Funding Liberty! Table of Contents
Funding Liberty!
Chapter 22
Post-Election Scramble
Willis Launches His 2004 Campaign
In January 2001 the Browne campaign began a series of after-action reports, discussing how it had spent its money, and what it felt its strengths and weaknesses were. Perry Willis's chief report appears as the January 20, 2001 LibertyWire. The Campaign acknowledges raising 2.42 million dollars for its 1997-2000 effort, two-thirds again as much as the 1.45 million dollars that were raised in 1994-1996. Willis did not emphasize that the majority of the million dollar increase referred to his campaign to secure the nomination for Browne, not to his campaign to put Browne in the White House. For July through November 1996, Browne's 1996 campaign spent $638,000, while in July through November 2000, Browne's campaign spent a shade over 1 million dollars. A $1 million increase in total campaign budget led to less than $400,000 in additional spending during the General Election campaign.
The 70% increase in campaign budget between 1996 and 2000 should be matched against a 130% increase in party membership, measured January to January of the election year. Campaign fundraising grew only half as fast as party membership. If this ratio of increases is applied to Browne's original call for 200,000 members by 2000, it becomes apparent that Browne had seriously underestimated how many Party members were needed to put his plan into effect.
Willis claimed that 12% of income went to overhead, 26% went to fundraising, and the remaining 62% went in some sense to outreach activities. In citing these numbers, Willis followed the sound accounting principle of distributing all costs over all projects in a reasonable way, so that there is no spending that is not assigned to any project. As he goes through the historical data, he discusses difficulties with the 1997-1999 approach, the candidate exploratory committee.
Willis's report demonstrates a strong grasp of the fundamentals of strategic planning. Before proposing what should be done next time, he first examined what was done last time, and which aspects of that effort were least satisfactory. Only after examining the historic record did he turn to proposing a course for the future. Willis's sound approach should be contrasted with the approach used by the Libertarian National Committee in developing a strategic plan, in which a historical analysis was by deliberate decision not undertaken.
Noting the unsatisfactory procedures of the past, Willis explains an alternative process for developing a campaign committee and infrastructure. His approach is astonishingly similar to what Willis and collaborators are now doing with Real Campaign Reform and the American Liberty Foundation, and are in significant respects similar to what Michael Cloud and Carla Howell are now doing with the Massachusetts Income Tax elimination effort.
Willis proposes a new way to develop a Presidential campaign: Identify a candidate and a set of issues that will be attractive to the Party and to donors. Create an educational foundation, potentially with tax-deductible contributions, and use the unannounced candidate as your travelling public spokesman. The travelling spokesman is from a foundation, not a political campaign, which greatly increases his credibility with the press. Politicians are suspected of saying whatever will serve them best. Foundations are expected to be advancing the public interest via their examination of the issues. Readers will recall a period prior to his election as Governor of California during which Ronald Reagan travelled the country giving speeches. There is no need to stay with a single spokesman. The use of a stable of spokespeople gives the foundation's ideas wider exposure and tests the viability of several possible candidates.
As election year approaches, one spokesman declares as a candidate. The foundation staff developed and tuned at the expense of foundation donors largely changes uniforms and becomes the campaign staff. The contacts and donor lists that were developed at the expense of the Foundation are then rented to the campaign at some cost.
Why is this arrangement politically effective? Because you are running a foundation rather than a campaign, you can hope for a few large donors who will give far more to you than they would have given to a campaign or political party. Even if you are less fortunate, you will develop a list of people who have donated $1000 each, and who can be asked to give again when the campaign starts. Because their prior gift was to the foundation, the donors begin as tabula rasa with respect to campaign contribution limits, so that from many of them you will be able to extract at least $1000 more than would otherwise have been the case. IRS reporting requirements on nonprofit groups are somewhat less tedious than FEC reporting requirements, though the public-information IRS 990 form will reveal how much you paid your primary officers and employees. As Harry Browne demonstrated in 1997-1999, trips to remote cities to give presentations in hotels to supporters and enthusiasts do on the average break even. The trips may not be fundraisers, but they are effective ways for a good candidate to travel to exotic places, meet interesting people, and infect them with the habit of donating generously.
