Romney Campaign Paid $33 Million to Two Consulting Firms With Ties to Key Staffers

The Romney campaign spent an estimated $356 million between January 1, 2011 and October 17, 2012 in its unsuccessful effort to defeat incumbent President Barack Obama.

According to Federal Election Commission documents, as reported by OpenSecrets.org, $33 million of this amount was paid to two consulting firms with ties to key staffers at both the Romney campaign and the RNC. 

Targeted Victory LLC, a Minnesota company with executive offices in Virginia, was paid $17 million for digital communications by the Romney campaign. FLS Connect LLC, an Arizona corporation with headquarters in Minnesota, was paid $16 million for voter contact and telemarketing services. Again, this is through October 17th, the final amount is likely much higher.  

Based on press reports and publicly available business incorporation documents, it appears that three individuals had control of these funds: Tony Feather and Michael Beach at Targeted Victory LLC; Tony Feather and David James at FLS Connect LLC.

Significantly, key staffers at both the Romney campaign and the RNC have close recent ties with both firms.

One prominent figure at the Romney campaign — Political Director Rich Beeson — and one prominent figure at the RNC — Chief of Staff Jeff Larson —  were both until recently partners at FLS Connect LLC.  It’s unclear what, if any, ongoing relationship they may have with the company. A second prominent player in the Romney campaign — Digital Director Zac Moffat — has not fully disclosed what, if any, ongoing business relationship he maintains with Targeted Victory LLC. Press reports have referred to Moffat as the co-founder of Targeted Victory LLC.

Given Romney’s loss to President Obama, the return on investment for this $33 million paid to a handful of well connected consultants has come under harsh questioning from many quarters. Perhaps the most significant question is this: Why was so much money paid to such a small group of insiders, with apparently little consideration for alternative vendors who might well have performed far better?

Public records of the ownership structure of Targeted Victory LLC are not consistent with press reports of the company’s ownership structure.The Minnesota Secretary of State’s website lists Tony Feather, a Karl Rove protege and the political director of the 2000 Bush-Cheney Presidential campaign, as the managing member. The company’s website, however, lists 32-year-old Michael Beach as the company’s co-founder. Other press reports describe 32-year-old Zac Moffat, the Digital Director of the 2012 Romney Campaign, as the company’s other co-founder. Neither Moffat nor Beach appear as members or owners in the available documents found at the Minnesota Secretary of State’s website.

Public records that show the ownership structure of FLS Connect, LLC are equally surprising. Tony Feather is also listed by the Arizona Secretary of State as one of two managing members of the company, which was organized in that state in 1999. Documents obtained by Breitbart News from the office of Arizona’s Secretary of State, indicate that Jeff Larson, who has served as Chief of Staff for RNC Chairman Reince Preibus since January 2011, is the second managing member of FLS Connect LLC:

TONY FEATHERMEMBER570 ASBURY ST STE 201ST PAUL,MN  55104Date of Taking Office: 01/19/2005Last Updated: 03/12/2005

JEFFREY T LARSONMEMBER570 ASBURY ST STE 201ST PAUL,MN  55104Date of Taking Office: 01/19/2005Last Updated: 03/12/2005

Larson publicly stated in November 2010 that he sold his “partnership” interest in FLS Connect LLC, but this sale has not yet been reflected in records at the office of the Secretary of State of Arizona.

When RNC Chairman Reince Priebus named Larson his chief of staff in early 2011, most press accounts described him as the “former owner” of  FLS Connect LLC. On February 2, 2011, Jonathan Martin at Politico reported:

RNC Chair Reince Priebus is expected to name Jeff Larson, a longtime Minnesota-based GOP strategist, to be the committee’s chief of staff on Thursday, POLITICO has learned.
Larson, who until late last year co-owned a highly regarded consulting firm, was selected after an intense candidate search in Washington and around the country.

His former firm, FLS Connect, specialized in voter contact. Larson worked in that capacity as a consultant on both of President George W. Bush’s campaigns and then served as CEO of the host committee when Republicans held their convention in the Twin Cities in 2008.

While Politico considered Larson a “former owner” of FLS Connect LLC in 2011, the state of Arizona still lists him as a managing member in November, 2012.

Connections between FLS Connect LLC and the Romney campaign are equally strong. Rich Beeson, who was named Romney’s Political Director in 2011, worked as an FLS Connect LLC partner prior to that time. The failed election day software program ORCA was Beeson’s idea. He left its execution to 28-year- old Dan Centinello, a college dropout, who famously bragged about its capabilities in October, as the Huffington Post reported:

There’s nothing that the Obama data team, there’s nothing that the Obama campaign, there’s nothing that President Obama himself can do to even come close to what we are putting together here.

Centinello’s claims, however, turned out to be little more than political hubris, and much of the blame fell on Centinello’s boss, Beeson.  RedState’s Ben Howe was especially critical of Beeson’s performance as political director, claiming he ran around the country settling political scores rather than building a campaign operation.

