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Consultant bridges ad campaigns
By SARA FRITZ
© St. Petersburg Times, published July 31, 2000
WASHINGTON -- In the sweepstakes of professional politics, Alex Castellanos has hit the jackpot.
A Republican media consultant known for his stunning attack ads, Castellanos is currently employed by three lucrative clients with similar objectives: presidential candidate George W. Bush, the Republican National Committee and Citizens for Better Medicare, a pro-Bush advocacy group sponsored by the pharmaceutical industry.
All told, these three contracts will net Castellanos' consulting business many millions by the end of the year.
But Castellanos' impressive client list has caused some critics to cry foul -- not because he's making so much money, but because his representation of this particular threesome is seen as a way for Bush, the Republican Party and a powerful special interest group to coordinate their efforts in ways federal campaign finance laws were designed to prevent.
By representing the GOP and Bush as well as an arm of the pharmaceutical industry, Castellanos' critics say, he can coordinate the advertising of the Republican presidential candidate with one of the nation's most powerful special interests, whose spending for this purpose is not limited by federal election laws.
Candice J. Nelson, a political scientist at American University who has studied the ethics of consultants, says many would refuse to do what Castellanos is doing: working in tandem for a candidate, a party and an interest group.
"It raises serious ethical questions," Nelson says. "The main question is: Who is your real client? Is it the party, the candidate or the interest advocacy group?"
Reform groups are also testing the legality of informal alliances like these.
Common Cause and Democracy 21, two allied reform groups, took legal action Thursday against both the Democratic and the Republican parties on grounds they are violating the law by coordinating advertising funded separately by the party organizations and the presidential nominees. Consultants often play the "linking" role between the party and the candidate, too.
"It's a charade," insists Fred Wertheimer, who heads Democracy 21. "Despite what the law says, all the advertising is being designed and controlled by the presidential candidates."
A long track record
In his mid 40s, Alex Castellanos, a Cuban-American with a well-known preference for cigars and expensive clothes, is considered a leading advocate of hard-edged, negative advertising.
In promotional materials for Castellanos' company, National Media, he describes himself as "media consultant to five U.S. presidential campaigns" who "has helped to elect eight U.S. senators (and) six governors." Among his clients have been Florida Gov. Jeb Bush and former Gov. Bob Martinez.
Castellanos' most notable ad, broadcast in 1990 on behalf of Sen. Jesse Helms, R-N.C., was both jarring and uniquely understated. It showed the hands of a white man tearing up a letter he received from a prospective employer. The letter said the white man had been rejected for the job in favor of a minority candidate. The ad was clearly designed to stir up resentment among white voters toward minorities in general and, more specifically, toward Helms' black opponent.
To this day, consultants debate the merits of that ad. Under the Code of Ethics of the American Association of Political Consultants, members pledge that they "will use no appeal to voters which is based on racism." Castellanos' name does not appear on the AAPC's membership list, however.
Castellanos was chosen to work for Bush and the Republicans because of his record of success -- even though he played a part four years ago in GOP presidential nominee Bob Dole's ill-fated campaign. His work for Dole was tamer than usual, simply using Clinton's own words -- "I think I raised them too much" -- against him in a television ad. After Dole lost, Castellanos was widely quoted saying he regretted that the campaign had failed to do more negative ads.
The story of Castellanos' three clients -- Bush, the RNC and the pharmaceutical industry -- and how they allegedly work together suggests that as the role of paid political consultants has increased dramatically over the past decade, so too have the ethical dilemmas multiplied.
In politics, Citizens for Better Medicare is what is known as "a 527" -- a group created under Section 527 of the tax code. Such groups have proliferated in recent years because they have been permitted by law to influence elections without having to disclose a list of donors, as a candidate would.
The pharmaceutical industry created Citizens for Better Medicare in mid 1999 and quickly began a nationwide television ad campaign designed to discourage legislative efforts to create a prescription drug benefit for Medicare beneficiaries. The industry fears such a step would lead to price controls on prescription drugs.
The group's first ads showed a woman named Flo, who cautions senior citizens against allowing big government "into your medicine cabinet." A recently published study of Citizens for Better Medicare's work by Congress Watch, a Ralph Nader watchdog group, accused the group of mounting "a sophisticated, coordinated campaign of misleading information designed to muddy the waters and stall prescription drug coverage for America's seniors."
Castellanos was not the only consultant considered for the account. Democrat Carter Eskew also submitted a bid. Eskew now works for Gore, an opponent of the group, but neither he nor any of Gore's other consultants now work for "527 groups," according to Gore spokesman Mark Fabiani.
