For-profit

Waterfront Strategies

Location:

Washington, DC

Formation:

July 13, 2006

Type:

Advertising Purchasing Firm

Parent Company:

GMMB Consulting

Headquarters:

Washington, D.C.

President:

Raelynn Olson

Waterfront Strategies is an advertising purchasing firm formed in 2006 by principals of the powerhouse Democratic political consulting firm Greer, Margolis, Mitchell, and Burns (GMMB Consulting). Waterfront typically works in conjunction with GMMB, placing media buys for political action committees (PACs), while GMMB works directly for political candidates and committees.

Since its first election cycle on record in 2012, Waterfront Strategies has become the top vendor for Democratic PACs, labor unions, and left-of-center nonprofits, spending $206,003,697 in the 2018 election cycle. [1] Senate Majority PAC, House Majority PAC, Women Vote!, League of Conservation Voters, NextGen Climate Action, and the government worker labor union AFSCME are among Waterfront Strategies’ top clients.

History

Waterfront Strategies is a for-profit corporation formed Delaware in 2006. [2] Its parent company is GMMB, a political consulting company founded in part by Jim Margolis, who was a top campaign consultant for President Barack Obama and Hillary Clinton, and represents high-profile Democratic politicians. [3]

While Waterfront acts as a separate corporate identity, it shares GMMB’s Washington, D.C. street address and at least two board members. [4] Waterfront’s president, Raelynn Olson, is also GMMB’s managing partner. While GMMB provides direct political consultation to Democratic political candidates, Waterfront serves as a media-buying vendor for political action committees that support those candidates. The setup is used to legally skirt campaign finance laws that prohibit candidates’ campaigns from coordinating with third-party groups like PACs. [5] Together, Waterfront and parent company GMMB have been the highest-paid consultant in each election cycle since 2012. [6]

Political Spending

Waterfront Strategies’ first election cycle on record was 2012, during which super PACs and other outside groups spent $1.3 billion to purchase media advertising on the PACs’ behalf. Waterfront was one of six media companies which received approximately one-third of that spending for political ads. [7] During that election cycle, Waterfront made $96,509,146 of payments on behalf of liberal super PACs, nonprofits, and labor unions. [8]

Political spending through Waterfront has steadily increased in each election cycle since 2012: 2014 spending totaled $132,621,244; 2016 expenditures were $180,822,140; and in 2018, the total spending by outside groups was $206,003,697. [9]

Tactics

Divide and Conquer

GMMB directly promotes candidates or campaigns, while PACs supporting candidates use Waterfront to buy ads attacking the candidates’ opponents. In 2014, for instance, then-U.S. Rep. Ron Barber (D-AZ) hired GMMB to produce ads for his re-election bid against Republican challenger Martha McSally. At the same time, the Democratic-aligned House Majority PAC paid Waterfront Strategies to create advertisments attacking McSally. [10]

“Pop-up” PACs

Waterfront Strategies has been a key advertising vendor for “pop-up PACs”—super PACs that form late in an election cycle and only spend money shortly before Election Day. This allows the PACs to avoid disclosing their funders until after elections are over. Post-election campaign finance reporting revealed the Senate Majority PAC was behind popup PACs that were deployed in several U.S. Senate races in 2017 and 2018. [11]

Waterfront Strategies was paid $1,630,758 by a super PAC called Red and Gold to purchase ads opposing Republican candidate Martha McSally in the 2018 Arizona primary election. [12] Red and Gold was formed on August 1, 2018, and paid Waterfront for the attack ads days later—on August 3rd and August 10th. Red and Gold did not file its first finance report disclosing its donors until September 20, 2018, nearly a month after the Arizona Republican primary was over. [13]

In 2014, Waterfront Strategies received nearly all the campaign funds from Put Alaska First, a super PAC for ads supporting Sen. Mark Begich in his reelection bid against Republican opponent Dan Sullivan. Campaign finance filings revealed that the super PAC received most of its funding from the from the national Democratic group, Senate Majority PAC. [14]

