The Future of the DNC: Bill Derrough

Bill Derrough was one of two candidates running for treasurer of the Democratic National Committee. We discussed the role of the treasurer, the DNC’s state of affairs, and how to regain the trust of Democratic donors to convince them to keep giving after a disappointing election result last November, among other subjects.  This is the latest in my “Future of the DNC” series profiling candidates who were running for leadership positions within the committee. This interview took place at the Democratic National Committee’s winter meeting in Atlanta one day before he was elected treasurer.

What made you want to run for this position, and what do you bring to the table?
Waking up on Wednesday after the election feeling like someone had run a truck over my head, and my two young boys coming up in the morning, because they had been with me the morning of the vote to go vote, to have to break the news to them that Donald Trump had been elected president. I thought my head was going to explode. I’ve never felt that way politically as long as I can remember, and I wanted to do something. I’ve been a big fundraiser and donor for the party for many years, going back to my days in college. House parties, door knocking, small dollars, and in the Nineties, more dollars, in the last fifteen or twenty years, a lot of dollars.

I was talking to the current treasurer every day about what we need to do to rebuild the party. My business, what I do for a living is fix companies that are in trouble, sometimes deep, deep trouble that are facing bankruptcy and going out of business, in other cases minor changes. I said, “I want to bring those skills to the table. I want a real seat at the table.” [Outgoing treasurer Andy Tobias] suggested I run for his seat and he would endorse me. I spent a month thinking about it, talking to family, thinking about everything the Democratic Party has done for this country and for working people like my mom and my dad, immigrants, LGBT people, across the gamut trying to give everybody a fair shake and opportunity. I decided that it would be a big-time commitment. I’d have to sacrifice things – some time with my family. I’d have to step back from a lot of my charity work. I had to do it, because I didn’t want to wake up four years from now and say “I had the opportunity to help, and I didn’t.” I do think I bring a unique skill set. I’ve helped hundreds of companies turn themselves around.

Do you view this as a full-time job? Are you going to take a leave of absence from your current job?
I’m fortunate in that I’ve co-run a business for almost 20 years with a business partner. I’ll be able to step back enough to do this. I don’t view this as, “you need to be intense for the next four years, or eight years.” I think that the next year or two is going to be very intense. Thankfully, I live very close to Washington, being in New York City the train runs every hour. I can be at the front door of the building by 9 a.m. leaving my house at 5:30. I’ve committed to being in the building every week. If you want to change it, you’ve got to be there, and I’m the only candidate that can actually make that happen.

Explain your relationship as treasurer with the finance department, how is that going to work?
The current treasurer was asked to become treasurer by Bill Clinton when he was president. Andy had been a good fundraiser for the DNC, Andy Tobias. So he was made treasurer and he used that role to be both a good steward of the money, but also to be a fundraiser.  So we almost have two complementary positions of fundraising in the sense, even though it’s not in the charter for the treasurer’s job.  Andy, he has his network. I have my network around the country that I have really not tapped into for DNC perspective, but I have a lot of friends come to me say, “You have to do this, and I will give money to the DNC.” Obviously, the national finance chair’s job is predominantly to help drive, to lead the fundraising operation, but I think all of the elected officers should be fundraising for the DNC. Some will have better success than others. I will leverage my network to expand the footprint.

I don’t know if you can comment on this, but what is the financial state of the party in the wake of the election?
I don’t know, because I am not a DNC member. I’m guessing things are not great, on the one hand. On the other hand, there is so much energy out there, people looking for something to latch onto that really should be the DNC. This should be the umbrella clearinghouse organization for all Democratic and aligned activities, whether you’re the DSCC, the DCCC, the DGA, state parties, county parties, the Democratic Municipal Officers’ Organization, we should be helping all of them fundraise, helping all of them get out the vote, helping all of them engage. I don’t know what the budget looks like, I’m sure it’s not great. But I do think there’s a lot of enthusiasm to invest, invest on a multiyear basis, but we need to show people a game plan.

