It Pays to Advertise


David Axelrod - Obama's second in command

Axelrod’s Former Ad Firms Signed On to Push Health-Care Overhaul
By Timothy J. Burger

Aug. 15 (Bloomberg) — Two firms that received $343.3 million to handle advertising for Barack Obama’s White House run last year have profited from his top priority as president by taking on his push for health-care overhaul.

One is AKPD Message and Media, the Chicago-based firm headed by David Axelrod until he left last Dec. 31 to serve as a senior adviser to the president. Axelrod was Obama’s top campaign strategist and is now helping sell the health-care plan. The other firm is Washington-based GMMB Campaign Group, where partner Jim Margolis was also an Obama strategist.

This year, AKPD and GMMB received $12 million in advertising business from Healthy Economy Now, a coalition that includes the Washington-based Pharmaceutical Research & Manufacturers of America, known as PhRMA, that is seeking to build support for a health-care overhaul, said the coalition’s spokesman, Jeremy Van Ess.

Hiring Obama’s campaign advisers makes sense, said Julius Hobson, a senior policy adviser in the Washington office of the St. Louis-based law firm, Bryan Cave LLP.

“If you’re in support of the president, then you use the people he used,” said Hobson, 61, who teaches a graduate course in lobbying at George Washington University in Washington.


HEN’s other members, according to its Web site, are the AARP, the biggest advocacy organization for retirees; the Advanced Medical Technology Association; the Business Roundtable; Families USA; the Service Employees International Union, all based in Washington, and the American Medical Association based in Chicago. PhRMA represents 28 drugmakers, including New York-based Pfizer Inc. and London-based GlaxoSmithKline Plc

Larry Grisolano, a partner at AKPD, said his firm and GMMB are splitting the fees on the $12 million campaign, though neither firm would specify its take. In an e-mail, Margolis declined to comment.

Grisolano said an interview that the firm’s history with Obama made it “kind of a logical place to go” for the health- plan ad work.

“We were one of the president’s ad firms, and so we have familiarity with how he spoke about health care during the campaign, what his viewpoints were on health care during the campaign,” he said. “And so I think if you’re interested in reform, we bring some valuable insight in that regard.”

Firms’ Fees

Last year, the Obama campaign paid $2.77 million in consulting fees to AKPD and $340.53 million to GMMB to produce and place ads, Federal Election Commission records show. Firms such as GMMB typically receive a low-to-mid single-digit percentage of ad spending as their fee for an account of that size, said Glenn Totten, a Democratic political consultant.

Axelrod was president and sole shareholder of AKPD from 1985 until he sold his interest after Obama’s victory, government records show. The firm owes Axelrod $2 million, which it’s due to pay in installments beginning Dec. 31. Axelrod’s son, Michael, still works there. He didn’t return a phone call. The firm’s Web site continues to feature David Axelrod’s work on the Obama campaign.

Ben LaBolt, a White House spokesman, said Axelrod “sold his ownership stake in the firm before the administration began.”

Grisolano, 45, said AKPD has had no contact with Axelrod “with regard to the Healthy Economy Now work.” He said he works with Axelrod, 54, on “strategy and research” for the Democratic National Committee.

‘We’re the Best’

“We get business for the same reason anyone else would get business: because we’re the best ones to do it,” Grisolano said.

At the White House, Axelrod’s role in the health-care debate ranges from Sunday talk show appearances to meetings with House and Senate lawmakers.

Van Ess said HEN is now dormant. PhRMA and three other members of HEN, plus the Washington-based Federation of American Hospitals, have created another coalition, Americans for Stable Quality Care, which last week announced a new $12 million ad campaign to promote health-care overhaul. GMMB and AKPD are also working on the new coalition’s ads.

Phil Singer, spokesman for the new group, said in an e- mail that the members of HEN who joined the Stable Quality Care effort “were happy with the work the media firms did for that group and naturally turned to them to help advise and consult this new effort.”

PhRMA senior vice president Ken Johnson said decisions on ad spending would be tailored to details of the House and Senate bills that emerge in September.

“Absolutely no decisions have been made,” Johnson said. “Any discussion about what we are or aren’t going to do this fall would be wildly speculative.”

Johnson declined to say if AKPD or GMMB would work on the campaign or how much additional funding PhRMA might provide for groups such as HEN.

“Trust me, all the Democratic consultants who work for us claim to have close ties to the White House,” Johnson said.


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