The check is in the mail.
That's how Mike McGavick's campaign for U.S. Senate explains a $120,000 discrepancy between how much the campaign reported it spent on TV advertising in the first quarter of 2006 and how much the McGavick campaign actually spent.
Here are the numbers: McGavick's most recent campaign-finance report with the Federal Election Commission (FEC) says he spent $119,000 on a statewide TV advertising blitz during the last week in March. However, TV advertising contracts reviewed by The Stranger from 10 TV stations in Seattle and Spokane show that McGavick's ad buy was worth much more—it cost at least $238,562. (There are eight additional TV ad contracts, including four in the Yakima-Pasco-Richland market, that The Stranger has not yet seen. They could be worth between $25,000 and $60,000.)
Democrats say the discrepancy—which makes it look like the McGavick campaign has much more cash on hand than it actually does—is intentional. "McGavick's shady Enron-style campaign accounting has dishonestly inflated the bottom line of an already struggling campaign," says Washington State Democrats communications director Kelly Steele. Indeed, McGavick's most recent FEC filing also says he has about $900,000 in his war chest going into the second quarter of 2006. But if you lop off the $120,000 difference between how much he reported he spent on TV and how much he actually spent on TV, it looks like McGavick's campaign inflated their cash on hand by 16 percent.
"Candidates try to make themselves look as robust as possible because money begets money," says Massie Ritsch, spokesman for the Center for Responsive Politics, a nonpartisan group that tracks campaign money.
One reason McGavick's campaign may have been able to keep its first-quarter debt off its first-quarter report is because the campaign bought its advertising on "Net 30"—a highly unusual arrangement for political advertising that allows campaigns to essentially buy an advertising spot on credit and pay the net amount due to the station a month after the ad runs.
The idea that a campaign could buy political ads on credit shocks people who are familiar with political advertising. For starters, credit, by definition, is a loan. Traditionally, loans need to be reported in campaign-finance reports. No account of a loan for the TV buy appears in McGavick's report. "Buying on credit would be very peculiar. It can be considered an in-kind contribution. So stations have campaigns pay in advance," says Catherine Herrick, a longtime political media buyer in Washington, D.C. who owns the firm Buying Time. (Her clients include the Democratic National Committee.) "I can understand it with a corporate client, but it'd be perplexing for a station to do that with a political campaign." Herrick's point is that political campaigns are based on fundraising. How does a TV station know a campaign is going to meet its fundraising goals? Obviously, some candidates are richer than others, and are good for it—but giving rich candidates the privilege of paying later diminishes the integrity of the public airwaves.
Longtime GOP media buyer Brad Mott with D.C.-area firm Media Ad Ventures, says, "Almost all political advertising is done on a 'pay-seven-days-in-advance' rule. Credit is a problem because if the bill doesn't get paid, at what point does it become an illegal corporate contribution? And from the buyer's perspective, people don't do it because they don't have the cash flow to float it."
However, Kathy Neukirchen, head of McGavick's media buyer, Media Plus—a heavy buyer in the local market with established credit—says all her contracts, including McGavick's, are "Net 30" (something the McGavick campaign initially denied).
A saleswoman at KOMO, which ran $37,690 worth of McGavick ads, angrily refused to comment on this story. Sales staff at both KING 5, which ran $51,950 worth, and KIRO, which ran $56,575 worth, says Media Plus can buy on credit because they have established credit. "Generally political campaigns don't have established credit," says Kiro's national sales manager Dave Blakely. "But [candidates] can always use an agency with established credit. We don't discriminate against candidates."
McGavick's campaign stands by its arrangement with Media Plus. However, after initially saying the campaign had done nothing wrong, McGavick spokesperson Elliott Bundy admits the campaign made a mistake by underreporting their total ad buy. They give two reasons for the gaffe, adding, however, that the underreporting was not done on purpose to mislead or evade, as the Democrats assert. First, their TV buy stretched over a two-week broadcast schedule, dividing their payment into two bills. The second bill didn't arrive until early April—in the second quarter. They say the second payment will appear in their second-quarter report. Furthermore, they say some of the ads themselves—they didn't say how many exactly—ran in the second quarter.
But public records show only one ad—out of the 570 ads accounted for in the $238,562 worth of contracts we've seen—ran in the second quarter. The ad was a 30-second spot worth $500. It aired on KIRO on April 3. Moreover, that ad was originally scheduled to run on March 25—putting it in the first quarter. It ran in April because other programming bumped it, KIRO says. In short, McGavick bought the advertising in and for the first quarter—and that full amount did not show up in McGavick's first-quarter report. This seems to contradict FEC rules. "If there's a contract, that's when the expenditure is made, and it has to be reported in that quarter," says FEC spokesman Bob Biersack.
"It appears that our understanding of FEC rules may have been incorrect," McGavick spokesperson Bundy told me Tuesday afternoon, "and we may need to amend our FEC report."
Cantwell's campaign reports that it has $5.5 million. McGavick's campaign reported that it had $896,000. However, a full account of McGavick's first quarter advertising onslaught, which is most likely worth over $250,000—not $119,000—would sack that figure considerably.
"He's already well behind the incumbent in fundraising anyway, whether he's underreporting or not," says CRP's Ritsch.email@example.com