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Just last week, House Judiciary Chairman John Conyers (D-MI) subpoenaed a big chunk of the Bush Administration to talk to the Committee about the Valerie Plame leak scandal. Among those listed to testify: Karl Rove, Lewis "Scooter" Libby, Scott McClellan, Dan Bartlett and Andrew Card.

And, predictably, Rove is the first one to thumb his nose at the Committee.

In a letter from Rove's attorney to Chairman Conyers, Robert Luskin writes:

While I understand that you would prefer-- and the Congress has taken the position in the pending litigation-- that Mr. Rove appear in person and assert any applicable privileges on a question by question basis, Mr. Rove is simply not free to accede to the Committee's view and take a position inconsistent with that asserted by the White House in the litigation. Mr. Rove will respectfully decline to appear before the Subcommittee on July 10 on the grounds that Executive Privilege confers upon him immunity from process in response to subpoena directed to this subject.

Our old friend executive privilege, rears its head again.

There's been a lot of talk in the last few weeks and months about John McCain's ties to lobbyists. So here at TPMmuckraker, we decided to do a little digging to officially catalog the possibilities. What we came up with, we fondly call "John McCain's Lobbyist Universe," a working guide to the presidential hopeful's connections. Click on each of the familiar faces to get a synopsis of their role in the campaign and their lobbyist ties. We expect to be growing and expanding this chart as more facts come in, and as always we welcome any tips or knowledge that you, our readers, have to offer.

Raising millions in campaign cash on behalf of someone else and spending almost the same amount on the fundraising process itself is just part of the business, according to staffers at the firm BMW Direct.

The company recently explained to ProPublica that even if a candidate doesn't actually keep much of the money, it's building a "donor file."

"One of things you do when you go out prospecting is build a donor file and that costs money," Scott Mackenzie, a consultant for BMW Direct and Chavez-Ochoa's campaign treasurer, said. "Once you build a house file and start mailing to the list, that's when you start making the money." ... "We don't feel it's right that all these candidates should run unopposed," said Mackenzie, and direct mail is the "only way if a candidate doesn't have name recognition or personal finances to run their campaigns."
Where would the little guys be without the help of firms like BMW Direct?
"We like working with people who are long shots," Jordan Gerhke, the firm's director of development, said. If not for the firm's efforts to help little-known candidates, only "a bunch of millionaires" would be able to afford a run, he said.

BMW even recruits some of those longshot candidates. For example, ProPublica found Brian Chavez-Ochoa who briefly ran against Rep. Nancy Pelosi (D-CA) in 2006. How did this obscure candidate get into the race?

"I was asked by a group in D.C. to put my hat in the ring, so I did," he told ProPublica. That group was BMW Direct, which proceeded to raise -- and spend -- more than $220,000 on his behalf.

It may not be new, but that doesn't mean donors like it.

The "Swift Boaters" from 2004 are back at it.

A group of top Republican contributors who financially fueled the famous "Swift Boat" campaign ads that helped sink Sen. John Kerry's presidential campaign back in 2004 are starting to regroup.

A story in today's Wall Street Journal reports on new Republican efforts to circumvent the landmark campaign finance laws named after their top candidate -- the McCain-Feingold Act of 2002.

The GOP is raising tons of cash for the Republican Governors Association, which is a so-called 527 group and permits donors to exceed the $2,300 individual cap that applies to presidential campaigns. Although these groups are barred from soliciting money for presidential candidates, the association is telling prospective contributors that money for the association will ultimately help out McCain at the top of the ticket.

Of course the association's fund is getting cash from big corporations like Pfizer, Bank of America Corp. and Travelers, which have given $150,000 or more. But that's not the main target of this fundraising effort.

Rather, the pitch is aimed at individuals, including many top contributors to the controversial Swift Boat group that targeted Sen. Kerry. Texas developer Bob Perry, the largest financial backer of the Swift Boat group, also is the largest individual donor to the governors group, at $250,000. Carl Lindner, a retired insurance executive in Ohio and another top Swift Boat financier, has contributed $100,000 to the governors' fund. The campaign-finance lawyer for the Swift Boat group in 2004 now serves the same role for the governors association. The McCain campaign and the individual contributors all declined to comment on their involvement.
Yet the whole situation is dubiously legal. In 2005 the Federal Election Commission banned such groups from soliciting donations by pledging help to a federal candidate. Even the McCain camp questions the pitch tactics.

