House Challengers Depend on Ingenuity, Not Money : Politics: Incumbents have huge edge in fund raising. Opponents skimp on everything except consultants.

Democrat Mike Gordon spends much of his time these days in a dingy, two-room storefront in West Orange, N.J., telephoning people who he hopes will contribute to his campaign against Republican Rep. Dean A. Gallo.

So far, Gordon’s calls have netted $85,000--less than half of what he had hoped to spend on the election campaign, and only a fraction of opponent Gallo’s $550,000 budget.

While Gallo throws splashy fund-raisers at the local racetrack, Gordon begs checks of $200 or less from friends and business associates. Gallo’s campaign operates out of a suite in a modern office building that projects an image of solid professionalism. Gordon’s dingy rooms project no such polish, but at least they’re cheap: He’s spent less than $3,000 on rent.

Gordon is the typical congressional challenger: woefully ill-funded and unable to afford most of the things an incumbent takes for granted. A computer-assisted study by The Times of campaign spending patterns by candidates for the U.S. House of Representatives found that the average challenger has spent $70,453 on his campaign, compared to $252,840 for the average incumbent.

Nevertheless, despite the poverty of his campaign, Gordon does have something that every challenger seems to value most: consultants. Already, he has spent 50% of his campaign outlay on consultants who tutored him on all the techniques for running as an underdog.

The Times study found that political consultants have become such an integral part of the American electoral system that it is commonplace for even the most lightly financed challenger to spend more than half of his hard-earned war chest on professional advice.

The tighter the race becomes, the more money both sides spend on consultants. In fact, consultant fees far exceed the cost of television advertising in most House races.

And if a challenger should be elected against the enormous odds, he is clearly so indebted to the consultant who helped get him to Washington that he continues to pay high consulting fees long after his need for professional advice has passed.

Consulting Costs

Thus, many incumbents continue to employ their consultants even when they have no opposition. Rep. Steve Bartlett (R-Tex.), a five-term congressman, still keeps his original media adviser on retainer, though he is running unopposed and plans no television advertising.

So far in this election cycle, House candidates have spent $36 million for consulting services and that is only a fraction of what is spent in all races, including Senate, state and local contests.

In House races, challengers rely heavily on consultants to help level a lopsided playing field that gives incumbents virtually every advantage. Most challengers do not have access to the most lucrative source of funds: political action committees and rich corporate executives.

“Fund raising is the most difficult part of the job,” Gordon laments.

Candice J. Nelson, author of a new book on congressional fund raising entitled “The Money Chase,” says it is virtually impossible for a House challenger to beat an incumbent with less than $500,000--a figure that is far out of reach to all but a handful of new candidates.

“You’re almost never going to have a poor, underfinanced guy win a House seat,” Nelson says. “If it happens, it’s the exception, not the rule.”

The disparity between incumbents and challengers is apparent in the average sum they spend for specific campaign items.

Incumbents spend an average $27,553 on salaries, compared to $8,816 for challengers. They spend $31,318 on advertising, compared to $15,839 for challengers; $6,309 for computer office equipment, compared to $1,450 for challengers; $10,267 for travel, compared to $1,326; $2,278 on staff meetings, compared to $160; and $3,419 on cars--compared to $502 for challengers.

Indeed, there is only one category where challengers spend more than incumbents: challengers pay an average of $2,026 for radio advertising, and incumbents spend $1,454. Challengers invest more of their resources in radio ads primarily because they cannot afford to buy time on television.

Challengers are forever searching for a secret strategy to overcome their money disadvantage.

In Orange County two years ago, two Republicans won vacant seats by getting Lt. Col. Oliver L. North to campaign for them. But that did not work this year for David Thibidoux, a Louisiana Republican, who lost in the primary after spending $26,221 to bring North to his district.

For most hapless challengers, the bare essentials soak up every penny they can raise. John M. Ragsdale in Connecticut spent $28,320 or 62% of his budget for salaries; Dan Kripke of California spent $13,000 or 49% on lawyers and accountants; Mark Baughman spent $9,632 or 25% on computers, and Terry Hayes of Arkansas spent 57% or $20,000 on fund-raising events.

