A nonprofit watchdog is questioning a $14-million ad contract between the ad agency with ties to Hillary Clinton's presidential campaign and the Consumer Financial Protection Bureau (CFPB) on grounds the consumer protection agency may be "subsidizing political coordination" between the ad firm and its political clients.
The Washington, D.C.-based Cause of Action Institute filed a Freedom of Information (FOI) request with the CFPB last week, asking for specifics on the contract the CFPB awarded to the ad firm GMMB to create online ads for the agency highlighting financial matters such as student loans, mortgages and other free financial resources the agency produces for consumers.
GMMB, also based in Washington, has worked with a number of Democratic political clients over the years, including President Barack Obama and the Clinton campaign.
According to the company's website, Jim Margolis, a GMMB partner overseeing the agency's political work, is "senior adviser to former Secretary Hillary Clinton, helping lead her presidential campaign effort." He also held a senior advisory post in both the 2008 and 2012 Obama presidential campaigns.
According to the website OpenSecrets, which tracks campaign spending, GMMB is the Clinton campaign's largest vendor, having been paid nearly $60 million by the campaign since August 2015.
In its FOI request, Cause of Action notes that "CFPB is a federal agency engaged, as part of its consumer protection responsibilities, in
substantial consumer information collection activities."
The group wants the CFPB to "confirm that
appropriate firewalls are in place to ensure that American taxpayers are not, through the effect of
the CFPB contract with GMMB, subsidizing political coordination," noting that under federal law, companies "contracted by
campaigns should not, and cannot, use information garnered by federal agencies to support
Cause of Action is seeking copies of all communications between the CFPB and GMMB, particularly on whether the data gathered in course of the ad campaigns will be shared with GMMB's other clients.
Cause of Action wants to ensure that the CFPB has contractual safeguards in place to guard against the possibility the data can be shared across GMMB's client base.
Cause of Action Institute president and CEO Alfred J. Lechner, Jr. told AMI Newswire that, given the amount of consumer data CFPB routinely collects, combined with GMMB’s partisan political clients, his group "is concerned about the nature of, and safeguards applied to, any CFPB information supplied to or received from GMMB."
According to a copy of the contract between CFPB and GMMB reviewed by AMI Newswire, "the Contractor [GMMB] may obtain access to non-public confidential information, Personally Identifiable Information (PII), or proprietary information."
The contract states GMMB may not disclose any of this information to "any third party, or otherwise use, any information it obtains or prepares in the course of performance under the contract without first receiving written permission from the CFPB."
AMI Newswire received no response from GMMB requesting comment on the FOI request.
AMI Newswire also reached out to the Clinton presidential campaign for comment, but received no response.
A spokesman for the CFPB, Samuel Gilford, told AMI Newswire the agency "began the digital marketing effort in 2013 with the goal of getting our tools and resources into the hands of consumers who need them."
"The planning for this effort began in 2012 and the award was made in August 2013," Gilford said.
Gilford said the contract eventually awarded to GMMB "was competitively solicited amongst qualified firms previously placed on the GSA Schedule. The Bureau received four quotes and eventually signed a Blanket Purchase Agreement (BPA) with GMMB after an open and fair selection process."
Gilford explained that a BPA is "a pricing agreement under which real work or actual needs are fulfilled by placing specific 'BPA Calls' for tasks and deliverables against the agreement."
According to the General Services Administration website, BPAs provide "convenience, efficiency and reduced costs" to federal agencies and contractors, enabling them to "simplify the filling of recurring needs for supplies and services, while leveraging ordering activities’ buying power by taking advantage of quantity discounts, saving administrative time, and reducing paperwork."
The agency's work on credit market practices, debt servicing and student loans has angered both corporations and politicians. But so does its structure. The CFPB has a single director, as opposed to a board, and is funded by the Federal Reserve system.
Its lack of accountability has led some to demand its elimination.
In June 2015, Sen. Ted Cruz (R-Texas) sponsored legislation to abolish the agency, saying it "continues to grow in power and magnitude without any accountability to Congress and the people."