Citizens for Better Medicare spokesman Dan Zielinski says Castellanos was hired to serve as a member of the group's advertising "creative team," and also to buy time for the ads on television stations around the country. In this capacity, Castellanos has been deeply involved in developing the group's latest ad campaign, which warns Americans that a prescription drug benefit could lead to "Canadian-style price controls."
Zielinski refuses to say how much his group is spending on the current ad campaign, but news reports peg the figure anywhere from $30-million to $50-million. If Castellanos is getting the usual 15 percent fee for ad placement, he could be earning somewhere between $4-million and $7-million from this account alone.
Castellanos is also helping to create the RNC ads, but the Bush campaign's ads are being produced by another firm headed by consultant Mark McKinnon.
According to Gore campaign officials, Castellanos' role as ad buyer for all three entities helps Bush in two ways: First, because Bush does not endorse the Democratic proposal to provide prescription drug benefits to all Medicare patients, the ads reinforce the Republican nominee's view that it would be an unnecessary, new big government program. Second, because Castellanos can buy ads for Citizens for Better Medicare, RNC and Bush in tandem, he is able to use them interchangeably in a way that extends the reach of the GOP nominee.
During a recent week in June, for example, the Democratic National Committee purchased television advertising time in the Tampa area in an amount measured as 500 Gross Rating Points (an accepted industry measurement). Meanwhile, during the same period, Castellanos purchased only 325 GRPs for the Republican Party in Tampa -- but he supplemented it with 200 GRPs bought by the pharmaceutical industry group.
Jamie Sterling, who tracks Bush ad buys for the Gore campaign, says he has seen a similar pattern of complementary ad buys by Castellanos in media markets all over the country. Sometimes, he says, when the RNC buys fewer ads, the pharmaceutical group buys more at the same time, so that the two combined keep pace with Democratic efforts.
Still, Sterling admits he has "no direct proof" that Castellanos is intentionally coordinating the three ad campaigns as one.
Brigham Young University professor David Magleby, meanwhile, says it is not unusual for candidates and special interest groups to coordinate their ad buys. Usually, he said, the coordination is done with the help of "a small fraternity of consultants," each of whom works for a different organization and shares information.
Castellanos, Magleby says, is the first consultant who singlehandedly appears to do the coordination between the various political groups.
In a legal complaint to be filed with the Justice Department and the Federal Election Commission, lawyers for Common Cause and Democracy 21 will charge that both the Republican and the Democratic parties are guilty of illegally coordinating their advertising campaigns with their presidential campaigns. Their lawyers will argue that the law intended the party advertising campaigns to be issue-oriented ads -- not ads promoting the nominee.
"Everyone -- the presidential candidates, the presidential campaigns, the political parties, the media and the voters -- knows these ads are presidential campaign ads run for the purpose of influencing the presidential election," the two groups said in a letter to Attorney General Janet Reno.
Technically, the big difference between party advertising and candidate advertising is the way they are financed. Unlike the candidate ads, the party ads can be paid for with "soft money," contributions that are not subject to strict limits.
Common Cause and Democracy 21 contend that party ads, because they are financed differently, must be kept strictly beyond the control of the nominee and must not be designed to promote the nominee's campaign.
Inaction by the FEC apparently has emboldened both the Republicans and the Democrats to drop any pretense of observing the legal distinction between party ads and candidate ads. Democracy 21's Wertheimer said the coordination is done primarily through shared consultants.
Just as Castellanos represents both the RNC and Bush, a media firm led by Democratic consultants Bob Shrum and Bill Knapp is purchasing advertisements for both Gore and the Democratic Party. But unlike Castellanos, they insist, they are not working for industry groups too.
Many consultants say it is accepted industry practice for them to buy TV advertising time for both a presidential nominee and his party. At the same time, they say, also representing an issue advocacy group, while not illegal, is a conflict most of them would try to avoid.
"Legally, nothing would prevent you from doing it," says Democratic consultant Peter Fenn. "Ethically, it is probably a gray area. . . . Politically, it would not be a very wise move because it could become fodder for your opponent to say your candidate is in bed with special interests."
In fact, Gore has begun taking that shot. During a news conference in early July, he charged that Castellanos' work for the three clients is evidence that Bush is closely aligned with "powerful groups and special interests" -- particularly the pharmaceutical industry.
- Times researcher Kitty Bennett contributed to this report.
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