Super PACs Are Cushy Jobs

Under FEC rules, it’s legal for super PAC founders to approve payments to themselves. In Illinois, social media entrepreneur Gary Franchi formed Revolution PAC to support Ron Paul and tapped into the fervent crowd of Paul supporters to back the Texas representative’s presidential bid. Franchi, who’d never been a political fundraiser, raised more than $1.2 million, including $85,000 from PayPal (EBAY) co-founder Peter Thiel. The super PAC spent 83 percent of its cash on overhead, FEC data show. Franchi and two social media companies he owns charged the super PAC $153,000 for media consulting, rent for office space, and other expenses from August 2011 to June 2012.

Franchi says he was “actually impressed” with what his super PAC accomplished, though he’s no longer involved. Revolution PAC was $63,374 in debt as of late November, and Washington-based campaign finance attorney Dan Backer has taken over the group. The loose ends he’s sorting through include distributing $25,000 worth of Ron Paul action figures—their delivery delayed by a production problem in China—to supporters. “Like many grassroots people, Gary was very enthusiastic about the cause but didn’t have the background to run a business or large organization,” Backer says. “With super PACs, a lot of people were getting paid what is probably not the optimal rate.”

The bottom line: Of the 420 super PACs active in the 2012 election, 151 spent no money to support candidates, instead using it on overhead.