You said you hadn’t tapped into your network of donors.
Not for the… I’ve been working for 30 years across the country for different companies. I’ve made lots of contacts over the years. I have not historically tried to tap into them for the DNC. I’ve tapped into people for various elected positions and things like that. I think people have viewed the DNC to be a bit of a black hole – not knowing where the money goes, what it’s being used for. I’m a Catholic. Catholics feel the same way when they go to parish. They don’t put a lot of money in there because they don’t know where it’s going to go, even though I know because I’m on the finance council of the church and it goes just to the church. If we can have a much greater transparency for people as to where the money is going, and report back to them, I’m committed to having quarterly reports about the treasury.

Like a publicly traded company?
Not quite like that. So a company will file a 10-K for the annual and a 10-Q for the quarter, and those are statutorily laid out. But then a company will also release its earnings update and talk to their investors, and that will be tailored to be more easily digestible because it’s for investors. While we have our [Federal Election Commission] reports we file, we should be producing reports that are like in PowerPoint format saying, “Hey, here’s what we did last quarter. Here’s the buckets where we spent the money. Here’s where we raised the money. Here’s our goals for the next three quarters.”

I’m assuming donors weren’t feeling too happy with the results of the last election. They spent a billion dollars in the last election and Donald Trump still won.  What’s your take on how to get these donors to open up their pockets again?
I think if our nominee had lost the popular vote by 3 or 4 million votes, I think if we had gotten shellacked and lost seats in the House and the Senate,  I think we would all rightfully question, “What the hell are we doing?” But we picked up seats in the House, we picked up seats in the Senate, and Hillary won 3 million more votes.

But for 80,000 votes in three states, you all would be having a very different conversation.
Exactly, on a national basis. However, we cannot ignore the fact that we are one state away from them having [inaudible] to call a Constitutional Amendment. What’s happened in the states is a travesty, we need to rebuild there. I saw this in 2000, “Al Gore’s going to win.” I saw this, I felt like in ’88 with Dukakis, where he was up 10 or 15 points. People get complacent sometimes. What I think we need to do is rebuild the party where it doesn’t matter who the nominee is, we’re going to win at the presidential level, we’re going to win at the state level, this needs a robust national organization with a symbiotic relationship working with state and local organizations. I have people telling me, “If you’re treasurer, I will commit to maxing,” which is $33,900, and they had given $1,000 before. Because they know that if I’m treasurer, I’m not going to waste the money, we’re going to have a plan and we’re going to try to invest it in productive activities.  People are pissed off about the outcome. Most of them are saying “What the F did I do, or did I not to to change the outcome?” People went out and voted, they didn’t vote in the same kind of numbers. If more people voted in Milwaukee, if more people had voted in Pennsylvania, it could have been a very different outcome. Not 400 electoral votes for Hillary, but a very different outcome from where we are today.

At the beginning of October after the Access Hollywood tape, people were talking about a 400-vote landslide.
I was talking to Democratic senators saying “Which committee are you going to be running?”

When Hillary Clinton lost those states, if she had won them she might have been able to bring [Senate Democratic candidates] Katie McGinty and Russell Feingold over the finish line with her.
Then there was the October Surprise….

There were like four in that final month of the race.
We were like, “OK, Washington Post. One more, one more…”

The leaked tax return, the Access Hollywood tape, James Comey, WikiLeaks, Obamacare premium hikes, every week there was another bombshell.
I can’t recall anything like this. You can’t plan for it because you don’t know who the nominee is going to be. I will say this: when Bill Clinton became the nominee in 1992, and I was a Bob Kerrey guy back then, the senator from Nebraska. I wasn’t mad that Clinton won. The best part of being a Democrat was seeing a campaign that fought back, that punched back just as hard as the other side did.

Very different media cycle at the time.
I understand. But James Carville and [George] Stephanopoulos had a focused message, and Bill Clinton framed a lot of the points in a way that really connected with people. But it’s not just connecting, it’s also punching back. But yes, it’s a different news cycle, you can’t plan for everything. But we need to make sure that our nominee and their apparatus is super-aggressive in going after the other side on all kinds of things.

