Funding Liberty! Table of Contents

Funding Liberty!

Chapter 5

The Nominee Campaigns

Browne captured the nomination. What did he do with it?

The biggest number associated with the campaign remains the fanciful assertion that the Browne campaign effort spent $3.5 million dollars in 1996. This claim was made by Harry Browne in LibertyWire, an electronic newsletter for his supporters, in an issue dated "a little over 200 days before the start of the 2000 Presidential Campaign in January". Browne talked of an "8.75 million national campaign effort in 2000" which would be "5.25 million more than in 1996".

The 1996 national campaign spent nothing like 3.5 million dollars. For all of 1996, Browne's Campaign Committee spent barely more than $900,000. Only $638,000 was spent after Browne captured the nomination. During the general election campaign, the National Committee spent another 1.3 million dollars. Ignoring the modest detail that the National Committee had extensive other duties besides supporting Browne, total Campaign and Committee spending for July-December 1996 was under 2 million dollars. For all of 1996 through elections, total spending by both the Campaign and the National Committee was only 3.1 million dollars, far less than Browne had claimed for his campaign effort alone.

During the general election campaign Browne 1996 spent $638,000. The advertising budget was $6120. That's the total itemized media advertising for the post-nomination campaign. Were you wondering why you didn't hear Browne radio ads in 1996? Except on four stations: He didn't buy any. Were you wondering why you didn't hear Browne TV ads in 1996? He didn't buy any. Browne's 1996 campaign spent less than one cent on the dollar to broadcast its message to the general public. Willis, of course, claimed he went over to Browne because Browne would do public outreach, not because Browne had invested heavily to retain his services.

Browne did do direct mail and printed advertising, with payments to Mount Vernon Printing, Jack Williams, Accumail, and Muni Savyon totaling over $80,000. Direct mail fundraising costs appear in this total. Browne's book did get his message out to at least some people who otherwise would not have heard it. Mount Vernon Printing and Accumail were vendors in 1996 and in 2000; Browne 1996 gave them substantially more than Browne 2000 did.

Browne's payments to his staff, particularly the $57,000 to Campaign Manager Sharon Ayres, were heatedly debated at the 1998 Party National Convention. $57,000 for the general election campaign is an annualized pay of $114,000 per year. $114,000 is a lot of money, more than most Americans will ever make in one year. The Campaign claimed that much of this money was reimbursement for legitimate expenses.  No evidence for this claim has ever been supplied.

Relations with State Parties

Libertarian State Parties provide a substantial part of the volunteer and other support for Presidential Campaigns. The Browne Campaign's treatment of state Party relationships in 1996-2000 does not appear to provide a positive model for future Libertarian campaigns.

Between the National Convention and Labor Day, relations between Browne and the Pennsylvania Libertarian Party went badly downhill. Repercussions last to the present. In 1996, only activists knew what had happened, but by 2000 many State Party members knew. Between 1996 and 2000 Browne's popular vote in Pennsylvania in the November Election fell by 62%.

In 1996 Pennsylvania had more national party members than all but a few other states. Its activists were vigorous and active, making it a natural for a Presidential campaign tour. State Party Chair Ken Sturzenacker reports spending weeks negotiating with Browne staffer Terry Bronson, trying to set up dates for a tour. A final agreement included the week around Labor Day, putting Browne in Philadelphia at Independence Hall at the traditional start of the campaign season. The tour included seven metropolitan areas stretching from Philadelphia to Wilkes-Barre to Philadelphia, with unique events at each stop. A fundraising dinner had already presold 200 tickets. Browne would make an early-morning hand-shaking appearance at a Stroudsburg commuter bus station used by Wall Street brokers to travel (nearly two hours, each way, every day) to work. In addition to the Independence Hall appearance, Browne was to pass through Philadelphia on an open tour bus, appearing with other LP candidates and a traditional string band.

The first sign of trouble came two weeks before the appearance. According to Sturzenacker, he received a 'strange and troubling' telephone call from Browne campaign associate Geoff Braun, cancelling the Stroudsburg appearance. According to Sturzenacker, "Braun curtly told me that 'Harry doesn't do that sort of stuff' ".

