July 31 (Bloomberg) -- Randall Broz owns Washington’s longest list of House Democratic fundraising clients.
He doesn’t advertise. He mostly stays out of newspapers. He doesn’t use Twitter, and only has a skeletal website. What Broz has developed, though, is a relationship with Representative James Clyburn, the third-ranking House Democrat.
Clyburn’s campaign and political action committees have paid Broz’s firms $1.9 million, including expenses, since 2003, according to Federal Election Commission records. Broz has profited far more from his association with the South Carolina Democrat, particularly in recruiting members of the Congressional Black Caucus, which Clyburn once ran.
This election cycle Broz has counted 15 of the caucus’s 43 members as clients, along with at least a dozen other U.S. House members.
“We’re word of mouth,” Broz said last month over coffee at a Starbucks near the Washington office of Angerholzer Broz Consulting, or ABC, the firm he put together with fellow Democratic fundraiser Lindsay Angerholzer last year. “I’ve turned away more business than I can take.”
With this year’s midterm elections expected to be the most expensive in history, money -- and the people who raise it -- are more important than ever in politics. The more than $1.07 billion spent so far on this year’s congressional contests is outpacing 2010’s midterm record, according to the Center for Responsive Politics, which tracks the data. Because candidates are reluctant to rely on strangers for such a significant task, fundraisers such as Broz benefit from personal connections to party leaders, reinforcing the capital’s culture of coziness.
Angerholzer Broz and a predecessor firm have been paid more than $8 million, including expenses, by the campaigns and political action committees of House Democratic incumbents and challengers since the start of the 2004 election cycle.
Broz co-owns an investment property with Clyburn’s longtime chief of staff, Yelberton Watkins. Clyburn’s political action committee treasurer and brother, John Clyburn, at times works out of the Angerholzer Broz offices.
Firms that work with members of Congress commonly “are staffed by people with personal or professional relationships to lawmakers,” said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, a government watchdog group.
Members of Congress, like anyone else, are “free to make referrals and recommendations,” Sloan said.
Broz works with more House Democrats than any other fundraiser, he said in an interview. Since 2003, when Broz founded Political Development Group, the firm he merged into Angerholzer Broz, he has had about 50 clients in Congress, according to federal records. That includes about 20 members of the black caucus.
After winning a special election to Congress in March 2008, U.S. Representative Andre Carson turned to Broz. The Indiana Democrat was facing re-election in eight months, and needed to raise more money fast.
Representative Clyburn, then majority whip, steered Carson’s campaign to Political Development Group, said Alex Zwerdling, Carson’s campaign manager at the time. Carson has since won re-election three times, and is favored over a Republican challenger in November.
Broz “was highly recommended by Mr. Clyburn, and his staff,” Zwerdling said.
Seven campaign managers or chiefs of staff for current and former candidates for Congress said they hired Broz through referrals from Clyburn or his staff or because they were impressed that Clyburn was a major client.
“Like any small business, the highest compliment I can receive is a referral,” Broz said in an e-mail. “I have been fortunate that Congressman Clyburn,” the Democratic Congressional Campaign Committee, “and many other current and former clients have thought highly enough of my services to refer Members and candidates to PDG and now ABC.”
Political Development Group “had a particular focus working with” the Congressional Black Caucus, which Clyburn chaired from 1999 to 2001, Zwerdling said.
Representative Clyburn said in a phone interview on July 11 that he has “never, ever sent any member” of Congress to Broz, though his staff might have.
Anyone who says otherwise “did not tell you the truth,” he said. While the congressman said he was satisfied with Angerholzer Broz’s work, he said he doesn’t want other lawmakers to blame him if they are disappointed.
“If you have a bad experience it’s because I was the SOB that referred him to you,” Clyburn said. “So I’m not going to do that.”
Broz works only with fellow Democrats, he said. He and his staff raise money by calling potential donors and persuading supporters to host and attend events, he said. His fees are comparable to the industry average, Broz said.
As a candidate for Congress from South Carolina in 2010, Rob Miller said he was introduced to Broz through Clyburn’s staff. Although Miller lost, Broz exceeded his expectations, he said.
“He’s the most down-to-earth guy you’ll ever meet,” Miller said. “He’s laid back. Professional. Has a solid staff.”
A 37-year-old Pennsylvania native who runs road races as a hobby, Broz comes from a Jewish family, and his parents worked in the travel industry. He got a taste of politics at Tulane University in New Orleans, where he was a member of the college Senate.
Broz worked as a finance director on a state and congressional campaign and as an independent fundraising consultant before he and a friend started Political Development Group in 2003.
“Members of Congress and candidates routinely approached me for help,” he wrote in an e-mail. “I needed my own office space and to hire good people.”
His timing was fortuitous. Clyburn, who had done his own fundraising, was looking outside.
The son of a preacher and a beautician, Clyburn, 74, graduated from what is now called South Carolina State University, a historically black college. After serving as South Carolina’s human affairs commissioner, he was elected to Congress in 1992. He’s known for bringing federal money back to South Carolina, a skill he touts in a memoir released earlier this year.
President Barack Obama has described Clyburn as “one of a handful of people who, when they speak, the entire Congress listens.” In a blurb for Clyburn’s memoir, “Blessed Experiences: Genuinely Southern, Proudly Black,” Berkshire Hathaway Inc. Chairman Warren Buffett describes him as “the most significant African American member of Congress.”
