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Home arrow Business & Finance arrow Building a business of politics the rise of political consulting and the transformation of American democracy

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Campaigns, Inc.

That Whitaker and Baxter had hit upon a novel, and lucrative, business of campaign management was clearly evident to scholars and journalists of the day. In 1951, Carey McWilliams, an astute observer of California politics, provided a detailed account of Campaigns, Inc. in a three-part series for the Nation. According to McWilliams, “The firm has evolved a style of operation which makes the old-fashioned boss and lobbyist completely obsolete. Whitaker and Baxter has ushered in a new era in American politics—government by public relations.”3 Five years later, Campaigns, Inc. figured prominently in the first scholarly treatment of the consultant-for-hire, Professional Public Relations and Political Power by political scientist Stanley Kelley. According to Kelley, “It was a Whitaker and Baxter inspiration to conceive of political campaigning as a business.”4 Similarly, Robert Pitchell, writing in the Western Political Quarterly in 1958, called Whitaker and Baxter “the giants of the industry, the most successful practitioners of the art of campaign management and the model by which all other firms may be measured.”5 Several key features contributed to Whitaker and Baxter’s success. First, Campaigns, Inc. attracted a diverse set of clients who provided the firm with a steady stream of revenue. Second, Whitaker and Baxter developed close relations with state and local media, and they understood well the economic incentives of newspapers and radio broadcasters. Third, the firm created a financing model that enabled clients to afford their services, frequently becoming the conduit through which firms and trade associations pooled their resources for political action. Fourth, although the Whitaker and Baxter model was well adapted to the particular conditions of California politics, their methods were easily replicated for a range of clients and campaigns at the local, state, and even national levels. In particular, Whitaker and Baxter demonstrated the power of issue-based appeals, speaking to voters in terms of individual interests and beliefs rather than partisan identities and attachments.

California provided fertile ground for Whitaker and Baxter to perfect their methods. In their first campaign together in 1933, the pair defeated a referendum supported by the powerful Pacific Gas and Electric Company that, if passed, would have blocked an ambitious public works program that threatened private utilities in the state. Working on a budget of less than $40,000, Whitaker and Baxter won by focusing their efforts strategically on the few counties that stood to gain the most from state spending. Their political savvy attracted notice throughout California, not least among the leaders of Pacific Gas and Electric, who put their erstwhile opponents on an annual retainer. Soon, the firm was handling as many as five or six initiatives and referendum campaigns in a single year, usually on behalf of the state’s most powerful industries.6

Ballot measures were only one important source of revenue for Campaigns, Inc. In addition, Whitaker and Baxter worked on statewide political campaigns and several municipal races as well. The firm orchestrated the opposition to Upton Sinclair’s bid for governor in 1934, managed George Hatfield’s successful run for lieutenant governor the same year, and helped elect two governors: Earl Warren in 1942 and Goodwin Knight in 1954. In addition, Campaigns, Inc. coordinated Northern California efforts for Eisenhower’s presidential campaign in 1952 and Nixon’s 1960 White House run. Finally, Whitaker and Baxter also served the public affairs and advocacy needs of corporate clients, trade associations, and interest groups seeking to influence the passage of legislation. Most notably, Campaigns, Inc. managed a statewide effort on behalf of the California Medical Association against Earl Warren’s proposal to create a public system of health insurance in the state. Their success in that campaign brought Whitaker and Baxter to the attention of the American Medical Association, which hired the team in 1949 to help defeat Truman’s plan for national health insurance, an effort that earned the firm almost $1.6 million in fees over a period of four years.7 In sum, Whitaker and Baxter devised a successful model of political consulting that generated a steady stream of revenue from a diverse array of clients and campaigns that included ballot initiatives, elections, and advocacy work.

This steady cash flow enabled the firm to spend freely on statewide media, a necessity given the scale and cost of California campaigns.

However, effective communication required more than well-crafted messages; it also required understanding how the media worked as a business. Whitaker and Baxter grasped the production demands of the press. Operating as a link between newspapers in need of advertising revenue and various interests in search of influence, Campaigns, Inc. secured favorable press coverage for the causes and candidates it represented. Savvy media relations also brought in more revenue for the firm as Whitaker and Baxter received commissions on the campaign advertising they sold their clients on top of the fees they charged for providing political advice. Here was a crucial innovation in the history of campaign management: by charging for individual products and services, media-intensive campaigns afforded consultants with multiple and varied opportunities to make money.

If the geographic scale of California politics required a heavy reliance on mass communication to reach a widely dispersed electorate, it was Whitaker and Baxter who discovered how to leverage the purchasing power of a statewide media campaign into a form of political influence. Early in their career together, Whitaker and Baxter combined the publicity functions of a press agent with the eye of an advertising account executive. This enabled the pair to work both the “buy” and the “sell” side of newspaper content: Campaigns, Inc. purchased advertising space in newspapers on behalf of their clients in order to ease the way for press releases and other forms of publicity designed to shape the content of news coverage.

