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The Hiroshima hustle; yet another way to fleece campaign contributors.


"Dear Friend, I am writing to you from Hiroshima,' begins the emotional letter from Rep. Edward Markey. "Here, 40 years ago, the nuclear arms race began. It is a brilliant summer afternoon as I look out my hotel window. But earlier this morning, as I visited Ground Zero, I was overwhelmed by the enormity of what happened here.'

Markey, the author of the nuclear freeze bill that passed the House of Representatives in 1983, goes on to say that having come "face-to-face' with the effects of nuclear war he now believes "more firmly than ever that we must either reverse this insane arms race, or likely in this generation see the end of life as we know it.' The letter, written last year on the stationery of Hiroshima's All Nippon Hotel, implored potential donors to use the political system to stop this madness by helping elect members of Congress committed to freezing the arms race.

Eighty-three-year-old Eula McNabb of Dallas, Texas agreed with Markey's pitch. She doesn't remember whether it was this lertter or one of several others Markey sent her that prompted her last year to mail a $100 check to Markey's political action committee, the U.S. Committee Against Nuclear War. She felt strongly that only by contributing money to campaigns could she help defeat well-financed candidates who, she says, "get their support from the military industrial complex.' Since there are so many good candidates out there, she turned to the PAC "so they can decide which candidate is worthy.'

But Ed Markey's PAC didn't spend Eula McNabb's $100 on helping candidates. In fact, over the course of its life, the U.S. Committee Against Nuclear War has spent only $40,000, 3 percent of the $1.3 million it has raised, on such efforts. That's better than Markey's other PAC, the National Committee for Peace in Central America, which has given only 2.8 percent of its $388,000 in receipts to political candidates. The 50,000 people who have contributed to the two PACs over the past four years were also promised that their money would be used to lobby legislators, train anti-arms race candidates, conduct polling and finance canvassing and phone banks. Those promises weren't kept either.

In fact, the strange thing about these PACs is that at first glance even Markey doesn't seem to benefit from the arrangement. What's the point of a PAC that doesn't give out money?

Mailing lists.

The $1.7 million in contributions have enabled Markey to build a bank of names of people who not only support his cause but have responded to a personal entreaty from him. He is, as one direct mail specialist put it, "sitting on a pretty valuable commodity.' He has tapped it to run for re-election to the House and to run for the U.S. Senate in 1984--a campaign in which he made a point of rejecting PAC money as corrupting and tied to special interests. Markey and the aides who ran the PACs also discussed how the lists could give him national notoriety, even how they might form the base for a long shot bid for the White House.

What Markey did was perfectly legal. Indeed, Markey's PACs are most troubling because to a large extent they merely embody the worst qualities of many other PACs. They show a disregard for the reasons people give to causes and ultimately may end up hurting the causes they claim to promote.

The name game

By mid-1982 the call for a nuclear freeze had energized a powerful, broad-based movement not seen since the Vietnam war. Starting a year earlier in several small Massachusetts towns, the effort had quickly spread from town to town, state to state, engaging thousands of volunteers. By January 1982 seven state legislatures, eight city councils, and 50 national and international organizations had joined the call for a bilateral halt of nuclear weapons production. By the middle of 1982 the effort had reached the U.S. Congress, with Ed Markey of Massachusetts leading the campaign in the House of Representatives. He had joined the fight fot he freeze early on, even though his congressional district, filled with high-tech industry, was dependent on the arms buildup for jobs. He vigorously lobbied other members of Congress to support his freeze legislation, which he called "the final option. We're either going to live together or die together. All other issues are only a footnote in history.' To help the cause, on June 9, 1982, only three days before the New York City freeze rally that drew 750,000 supporters, Markey established the U.S. Committee Against Nuclear War.

The PAC went to the direct mail firm of Richard Parker and Associates, which had a reputation for being idealistic, liberal, and savvy. Within a year the PAC had raised $113,000 and given out $8,000, or 7 percent, in contributions to candidates. Even giving 7 percent of receipts to candidates may seem strikingly low, but it's not unheard of for the first years of a PAC's existence. These early years are spent "prospecting,' that is, building a list of loyal donors by testing out other organizations' lists. To do this they work that essential arena of modern political coalition building--the list market. Sometimes operating through a list broker and sometimes trading directly with other organizations, the U.S. Committee Against Nuclear War has swapped its lists with dozens of other liberal groups and candidates, including Physicians for Social Responsibility, the Union of Concerned Scientists, the Nation and Progressive, and others. After doing a test mailing to see if a borrowed list would give a good return, Richard Parker and Associates wold "roll out,' mailing to the entire list. As contributions came in, the donors' names were added to the "house list.' According to direct mail theory, as this list of proven givers grows, forming a solid base to support the PAC, the portion of receipts going to candidate contributions is supposed to increase.