"If it is in fact telling its donors their money will help elect McCain they are being inaccurate," said McCain spokesman Brian Rogers, told the Journal, noting the group cannot legally attempt to sway a federal race. But he said that because he had not yet seen evidence the group is campaigning on Sen. McCain's behalf, "It's not an issue." We'll have to wait and see what kind of ads the association actually runs. But so far, they've seen a big uptick in donations, raking in $14 million during the first half of this year, compared to $3 million for the Democratic governors' group.

The governor's association is unique among the so-called 527 groups. Like its Democratic counterpart, it is the only 527 set up by the national party.

The McCain camp is also trying out some other tactics to get around McCain's 2002 law and rake in more money to match Sen. Barack Obama's massive money machine, according to the Journal.

They're leveraging a technique that establishes a joint fund-raising account allowing donors write checks for up to $70,100. The campaign pulled in $3 million for the fund in a matter of days in June.

The Justice Department admitted error yesterday for failing to inform the Supreme Court that Congress had recently made the rape of a child a capital offense in the military. On June 25, the Court ruled that the death penalty was not appropriate punishment for the rape of an child. Admissions of error are highly unusual for the Justice Department. (New York Times)

After revelations from the House Oversight Committee that the Bush Administration was aware of the deal between Hunt Oil and the Kurdistan Regional Government, the State Department released a statement insisting they had no prior knowledge of the arrangement. (Washington Post)

A federal judge dismissed a lawsuit Wednesday by an Islamic organization that accused the Bush administration of illegally wiretapping its telephones. The federal judge tossed out the suit because the call log was part of a top secret document. (AP)

Read More →

We finally heard back from someone at the campaign of Deborah Travis Honeycutt. A couple days ago, we reported that a Washington-based fundraising group raked in more than $500,000 for the little-known Republican running for Congress in suburban Atlanta.

That money came from a nationwide direct-mail effort targeting self-styled conservatives who want to help defeat Democratic lawmakers.

But only about $17,000 of that amount was spent in her district. Most of the rest went to fees paid to the fundrasing firm, BMW Direct, and its affiliates and vendors.

That didn't seem to bother her campaign manager, Michael Murphy.

"We've been very pleased with them. BMW Direct has been able to help us raise resources and tap into a thirst in the country for the principles and platforms that she stands on," he said.

Murphy was unable to say what that campaign money raised was spent on. The three campaign staffers are volunteers, and so far the main activity has been "pressing the flesh," he said.

Murphy couldn't say exactly how much was ultimately given to the campaign. Those details were handled by Andrew Honeycutt, the candidate's husband and "campaign executive," he said. (Andrew Honeycutt has not returned our calls)

"I just work with the resources we have," Murphy said in the interview today.

"All I can say is we've been very pleased with BMW Direct."

Thanks to help from TPM Reader BK, we uncovered some congressional testimony from last year about BWM Direct, the Washington direct marketing firm that raises money for GOP candidates, among others, but doesn't give them much of it.

The House oversight committee held a hearing on December 13, 2007, about veterans' charities. The legislators heard a complaint from Bonnie Carroll, the executive director for the Tragedy Assistance Program for Survivors, or TAPS, a group that provides support to families of fallen combat troops.

Carroll had this exchange with Rep. Elijah Cummings (D-MD) at the hearing on Dec. 13, 2007. She doesn't identify the firm during the hearing, but in a phone interview with TPMmuckraker this week she confirmed she was referring to BMW Direct:

Mr. CUMMINGS. Well, Let me ask you this. How much money did you make under the telemarketer? How much money did you make?

Ms. CARROLL. If I could just defer to our CFO here.


Ms. CARROLL. It is upset,ting to say that our income was approximately $50,000 to their total of $500,000. Mr. CUMMINGS. Wait a minute. Let me get this right. I know I didn't hear that right. Let me get this right. They got $500,000, and you got $50,000?

Ms. CARROLL. Yes, sir, that is correct.

