Guest post by mxmBACKGROUND
Sarah PAC is a nonconnected Political Action Committee. In looking for comprehensive explanations of PACs, about.com provides a summary that provides just that:
Political parties are the oldest advocacy groups that fund political campaigns. Political Action Committees (PACs) are the next best-known group and began in 1943.
Federal political action committees, PACs, raise "hard" money for the purpose of defeating or electing candidates to federal office: Senators, Representatives, Presidents. PACs must register with the Federal Election Commission.
PACs may receive up to $5,000 from an individual, another PAC or party committee each calendar year. PACs can give $5,000 to a candidate committee per election cycle (primary, general or special). They can also give up to $15,000 each year to any national party committee and up to $5,000 annually to any other PAC. Some states have limits on how much a PAC can give to a state or local candidate.
Corporations (profit or nonprofit), labor organizations, and incorporated membership organizations cannot make direct contributions or expenditures in connection with any federal election. However, they may set up PACs that, according to FEC, "can only solicit contributions from individuals associated with [the] connected or sponsoring organization." The FEC calls these "segregated funds" organizations.
Most of us associate PACs with business, labor or ideology. But there is another class of PAC, the nonconnected political committee. This class includes what is called a Leadership PAC, where politicians raise money to -- among other things -- help fund other candidate campaigns. Leadership PACs can solicit donations from anyone. Politicians do this because they have their eye on a leadership position in Congress or a higher office; it's a way of currying favor with their peers. And the NYT reported in 1999 that "Leadership PAC's are the fastest-growing segment of political fund-raising.
The Federal Election Committee (FEC) has published a guide for nonconnected PACs, Nonconnected Committees. This guide is available online.
Events
These are the dates and events to keep in mind when considering the impact on Sarah PAC’s cash flow. Some are events that may have provoked contributions or necessitated disbursements. Many are just of interest and paint a picture.
2009
Jan 28 Sarah PAC launched
Jan 29 Sarah goes to Washington, Alfalfa Dinner
Feb 16 Bristol Palin does Greta, Sarah interrupts
Apr 22 Alaska Fund Trust launched
Apr 27 AFT ethics complaint filed
May 12 Going Rogue book contract signed
Jun 22 Webathon for the AFT, and by the way, don’t forget Sarah PAC also, too
Jul 3 The Big Quit
Jul 13 Sarah PAC files mid-year report
Jul 14 Preliminary report on the AFT ethics complaint completed
Jul 14 Land purchased adjacent to current home
Jul 22 Kristan Cole freezes the AFT following ethics complaint preliminary findings
Jul 26 Last picnic on the job for Governor Palin
Sep 2 Levi Johnston does Vanity Fair, interview released online
Sep 15 Palin signs with Washington Speakers Bureau
Sep 23 Hong Kong speech
Oct 13 Construction underway on expanded home complex
Oct 23 Palin files final APOC disclosure, claims $1,250,000 retainer
Nov 4 Bristol Palin files for sole custody of Tripp
Nov 14 NYT reports $5,000,000 retainer for Going Rogue
Nov 16 Sarah does Oprah
Nov 17 Book Released
Nov 18 Book Tour, first stop in Grand Rapids, MI
Dec 13 Teens break into Wasilla home, party and commit vandalism
Dec 16 Palin goes to Hawaii
Dec 22 Book tour, final stop in Wasilla, AK
Dec 27 News leaks that Bristol Palin filed for sole custody and child support
2010
Jan 11 Palin joins Fox News
Jan 22 Palin and Bristol do Oprah from the kitchen
Jan 30 Sarah PAC files year-end report
Jan 31 Palingates identifies Facebook ghostwriters RAM and Russo
Feb 24 Meg Stapleton quits
Mar 4 Harper Collins announces Palin will write a new book
Mar 5 Palin and entourage hit Los Angeles, swag abounds
Mar 23 Palin published Facebook target list of democrats in the cross-hairs
Mar 25 Palin signs with Discovery Channel
Mar 27 Palin speaks in Searchlight, NV
Apr 1 Fox special, Real American Stories airs
Apr 5 Palin travels alone
Apr 6 Palingates identifies Mandell and Lafferty links to Sarah PAC, NOW scheming
Apr 6 Palin speaks at Wine & Spirits convention in Las Vegas
Apr 9 Palin speaks at Southern Republican Leadership Conference
Apr 10 Palingates clarifies and elaborates on Mandell/Lafferty links to Sarah PAC
Sarah PAC
Sarah PAC was launched January 28, 2009 amidst great fanfare. At that time Sarah Palin had been home from the 2008 campaign for 12 weeks and she was functioning once again as the Governor of Alaska. The short Alaska legislative session was underway and work was just hard for the Governor. But, she found the time and the energy to establish her own PAC. Her fans received the news with great enthusiasm.