Who, though, is to be the spokesman and future candidate? Here the foundation has an enormous advantage over a campaign committee. The Foundation scheme lets its users field several spokesmen at the same time, each working a different set of constituencies to develop part of a master donor list. The users learn from experience which of the spokesmen are effective at working crowds, and which would not be effective candidates. In the end, one of the spokesmen becomes the candidate, while the other spokesmen become surrogates, the Vice Presidential candidate, or nominal future cabinet secretaries. It is highly probable that Browne would have been one of the spokesmen if the Foundation approach had gone as Willis intended.
However, the clique within the Libertarian Party that gave us Browne 1996 and Browne 2000 has been quietly developing another candidate for 2004. The development methods were as interesting as those used by the Browne campaign. The candidate was about as credible as Browne—never before elected to anything. In developing their candidate, the clique showed no more concern than in the past for the impact of their activities on real Libertarian candidates with far better chances of winning their elections.
Tuniewicz Resigns
At the December 2000 National Committee meeting, National Treasurer Mark Tuniewicz secured amendments to the Party's Policy Manual, changing the specified duties of the National Treasurer. Tuniewicz had been unhappy with National Chair Bergland's treatment of issues relating to Tuniewicz's office. In particular, Bergland had forbidden Tuniewicz to communicate directly with the Party's Auditors or with consultants on FEC Filings. Tuniewicz was instead required to pass his inquiries through the Party's staff in Washington. A nominal explanation was that the Party was short of money, and that the National Treasurer might waste it asking questions of the auditors. This explanation seems quantitatively odd. The Party had a budget of several million dollars. Even at professional charging rates, a Treasurer could have consumed a significant number of hours of Auditor time while making a negligible impact on the budget.
At least some Libertarians were very disturbed by Bergland's ruling as Party CEO. There was one other obvious reason why the National Treasurer would need to communicate directly with the auditors. If the National Treasurer suspected financial irregularities on the part of the Party staff or National Chair, Bergland's ruling forced the Treasurer to reveal to the staff—who report to the National Chair—what he suspected whenever he posed a question to the auditors. This consequence of Bergland's ruling as National Chair did not appear to some Libertarians to be a sound way to run any organization, no matter how honest the current National Committee and Staff might be. After the 2002 National Convention, investigation of National Headquarters accounting methods by newly-elected National Chair Geoff Neale and National Treasurer Deryl Martin revealed substantial deviations from standard practice, deficiencies that might well have been uncovered if Tuniewicz had been able to interact directly with the auditors.
As seen in the December LNC Minutes, the revised Policy Manual read in part:
"Section III Position Description of National Treasurer
A. Responsibility and Authority. The Treasurer is the Chief Financial Officer of the LNC and shall have responsibility and authority to perform all functions in conjunction with that role. In part this includes
1. To prepare and file Federal Election Commission reports and income tax returns as required by law, directly or _by written delegation_ to staff.
... To supervise and review the preparation of all accounts of the party..."
Tuniewicz was soon to learn the value of his amendment. The National Party had long filed monthly Financial Disclosure reports with the Federal Election Commission, permitting party members to learn how the Party was spending the members' money. In January 2001, the Washington staff filed with the FEC to change the Party's filing frequency from "monthly" to "quarterly". Under FEC regulations, for 2001 a 'quarterly' filing schedule meant once for each half-year.
Tuniewicz had not directed anyone to make the change in filing frequency. Nor had he given a written delegation to staff to make the change. Indeed, he did not know that there had been a change until well after it occurred. The Minutes of the February 13 LNC meeting quotes Tuniewicz as saying '...he was not contacted regarding this decision until about one month after the FEC was told that the decision had been made.' While Tuniewicz did express agreement with the decision, agreement with a fait accompli is a feeble sort of agreement. Furthermore, this change had certain major consequences not recognized at the time, namely that it greatly increased the potential filing burden on the LNC. As a quarterly filer, the LNC was required to file a report whenever it made expenditures in connection with a Federally-linked primary election, an event that potentially happens with significant regularity during each Federal Election cycle.