Two days later, reports Sturzenacker, the Browne trip was cancelled. While he was the State Party Chair and host and had arranged the trip, Sturzenacker maintains that he was never contacted by the Browne campaign about the change of plans. Instead, Sturzenacker received an email from Tim Moir, the local Regional Representative to the Libertarian National Committee, saying that Moir had been called by Perry Willis and informed that the trip was cancelled. As Sturzenacker learned when he was finally able to reach Willis, the email was correct.

According to Pennsylvania activists, the cancellation caused massive disruptions around the state. The Berks County LP had to refund the 200 tickets it had already sold. Philadelphia Press and Party members, who had in many cases adjusted Labor Day plans to meet Browne, had to change arrangements at the last moment. The host of one event had to stand at the site telling people who showed up to see Browne that Browne would not be there. Michael Sensor, Editor of the eZine LibertyCap, reported in 2000 that he had tried to interview a Browne campaign official about the cancellation. Sensor received a flat 'No Comment' in response to his questions.

By the end of 1996, Browne's political machinations had created a reputation that would permanently mar his future achievements. A politician's word to other politicians is his stock in trade. By breaking his promises to his fellow politicians in Pennsylvania and New Hampshire, Browne destroyed the political capital that permitted him to deal with activists in those states. In later years, Browne was to skip further opportunities to build political capital by travelling to advance the Party. In 1997, then-Libertarian Murray Sabrin ran a large-scale campaign to be elected Governor of New Jersey. He raised hundreds of thousands of dollars, got to debate his major opponents, drew 5% of the vote, and according to one exit poll saved Christine Whitman's re-election drive:  He selectively drew votes from her Democratic challenger, James McGreavey. Browne could have campaigned for Sabrin; he did not. In 2001, Nashville, Tennessee was rocked by demonstrations opposing a proposed state income tax. The demonstrations were led by Libertarian activists and radio talk show hosts. Browne was regularly invited to make the drive from his Tennessee home to Nashville to appear and speak; equally regularly, Browne did not appear in Nashville. New Jersey and Tennessee activists also did not forget Browne's absence.

The P Transaction

Accounting software is seldom the stuff of political machinations. Accounting and programming can be dry-as-dust topics. The P Transaction was different. Through the P Transaction, Perry Willis and the Browne Campaign cost the Party tens of thousands of dollars, enhanced Willis's salary, and selectively increased the 1998 and 2000 delegate counts of pro-Browne states.

How could an accounting module do all this? The National Party has a database system to keep track of members, donors, accounts, and ledger entries. In 1996, the database contents were maintained by computer code written and maintained by activist John Famularo. Corresponding to each allowed set of changes to the database was a "Transaction" [We are discussing the 1996 system, which has since been changed.] In National Committee coding parlance, a "Transaction" was a computer code module that when invoked modified the data base in specified ways. For example, the "C Transaction" was invoked when a donor gave cash. The contribution was recorded as associated with the donor, the cash on hand record was updated, and if the contribution was at least $25 and the donor was a member (someone who had signed the pledge) the member's period "in good standing" (Party nomenclature does not quite match this standard parliamentary phrasing) was extended by a year.

On May 3, 1996,Party National Director Perry Willis asked John Famularo to add a new transaction, the ‘P Transaction’, to the Party database system. The nominal purpose of the transaction was to permit the National Party Headquarters to record contributions to the Presidential campaign, if hypothetically the LNC took over the accounting and FEC filing requirements for the Presidential Campaign. However, the P transaction did other things. In particular, if a person were on file as having signed the pledge, and if they gave at least $25, their expiration date (after which they were no longer a member in good standing) would be incremented by a year. I have confirmed from John Famularo— who wrote the computer code—that the incrementation process for the P Transaction was cumulative. If a donor gave repeatedly, for each separate donation of $25 or more an additional year was added to the member's period in good standing.

The actual memo requesting the changes, as supplied to me by John Famularo, reads

"Subj: system request
From: Perry Willis 76216,2726
To: John Famularo 70726,1575
Date: May 3, 1996

I know you're very busy with the convention so I've tried to keep requests to a minimum (there haven't been any for awhile), but in preparing for the nomination campaign there is one change that we need to have made before the convention if humanly possible. This is so that we can do caging and FEC reporting for the Presidential campaign should it come in house (as appears probable).