A second fund raising device was set up for Sarah Palin on April 22. This time, her BFF Kristan Cole set up the Alaska Fund Trust (AFT). That Kristan, such a good friend, don’t you know? It was a big surprise for Sarah, she claimed she knew nothing about this beforehand. More fanfare.
A webathon for the AFT was initiated in June by Sarah’s devoted fans. The objective was to raise $500,000 to help retire her outstanding legal expenses. You will recall that these legal expenses were from fighting all those ethics complaints and for a while, that tricky Sarah had convinced some that it was also for the Vice Presidential vetting process. Well, we knew better and finally the McCain camp came out and said so. Heck, gosh darn it, that wasn’t supposed to happen.
The webathon cause was picked up by other pro-Palin groups and sites and discussed on Fox News. The original group and its sisters continued to prompt the faithful for contributions to the Alaska Fund Trust and to Sarah PAC for months. There was also the $10 per Facebook fan initiative promoted to coincide with Sarah reaching her 1,000,000 friends mark. Wow, a million friends. The clarion call among these groups was poor Sarah, she hardly makes any money and then she has to deal with the outrageous legal bills that mounted from ethics complaints. Because the AFT limited contributions to $150, the devoted were urged to contribute to Sarah PAC if they had reached their maximum. While unverifiable, the webathon reportedly raised $115,000 - $123,000 for the AFT according to comments found in the supporting blog sites.
PAC data has been made available through various FEC reporting forms. PAC data was released July 13 for the time period January 1 through June 30, 2009. The year-end PAC report was filed on January 30, 2010 and covers the time period July 1 through December 31, 2009.
The data from Schedule B, Itemized Disbursements for the July and January PAC reports has been transcribed into a spreadsheet and categorized. The detail in Schedule B is inconsistently described, and that adds challenge and creates confusion. I have done my best.
I do not fully understand why some PACs report monthly, some quarterly and some bi-annually. Sarah PAC reports bi-annually. Those 6-month intervals are too long to really assess performance and I did not have what it takes to sort the voluminous records of contributors into monthly periods.
In an effort to estimate monthly incoming receipts, the period costs, as charged by the fundraising internet credit card vendors were used to estimate incoming receipts. Period 1 costs from Edonations were calculated to be 14.5% of the total receipts. Edonation disbursements were made frequently and are reported in Schedule B. By accumulating monthly Edonation disbursements and using 14.5% as the vendor’s commission rate, estimates of monthly incoming receipts were calculated.
Determining Period 2 monthly incoming receipts was slightly more challenging as there is an apparent change in the fundraising vendors late in the year. Upstream Communications appears to have taken over for Edonations. Nevertheless, using the same approach, the Period 2 commission to the internet fundraising vendors was calculated to be 12.3% of total receipts. It is unlikely that all donations were received via the internet. It is unknown if cash or checks were donated during Sarah Palin’s public appearances or whether any donations may have come in through the mail.
Following are calculated / estimated monthly incoming contributions (IN) and the sum of monthly disbursements (OUT).
Cost of doing business
On average, the cost of procuring donations over the internet was 13%
Supplies, equipment rental, postage, telecommunications, bank fees and shopping trips to Best Buy, Costco and Meijers made up 0.6% of incoming cash.
Sarah Palin has been advised, counseled and coached by a multitude of specialized experts. While she is to be commended for her foresight in seeking out such expertise, it is not without cost. The PAC has invested 32% of its cash in consultants, writers, attorneys and clerical support. How much of this specialized assistance was required for the book tour is unknown. Jason Recher of North Star Strategies was frequently seen on the tour and it is believed that he came on board specifically to advance the tour and provide support for the tour. He ended up advancing himself and he is the only consultant now seen accompanying Palin when she is out and about. Although not last week.
Does Sarah Palin behave in a manner that demonstrates a good return on the $678,061 investment? Do her speeches inspire and inform? Are her writings coherent, thoughtful, fact based, focused on specific matters of national concern, solution or policy oriented, and generally useful and helpful to the readers?
Travel expenses, including commercial and charter air travel, hotels, auto rentals, restaurants and one Visa bill in the amount of $4072 were paid by the PAC. Total travel expenses for the 11 month period represented 4% of the incoming cash. It is likely that the November and December travel expenses are related to the book tour. Hotel expenses in November are related to Palin’s first appearance on Oprah. Weren’t Willow and Piper there in the audience? Do you think that they had their room paid for by the PAC also too?