My sources in the Watergate Building indicate another reason that might have motivated some people to want to dispense with the monthly filings. In the first two months of 2001, the National Party spent $80,000 more than it took in. LNC, Inc. then made accounting changes which yielded a one-time income stream that cancelled some of these losses. As Dasbach correctly noted, critics of the group running the Party had taken to examining FEC reports for interesting information. Plunging the Party into debt, so that at one point Party primary vendor Brick Mill went unpaid for more than 90 days, certainly qualified as an 'interesting' finding. The changes in filing frequency hid from critics of the Lark-Dasbach administration how Lark and Dasbach were running the Party.
In April 2001, National Party Treasurer Mark Tuniewicz announced that he would resign as Treasurer at 8 AM, April 21, the start of the next National Committee meeting. Tuniewicz announced that on that date he would also revoke his membership certification ("the pledge") and cancel his life membership in the National Party. Tuniewicz had previously announced his resignation from the Massachusetts Libertarian Party state board. He had been a member of the National Party for 21 years, including six years as a member of the National Committee. Now he would be gone.
As of this writing, little of Tuniewicz's promised explanation of his resignation has appeared. In the April 2002 Let Freedom Ring!, Tuniewicz discussed certain cultural issues within the Party as a difficulty.
Tuniewicz promised that he would not join another major party. In this, he differed from his 2000 opponent for National Treasurer. His opponent had been Nevada Libertarian Terry Savage. After the November 2000 general election, Savage defected to the Republicans. Savage was believe by many Tuniewicz supporters to be the de facto candidate of the Libertarian Party establishment--perhaps not with Savage's knowledge or consent--because for reasons that remain unclear the establishment wanted to replace Tuniewicz.
So why did Tuniewicz resign? As Editor of Let Freedom Ring! I obtained from confidential sources a statement from Tuniewicz to the National Committee outlining several issues related to his resignation. I have confirmed with Mark Tuniewicz that the following is indeed what he said to the National Committee. Mark asked me not to quote one number until it could be verified exactly, and I have deleted that sentence from the following.
Addressing the National Director, Tuniewicz wrote the National Committee in April 2001
“At the Executive Committee teleconference held in February of 2001, I let you know at the end of your Director's report that I hadn't been receiving my normal weekly financial information for at least the 3 weeks prior. You said you would check with Nick Dunbar as to the status and that you'd take care of it.
At March's EC teleconference, I again pointed out that I STILL had yet to receive this reporting, now about 8 weeks behind. I expressed this in the context of our discussion regarding the new monthly reporting package that the EC was in the process of developing. You again cited the need to speak with Mr. Dunbar, and had no other explanation.
Steve, it's April [2001], and I STILL haven't received these simple, system-generated reports. In my opinion, there is just no excuse for this...It is simply outrageous! I'd appreciate it if you wouldn't attempt to pass off responsibility for this to others. You are responsible for insuring that this information is provided on a timely basis.
While I recently announced my resignation effective later this month, all of these events took place prior to that announcement. I plan on continuing my oversight responsibilities up until then, which obviously include review of financial information. You should also be aware that my inability to carry out my responsibilities as Treasurer due to this situation was one key factor in my recent decision to resign. I can't do my job when you can't (or won't) provide me with the information I specifically and repeatedly request to do so.
For the Committee's information, there have been MANY instances during my tenure as Treasurer when my weekly reporting has been 1, 2, or even 3 weeks late. This was repeatedly discussed by members of the executive committee under Mr. Bergland's administration. [A sentence stating the large exact number of events is here snipped until its numbers have been verified. GP] There have also been repeated instances of our monthly financial information being provided very late to the LNC, and periods of many months on end when regular providing of monthly revenue and expense information to state chairs did not take place. This is a longstanding problem that Mr. Dasbach has been made aware of previously.
