The biggest brand name in conservative politics is about to enter the burgeoning right-wing marketplace — and she's perfect for it. Ka-ching!
By DAVID S. BERNSTEIN
July 17, 2009
Those confused commenters have no clue as to the opportunities that await Palin — because few understand the extraordinary, multi-billion-dollar marketplace that has developed for movement conservatives.
The Phoenix reviewed the most recently available financial reports of some 250 conservative-advocacy groups and political-action committees; their combined gross revenues totaled more than $2 billion. And that's only the major players, in just the nonprofit portion of the industry.
No wonder the father of Palin's grandchild, Levi Johnston, told reporters that the governor is quitting "to take some of this money people had been offering."
Palin is poised to be the hottest brand to ever hit that market. And her entry is beautifully timed.
Thanks to the election of Barack Obama and a heavily Democratic Congress, the conservative industry is, despite the recession, experiencing boom times. Books declaring that Democrats are unleashing "statism" and "socialism" — by Mark R. Levin and Dick Morris, respectively — have dominated the bestseller lists. Rush Limbaugh is enjoying record listenership. Over the past three months, every one of the 10 most-watched daily programs on cable news belonged to the right-wing Fox News Channel (FNC). Political interest usually peaks during a presidential campaign year, but FNC has actually improved its ratings this year — in part by playing more directly to the right wing, by ditching Sean Hannity's liberal co-anchor, and by adding froth-mouthed Glenn Beck to its daily line-up.
There are at least 10 million people who could be called true "movement conservatives" in America today — perhaps twice that number, including conservative and libertarian independents, along with "base" Republicans. They are not only reading and tuning in — they are contributing to conservative nonprofit organizations and political-action committees; they are attending conferences; they are buying paraphernalia; and they are signing up for e-mail newsletters and online publications.
But the analysts, thinking only of Palin's presidential prospects, are missing all of this. They are accustomed to paying attention to how people vote, not how they spend.
"We tend to think of the Republican conservative electorate," says Zelizer. "There's also this vibrant marketplace that's been built up over the past 30 years, and it can be quite lucrative."
Put another way,
And unlike earlier times, most of these organizations are no longer reliant on (or controlled by) large conservative foundations. A review of the biggest conservative foundations' grant-making reports found that they were responsible for about only $50 million of the $2 billion pulled in by the groups reviewed by the Phoenix.
Not incidentally, all of this is helping push the conservative base further to the fringe of American politics, and almost certainly damaging the Republican Party. But if you think that bothers the right-wing merchants, you've got it backward. If anything, they are incentivized to help the GOP lose: Democrats in power give them a foe to rally the ideologues against (and a growing pool of disaffected Americans if the economy, or anything else, goes badly). The ascension of Obama and the Democrats was a financial godsend that repowered the gravy train — it was the best thing to happen to them since the Clinton era, when conservative talk-radio listenership tripled, and much of this industry was born.
So are these organizations run by true believers, or cynical parasites? That's ultimately a moot point. It's like asking whether fast-food CEOs eat their companies' food, or if tobacco executives smoke. In a consumer market, the consumer will get what they want from someone, whether it's chicken nuggets, Marlboros, or the most reactionary, extremist fear-mongering.
"If you want to do well in that marketplace, they expect red meat," says Zelizer, speaking of the conservative customer base. "They don't want moderates — that's not what sells."
Palin is red meat, atop red Naughty Monkey heels. She will sell.
Building an empire
Plus, she has an army waiting to follow her — even here in liberal Massachusetts.
Other Massachusetts residents who contribute to right-wing groups, in interviews with the Phoenix following Palin's resignation announcement, agreed with that sentiment. Palin has many options for channeling that following into a quite-profitable enterprise built around her brand.
If she plays it right (and finds trustworthy people to manage her affairs), she can make a lot of money, from a lot of different sources. And there's more than just dollars. Nonprofit organizations will pay for her and her fisherman-husband, Todd, to cash in on their notoriety and live the lifestyle of the rich and famous: travel, well-appointed offices, and other lifestyle accouterments. She will be paid to take part in luxury "conference" cruises, like one hosted by Oliver North's organization in June, or National Review's this month.
(Palin knows all about that world: her path to the V-P nod actually began when she visited with groups from National Review and Weekly Standard cruises during their stops in Juneau.)