A super PAC called Texas Forever hired Waterfront Strategies to run $1.29 million in ads attacking Republican senator Ted Cruz two weeks before he faced Democratic challenger Beto O’Rourke in the 2018 election. [15]

Highway 31 was a super PAC formed November 6, 2017, primarily funded by the Democratic Senate Majority PAC for the sole purpose of defeating Republican Roy Moore in Alabama’s special Senate election in December 2017. [16] Waterfront Strategies was one of Highway 31’s primary vendors, hired to place attack ads against Moore in his race against his Democratic opponent, Doug Jones. [17] According to reports filed with the Federal Election Commission, Highway 31 bought $2,258,100.80 in campaign ads through Waterfront. [18]

Other Notable Campaigns

The most prominent race for Waterfront in 2012 was that of Missouri Sen. Claire McCaskill’s reelection bid. [19]

Waterfront Strategies was hired by the Senate Majority Fund and the National Education Association to run ads against Thom Tillis, a Republican challenging Kay Hagan, the Democratic incumbent in North Carolina’s 2014 U.S. Senate race. The Senate Majority Fund paid Waterfront $999,000. [20] The NEA directed $3.6 million to Waterfront for campaign ads in race. [21]

In 2016, the Senate Majority PAC spent $2.3 million with Blueprint Interactive and Waterfront Strategies for media attack ads against Nevada Republican Joe Heck. Heck was running against Democrat Catherine Cortez Masto for the open U.S. Senate seat being vacated by Democratic Senator Harry Reid. [22]

The Senate Majority PAC was Waterfront’s top client in the 2018 election cycle, with $28 million in payments. $507,000 was directed toward a one-time ad buy in the 2018 special Senate election in Mississippi. The ad attacked incumbent Republican senator Cindy Hyde-Smith, who faced a challenge from Democrat Mike Espy. [23] The PAC also hired Waterfront to spend $591,000 for ads opposing the Republican frontrunner in Arizona’s GOP Senate primary race. Also in that race, Waterfront handled $4 million in media buys for Majority Forward, a dark-money organization that shares office space and other resources with Senate Majority PAC. [24]

The Senate Majority PAC also paid Waterfront $2.6 million to buy campaign ads for the reelection bid of Senator Bill Nelson (D-FL). [25]

Controversies

Highway 31

In March 2018, the nonprofit Campaign Legal Center filed a complaint with the Federal Election Commission against Highway 31 for campaign finance reporting violations, specifically, for reporting debts to its vendors but no donors on its pre-election FEC report. [26] According to the complaint, Highway 31 began advertisement spending two days after its formation, despite raising no money. Waterfront and another firm, Bully Pulpit Interactive, extended to Highway 31 a $1,154,844 line of credit. Highway 31 repaid the vendors after it received $1.2 million from Senate Majority PAC. [27]

Consumer Financial Protection Bureau

The Consumer Financial Protection Bureau spent more than $15 million in fiscal 2016 for internet advertisements to promote the agency’s online tools for consumers, $12.5 million of which was spent through GMMB, Waterfront’s parent company. [28] Given GMMB’s partisan political clients, the CFPB’s contract with GMMB prompted an investigation by Cause of Action, a right-leaning government watchdog group. [29]

Clients

The top two clients for Waterfront Strategies for each election cycle have consistently been the Senate Majority PAC (SMP) and House Majority PAC, both headed by prominent Democratic insiders. The Senate Majority PAC is run by allies of Senate Minority Leader Chuck Schumer. [30] Other SMP leadership has included Susan McCue, the former chief of staff for former Senator and GMMB client Harry Reid; heavyweight Democratic insider and Priorities USA president Harold Ickes; and Jim Jordan, a former head of the Democratic Senatorial Campaign Committee. [31] The House Majority PAC was founded by Ali Lapp, a veteran Democratic operative. [32]

