Hillary's Strategist

Immediately after Mark Penn resigned as Hillary Clinton’s chief strategist a week ago, he was on the phone with at least two prominent Democrats to assure them that nothing had changed. He said that — though lacking a title now — he still was polling and crafting her message, adding that he had just participated in a top-level conference call. De facto retention of Penn signified a desire to defeat Barack Obama at any cost.

One day later, word was spread in Democratic circles that Geoff Garin, hired as a pollster by Sen. Clinton last month, had supplanted Penn as chief strategist. An experienced political practitioner renowned for ethical standards more than imagination or daring, Garin in charge reassured the party faithful. It was interpreted as ruling out an eleventh-hour assault on Obama that would have less chance of nominating Clinton than wrecking the party.

Is Penn deceiving friends about his real status just to save face? Or is Garin merely a figurehead to take the heat off Clinton while she still relies on the contentious Penn?

Neither proposition is wholly true. Garin values his reputation too much to take a sham job lacking in authority. Penn’s firm (Penn, Schoen & Berland Associates) continues to poll for Clinton, adding to the enormous debt the candidate owes it. Penn remains seated at the table but is not chairing the meetings.

As it enters its probable final days, Clinton’s campaign appears as dysfunctional as it was last year when her nomination seemed inevitable. Penn’s strategic decisions are blamed by Clinton’s friends and foes for her fall, but that was not the reason given for his resignation. It was the discovery by outraged union leaders that Penn was helping the Colombian government seek congressional approval of the free trade agreement, which is opposed by labor and Clinton. That enabled Penn’s exit without admitting his strategic errors.

Whatever was the real reason for sacking Penn, Democrats who are interested in preventing the struggle for the nomination from destroying the party sighed in relief. Garin looks to a post-Hillary political life and does not want to be seen conducting a berserk attack with little chances for success. In contrast, Penn might be willing to fly a kamikaze mission in what is likely to be his last political campaign. Thus, it is critical that Penn still plays a major role in the campaign.

Penn’s business conglomerate remains entwined in Clinton’s campaign. Three weeks ago, the campaign hired as chief operating officer Howard Paster, who heads the London-based global advertising giant WPP. Penn is CEO of the public relations and lobbying company Burson-Marsteller Worldwide, which is owned by WPP. Penn and Paster won the admiration and devotion of the Clintons by running Bill Clinton’s 1996 presidential campaign.

Beyond loyalty, Penn is welded to the 2008 Clinton campaign by financial ties. A source who has had close connections with Penn got word to me that he believes the Clinton campaign is $10 million in debt to Penn, Schoen & Berland, which is owned by Burson-Marsteller. The campaign’s March report to the Federal Election Commission recorded indebtedness to the company of nearly $2.5 million (with its expenses for the month listed at $3.1 million).

My sources suggest that Clinton’s full indebtedness may be revealed only gradually. This money link helps explain why Penn is still around after organized labor demanded his scalp last summer and he is blamed inside the campaign for failing to perceive the public’s demand for "change."

Just how much money Clinton owes Penn can cause major difficulties in the future. If not repaid promptly, would it constitute an illegal financial contribution? Because the British WPP owns Burson-Marsteller, would that debt constitute an illegal foreign contribution?

Over the last week, I talked to 10 superdelegates (including two U.S. senators) who are committed to Clinton. Each claimed he would stick with her, but none could see how she could be nominated. In such a frame of mind, they would prefer a Geoff Garin-style soft landing to conclude the campaign. With Mark Penn still around, they could get a far more dramatic endgame.