And if she's looking for a model of success, she would do well to study at the feet of the master: former Speaker of the House Newt Gingrich.
Gingrich's large and growing empire illustrates the scope of the conservative marketplace. In 2007, Gingrich launched American Solutions for Winning the Future, a "527" organization that can raise and spend unlimited amounts — more than $14 million last year, almost all from small-dollar donors. He also created the for-profit American Solutions, which does the nonprofit's telemarketing. The Gingrich Group offers consulting. There is also the for-profit Center for Health Transformation, funded largely by pharmaceutical companies, and CHT Press, which thus far has published three books, including two by Gingrich. Gingrich Productions creates multimedia products. Most recently, he formed an umbrella group of religious conservative organizations.
He also has a deal with townhall.com, a top right-wing portal Web site (and part of another multifaceted player in this marketplace, Eagle Publishing), to distribute a twice-weekly e-mail newsletter. Largely as a result of all this activity, he has one of the most coveted mailing lists in the business, which commands one of the highest premiums around (starting at $125 per 1000 names). Such lists of proven conservative contributors — who skew heavily toward white, suburban retirees with disposable income — are attractive not only to other conservative groups, but to companies selling financial services, health products, and other wares.
And all of these ventures — plus his contract as an FNC commentator, his highly lucrative speaking engagements, and his paid fellowships with prestigious conservative think-tanks — not only make money off the Gingrich name but promote it, placing him and his products in ever-greater demand.
Whatever Gingrich can do, Palin can likely do better. All of the above, and more, is open to her.
Like Gingrich, who has made an art of it, Palin boosts her visibility, and status, by coquettishly stoking the rumors of a presidential candidacy.
Whether Palin intends to seek the nation's highest office in 2012 or not, she certainly won't say for the next 18 months. If she isn't planning to run, saying so would remove some of her cachet, media attention, and influence. And if she is running, she won't say so — because federal-election laws would then prohibit her from involvement in any political-action committees.
Gingrich is one of the most profitable brand names in the industry, but he's hardly alone. Pat Buchanan, Gary Bauer, Oliver North, and Linda Chavez are among the many competing for conservative donors. (For a comparison of their value in the marketplace, see "Who's Worth What.")
Alan Keyes has parlayed his quixotic 2000 presidential campaign into a veritable conservative kingdom.
Keyes and his loyalists now operate a for-profit Web site; a number of PACs and not-for-profit organizations focused on abortion (Life and Liberty PAC), immigration (Minuteman Civil Defense Corps), and economic populism (Declaration Alliance); a consulting firm (Politechs); a political-research firm (Primer Research); a political Web consultancy (Strategic Internet Campaign Management); a political media firm (Mountaintop Media); a mailing-list provider (Response Unlimited); an online-fundraising site (rightmarch.com); and a media-relations company (Diener Consulting) — many of which operate out of the same address.
If Palin doesn't want to invest in that kind of operation, she could choose to lend her name to those who have the expertise. There are plenty of operatives around who already have the infrastructure and organizations, but who lack a big-name celebrity with drawing power in the conservative arena.
One name-brand who takes that route is radio talk-show host Michael Reagan, son of the late president. He has teamed up with David Bossie — a Republican operative so sleazy that, when Bossie was a top Clinton-scandal investigator for House Republicans, Gingrich had to fire him for having "embarrassed" the effort.
Reagan lends his name and face as "co-founder" of, among other things, Bossie's Presidential Coalition. That PAC raised and spent about $6.5 million in 2007–'08 — 80 percent of which came in contributions of less than 100 dollars, according to federally filed documents.
Of that $6.5 million, three-quarters was spent on fundraising and follow-up with contributors. (Much of it was reported in campaign-finance documents as "survey" work, but was actually telemarketing, conducted by Presidential Coalition's fundraising vendor, under a separate name.) More than $400,000 of the rest went to salaries of Bossie's Citizens United nonprofit — mostly to Bossie and his cohort Michael Boos.
After rent, insurance, and legal and accounting fees, that left less than $150,000 — about two percent of the contributions — to put to actual use. (Compare that with the American Association for Justice PAC, which raised a similar $6.2 million in the 2008 election cycle, and gave $2.7 million of it to candidates.) Most of that $150,000 went (either directly or through other PACs controlled by Bossie and Boos) to a couple dozen candidates, mostly conservatives running for state-legislative office in Virginia, where Bossie and Boos live.