Other progressive clients pouring significant amounts of money into campaign ads via Waterfront include Women Vote!, League of Conservation Voters, NextGen Climate Action, and AFSCME. In 2018, Waterfront Strategies handled $39 million in advertising spending for Majority Forward, nearly all of its outside spending to support Democratic candidates for state legislative races. [33]

Partial Client List

Alliance for A Better Minnesota PAC (Political Party/527)

American Federation of State, County and Municipal Employees (AFSCME) (Labor Union)

Giffords PAC (Americans for Responsible Solutions) (Political Party/527)

Defenders of Wildlife (Non-profit)

Environment America Action Fund (Political Party/527)

Environmental Defense Action Fund (Non-profit)

Highway 31 (Political Party/527)

House Majority PAC (Political Party/527)

Independence PAC (Political Party/527)

International Association of Fire Fighters (IAFF) (Labor Union)

Latino Victory Fund (Political Party/527)

League of Conservation Voters (LCV) Action Fund (Political Party/527)

League of Conservation Voters (LCV) (Non-profit)

NARAL Pro-Choice America (Non-profit)

National Education Association (NEA) Advocacy Fund (Political Party/527)

NextGen Climate Action Committee (Political Party/527)

Patriot Majority USA (Non-profit)

Planned Parenthood Votes (Political Party/527)

Senate Majority PAC (Political Party/527)

Sierra Club Independent Action (Political Party/527)

Texas Forever PAC

Put Alaska First

Red and Gold

United Food and Commercial Workers (UFCW) (Labor Union)

VoteVets.org PAC (Political Party/527)

Leadership

Raelynn Olson is GMMB’s managing partner and is widely cited as Waterfront Strategies president.

Jim Margolis is one of the founding partners of GMMB (Greer, Margolis, Mitchell, Burns). Margolis was a top campaign consultant for President Obama in 2008 and 2012. He also worked for President Bill Clinton, former U.S. Senators John Kerry (D-MA) and Barbara Boxer (D-CA), and former Senate Democratic Leader Harry Reid (D-NV). [34]

References

  1. “Expenditures.” OpenSecrets.org. Accessed April 11, 2019. https://www.opensecrets.org/expends/index.php.
  2. “Waterfront Strategies Inc.” Delaware Lookup. Accessed April 09, 2019. https://www.delawarelookup.com/company/4189500/waterfront-strategies-inc.
  3. Schoffstall, Joe. “George Soros Only Funder of ‘Immigrant Voters Win PAC’.” Washington Free Beacon. April 19, 2016. Accessed April 09, 2019. https://freebeacon.com/issues/george-soros-funder-immigrant-voters-win-pac/.
  4. “DCRA.” DCRA. Accessed February 18, 2019. https://mybusiness.dc.gov/#/quicksearch
  5. McAuliff, Michael, and Paul Blumenthal. “Profits Of Politics: Shadow Super PAC Consultant Kabuki.” The Huffington Post. December 07, 2017. Accessed April 09, 2019. https://www.huffingtonpost.com/2012/06/08/political-consultants-2012-campaign-big-money_n_1579661.html.[/note]

    Waterfront has become the top vendor for liberal groups, passing through $206,003,697 in the 2018 election cycle which was 38 percent more than the next highest vendor. [note]“Expenditures.” OpenSecrets.org. Accessed April 11, 2019. https://www.opensecrets.org/expends/index.php.

