Is Norm Coleman Getting His Money's Worth?

Norm Coleman's already-slim chances of prevailing in the election contest in Minnesota have now entered Calista Flockhart territory today after a Minnesota panel ruled that Al Franken has in fact won the election. See Rick Hasen for a cogent legal analysis of the issues at hand and the current status of the case.

Coleman has already announced that he will appeal to the Minnesota Supreme Court, and has also implied ta he would appeal to the U.S. Supreme Court. Because Minnesota will not issue an election certificate until the Minnesota Supreme Court has either ruled on Coleman's appeal or decided not to hear it, and the Republicans will probably filibuster Franken until he has such a certificate in place, this will probably delay his ascension to the Senate for several more weeks.

One interesting question is how much it is costing Coleman to continue to pursue his case. Let's make some quick and dirty guesses: Coleman is paying 5 attorneys, who are billing at a somewhat discounted rate of $500 apiece for 50 hours worth of work per week. That works out to $125,000 per week, or $17,857 per day, in legal fees.

Is this a decent estimate of Coleman's legal bills? I actually think it might be. MinnPost.com reported that in a 37-day period from November 25th through December 31 of last year, Al Franken incurred $650,923 in legal expenses. That works out to $17,593 per day, almost exactly matching our estimate of Coleman's bills. Why, by the way, are we using Franken's legal fees to estimate Coleman's legal expenses and not Coleman's themselves? Because Coleman's most recent FEC filing did not include any fees paid to Tony Trimble, one of his leading attorneys, and the payments disclosed to his other attorneys were even-numbered amounts that appear to reflect some sort of up-front fees rather than the result of hourly billing. In other words, Franken's figures seem much more complete, and are probably a better reflection of the costs that Coleman will eventually be accountable for.

Apart from his legal operations, Coleman incurs certain other expenses in keeping his campaign operational -- for example, hiring consultants, a PR staff, programmers to maintain his website, people to solicit and process contributions, etc. Let's say that this relatively bare-bones operation is equivalent to what a campaign committee might spend in its very early days before it had begun active campaigning. In the three months between July and September 2007, which qualifies as such a period, the Coleman campaign spent $289,540, which is equal to $3,147 per day or $22,030 per week.

So the cost to Coleman of continuing to fighting his legal battle is probably something like this:

Legal Fees  $17,593/day   =   $123,151/week
Other Fees  $ 3,147/day   =   $ 22,030/week
============================================
Total       $20,740/day   =   $145,181/week

That is, about $20,000 per day or $145,000 per week. Let's say the Minnesota Supreme Court will take six weeks to hear the appeal; that would translate into another $871,086 in expenses for him.

There are two benefits to Coleman in continuing to press his case. Firstly, there is a small chance that he will prevail. Secondly, so long as he delays the state from issuing an election certificate, he keeps Al Franken out of the Senate. Given the current contours of the Senate, merely preventing Franken from voting is really every bit as good to Republicans as having Coleman voting in his place.

OpenSecrets.org reports that Coleman spent $21,821,755 in an effort to win a six-year term in the Senate. Al Franken, incidentally, spent almost exactly as much. $21,821,755 for a six-year term works out to $9,957 per day; this is the approximate cost of a Seante seat in Minnesota. If you accept my hypothesis that preventing Franken from being seated is roughly as good an outcome to Coleman as being seated himself, blocking Franken for six additional weeks is worth about $419,649 to Norm Coleman.

However, we estimated that Coleman will incur $871,086 in legal and other bills to continue pressing his case for six more weeks. If we deduct out the $419,649 benefit of blocking Franken's seating, that leaves an additional $451,437 for Coleman to cover.

In order for Coleman to get value for that $451,437, he needs to have some chance of actually prevailing in his election lawsuit. Recall that Coleman was willing to invest $21,821,755 to win a six-year term. If Coleman eventually wins in Minnesota, his term will be slightly less than six years -- more like 5 and 7/12 years if he were somehow actually seated by June 1st. After discounting for the time that has already expired from the term, we estimate that this is worth $20,306,355 to Coleman.