Steve, I've attempted to be understanding about those situations, which I consider to be sloppy and unprofessional at best, and incompetent at worst. I've been hesitant to raise this issue strongly in the past because of our friendship and close working relationship.
But this most recent string of events is, in my view, serious enough to easily be considered just cause for termination because of the clear inattention to an important job responsibility after repeated notifications to correct same.
I urge you to reconsider your position as National Director. LNC members, state chairs, and members are concerned, as am I.
Mark Tuniewicz
Treasurer
Libertarian National Committee, Inc."
Claims were circulated in some quarters that these issues had never been raised before to the LNC Executive Committee. I quote from the LNC Executive Committee Minutes, available to all LPUS members at archive.lp.org:
LNC ExComm Teleconference
September 26, 2000
“...Dehn asked why the EC has not been receiving updated financial information on a regular basis.
Dasbach said he has been swamped. He said that he would send out a report the following day.
Dehn said that he has not received an income sheet and a balance sheet in some time.
Givot said that he has not received one in several months.
Dasbach said that he would discuss this with Nick Dunbar.”
And at the March 13 LNC 2001 ExComm meeting, Michael Gilson asked if a written copy of the National Director’s report on “outstanding accounts payable” had been emailed. The National Director, among other things, reported that there is a technical limitation on LNC financial software "which precludes generation of reports in a given year until the prior year’s books are closed.”
I discussed this final statement with several persons knowledgeable in financial reporting software. There was agreement that it was possible for a firm using paper ledgers to need three months to close its books on a year. It is, however, surprising to read that in a party with a large number of computer-literate members that the Executive Committee and its staff had to go nearly a quarter of a year without getting detailed financial reports. This difficulty has since in part been fixed; in 2002 the Party closed its books for 2001 in late January.
On April 21, 2001, Mark Tuniewicz’ resignation became effective. At the LNC meeting, At-Large representative Lois Kaneshiki offered a motion that the LNC should determine why Tuniewicz resigned before appointing a replacement. The motion was rejected. The LNC instead appointed Deryl Martin as the new National Treasurer.
Other issues related to the Tuniewicz resignation appeared as an exchange of public missives between Tuniewicz and Bumper Hornberger. Hornberger wrote as a small part of a much longer letter:
“LNC members serving on the Bylaws Committee included LP National Treasurer Mark A. Tuniewicz, who recently and without explanation resigned his post and his membership in the party and who so far has declined to come forward and disclose whether or not he has information about the use of third-party intermediaries to funnel money to third-party beneficiaries."
Your author is not aware of any occasion prior to this statement in which the question of third-party beneficiaries had been raised prominently. I am certainly not aware of prior occasions on which Tuniewicz had actively declined to answer questions on the topic. Tuniewicz promptly disclosed his information, responding:
“With the exception of the recent disclosures by Mssrs. Famularo, Willis & Browne, I don't recall LNC, Inc. or the Browne campaign utilizing 3rd party intermediaries to funnel money to third-party beneficiaries ... with one exception:"
Tuniewicz went on to detail the exception, to which we return in our discussion of events in scenic Massachusetts. The exception involved not the Browne-Bergland events but efforts to groom a successor to Browne. Tuniewicz concluded his letter
"Other than this item, I don't recall any use of intermediaries from 1996 when I joined the LNC through the end of my term as National Treasurer earlier in 2001. I'd like to stress that these issues have absolutely nothing to do with my resignation as Treasurer and from the LP. Any suggestion to the contrary is libelous...
With best wishes,
Mark A. Tuniewicz"
Tuniewicz's acts and statements were for many Libertarians a significant indication that difficulties in the National Party did not just represent the complaints of a particular faction within the party. The unrolling Browne nomination scandal provided another.
And now we have reached Chapter One of this book, for at 4 in the afternoon on April 21, 2001 John Famularo distributed to the Libertarian National Committee the remarkable Willis invoice.