A Democratic Firm Is Shaking Up The World Of Political Fundraising

Originally published in The Intercept on January 23
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WHEN KARA EASTMAN pulled off a primary upset this past spring in Nebraska’s 2nd Congressional District, a swing seat in the Omaha metro region, she did so with no help from the national Democratic party. Eastman, a social worker and first-time candidate running on an unapologetic left-wing platform, was competing against former Rep. Brad Ashford, who served for years in the Nebraska legislature and one term in Congress between 2014 and 2016.

Despite Ashford’s long track record of supporting abortion restrictions, pro-choice groups like EMILY’s List, Planned Parenthood, and NARAL Pro-Choice America opted to stay out of the race. The Democratic Congressional Campaign Committee, or DCCC, elevated Ashford to their “Red to Blue” list, a signal of official party support for competitive races, and political action committees controlled by House leader Nancy Pelosi, D-Calif., and Rep. Steny Hoyer, D-Md., kicked in over $28,000 to Ashford’s bid.

Eastman, who embraced not only reproductive freedom but also policies like “Medicare for All,” tuition-free college, a $15 minimum wage, and increased gun control, struggled early on to compete. While her proposals and personal story were popular, finding donors was hard.

Yet by the time her primary rolled around, Eastman emerged the winner, raising close to $400,000  and benefitting from a flurry of late-stage media coverage. Using a new digital fundraising company to target customized groups of donors across the country — such as all Democrats who identify as social workers or those who back “Medicare for All” — Eastman’s team was able to change the trajectory of the race.

Her campaign credits Grassroots Analytics, an obscure tech startup that’s quietly shaking up the Democratic campaign finance world. Not a single article has ever been written about or even mentioned it, despite the company having aided some of the biggest upsets of the 2018 cycle, including Joe Cunningham in South Carolina, Lucy McBath in Georgia, and Kendra Horn in Oklahoma.

“Grassroots Analytics absolutely was what allowed us to be competitive in the primary and get on TV, otherwise there is no way we would have won,” said Dave Pantos, the finance director for Eastman’s campaign. “We were definitely not the mainstream candidate, and we didn’t have access to donor lists that more establishment candidates have.” Eastman ended up losing the general election, earning 49 percent of the vote, but has already announced that she’s jumping back in the fray for 2020.

Grassroots Analytics says it wants to level the playing field and to make it easier for candidates to run who don’t already have a built-in network of wealthy family, friends, and co-workers. Using an algorithm to clean and sort publicly available data spread across the internet, the company provides campaigns with customized lists of donors who they believe are most likely to support them. If you’re involved in the world of political fundraising, a thought has probably occurred to you just now: Wait, isn’t that illegal? Hold that thought.

Establishment groups like the Democratic National Committee, the DCCC, and EMILY’s List have largely given the firm the cold shoulder, despite its goals and the fact that it worked with 137 campaigns in the last cycle. Not even mainstream progressive organizations like Our Revolution or Justice Democrats would return Grassroots Analytics’s entreaties to work together.

DANNY HOGENKAMP, THE 24-year-old founder and director of Grassroots Analytics, wasn’t expecting to end up in this kind of business. He had no background in politics; he studied Arabic at the University of North Carolina at Chapel Hill and assumed he’d end up doing foreign policy or refugee resettlement work after college.

But after graduating in 2016, with no job yet to speak of, he decided to go crash with some relatives in Syracuse, New York, where he was born, and try his hand in a congressional campaign. He enlisted with first-time candidate Colleen Deacon, a 39-year-old single mother who had worked as Sen. Kirsten Gillibrand’s regional aide in upstate New York. Deacon, who previously lived on Medicaid and food stamps, campaigned on putting herself through college with minimum wage jobs and student loans.

Hogenkamp was placed on the finance team, where he was charged with raising money and managing a team of 20 unpaid interns. It was there that he first encountered the opaque world of political fundraising — a world that even many organizers, pundits, and journalists can hardly grasp.

“I had no idea what campaigns were like, and it turns out that literally what candidates actually do to raise money, unless you’re really well-connected and famous, is sit in a room and call rich, old people to beg for $1,500, $2,000, or preferably [the federal maximum] of $2,700,” he said.

To run a competitive House race, Deacon’s campaign knew it needed to raise between $1.5 million and $2 million. Syracuse is one of the poorer metropolitan areas in New York, and after the campaign exhausted all the local prospective donors it could think of, the next step was the big open secret in political campaigning: finding similar candidates in other states and races and then researching who donated to their campaigns. So, for example, Deacon staffers would search for similar candidates — like Monica Vernon, who was running for Congress at the same time in Iowa — and then try and track down the contact information for the donors listed on their Federal Election Commission reports.

“Our interns would literally just Google people and try to find their phone numbers,” Hogenkamp said. “But donors change their numbers all the time, and they’re hard to find.”