Markey's PACs, however, didn't increase their contributions to candidates as the house lists expanded. In fact, as their receipts grew, the proportion going to candidates decreased. By the 1983-84 election cycle, the U.S. Committee Against Nuclear War was spending only 3 percent of what it took in and so far in the 1985-86 election cycle it has spent only $250--despite having raised $270,000. Even after the freeze faded as an issue in mid-1983, the fundraising continued. To generate contributions, the committee shifted to other issues such as the MX missile and Star Wars. In November 1983, Markey created his second PAC around another hot issue, U.S. involvement in Central America. The National Committee for Peace in Central America gave about 5 percent of its receipts to candidates in 1984 and has made no contributions since then. His PACs' contribution record is "among the worst I've ever heard of,' according to Larry Sabato, University of Virginia professor of government and the author of a book on political consultants and direct mail. The average for PACs like Markey's is 15 percent.

Over the past four years, the two PACs have spent $1.25 million on direct mail, a price tag that includes both high consulting fees as well as the actual cost of producing and sending hundreds of thousands of thick, stylized direct mail packages. After sending more than 20 mailings, they have created a hefty file of names: 17,000 for the Central America PAC and 33,000 for the arms control PAC.

But so much money was plowed into the list-building operation that even though they were raising hundreds of thousands of dollars, the PACs often didn't have enough money to pay the rent. Consequently, they had to take out loans, sometimes from a bank, sometimes from the PACs' treasurer and counsel, William Oldaker, and once from a lobbyist for several clients with important business before the Energy and Commerce Committee, on which Markey serves. This March, Paul S. Quinn, a Democratic party fundraiser and lobbyist who helps run the PACs, loaned the arms control PAC $500. Quinn and his law firm, Wilkinson, Barker, Knauer and Quinn, represent U.S. West, a holding company for several telephone firms, all of which have a special interest in Markey, who is jockeying to take over as chairman of the telecommunications subcommittee next year and who introduced six telecommunications bills this session. Markey says the loan is permissible because it went to the PAC rather than to him, but another person familiar with the PAC said the loan was accepted for another reason: "They were desperate to find money--from wherever they could.'

Old ladies and preachers

While the mailing list machine was operating at full throttle, the fundraising letters, with the approval of Markey's top congressional aide Peter Franchot, promised the donations would be used to help elect candidates who supported the goals of the committees. One recent solicitation from the Central America committee, for example, pledged to "earmark your contribution to be used to support those congressional candidates who favor peaceful solutions to social issues.' Another said, "Most importantly, the U.S. Committee [Against Nuclear War] has been active at the polls, supporting candidates for the House and Senate who agree with our views.'

They did, of course, spend some money on political campaigns--using some intriguing criteria. In the 1983-84 election season the PACs, ostensibly dedicated to stopping the arms race and war in Central America, contributed to almost half the Democrats on the Energy and Commerce Committee. The beneficiaries included some, like Cardiss Collins and Jim Florio, who had no serious opposition. Although they gave mostly to liberal Democrats, the U.S. Committee Against Nuclear War also gave to conservative Jamie Whitten, who voted for an amendment to weaken Markey's freeze legislation.

Well aware that the politically concerned would not give to a PAC that wasn't contributing to campaigns, the solicitation letters, some written by Markey aides and some by Richard Parker's firm, camouflaged this flaw. "During the 1984 elections, we helped almost 60 candidates for the House and Senate--and our record rose to over an 80 percent victory rate.' Actually, they gave to 34 candidates for the 1984 election. (Fifty-nine contributions were made during the 1983-84 election cycle but 28 were made in early 1983 to pay for 1982 campaigns.) Of those 34 candidates, none received the $5,000 maximum, only five received as much as $1,000, and 15 received $250 or less. The strategy was to stretch what little money they had saved for contributions to cover as many candidates as possible. And, also unmentioned in the letters, all but two of the victors were incumbents, and half of them won by more than 15 percentage points.