Without sufficient money to run a good campaign, challengers must rely almost entirely on ingenuity and perseverance.

Al Beverly, a Republican newcomer challenging Rep. George (Buddy) Darden (D-Ga.), is clearly a candidate with both those qualities. Operating out of a spare bedroom of his home, he has mounted perhaps the most effective campaign he can with available resources. So far he has spent only $14,104.

Lacking a media consultant, Beverly took lessons from a friend on how to write a press release. And with the help of volunteers, he produced three reasonably polished 30-second television commercials for $400.

As a result, he has a scrapbook of about 75 press clippings about himself. But his lack of funds has made it impossible for him to air the ads anywhere except on the most obscure cable television stations, which charge $15 for 30 seconds.

Still, despite Beverly’s impressive effort, he can never surmount the incredible advantage enjoyed by his opponent, Darden, who has spent $208,493 during the current campaign.

One of the biggest obstacles these challengers face is that they often must quit their jobs to spend a year campaigning. As a result, at least five Republican challengers have drawn living expenses from their campaign accounts. Although it is entirely legal under federal election law, these challengers have endured considerable criticism for living on campaign funds, and Mike Pence of Indiana has halted the practice because it caused so much controversy.

But those who are using their campaign funds for living expenses vigorously defend it. Eric Armstrong, aide to Ted Blanton of North Carolina, says his boss has no other way to support his wife and four children. “How else can a working-class American afford to take time off to run for public office?” he asks.

Underfunded challengers always complain that they get little or no financial assistance from the national Republican and Democratic parties. Indeed, the national parties seldom contribute to candidates who cannot first raise $50,000 to $100,000 by themselves.

The Chosen Few

Only a select few challengers--as well as a few candidates seeking vacant seats--have a chance of getting assistance from the National Republican Campaign Committee or the Democratic Congressional Campaign Committee. Under federal election law, these committees can provide candidates with a maximum of $5,000 and more than $45,000 in services.

Knowing they have limited funds themselves, the two parties’ national campaign committees carefully target their efforts, selecting a relative handful of races where they believe the challenger has a serious chance of ousting the incumbent.

In those selected races, the financial disparity between challengers and incumbents is considerably narrower--though The Times found that the incumbents’ spending advantage is seldom ever narrowed to less than 1 1/2-to-1 in races with well-funded challengers.

While money from the national party is not necessarily decisive by itself, it does help challengers and candidates for vacant seats attract additional contributors, particularly political action committees. The Times found that all of the top challengers with at least $400,000 to spend have received strong support from the party committees.

In the better-financed, hotly contested races, the spending difference between incumbents and challengers is substantial. Incumbents spend $43,660 for salaries, compared to $39,950 for challengers. They spend $28,701 for stamps and printing, compared to $23,334 for challengers; $10,393 for travel, compared to $4,707 for challengers; $7,591 for computers and office equipment, compared to $5,850; and $8,896 for lawyers and accountants, compared to $1,020.

Even when it comes to picking consultants--the biggest single expenditure even in many of these hot contests--most challengers must hire cheaper firms, usually those with only local experience, instead of getting assistance from one of the big-name Washington outfits.

On average, incumbents in hotly contested races spend $130,968 on consultants--including pollsters--compared to $88,575 spent by challengers. The difference between incumbents and challengers is $14,636 to $9,429 for fund-raising consultants; $6,172 to $5,257 for direct-mail consultants and $18,918 to $9,292 for pollsters.

The one area in which spending by incumbents and strong challengers is roughly equal in hotly contested races involves general consultants, or the professionals who advise candidates on overall strategy. On average, both sides spend about $33,000 for a general consultant. Challengers rely on general consultants primarily to compensate for their lack of experience in running a campaign.