  6. Evers-Hillstrom, Karl. “The Mysterious Political Consultants Making Millions to Influence Elections.” OpenSecrets News. January 16, 2019. Accessed April 09, 2019. https://www.opensecrets.org/news/2019/01/political-consultants-making-millions-to-influence-elections/.
  7. Dooling, Will. “Where Did All Those Super PAC Dollars Go? 1/3 of All Outside Money Moved Through Handful of Media Firms.” PR Watch. October 31, 2013. Accessed April 09, 2019. https://www.prwatch.org/news/2012/12/11868/where-did-all-those-super-pac-dollars-go-13-all-outside-money-moved-through-handf.
  8. “Expenditures.” OpenSecrets.org. Accessed April 11, 2019. https://www.opensecrets.org/expends/index.php.
  9. “Expenditures.” OpenSecrets.org. Accessed April 11, 2019. https://www.opensecrets.org/expends/index.php.
  10. Wray, L. Randall. “How Mitch McConnell Is Bending Every Last Campaign Finance Rule.” The Nation. June 08, 2011. Accessed April 09, 2019. https://www.thenation.com/article/how-mitch-mcconnell-bending-every-last-campaign-finance-rule/.
  11.  Severns, Maggie, James Arkin, Alex Isenstadt, and Christopher Cadelago. “‘Oh That’s Cool – Do That!’: Super PACs Use New Trick to Hide Donors.” POLITICO. August 17, 2018. Accessed April 12, 2019. https://www.politico.com/story/2018/08/17/super-pacs-hidden-donors-disclosures-741795.
  12. Willis, Derek, Sisi Wei, and Aaron Bycoffe. “FEC Itemizer.” ProPublica. August 12, 2015. Accessed April 12, 2019. https://projects.propublica.org/itemizer/filing/1263458/schedule/se#500045889.
  13. https://www.azcentral.com/story/news/politics/elections/2018/08/19/arizona-elections-democrat-group-red-and-gold-meddling-gop-senate-primary/1009619002/
  14. Blumenthal, Paul. “Alaska Super PAC Fixated On Local Cred Is Actually Funded Almost Entirely By D.C. Money.” HuffPost. April 16, 2014. Accessed April 11, 2019. https://www.huffpost.com/entry/super-pac-mark-begich_n_5159921.
  15. Balcerzak, Ashley. “How a Super PAC Helping Beto O’Rourke by Bashing Ted Cruz Can Hide Who’s Funding It.” The Texas Tribune. November 02, 2018. Accessed April 09, 2019. https://www.texastribune.org/2018/11/02/how-super-pac-bashing-ted-cruz-can-hide-whos-funding-it/.
  16. “Mysterious Democratic-funded Super PAC Spent $4M to Defeat Moore in Alabama.” NBCNews.com. December 27, 2017. Accessed April 12, 2019. https://www.nbcnews.com/politics/elections/mysterious-democratic-funded-highway-31-super-pac-spent-4m-defeat-n832871.
  17. [1] Hayashi, Yuka, and Brody Mullins. “Consumer-Finance Agency, Under Fire, Accelerates Ad Spending.” The Wall Street Journal. June 12, 2016. Accessed April 09, 2019. https://www.wsj.com/articles/consumer-finance-agency-under-fire-accelerates-ad-spending-1465768902.
  18. Willis, Derek, Sisi Wei, and Aaron Bycoffe. “FEC Itemizer.” ProPublica. August 12, 2015. Accessed April 12, 2019. https://projects.propublica.org/itemizer/filing/1263458/schedule/se#500045889.
  19. McAuliff, Michael, and Paul Blumenthal. “Profits Of Politics: Shadow Super PAC Consultant Kabuki.” The Huffington Post. December 07, 2017. Accessed April 09, 2019. https://www.huffingtonpost.com/2012/06/08/political-consultants-2012-campaign-big-money_n_1579661.html.
  20. “Super PAC Spends $1 Million Against Thom Tillis.” Roll Call. March 31, 2014. Accessed April 11, 2019. https://www.rollcall.com/news/super-pac-spends-1-million-against-thom-tillis.
  21. Camera, Lauren. “NEA Spends Big on State Races.” Education Week – Politics K-12. October 28, 2014. Accessed April 11, 2019. http://blogs.edweek.org/edweek/campaign-k-12/2014/10/nea_spends_big_on_state_races.html.