The whole thing was invariably slow and disorganized. “It was the stupidest process,” he said. “It’s not digitized; there’s no math; it’s just random and stupid.”

Hogenkamp, still pretty much an idealistic novice, was convinced that there had to be a better way, some obvious step he was missing. So, from his perch as a relatively high-level finance staffer on Deacon’s team, he reached out to everyone he could think of — like the DCCC, EMILY’s List, liberal consulting firms, and other politicians — to find out how to make this fundraising process easier. “No one had any good answers; they said, ‘Well, this is just how you do it,’” he said. Hogenkamp recalled Gillibrand’s team telling him about its personal wealthy contacts in New York and how fundraising for the campaign meant going to those people and asking each of them to go out and find 10 more donors within their own networks.

Eventually, Hogenkamp connected with David Chase, a Democratic political operative who was then managing the campaign for Rubén Kihuen in Nevada’s 4th Congressional District. Chase offered a bit of help: He had developed a very rudimentary tool to aid his team’s fundraising efforts.

“Using OpenSecrets, I built some product that allowed you to search through all the federal and state contributions,” Chase told The Intercept. “It was very simple — I don’t have any advanced technological skills — but I wrote a script that allowed you to upload a list and it spit back the stats on the amount of times someone had given to state races and their average contributions.” In other words, for someone looking to discover who had given $500 or so to multiple candidates, Chase’s tool provided a way to more quickly glean that information.

Chase explained his tool, and Hogenkamp realized that there was a lot more he could do with an idea like that. During college, he had interned at the Consumer Financial Protection Bureau, where he learned to model how likely students were to default on their student loans. “I just randomly had a background in R and Python and zero-inflated negative binomial regressions from my time at the CFPB, so it was really just serendipitous that I actually knew what to do,” he said. Following that conversation, Hogenkamp went back and recruited a bunch of Syracuse University computer science students to help him build out his vision.

The result was effectively what he calls a “cleaner” of publicly available data, scraped from across the internet, that analyzes and sorts information for more than 14.5 million Democratic donors over the last 15 years. The tool would generate lists of individuals most likely to support a candidate given shared characteristics and shared views — ranging from race and ethnicity to a passion for yoga or universal health care.

“We know where you live; where you used to live; what issues you care about; if you’re trending Republican or Democrat; what other kinds of candidates you like to support; and contact information” he explained.

The lists aren’t perfect or fully comprehensive. They exclude some websites for legal reasons, and when I asked to see my own donor profile, recalling a $25 donation I gave in college to an Ohio Democrat, Grassroots Analytics had no record of it, because I’ve never given above the $200 reporting minimum to a federal candidate, and only some states and localities disclose small-dollar donations. Had I donated $5 to Stacey Abrams’s gubernatorial campaign, by contrast, I would have shown up in their system.

Nevertheless, the tool offers candidates — especially insurgent and working-class ones who lack rolodexes of wealthy friends — a real window into what is arguably the most important part of any political campaign: early-stage fundraising. The unspoken rule of viability in federal campaigning is that if you haven’t amassed at least $250,000 by your first quarter financial report, you’re probably not a candidate who people will take too seriously. EMILY’s List, an acronym for “Early Money Is Like Yeast,” was founded precisely to help female pro-choice Democrats compete against men who have long received the bulk of political contributions from the heavily white and male political donor class. Yeast makes the dough rise.

Connor Farrell, the finance director for Abdul El-Sayed, a left-wing former candidate who ran for Michigan governor this past cycle, credits Grassroots Analytics with fast-tracking his campaign’s fundraising, allowing the team to target progressives and doctors across the country. (El-Sayed campaigned on his credentials as a physician and public health expert.) “The applications of this new tool were valuable for our call-time operation, building for events, and some digital solicitations,” Farrell told The Intercept. “Grassroots saved us enormous research time, while allowing us to pivot quickly to new avenues of research. For a bootstrapped campaign, saving time and being flexible in your finance department is critical.”

IS GRASSROOTS ANALYTICS legal? And moreover, in the age when big tech companies are under fire for sharing personal information — not to mention Cambridge Analytica, the political consulting firm, hired by the Trump campaign in 2016, which gained access to more than 50 million Facebook users’ private data — is it ethical?

Depends on who you ask. Federal law prohibits “any information copied from” Federal Election Commission reports from being “sold or used by any person for the purposes of soliciting contributions or for commercial purposes.” Subsequent regulation prohibits “information copied, or otherwise obtained, from any [FEC] report or statement, or any copy, reproduction, or publication thereof” from being sold or used for soliciting contributions. But because these laws date back to before the advent of the internet, and campaigns across the country already scour through FEC lists for leads, Grassroots Analytics says it’s effectively just simplifying the process that hordes of interns and finance staffers already do every day when they set out to research donor prospects.

