This Way Lies Victory: Fixing NAR's Political Survival Initiative

Since I broke the news of the new NAR REALTOR Party Political Survival Initiative (“#RPPSI” hereafter, as that is the Twitter hashtag as well) on Tuesday, the response has been really quite interesting and overwhelming. Various people have written blogposts on the subject. As of this writing, I know of the following posts:

• Jay Thompson
• Monica McGillicuddy
• Matt Fuller
• Mike Long
• Kathy Howe
• [EDIT: Jay Thompson has compiled even more, so go here for his new post and the links]

And there are dozens if not hundreds of comments on Twitter (#rppsi hashtag) as well as Facebook. I’ve also gotten dozens of direct messages, emails, and Facebook messages from various points of view.

On the whole, the responses trend negative, and for the reasons I laid out in the first post. Yet, despite the skepticism towards the #RPPSI initiative itself, the discussion as a whole is truly encouraging: REALTORS are finally engaging with each other on a topic that is critically important, learning some more details about what is going on, and debating pros and cons in a remarkably collegial way (for the Internet, anyhow).

I do have a few followup thoughts, now that I’ve had a chance to think about the initiative and my initial reaction some more. I think NAR is doing a very dangerous, if necessary, thing with #RPPSI. But with a simple tweak, it can become a great thing that would set up victory after victory for NAR, for homeowners, and for REALTORS.

Issue Advocacy vs. Political Action

The first point is that there is a rather subtle but important difference between issue advocacy and political action, as the various bloggers and commenters highlight. This comment by Ken Oenbrink on Jay Thompson’s post is illustrative:

Here is my take:
I will gladly pay an additional $40 dollars a year to NAR.
They can use it to “lobby” current local, state and federal officials on real estate related matters.
They can use it to oppose legislation, bills, referendums, propositions etc., that negatively effect the real estate industry.
They can use it to endorse any legislation, bill, referendum, proposition etc., that can help or improve the real estate industry.
THEY CANNOT USE IT TO CONTRIBUTE TO ANY LOCAL, STATE OR FEDERAL ELECTED OFFICIAL’S CAMPAIGN!
If I want my $$$ to go to someone’s campaign, I will donate to that candidate because I agree with their views on many different issues, not just real estate matters.

The responses generally in support of #RPPSI have not yet addressed this specific point. For example, Jim Lee, a strong supporter of #RPPSI commented on my blog:

I believe before anymore knee jerk, “Hell no, I’m against it” comments get posted, those opposed and anti-RPAC folks need to take an in-depth look at NAR and what it does for you in the national, state, and local political arenas.

Just last year in my state of New Hampshire, our RPAC Trustees (that’s the state group that decides who gets contributions) interviewed 50 candidates for our state senate. We elected 18 out of the 19 candidates we chose to support.

Why? Because they were the most real estate and Realtor friendly candidates. Candidates that were willing to make a commitment to support homeownership, housing affordability.

NAR does the same thing on the national level. They’re not necessarily Republicans, or Democrats, but rather candidates that are friendly to real estate issues, keeping homeownership affordable, keeping us in business selling houses.

Kristal Kraft also commented on Jay’s post:

I think we have to look way beyond our personal feels about PACs and politicians when it comes to this increase in dues. It’s a move that is good for not just our profession but for the country as a whole. Housing does matter. It matters to us Realtors and every homeowner who has ever taken the leap into purchasing a home. I know you agree with that!

And they do agree with that. The confusion here is frankly between issue advocacy (i.e., “lobbying”) and political action. I’m on record as having said that the most important thing that NAR does for its members is political issue advocacy. I believe that REALTORS need to get even more active politically, and become far more aware of what’s going on in Washington DC and in the statehouses.

But that there is a difference between RPAC and the new REALTOR Party is highlighted by NAR’s citation of, and reliance on, the Citizens United decision.

Lobbying and issue advocacy using “soft money” was never prohibited; it can’t be, as freedom of speech, even by corporations, is a Constitutional right enshrined in the Bill of Rights. What was prohibited, and was at issue, in Citizens United was whether such soft money could be used to directly support or oppose a candidate, or what the Court called “electioneering communications”. Under the Bipartisan Campaign Reform Act of 2002, the law that Citizens United struck down, corporations and unions could always form PAC’s for the purposes of “electioneering communications” but could not use its general treasury funds for such activities.

Long before Citizens United, NAR could — and did, to great effect — utilize its powerful PAC’s (RPAC I and RPAC II) to persuade elected officials to side with NAR on a variety of issues. And yes, the RPAC funds could go to directly support a candidate. For a variety of reasons, of course, contributions to a PAC could not be mandated by any organization or company. The dues revenues allocated towards political lobbying activities were always prohibited from such direct “electioneering communications”… until Citizens United.

In practice, this meant that while NAR (or a local/state Association) could run TV ads urging voters to “Ask your congressman about what he will do to protect the mortgage interest deduction”, they could not run an ad urging voters to “Vote for Joe Schmoe! He’ll protect your homeownership rights!” What #RPPSI proposes, after Citizen United, is to conduct these specific electioneering communications using soft money.