The database should be modified to allow the entry of a new class of transactions. They will behave similarly to the "M" (Marrou/Lord) transactions in 1992. Since we don't yet know who will win the nomination and because we probably want a more generic approach anyway, we will use the letter "P" to denote Presidential transactions.

The P will be stored in the field bacct. So that means the P distinction is at the level of N (NatCom), E (Exempt), W (Write-Off) and K (In-Kind). We expect to limit P transactions to a certain range of source codes, but it is not necessary to program that limitation.

In 1992, the Marrou/Lord transactions did not affect properties like expiration dates. These new P transactions, however, should be counted for calculations like expiration date. We want all of the presidential contributors to get LP NEWS and all of our other mailings, and to become members if they sign the certification. The simplest way to describe it is that P transactions should be included in c12, t12, t36 and t99, just like N/W/K transactions. Any P material sales transactions should be included in t12/t36/t99, but not in c12, just as with other material sales transactions. Because P transactions are included in c12, we would expect properties like the following:

If an individual has no expiration date and they have $25 in P transactions, they should be given an expiration date (subscriber if no certification on file, otherwise a subscriber).

If an individual has a signed certification and they give at least $100 in P and/or other contributions in a year, they qualify for a premium membership.

P transactions should be listed on the daily report. On the summary page, there should be a separate column for P transactions (Natcom/Exempt/Presidential). P transactions should NOT be included in the summary of transactions by source code (option A on the Reports menu).

Let me know if you see any problems."

Famularo notes that the intent as expressed to him was to have the code in place before the election, and to apply it before the election only to Harry Browne's campaign records, so that Browne donors and only Browne donors would receive such benefits as the membership renewal or extension.

The Party had long had in place another Transaction Code for importing the names of potential contacts as supplied by a Libertarian political campaign. This other Transaction added the names, addresses and other contact information to the appropriate part of the Party database, so that the contacts could be used for future mailings and outreach. However, the long-standing Transaction had no effect on the membership roster, only on the mailing and contact lists. In contrast, the P Transaction expanded the roll of members whose dues were current. The number of members determines the state-by-state allocation of delegates to future National Conventions and, as will be seen, influenced Perry Willis's pay from the LNC.

We now reach the LNC Executive Committee meeting of June 19, 1996. All committee members (Chair Steve Dasbach, Vice Chair Karen Allard, Secretary John Famularo, Treasurer Hugh Butler, and LNC appointee Sharon Ayres) were present, as were observers Perry Willis, Ron Crickenberger, Stuart Reges, and Gary Johnson. Stuart Reges is identified in the Minutes as a former National Director and Party computer consultant; the Minutes neglected to note the more germane fact that he was a current member of the Browne Campaign staff.

Reges proposed to the LNC that the "P Transaction" should be added to the computer code. Reges said that the Browne campaign would supply information before the convention; Willis announced that a staff worker had time before the convention to enter the data. Famularo disagreed with other Executive Committee members as to whether having the Party handle such information before the convention appeared improper, but agreed to write the needed code. The final motion authorized the National Headquarters to "begin processing the historical contribution information from any Presidential campaign willing to provide such information". The final vote was AYE—Allard and Butler, NAY—Famularo, and ABSTAIN—Ayres and Dasbach. Under Roberts' Rules, Dasbach, as chair of a small committee, had had the option to defeat the motion by voting to create a tie. Butler had previously failed to notify the LNC that it was financially supporting Browne’s campaign.

The June 19 Minutes do not explain the detailed functions of a ‘P Transaction’. The July 22, 1996 Minutes provide the details as supplied to the LNC. Between the two meetings, a new National Committee had been elected; the new members of the Executive Committee were Chair Steve Dasbach, Vice Chair Karen Allard, Secretary Gary Johnson, Treasurer Hugh Butler, and LNC Representatives Ron Crickenberger and Bill Hall; all of whom were present. Observers included Mark Tuniewicz, Joseph Dehn III, and Perry Willis. Willis reported that the P Transaction was working, but information from the Browne Campaign had only been entered after the convention. "Perry Willis said that some former members of the Libertarian Party whose dues had lapsed had contributed to the Harry Browne campaign. He said their memberships were being reactivated if they had given at least a certain amount." According to the Minutes, Joe Dehn said that there should be a public announcement that Browne contributors were "being made members of the Party" based on their contributions to Browne.