If they camouflaged the truth on candidate contributions, they buried it when it came to other promises. In three of the most recent solicitation letters, the PACs said they would "conduct effective polling to find out those races where our early involvement can make a difference,' "lobby legislators against the expenditure of the tax dollars for guerrilla killers,' "begin media training of candidates and their staffs, so that Central America is dealt with prominently and well,' and "start electoral operations like phone banks and canvassing, which must begin early if they are to be effective in election.'

None of the above has ever occurred, Oldaker says, nor is it likely to, as both committees are broke, without staff, and struggling to send off another mailing. As for the "regular updates,' "special bulletins,' and "special reports,' the letters also promised, well, most of those, according to Bill Rehm of Richard Parker and Associates, "were in the form of subsequent solicitations which reminded them what's happening and ended with a request for money.'

The solicitations didn't just ask for money or make misleading promises. They did encourage recipients to write their congressmen. And while Rehm admitted that the "as I look out my hotel window'-in-Hiroshima letter was not written from Japan ("we pretended it was'), or written by Markey (although he was "very instrumental in conceiving it'), or even on genuine stationery ("we went to a Japanese typesetter here'), the direct mail specialist was careful to point out that Markey did actually stay at the All Nippon Hotel when he visited Hiroshima last summer.

Not surprisingly, when I called some of the contributors to these PACs and mentioned the proportion of donations that went to political candidates, their reaction was much like those who have just been told by "60 Minutes' that they've invested in phony Florida real estate. "That's dreadful, absolutely dreadful,' said Louise D. Peck, retired, of Ridgefield, Connecticut. "I'm very disappointed and quite frankly angry.' Ninety five-year-old Edna Sutten of LaVerne, California, who gets five or six solicitations of various sorts each day, was similarly perturbed: "It seems to me that with all those candidates who need money they should send it to them.'

Is it hitting below the belt to quote a defenseless little-old-lady? No. Most of the contributions to the PAC, were "unitemized' small contributions, which don't require the donors to submit information about themselves. Yet of the 17 contributors to the Nuclear War committee in the last quarter of 1985 who did list their occupations, ten said they were retired. Granted, it wasn't just the elderly who expressed concern about the contribution levels. A clergyman did too. "That is a deception,' he said. "I don't like that deception.'

More important than either age or piety, though, was the size of contributions. About 80 percent of the donations were unitemized, meaning they were under $200, with the average contribution being $22. The PAC was not supported by wealthy financiers out to buy influence, but by people contributing small amounts to a cause in which they believe.

Upwardly mobile

"There was a hope at every stage that the freeze could be turned into a higher office for Markey, whether it was the senate race or a presidential race,' said one person formerly involved with the PAC. The freeze movement seemed so strong that in 1983 Markey and aides discussed how it might raise him to national prominence, and even toyed with the idea of launching a bid for president based on the freeze and his network of supporters. Even in his 1982 book Nuclear Peril about nuclear proliferation, Markey noted that the drive to curb nuclear fuel sales might need "unorthodox stunts' such as "an underage congressman running for vice president.'

But after Massachusetts Senator Paul Tsongas announced he would not seek reelection, Markey decided instead to set his sights lower, entering a crowded Democratic primary for the Senate seat, using the PACs' mailing lists to help raise money. Of course Markey needed help raising money. After all, he wasn't taking PAC money. Even though he was running for Senate against another congressman, as well as the speaker of the Massachusetts House, the secretary of state, and the lieutenant governor, Markey led the field in fundraising, receiving $270,299 in just the first three months. Oldaker admits the lists were somewhat helpful, generating $20,000 for the campaign. The Boston Globe indicated it may have been much more. Markey, it wrote, "apparently translating his activism on the nuclear freeze issue into financial support, reached outside the borders of Massachusetts for campaign money. Approximately 28 percent of his contributions came from out of state, many from California.' So much was coming from California, in fact, that Markey set up a Senate campaign office there.

Markey pulled out of the race shortly before the primary, appearantly fearful about losing his House seat without winning the Senate race. After his reelection to the House, Markey "just lost interest in the PACs,' according to Beth Grupp, who helped run them in 1985.

