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WisePA Managing Partner in The Hill – Ethics of Influence: Political Consulting

Note: The title was altered by The Hill and does not represent the content, or the author’s intent, of the article. The original title was Ethics of Influence: Lobbying and is the second installment in a three part series that discusses ethical business practices in lobbying, politics, and public relations agencies.

Blame Citizens United for unsavory political consulting
By Brian J. Wise
August 19, 2016

Democracy has long been lucrative for the people who best know how to manipulate the system — political consultants.

But in the wake of the Citizens United decision – which led to candidates and parties embracing the power of third party organizations – a new type of political consultant has emerged, and is quickly destroying the integrity of a system which has historically led to strength and stability on both sides of the aisle.

This new political consultant focuses on developing short-term nonprofit organizations to raise money and purport to influence elections and public policy issues. The problem for some, is their motivations are focused on lining their pockets, rather than achieving results or influencing policy. Most importantly, the deceptive practices and empty promises consultants make to donors have led to a near universal distrust by political donors of all stripes, which has led to a decline in the ability for legitimate groups which effectively fight for worthy causes to receive funding.

Simply put, because of the actions of a few political heavyweights over the last 10 years, especially on the Republican side of the aisle, donors are not willing to invest as heavily in the types of efforts which can most effectively and efficiently influence the political and policy climate in the country. This has led to a degradation of the ability of legitimate candidates, or policy advocates, to build the support they need from third party groups to achieve their policy and political goals.

This is not about political contributions. Donors continue to give to political candidates and committees, and those entities provide valuable services to the candidates. But every election season, thousands of new nonprofits spring up, and consultants “go on the hunt” for donors with whom they have some relationship, or a colleague who might have a relationship with a high net worth individual. They then try to convince as many donors as they can to write six- to seven-figure checks to fund efforts which promise to influence the election. All the while, many of these consultants have as their main goal to make as much money for themselves and their friends, who are usually vendors of the new organization, before the donor realizes they have been hoodwinked.

The secret sauce is in how these consultants make their money. Most political consultants generate income in four ways.

First, they will receive a monthly retainer from the organization, usually dictated by the consultant, and often pushing the maximum of what would be considered reasonable for their services by the IRS.

Second, they receive a commission on the fundraising they bring in. This commission usually ranges from 8-12% of the total amount raised. Many times this will be paid to an LLC or another entity the consultant owns.

Third, the consultant will receive a commission on the ad buy, which typically amounts to 8-15 percent of the total ad buy. One reason you see so many ads during campaign season, regardless of their effectiveness, is they are a main source of income for the consultant class.

Lastly, the consultant commonly will receive finder’s fees or kickbacks (also called “rippers”) for contracts provided to vendors. For instance, a consultant may have a friend who owns a website development company, and the friend may charge the organization $40,000 for a new website (which should cost $30,000), of which the consultant may make a $5,000-10,000 commission. With little oversight of these organizations, this can be a very lucrative business for America’s political consultants, and a difficult environment to navigate for political donors.

The scam of nonprofit “soft-money” fundraising has impacted political campaigns, but more importantly, it has left both parties, but especially the GOP, without the caliber of third party organizations, or the extensive network needed to effectively fend off policy and political threats from insurgent candidates and hot-button issues.

Compounded with the fact since 2008, there has been no single “kingmaker” within the GOP, the party is in a rudderless position which arguably it hasn’t experienced since the late 1970s. The Democratic Party is in a crisis of its own, with two kingmakers representing different interests within the party: the Clinton family and Senator Elizabeth Warren.

Many wealthy donors on both sides of the aisle have made valiant efforts to develop networks of influence, and many have had limited, targeted success. For the GOP, however, those successes on small policy battles are short-lived, because the structure of the party apparatus lacks the coordination and united power necessary to control the makeup of the party and its policy platform. On the Democratic side, the coordination is much more centralized and unified and, as was seen in the 2016 primary fight, is split in half along the lines of the followers of the two party leaders mentioned above. Contrast this with a Republican party with at least a half dozen factions, and even more donors, vying for control and competing against each other.

Networks of support take decades to build and require consistent and reliable funding. But the recent actions of groups which raise hundreds of millions of dollars promising results, and then fail to deliver, have stripped the GOP of the support critical to building an infrastructure for effective advocacy. More importantly, these efforts to bilk donors out of their cash lead to a culture of mistrust within the party, and lead to efforts which lack integrity and accountability.

