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GOP Mail Firm’s Net Rate Raises Concerns

Retired Army Lt. Col. Bill Russell’s campaign burn rate has raised concerns about the viability of his candidacy — and questions about the direct-mail firm he employs — according to local Republicans who could pick him as their nominee to run for the late Rep. John Murtha’s (D-Pa.) seat this week.

Although Russell raves about his campaign staff and direct-mail firm, Base Connect, former clients of the national direct-mail firm interviewed for this story said they are hesitant to use the firm again because they believe they didn’t get enough bang for their buck.

Russell was the 2008 GOP nominee against Murtha, and so far this cycle he has raised more than $2.9 million for his campaign — a sum that even most incumbents would marvel at. But at the end of last year, he reported having just $211,000 left in the bank because he spent an exorbitant amount to raise that eye-popping figure.

“It matters because if you’re looking for the ability of a candidate to win a seat, you’re looking at how much cash do they have. What they’ve raised is kind of irrelevant,” said Charlie Gerow, a GOP strategist based in Pennsylvania.

Local officials will pick either Russell or businessman Tim Burns on Thursday to be their nominee in the May 18 special election. Meanwhile, both Republicans are also running in the primary for a full term on the same day in the southwestern Pennsylvania swing district.

Given that candidates must run simultaneous campaigns for both races, every penny counts.

In the fourth quarter of 2009, Russell raised a whopping $896,000 but spent $809,000, about $680,000 of which was spent on direct-mail-related costs. Gerow allowed that Russell’s fundraising “ultimately might cause some angst” for Republicans if he’s the nominee and can’t raise enough money for the special election.

The pitch for Base Connect, formerly known as BMW Direct, is simple: A campaign might not net much cash during most of the campaign while donors are prospected, but the candidate will have ample funds to spend in the final stretch of the race once those donors are farmed.

As one GOP consultant put it, Base Connect employes a strategy of “no cost prospecting.”

“It’s not a high net process because of postage costs, because of printing costs,” the GOP consultant said. “It is not the most cost-efficient way to raise money, but it is a way to raise money.”

According to direct-mail fundraising totals supplied by Base Connect, Russell is utilizing his donor list and raised almost $193,000 from Feb. 18 to March 3. A company spokesman said only a minimal part of that will go to vendors and overhead costs at this point, although an exact figure was not available.

Russell said he’s been pleased so far with Base Connect’s work, and the GOP contender is even featured in a promotional video on the company’s Web site. The sprawling 12th district covers several television markets, and Russell said his direct mail also works as campaign advertising.

“Every piece of mail that goes out is an advertisement,” Russell said. “And that’s something that a lot of folks overlook.”

According to several direct-mail consultants, earning back 80 percent of a campaign’s costs during the prospecting period is considered to be a great rate of return. However, once a donor list has been cultivated and groomed, campaigns can consider a 200 percent rate of return to be an excellent deal.

“Yes, but it’s still better than your standard political rubber-chicken fundraiser,” Russell said. “It still comes out way ahead of that.”

Base Connect has a range of clients, from sitting Members of Congress to long-shot conservative candidates in heavily Democratic districts. Base Connect Chief Operating Officer Michael Centanni confirmed the firm works for Reps. Trent Franks (R-Ariz.) and Anh “Joseph” Cao (R-La.) and counted Rep. Geoff Davis (R-Ky.) as a longtime client until last year.

Base Connect pitches itself, however, as a firm that does direct mail for candidates who could potentially have wide appeal and therefore a national fundraising base. For example, Base Connect worked for Russell when he ran against Murtha, whose views on the war in Iraq generated national headlines.

Among the other candidates the firm does work for is Lt. Col. Allen West (R), who is running for a second consecutive cycle against Rep. Ron Klein (D-Fla.).

One GOP operative who had an unpleasant experience working with the firm last cycle said he got the impression that Base Connect pitched candidates with little or no chance of winning.

“They feed off of these fifth- and sixth-tier candidates that really, I don’t think they know what they’re getting into,” said one GOP operative, who declined to be named on the record because of his current job.

Centanni sees it differently: Candidates with potential don’t have to invest any of their own campaign funds in prospecting donors.

“None of these candidates have we ever asked, ‘Oh, by the way, we need a check for $40,000 or $50,000 or $100,000 to get this program started,’” Centanni said.

Base Connect’s biggest money earner last cycle was Deborah Honeycutt (R), a black doctor running as a conservative against Rep. David Scott (D-Ga.) in a majority black district.

Honeycutt raised $5.3 million for her 2008 campaign but only netted about $700,000 of that figure to use to fund non-fundraising campaign activities, according to her top aide.

Honeycutt lost to Scott by 38 points in a district that President Barack Obama carried with 72 percent. Her cash position was not much better when she ran in 2006: Her aide said she raised $2.3 million but only netted $350,000 for the actual campaign. She is running again this cycle but is no longer using Base Connect.

“I found that they did their job well,” she said. “I also found that the return to the campaign was not what I had hoped it would be.”

Frank Ryan (R), a businessman and retired Marine colonel, is making his second run this decade to try to win Rep. Tim Holden’s (D-Pa.) seat. He said he learned a lot from his 2004 race, when he raised $861,000 with the help of Base Connect but came in fifth in a six-way primary.

Although he has no complaints about Base Connect from that cycle, Ryan is still going with a different strategy this time around.

“And if you notice in 2004, a significant portion of my funds raised when to fundraising expenses,” Ryan said. “I’m doing it entirely differently this time. I’m doing very little direct mail.”

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