Mr. CUMMINGS. Jiminy Christmas.

Ms. CARROLL. And we terminated that very quickly, and it was a regrettable experience.

Carrol provided us with this data on how their deal with BMW played out between 2005 and 2007:

In 2005, the firm raised $371,375 and spent $366,375, giving TAPS a net of $5,000.

In 2006, the firm raised $187,394 and spend $176,310, giving TAPS a net of $11,084.

In 2007, the firm raised $3,187 and took no expenses out, giving TAPS a net of $3,187.

In total, BMW Direct raised $561,956 on behalf of TAPS, spent $542,685, giving TAPS a net of $19,271.

Let's do the math. That's...3.5 percent. So all those people who thought they were giving money to support widowed wives of slain combat troops, less than a nickel on the dollar actually did.

While TAPS was disappointed with how much money they ultimately received, Carroll said BMW Direct didn't misrepresent itself from the outset. "BMW was forthright," she said, and was not "raising false expectations on either instantaneous or total economic returns."

We also talked to the National Black Republican Association, which used to have BMW Direct raising money for its Black Republican PAC. Frances Rice, the group's chair, said they stopped working with BMW Direct last year. The two parties had a "disagreement over strategy." Rice declined to elaborate.

As we reported earlier, Chairman Waxman of the House Oversight Committee claimed today that the Bush Administration knew about the Hunt Oil deal way before it happened-- something the administration has denied regularly.

According to Waxman, there were nearly a dozen contacts between various levels of the administration and Hunt Oil as the deal was taking place. Hunt regularly informed the President's Foreign Intelligence Advisory Board of his intentions to seek a deal with the Kurdistan government. Management at Hunt also regularly met and communicated with the U.S. Regional Reconstruction Team (RRT), as well as State Department personnel.

So let's go through a little time line of the events and communication leading up to Sept. 8, 2007-- the day the Hunt Oil deal was finalized with the Kurdistan government.

June 12 and 15: Hunt Oil officials meet with officials from the RRT for the Kurdistan region, "to investigate investment prospects" in the Kurdish region. Hunt Oil General Manager Ken McDonald, asks RRT members if the deal between Hunt Oil and Kurdistan is in violation of U.S. policy:

I specifically asked if the USG had a policy toward companies entering into contracts with the KRG and [redacted] replied that there was no policy, neither for nor against.

July 12, 2007: Ray Hunt, president and CEO of Hunt Oil sends a letter to the President's Foreign Intelligence Advisory Board, letting them know he is pursuing an oil deal in Kurdistan:

We were approached a month or so ago by representatives of a private group in Kurdistan as to the possibílity of our becoming interested in that region. We had one team of geoscientists travel to Kurdistan several weeks ago and were encouraged by what we saw. We have a larger team going back to Kurdistan this week but who they will actually meet with while they are there and what the relationships of those people might be with the Government of Kurdistan are both unclear at this time.

August 2007: Hunt Oil representatives exchange a series of emails with State Department personnel discussing their return to Kurdistan.

August 30, 2007: Ray Hunt sends another letter to the Advisory Board to let them know he will be in Kurdistan the week of September 3:

While my schedule is still fluid, there is a high likelihood that I will meet with President Masoud Barzani, the Prime Minister, the Oil Minister and various other individuals associated with the government of Kurdistan.

September 5, 2007: McDonald informs the RRT in Erbil that "Hunt is expecting to sign an exploration contract" with the Kurdistan Regional Government. That same day, the RRT leader sends an e-mail summary of the meeting to the Embassy in Baghdad and the State Department headquarters in Washington. A second synopsis of the meeting is sent to the Embassy in Baghdad in a situation report the following day.

September 8, 2007: The Hunt Oil contract is finalized with the Kurdistan Regional Government.

September 13, 2007: A State Department official contacts Hunt Oil to describe another "good opportunity for Hunt" in Iraq, prompting a Hunt Oil official to write Ray Hunt: "This is really good for us. . .I find it a huge compliment that he is 'tipping' us off about this . . .This is a lucky break."

House oversight committee Chairman Henry Waxman says the Bush Administration knew about the September 2007 deal that Texas-based Hunt Oil struck with Kurdish officials in Iraq.