On November 13, in a National Review interview, Beeson attempted to defend the Romney ground game’s performance:

“We turned out the groups we needed to on our side,” Beeson says, adding that Democrats “did a better job of turnout than we thought they could do. They did alter the electorate.”

“The ground game worked fine,” Beeson continues, commenting that 160,000 more African-Americans voted in Ohio than had in 2008, while the percentage of 18 to 25 year olds who voted in Colorado jumped to 20 percent from 14 percent in 2008.

“We hit the numbers we needed to hit. Our ground game turned out the people it needed to turnout. They just turned out more. They turned out 18 to 29 [year olds] at a higher level. They turned out African-Americans at a higher level. They turned out Hispanics at a higher level.”  

Beeson contends that while Orca had its flaws on Election Day, it was a smart idea. “Did the overall system work the way that we wanted it to? No. But it is a good precursor for what I think we’ll want to be able to design and implement and improve on in coming elections? Absolutely,” he says.

FLS Connect, LLC was founded on July 27, 1999 in Arizona by Tony Feather, a Karl Rove protege and the political director of George W. Bush’s 2000 Presidential campaign; Jeff Larson, another Karl Rove protege who has served as Chief of Staff to RNC Chairman Reince Priebus since January, 2011; and Tom Synhorst, who had a leadership role in Bob Dole’s 1996 Presidential campaign and is now Chairman of the powerful DCI Group public relations firm, which he founded in Arizona in 1997.

The firm’s original name was Feather Hodges Larson & Synhorst LLC. Some time after the firm’s founding, Hodges left.  After Feather served successfully as George W. Bush’s political director in 2000, Synhorst and Feather formed another separate company, the DCI Group, to focus on Washington, D.C. lobbying.  That same year, Feather Hodges Larson & Synhorst LLC changed its name to FLS-DCI. 

In 2005, after the re-election of George W. Bush, Synhorst left the firm, which Larson and Feather renamed FLS Connect LLC.  The company moved its main offices to Minnesota, but it remains an Arizona corporation. 

Here’s how the company website describes the history and ownership of FLS Connect LLC:

FLS Connect started with a staff of seven people in 1999 and within a year, had worked with a winning Presidential campaign, multiple Congressional and gubernatorial candidates and state parties and grew into one of the most efficient and effective voter contact and fundraising companies the industry has ever seen.

Today, FLS Connect has opened multiple call centers, built a staff of over 350 personnel and added cutting edge technology, products and processes to create a multi-functional organization that develops partnerships with clients with a focus on excellence, integrity and victory.

The website lists only two current partners, Tony Feather and David M. James:

Tony Feather brings years of expertise in the field of campaign mechanics and voter contact strategies. He began his campaign career over 30 years ago and has since worked in the campaigns of many elected officials. He served as Political Director for the Bush/Cheney 2000 campaign and as Executive Director of the Missouri Republican Party.

Tony was also appointed by former Republican National Committee Chairman Haley Barbour to be his Midwest Regional Coordinator, overseeing nine Midwestern states.

David M. James has been a political operative in the Republican Party for nearly 20 years, holding professional positions with county, state and national committees.

Prior to joining FLS Connect in 2005, David served as Regional Political Director for the Republican National Committee (RNC) for the Mid Atlantic/Ohio region, Executive Director and Political Director of the Republican State Committee of Pennsylvania, Executive Director of the Republican Committee of Chester County and a consultant to many successful political campaigns.

David continues to lend his campaign management experience as a leading instructor of Republican campaign managers and political operatives.

The Romney campaign was not the only Republican source of revenue for both FLS Connect LLC and Targeted Victory LLC. 

Federal Election Commission records show that in 2011 and 2012, FLS Connect LLC was paid an additional $2.5 million by the Republican Senatorial Committee for telemarketing and fundraising services.

The Republican National Committee also made extensive payments to both firms. Federal Election Commission records show that in September, 2012 alone, the RNC paid FLS Connect LLC over $4 million, and Targeted Victory LLC over $400,000.

These close personal and business relationships between staffers at the Romney campaign and the RNC and these two consulting firms, in which the staffers may continue to retain some kind of financial relationship, raise a series of ethical and managerial questions.

Did Moffat and Beeson at the Romney campaign and Larson at the RNC help select vendors with whom they have a prior business relationship based on those relationships–and perhaps their own personal financial considerations–rather than the capabilities and records of those vendors?

Did any of these three–Moffat, Beeson, or Larson–fully disclose the nature of their relationships with Targeted Victory LLC and FLS Connect LLC to their superiors?

Who made money off the $33 million paid by the Romney campaign to these two firms? 

Finally, and most importantly, did these two consulting firms provide valuable services to the Romney campaign, or was much of this $33 million simply wasted for the personal financial benefit of a few key individuals?