To comply with the legal prohibition, Grassroots Analytics bars its algorithm from scraping the FEC website and websites like OpenSecrets that aggregate data directly from the FEC. Instead, Grassroots Analytics collects campaign contribution data only from public record caches, newspaper articles, nonprofit reports, and secondary websites. However, there’s little question that most of the campaign finance information they do collect originated at some point from FEC reports.

The company, in other words, exploits an ambiguity in the law, which is whether they have in fact “obtained” information from FEC reports. How many layers removed does information have to be in the age of the internet to pass legal muster? In an advisory opinion produced at the request of Grassroots Analytics that was reviewed by The Intercept, an attorney with one of California’s top boutique firms specializing in political and election law determined that existing law, court cases, and the FEC’s enforcement history “provide no clear answer to this question.” But because Grassroots Analytics takes steps to omit FEC data and sites that aggregate directly from the FEC, the attorney hired to assess their legal status determined that the company has a “legally defensible” position that its products and services do not violate federal law and that in their expert opinion, the FEC, especially with a Republican majority, is unlikely to conclude that the firm or its clients are breaking the law.

“I obviously didn’t go into tens of thousands of dollars of credit card debt to get this thing going without getting extensive legal advice from multiple law firms,” said Hogenkamp. “I’m a little rash sometimes, but I’m not that stupid.”

But should donor information, even if it’s technically public, be made so easily accessible?

“They’re donor pimps, that’s all they are,” said one fundraiser. “If you don’t know people, if your staff doesn’t know people, then you actually shouldn’t run for office. You’re not actually a good candidate.”

Others shrug off the critics, saying that while the FEC and secretaries of state should work to clarify campaign finance rules in the age of the internet, including for political advertisements, right now it’s no secret that most campaigns utilize FEC data in some fashion for solicitation purposes. “Most people think it’s fine to use those lists to research people a little further, to get a better picture of their donor history, and then turn them into leads,” one senior finance director told me.

“I think part of the debate is that the folks who’ve traditionally run the finance side of our party tend to be a little older, more focused on relationships and identifying event hosts and bundlers,” said Chase, who now works for a Democratic consulting firm. “But I think from the last cycle or two, you’ve seen a pretty dramatic shift in the way our party raises money. Digital fundraising exploded, and with that came folks like Danny who said, ‘Well, maybe we can do some of this stuff better than the traditional way of just calling rich folks and trying to get nice checks.’”

The debate also stems partly from confusion over what Grassroots Analytics is or actually does. Some suspect they’re just farming out lists of rich people to clients and engaging in another disapproved practice that’s rampant in the campaign industry — taking donor data from one campaign to another. Trading rich donor contact information is also not unusual among senior finance staffers.

Hogenkamp understands the mistrust. “Don’t get me wrong: I’m so skeptical of everyone in this industry. I totally understand how very smart people would think we’re just some kids with a list of like a hundred thousand donors and that we just make money off that same list,” he said. “But it’s like, no, we have more than 14 million people.”

There is another data analytics company that bills itself as helping candidates (and nonprofits and universities) become more strategic in their fundraising efforts. RevUp, which promises to “revolutionize your fundraising,” was started in 2013 by a top Obama fundraiser and Silicon Valley investor named Steve Spinner. It’s a software company that works with both Republicans and Democrats, helping campaigns to analyze their existing social networks, like their email contacts or LinkedIn connections, to more efficiently find new prospects to hit up. (Grassroots Analytics also analyzes clients’ LinkedIn data for donor prospects.) In October, RevUp, which has won several campaign industry awards for fundraising and innovation, announced a new $7.5 million round of investment.

A key difference between RevUp and Grassroots Analytics is that the former doesn’t expand the universe of donor prospects beyond your own network — it just helps you navigate and analyze the contacts in your existing universe more efficiently. From one vantage point, that’s more respectful, and skirts the thorny questions of legality and ethics. From another, it doesn’t do much to change the problem of connected people hoarding access to connected people.

“At RevUp, we believe successful fundraising is all about respecting prospective donors,” Spinner told The Intercept. “Through our data analytics software, RevUp uniquely allows a candidate, staff, or volunteer to reach out to the right person, at the right time, with the right ask. Our mission is to expand the donor universe and grow the pie beyond the ‘low-hanging fruit’ — the 25,000 major donors that get constantly called.”

WHEN HOGENKAMP FIRST developed Grassroots Analytics, he hoped someone in the Democratic establishment would recognize the potential of this technology, buy him out, and give him the institutional support to make it grow. But despite his persistent appeals, almost no one would return his emails.

