Merchants Demand Cash as Campaigns Fail to Pay Tabs : Candidates Burn Credit Bridges in Iowa

Mark Vukovich was disappointed when Ohio Democratic Sen. John Glenn decided not to run for President next year.

“I was really hoping he would run again so I could sue his campaign when it came to Iowa,” said Vukovich, an officer of a local car dealership that says it has yet to see a dime of the $3,724 in rental fees still owed it from Glenn’s losing 1984 presidential bid.

Candidates, staff, press and security people spend up a storm here every four years on food, rooms, transportation and other resources, getting ready for the state’s vaunted presidential preference caucuses.

That is always good news for Iowa’s economy, but businessmen like Vukovich have sometimes found lumps in the gravy train. Stung more than once by presidential campaigns that leave the state without paying their tabs, many merchants have put campaigns on notice that this time around their business is appreciated but their credit is no good.

“Hail to the chief, but cash on the barrelhead” seems to be a growing refrain heard by presidential candidates as they shop for votes both here, in anticipation of the Feb. 8 caucuses, and elsewhere around the country. Everyone from the printers who churn out custom flyers to the specialty shops that sell balloons and crepe paper has begun crunching down on campaign credit. More and more, firms want cash up front from political candidates or even large deposits to cover anticipated spending.

The candidates usually don’t run up the debts personally, even though it is their name on the campaign. Most often it is their staffs, eyes cast upon the White House, that generate the red ink under the umbrella of the candidate’s campaign committee, which is then liable for the debt.

“It’s a shame we can’t vote for President by the quality of the people who work for the campaigns,” Vukovich said. “Glenn may be a quality senator, but he had people on his staff who belong in a penitentiary.”

Glenn, who dropped out of the 1984 race a few weeks after finishing a dismal sixth in the Democratic caucuses here, still owes more than $2.1 million to creditors across the country. Much is owed to banks for loans, but the debt also represents purchases of everything from the coffee Glenn supporters drank (Custom Coffee in Des Moines, $554.75) to the rolls they noshed on (Scruffy’s Breadboard, $400).

Hart Owes $1.35 Million

Former Sen. Gary Hart (D-Colo.) had yet to pay off $1.35 million on his failed 1984 presidential drive when he pulled out of the 1988 race last May in a scandal involving Miami model Donna Rice. And that debt had been whittled down from $5 million only because Hart had pressed many of his creditors to settle their claims for far less than they were owed, some for as little as 10 cents on the dollar.

In all, past presidential candidates have racked up a whopping $8 million in bad debts dating back to the 1976 campaign, according to records on file at the Federal Election Commission. Former President Jimmy Carter still owes $676,187 on his unsuccessful 1980 reelection drive; California Democratic Sen. Alan Cranston’s 1984 campaign committee is still in hock for $454,457 and Democrat George S. McGovern, the former South Dakota senator, has yet to pay off $6,311 still on the books from 11 years ago.

Presidential aspirants raise and spend tens of millions of dollars trying to get elected and only a handful over the years have gotten in any serious financial bind. Yet, even candidates with impeccable payment records have been hobbled by the legacy of the deadbeats.

Personal Credit Card

One example: Vice President George Bush has always run flush campaigns. But last fall, when Bush went to Cedar Rapids for a hastily arranged Republican fund-raiser, the Best Western Town House motel made a state GOP official charge the rooms and refreshments for the vice president’s party on her personal credit card. Glenn’s 1984 campaign still owes the motel $2,428.

“You get a few bad problems with one, and you kind of caution up on all of them,” said Parnell Proctor, a part owner at the motel. “ . . . These people from Congress, as bad as they are about handling the national debt, I guess we can’t expect them to manage their own.”

