How Political Consulting Became a Multibillion Dollar Racket

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AP Photo/Wilfredo Lee, File

Adam Sheingate, a political scientist at Johns Hopkins University, just released his new book Building a Business of Politics: The Rise of Political Consulting and the Transformation of American Democracy. The book takes a critical look at the rapid growth of profitability and influence in U.S. political consulting industry, especially in a post-Citizens United world where the money spigot runs untapped. In a recent New York Times op-ed, Sheingate explained how and why the amount of money spent on ad buys-where consultants make their money-in 2016 will eclipse that in any previous election.

This week, The American Prospect talked with Sheingate about his book and the impact of consulting on the American political process. This interview has been edited for style and clarity.

What did you set out to do with this book and what did you ultimately find in your research?

I want people to think about politics from the perspective of a consultant. We normally think about it from the perspective of candidates; we might think about contributions from donors; we certainly think about voters. But we don't give enough attention to the people whose businesses survive based on the money they earn in politics, so I wanted to focus attention on that perspective.

I think once you do that, you find some of the characteristics of politics are reflections of the incentives of the consultants who run the campaign. The heavy reliance on media is partly due to the fact that it's the way to make the most money.

You lead off the book by introducing Mentzer Media, which is one of the most prominent consulting firms for GOP campaigns. The firm has made more than $1 billion in campaign ad buys, most recently placing $245 million in ads for Mitt Romney's 2012 super PAC. You also briefly highlight the large market share that GMMB, another consulting firm, enjoys on the Democratic side. In 2012, it handled $435 million in spending-90 percent of which came from Obama's campaign.

How are consulting giants like these indicative of the modern political consulting industry?

It shows how central they are to Republican and Democratic circles respectively given the amount of money that they handle. It also shows that the most lucrative part is media, even though research suggests that media effects may not be as useful to candidates as they think they are.

Can you explain the partisan nature of political consulting?

There's a Democratic market and a Republican market, and most firms only participate in one or the other. It used to be that advertising companies would take on political clients, [in] the Mad Men era of politics in the 1960s where you'd have Madison Avenue advertising firms that handled presidential campaigns. But they quickly realized that they couldn't balance the partisan aspect of campaigns with business demands. It was much more effective from a business perspective to have consultants specialize for one party or the other.

The industry standard is a 10-15 percent commission on each ad buy. Do you have an idea of whether the percentage for ad buys and other services has increased?

I don't actually have information that would show commissions and fees are going up. The business model-selling products and services-has essentially stayed the same, but because there is so much more money coming into the political system through campaign contributions, particularly in the aftermath of Citizens United, there's just so much more money to make in politics.

One of the things that happened with Citizens United is the growth of super PACs. Super PACs are starting to do [more traditional campaign work], but they still spend most of their money on TV. That's the honey pot for consultants. The cost of buying an ad is more for a super PAC than for a candidate. When a candidate buys airtime, the rules require that the station gives them the lowest available rate. But when a super PAC buys an ad, they can charge whatever. So depending on how the consultant sets up the contract, if it's a commission based on the cost of the ad, the super PAC ad will make them more money than the campaign ad.

Finally, the general thing is the fragmentation of our political system. You've got all these different candidates, committees, super PACs, 501 (c)(4)s-it makes it hard for voters to know what's going on, but it's great for consultants. It's just more potential clients for them to work for.

That's one of the reasons that political consulting is so much bigger in the United States.

In other countries, you work for one of the political parties; there's really no one else to work for. But here, there's just so much more money and opportunity.

Do you think the huge influence of the political consulting industry is propping up the use of TV ads, despite evidence that those ads are not as effective as they used to be?

I think the answer is yes. There's anecdotal evidence, in addition to research, that suggests there are struggles that take place inside of campaigns between traditional media consultants and the new digital consultants.

There's so much money, it's gotta go somewhere. What else are you going to do with millions of dollars pouring into super PACs? You're going to run ads with it.

What do you see political consulting looking like in future election cycles?

One is the continued shift toward digital platforms in politics-getting political ads on streaming services like Netflix.

The other thing is the consolidation of the industry, in two senses. Most of the money is going to be going to a smaller number of firms. But also, the industry is being integrated into a broader global industry of public relations. And so, the large global conglomerates that own most of the advertising and public relations businesses in the world, they are buying political consulting firms.

It's possible in a future election for the two leading consultant firms-one Republican, one Democratic-in a presidential campaign to be owned by the same parent company.

Would campaign finance reform measures curb the industry?

Theoretically, if you were able to somehow turn off the spigot or reduce the amount of money that would also reduce the amount of business for consultants. But in the United States, there are so many elections and so many candidates running. So even if there were public financing of presidential elections, that just means the business goes to other races.