This is not unusual. In fact, of the dozens of organizations for which the Phoenix reviewed recent filings, a great many appear to have very little function other than convincing members of this conservative constituency to send them money (very little of which actually goes to furthering any ideological agenda). On the part of the IRS form where groups are asked to articulate their programmatic achievements, that function is often paraphrased as "educating the public," to justify their tax-exempt status as charitable entities. Other groups tout as their main (or even sole) achievements the number of times their principals appeared on TV or in newspapers.
In some cases, the groups, and even candidates, appear to be shells existing only to perpetuate the flow of money from contributors to the direct-mail companies.
A notorious example is Washington-based Base Connect (formerly BMW Direct), run by direct-mail veteran Kimberly Bellissimo. The company operates sister companies, which are paid to perform the various parts of running the client's direct-mail campaign — production, list purchases, printing, fulfillment, and media. Virtually all of the money Base Connect raises for their client is simply paid to these Base Connect companies, which has led to some public suggestions that it's all a big shell game.
Barely any effort is made to pretend otherwise. Several of Base Connect's clients, like Freedom's Defense Fund and Black Republican PAC, exist only as a theoretical construct — just words on the piece of mail. A Base Connect executive, who serves as those organizations' treasurer, has a standard memo he submits to the FEC, to explain the lack of administrative costs for groups reporting multi-million-dollar operations:
Urgent — give now
Palin can hit almost every hot button on the conservative-movement spectrum. The gun-rights crowd knows her as a rifle-toting hunter. The "Drill, Baby, Drill" crowd sees her as an energy expert. The populists buy the McCain-campaign-created image of the maverick reformer. To military fetishists, she is the proud mother of private first class Track Palin, soldier in Iraq. The economic conservatives praised her denouncing of the federal stimulus (although as governor she ultimately accepted almost every penny) and her willingness to suggest that Obama might be a socialist. (Her one major apostasy, belief in global warming, is almost never mentioned outside Alaska.)
Palin also clearly knows one of the most important lessons of the world she's entering: the urgent need for people to give now. She opened a legal-funds account earlier this year, and in the midst of a recession urged people to contribute money to cover her purported $500,000 debt — while at the same time, she was cashing a book advance reportedly worth between $4 million and $7 million. She has also already raised more than $700,000 through her political action committee, SarahPAC, since creating it earlier this year.
Finding and exploiting that urgent need, or even creating it out of thin air, drives the industry.
Gun-rights advocates, for example, should be relieved that the Obama administration and the Democratic Congress have taken virtually no action on gun control in these first six months. But an appeal for money to send thank-you notes to Capital Hill is unlikely to open many wallets.
So instead, groups like Gun Owners of America (GOA) — run by another titan of this industry, Alan M. Gottlieb — have been sending out action alerts warning, in dire terms, of an emergency threat to gun owners supposedly embedded in the Senate's health-care-reform bill (and before that, in Obama's stimulus package). The alleged danger lies in a provision that would create a digitized medical-information database, to increase efficiency, save money, and improve treatment. But according to GOA, it is possible that this could somehow result in a gun-store background check accessing your medical records — which could result (I am not making this up) in depriving people with Alzheimer's the right to illegally purchase firearms by not disclosing their condition.
Can Palin be this ruthless? Her high-school-basketball teammates didn't nickname her "Barracuda" for nothing.
She also seems to grasp the notion — as Gingrich and Keyes have done — that she can use separate organizations to appeal to different potential contributors. (This serves two ends: gathering a broader range of supporters who might be turned off by some of her views, and creating more targeted direct-mail lists.) The SarahPAC Web site, for instance, emphasizes her economic and environmental priorities — there is no whiff of religion or social values there.
Elsewhere, however, it is clear that she is forging a connection directly to the faith-and-values crowd. Her first speech in the lower 48 this year was at a right-to-life dinner in Indiana, where she spoke of maintaining her pregnancy after learning that Trig would be born mentally disabled. Religious conservatives idolize Palin for it, says Howard Phillips, long-time conservative activist (and onetime chair of the Boston Republican Party) who heads the Conservative Caucus. "Her number-one issue is the defense of life," says Phillips.
HarperCollins, which is publishing Palin's memoir, will reportedly also distribute the book through its Zondervan subsidiary — possibly with additional faith-oriented material. Zondervan distributes through religious outlets, and more than three dozen "strategic alliances" with religious groups, ranging from Focus on the Family to Prison Fellowship.