Campaigning for the major party nominations was no big deal in Iowa until Carter’s surprise victory in the 1976 caucuses catapulted him to the presidency. Some Iowa shopkeepers acknowledge that they were a bit naive in 1980 and even 1984 as their state was emerging as a featured opening act for the national nominating circus. Campaign staffers were often given carte blanche to charge rooms, supplies, meals, office space, cars, equipment and a host of other items.

‘Awe-Struck and Star-Struck’

“It felt like something of a privilege to have what we perceived to be candidates of that caliber visiting the city and the state,” explained Jeff Hunter, part owner of the 235-room Fort Des Moines hotel. “Some people were awe-struck and star-struck, and for that reason they might have extended credit a little more liberally than they ought to have.”

Hunter and his partners were among those victimized. In 1980, Republican candidate John B. Connally left the hotel holding an outstanding bill for $17,054. Connally, a former U.S. Treasury secretary, finally settled the account four years later by paying less than half.

Candidates are not personally liable for their campaign debts. In fact, they may be creditors themselves. For example, among the dozens of creditors still owed $841,605 by the Connally committee is Connally himself, who loaned his campaign more than $500,000.

In July, he went bankrupt after speculating in the Texas real estate market.

These days, Hunter says, he is stingier with credit. But he also remains philosophical about the experience. “I’ve been stiffed by national candidates, and I’ve been stiffed by local candidates,” Hunter said. “It’s a less than perfect world.”

Car dealers and rental agencies are not so sanguine. Some have lost not just money, but vehicles. After the 1980 caucuses, cars hired by the campaign of Sen. Edward M. Kennedy (D-Mass.) were found abandoned along rural roads. When Kennedy returned to the state a few years later, Democratic consultant Dan Hunter recalls getting an unusual request from a former aide to the senator. “She asked me if I would loan my own car because Kennedy couldn’t rent cars in Iowa,” said Hunter, brother of the Fort Des Moines owner.

Vukovich, vice president of Dewey Ford, has suffered similar problems. His firm rented a dozen cars and vans to the Glenn campaign. The vehicles were intended for use in Iowa, but Glenn staffers drove some of them as far as New England. One Glenn supporter was arrested by a state trooper in Tennessee after Dewey filed a stolen vehicle report on the conversion van she was driving. The company did not press charges.

Campaign officials acknowledge that the new environment can make their work cumbersome. Gordon James, special events director for the Bush Iowa campaign, said he no longer can just say “charge it” when hiring halls and arranging for food and entertainment. Now, James explained, he must facsimile requisition forms for all proposed purchases to the national campaign headquarters in Washington, which then air-expresses a signed check back to Iowa.

Despite the bother, James says the procedures have forced him to be more frugal. “You can’t bet on the come,” he said. “You can’t go to the bank and pledge the results of a (fund-raising) mailing. You’ve got to have cold hard cash. That keeps everybody honest.”

Not everybody insists on cash these days. Carter Printing, which does a landmark business producing brochures and flyers for several Democratic candidates, allows them 30-day revolving accounts. But Ron Hoyt, the Carter manager, said he plans to review the payment records next month and may drop campaigns that have fallen behind.

Carter can take a few risks because the extra revenue generated by campaign work far outstrips potential losses, Hoyt explained. Besides, Hoyt said, when payments lag he has learned to pry money out of campaigns by threatening to tell his story to the local media. “It’s real obvious what a little bad press can do to them,” Hoyt said with a chuckle.

Not all Iowa businessmen have been so successful, however. In 1984, Hart used Al Beyer’s Dubuque-based charter air service for one tour. The bill came to $11,600, but Hart paid nothing on the account until last winter, when Beyer agreed to settle the bill for half. In the interim, Beyer filed for bankruptcy, and the Dubuque airport evicted his service when he was late paying the airport’s $5,000 monthly space rental fee.

Beyer admits to being a poor business manager and bears no ill will toward Hart, who was only one of many accounts from whom he had failed to collect. And, Beyer said, if he ever gets the chance to fly another candidate, his motto will be: “Got any money? This account is cash up front.”