Funding Liberty! Table of Contents

Funding Liberty!

Chapter 8

Favors Returned

National Party Support for Browne's Nomination Drive

In July 1998, the National Chair and high-ranking members of the National Party's staff owed their jobs to Harry Browne and his Presidential Campaign. This circumstance was the latest consequence of the intimate connections that had existed between Browne, Bergland, Willis, Dasbach, Cloud, Winter, and others since 1994. The record of relationships between these men leads naturally to the question of how the political debts to Harry Browne and his political machine were repaid.

As we shall now see, the Libertarian National Committee gave Harry Browne's Presidential campaign extensive propaganda and financial support while Browne was still seeking the nomination, long before Browne became the Party's presidential candidate. A variety of pretexts were used to disguise what was happening. In each case, the National Party maintained deniability. At some point, however, the agreement between acts of the National Committee and needs of the Browne campaign passes faith in coincidence. I begin with direct financial support for Browne's staffers, in which the documentation is clear.  I then examine extensive support for Browne by the Party's propaganda machine. Alert readers will note similarities to ongoing events in the current Libertarian Party, events that could be said to be a repetition of the old pattern to provide support to a new Browne-style candidate.

Propaganda Support

Until Fall 1999, the National Committee gave the Browne campaign extensive advertising support. Browne's name and words regularly appeared in LP News. Of course, he was a former Presidential candidate, but you could fairly ask yourself: How often was Browne featured? How often were Andre Marrou or Ron Paul featured? 

It is perhaps not irrelevant that after the 1996 Browne Campaign LP News changed editor. Historically, LP News had been edited outside the National Party Headquarters. In Summer 1997 Bill Winter was made Editor of LP News, bringing the party's newsletter firmly inside the Watergate Headquarters. Winter had been paid by Browne. As shown by the 8/1/95 memo, Winter was not just a graphics consultant; he was part of the Browne Campaign's inner circle debates on campaign tactics.

The extent to which LP News was to serve the interests of the National Committee's staff and their friends, rather than the interest of the Party and its elected governing body, was revealed four years later. An article about the Willis Invoice and its aftermath was to appear in LP News. The October 2001 issue of Liberty magazine, based on interviews with Dasbach, Winter, and Lark, reported "...Lark and Winter had indeed disagreed about where the article should appear in LP News. Winter wanted it to appear on page 4, a very unprominent position in the paper. Lark thought it was important enough that it should appear on page 1. Winter said that he'd do that if Lark insisted but that he would consider it to be 'a vote of no confidence with respect to his professional judgement' " The story finally appeared on page 3 with a box announcing the location on page 1. On a critical governance issue, the Party's CEO allowed the staff to bury a discussion of earlier staff conduct.

Liberty magazine appends to their description of the situation a peculiar footnote. They had interviewed Winter, but "Curiously, Winter was unwilling to answer our inquiry about the matter. 'I have no comment on this. Why don't you make up quotes on this like you do on everything else?' " Challenged by Liberty to supply an example of a made-up quote, Winter declined.

The National Committee gave the Browne campaign more substantive propaganda aid. In 1998 and 1999 the National Party purchased nearly 4000 copies of Browne's book "Why Government Doesn't Work". The books were to be used as premiums, gifts given to especially generous donors to the National Party.

The books themselves were highly targeted advertising for Browne's next campaign: The National Party does not subsidize travel for the ca. 1000 delegates actually likely to appear at a National Convention. In most states, any Libertarian who wants to be a National Convention delegate is able to do so. By putting a book by Harry Browne in front of the party's 4000 most generous donors, the Party had at its expense put Harry Browne's name, likeness, and words in front of 4000 people who were highly likely to be delegates to the next convention, and who were all relatively able to afford the trip. The book premium by itself was an enormous advantage for Browne, a contribution in kind to his campaign worth many tens of thousands of dollars.

Even if one of Browne's opponents had had a book and the money to spare to distribute it, he could not have duplicated the feat. The Party treated the list of maximum donors as a closely held secret.  Even if the opponent had had the LNC Major Donor list, whatever he sent the donor would have appeared to the donor to be advertising matter and therefore suspect. In contrast, Browne's book came from the Party itself and implicitly carried the Party's imprimatur.