Donors to conservative causes must focus on identifying trusted partners who offer transparency, accountability and integrity in return for their investment. More importantly, they should put pressure on consultants to deliver results. Contracts between organizations and consultants should incentivize effectiveness and reward results rather than further deteriorate donor confidence through failed endeavors.

Oversight of the operations of nonprofit and political organizations, as well as a thorough vetting of the operations and standards of those organizations, are vital to the effective and efficient use of limited financial resources.

 

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WisePA Managing Partner in The Hill – Ethics of Influence: Public Relations Agencies

Note: The title was altered by The Hill and does not represent the content, or the author’s intent, of the article. The original title was Ethics of Influence: Lobbying and is the second installment in a three part series that discusses ethical business practices in lobbying, politics, and public relations agencies.

PR firms should focus on winning over cash
By Brian J. Wise
August 18, 2016

Public relations companies throughout the world represent corporate, nonprofit, and individual clients by telling their stories to different audiences. For decades, the industry has innovated in almost every manner except in the way they structure client contracts. In this area, they ignore innovation in how to effectively represent their clients in favor of old-school models that don’t mesh with modern campaigns.

The traditional business practices of public relations firms are structured primarily around open-ended retainers and billable hours. These payment models incentivize ineffectiveness, lead to high client turnover and, I would argue, are fundamentally unethical.

It is important for businesses to have an “agency of record.” For these types of engagements – general public relations work on an ongoing basis where there is an understanding that the firm is simply available on standby for “whatever comes up” – open-ended retainers and billable hours are certainly reasonable and appropriate.

This contract structure, however, becomes problematic when a client needs something specific and measurable accomplished.

Clients who entrust crisis and public opinion campaigns to public relations agencies should be wary of doing so under the same terms as traditional ongoing representation contracts. When these campaigns are structured based on billable hours and open-ended monthly retainers, it incentivizes the firms engaged to delay the achievement of the campaign objectives as long as possible to maximize their profit. In other words, the longer it takes to win, the more money the firm will make, whether they achieve the client’s objectives in the end or not.

PR firms regularly prolong their efforts in order to maximize the income they can receive from a client in need. To compound this issue, clients are frequently willing to pay premiums for crisis work, further incentivizing firms to ignore the urgency that the issue presents to the client in exchange for a lucrative contract.

As a result of this reverse-incentive structure, the tactics used by firms often reflect a desire to show quantitative results, rather than qualitative success. Firms will, for example, frequently suggest that clients run “digital grassroots campaigns” which may tout a large number of letters sent to Members of Congress, or thousands of social media engagements. Such tactics are meant to create false confidence for the client that these firms are actually doing something, without regard for how or whether those tactics are actually advancing the campaign towards a win.

There is no problem with public relations firms making money. They are, after all, for-profit companies. But firms that hope to retain lucrative clients for the long haul, rather than churning through contracts after extracting maximum short-term profits without demonstrating real results, would be wise to employ a more ethical business model.

An ethical client relations contract should, as its foundation, incentivize winning over losing. An ethical engagement for a crisis campaign should be structured such that if the client wins, the firm wins (and gets paid). The ethical business model incentivizes efficiency in the use of resources and the choice of tactics that advance the campaign, rather than creating a false impression of success.

This type of business model is gaining traction among boutique advocacy firms, but has yet to be adopted by larger companies. Those firms are seeing historically high client churn rates due to their focus on work product rather than real results and clients are increasingly choosing these new, more aggressive competitors. They understand that the firm with a clear financial incentive to win will work harder and smarter than the one that gets paid regardless of whether they achieve the client’s goals.

When clients begin to demand contracts that pay firms to win, instead of to work, they will begin to see a change in the results of their campaigns. And we will begin to see a change in the operations, staffing and tactics of our nation’s large public relations agencies. It is time that we change the ethics of influence.

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WisePA Managing Partner in The Hill – Ethics of Influence: Lobbying

Note: The title was altered by The Hill and does not represent the content, or the author’s intent, of the article. The original title was Ethics of Influence: Lobbying and is the second installment in a three part series that discusses ethical business practices in lobbying, politics, and public relations agencies.

