High on the Hog: A Look Inside eMeg’s $pending
The amounts of expenditures officially categorized in Meg Whitman’s 1,041-page, $29.4 million campaign finance report mask the staggering sums she has actually paid to political and business consultants and cronies, a Calbuzz analysis of her filing shows.
The formal FPPC category for “campaign consultants” totals $5.25 million on Whitman’s electronic statement for 2009. But when fees, travel and other expenses are totaled for consultants, it turns out that eMeg actually has forked out about $12.7 million to various strategic, research, media, fund-raising and other consultants.
A close reading of the report also reveals eMeg’s eye-popping financial relationships with a cadre of political and business associates.
For example: Not only has Whitman paid $350,000 categorized as “campaign consultants” to Tokoni – the online networking firm founded by her former eBay retainers Alex Kazim, Mary Lou Song and Rajiv Dutta, and funded by eBay founder Pierre Omidyar – but the report elsewhere lists $2.55 million in payments to Tokoni for information technology costs and web services. That’s a total of $2.9 million for her pals who built and operate her poppy-festooned campaign web site.
Which makes sense, since Kazim was her point man at Skype – eMeg’s $3 billion flop investment for eBay. Calbuzz doesn’t expect to hear any critical eMeg war stories from these guys; for sheer interlocking intertwinedeness, the Tokoni connection is unmatched.
Our Department of Linguistics and Obscurata assures us that “tokoni” is the Tongan word for “help.” (Not as in: eMeg is not known to be nice to the help, but more like, We’re from Calbuzz, we’re here to help.) The firm is a social networking operation that recently began selling help for companies to brand themselves, in part by developing online communities for their customers and/or clients.
That’s what they’re doing for eMeg, Mary Lou Song told Helzerman’s Odd Bits a while back: “If you look at Meg Whitman as a brand it makes sense,” she said. “What makes politics so great is talking about life stories and the impact. She was excited about her site and letting Californians talk about their lives.”
In addition to infusing her campaign with $19 million of her own fortune, Whitman raised about $10.2 million from other donors. But it cost her about $3.6 million, in fees to fund-raising consultants, costs and event expenses to raise that $10.2 million. That’s way too high, several veteran California campaign consultants told us, saying that 15-20% is the rule of thumb: “If you’re paying more than 15% on all the money raised,” said one, “you’re getting hosed.”
Some of eMeg’s largest expenditures were made to a fund-raiser and his business operation. Her FPPC report lists SJZ Inc., Solamere Capital and MJF, LLC.
WTF is all that, we asked.
SJZ Inc. is Spencer J. Zwick. Like Meg, he’s one of former Massachusetts Gov. Mitt Romney’s closest political allies, and now her national finance chairman. At a price: $564,046 to be exact, which is loyalty you can depend on.
Beyond that, eMeg also shelled out $96,000 to Solamere Capital – the investment firm founded by Zwick and his pal Tagg Romney (Mitt’s boy) – apparently for the services of Solamere employee Mason J. Fink. Those payments — $16,000 a month — stopped after July and instead eMeg started paying MJF LLC (Fink’s independent business) directly at a rate of $10,000 a month.
The reason the campaign stopped paying Solamere and started paying Fink directly in August may have something to do with Griff Harsh – Meg’s son with her husband, Stanford neurosurgeon Dr. Griffith R. Harsh IV. Young Griff went to work at Solamere that month as a junior analyst.
Valleywag, a part of Gawker, posted an item – a cheap, sleazy rumor, really — that suggested, without saying so, that eMeg’s campaign was paying Solamere to employ Griff. But according to Tucker Bounds, Meg’s communications honcho, the campaign made the switch when Griff went to work at Solamere specifically to avoid even the appearance of an impropriety, which Valleywag tried to imply.
Still, the connections between Meg and the Romneys are pretty deep, since – according to eMeg narrative – Mitt was her mentor at Bain and Company years ago. Having Mom shovel something like $700,000 to Solamere’s founder, company and an employee appears, at least, not to have hurt Griff’s employment chances.
The most head-banging number in the report is the $3.9 million paid to Smart Media Group of Alexandia, Va., for what appears to be Meg’s online videos and her radio advertising and air time.
Smart Media’s clients include other branded commodities like American Airlines, MasterCard, Columbian coffee and the Dallas Cowboys, along with some entities in search of a brand (like Meg is) – the Republican National Committee, the National Republican Congressional Committee and the Republican Governor’s Association.
There’s much more fun with numbers: Like $290,662 to ACM Aviation for private jets. Or $1.96 million spent on campaign worker’s salaries, of which $50,000 was to California Choice Benefit Administrators for health insurance.
Or how about $528,121 to HSG Communications LLC for salary at $36,000 a month, plus expenses. That’s campaign ayatollah Henry Gomez. As consultant fees go, it’s a very large number, especially for a guy whose experience was as an uberflack at eBay, not a commander in the political trenches.
Atop the food chain – at least until we see in the next report what Mike Murphy’s getting paid* – is Scott Howell & Co, the media consultants from DC, who have thus far been paid $825,000 at $75,000 a month. That’s more even than eMeg has spent on polling and research — $672,463. (As veterans of the polling biz, Calbuzz can testify that with $670,000 you could find out what left-handed, Basque rutabaga farmers in Fresno County think about global warming, if that’s what you wanted to know.)
Campaign manager Jillian Hasner’s a consultant at $28,500 a month while Jeff Randle, who had been top dog (after Gomez) at $27,500 is now down to a lousy $25,000 a month. Geez. Don’t get too upset: Jeff made $287,500 last year from Meg’s campaign, plus $79,652 billed to Randle Communications; his partner, Mitch Zak, made another $180,000.
Not sure how the salaries get set inside the campaign, with Sara Myers, who had been at $6,000, now pulling $8Gs bi-weekly** a month; Tucker Bounds and Todd Cranney at $7,500; Michael Saragosa and William Semmes at $6,250; John Endert at $5,250 and the Volcanic Sarah Pompei at $5,200. At those rates, our old colleague, Mary Anne Ostrom, is worth much more than the $4,250 she’s pulling now.
As for catering, the expense always most important to Calbuzz: eMeg dished out $12,275 to Wolfgang Puck. Burp.
* The report does include $27,500 a month for November and December for Bonaparte Films LLC for which Murphy is writer, producer and consultant. Total payments to Bonaparte thus far = $57,975 (for two months).
** Imagine our embarrassment when a reader notified us that we had underpaid all those staffers by half!
It’s noteworthy how little the mouthpieces are being paid. It underscores that they are little more than voiceboxes.