The Buffalo News recently reported that former New York Republican gubernatorial candidate Carl Paladino has been accused of not paying back debts incurred during the campaign to consultants.
According to public records, Paladino’s campaign committee, “Paladino for the People,” has outstanding debts from the campaign totaling $6.1 million.
Paladino is quoted in the Buffalo News outlet as saying that there is only $5,000 left in the campaign’s treasury and that “we paid everybody who should be paid, and we're comfortable with that.”
Paladino’s is not the only campaign with debts remaining from the 2010 election cycle. Minnesota Republican gubernatorial candidate Tom Emmer has been unable to pay debts to local counties his campaign incurred during the recount following the election.
Similarly, Sue Lowden, a Republican primary candidate in the 2010 Nevada Senate race, failed to make good on outstanding obligations to her Denver-based polling firm, Vitale & Associates. The firm filed a lawsuit to reclaim that lost revenue last December, seeking nearly $78,000.
Aaron Beytin, president of the direct mail firm Beytin Agency, says that there are few reliable ways to prevent a losing campaign from defaulting on its debts. He advises working with clients you are already familiar with and being discriminating about any unfamiliar clients you consider taking on. “Unfortunately in the political business there are a lot of people who are willing to let debts go unpaid,” says Beytin. “The biggest thing you can do is get paid up front before you send out a piece of mail or do a TV ad.”
Beytin says going to court is always an option, but it is never the best one. In many cases, the required legal costs threaten to exceed any potential reward.
James Spencer, president of The Campaign Network, a strategic consulting firm, advises campaign consultants to insist on a clear contract with defined deliverables. However, he says, “even if you have a contract, it may be difficult to enforce.”
Like Beytin, Spencer says that consultants should always try to get campaigns to settle all debts before Election Day, although he acknowledges that this can be difficult to achieve in practice.
“The advice I give to people in our industry is talk to your colleagues,” says Spencer. “I have given my sample contract away a hundred times.”
In addition, Spencer says that establishing clear deliverables, setting boundaries for clients who try to monopolize your time, and managing the expectations of clients who are overly optimistic about their chances of victory can minimize post-election payment problems.
Noah Rothman is the online editor at C&E. E-mail him at