Browne's book was effective well beyond its near-4000 recipients.  The book premium was not a surprise gift. Fundraising letters systematically outlined the additional rewards that would go to major contributors. Even if a recipient of the letter gave no money at all, the recipient saw what the Party thought was a worthwhile gift to thank its donors. And did the party think was worthwhile? Why, the words and thoughts of Harry Browne.  If the book itself wasn't enough, references to Browne's works and quotations from Browne's words in at least some of the Party's direct mail letters might have filled the gap. Fundraising letters went out to Party members on a regular basis. In addition, the Party mailed, under Willis's direct supervision, over two million Project Archimedes letters to a wide range of lists, many of which included National Party members, and many of which includes references to and quotations from Harry Browne.

Direct Financial Support

Payments by the National Committee to Perry Willis continued after Willis resigned as National Director. National Party gadfly Jacob Hornberger raised the issue, writing in one of his regular critiques of the Party "When Willis resigned from the national LP to go to work for the Browne campaign, he cut a deal with LP National Chairman (and current LP National Director) Steve Dasbach that guaranteed Willis continued payments of LP money while serving as Browne's campaign manager...."

The meaning of 'cut a deal' was clarified by LNC member Joe Dehn. The deals had apparently existed well before Willis resigned. Writing on June 18, 2001 to the Libertarian Party membership through the lpus-misc@dehnbase.org email list, Dehn explained

"...The fact is that there were two deals—a more general one and a more specific one. The general deal, providing that Willis would continue to receive money, was made several years prior to the resignation, and not revealed to the LNC until around the time of the resignation (i.e., the 1993-96 LNC was not told about it at the time it was made, and the 1996-98 LNC wasn't told about it until the provision was invoked). The specific deal, about work that Willis would do for the LP during the time that he would be paid by the LP (already required by the earlier deal) was presented to the LNC around the time of the resignation, but without any alternative—the implication was that without this deal, we would still be obliged to pay him but we would get less in return. The LNC was essentially presented with a fait accompli, with no practical choice to be made."

In a later missive, sent to lpus-misc@dehnbase.org on June 19, 2001, Dehn further clarified the contract between the LNC and Willis. Dehn's major theme was that several claims by Willis in his 2001 confession appeared to be untrue. Willis said that prior National Directors were not entitled to participate in LNC meetings, and the LNC had agreed to let him do so. Dehn said that during his three terms on the LNC, all prior to Willis's appointment, the National Director had always been accorded the privilege of participating in LNC meetings, and went on to say "The other thing that seems odd is that there doesn't seem to be any record of the 'agreement' of the LNC to these 'conditions'. The Minutes of the December 1993 meeting do not report there being any such agreement in connection with vote to approve his hiring..." Having discussed the Willis confession, Dehn went on to say "There was, allegedly, an employment contract made between Dasbach and Willis, but this contrast was, as far as I know, never seen by the LNC so it can hardly be cited as evidence that the LNC agreed to its terms."

In support of Dehn's assertions, on June 20, 2001 John Famularo wrote on lpus-misc@dehnbase.org that "I can only speak for myself. I was the Party Secretary at the time (1993-1996) and as such a member of the LNC and the EC. At this point we only have Steve Dasbach and Perry Willis's words that a contract existed as of April 1994. I was never informed of, nor saw any contract during my term in office. However, besides the implied consent to abide by and execute the LNC policies, the specific prohibition on supporting a candidate for internal election was communicated to Willis at more than one formal meeting..."

The LNC uncritically swallowed the most astonishing feature of the supposed contract. I refer to the severance clause. It is not unknown for employment agreements to include a severance clause, under which the employer pays the employee a penalty if the employer chooses to discharge the employee without having good reason. A normal severance clause, however, refers to the case in which an employee leaves his employer involuntarily. The contract for Willis, as released by John Famularo, had a severance clause giving Willis six month's pay if he were involuntarily discharged without cause, three months if he were discharged with cause, and a third severance clause.