Yet while no groups would publicly associate with Grassroots Analytics, staffers for some major Democratic political organizations were discreetly referring their candidates to the company throughout the 2018 cycle. Two emails reviewed by The Intercept showed an EMILY’s List campaign operative connecting Grassroots Analytics to Sol Flores’s primary campaign in Illinois and to Veronica Escobar’s race in Texas. “Thanks again for all your work with all o[f] EMILYs List candidates,” they wrote.

Other emails showed Democratic consultants setting up deals with Grassroots Analytics, explaining that the DCCC would be the organization actually writing the check on behalf of their clients. (This was the case with Linda Coleman’s unsuccessful bid for Congress.)

The DCCC and EMILY’s List did not return multiple requests for comment. When the DNC rolled out its “I Will Run” program in April 2018, which was essentially a list of vetted technology companies they recommended campaigns to hire, DNC Tech Manager Sally Marx announced the committee had “surveyed the progressive tech ecosystem looking for tools that campaigns and state parties can use to upgrade their work.” Their list, the DNC said, was a “curated compilation of the best-in-class tools currently used by campaigns.”

RevUp was on there for recommended fundraising companies, but Grassroots Analytics was not. The DNC declined to make Marx available for comment, but in a statement provided by a spokesperson, the party committee claimed Grassroots Analytics “was not on our radar until recently. As we head into this cycle, we look forward to re-evaluating and potentially adding new vendors to our I Will Run marketplace.”

Spokespersons for Our Revolution and Justice Democrats also confirmed that they do not have relationships with Grassroots Analytics and have not referred their candidates to the company.

One person who did show an early interest and helped Hogenkamp break into the field was Molly Allen, a political consultant who runs the political action committee for Blue Dog Democrats. She met with him in 2017 and referred Grassroots to their first three clients.

“I’ve only met Danny a few times and haven’t formally worked with them more than a short-term one-off, so I can’t speak to their work in details, but Danny seems great and I respect his start-up idea and success!” wrote Allen in an email.

I asked Hogenkamp how he felt about his company breaking out by representing Blue Dogs, when they had envisioned being a fix to the barriers blocking progressives from running for office.

“It was weird, but I was desperate,” he said.

Over the course of the last two years, though, Grassroots Analytics has decided to work with anyone running in the Democratic caucus, a decision Hogenkamp says was made to avoid pitting themselves as arbiters of the left. (This could also just be a handy rationale to bolster their client lists and profit margins.) But Grassroots Analytics, Hogenkamp adds, does have some red lines for clients, saying they turned down someone last year who they felt had too strong of ties to charter school backers.

BUT IF THIS all could be started by a young person with barely any political experience, why hadn’t it been done before?

Multiple people interviewed for this article chalked the problem up to monopoly in the political industry and the disincentives to innovate that come with monopolies.

Sean Adler, a New York-based software engineer, said he ran into this problem when he tried to insert some innovation into campaigning four years ago. A friend of Adler’s had mounted a bid for Congress in New Jersey, and Adler, then 23 years old, started developing phone banking tools for the campaign’s volunteers. He ended up co-founding a company to sell the technology and called it Partic.

“I wrote the whole thing from scratch. We took the whole data file of voters, and it would distribute lists and show a script and do all sorts of custom assignments,” he explained. “But one thing that ended up being a bummer was the DCCC had their own thing they forced campaigns to use, so we ended up only getting the real scrappy campaigns, the real mega-underdogs.” Adler was referring to VAN, an omnipresent software company that provides what they describe as “an integrated platform of the best fundraising, compliance, field, organizing, digital, and social networking products.”

Adler built a host of new design features and capabilities to make phone banking more useable and successful than he found VAN’s technology offered. Partic worked with eight campaigns in the 2016 cycle, but has since ceased operations, citing the enormous barriers new companies face to compete effectively.

“No one can enter this market without a lot of connections, and that’s fair, but the customer base of this market also completely goes away every two years, so the only people who can sustain that are people who are already in it,” Adler told The Intercept. “I think I was too much of an idealistic liberal,” he continued. “I thought, ‘Oh sure, the Democratic Party might not be as technologically advanced as Google, but they certainly wouldn’t try to shut out people with better ideas and products in order to protect their friends.’ For the state of the world to change, people like Danny have to succeed. The establishment monopoly not only screws over local candidates no one has ever heard of, but it also screws over candidates at the very top.”

Ultimately, Hogenkamp says he wouldn’t mind being put out of business, citing the new bill introduced in the House this month for publicly financed elections.

“I sort of stumbled into this. I think the whole campaign fundraising system is stupid, and you know, if our country gets serious about publicly funded elections, I would so gladly shut down the business and go work in the State Department like I had planned,” he said. “I don’t care enough about this; the whole campaign finance system needs to be completely overhauled, but until that happens, the only way you’re ever going to do it is helping Democrats raise money to win competitive elections.”

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