California's Political Gold Rush

California's Political Gold Rush
Who wins in the Golden State's lucrative new campaign world?

The discovery in 1848 of a glittering metal in the sandy shallows of the American River sent thousands of people scrambling over the Sierra Nevada to California. Four years later, most miners had given up the aim of striking it rich, as loneliness and disappointment had taken their toll. California, though, was forever changed.

The state is now on the verge of a second stampede for riches. But this time it won’t be bearded roughnecks and saloonkeepers reaping the rewards. This boom is for the state’s well-heeled political consultants.

To be sure, California has long been a lucrative state for consultants. A few ballot initiatives stir up controversy each cycle, and the top issue campaigns often have massive budgets. With the death penalty, three-strikes law, union dues and tax increases set to be on the ballot in 2012, this November won’t be an exception. It will likely lead to the state’s consultants reaping their biggest windfall in decades.

It’s far from the lone bright spot in the consulting market. Nationally, firms are benefiting from a highly competitive presidential cycle, runaway spending from well-funded Super PACs and a congressional landscape shuffled by redistricting.

“This is going to be, in fact already is, a very good year for consultants,” says Tom Edmonds, who heads the International Association of Political Consultants. “Just try to place a television buy in any key state and you’ll know instantly that lots of political money is being spent.”

Given California’s new top-two primary system and an increasingly competitive playing field, opportunities in the state have exploded. With other states looking at deploying a version of California’s new system, strategists will be keeping a close eye on how the state’s experiment plays out, and whether the end result is a more permanently competitive landscape in California.

“Those two things together are just a goldmine,” Democratic consultant Richard Schlackman says of the combination of the state’s new primary system and congressional map. Though before Beltway consultants get any ideas about moving out west, the local competition wants to disabuse them.

“Nothing to see here,” jokes Democratic strategist Roger Salazar. Tongue firmly in cheek, he warns the potential competition not to come scrambling westward in search of fortune. “I want all consultants eyeing California to stay away.”

Salazar’s good-humored warning isn’t being heeded. Inside a squat, beige office building in West Los Angeles, Brandon Hall has set up an outpost for his Seattle-based firm, KullyHall. Together with his partner, Dan Kully, they had been known as a West Coast consulting shop, but didn’t have a presence in California until Hall signed the lease on their L.A. office on April 1. "With the change in California, there's going to be a lot more business available," says Hall, who mans the sparsely furnished operation along with a staffer. "We want to be able to play a role in California politics.” That isn’t exactly an easy thing for out-of-state consultants, who can be viewed as carpetbaggers by the local political community.

“California politics has always been, from a consulting standpoint, very insular,” says Hall. “You had California consultants and then you had everyone else … There has been in the past, I think, [a feeling] ‘keep the national consultants out of California.’"

The ripening market in California is down to a simple equation: More competition means more work for political consultants. That’s how it adds up for George Gorton. “You don’t hire a consultant when you have a dead lock on the district,” says the veteran California GOP operative.

It’s not just business that’s generating the gravitational pull to the West Coast. Hall, who managed Senate Majority Leader Harry Reid’s (Nev.) successful reelection bid in 2010, spent a year at the firm’s office in Washington, D.C. But it wasn’t a good fit. "It didn't make sense from a business standpoint to be there," he says. "We're better able to service our clients when I'm here. It's easier to go visit them and spend time on the ground."

Being based in in Los Angeles, he adds, there’s a "huge quality of life difference."

That sentiment is shared by other consultants who’ve set up camp in Southern California. When Mike Dorsey was scouting locations for a satellite office for Mission Control, the Connecticut-based mail firm he works for, he didn’t opt for one of the shiny high-rise office building along Wilshire Boulevard. He chose a space near Venice Beach.  Who needs K Street, it seems, when you’ve got Abbot Kinney Boulevard?

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