Names of Political Donors Become a Hot Commodity

If you gave money to support Proposition 187, your name--along with those of 209,999 other anti-illegal immigration donors--is for rent for 9 cents a pop.

A $1,000 check to a Republican-backed campaign might have landed you on a rentable roster of “California Fat Cats.” A mere $80 donation could have put you on the list of “Beer-Bellied Reactionary Republicans.”

And if you’re a Christian, a doctor and a donor to evangelical political candidates: “Born Again Doctors Who Donate.” Your address could be had for 10 cents, 20 cents for your phone number. “Doctors can be very generous,” an ad for the list reads.

Whether you give to a cause or a candidate, or attend anyone’s fund-raising dinner, it’s highly likely that you’re giving more than money.

Perhaps unwittingly, you are also passing along your identity to people who will traffic in your generosity, leasing your name to anyone willing to pay from 7 to 12.5 cents.

You become a commodity on the little-known list market.

It’s an industry that’s “growing like a mushroom on steroids,” said Chip Hetzl, owner of Yankee List Marketing in Maryland, which handles a number of political lists, including “California Fat Cats.”

While most people seem to know their names are somehow swapped among catalog companies and charities, fewer realize that a thriving, multimillion-dollar industry is profiting off their political activism.

Renting out your name for a limited number of mailings is a way for campaigns to retire their debts, or fatten campaign coffers.

Retired or ousted politicians often lease the names of their supporters to other campaigns when they no longer need them. Some political consultants make co-ownership of the names of campaign donors a lucrative part of their contract.

Two Newport Beach consultants parlayed the names of donors to political causes into a sideline business earning as much as $2.25 million a year.

During campaign season, some professional list gatherers become the unseen scavengers of the campaign trail, snapping up the names of supporters however they can. The owner of one New York list company made the big time by plucking the roster of $1,000 donors to the GOP from a trash bin in Washington’s Union Station.

“It’s free money,” said Denison Hatch, a direct mail specialist from Stamford, Conn., who edits the trade publication Who’s Mailing What! “You rent them out and rake in the income.”

In few places is the trade in political cause-related names larger than in California, where a steady escalation of initiative campaigns provides a gold mine of grass-roots givers. There are 11 measures on this month’s statewide ballot alone.

“California’s quite a biggie, because of all the initiatives,” said Dodee Black, executive vice president of Atlantic List Co. in Virginia.

Black’s company, in partnership with Sacramento political consultant Wayne C. Johnson, owns the “Great American Donor File,” a list of about 700,000 donors to Republican candidates nationwide.

To keep the list current, Johnson said, an employee is on an endless photocopying journey through county courthouses nationwide, gathering the names of new donors.

The donor list--the largest up-to-date Republican list in the country--”is used by almost every major Republican candidate in the country,” said Johnson, who also owns a panoply of conservative lists, including “California Freedom Donors.”

Among those that used the donor list this year were the presidential campaigns of Sens. Bob Dole, Phil Gramm and Dick Lugar.

Representatives of list companies nationwide regularly line up at the California secretary of state’s office to collect the names and addresses of $100 donors from campaign reports.

Said one list broker: “Thank God it’s an election year. Initiatives equal causes, and causes equal lists. We need some new causes.”

List companies now tout more than 600 political lists, complete with catchy names to lure potential renters--from 29,888 “Hillary Haters” who support ultra-right-wing causes, to “Jewish Democratic Donors,” who give an average of $110, according to the Oklahoma City-based Marketing Information Network, which keeps a database of the lists for brokers nationwide.

Among the priciest political lists: the “Gay and Lesbian Victory Fund,” 7,000 gays and lesbians who have promised to donate $200 a year to political campaigns. The list rents for a sky-high 15.6 cents a name.

“A gay and lesbian list, in general, rents for more than a list of straight people,” explains Todd Cunningham, who manages the list for Angle Media in Dallas. “It’s tough to find people who are willing to identify themselves as gay. . . . These people are high-dollar donors and very, very responsive to direct mail.”

No one knows how lucrative the list industry is because almost all of the companies that deal in lists are privately held and do not reveal profits.

But clearly there is money to be made.