A few House challengers do hire big-name Washington consultants, usually as a ploy to attract attention and contributors. But political scientist Norman Ornstein says House candidates get very little return on this investment because prominent consultants always focus most of their attention on higher-profile Senate and gubernatorial races.

“It’s a big scam, to tell the truth,” Ornstein says.

The Hired Help

In California, it is not unusual for a House challenger to hire a single consulting firm to run every aspect of a campaign. Ralph Waite, the actor who once played the father on the television show “The Waltons,” has already paid $184,424--or 49% of his funds--for a consulting firm to run his campaign against Rep. Al McCandless (R-Bermuda Dunes).

Likewise, Rose King, the political consultant for Calvin Dooley’s challenge to Rep. Charles Pashayan Jr. (R-Fresno), says the young Democratic challenger has no campaign apparatus apart from her Sacramento-based firm.

“I am responsible for everything--the media, the management, the message,” says King, whose services will cost Dooley at least $66,434. “I contract with the media guy in Fresno. I contract with a pollster. I do the script-writing myself. But primarily my job is managing the spending money--spending it, and spending it wisely.”

Among the challengers who have spent the most on consultants is Jim Salomon, who is taking on Rep. Anthony C. Beilenson (D-Los Angeles). Salomon paid $74,434, or 28% of his funds, for a fund-raising consultant. In Florida, likewise, Democratic challenger Reid Hughes has spent $366,155--or 60% of his funds--on media consultants in his bid to unseat Rep. Craig T. James (R-Fla.).

While House candidates have become increasingly dependent on consultants--a phenomenon known among experts as “the professionalization of politics”--they have also become less reliant upon volunteers. Even well-funded incumbents sometimes have trouble finding volunteers.

“Campaigns are a reflection of the times,” explains Nancy Parish, Darden’s campaign manager. “Couples are working. Young mothers don’t have the time to volunteer because they’re returning to the work force. As a result, our volunteers are older. You have to work to get people to volunteer.”

In recent years, a debate has raged in Washington over the role of television costs in congressional campaigns. Some members of Congress claim that rising television rates are to blame for the high cost of campaigning, but the National Assn. of Broadcasters contends that their members are being made scapegoats for a much more complex problem.

The Times found that the average incumbent involved in a hotly contested race has spent $81,153--or 21% of his campaign funds--to place ads on television, including the entire cost of the media consultant. The average challenger in these races has spent $56,015, or 20%.

But in all 435 races, spending for television and radio is only 16% of their campaign costs. These findings were consistent with a controversial National Assn. of Broadcasters’ study, which found that all House candidates spent 15.8% of their money on television and radio advertising in the 1986 election. Presumably, these percentages will rise slightly as candidates place their last-minute broadcast commercials.

In other words, while the cost of television time may be contributing to the total cost of campaigning--and limiting the amount of TV a candidate can afford to use--other expenditures loom much larger in the overall picture.

Unlike statewide Senate races, where television advertising always is a factor, 361 House candidates used no television advertising whatsoever in this campaign, and many candidates used it only sparingly.

As a rule, television advertising is more often used in rural House districts than in urban areas. Experts explain that it makes no economic sense for House members running in a large metropolitan area to purchase television time at high rates, when only a faction of the total viewing audience lives in their district.

“With 20-odd congressional districts in the Los Angeles area, a candidate cannot afford what it costs just to reach one-twentieth of the audience,” says Herbert E. Alexander, political scientist at the University of Southern California.

The biggest spender on television advertising among this year’s House challengers is John Carrington, who is running against Rep. David E. Price (D-N.C.). Carrington has reported spending $522,367--or 86% of his campaign funds--to place ads on television.

With all the difficulties facing House challengers, few people get elected to Congress as easily as Maxine Waters, the Democratic assemblywoman from Los Angeles. She has no general election opposition in her bid to replace retiring Rep. Augustus F. Hawkins (D-Los Angeles).

Even so, in an effort to build the kind of unshakable power base that Hawkins long enjoyed, she has laid out $130,132 on stamps and printing--more than any other candidate running in this year’s election. “We did a lot of direct mailing,” an aide observed.