Back to the money issue, you mentioned how Democrats have suffered losses in state and down ballot races over the last eight years.  What would your role be in terms of fundraising or giving out money to the DGA, the DLCC and others?
There is theoretically a finite amount that an individual can give to all committees and things like that, you don’t run up against that with that many people. There are other ways to spread money around. Let’s say you hit some kind of personal cap on a committee basis. You could still direct it to individual campaigns, that can give money to a senator, a senator can give money to another campaign.  I think what we need is to make the DNC an enabler and a clearing house for all Democratic activities. I always like to figure out why people do what they do. One of the stories I hear a lot from the states is, “The DNC comes, has a big dinner, they don’t invite the state party chair, they don’t even tell him or her about it.” I think that comes from the view that there is a limited dollar, and I’ve got to get it first. I don’t believe that there is a limited dollar. I believe, this goes to my father, who is a carpenter. He had a limited budget, right? He had a great pitch, a great cause, he’d write a $20 check to a charity. He died in January, he still had his Clinton-Gore ’92 bumper sticker from when he sent money himself. I think we need to be partnering with local state and Democratic parties, and make the pie bigger for everybody.  Think about how much energy there would be if you were jointly having dinners. But I also think we need to move back from overreliance on events for fundraising and get to a model that is a recurring funding model. So, if we can convince a million Democrats to give $5 a month… How many people voted for Hillary Clinton? [65.8 million] So one million people is like one and a half percent of that.

One million people giving $60 a year, that’s $60 million.
$60 million dollars. If we get 1,000 people to max $33,900, that’s almost $34 million. That’s almost $100 million per year in recurring revenue that we can rely on, and then use the dinners and events to be on top of that, to be more of an affirmation or motivation event, not simply a fundraising dinner. I’m on the board of the Boy Scouts of New York and we’re talking about the same thing, getting away from constant event fundraising and try to get people to commit large dollars on a regular basis so you don’t have to come to an event.

New York is kind of a special place in that regard, I see that in Los Angeles as well where so many people and organizations hit the town for fundraising because of how much money there is in those cities.
And we need to be smart about how we use our money. One of the things I heard was that in one of the states in the Midwest was the Clinton campaign was using campaign money to do voter registration, but I understand that voter registration is a tax-deductible activity. Tom Steyer’s group was doing voter registration in the same states. So if you’re a wealthy donor, you’d rather have your charitable dollars going over there, because it’s tax-deductible, and then you use your non-tax-deductible dollars for some other activities. We need to be smarter about how we approach that.

You talked about transparency. A lot of nonprofits like to show their donors what they get for their money, like “$1,000 will pay for a well in an African village.” Is there that kind of metric in mind?
Yes, you need to articulate that. My father was a FDR Democrat, carpenter, working men and women. My mother was an immigrant. But he also grew up during the era of fascism, and he fought in World War II, so he was a big believer in the Second Amendment, not like a crazy nutjob Second Amendment. I never could find [his guns]. He always hid them, he never took them out, but he’d go hunting a couple of times. But my dad, when he died, I found in his top drawer his union pins, his pins from [inaudible] conventions, and a ton of NRA memorabilia, because they knew how to a $5 donor feel important. So to your point, how do you get somebody, not just the typical, but to have them feel their dollar is going to something specific? Whether you’re a $5 a month donor, or a $100 a month donor, or a $34,000 a year donor, we need to have you feel like you’re involved in something, going back to my Catholic Church example. Most people assume that if you go to a Catholic parish, the money comes in and it’s like some big swirling account.

A fund that goes directly to the Vatican?
Yeah, like it goes to buy a new plane or something. Probably not under Pope Francis, but that’s what most people think. In reality, every Catholic parish lives on its own and it is subsidized by the diocese, the archdiocese, or it pays a tax, like ten percent. The rest of it is self-funding. Similarly, everybody at the DNC has no idea where it’s going, there’s this suspicion. If we can be more clear with people and have them feel better, feel like being a DNC member is something to be proud of, then I think you’d actually have more money coming in.

