Chapter Fourteen
Browne’s Campaign Went Broke, It Claimed
April 2000
On April 24, 2000, the Browne Campaign made a surprise announcement: It was out of cash, with $83,343 in bills it could not pay. If Party members did not open their checkbooks, the campaign would have to shut its doors. Either the Browne campaign got a serious cash infusion immediately, or the Campaign would shut down forever. It would collapse without even reaching the National Convention. In 2001, Willis was to make the same claim about the Browne Campaign’s predicament in late 1995—a cash flow crisis threatened to shut down the campaign. Willis’s April 2000 scare tactic generated a short-lived spike in giving, but the campaign’s April income was still smaller than the income it received in February or June.
According to its FEC reports, on the very day that the Campaign claimed that it had a financial crisis, it also paid Campaign Manager Perry Willis $1000 for ‘campaign management’. On the very same day, FEC reports indicate that the Campaign paid Willis’s brother and campaign staffer Steve Willis $1000 for ‘phone, office, and salary’. When a political campaign is short of cash, it is unusual to put the campaign chair first in line to be paid, the chair’s brother second in line to be paid, and outside vendors later in line to be paid.
Was the financial crisis real, or was it a fundraising stunt?
The Campaign’s claim of more than $83,343 in “unpaid bills” on April 24 is not obviously consistent with its FEC report for April, as filed under penalty of perjury on May 23, 2000. Spending from April 24th through the end of the month came to $8500, including $2000 to the Willis brothers and $5000 to the PC Trust associated with the Browne Campaign’s never-filed lawsuit against the FEC. The PC Trust was a legitimate investment, but it was not a debt that could force a campaign shutdown. FEC reports show the Campaign ending April with exactly $1000 in loans, debts, and obligations owed by the Campaign. Combining the end-of-month debt with any debt reduction between April 24 and the end of the month, the debt on the 24th could not have been more than $10,000—according to the campaign’s own FEC reports. A debt of $10,000 is far less than the $83,343+ debt the Campaign claimed.
Allowing that the reported spending all discharged campaign debt, no less than $73,000 in alleged debt simply vanished between April 24 and the end of the month. Where did it go? Perhaps the FEC report was incomplete. There have been suggestions that the Campaign was using an accounting standard that did not report all debts on the FEC reports. However, in December 2000 the Campaign claimed it had another $100,000 of debt. The Libertarian National Committee noted that no debt appeared on the FEC reports. Perry Willis immediately agreed that the Campaign’s end-of-year FEC filing needed to be amended to show those debts. Willis’s standard was clearly that FEC reports were supposed to show all debt, not just some debt. Applying the same standard to the report filed on May 23, that report must therefore also be taken to report all debt.
Curiously, despite promises to the Libertarian National Committee, no amendment to the late-2000 FEC filings was made. Perhaps the debt joined the $750,000 in cash and pledges that Kristin Overn’s letter of Fall 1999 said was reserved for 2000 expenses. That $750,000 cannot be found in FEC reports for 1999 or 2000. Where did it go? There has never been an independent, public audit of the Browne campaign’s finances as read against its fundraising statements.
There is another way to analyze the campaign’s finances, based on limited available information. FEC filings show the date and amount of every expenditure. The direct record of donations, as correctly reported to the FEC, is not complete. FEC filings only include donation dates for large donors. Small donations are reported as a monthly aggregate. You can’t calculate from FEC reports a campaign’s day by day cash on hand.
For the month, the Campaign spent just under $60,000 before it claimed a financial crisis, and $8500 afterwards. The campaign began April with more than $6000 cash on hand, raised $107,000, and closed the month with $45,000 cash on hand. Through April 24, almost $16,000 in large donations was received; in the last six days of the month, the campaign received $30,000 in large donations. For the whole month, smaller donations amounted to more than $60,000.
If you assume that the smaller donations divided in the same proportion as the larger donations, the campaign received roughly $20,000 of small donations before April 24 and $40,000 afterwards. In the month through the date of the appeal the campaign started with $6,000, by assumption received $36,000, and spent $60,000, leaving it short $18,000 relative to the disbursements it had made. Did the campaign actually write checks without having the money to cover them? This is difficult to believe. Or did the small donations come in more smoothly through the month, so that the spike in giving involved only large donations? In the latter case, Browne’s Campaign could well have had the cash on hand to cover disbursements reported through April 24. Based on its FEC filings, made under penalty of perjury, the Browne campaign appears to have had nothing like $83,343 of debt.
How did the campaign explain its financial crisis? The previous Fall the Campaign had claimed to have a $750,000 reserve fund to pay all management expenses through to election day. Where was it? The campaign was being run by highly experienced Libertarian Party operatives. Indeed, many long-time activists said that Browne should be supported simply because he had the best possible team of Libertarian campaign managers. How could Browne 2000 have run out of money?
