A secretive Washington, DC, consulting firm run by former Obama campaign staffer Jim Margolis poured $733,000 into a media buy for Highway 31 — a shell independent expenditure organization set up to support liberal Democrat Doug Jones and oppose Roy Moore in the December 12 Alabama U.S. Senate special election — for just one day of advertisements purchased on Thursday, according to a report filed with the Federal Election Commission (FEC) late Friday.
According to a report it filed with the FEC for the period from its inception on November 6 to November 22, Highway 31 has no assets. However, it has obtained more than $2.7 million in advertising services over a 25-day period (Nov. 6-30) from two D.C.-based consulting firms founded by former Obama campaign officials: Bully Pulpit Interactive, an online advertising firm founded by former Obama campaign digital media director Andrew Bleeker, and Waterfront Strategies, a media purchasing firm that is a wholly owned subsidiary of GMMB Consulting, which was founded by Margolis.
According to an independent expenditure report signed by Highway 31 Treasurer Edward Still and filed with the FEC on Friday, Highway 31 incurred two separate obligations, totaling $733,464, for media buys for local television and radio station advertisements “publicly distributed/disseminated” on Nov. 30, purchased by Waterfront Strategies to oppose Roy Moore.
One of these obligations was for $519,537 and the second was for $213,927, together totaling $733,464.
All told, in the 25 days since its inception, Highway 31 has incurred more than $2.7 million in obligations, almost all of it with Bully Pulpit International and Waterfront Strategies. The entire $2.7 million appears to have been provided to Highway 31 on credit.
Breitbart News asked Highway 31 spokesperson Adam Muhlendorf, a former staffer for a Democratic Congressman, to answer some very basic questions about Highway 31:
1. Has Highway 31 received any contributions as of close of business, Friday, December 1?
2. If so, what is the total amount of those contributions, and what are the names and addresses of anyone who has contributed more than $2,000?
3. How much has Highway 31 paid to its vendors as of close of business, Friday, December 1?
4. How much does Highway 31 owe its vendors as of close of business, Friday, December 1?
Muhlendorf has not yet responded.
The Washington Post noted on Friday that “Under the rules set out by the FEC, final contributor and expense disclosure reports for the race must be filed by Jan. 21,” which is more than one month after the date the election is to be held on December 12. “The second biggest spender in the Alabama Senate race looks and acts like a local operation,” the Postsaid of Highway 31, adding:
But in a state where out-of-state interference is seen as poisonous by many voters, the true identity of the donors to Highway 31, which exists to support Democratic candidate Doug Jones, has been carefully shielded from Alabama voters by legally evading Federal Election Commission disclosure rules.
To date, the organization has reported spending nearly $2 million on television, digital and direct mail ads, including attacks on Republican Roy Moore for allegedly dating teenage girls and praise for Jones as a Christian believer who will uphold Second Amendment rights. Highway 31 is named for the road connecting Alabama’s four major cities.
The unusual ruse deployed by the former Obama campaigners to flood Alabama with advertisements funded by secret, out-of-state investors appears to comply with federal election law as interpreted through rulings by the FEC, but a long list of critics say the sophisticated deception violates the spirit of the law.
More importantly, it fundamentally violates principles of transparency critical to confidence in the entire democratic process.
Breitbart News summed up the situation on Friday:
A legal expert on federal election law tells Breitbart News this arrangement is probably “a legal in-kind contribution to the IE” by Bully Pulpit Interactive, according to a recent FEC administrative ruling, even if Bully Pulpit Interactive is never paid a dime by Highway 31, the IE.
However, the arrangement may violate the spirit of federal election law if some other group is paying Bully Pulpit Interactive a like amount for an “unrelated project” that requires basically no work. Proving that such a behind-the-scenes arrangement was, in effect, made to compensate, however, would be very difficult, the expert says, even it does exist.
“Yes, this appears to be legal. FEC regulations concerning debt are fairly straightforward: political committees are allowed to have debt as long as they report the amount of debt to the FEC. The regulations do not address the situation of taking on debt when a committee has no assets or donors, ” Tyler Cole, Legislative Director & Policy Counsel at Issue One, a non-profit whose “goal is to pass and protect federal legislation that strengthens accountability and returns America to a system of self-governance for the common good,” told Breitbart News when asked about the propriety of the Highway 31 arrangement with Bully Pulpit Interactive and GMMB Consulting’s Waterfront Strategies.
“Issue One believes that it is important for voters to know who is funding advertisements that seek to influence their vote,” Cole added.
“This is disclosure in name only given that due to the reporting deadlines, voters will not be able to see what individuals or organization are funding Highway 31 until after the election. Unfortunate situations like these are why we believe that disclosure laws should be strengthened so voters get more information and get that information more quickly and easily,” Cole concluded.
The flood of secretive, out-of-state money coming in from liberals in Washington, DC, — and likely elsewhere — to elect liberal Democrat Doug Jones over conservative Republican Roy Moore on December 12 now looks to be at an unprecedented level.
In 25 days, these unknown donors funded $2.7 million in campaign ads supporting Jones and opposing Moore. At the daily rate of $733,000 spent on Thursday, the money spent over the next twelve days could be well over $8 million, bringing the total amount spent by unknown parties not from Alabama against Moore to well over $10 million in just a little over one month.