Clyburn had just become vice chairman of the House Democratic Caucus when Broz approached him. At Clyburn’s request, Broz submitted a fundraising proposal.
He’d “decided to bring on a fundraiser,” Broz said. “I went and interviewed and we hit it off. And we’ve been together ever since.”
Clyburn’s campaign and his leadership PAC have paid Angerholzer Broz and the predecessor firm three times as much as any other member of Congress has paid them in that period, according to campaign records. Clyburn has used the fundraising group longer than any other client.
As a Democratic leader in the House, Clyburn is expected to raise money for other candidates, and Angerholzer Broz helps him accomplish that goal, he said.
“I’ve stuck with them for the same reason I’ve stuck with the staff I have,” he said. “When I’m satisfied that they’re doing well, I stick with them.”
Clyburn’s leadership PAC -- called “Bridge PAC,” an acronym for “Building Relationships in Diverse Geographic Environments” -- uses Angerholzer Broz’s office as its business address, as do some other clients’ PACs, Broz said. Members of Congress aren’t allowed to conduct campaign work from their government offices.
Clyburn’s brother John has been treasurer of the leadership PAC, which donates to other candidates, for more than a decade. Two years younger than James, John was “the scholar” in the family, the congressman wrote in his memoir. John Clyburn attended South Carolina State University before moving to Washington in 1965.
He’s been in and out of trouble. A former consulting contractor during ex-Mayor Marion Barry’s administration, John Clyburn was acquitted of federal bribery and conspiracy charges in separate cases in 1990 and 1991.
In 2008, the U.S. Justice Department sued him for allegedly failing to pay about $1.1 million in employment taxes and interest. He incurred the tax bill as chief executive officer of a company that provided housing for the mentally ill. The case was settled, and he agreed to pay a reduced amount. He’s now a free-lance health care consultant, he said.
Asked if the tax case was justified, John Clyburn said, “No, but I’m not going to get into that.”
“I trust my brother explicitly” to handle the PAC’s finances, Representative Clyburn said. “Who hasn’t had tax problems?”
Like his older brother, John Clyburn has ties to Angerholzer Broz. He has a Political Development Group e-mail address for PAC business, and works from Angerholzer Broz’s South Capitol Street office as often as two to three times a week, he said in a telephone interview.
Broz said it’s not the case that John Clyburn works out of Angerholzer Broz’s office.
After talking with Michael Hacker, a former adviser to Clyburn designated to speak for Angerholzer Broz for this article, John Clyburn said his prior statement that he worked there as often as two to three times a week was incorrect.
“I doubt if I’ve spent a grand total of two hours there in 10 years,” he said.
How much time John Clyburn spends at the Angerholzer Broz office could bear on arcane campaign finance rules. They require candidates and leadership PACs to report -- at fair market value -- in-kind benefits such as office space. The PAC doesn’t pay rent to Angerholzer Broz, John Clyburn said.
“I pay for nothing there, but they don’t pay me either,” he said. “When I’m there, I read over reports or I sign checks then I leave.”
Hacker said in an e-mail that providing work space “as needed and when available” isn’t considered an in-kind contribution. It’s “standard practice for fundraising firms who have office space” and is included in retainer agreements of all its clients, he said.
As a result, the “vast majority” of House and Senate incumbents don’t report paying rent for office space to handle campaign work in the Washington area or receiving in-kind contributions for rent, he said. He declined to provide the retainer agreements.
Clyburn also has gone to Broz with non-campaign work. His foundation, which gives scholarships and laptops to students, has paid Political Development Group at least $33,900 to raise money at his annual golf tournament in Santee, South Carolina.
There are other ties. Last July, Broz, Watkins and a third investor bought a two-story row home in Northeast Washington for $350,000. Broz said the house has “nothing to do with anything political or professional.” Hacker said it’s an investment property purchased entirely with personal finances.
Watkins said through a Clyburn spokesman that he and Broz have worked together for many years and are friends. They and another friend invested in a distressed fixer-upper property, Watkins said. Representative Clyburn said he was unaware of the financial relationship between Broz and Watkins.
Angerholzer Broz is now branching into gubernatorial races, raising money for Democratic candidates in Maine and the U.S. Virgin Islands. Its success reflects the quality of its work, Broz said, citing two congressional races in which its fundraising played a key role.
In 2004, when former Representative John Salazar was running for an open seat in Colorado, Broz spent the final two weeks of the campaign knocking on doors in Pueblo, he said. Salazar won by four percentage points. He did it “in a terrible year for Democrats,” Broz said. Salazar didn’t respond to requests for comment.
Four years later, another Political Development Group client, John Adler, narrowly won a New Jersey seat that had been held by a Republican. “We raised more money out of D.C. than pretty much any other Democrat in an open seat or challenger race that cycle,” Broz said. Adler died in 2011.
Broz predicts Democrats will pick up seats in November in the U.S. House, where Republicans now hold a 35-seat advantage. His clients include vulnerable Democratic Representatives Dan Maffei of New York, and Suzan DelBene of Washington.
Although Clyburn easily won his primary in June, he isn’t taking any chances. Broz organized a fundraiser for him in Columbia, S.C., in June, and two more in Washington this month.
Even in a safe seat, fundraising is vital to repelling challengers, Clyburn said. “I wouldn’t have beaten them if I was broke,” he said.
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