Take, for example, that list of donors to Proposition 187. All or part of the list has been rented out more than 40 times since May 1995, says Jennifer Krause of Virginia-based Affinity Marketing Group Inc., which manages the list for Save Our State, the Orange County group that sponsored the 1994 initiative to crack down on illegal immigrants.

If the entire list had been rented each time, the total take for 40 rentals would have been $756,000--70% of which typically goes to the list’s owner, with 20% for the broker-salesperson, leaving 10% for the firm that maintains and produces the computerized lists.

Gary Kreep, head of the nonprofit U.S. Justice Foundation in Escondido, said his group has rented the Proposition 187 list twice to help raise funds to “save Prop. 187” in the courts--and to beef up his own group’s mailing list.

Kreep said that for many small public-interest groups, the ability to rent out their lists of donors can help keep them afloat through rough periods. “At times we have concentrated on renting out our list to help pay the bills,” he said. The U.S. Justice Foundation, which has obtained charity status from the IRS, has 83,000 donors on its list.

The rental price for lists ratchets upward if a potential user wants more than just a donor’s name and address. For a few pennies more per name, some list owners also will provide your birth date, phone number, ethnicity, income, occupation, marital status, political affiliation, and whether you own a home and when you bought it.

List brokers--which one list owner likened to the “used-car salesmen of the list business”--use a sort of list psychology to determine if donors to one cause are likely to open up their wallets for another. Many groups with similar causes simply swap their lists to boost the donor base of both--with the broker who arranged the deal getting a cut.

Conservative causes make up a majority of the political lists available. A number of list companies hawk the high-priced names of rich Republicans, calling them “Cadillac Conservatives” or “Grand Old Pachyderms.”

Response Unlimited in Waynesboro, Va., specializes in Christian evangelical political lists, including 131,000 “Grass-Roots Conservative Donors,” which list manager Greg Sholes described as “real basic, flag-waving kinds of individuals.” The list has been rented by the presidential campaigns of Gramm, Pat Buchanan and Alan Keyes, he said.

For 15 cents each, the company also touts a list of 3,000 people--”many of them high-profile personalities”--who bought a book called “Secret,” which the ad said exposed “Bill and Hillary’s” connection to a Marxist-terrorist group.

Many list names are made up to disguise the political group that is offering them for rent, brokers say.

Generally, the most expensive lists are those made up of conservative donors, list managers say.

“Republicans are worth a lot more than Democrats,” joked Elaine Murphy, president of Names in the News/California, one of the largest companies handling the lists of liberal causes.

Murphy said many of the conservative lists spring out of Southern California--”the most concentrated area of political conservatism in the country.” But one of the “very, very hot lists” in the industry right now is a roster of Democrats who have donated in the past year.

When a political group rents out the names of its donors, the money doesn’t always go to the cause. Often, the money goes into the pocket of the group’s fund-raiser.

Johnson, the Sacramento political consultant and fund-raiser, is a nationally recognized list owner and manager. He has built a lucrative business renting lists he owns or co-owns.

Johnson’s contract with People’s Advocate, a nonprofit, anti-tax group, gives him co-ownership of the group’s mailing list with the right to rent it out--which Johnson does, up to three times a month, under the name “Private Property Active Donors.”

Johnson also rents other lists he owns to People’s Advocate through an East Coast broker. Rod Harten, who keeps track of the tax group’s mailings, said the group only found out by accident that several of these lists also were owned by Johnson, their chief fund-raiser.

“Although he never told us, a full half the lists we rent are his lists,” Harten said.

Johnson defended his ability to rent out the nonprofit’s lists, saying his contract with People’s Advocate provides for fees much lower than the industry standard.

William A. Butcher and Arnold C. Forde, the Newport Beach consultants who made as much as $2.25 million a year renting lists in the mid-1980s, made it a condition of their fund-raising contracts that they would own the lists of donors, and even the groups they raised money for couldn’t use them without Butcher-Forde’s written permission.

Among the donor lists they controlled: Howard Jarvis’ taxpayer groups, James Roosevelt’s National Committee to Preserve Social Security, and that of the Doris Day Animal League.

The Howard Jarvis Taxpayers Assn. advertises its 1.4 million-donor list for 4.5 cents per name, or 10 cents per name for a list only of those who have given money in the past three months. And all revenue from list rentals goes to the fund-raising firm, not the association.

