The Libertarian National Committee Directly Funded Harry Browne’s 1996 Nominating Campaign
Prior to the nominating convention, LNC, Inc. directly funded Browne’s nominating campaign via loans and a direct cash subsidy. The loans were for $11,185.01. The direct subsidy was for $3,333. The loans were publicly revealed, but are not remarked upon by the LNC in its published Minutes. The subsidy was only uncovered recently. I can be this exact about the loans because the loans and their purpose were reported in the FEC filings of LNC, Inc. for the first half of 1996, correctly reported on line 9 and Form D of the FEC filings as a debt owed to the LNC. The August 13, 2001 report of National Chair Lark to the LNC supplies considerable additional detail and revealed the direct subsidy.
How were the loans made? In five separate months during January-June 1996, the Browne campaign rented the LNC, Inc. mailing list. They rented it eight times. The Campaign made mailings to the LNC list. It received donations from people on the LNC mailing list.
But the Browne Campaign didn’t pay for using the lists.
At least, it did not pay for the lists in advance. When the Browne campaign used the lists without promptly paying for them, the LNC did not move against Browne to collect what it was owed. Nor did it shut off further use of the lists by Browne. Instead, the LNC gave the Browne campaign a line of credit, so that Browne mailed and mailed while his debts to the LNC grew and grew. The June 1996 FEC filing of LNC shows a debt of $11,185.01 from the Harry Browne committee to the LNC for list rental. Invoices uncovered by LNC National Chair James Lark and reported to the LNC reveal the details. In a memo dated August 13, 2001, Lark reported to the LNC a series of occasions on which Browne was invoiced for the list, but was allowed to rent the list without paying immediately. Lark lists invoices from the LNC to the Browne campaign and when the debts were paid:
- “According to invoice, campaign rented current member list for $1766.50 (14,132 names at $125/1000 names), lapsed member list for $1785.90 (17,859 names at $100/1000 names), and paid a charge of $15.50 to FEDEX something on behalf of Michael Cloud. Invoice paid on Jan. 23, 1996.
- “Invoice from LP to Browne campaign for $3543.00 on Jan. 17, 1996. According to invoice, campaign rented the current member list for $833.25 (14,132 names at $62.50/1000 names), the current member list for $833.25 (14,132 names at $62.50/1000 names), the current member list for $833.25 (14,132 names at $62.50/1000 names), and the current member list for $833.25 (14,132 names at $62.50/1000 names), and paid a charge of $10.00 to FEDEX something on behalf of Michael Cloud.
- “Invoice from LP to Browne campaign for $1865.75 on Feb. 6, 1996. According to invoice, campaign rented current member list for $1865.75 (14,926 names at $125/1000 names).”
- “Invoice from LP to Browne campaign for $1937.38 on March 25, 1996. According to invoice, campaign rented current member list for $1902.63 (15,221 names at $125/1000 names), and paid charges of $21.75 and $13.00 to FEDEX something to Steve Lyons (Champion Printing in Cincinnati, OH). (Total: $1937.38)
- “Invoice from LP to Browne campaign for $1908.00 on April 25, 1996. According to invoice, campaign rented current member list for $1908.00 (15,264 names at $125/1000 names).
- “Invoice from LP to Browne campaign for $1930.88 on June 21, 1996. According to invoice, campaign rented current member list for $1930.88 (15,447 names at $125/1000 names).
- The invoices from January, February, March, April, and June were paid (total: $11185.01) on July 3, 1996.
In reading this series, #1 is typical of a long series of earlier occasions on which Browne’s campaign rented the list of current or former members and paid immediately for its use. #2-#6 show a series of occasions in February- June 1996 in which the Browne campaign rented the list but only paid for the list on July 3, as reported in #7. While accountants may insist on particular phrasings, the extended delayed payment is de facto a loan by the LNC to Browne. The response of the LNC to the above revelations appears in a later Chapter.
The preceding forensic analysis found a substantial discrepancy between the amounts spent on printing, mailing, and list rental. As shown in National Chair Lark’s report, the discrepancy was real. Browne used the LNC mailing list, but did not pay in advance for using it, as LNC policies require. In 1999, a similar set of discrepancies appear in the campaign finance records. These discrepancies, however, have not yet been explained.
The loan to Browne has been a matter of public record for the past five years. Anyone could have found it by looking carefully at the LNC’s FEC filings. To my knowledge, no one did. When I did do research (previous section) it was readily apparent that Browne was mailing letters but not renting very many mailing lists. However, at that time I did not find where the mailing list rentals were being hidden. Indeed, my estimate as to how much Browne should have been expected to spend on mailing lists was perhaps $4000 low.
In July, 1996, the Browne Campaign discharged its debt. When it paid the LNC, it reported the payment as being for ‘Administrative Services’, a remarkably broad phrase. The Browne campaign had reported prior payments for the LNC current member list by describing them as ‘list rental’. The July 1996 payment, made for the same reason, was described as being for ‘administrative services’ rather than being identified as a list rental. In July 1996, Browne was already the Party’s candidate for President, entitled to use the Party mailing list for free. Identifying the July 1996 payment as a ‘list rental’ would potentially have raised all sorts of questions.