The financial strength of the religious part of the conservative marketplace is enormous — and the void waiting for a new leader is apparent by the number of people vying for it. Gingrich recently launched an organization called Renewing America's Leadership, intended to be a political arm for religious-right groups. At least three other organizations with the same goal have debuted just in the past few weeks: Faith and Freedom Coalition (chaired by former Christian Coalition head Ralph Reed), the American Principles Project, and the Freedom Foundation — the latter two also featuring prominent leaders. None, however, has anyone with the cachet of Palin, whom Christian conservatives view as a modern-day Queen Esther, as the Phoenix reported during the presidential campaign.
(Palin encourages that view: in one of her first interviews after announcing her resignation, as was widely reported, she proclaimed that, politically speaking, "if I die, I die." What was not widely reported was that, in that instance, Palin was quoting Queen Esther.)
HarperCollins will also most likely help Palin maintain high visibility. It is owned by News Corp, the umbrella under which arch-conservative opportunist Rupert Murdoch operates Fox News Channel.
It's not clear how much formal synergy exists between the two. But it's hard to imagine why else Hannity (a HarperCollins author) provides such a ubiquitous platform to former Clinton advisor Dick Morris, other than to pump up sales for Morris's books, published by HarperCollins — or to imagine Morris's latest book debuting at number one on the New York Times bestseller list last month without that exposure. Others in the HarperCollins stable, like Neal Boortz and Bernard Goldberg, also get plenty of FNC face time. Although it's unlikely that Palin would decide to host her own show — Phillips notes that it would anchor her down — she could make frequent appearances and fill in as a guest host. Especially as the publishing date for her book draws near.
All of this assumes that Palin wants this remunerative path, and not one that takes her to the presidency.
Mitt Romney, by way of example, is doing what potential presidential candidates do at this stage. He travels the country raising money for Republican Party committees and Republican candidates; he raises money through his Free and Strong America PAC, and doles it out to candidates and party committees; and he appears on mainstream news shows to speak about national issues of the day.
That's basically a marketing campaign targeted to the Republican Party establishment — the moneyed interests and beltway insiders — which is still a huge key to winning the party's nomination, says Andrea Campbell, political-science professor at MIT.
Meanwhile, Romney has steered clear of the pitchforks-and-populism base, which tends to make the party-establishment crowd queasy. They want someone like Romney, who skips the "Tea Party" protests to glad-hand with elites paying $1000 a plate.
But if that is the path to the White House, it may not be compatible with becoming queen of the conservative donors. The angry, dedicated base who respond to direct-mail entreaties are looking for someone who demonizes David Gregory and George Stephanopoulos, not someone who chats amiably with them on Sunday mornings.
Which helps explain why the lists of Romney contributors don't command the premium of the presidential candidates he walloped, like, immigrant-bashing former congressman Tom Tancredo.
That's also why some who see Palin as a strong candidate hope she remains a politician, not a brand.
That's the advice of Phillips. "There's no question she's got a bright future" down either path, says Phillips. But activities like running a direct-mail-driven conservative organization, he says, "would diminish the extent of her appeal."
Truth is, the GOP establishment might never warm to Palin, even if she does as they want and disappears for a while to study up on economic and foreign-policy details. Renegades bucking the establishment may historically have a chance in the Democratic Party — including both Clinton and Obama — but not in the GOP.
"Palin is very popular among social conservatives," says Campbell, "not the other parts of the Republican coalition." And that's not to mention the centrists who decide the general election, even if she did win the Republican nomination.
Palin has already showed signs that she has seen her path, and it doesn't include sucking up to the GOP establishment. Not that she will leave the party — she's just making it clear that the Palin brand is separate from the party brand. And she's going to do what's best for her.
In fact, she did not utter the word "Republican" once in her 20-minute resignation speech — in which she pointedly mentioned that she would support candidates from any party. In later interviews, she avoided speaking of the Republican Party as though she was part of it: referring to the GOP as "it" or "they," not "we."
Palin's celebrity status was granted by the Republican establishment, when it plucked her from obscurity last August. But she has never been part of that world. In 2012, ever more comfortable with her lucrative lifestyle, look for her on the National Review cruise, not the Iowa caucuses.