Joel Fox, the executive director of the taxpayer group, said that he thinks the Jarvis organization “should be able to share in the rental fees” and that he “brought that up” to no avail with the fund-raisers.

David Ormstedt, an assistant attorney general in charge of policing nonprofit groups in Connecticut, said such groups are giving away the farm when they surrender control of their mailing lists to their direct-mail consultants.

“That’s the most valuable part: the mailing list,” he said. “It’s more valuable than anything else” the nonprofit group has.

Hetzl, owner of Yankee Lists, said the trade in political lists is booming “in part because it is profitable, but [also] because anyone can do it. There are no formal requirements for starting up. No degree. No certification.”

Leslie Mandel, owner of Rich List Co. in New York, said she started out 16 years ago by copying the names of patrons out of programs at theater benefits, and getting her rich cousins to give her the membership lists of charities on whose boards they sat.

But Mandel’s big coup came when she worked on the 1981 inaugural of Ronald Reagan.

As she helped Republican Party staffers welcome $1,000 donors arriving at Washington’s Union Station, Mandel realized the staffers were consulting a list as the VIP invitees asked for their tickets. On a hunch that the list would later be tossed, Mandel returned after the event and fished a copy from a trash bin. It’s still one of her best lists.

“It’s proven to be very valuable, because the Republican Party itself still rents it from me,” said Mandel, who considers the competition for names “dangerously cutthroat.” Mandel, like virtually every list owner, “salts” her list with the names of relatives and friends who alert her if a group uses her list more than one time.

But list professionals, among them Johnson, say the business is not as easy as gathering up a bunch of names and renting them. To keep a list “active,” the list owner must continue to acquire new names and purge the list of people who have died or moved.

The more recently people have donated money, the more valuable the list. And, list managers say, many lists die when the cause does.

Johnson, who got his start with the list of donors to Jack Kemp’s 1988 presidential bid, said someone is always sidling up to him and murmuring in hushed tones, “I got a list,” but the lists are usually several years old and unusable.

Johnson said the whole political list business is likely to be “completely revolutionized” in two to four years as voting records and campaign contributions go online, giving quick and easy access to everyone.

“Instead of putting a guy on a plane to Tupelo to photocopy all the campaign reports . . . in the county courthouse,” Johnson said, he’ll be looking for the information on the Internet.

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Safeguards for Giving

What’s the best way to ensure that your donation ends up working for the cause you support? Experts say the first rule is to avoid responding to phone or mail solicitations. While many nonprofit groups raise and spend money responsibly, the only way you can be sure is to give directly to a nonprofit whose track record is well known. If you’re tempted to respond to a phone or mail appeal, here are some tips from regulators and industry watchdogs:

* Never contribute money to a stranger over the phone.

* Ask for copies of the nonprofit’s two most recent IRS Form 990 filings, its last two annual reports, and, if the group is based in California, the form CT-2 required by the state attorney general.

* Ask for a copy of the nonprofit’s contract with its fund-raiser.

* Ask if the nonprofit’s mailing list is co-owned by its fund-raiser and who earns money from rental of donors’ names.

* If the nonprofit refuses to give you any of this information, give elsewhere.

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ONCE FINANCIAL FORMS ARRIVE

* Form 990 should state how much directors are paid, the level of travel and entertainment costs and whether the nonprofit has any huge liabilities.

* Nonprofits can decide whether some of their fund-raising expenditures are educational. If the bulk of spending is charged to public education, be suspicious--the group may be trying to hide the fact that most donated money is spent to raise more money.

* If after reviewing financial documents you want to support the group, don’t use the direct mail return envelope. Using your own envelope will reduce your chances of ending up on a mailing list and having your name peddled to other nonprofit groups as a potential donor.

* Each year, the California attorney general’s office publishes two reports to aid donors. One evaluates nonprofits using commercial fund-raisers; the second explains how to investigate a nonprofit’s finances. Both are available by writing to the Attorney General’s Public Inquiry Unit, P.O. Box 944255, Sacramento, CA 94244.

Source: Times reports

Researched by TRACY WEBER / Los Angeles Times