Watchdog Investigates Dem Firm’s $14 Million in Government Contracts

Consulting firm that worked for President Obama’s campaign awarded contracts from CFPB

cash money
AP

A government watchdog group has launched an investigation into millions of dollars worth of contracts that were awarded by the Consumer Financial Protection Bureau to a top Democratic political vendor who worked for President Obama’s campaigns and now works on behalf of Hillary Clinton’s campaign.

The Cause of Action Institute, a D.C.-based government watchdog organization, sent a Freedom of Information Act request on Wednesday to the Consumer Financial Protection Bureau seeking information into $14 million worth of contracts awarded this year to GMMB Inc., a powerful Democratic media consulting firm, to create online advertisements for the agency.

"CFPB is a federal agency engaged, as part of its consumer protection responsibilities, in substantial consumer information collection activities," Cause of Action Institute president Alfred J. Lechner, Jr wrote in the FOIA letter. "Given GMMB’s partisan political clients, CoA Institute is concerned about the nature of and safeguards applied to any CFPB information supplied to or received from GMMB."

The group hopes to obtain information regarding the contract, all communications between the agency and GMMB, and any consumer data CFPB may have shared with the firm, including individual addresses, lists, and targeted advertisements. "Firms contracted by campaigns should not and cannot be using information garnered by federal agencies to support political causes," the letter states.

The first contract in question was awarded to GMMB on Feb. 18 in the amount of $12.5 million. A few weeks later, on March 1, a second contract was given to GMMB, this time for $1.5 million. Shortly after, a third contract for $400,000 was awarded to the media firm in mid-March, bringing the combined contact totals $14.4 million.

According to USASpending.gov, which tracks federal contracts awarded to organizations, GMMB has raked in nearly $40 million in government contracts since 2008 from agencies including the Transportation Security Administration, Department of Homeland Security, and the Department of the Interior, among others.

GMMB is one of the top vendors for Democratic candidates and campaigns in recent years, having been paid nearly $1 billion from Democratic politicians and candidates since 2008.

GMMB pulled in $365 million for their media services during the 2008 election cycle, by far the most of any political vendor that cycle. In 2010, the group added $37 million. The firm was again the top vendor in politics in 2012, being paid $435 million in services to Democratic candidates. In 2014, GMMB received $32 million. For the 2016 election cycle, the firm has made $66 million to date.

Jim Margolis, a partner at GMMB, has aided numerous Democratic presidential campaigns. He has worked for Bill Clinton, John Kerry, and was a senior adviser to President Obama in the 2008 and 2012 elections. In 2010, he aided Sens. Barbara Boxer (D., Calif.) and Harry Reid (D., Nev.), for whom he was a longtime adviser.

Margolis is now a senior adviser to Hillary Clinton and helps lead her campaign. Clinton’s campaign has paid GMMB $60 million so far this election cycle.

GMMB also has an internal branch called Waterfront Strategies Inc., which operates separately of campaigns and on behalf of Democratic political action committees producing advertisements.

Waterfront was incorporated in Delaware and its president is listed as Raelynn Olson, who is a managing partner at GMMB. The group also shares an address with GMMB in D.C.’s Georgetown area. Outside of this, little information is publicly available on the group, which does not even appear to have a website.

Waterfront Strategies has made millions more providing services to Democratic political action committees including Harry Reid’s Senate Majority PAC and billionaire environmentalist and Democratic mega-donor Tom Steyer’s NextGen Climate Action.

The arrangement between GMMB and Waterfront Strategies has drawn criticism in the past for treading a fine legal line.

Sam Gilford, a spokesperson for CFPB, told the Washington Free Beacon that the contracts were awarded to create online advertisements to promote the Bureau’s free consumer resources.

"Research conducted by the CFPB has found that for every dollar put towards financial education, $25 is spent on financial marketing, which can make it difficult for consumers to find objective information," Gilford said in an email statement.

"Our goal is to reach consumers when they are most likely to need our help," he continued. "Consumers who are in financial trouble or who are seeking financial information often turn to popular search engine websites or browse popular financial websites. We want those consumers to easily find our free and unbiased information before they make a financial decision that could have a huge impact on their lives."

The contract was awarded after an open and competitive selection process, Gilford said.

Update 3:56 p.m.: Following publication, a spokesperson for GMMB told the Free Beacon, "Our work with CFPB is focused entirely on educating the public about CFPB’s financial tools as part of the agency’s mission. We do not access any of CFPB’s consumer data."