Senate hopeful has WWE in her corner

Question of the Day

Is it still considered bad form to talk politics during a social gathering?

View results

When Linda McMahon resigned her job last year running World Wrestling Entertainment in hopes of filling the seat of retiring Democratic Sen. Christopher J. Dodd in Connecticut, she told voters she was no longer active in the company that’s made her wealthy enough to finance a campaign with tens of millions of dollars of her own money.

But World Wrestling Entertainment (WWE), best known for its televised wrestling matches and soap opera story-line plots, was plenty active early in Mrs. McMahon’s campaign.

According to a little-noticed regulatory filing, the WWE was producing political ads for the McMahon campaign, as the former chief executive launched a bid to win the Republican primary.

The hiring of the wrestling company to produce $162,000 in ads appears nowhere in any of Mrs. McMahon’s campaign-finance reports, however. That’s because the WWE was acting as a subcontractor to one of the campaign’s vendors, and federal election law generally doesn’t require campaigns to publicly report payments by vendors to subcontractors.

Campaign officials say the money for the WWE-produced ads flowed from the McMahon campaign to its media consulting firm, which, in turn, hired the WWE at fair-market value.

The arrangement, which is legal, sheds light on a side of the federal election law that allows campaigns to spend millions of dollars on media consultants, yet requires no public paper trail to show how these same consultants pay out substantial sums of campaign cash.

The WWE’s role as subcontractor in the McMahon campaign became public only through a recent U.S. Securities and Exchange Commission (SEC) filing by the WWE.

Like all publicly traded companies, the WWE must report on any so-called “related party” dealings between the company and entities or people who may have personal or family relationships with its executives.

Mrs. McMahon’s election team engaged the Company to produce certain television advertisements during the initial months of the campaign,” the WWE reported in the SEC filing.

“The Company performed these services and charged the campaign the fair-market value for the provided television production services,” worth approximately $162,000, the company said.

McMahon spokesman Ed Patru said the campaign’s media consultant, Scott Howell & Co., hired the WWE among other subcontractors “at market rate to use production facilities and equipment.”

“Scott Howell & Co. chose to subcontract with WWE facilities because their facilities and capabilities met the firm’s needs, and the proximity and availability met our campaign’s needs,” he said.

“WWE bills Scott Howell & Co. directly, which in turn pays those bills,” he said. “As Scott Howell & Co. submits reimbursement invoices to the campaign, we pay those bills.”

So far, Mr. Patru said, the campaign has received two invoices from Scott Howell & Co. for $69,150.94, which he said were paid and later reported in an FEC disclosure report.

The law does not require campaigns to make public how media companies spend campaign money, though federal regulators still require that records be kept in case of an audit.

Story Continues →

View Entire Story
Comments
blog comments powered by Disqus
TWT Video Picks