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PAYING OFF PENN.
In recent weeks, the vestigial fundraising machine of the Clinton campaign has grown increasingly pathetic. One e-mail touted the chance to lunch with James Carville and Paul Begala. "You will get to tour all the amazing sights D.C. has to offer," it enthused, "and who knows what else could happen!" I think I know. James Carville will talk a lot and Paul Begala will rely heavily on metaphors and quips. What are the chances that I'm wrong?
The e-mails were all the stranger because the only debt the campaign has left is to Mark Penn's consultancy. A quarterly filing turned in last Wednesday showed that the final item on Clinton's balance sheet was $2,300,000 owed to Penn, Schoen & Berland Associates LLC. As Penn has gotten a fair amount of the blame for Clinton's loss, this galls some. Karen Tumulty, however, clarifies things considerably:
Not surprisingly, many Clinton allies are decidedly unsympathetic to Penn's situation. Fumes one: "He should have to eat it." But it isn't that simple. The money is owed not to Penn personally but to his company, which is a subsidiary of the worldwide public relations and advertising firm WPP Group, based in London. The bills the Clinton campaign ran up included $5 million for the polling that apparently failed to pick up on the public mood. And then there was the cost of sending out 20 million pieces of direct mail, with postage alone reaching $8 million, according to an official for the firm. Many would argue that it was money ill-spent. At a minimum, that big a bill for snail mail suggests that Clinton's campaign was relying heavily on tactics from the 20th century, while Obama was running circles around her by using the far more cost- (and politically) effective Internet.[...]
Yet the bills remain. "They're not paying Mark Penn; they're paying the shareholders of WPP," says WPP executive vice president Howard Paster, who ran the Office of Legislative Affairs in Bill Clinton's White House. And as long as Hillary Clinton continues to show an ability to pay them off, the firm does not have the option of simply forgiving the debt, Paster insists. If it did, its lawyers say, that could be an illegal in-kind contribution under federal election law.
But that doesn't explain why Clinton is fundraising to pay off this money. Between 2004 and 2006, tax documents show that Bill Clinton earned $51 million. Put differently, erasing his wife's campaign debt would consume 1/25th of his income over a two-year period. I blow a 25th of my income on the occasional dinner. But the former First Family's unwillingness to shoulder the loss themselves means, inevitably, that it will be borne by committed campaign supporters who still love Hillary but are much poorer than the Clintons. It's also requiring a frankly embarrassing level of shilling: They're selling off days with Bill Clinton and tickets to American Idol and lunches with political consultants. Why bother?
COMMENTS (19)
Is Clinton allowed to make a $2 million contribution to his wife's campaign, just like that? If so, they could have self-funded from the start.
Posted by: tyronen | April 17, 2009 10:11 AM
do you have a preposterously low income or do you occasionally eat preposterously expensive dinners?
Posted by: sarah | April 17, 2009 10:24 AM
no surprise
no shame.
we are still up to our waists
in the wicked after~effects of the era of clinton karma.
as time passes, one can see that they both are growing old now,
and soon will be relegated to the
past generations in history books.
it will be left to the historians to trace the spiritual decline under the clinton and bush administrations, and how they bankrupted america.
clearly, the clintons arent done doing that yet.
Posted by: jacqueline | April 17, 2009 10:29 AM
do you have a preposterously low income or do you occasionally eat preposterously expensive dinners?
This. Hyperbole has its limits.
Posted by: Chris O. | April 17, 2009 10:35 AM
The Clintons did pay off $13 million of their debt through their own personal funds. So I think its unfair to say that they haven't put in anything.
Posted by: Joan | April 17, 2009 10:37 AM
Preposterously expensive dinners consume much less income than do preposterously expensive children, so childless people like ezra can occasionally indulge.
Posted by: Tiny Tim | April 17, 2009 10:39 AM
This post displays a lack of intellectual honesty on Ezra's part that is somewhat embarrassing.
I'm all for Mark Penn-bashing. I'm in favor of both the substance and the optics of Mark Penn-bashing.
But you can bash Mark Penn without having to intentionally play stupid in the way Ezra is doing in this post.
Posted by: Petey | April 17, 2009 11:07 AM
as time passes, one can see that they both are growing old now
as are you, hag!
Posted by: Anonymous | April 17, 2009 11:09 AM
Perhaps the shareholders of WPP, (who are whom, exactly? Is Penn among them?) should eat it. Perhaps the company's management should think twice about getting into inherently risky lines of business like political campaigns. Maybe, if PR firms could lose big money, then campaigns wouldn't be a two-to-four year media barrage.
Sorry, WPP, but our political process shouldn't be a cash cow for private business.
Posted by: biggerbox | April 17, 2009 11:09 AM
$100,000/25 = $4000
$50,000/25 = $2000
$25,000/25 = $1000
Dude, either you are one broke-ass writer or you're eating like effin' Henry VIII.
Posted by: ronbailey | April 17, 2009 11:10 AM
If it weren't for Mark Penn, Hillary Clinton or John McCain might well be President today. I don't care what the man charged, he's worth every penny.
Posted by: ostap | April 17, 2009 11:14 AM
what ostap said...cause as with memos on torture, unwarranted wiretapping, war, Obama = change...LMAO
Posted by: Anonymous | April 17, 2009 11:17 AM
No one ever got rich paying their outstanding bills with their own money, you know.
Posted by: Tyro | April 17, 2009 11:43 AM
Case #1 for fundraising: You can't spend past income -- past income is either current savings or already spent. If I were Clinton, the millions still owed to Penn's outfit would be balanced against future income, which took an immediate nosedive when Hillary became SecState.
Caes # 2: Penn did such a bad job that you don't owe him a dime, pass the buck to your supporters.
In any case, ostap at 11:14 makes the most sense.
Posted by: Anonymous | April 17, 2009 11:57 AM
Sorryy, should have written "In any case, ostap at 11:14 makes the least sense."
Posted by: Anonymous | April 17, 2009 12:03 PM
apparently Monica Lewinsky was the only one Bill Clinton jilted
Posted by: jizzbag | April 17, 2009 12:43 PM
I'm not sure the Clintons have so much money these days. They've earned about $100M since 2000, but out of that they've paid about $33M in taxes, given about $10M to charity, and already put about $16M into Hillary's campaign. And presumably they're paying quite a few personal staff: let's suppose they spend about $2M a year, for a total of about $20M spent.
That would mean they've spent or given away about $80M of their $100M earnings, leaving about $20M. But presumably they have real estate in NYC and DC which may tie up some millions. And if they're anything like the rest of us, any investments they made will have lost 40-50% in the market crash.
So my guess would be that they have $5M in real estate, and about $8-10M in investments. On top of that, Hillary's position constrains Bill's ability to earn money over the next few years, while they don't want to stop spending.
I think they *could* find the cash to pay off Penn. But I don't think it's as easy as you suggest.
I would welcome any actual hard evidence about their current net worth: my analysis is quite speculative, but I think plausible.
Posted by: Richard Cownie | April 17, 2009 3:57 PM
More evidence - I found reports that in 2007 Clinton declared net worth of 35M, including about $30M of investments. She didn't earn anything on the campaign trail, and she put in $16M, which would leav about $14M of investments. Let's assume she lost 40%, then she would have around $8M in investments (and about $5M in real estate).
That would be right in line with my previous speculation.
Posted by: Richard Cownie | April 17, 2009 4:04 PM
You can't spend past income -- past income is either current savings or already spent.
Man, that is beautiful! Accounting as metaphysics! But seriously, anon, you can spend past income -- precisely because it is current savings, you douche.
Posted by: SqueakyRat | April 17, 2009 7:23 PM