Real life lobbying looks too much like House of Cards
By Brian J. Wise
August 17, 2016

Influencing legislation on behalf of clients is a cutthroat business. Personal and professional relationships are leveraged, legal boundaries are pushed, and influence is peddled through every means available. 

But what if lobbyists were incentivized to work against the interests of their clients? What if lobbyists saw great opportunity for profit in the failed policy campaigns they are hired to execute? What if lobbyists sabotaged effective efforts in order to create a prolonged need for their services at a time of crisis, when clients are willing to pay a premium? That is our current system, and the people losing are the clients of traditional lobbying firms, and the businesses, employees, and consumers they represent.

Stories of the nefarious tactics of lobbyists representing corporate interests make for good storylines. Shows like “House of Cards” and “Scandal” may seem far-fetched, but the reality of the lobbying industry isn’t far off from the themes of those hit television shows. The fight isn’t always for influence on the Hill; plenty of people are able to claim that. The real fight within the industry is for market share and profit, with many government relations consultants willing to do almost anything, including work against their own clients’ interests, to grow their share of the pie.

According to OpenSecrets.org, more than $3.22 Billion was spent on lobbying in 2015. That amount was split amongst 11,512 lobbyists, the smallest number of individual lobbyists since 1998. The nature of lobbying makes this industry ripe for the kind of competitive tactics consultants use to increase their own profits.

Lobbyists are regularly hired by clients experiencing a crisis to accomplish very specific legislative or regulatory objectives. This often leads clients to overlook the incentives that lobbying firms may or may not have for achieving those goals. In addition, lobbying firms are frequently asked to work collaboratively with competing firms who may be able to offer different assets and resources to a specific campaign. When this happens, one team of lobbyists can end up working against the other team of lobbyists, in some cases sabotaging the efforts of the competing firm, in order to solidify their ongoing relationship with the client. In these cases, it is easy to blame a lack of results on the collaborating firm, rather than taking responsibility for the failure within their own practice. Ultimately, the loser is the client.

Compounding their desperation, traditional lobbying firms are becoming increasingly threatened by the effectiveness of independent third party organizations and their ability to influence public policy debates in a much more efficient way than traditional lobbying. Gone are the days of walking into an office with a bag of cash and a demand for a quid pro quo vote. The rise of third party grassroots and political organizations has, in many regards, reduced the need for a dedicated lobbyist, and traditional lobbyists are taking note. These groups exert much more power and influence than a single lobbyist ever could. With the increased influence of movements like the Tea Party on the right and the Warren Wing of the Democratic Party, the insurgent power of these organizations has challenged and, in many cases overtaken, the establishment regimes over which traditional lobbyists exerted so much influence.

The changing roles in the industry of influence lead lobbyists, therefore, to fight back for their share of each client’s budget. As lobbyists see their share threatened, they fight to discredit and destroy the effective campaigns that are replacing them. 

This can be seen within grassroots advocacy organizations, especially on conservative issues. Organizations who receive a significant portion of their funding from corporate interests and high net worth individuals are being pressured by lobbyists to return to the traditional lobbying model. But instead of embracing this new model, lobbyists are increasingly grasping at the air, hoping that clients won’t notice the effectiveness of third party organizations and the more efficient tactics they use to mobilize grassroots support to influence elected officials, rather than the lobbyists’ pay-for- play approach, which continues to see campaign contribution limits drop and their relative influence declining with it.

While ultimately shortsighted and not at all in the interests of the client, these are the extreme lengths many lobbyists will go to avoid embracing innovation in the industry. To evolve would be to accept the threat to their market share.

Clients who seek to influence public policy would do well to recognize the incentives that motivate each lobbyist with whom they contract. It is not always better to employ dozens of independent lobbyists that all work for different companies. They may have different relationships, but that gives each one of them more people to blame for the failure of a given campaign.

Lobbying campaigns are most effective when they are run through a single shop, with a single person who is ultimately accountable for the success or failure of a campaign. That “lead” must be incentivized to win. If you are in an industry that seems to be under constant attack, you must ask yourself if it is time to consider a different strategy, to develop a base of support now to mitigate regulatory or legislative attacks in the future. As part of this process, it is critical to question the tactics of failed campaigns and determine whether the government affairs professionals entrusted with leading these important policy campaigns are working with you, or against you.