The objection of the reasonable opponents, like Jay and like Ken, is not against political activity. They’re fine with RPAC. They’re fine with lobbying. They’re great with issue advocacy. The objection is a very narrow one: doing “electioneering communications” with soft money funded by mandatory dues dollars.

Why Political Survival Initiative Is Important

And this is where the strongest argument for #RPPSI exists: “Our opponents will do it, so we have to as well.”

Post-Citizens United, there is no doubt that any corporation, group, or union can conduct direct electioneering with soft money. So, for example, Bank of America can decide to spend $25 million out of its general treasury funds to support Senator Jones or Congresswoman Smith.

If you are NAR, and you know that one of the most valuable services you perform for your members is political advocacy, this is a tremendous challenge. Take for example the issue I cited in the first post: banks deciding they want to get into the real estate brokerage business. Pre-Citizens United, those banks could only use their PAC’s, to which its employees and others would voluntarily contribute, and ask its executives to make campaign contributions — all of which are capped by law. As long as NAR had a larger base of contributions — which it does — than the banks, it could work to ensure that its PAC war chest was larger than that of Bank of America. That is one key reason why NAR defeated the last set of proposals to allow banks to do real estate brokerage, back in 2000-2003 timeframe.

This time around, the fear is that the Banks will just crush NAR in the fundraising department. To compete, NAR needs to use its general treasury funds — the soft money — to do direct action. And what’s more, NAR needs more money to stay competitive: hence, the $40 dues increase.

I’ve been sounding the alarm on 7DS and on Notorious as to just a few of the issues coming down the pike from Washington DC, from the mortgage interest deduction to fundamental changes in housing finance. I believe that it is critical that NAR and its members engage these issues directly, whatever one’s view may be on the policies proposed.

Many of the REALTORS who are responding to #RPPSI contend that where NAR should spend more time, money, and energy is on making REALTORS better educated, more professional, and more productive. I respectfully disagree, not because professionalism and education are not good things, but because those things can and are done by other organizations. The brokerage for example, or a national franchise, provides enormous amounts of education and training. But only NAR (plus the local/state Associations) can do politics with any real degree of success. Political influence is the primary reason for NAR’s existence, and always has been.

Besides, an Association can walk and chew gum at the same time. It can raise the bar on professionalism and ethics, while at the same time engaging in the political process like no one else can.

Is NAR Playing to its Strengths?

So I sympathize with NAR’s goals here with #RPPSI. I am, however, skeptical as to the methodology not so much out of principle, but out of pragmatic considerations.

As commenter Richard Whitney, a former chair of New Hampshire RPAC, points out, having the deepest pocketbooks was never NAR’s real strength:

The banks, insurance companies, and lawyers will ALWAYS have more money then us. But what we have is individuals in every community ready to talk to their representatives. When we beat the banks on their getting into real estate they outspent us 3 to 1 and they had the chairman of the banking committee in their hip pocket. Through a lot of hard work by our members we beat them because we were able to get thousands [of] individual REALTORS to tell their reps how important this was. Let’s play to our strengths and not our weaknesses.

In my view, what makes NAR so powerful isn’t just the millions of dollars in its RPAC war chest. What makes NAR so powerful is that it has a million members, a million names, phone numbers, addresses, and emails. Even granting that most of the membership doesn’t care about political issues, NAR has enough thousands of members who do, and strongly enough to voluntarily contribute to a PAC, that any elected official has to worry about people in his own district.

Raising awareness among the 1,000,000 REALTORS, educating them as to the issues, motivating them to action, and organizing them to be a powerful grassroots lobby (we can call it “astroturf” since the lobby might be guided from above), would be incredibly valuable… and also rather expensive. But it would play to NAR’s strengths.

This Way Lies Victory

Using the $40 to conduct direct political action is a loser on many levels. Opponents can easily outspend you anyhow out of soft money, while you risk alienating many of your most engaged members because you supported some candidate they despise.

Better way is to use the additional $40 dues (some $40 million per year) to develop out a grassroots capacity, to build out an on-the-ground political organization rivaling that of the national parties, but focusing on issue advocacy related to property rights. And yeah, at $40 million a year, you can do just that. If you can engage, educate, activate, and organize just 5% of the membership base… that’s 50,000 committed activists of all parties who believe in property rights and the free market… and they’re backed with a war chest of $40 million annually.

That would be a true game-changer that does not get in the way of any particular individual’s deeply held political beliefs. That’s a capacity that NAR can build that would nullify the funding advantage of just about any corporate entity or union post-Citizens United. “We’ve got $10 million for your campaign, Mr. Congressman” can be met with, “Yeah, but we’ve got a thousand activists on the ground in your state, Mr. Congressman, and two hundred of them are precinct chairmen.” Game over.

The PAC’s can continue to be used for direct electioneering communications; indeed, creating the grassroots network would improve RPAC as well, as increased awareness leads to increased voluntary contributions without any of the resentment that simmers out there for #RPPSI as currently proposed.

This way lies victory, and sustainable advantage for victory after victory.

Your thoughts, as always, are welcome.

-rsh