The P transaction had several consequences that the Party as a whole might not have approved, if the consequences had been clearly understood.

First, Willis had a secret letter of employment agreement with the National Party, whose terms were only revealed to the LNC on the day in 1997 that he resigned and began collecting his severance pay. In 1996, this agreement was known only to Perry Willis and to National Chair Steve Dasbach, who were both present at the July 22 meeting. Under the agreement as posted by John Famularo, Willis's pay was determined by the previous twelve months' revenue and by the current number of members. So long as the Party had had adequate revenue, each increase of one thousand in Party membership was worth $4000 or so per year to Willis as an annual pay increase. The Browne campaign had thousands of donors, or so it said. If a significant fraction of them were reactivated or transformed into members by the P Transaction, Willis would benefit financially.

When the LNC Executive Committee discussed the P Transaction, only Willis and Dasbach knew about Willis's employment agreement. Neither disclosed to the National Committee that Willis had a personal financial stake in putting Transaction P in place. Even Willis's enthusiasm for deploying the P Transaction before the National Convention can be explained by reference to his employment agreement. Under his secret agreement with Dasbach, Willis's salary was adjusted quarterly. If enough memberships could be reactivated in June, Willis's salary might have gone up three months sooner than would otherwise have been the case.

Second, the National Committee renewed the ‘memberships’ (properly, periods when dues were current) of people who had paid money to Browne but not to the Party. The Browne campaign did not pay for these extensions. The National Party paid the cost of mailing LP News, etc. Some Libertarians will recall periods when the LNC mailed "instant membership offers", membership cards that were valid if the recipient signed. Browne donors who were not Party members and who then signed the Pledge became Party members. However, National Party By-Laws refer to a member in good standing as one who has paid the established dues. The By-Laws as voted by the National Convention do not permit people to become members in good standing when they had not paid the Party any money, and when no one else had paid for their membership.

Third, while many of these memberships would expire in July 1997, continued Browne fundraising through the end of the year and the multiple incrementation procedure meant that other memberships could persist into December 1997 or later. There is little information as to how many did so. For the 1998 convention, December 31, 1997 was the critical date, because the delegate assignment to the 1998 National Convention was determined in large part by the number of party members in each state the prior November. By converting his donors into Party members, Browne selectively increased the delegate allotments to states in which he had strong support from well-to-do persons. Recall that the Libertarian Party does not have the money to support delegate travel. If you are a delegate, you almost certainly have to pay for the trip. By increasing the delegate allotments from states likely to have pro-Browne people who could afford to go to the National Convention, Browne potentially enhanced the control he and his clique had over the 1998 National Convention.

Debate over the P Transaction continued through the April 1997 LNC meeting. According to its Minutes,

"Steve Dasbach described an arrangement where contributors to the Harry Browne for President campaign received a subscription to LP News and the campaign gave $25 to the party. He noted a correction to the 1996 income statement: it should show a $58,050 credit to membership income representing the dues payments and a $58,050 debit to prospecting expenses representing the value of the names provided by the campaign.

"Joe Dehn questioned the propriety of the original arrangement and the lack of documentation. It started before Harry Browne won the nomination and there was no written agreement. Joe Dehn said it violated the bylaws because the LNC sets dues and the LNC did not pass a resolution on this policy. Steve Dasbach said the policy was discussed at LNC and LNC Executive Committee meetings."

Dehn, in calling my attention to this section of the Minutes, advised me

"— technically they were not being "made members" as a result of the contributions, but rather becoming members whose dues were current. But I was surprised by this, and my point was that this was not something that should have been done without people knowing. I was annoyed both at the idea that the staff had essentially taken upon themselves to redefine the dues requirement—a job assigned by the bylaws to the LNC—and at the idea that the measurement of our progress according to paid membership, which I had been carefully tracking for years, had been suddenly distorted without any warning.