The third clause, the one that was invoked, was that rarest of birds, a severance clause in which the employee is paid because the employee voluntarily leaves for other pastures.  If Willis left voluntarily, he got a golden parachute: a half-year's severance pay.   My contacts in the private sector say "There's no such thing!". The presence of such a clause, virtually unknown in private commercial circles, should raise the most serious questions. Why was one offered here? There are vast numbers of commercial publicists and political managers on the market, many of whom will push Libertarianism with the same enthusiasm and consummate skill they used to sell soap. What unique skills did Willis bring to his employer, the Libertarian National Committee? Or, as critics might suggest, did the voluntary resignation clause reflect previously-established plans relating to the 2000 campaign, plans that would permit Willis to work nearly full time for Browne while the National Committee paid his salary? The latter alternative would require that a degree of foresight had for once been applied to Libertarian political campaigning.

Furthermore, why did the LNC accept that such a contract was valid, after it had without the National Committee's knowledge allegedly been signed?  At the time, no LNC member questioned the legitimacy of a secret contract, let alone when the contract had actually been written and signed.

The secret contract appears to have had a profoundly damaging impact on the National Party even while Willis was still on the payroll. The core difficulty was that many issues impinged on how much Willis would be paid under his contract.  The LNC didn't know that Willis had a financial interest in their decisions, on which Willis had direct input because he had the privilege of participating in LNC meetings.

In a late August 2001 message from Joe Dehn to Steve Givot, forwarded by Dehn to lpus-misc, Dehn explains:

"...For THREE YEARS the LNC was operating without the knowledge that its top employee was protected by a secret deal that would have cost the party what was then an amount it could not afford to lose if he was crossed. The rest of the LNC did not know this, _but Dasbach did_. Please note, if it is not already obvious, that this period spanned the entirety of the Willis/Browne work controversy, including the period when Dasbach ‘interpreted’ the office-neutrality rule in such a ridiculous way and all the inaction which followed."

That is, the secret contract put Willis in a position from which he could dictate which policies the Naitonal Party would follow with respect to the Browne campaign. If Dasbach did not follow Willis's policies, and instead removed Willis, the National Party might well suffer unbearable financial penalties. If Willis simply resigned, the National Party would owe Willis a half-year's salary that they could not readily afford to pay. In the end, from the externally-available evidence, Willis was allowed to do what he wanted.

Finally, Dehn also makes a further extremely serious accusation in his June 18 statement, an accusation that was not widely recognized by Party members who saw his remarks. Libertarian National Committee, Inc. is a corporation with a balance sheet. That balance sheet is regularly audited. Dehn claims—and the author has every reason to believe that Dehn is telling the truth—that the LNC was not informed of these obligations to Willis until it came time to pay them. By inference, the obligations did not appear on the balance sheets, in which case the audits were based on information that should have been known to be false and misleading by at least some persons responsible for informing the auditors. Furthermore, the LNC was making decisions based on financial information, notably the balance sheets, that were known to be false and misleading by at least some people who were regularly present at LNC meetings and permitted to speak. However, none of these people spoke up. [As an aside, I know of no evidence that LNC National Treasurers Hugh Butler and Mark Tuniewicz knew of the secret contract or failed in their duties with respect to this issue.]

When the LNC was informed of the alleged secret contract, the LNC did not take action against any of the officers or employees who had apparently misled it and its auditors. Instead of disciplining or removing the responsible persons, the LNC let matters pass. The LNC had already lost control of the Party once when it let Perry Willis get away with his 1995 statement "...Sharon Ayres is his friend and (he) would give her advice if asked but that does not constitute conflict of interest." By accepting that the alleged secret contract with Willis was valid the LNC again lost control of the National Party.

The severance clause covering voluntary resignations directly financed the Browne Campaign's efforts. Willis received a salary from the LNC for a half-year, and was able to work nearly full time for the Browne Campaign without the Browne Campaign needing to pay him for his efforts. The Browne juggernaut that defeated Gorman and Hornberger was thus paid for, in significant part, by the supporters of Gorman and Hornberger, via their dues and donations to the National Party.

A memo dated February 19, 2001 from Libertarian Party National Director Steve Dasbach to "Interested LP members" revealed parts of the money given to Willis by the LNC. Dasbach's memo was a response to an open letter to the Party's membership from long-time Libertarian activist Bumper Hornberger. Hornberger described payments by the Libertarian National Committee, as revealed in the LNC's FEC reports, to Perry Willis, Stephanie Yanik, and Optopia—a business entity sharing a mailing address with Willis and Yanik—and also to Browne's regular publisher 'Liam Works'.