Expenses from the Going Rogue book tour were paid by the PAC. Certainly, other book tour expenses are included in the consulting and travel categories. The book tour expenses in the following table represent 6.5% of the PAC’s incoming cash.
However, if you consider that all of the NorthStar / Jason Recher expenses and the IzzyLene / Meg Stapleton expenses posted in November and December and the Palin travel expenses were for book tour activities (or at least in part associated with the tour), then the total expenses paid by the PAC are $265,099 or 12.4 % of the PAC’s cash. For the tabulations though, I am giving her the benefit of the doubt and going with 6.5%. I want to be fair.
PAC Purpose
Over 11 months, $60000 was directed towards the support of political candidates or political/policy PACs. This represented 3% of the incoming cash.
Charitable donations were made to 2 causes, for a total of $2000. This represented 0.1% of incoming cash. I have been unable to find any provision in the FEC guidelines that permits PAC charitable donations. This may be a violation.
In my work, the sum of donations to politicians and political causes was $60,000. Repeatedly checked and checked and checked. The year-end FEC filing reports $45,500. Go figure.
Notes and Observations
Legal Services -- The Alaska legal firm Clapp, Peterson, Van Flein, Tiemessen submitted 3 invoices to the PAC. Or Sarah Palin submitted these invoices to the PAC, but one way or other these were paid by the PAC.
12/08/2009
Legal Services, Political Services, June
$45000
12/08/2009
Legal Services, September
$10000
12/08/2009
Legal Services November
$10000
Attorneys with Clapp, Peterson, Van Flein, and Tiemessen must have a greater degree of PAC and political experience than the consultants and specialized attorneys Sarah Palin paid to advise her PAC.
Book Tour
The PAC purchased approximately $48000 worth of Palin’s book Going Rogue. Authors have suggested that publishers may sell in bulk to authors at a discounted rate. Purchase prices of $5 to10 per book have been suggested as reasonable. Palin offered her supporters a promotion, for a $100 contribution to her PAC; the donor would receive a personally signed book. Using Palin’s price per book of $10 that would mean she had access to as many as 4800 books. Selling them to donors at $100 a pop, leaves a PAC profit margin of $90 per book. Well $90 x 4800 = $432,000. That is what the PAC could have earned from this promotion. Of course, if she was able to purchase the books from her publisher for only $5, then the profit could have been $912,000. From this, there would be fulfillment expenses. The PAC paid $15714 for HSP Direct/Books Donor Fulfillment.
As we saw complainers on the pro-Palin web sites who paid the $100 and never got the goods, we can assume what – she over sold, she failed to deliver, she had to go to Hawaii, then she had to deal with B & E stuff, then she had to deal with the publicity surrounding another daughter’s custody suit, she got the carpal tunnel syndrome… what?
There may be a continued positive impact on donations to Sarah PAC through January, as there was unfinished business with the $100 autographed book promotion.
Additionally, $17934 worth of Going Rogue trinkets and t-shirts were purchased by the PAC. These trinkets may have been sold or given away; it is unknown what was done with these items. What is known is that the usefulness of the items is limited to book promotion, as they all bore Going Rogue promotional advertising. To the best of my ability to determine, there was no PAC promotional advertising associated with these items. The Palin book tour rented a credit card machine. The PAC paid $1508 for the use of the credit card machine.
Photographer Shealah Craighead accompanied the book tour. She took hundreds if not thousands of candid shots during the course of the tour as well as photographs of tour guests with and without Palin present. These photographs have been offered for sale, online, by Craighead. Throughout the tour, there were frequent reports from guests that they were forbidden to use their personal cameras to take photos of Palin. If they wanted a photo, they had to purchase one from Craighead. The proceeds of the photo campaign were said to benefit the PAC. It is unknown if the PAC received any benefit from the sale of photos. For Craighead’s services, the PAC paid $14163 in professional service fees and $20227 in travel expenses.
Some of the consulting expenses paid by the PAC are related to the book tour. Jason Recher of North Star Strategies was frequently seen with the book tour entourage. The PAC paid North Star Strategies $70000 in professional fees and $10281 for expense reimbursement. Meg Stapleton was also reported to be an occasional part of the tour.
The PAC paid for the $13000 promotional bus wrapping, advertising both the book and the PAC.
Outstanding Expenses
It is assumed that additional consulting and book tour expenses, for services and activities during the month of December will be carried forward into January 2010. Routine monthly payments were not made to several consultants and expenses for at least North Star Strategies were not included in December. These anticipated outstanding December expenditures that may carry forward could exceed $50000.