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Wise Public Affairs Hires Dane Bahnsen as Vice President

FOR IMMEDIATE RELEASE
Published: March 1, 2016

WASHINGTON, D.C. – Wise Public Affairs (Wise PA) today announced it has hired Dane Bahnsen as Vice President, Business Development, who most recently was the National Finance Director for Mission:NEXT with the Jeb 2016 presidential campaign. Prior to his work on the Jeb 2016 campaign he served as the Florida State Finance Director for Right to Rise USA Super PAC and has quickly established himself as a leader in political fundraising and campaign management. Bahnsen is a combat veteran who served in Afghanistan where he trained Afghan National Police and earned the Combat Infantryman Badge. He started with Wise Public Affairs on March 1, 2016.

“As Wise Public Affairs continues to grow, Dane brings an unparalleled network of relationships and resources to our clients,” said Brian Wise, founder and Managing Partner of Wise PA. “Dane represents the new face of public affairs in this country with an appreciation for incentivizing effectiveness rather than encouraging failure. Those principles are the foundation of Wise Public Affairs. Dane’s expertise and experience will complement our firm’s exceptional staff and reinforce our WISE values – Winning, Innovation, Service, Ethics .”

Bahnsen will head up the firm’s business development efforts, as well as nonprofit and political fundraising service offerings.

Wise Public Affairs is a unique public affairs firm specializing in strategic advocacy, grassroots mobilization, and nonprofit management. Wise PA works on behalf of its clients to influence public policy, public opinion and public behavior through results-driven strategic advocacy campaigns. 

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Wise Public Affairs Hires Laura Keehner Rigas as Vice President

FOR IMMEDIATE RELEASE 
Published: February 4, 2014

WASHINGTON, D.C. – Wise Public Affairs (Wise PA) today announced it has hired Laura Keehner Rigas, a 15-year communications veteran who most recently was National Communications Director for the American Conservative Union (ACU) and its Conservative Political Action Conference (CPAC). Rigas previously served as a trusted leader in several senior positions in the Bush Administration, including as U.S. Department of Homeland Security Press Secretary, U.S. Department of Justice Senior Advisor, and at the White House. She left ACU in January to accept the position of Vice President, Strategic Communications, at Wise PA.

“In Washington where there are thousands of communications professionals who promise to deliver, Laura is someone who has a record of delivering for employers from the highest levels of government to nonprofits, and now our clients will receive that same quality of counsel,” said Brian Wise, founder and Managing Partner of Wise PA. “We are lucky to have an opportunity to welcome such a seasoned and creative team player to our family.”

Rigas will lead the firm’s strategic communications, digital marketing, and media outreach efforts on behalf of the firm and its clients.

Wise Public Affairs is a unique public affairs firm specializing in strategic advocacy, grassroots mobilization, and nonprofit management. Wise PA works on behalf of its clients to influence public policy, public opinion and public behavior through results-driven strategic advocacy campaigns. 

 

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Wise Public Affairs Hires GOP Policy
and Coalitions Expert, Sarah E. Makin

FOR IMMEDIATE RELEASE 
Published: September 19, 2013

Washington, D.C. — Wise Public Affairs (WPA) today announced it has hired Sarah E. Makin, a 7 year veteran of Capitol Hill who most recently served as the Director of Conservative Coalitions and State Outreach for the House Republican Study Committee (RSC). Makin, who has been a trusted policy and coalitions advisor to RSC Chairman Steve Scalise (R-LA), Governor Mike Pence (R-IN), Chairman Jeb Hensarling (R-TX), and Representative Randy Forbes (R-VA), left the Hill in late August to accept the position of Vice President at Wise Public Affairs.

“Ms. Makin has been one of the brightest and most effective staffers on the Hill,” said Brian Wise, founder and Managing Partner of Wise Public Affairs. “Her extensive relationships both on and off the Hill will offer our clients unparalleled access to the nation’s most prominent organizations, leaders, and elected officials. When it comes to coalition building and policy advocacy campaigns, Sarah is the person that you are glad is on your team, and not your opponents’.”

Sarah began working with Wise Public Affairs in September, 2013, and will lead the firm’s coalition building and Capitol Hill outreach efforts on behalf of their clients. She will also serve as a lead instructor for the firm’s innovative grassroots advocate training program called Advocate Boot Camp (www.AdvocateBootCamp.com).