  22. Kaye, Kate. “Nevada Senate Race Drew in $31 Million From 34 Groups in Last Few Weeks.” AdAge. October 20, 2016. Accessed April 09, 2019. https://adage.com/article/campaign-trail/nevada-senate-race-rakes-31-m-34-groups/306360.
  23. Alic, Haris. “Schumer-Linked Super PAC Invests $500,000 to Boost Espy in Mississippi.” Washington Free Beacon. November 20, 2018. Accessed April 09, 2019. https://freebeacon.com/politics/schumer-linked-super-pac-invests-500000-to-boost-espy-in-mississippi/.
  24. Sanchez, Yvonne Wingett. “Why a Democratic Group Is ‘meddling’ in Arizona’s GOP Senate Primary.” Azcentral. August 20, 2018. Accessed April 09, 2019. https://www.azcentral.com/story/news/politics/elections/2018/08/19/arizona-elections-democrat-group-red-and-gold-meddling-gop-senate-primary/1009619002/.
  25. Schorsch, Peter. “Sunburn – The Morning Read of What’s Hot in Florida Politics – 7.16.18.” Florida Politics – Campaigns & Elections. Lobbying & Government. July 16, 2018. Accessed April 09, 2019. http://floridapolitics.com/archives/268170-sunburn-the-morning-read-of-whats-hot-in-florida-politics-7-16-18.
  26. Jackson, Daniel. “Watchdog Accuses Key PAC in Alabama Race of Hiding Donors.” CNS. March 06, 2018. Accessed April 14, 2019. https://www.courthousenews.com/watchdog-accuses-key-pac-in-alabama-race-of-hiding-donors/.
  27. Federal Election Commission Complaint: Highway 31. PDF. Washington, D.C.: Courthousenews.com, March 5, 2018. https://www.courthousenews.com/wp-content/uploads/2018/03/Highway31.pdf
  28. Hayashi, Yuka, and Brody Mullins. “Consumer-Finance Agency, Under Fire, Accelerates Ad Spending.” The Wall Street Journal. June 12, 2016. Accessed April 09, 2019. https://www.wsj.com/articles/consumer-finance-agency-under-fire-accelerates-ad-spending-1465768902.
  29. Schoffstall, Joe. “Watchdog Investigates Dem Firm’s $14 M in Government Contracts.” Washington Free Beacon. June 20, 2016. Accessed April 14, 2019. https://freebeacon.com/issues/watchdog-investigates-dem-firms-14-million-government-contracts/.
  30.  Severns, Maggie, James Arkin, Alex Isenstadt, and Christopher Cadelago. “‘Oh That’s Cool – Do That!’: Super PACs Use New Trick to Hide Donors.” POLITICO. August 17, 2018. Accessed April 12, 2019. https://www.politico.com/story/2018/08/17/super-pacs-hidden-donors-disclosures-741795.
  31. McAuliff, Michael, and Paul Blumenthal. “Profits Of Politics: Shadow Super PAC Consultant Kabuki.” The Huffington Post. December 07, 2017. Accessed April 09, 2019. https://www.huffingtonpost.com/2012/06/08/political-consultants-2012-campaign-big-money_n_1579661.html.
  32. Livingston, Abby. “Meet the Super PAC Woman.” Roll Call. September 18, 2014. Accessed April 11, 2019. https://www.rollcall.com/news/2014-house-races-super-pacs-ali-lapp.
  33. Evers-Hillstrom, Karl. “The Mysterious Political Consultants Making Millions to Influence Elections.” OpenSecrets News. January 16, 2019. Accessed April 09, 2019. https://www.opensecrets.org/news/2019/01/political-consultants-making-millions-to-influence-elections/.
  34. Schoffstall, Joe. “Watchdog Investigates Dem Firm’s $14 M in Government Contracts.” Washington Free Beacon. June 20, 2016. Accessed April 14, 2019. https://freebeacon.com/issues/watchdog-investigates-dem-firms-14-million-government-contracts/.

Directors, Employees & Supporters

  1. Jim Margolis
    Partner (GMMB Consulting)
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Waterfront Strategies

3050 K Street NW
Suite 100
Washington, DC 20007