Will Colbert's Crunchy Campaign Get Bitten by Election Laws?

Financing Rules Could Kill Comedian's Doritos Partnership

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NEW YORK -- Finally, a presidential campaign-finance scandal that has nothing to do with Rudy, Hillary or Obama and everything to do with branded entertainment.
Stephen Colbert, shown with his presidential campaign sponsor, Doritos, may discover the FEC doesn't have a strong sense of humor, says one Washington insider.
Stephen Colbert, shown with his presidential campaign sponsor, Doritos, may discover the FEC doesn't have a strong sense of humor, says one Washington insider.

Doritos has sparked legal controversy over its sponsorship of a mock presidential campaign by Stephen Colbert on his late-night Comedy Central program "The Colbert Report," cheekily titled "The Hail to the Cheese: Stephen Colbert Nacho Cheese Doritos 2008 Presidential Campaign."

Not on South Carolina ballot
It's an ad buy just as purposefully irreverent as the campaign it's supporting. Just two weeks after his initial headline-grabbing announcement, Mr. Colbert's bid to appear on the Democratic ballot in his home state of South Carolina was rejected by the state's Democratic executive council. But whether Doritos will be able to continue supporting the crunchiest campaign of the year remains in legal limbo.

Had the nomination gone through, Mr. Colbert's name on the South Carolina ballot and his corporate sponsorship would have made the threat of a Federal Election Commission smackdown quite serious, said William Minor, a Washington-based partner in the government-affairs practice at DLA Piper US. "The prohibition of corporate contributions to candidates is a centerpiece of federal election laws," Mr. Minor said. "[Mr. Colbert] may unfortunately discover that the FEC doesn't have as strong a sense of humor as some of us would like."

Mr. Minor did some pro bono work when his friend, humorist Bill Schein, mounted a less-than-serious run for president four years ago. Mr. Shein, using the pseudonym Will Markson, formed a nonprofit corporation to avoid violating FEC rules.

A fake presidential run is something of an old joke. Pat Paulsen declared his candidacy on the Smothers Brothers comedy show in 1968. But his bid was before election laws were overhauled in 1971 and amended in 1974, following the Watergate scandal. Mr. Schein mounted his fake run in an attempt to illustrate election laws, never putting his name on a state ballot and not accepting corporate sponsorship.

Sponsorship could make all of the difference in this case, Mr. Minor said.

"I don't know if Doritos is officially sponsoring or if it's part of the fun, but if they are and [Mr. Colbert] is found to be a legitimate candidate, then it risks the possibility of being an illegal corporate contribution," Mr. Minor said.

In which case, he said, the FEC has "broad latitude" to investigate "allegations of corporate political activity and has the power to bring charges or try to reach a settlement."

Idea came from Colbert
Comedy Central spokeswoman Aileen Budow said the idea to bring Doritos in as a campaign sponsor actually came from Mr. Colbert himself in the concept stages. "He had a good experience with them early in his career," she said.

Once the nomination was formally announced, Comedy Central had a tight window to get Doritos on board. Ad sales chief Jeff Lucas went straight to Frito-Lay's agency, OMD, to start up an instant communication and got the OK within 36 hours.

Ms. Budow declined to say how much Frito-Lay is paying for the integration, but such a deal would likely set the marketer back something in the range of $500,000 to a couple million dollars, according to an executive who has worked on similar integration deals.

But even that sum seems like a bargain compared to what Doritos would have to pay under South Carolina political guidelines -- if corporate financing was legal, of course. Mr. Colbert paid $2,500 to the Democratic party as part of his bid to have his name added to the South Carolina Democratic ballot. He did not, as originally planned, file for inclusion on both parties' ballots. The Republican Party's filing fee is $35,000, which would have put him well above the $5,000 mark that would make him an "official candidate."

The difference is created by the parties. The state's fee is $20,000 per candidate, said Chris Whitmire, spokesman with the South Carolina State Election Commission. The Democratic Party throws in $15,000 for each candidate, while the Republican party takes the same amount off the top, for its own coffers.

Holy grail of word of mouth
But no matter what comes out of Mr. Colbert's jocular stab at the Oval Office, Doritos has already scored the holy grail in word-of-mouth marketing. "It's a total win for them. They get publicity, they get press, they get branding," said Brad Adgate, senior VP-research at Horizon Media. "The world we're living in now is a lot different than it was, say, a decade ago. I don't think anybody pulled out of 'The Tonight Show' just because [Arnold] Schwarzenegger said he was running for governor. To be able to have your brand resonate or associate with [a late-night personality] -- right up with the 18- to 34-year-old male audience -- can only be a positive."

Plus, it's likely that Doritos could emerge unscathed legally as well. Doug Wood, a New York-based partner in Reed Smith's advertising and marketing practice group, said he didn't see any legal issues for Frito-Lay's sponsorship. Issues could arise, he said, if Mr. Colbert made remarks about other snack products that were false, disparaging or misleading, or if he were to carry Doritos bags around with him on a campaign trail.

"He's being paid to render services," Mr. Wood said. "They're not really sponsoring a political campaign."

So long as Mr. Colbert's contract is explicitly one for services, he should be in the clear, Mr. Wood said.

Some brands would avoid such a partnership in the event that the spokesperson went off the handle (a la Kate Moss or Lindsay Lohan), then some of the fallout could land on the sponsor. But Doritos is an edgy brand with lots of young, male fans, Mr. Wood said, so this is probably what it signed on for.

As Mr. Colbert phrased it Tuesday, it's a "SNAC PAC" that keeps on giving. The Society for North American Crunchiness Political Action Committee, that is.
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