"In response to my complaint that it was a bylaws violation, the first explanation was that it had been approved. But nobody could show me when it had been approved. The story then became that the Browne campaign was going to pay for these memberships—they had intended to do this all along. I never saw any evidence that this plan had occurred to anybody before I asked, either, but I was willing to accept that as being in conformance with the bylaws, since we didn't have any rule against one person paying for another person's membership. As long as _somebody_ paid the $25, the principle of the dues being set by the LNC was safe. I was still annoyed about the distortion of the count, but there didn't seem to be anything I could do about that—the damage had been done.

"But in the end they didn't really pay it. They just created some silly entries in the accounting system so they could claim to have paid it."

Indeed, the reader will note that the cost of the memberships turned out to be $58,050, corresponding to 2,322 new members, and what should have been the independently-determined value of the names supplied from the Campaign to the LNC by astonishing coincidence turned out to be exactly the same $58,050. As a result of the coincidence, Browne owed the Party nothing for the members, and the Party owed Browne nothing for the names. It is interesting to note—referring ahead to a 1999 anomaly—that I have been told by sources within the LNC that Browne may have cut another deal on these same names, transferring them to the Party in exchange for which Browne's 2000 campaign got free use of Party mailing lists or components thereof.  If these sources were correct, the Party would appear to have paid a very high price for the list of names.

The author is amused to note that when a few years later the Libertarian Party of Massachusetts turned over to the National Party the names of more than 2000 registered Libertarian Party voters, names generated by my 1996 U.S. Senate Campaign effort, my voters did not get the same benefits. They were instead treated to Project Archimedes letters. Nor did my campaign—which was not consulted in advance about the transaction—receive any benefits from the National Party. Indeed, the thanks that I received from the National Party for my 1996 effort was an eventual apology for having hired away some of my professional petitioners, probably costing me (based on those petitioners’ estimates of their collection rates) ballot access for my 1996 Senate campaign.

Dasbach's report specifying the cost of the 2,322 names to the LP neglects to mention that under his secret contract with Willis those 2,322 additional members increased Willis's salary by $8000 or more per year.

In 2005, it was learned that some Browne donors had as a result of the transaction received life memberships.

What is the significance of the P Transaction for the Browne Campaign?

Once again the National Party had given Browne's campaign a direct subsidy of substantial value for Browne's 2000 effort.  Browne donors, in addition to the letters and the books and other tchotchkes, now had received Party membership extensions, which some of them believed had been paid for by the Campaign, but which were actually gifts in kind from the Party. Those positive memories should reasonably be expected to have a cash value for Browne's Campaigns in the years to come.  In 1997, Browne would again ask his donors for money.  By rewarding Browne's pre-1996-convention supporters with Party memberships, the Browne donors were given happy memories by the LNC, memories that would still be in place when Browne launched fundraising for his 2000 Campaign.

There is room for doubt as to who actually approved the delayed payments and special rental rates for Browne's uses of the LNC mailing list.  There is absolutely no doubt that the $58,050 gift in kind to the Browne Campaign, in the form of members having their dues made current, was voted by the LNC Executive Committee.  Allard and Butler voted in favor; Famularo voted against.  As Chair of a small committee Dasbach had the option under Roberts' Rules of Order to defeat the motion by voting 'no' and making a tie.  Dasbach's 'abstain' was the vote that passed the motion.

Election 1996

At long last, Election Day came and passed. William Jefferson Clinton crushed Robert Dole, but narrowly failed to get a majority of the popular vote. Ross Perot, in his second run for President, finished third at 8%. Ralph Nader beat Harry Browne and finished fourth. Nader had refused to allow fundraising for his campaign. The Browne campaign spent two-thirds of a million dollars. Browne finished fifth, receiving 470,000 votes, one half of one percent of the total. Browne's performance was mediocre for a Libertarian Presidential candidate. He hadn't obtained the near-million votes of the 1980 Clark campaign. He had not fallen to the dreadful near-quarter-million votes of some previous efforts. However, he had done better than he would do in 2000.