Researchers Keating Holland, Murielle Gamache and Stephanie Grace contributed to this story.

How the Study Was Conducted

The Los Angeles Times computer-assisted study of campaign spending is based on an analysis of 229,169 separate expenditures reported to the Federal Election Commission by the 798 candidates currently seeking seats in the U.S. House of Representatives. The data includes all money spent by these candidates from Jan. 1, 1989, through Sept. 30, 1990.

Copies of each report were obtained by The Times, and every expenditure was entered into the database under one of 273 different categories.

For purposes of analysis, candidates were divided into three major groups--incumbents, challengers or candidates for open seats. They also were classified according to the intensity of their races--unopposed, contested or involved in a close race.

Candidates such as John P. Murtha (D-Pa.), who won his primary by less than a 55% majority, were included in the “close race” category. Uncontested races included both those without general election opposition and those where opponents have raised less than $5,000. All other candidates were classified as “other contested.”

By and large, The Times relied upon the candidates’ descriptions of each expenditure in order to classify the outlay. In some cases where the purpose of an expenditure was not clear on the report, candidates were asked for an explanation.

CONSULTANTS: THE BIG SPENDERS

House candidates have already paid $36 million to consultants in this election, and these are the incumbents and the challengers who have spent the most.

INCUMBENTS

Sidney R. Yates, D-Ill.: $556,694 Jolene Unsoeld, D-Wash.: $406,031 Ronald V. Dellums, D-Cal.: $315,537 Nick J. Rahall, D-W.Va.: $286,134 Jill Long, D-Ind.: $278,733 David E. Bonior, D-Mich.: $269,386 John Miller, R-Wash.: $267,391 Newt Gingrich, R-Ga.: $265,874 Richard A. Gephardt, D-Mo.: $256,041 George E. Brown Jr., D-Cal.: $247,999 CHALLENGERS

Reid Hughes, D-Fla.: $424,333 Ralph Waite, D-Cal.: $230,957 Calvin Dooley, D-Cal.: $190,013 Ally Milder, R-Neb.: $180,195 Mike Pence, R-Ind.: $173,514 Bob Hammock, R-Cal.: $170,926 Mike Kopetski, D-Ore.: $166,407 Dick Waterfield, R-Tex.: $148,340 John A. Johnson, R-Ind.: $139.336 Richard W. Hawks, R-Ind.: $136,627 INCUMBENT/CHALLENGER EXPENSES Comparing expenses of challenger Michael Gordon and incumbent Congressman Dean A. Gallo in New Jersey’s 11th District race.

Total spent Total spent by Gordon by Gallo OVERHEAD Office $2,630 $20,364 Salaries/taxes 9,867 40,551 Banking/finance fees 128 0 Lawyers/accountants 0 15,177 Telephone 2,172 6,872 Car purchase/ 0 605 lease-maintenance Computer/office equipment 500 6,553 Travel 44 0 Meetings/dinners 40 5,030 Constituent entertainment/ 0 8,631 gifts Miscellaneous 2,022 4,160 TOTAL $17,403 $107,942 FUND-RAISING AND DIRECT MAIL Consultants $2,500 $99,794 Fund-raising events 4,237 127,485 Direct mail 122 0 TOTAL $6,859 $227,279 GENERAL CONSULTANTS $14,380 $13,515 POLLING $8,400 $14,850 ADVERTISING $2,899 $15,074 OTHER CAMPAIGN ACTIVITY Stamps and printing $1,444 $17,382 Leaflets/bumper stickers/ 1,675 9,268 yard signs Voter activity 850 7,137 TOTAL $3,969 $33,786 DONATIONS To other candidates $0 $14,250 To local charities 0 2,685 and booster clubs To political party 0 17,573 organizations TOTAL $0 $34,508 Contribution refunds $0 $3,850 Unitemized expenditures $0 $9,952 Total campaign expenditures $53,910 $460,756