Dasbach traces at length the relationships between Perry Willis and the National Committee. Before 1993, Willis was a political consultant, at times doing business as 'Optopia'.   Dasbach describes the 1993 events:

"When I was elected National Chair in September 1993, then National Director Stuart Reges had given notice that he planned to resign 30 days after the convention, and that he would not be available to provide transition assistance after that date.  Not surprisingly, thirty days turned out to be far too short a period to provide for a smooth transition.

After Willis was confirmed as National Director at the December 1993 meeting, we sat down to write up an employment agreement.  Salary increases were written into the agreement based on performance..."

Dasbach's presentation omits a critical historical issue, namely that Reges was succeeded not by Perry Willis, but by Gene Cisewski.  National Chair Steve Dasbach discharged Cisewski on November 7, 1993. According to John Famularo and his documentation, lobbying for the firing were Willis and Harry Browne's future campaign staff, including Bill Winter, 1996 campaign co-chair David Bergland, and 1996 Browne Campaign Manager Sharon Ayres.

 And now the question that was never asked:  How did Willis's agreement compare with Cisewski's?  After all, Willis and Cisewski both came with good recommendations, and were hired under very similar circumstances. If the two agreements had been written in the best interests of the Party, one would expect that the agreements would be very similar, down to the salaries and severance clauses.

From 1993 to 1997, Willis was the Libertarian Party's National Director. According to Dasbach, after Willis's confirmation in office by the LNC, he and Dasbach worked out an incentive-based contract: The two measurable elements in the incentive were the membership of the National Party and National Committee's budget. The maximal objectives were 20,000 members and $2 million in yearly expenditures by the National Committee. When Willis reached those objectives, his salary would rise to $100,000 a year. The two objectives were in fact reached almost simultaneously in Fall 1996. Because the Party was financially stressed, Willis postponed receipt of part of his salary until Party finances recovered. According to Dasbach, Willis only received some money he was owed in late 1997, after he had resigned as National Director.

Willis resigned in September 1997. Under the alleged contract between Willis and the LNC, Willis was to continue working for the National Committee for another six months, assisting the new Director with the transition process. Between October 1997 and April 1998 Willis was paid approximately $34,000 for his work for the National Committee.

Between Summer 1998 and 1999, Willis continued for the LNC as a consultant managing the National Committee's Project Archimedes mailings. More than 2.25 million letters were allegedly mailed. Willis received a management fee of one cent per letter or more than $23,000 for his management of the program.

The size of the 'management fee' is anomalous.

On one hand, in Summer 1996 then-Party-Chair Steve Dasbach claimed to Dean Ahmad and Jesse Markowitz that Willis had been paid to produce a 'document' for Browne and that Willis produced Browne's document "...on his own time and he was paid market rate for the work."  This document for the Browne campaign was also discussed at the April 1995 LNC meeting. From Browne's FEC filings prior to April, Willis had been paid $578 as of the date of the LNC meeting. The document in question may, however, have been a document for which Willis was later paid $2000.  In either case, Willis’s market-rate pay for a document was no more than $2000.

On the other hand, Willis was paid $23,000 by the LNC—eleven or forty times as much as for the 1995 document—as a management fee to produce and ship a Project Archimedes recruiting letter. If the document for Browne correctly set $578 or $2000 as a market rate for a document, for the second document Willis appears to received far more than market rate.

Regardless of the rate, payment on a royalty basis for writing a fundraising letter is extraordinary, particularly when the royalties are based on the number of copies mailed and not on whether the letter succeeded. I have myself written fundraising letters—including one for a Libertarian Presidential campaign (it made money). The work is in writing the letter and generating the graphics. If you are the writer, it makes essentially no different whether the mailing house is shipping a hundred or a million letters. The writer does the same amount of work, no matter how many copies are mailed. It makes sense to pay a letter writer a flat fee, or perhaps a commission based on returns. Payment on a royalty-type basis based on copies mailed approaches being inexplicable. Furthermore, $23,000 appears to be well in excess of a reasonable market rate, given that $578 or $2000 has already been identified as the market rate for writing a document. Regardless of intent, the $23,000 was a very generous de facto subsidy of the Browne Campaign by the National Committee, in the form of a stipend for Browne's campaign manager, from a Chair and National Director who owed their jobs to the political work of Harry Browne and his staff.