Pamela Pryor 6000
North Star 20000
North Star Expenses ?
IzzyLene 10000
Miscellaneous
Palin reported some gifts from Sarah PAC in her final APOC disclosure. These included:
Jan 09 Airfare, lodging, food to DC for the Alfalfa Dinner, $3000
Apr 09 Airfare, lodging, food to Indiana Right to Life Dinner, $6885
Jun 09 Airfare Seward Celebration, $4230**
Jun 09 Airfare to NYC (to attend a ballgame) $2500**
Jun 09 Airfare multicity $5875**
**this was one long continuing trip for Sarah, Todd and Willow
The Alfalfa Dinner was held on January 29, 2009. The PAC reports show no entry that could be construed to be this trip or these expenses.
The only “gift” related travel expense claimed in the PAC report is $8167.80 for Seward House, Auburn NY. The expense type is "In-Kind to Charity/Airline Travel". Todd and Willow accompanied Palin on this trip.
This leaves a discrepancy of $2947 that Palin claimed as a gift that she received from Sarah PAC. Remember the excitement she had since President Obama was going to be there? I wonder if she had anything from the consignment shop to wear. How foolish of her not to ensure that there was linkage that would be transparent between the PAC and her APOC gift report.
There are many questions that arise when attempting to analyze Sarah PAC’s performance. Two easy disbursements to question are the $1000 payout to Chuck Heath for postage and a $4000 payout to Meg for storage reimbursement. Hope they have receipts.
Conclusion
The book tour was lucrative for the PAC, if an audit of the incoming cash aligns with the disbursements. This may need to be done.
My opinion as to where the PAC is now is based on an analysis of 2009 monthly cash flow, a year + of observing Palin’s behavior, her broad base of money making ventures and her diminishing popularity.
During 2009, there were spikes in the donation levels. It would seem that there was start up excitement that quickly tapered down. A spike is seen mid to late June through July. This corresponds initially with the webathon sponsored by the devoted. While the webathon was setup for the AFT, contributions to the PAC played heavily in the discussion on pro-Palin sites.
More consequently, the sudden decision Palin made to quit her position as AK governor possibly created an atmosphere in which individuals made donations in sympathetic support. Donations returned to pre-resignation levels and declined until December. Some of the November decline is perhaps due to vendor change and conversely, some of the December gain may be the result of this same change. It seems most likely that a good part of the December spike is an artifact of the Going Rogue book tour. The sale of autographed books for $100 could have netted the PAC $500,000 or more and we will probably see the impact through January 2010.
Palin is gainfully employed by Fox News, The Washington Speakers Bureau, Harper Collins and soon, The Discovery Channel. Her speaking fees, book advances and royalties, and news consultant salary are widely reported and discussed in the MSM and the blog communities. It is well recognized by her fans that she is a remarkably wealthy woman now. I don’t think they will be sponsoring any more webathons.
It is my opinion that part of the reason Palin is playing to the hateful right now, is that is where the money is; that is all that’s left to hit up. She has tapped out the devoted who are smaller in numbers. The GOP moderates are disinterested in contributing to her PAC; her popularity has peaked and is steadily declining. She has one source of cash left – the haters and the wingnuts.
And she likes it; that is the other part of the reason she is playing to the hateful. She is striving mightily to create another drama to boost contributions.
So, it is my prediction that Palin’s base rate of incoming PAC cash will be modest, around $75,000 to $100,000 monthly. That is where she was without the artificial spikes caused by drama and books............I believe that she saw for herself that her expenditures had to be cut.
We will likely see fewer consultants on the PAC dole in the next report. In 2009 she was averaging $58,000 per month in consultants and attorneys. Her travel without an entourage last week may be a signal that the PAC is tightening its belt. And at 13% of incoming cash, her internet fundraising vendor would take $13,000. So right there she would be down $71,000 out of an assumed $100,000 inflow. That’s a pretty big burn for nothing other than some hate filled Facebook ramblings and an occasional writer for a high-profile speech. Wonder what we will see for the TV studio? Also too, I wonder if Van Flein is still providing political advice?
I believe that the second year PAC performance will be very telling.
Yes, the GOP is sucking up to her, they are afraid of her and her hateful followers. She wields a powerful club over the nation. And she likes to use it. What’s to stop her? She has everything she ever wanted -- a stage, beauty, devoted followers, sympathy for her victimhood, wealth, power, disregard for truth, unlimited opportunities to be the mean-girl, constant attention, servants, no family responsibilities. Everything she ever wanted.
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