Back in December, CNBC published a sort of “gotcha” piece about how Mike Bloomberg is paying a digital agency that he owns — an agency called “Hawkfish” — to run all of his campaign’s online efforts. The article didn’t attract much notice because it was published a few days before Christmas, but I thought it was super interesting and want to circle back on it.
Hawkfish will be the “primary digital agency and technology services provider for the campaign,” Julie Wood, a Bloomberg campaign spokeswoman, told CNBC. She added that the firm “is now providing digital ad services, including content creation, ad placement and analytics” for their campaign. It will also help Democratic races across the country in future election cycles, she said.
While it is unusual for a presidential candidate to turn to a company he founded for assistance, ethics experts say Bloomberg’s move does not break Federal Election Commission laws.
“I would say nothing shows a red flag as far as a violation,” Paul S. Ryan, vice president of policy and litigation at Common Cause, told CNBC. “If he sincerely had not made up his mind to run when he made this company to help Democrats, it’s fine. Going forward, the campaign would have to pay fair market value to the company in goods that he’s receiving.”
The TL;DR version is that Bloomberg’s approach is novel, but not illegal, so long as he’s paying it fair market value. (If he paid it less than fair market value then the services he received would be an illegal in-kind contribution.)
This setup reminds me of Tom Hagan, the family attorney & consigliere in The Godfather, who says:
“I have a special practice. I handle one client.”
For my part, I think this is a smart move by Bloomberg. Practically speaking, it’s as if he in-housed the campaign’s digital operation. But because the infrastructure is housed in a third-party organization, it can endure and outlast Mike Bloomberg 2020.
For example, Hawkfish (and its expert team) could bring their accrued technology and trade secrets to bear as a future vendor to the Democratic National Committee, PAC, or a post-presidency nonprofit, supporting the Bloomberg administration from outside of his campaign infrastructure.
So, far from gotcha news, CNBC picked up on a really savvy and innovative campaign strategy made possible in-part (but not exclusively) by Bloomberg’s self-funding infrastructure. Expect to see more of this sort of thing in future cycles.