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 Christopher J. Dodd in Connecticut, she told voters she was no longer active in the company that’s made her wealthy enough to finance a campaign with tens of millions of dollars of her own money.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.
“I think any additional disclosure of transactions involving related parties would be a good thing,” said Paul Ryan, associate legal counsel of the nonpartisan Campaign Legal Center.
Mr. Ryan said that while the law prohibits candidates from converting campaign funds for “personal use,” campaigns nonetheless can pay a company owned by the candidate or family members as long as the services are charged at fair-market value.
WWE spokesman Robert Zimmerman said the company, which typically doesn’t produce political ads, undertook the job at the request of the campaign.
“WWE has done outside production for others at which WWE charged/charges fair-market value, such as THQ and MyNetwork TV,” Mr. Zimmerman wrote in an e-mail to The Washington Times.
“This is done on an ‘as able’ basis, if asked,” he said. “WWE agreed, at the request of the campaign and for a fair-market fee, to provide production services for the short period in question.”
The same SEC filing also notes that Mrs. McMahon rented office space from the WWE for 2 1/2 months, for which the company received a fair-market value of $23,000.
Mr. Zimmerman said the office space was leased to Mrs. McMahon personally, not to the McMahon campaign.
Mrs. McMahon’s affiliation to the WWE has surfaced as an issue on the campaign trail. She has pointed to her experience as a corporate executive to bolster her business credentials, but critics have pointed to the content of WWE programming as a potential liability.
She founded the WWE with her husband, Vince, who serves as the company’s chief executive and chairman. According to the Center for Responsive Politics analysis last year, Mrs. McMahon and her husband have contributed nearly $90,000 to federal candidates and committees since 1989, with 54 percent to Republicans and 44 percent to Democrats.
Mrs. McMahon has said she won’t take money from political action committees and reportedly is set to spend up to $50 million of her own money to finance her campaign.