Even the former staff people most critical of the PACs believe Markey's commitment to the cause was sincere and that he initially set them up for noble reasons. But, they say, ambition-- both Markey's and his aides'--carried him farther and farther away from the original goals. "It never occurred to Markey to ask the public to contribute to what basically was a front group,' said one, "but the overzealousness of the staff around him let what could have been a good idea get out of control.' After the 1984 election, according to another person familiar with the PAC, instead of intervening to guarantee that the PAC would be used to help the movement instead of just Richard Parker and Associates, Markey simply "hoped the problem would just go away.' So with Oldaker and Franchot running the operation, and Richard Parker constantly demanding more mailings to help pay off the PACs' debts to him, the direct mail solicitations continued. Throughout 1985 the PACs raised $430,000 until February 1986, when they discontinued the mailings. They are now $75,000 in debt, and struggling to get out of their contract with Richard Parker, to whom most of the money is owed. "It was a lot of trouble to keep [the PACs] going,' Grupp notes. That's shame for those who gave the $1.7 million.

Oldaker predicts that the PACs will give out $50,000 before November; that's roughly the equivalent of all the contributions they've given so far. This seems unlikely since the PACs don't have enough money to pay the rent without taking out loans. But even if they do raise the money, that doesn't excuse the previous four years. "As someone in the movement you have a responsibility not to rip people off,' said one familiar with the PACs. He noted that not only were donors being misled, but the PAC was competing with other arms control groups for each dollar. The PAC, he said, "should have been put down.'

PAC-pockets galore

Markey argues that while the PACs haven't "been as effective as we would have liked them to have been' in the area of campaign contributions, "they still made a very valuable contribution' by giving the freeze movement energy, coherence and organization, and by sharing the mailing lists with other candidates. In addition, he says that by sending out solicitations the PAC was "communicating with millions of Americans about the movement' and "help[ing] interface the grass roots with Congress.' One problem: that's not what they told Eula McNabb her money was going for. She wanted them to spend her money on candidates, not on more "communications' to her. Misleading mail recipients is not illegal; some even say it's common. In fact, Markey's final argument in defense of the small portion of receipts his PACs gave to candidates is that they were just doing what most PACs do, but toward a more admirable end. When shown copies of the letters claiming that donations would be earmarked for candidates, Markey, after a full minute pause, said, "In the universe of direct mail solicitations we conduct our direct mail in the same fashion as the right wing groups do.'

To an uncomfortable extent Markey is right. Rep. Robert Dornan, for instance, is president of the American Space Frontiers PAC, which raises and distributes money to promote the Strategic Defense Initiative. Although it has given out $57,000 to candidates, more money in the past two elections than both of Markey's PACs together did in the last three, that still amounts to only 8 1/2 percent of what it has taken in. Dornan too has used the mailing lists of the PAC for his own campaign, raising as much as $40,000 from the PAC list in his last House election race.

There are, however, a few PACs that have proven that even within today's corrupting campaign finance system there are more honest and effective ways of leaving a mark. The Council for a Liveable World and its affiliated PAC, Peace PAC, for example, raise money around many of the same issues as the U.S. Committee Against Nuclear War. In 1984, Peace PAC raised $374,000 and gave out $101,000, even though its house list is half the size of the Markey PAC. It does its own direct mail, which it pays for through other mailings, low-cost fundraisers, and contributions from larger donors. Most of their direct mail letters ask donors to make out their checks not to the PAC but directly to the candidates. The PAC then bundles them together as one contribution and forwards them to the needy campaigns, usually as $5,000 contributions.

PACs might be encouraged to be more forth-coming if they were required to file their direct mail solicitations with the Federal Elections Commission. The prospect of an opposition candidate waving a letter in the air, decrying the fraud perpetrated on the people and the cause, might make members more careful about the claims they make. Larry Sabato, of the University of Virginia, also proposes that the federal government require of PACs what some state governments do of charities: that the organization be required to list on solicitation letters how much of its budget goes to administrative costs.

Rep. Andy Ireland, a conservative Democrat turned Republican, was able to see what liberal populist Ed Markey could not. After running his America's Small Business PAC for two years and seeing that most of the money was going to pay a direct mail firm, he disbanded the PAC. "There comes a point when you have to decide what your're in business for,' says a spokesman for Ireland, Ed Morabito. "If you're there just to raise money, but not for your original goal, then you should be out of business.'
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Title Annotation:misuse of nuclear freeze campaign contributions
Author:Waldman, Steven
Publication:Washington Monthly
Date:Oct 1, 1986
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