Is there such a thing as too much transparency with the DNC budget? For example, the intelligence budget is classified, though the general figure is subject to speculation or discussion.
You can easily say the number, but you don’t want to divide it up. Because I would like to create some operations in the DNC, [inaudible] on the digital that happens to be way ahead of the curve. I’ve got friends in the digital world who say “Oh, yeah. We know exactly who Trump hired. Jared Kushner went out and hired these three people. They built his digital strategy, it was very micro-targeted.” So when a company, whether it’s American Airlines or iHeart Communications, iHeart is a client, they just did their earnings call today, they update their investors who make the decision to invest in their company. They give slides as to what they’re doing, they talk about operating metrics and financial metrics.  It’s not telling the whole world their secret sauce. We can do the same thing here.

But is there too much transparency to the point where, for example, the Republican Party could try to reverse engineer countermeasures based on what your expenditures are?
Yes, there is. This notion of having complete transparency doesn’t make any sense. It would be probably like a public company, with a securities filing. There’s so much information in there, a lot of people say it’s not necessarily relevant or digestible. I know how to read one, I’ve been doing it for 30 years. But also for the reasons you talked about, we don’t want to be telegraphing to your principal opponent what you’re working on. So we have to figure out a way to take the data we have and [inaudible] it into information that provides members with enough information they feel good about they know what’s happening, they feel good about where the money is going, but isn’t a road map to the secret sauce. That’s possible. I’ve seen this all the time, it’s not rocket science.

What is going to be your benchmark for success?
At the end of the day, it will be how the Democratic Party looks in terms of local, state and federal officeholders 8 to 12 years from now. This is not going to be an overnight process. The thing I’ve been saying to people is, the difference between me and many of the other people running for the officer positions is I’m not looking to run for anything else. I’m not a politician. However, I’m committed to doing this for 8 to 12 years. There are people who will come and go as officeholders and maybe as chair as well. I think we need to have a long-term strategic plan that we focus on and we don’t take our eyes off it. We’re going to have some successes along the way, maybe we’ll have some bigger successes. Maybe 2018 will be phenomenal, got to keep our eye on the ball. Keep building, keep building, keep building.  So I think we got to have that continuity. I would measure success in that we move back from being one state away from a constitutional amendment [inaudible], and we’ve got a lot more state houses, a lot more governor’s mansions, and one or both houses of Congress are back in Democratic control. Also be if we continue to elect Democratic presidents. Obviously we did, we won by 3 million more votes, but we have to be smarter about the Electoral College. This notion that we’re going to get rid of the Electoral College, let’s not waste our time on things that will never happen, right? We can talk about the Electoral College to rile people up, but let’s not waste time and effort and signatures.

Historians speak about a President’s first Hundred Days in office. What would you do in your first Hundred Days as treasurer, in order of importance?
First, diagnose the problem. I have to get on the inside. Where is the problem? What does the budget look like? Where have we been spending money? Where do we need to be spending money? In my business, it’s almost like an ER-kind of thing: stabilize the patient first. Stop spending money in dumb areas, if we are. I don’t know. Figure out ways to stretch the dollar farther in the short run. Try to get some funding in, like pumping blood back into the patient, in the short run to build back up. We have to determine what are our goals. I think we broadly know what our goals are, but if we try to do a hundred things at the same time, we will probably fail. We need to set up a principal set of five to ten things we want to accomplish, and then secondary and tertiary sets of goals, and hold people accountable. If somebody is out there responsible for XYZ, and they’re not doing the job, why isn’t it working? Is it them or is it the problem? Are we not helping them right? But we need to hold people accountable. If it’s not working, you need to change the strategy or change the people.

Author: David de Sola

Editor/Publisher Political Wilderness

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