So Coleman is gambling $451,437 for a chance to win $20,306,355. This is a good bet for him, so long as his chances of eventually being seated are at least 2.2%.

Are Coleman's chances in fact that high? In my opinion, they are not. This is because Coleman faces two and probably three hurdles to eventually being seated. The first hurdle is that either the Minnesota Supreme Court or the U.S. Supreme Court must decide to hear the case and then rule in his favor. From reading Hasen and other legal experts, the chances of this appear to be fairly low, although certainly not impossible. The second and more problematic hurdle is that even if Coleman wins some sort of remedy from the courts, it will not necessarily result in his victory. On the contrary, I think it is quite unlikely to result in his victory, because most of Coleman's suggested remedies will involve counting more ballots, and counting more ballots will probably just increase Franken's lead.

The third hurdle is the United States Senate, which is ultimately responsible for adjudicating election contests. Most of the scenarios in which Coleman would ultimately be declared the victor by the courts involve some fairly radical case law, such as the Court deciding that the entire recount and absentee-ballot counting process was illegitimate and reverting to the Election Night result, or authorizing the counting of additional absentee ballots only from Coleman's list but not from Franken's. I don't see how these things are likely to happen, but if they did, the Democratic-controlled Senate would surely be very unhappy about it. The best-case scenario for Coleman, then, might not be being seated immediately, but rather triggering some sort of impasse, at which point the Senate might declare a re-vote. I don't know what Coleman's odds might be of prevailing in a re-vote, but given that his PR operation has lost momentum as Franken has spent more and more days with an ostensible lead, they are probably not greater than 50:50.

My guess is that Coleman's chances of clearing all three hurdles and eventually being seated (probably following a re-vote) are probably not more than 1-in-100, and might be more like 1-in-1,000 or even longer, which would not be enough to warrant his continuing to press his case. Then again, many of the assumptions that I've made here are rather crude; a reasonable man could easily reach a different conclusion.

Also, it's possible that we've overstated the magnitude of Coleman's legal bills. Tony Trimble, Coleman's lead counsel, has donated tens of thousands of dollars to Republican candidates over the years and might be personally vested in the case. Although as I understand federal elections law, he must still charge Coleman an arm's-length rate for his services less they constitute an in-kind contribution, there are a wide variety of billing rates and structures that he could reasonably justify. Another option that might make sense for Coleman is to deliberately do a cheap-o/half-assed job of continuing to press his case, which might further reduce his chances of actually prevailing, but would nevertheless prevent Franken from being seated in the interim.

Finally, Coleman may still be playing with house money; his campaign committee had about $2 million in cash on hand as of December 31 and he has undoubtedly raised a bit more since then. The more salient question may be whether Coleman is making better use of his remaining campaign funds by continuing to press his legal case rather than preserving them for some future election (which is a perfectly legitimate use of such monies).

It's actually very rare for a sitting senator to lose an election and then to mount some sort of a political comeback -- for some reason, losing seems to be more devastating to senators than it is to governors, representatives, or presidential candidates. And Coleman's track record is particularly unimpressive; he's been elected to national office just once, in 2002, in what was an extremely good year for Republicans and then only after his opponent died. Moreover, it's not clear when Coleman might have another opening. Minnesota's other senator, Amy Klobuchar, is not up for re-election until 2012 and is currently rather popular. Tim Pawlenty appears more likely than not to seek a third term and Coleman is surely not going to try and primary him. Nor does Coleman have any realistic chance of appearing on a presidential ticket. His best bet might be to wait until 2014, when Franken would be up for re-election, but six years is a lifetime in politics. Although Coleman's chances of prevailing in his legal case are not very strong, they may be better than his next-best alternatives.