In order to carry out these functions, Whitaker and Baxter created several business entities within Campaigns, Inc. that, together, gave them greater control over the conduct of political work (while also providing multiple streams of revenue for the firm). Whereas Campaigns, Inc. managed overall strategy and client relations, the Clem Whitaker Advertising Agency produced all of the firm’s advertising work. The California Feature Service, also under their direction, distributed a free, weekly compendium of news items written to promote the interests of Whitaker and Baxter’s clients but written to appear as objective reporting of political events. Many rural and small-town editors in need of content simply reprinted portions of the California Feature Service in local papers or reworked the material into their own editorials.8

In fact, the pair made no secret of their desire to translate massive advertising buys into favorable press coverage for their clients. Whitaker and Baxter routinely sent letters to editors throughout the state informing them of their campaign efforts and, especially, their intention to purchase advertising on behalf of their clients. A 1936 letter was typical: “We recognize that newspapers cannot pay bills with publicity! We accept the management of campaigns only after a general advertising schedule has been approved. If you receive publicity from Campaigns, Inc., you will also receive paid advertising.9 These advertising announcements often included an explanation of the issue and an explicit plea for support. Working to defeat a proposal for state pensions for the elderly (also known as the “Ham and Eggs” Plan), Whitaker and Baxter ran advertisements in 400 Northern California papers. In a letter to editors that accompanied the ad copy and payment, Whitaker and Baxter wrote, “We sincerely believe that the Ham and Eggs pension scheme ... would bring bitter disillusionment to elderly citizens who are now supporting it,” adding that, “If you can make use of the news material inclosed [sic] with this letter, or lend us support during the weeks to come, we shall be deeply grateful.”10 To ingratiate themselves further, Whitaker and Baxter never deducted commissions from their advertising buys, as was common practice at the time. Instead, they earned their return from the fees they charged their clients. In sum, Campaigns, Inc. sought influence by providing the newspaper business with a steady source of advertising revenue.

Whitaker and Baxter’s emphasis on paid media had another advantage: it was much easier to document expenditures for newspaper advertisements and radio spots than it was for lobbying and other traditional forms of political spending. Whitaker and Baxter used this fact to sell their services, especially to business clients accustomed to careful accounting practices. This businesslike approach distinguished professional campaign management from the old-style politics it sought to replace. “Managing campaigns is no longer a hit-or-miss business, directed by broken-down politicians,” Clem Whitaker wrote. Instead, “It is rapidly emerging ... to become a mature, well-managed business, founded on sound public relations principles.”11 Rather than “hundred-dollar bills floating around campaign headquarters like pennies raining down from heaven,” Campaigns, Inc. provided each client with an item-by-item breakdown of its expenditures.12 This was important given the scale of a statewide advertising campaign. According to Whitaker, a typical media effort designed to reach the 4 million voters in California required 10 million pamphlets, 2 million postcards, and 500,000 letters, as well as radio spots and movie trailers throughout the state. Whatever the expense, however, Campaigns, Inc. promised that “in every campaign, we do our utmost to get a dollar’s value for every dollar spent, just as we would if we were merchandising commodities instead of selling men and measures.”13 By operating according to “sound public relations principles,” Whitaker and Baxter could calculate for their clients the return on investment for services rendered.

This businesslike approach to campaign management extended to fundraising efforts as well. Typically, Campaigns Inc. solicited funds directly from business groups and trade associations in order to cover the firm’s expenses and fees during the course of the campaign. For example, in 1938, Whitaker and Baxter managed the opposition campaign against the Garrison Bond Act, a measure that would have made it easier for cities and counties to finance the construction of public utilities. In order to deny local governments this new source of revenue, private utilities in the state organized the California Debt Relief Association to defeat the measure in a legislative referendum.14 Essentially a shell organization meant to conceal the political efforts of the power industry, the California Debt Relief Association amassed a $100,000 war chest to fund a barrage of newspaper advertising, radio spots, and direct mail. Campaigns Inc. handled everything, including raising money from power companies that were instructed to send “all remittances ... immediately on receipt,” with checks made payable to “the California Debt Relief Association, c/o Clem Whitaker, 111 Sutter Street, San Francisco.”15 Throughout the campaign, Whitaker and Baxter provided the power companies with “a finance statement, covering all income received . and an analysis of all expenditures,” including “a check-by-check accounting of all disbursements.”16 Handling fundraising efforts also made it easier for Campaigns, Inc. to collect the $15,000 fee the firm was owed by the state’s power companies, as Whitaker and Baxter simply deducted payment from the contributions they collected.

In sum, Whitaker and Baxter developed a successful and selfsustaining model of campaign management. Media-intensive campaigns cost more money than traditional forms of vote-getting, but the money used to purchase advertisements and radio could be spread throughout the state, earning goodwill from newspaper editors and station managers. Whitaker and Baxter needed to help them convey their clients’ message. At the same time, expenditures on media could be easily accounted for, allowing Whitaker and Baxter to present themselves as competent professionals rather than political hacks. This endeared them to the California business community, which provided Campaigns, Inc. with much of its work. In some cases, Whitaker and Baxter helped create the organized groups they served, effectively underwriting the costs of collective action through their fundraising efforts. For a fee, Campaigns, Inc. could turn a disparate collection of interests into a potent political force.

 
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