzelbacher would be able to file for unemployment after he loses.

It's a good question and one I don't have any answer to. If you know, please share.

End Side Note
***


The next filing date for the candidates is April 15th for their quarterly report ending March 31st.

1 comment:

Bytor said...

I used to be in the 9th but was drawn out. I would vote for Joe, of course, over Kaptur.

But let's face facts, here. He doesn't have a prayer. In 2010, a very well financed candidate, in a huge Republican wave, didn't even come close to beating Marcy.

The district has since been redrawn to be even MORE Democratic. So, without the financing, and without the wave carrying him along, how does anyone expect him to compete?

They don't. And that's going to hurt his fundraising, as well.

This district was drawn to pack Democrats. It will be in Democrat hands for the next 10 years. Bank on it.

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