That contradicts what President Bush said at the time.

That deal was controversial because it came at a time of precarious negotiations in Baghdad about a possible revenue-sharing agreement between the warring factions in Iraq. The Kurds decision to forge a deal independent of the Baghdad government angered the Sunni and Shia Arabs in Iraq.

In a letter to Secretary of State Condoleezza Rice, Waxman asked for further information about the U.S. involvement in Iraqi oil deals, the Hunt Oil deal as well as more recent deals. He quoted the president speaking shortly after the deal was announced almost a year ago.

Administration officials criticized the Hunt Oil contract because it jeopardized the efforts of the Iraqi parliament to come to an agreement on the national oil legislation. When President Bush was asked about the Hunt Oil contract, he stated:

"I knew nothing about the deal. I need to know exactly how it happened. To the extent that it does undermine the ability for the government to come up with an oil revenue sharing plan that unifies the country, obviously if it undermines it I'm concerned"
Waxman said his committee has conducted an investigation of the Hunt Oil deal.
The documents that the Committee has received tell a different story about the role of Administration officials. Ray Hunt, the head of Hunt Oil, personally informed advisors to President Bush of meetings he and other Hunt Oil officials planned with representatives of the Kurdish government. Other Hunt Oil officials kept State Department officials informed about the company' s intentions.

After taking a hard look at the candidates who work with BMW Direct, the conservative Washington political firm that appears to keep a lot of the money it raises on behalf of other people, we've found an interesting pattern.

The firm appears to have two different types of clients.

For some candidates -- the little known longshots who are challenging incumbents -- the firm raises considerable amounts of money with nationwide mailings and spends almost all of that money on its own direct mail campaign. The monies raised by BMW go into the campaign's accounts then are quickly expended with various fees back to BMW or its affiliates, usually by the end of the same FEC reporting period.

For other candidates -- ones who are already in office and have a substantial campaign operation -- the firm appears to charge less in fees and does not allow expenses to eat up all the money pulled in. These candidates actually have some cash on hand at the end of the reporting period.

For example, take a look at Rep. Geoff Davis, the Republican from Kentucky. According to his most recent quarterly FEC report, he spent a lot of money on direct mail expenses -- $88,674.56 -- during the first quarter. But that was less than 60 percent of his total expenses. Davis also appears to have other normal campaign activity, where he is paying people in his home district for "administrative support," rent, catering campaign events, and paying mobile phone bills. (And $1,521 worth of tickets to the Kentucky Derby.)

And most importantly, while most of his campaign contributions were from outside his district -- presumably the haul from a nationwide direct mail campaign -- he actually had money left over at the end of the quarter - a net gain of $73,750.62. It's also very clear that Davis. a two-term incumbent from a district with a lot of Democrats, has an established campaign in place. That additional money added to his overall war chest for a total of $724,286.

Another client who appears to do routine business with BMW Direct is Rep. Virgil Goode (R-VA). He's actually facing a tough race this year. Goode spent $69,852 on direct-mail related expenses in April and May. But he took in a total of $136,909, including a lot donations from inside his own state. And Goode still has more than $600,000 on hand.

The upstarts don't fare as well with BMW Direct. We've already told you about Deborah Travis Honeycutt down in Georgia. There are a few others like her.

For example, Duane Sand, a little known Republican from North Dakota. His filings show he raised more than $300,000 during the first quarter and also spent more than $300,000. In the end he had less than $40,000 on hand. Almost all of his money came from out of state. And his expenditures show that more than 90 percent of his expenses were related to the direct-mail campaign, or $360,681.77 out of the total expenses of $389,501.01 spent for the quarter.

It's the same with Russell Williams, a retired Army lieutenant colonel and Republican running for office in Pennsylvania. He's challenging Rep. John Murtha (D-PA). During the first quarter, he only held on to about 13 percent of his money, raising $222,071.09 and spending $193,606.89, almost all of that money going to direct-mail expenses. Russell's campaign treasurer is Scott Mackenzie of BMW Direct.

Typically, direct-mail fundraisers take at least 30 percent of the fees raised. So even for the office holders, BMW Direct looks pricey. But at least they actually get some return on the deal. Some of those longshots aren't so lucky.