Soon after the election attacks were circulated on two of Browne's predecessors. As recalled to the author by Bill Woolsey: David Nolan published a critique of the 1980 Clark campaign for not being adequately libertarian. A major criticism was that the Clark campaign hadn't called for immediate abolition of the Income Tax. (Clark had called for cutting the income tax in half.) According to Woolsey, Nolan explained to him that there had been a request that Nolan write the critique. David Bergland criticized the 1988 Ron Paul campaign for not knowing how to work with Libertarians.  Bergland had been Browne's 1996 Campaign Chair.  Whatever the actual motive for these attacks, they had the secondary effect of making many Libertarians feel worse about 1980 and 1988, and thus less bad about 1996.

Composite Spending

How did the Browne Campaign spend its money to get its half percent of the vote?

The primary beneficiary of the Browne general election Campaign's spending was LNC, Inc.; it received $117,000. Sharon Ayres received $57,000. Other Browne campaign staffers received rather less.

Are these numbers of interest? The Libertarian Party's Presidential candidate is selected by unbound delegates elected from the several states. Libertarians across the country have limited information about Presidential campaigns. They select National Convention delegates who they trust rather than voting directly for a Presidential candidate about whom they can know little. The delegates have the duty to understand issues and study possible candidates.

The Party rank and file might not have examined the 1996 Browne campaign. Browne's supporters in the higher reaches of the Libertarian establishment remained responsible to the people who elected them. Before they supported Browne in 2000, it was their moral duty to look under the hood of Browne's machine. What had Browne done in 1996? What would another Browne Campaign provide the Party?

I begin with a table, showing what Browne spent during his election campaign.  The periods in the Table are FEC reporting periods as fixed by FEC regulations. "Pre-General" is the first 18 days of October. "Near General" is mid-October through late November.

1996 Post-Nomination Spending

Income and spending peaked in August, and did well in the Near General period. All told, the Browne campaign brought in nearly $591,000, and spent nearly $640,000.

As an aside, compare total spending in 1996 with the 2000 campaign, which is fresher in many readers' memories. For 2000, Browne spent

2000 Post-Nomination Spending

Browne 2000 in each reporting period collected and spent about two-thirds more money than Browne 1996 did. The 2000 Campaign's improvement was more marked before the National Convention. In both 1996 and 2000, spending was largest in August and in the near-General periods.

The 'size of the campaign' quoted here, namely two-thirds of a million dollars in 1996 and one million dollars in 2000, is far smaller than numbers quoted by some other Libertarians. If you want to inflate these numbers in mostly meaningless ways, add to the spending total for the active campaign the pre-nomination campaign spending (which pushes the 2000 campaign up to 2.4 million dollars). Better yet, add to the total the entire LNC budget, as though the LNC did absolutely nothing except field a candidate for President.

Where did the 1996 money go? For the same period, FEC reports reveal

1996 Post-Nomination Aggregate Expenses

Recipient                           Purposes                                                  Amount

Libertarian National             administrative and contract services     $117,000

      Committee

Sharon Ayres                       payroll, travel, supplies                             $ 57,000

Carlson Wagonlit Travel    travel                                                            $ 47,000

Mount Vernon Printing       printing                                                        $ 44,000

Terry Bronson                      payroll, travel, supplies                             $ 33,000

JHarris Dean Consulting    consulting, travel, and supplies               $ 29,000

Michael Cloud                      consulting, travel, and supplies              $ 28,000

Harry Browne                       candidate reimbursement                          $ 27,000

Robert Martin                       payroll, travel, office supplies                  $ 24,000

Jack Williams                        books                                                           $ 23,000

PrimePay                                payroll and tax services                            $ 20,000

Stuart Reges                         consulting, reimbursement for travel     $ 19,000

Accumail                               postage and mailing                                  $ 18,000

Lisa Paley                              payroll, reimbursement                              $   7,000

Jo Jorgenson                        VP campaign expenses                              $   6,377

Debra Greeson                      payroll, travel, supplies                             $   6,181

Advertising                           WTOP, WBZ, WKOX, WRKO                $   6,120

Muni Savyon                        mailing                                                         $   4,769

Phone                                     answering                                                    $   3,329

Multiple                                 polling                                                          $   2,596

 One sees that money went to staff, to outside vendors for travel, printing, and mailing. Near the bottom of the list, $6120 was spent for a few radio ads. The Browne campaign talked about outreach, but when it came time to reach out to the public it spent one cent on the dollar.

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