In Fall 1999 Willis told the National Party that he needed to work full time for Browne. He was promptly released from further work for the National Committee. In the two years between his resignation as National Director and the end of his work for the National Committee, Willis had been paid at least $57,000 by the LNC—not a first class salary, but a very healthy supplement to his other income.

Dasbach's memo also reported on LNC payments to Stephanie Yanik. Yanik was employed by the LNC in March and April 1998, earning modestly under $2000. She left the LNC at the end of April 1998 to work for the Browne campaign.  

Finally, Dasbach's memo discussed the National Committee's payments to Optopia and Liam Works. In April 1998 the National Committee purchased more than 900 copies of "Why Government Doesn't Work" using Optopia as the vendor. These copies were personally autographed by Harry Browne for use as a premium—a gift that the party sends to donors to thank them for their generosity. Payments to Liam Works between 9/23/98 and 10/11/99 came to nearly $12,000, and paid for approximately 3000 additional copies of Harry Browne's book "Why Government Doesn't Work". Two-thirds of the purchases happened after April 1999, as Browne was preparing to launch his campaign. Browne's book was used as a premium for people who gave generously to various LNC fund drives; some copies were also sold. Between Liam Works and Optopia, the LNC purchased and distributed almost 4000 copies of Browne's book.

The price the LNC paid for these books was quite modest. $4 per copy is a good price for a hardback, even on a remainder shelf. Writing of the use of Browne's book as a premium, Dasbach says that the LNC used it because 'it was the best book for this purpose that was available for this price. We stopped using it in Fall 1999 because Browne was about to become a declared candidate for the LP's Presidential Nomination.' Dasbach notes that in Fall 1999, 'Why Government Doesn't Work' was replaced as a donor premium by several other volumes, none of which were as effective as premiums as Browne's book had been. In 2001, the LNC resumed the use of Browne's book as a premium, continuing to distribute it to major donors even after the Willis pay-off was revealed.

In writing his February 19, 2001 memo, Dasbach expressed his displeasure at Hornberger's approach to ferreting out the truth about the various payments to Willis, Optopia, and other vendors. Hornberger separately responded. It is important to emphasize that their exchange happened before John Famularo published the notorious Willis Invoice to Dean, Spear & Associates. When Dasbach and Hornberger wrote, information available to most Party members indicated unambiguously that in December 1995 Willis had stopped working for the Browne campaign.

Dasbach lamented that 'Hornberger made no attempt' to contact the National Party prior to publishing his "Optopia and Liam Works: An Open Letter to the National LP Hierarchy and the Harry Browne Campaign". Dasbach maintained that if Hornberger had contacted the National Party, 'he would have discovered that the payments were all reasonable and proper for the products and services provided.'. Dasbach asserted 'The National Staff is committed to maintaining the highest standards of honesty and integrity. Assertions to the contrary are without merit.'. Dasbach's assertion, describing the National Staff that reported to Dasbach as National Chair and Party CEO, turned out to be wrong. While Dasbach was National Chair and Party CEO, Dasbach's own National Director had taken a substantial under-the-table payment from the Browne campaign.

Hornberger, writing in a February 2001 memo "It's the Browne Campaign's Turn", responded that he had previously tried the private-contact approach that Dasbach recommended. "Four years ago,"  Hornberger wrote, "…when I learned that Harry Browne had made ... payments of money to LP officials, I write Dasbach...requesting an explanation." According to Hornberger, he, Dasbach, Perry Willis, and Bill Winter had a private meeting (LNC Member Sharon Ayres, says Hornberger, was not present.) On this date, Hornberger asserted, Dasbach, Willis, and Winter all "…assured (Hornberger) that they would never again use LP resources to advance the pre-nomination campaign interests of Harry Browne." These assurances to Hornberger proved to be incorrect.

Forward to Chapter 9

The CMLC Index Pages

The CMLC Publications Pages

Funding Liberty! Table of Contents