A top Democratic organization strongly encouraged state campaigns to do much of their digital ad-buying business with a company that one of its members is set to soon join as CEO — a development that has puzzled and concerned some party insiders.

At a meeting in Little Rock, Arkansas last week, the Association of State Democratic Committees — an umbrella group for state parties — voted to recommend state races use one liberal firm, TargetSmart, for a major portion of digital ad buys, which could be worth millions.

TargetSmart announced on May 7 that Liz Walters, outgoing chair of the Ohio Democratic Party, is taking over as CEO this summer. Walters, who made her departure public in a post on X, said she would leave the state party role by June 30. And until the week before the group’s meeting, she was part of the ASDC’s leadership team as treasurer.

Walters recused herself from the TargetSmart vote. But she has reportedly praised the use of TargetSmart repeatedly in recent years, went to the meeting where the resolution passed, and continues to sit on a key board of state party leaders tied to the deal.

Word of the deal spread through Democratic circles this week, leaving some in the party worried about the possibility of a conflict of interest — or the perception of one — at a time when Democrats are already struggling mightily. Others are concerned that using a sole media-buying platform for many digital ads will stifle innovation and raise costs for campaigns.

“I just don’t understand this at all. It’s the ultimate solution in search of a problem,” said Rob Flaherty, the former deputy campaign manager for Kamala Harris’ 2024 presidential campaign. “No one who works directly in this space is asking for this, nor should we want it. Even the stated rationale makes no sense: This is a space where competition leads to better pricing. A strategic monopoly doesn’t serve us.”

A Democratic campaign veteran who, like others in this story was granted anonymity to speak freely, said the deal is “a conflict of interest you could see from space.” A Democratic state party chair said “the perception sucks, the perception is terrible.”

Walters responded in a statement that the decision to leave the Ohio Democratic Party, “an organization I love,” was “a hard one.” She added that “in the interest of transparency, as soon as I decided to join TargetSmart, we made the news public and I recused myself from all matters involving the company.”

Axios first wrote about the existence of a deal between the ASDC and TargetSmart, but concerns about a conflict of interest have not been reported before.

ASDC president Jane Kleeb said in an interview that it was her suggestion, not Walters’, to give TargetSmart the special status. Kleeb defended the decision as a way for state parties to save money and solve other problems, such as navigating a bewildering web of new digital firms.

She said that Walters has praised TargetSmart internally over the years but added that “lots of us” have also spoken highly of the company since they’ve worked closely with them.

“There is no conflict of interest. We have been talking about this for years,” she said. “I knew that the vendors would have their guns and knives out for me because they will perceive it as taking business away from them. But it doesn’t.”

She added, “I am trying to innovate and create reliable streams of revenue” for state parties and “with this system, there will be a 5 percent return to state parties, which is a really wonderful thing.”

Other Democrats in favor of the resolution said that the setup would also help ensure the digital safety of voter files.

A second Democratic state party chair granted anonymity to speak candidly about the deal said that Walters praised TargetSmart at multiple ASDC meetings in recent months, including in Little Rock last week.

“Every single meeting she would talk about the benefit of the tool and why it’s really important, and anytime people would raise questions, basically, she was answering them as CEO of TargetSmart, but that wasn’t the role she was in,” said the person, who was in the meetings.

“It’s an unfortunate way to enter into a relationship, because I think it could be a good tool, but now it’s clouded,” the person added.

TargetSmart has worked with the Democratic state parties for years to house their voter files, a precious resource used by campaigns. The ASDC said that it asked TargetSmart to develop its digital ad-buying tool in 2023, and that later it was rolled out to some trial participants, including in Ohio. State parties generate revenue when their voter file is bought and sold, as well as when their voter file data is used on TargetSmart’s ad-buying platform.

The ASDC’s nonbinding resolution states that members are encouraged to either “institute a requirement” for voter file users to utilize TargetSmart for digital ad-buying or “strongly encourage” users to “explore utilizing” the platform.

A TargetSmart spokesperson said the buying platform is more cost efficient, reliable and enables transparency in ad placements. And TargetSmart senior adviser Tom Bonier said in a statement that “we’re proud to have the opportunity to continue to serve state parties as they provide this cutting-edge resource to their members.” He didn’t respond to a question about when TargetSmart began discussions with Walters about the job.

A person close to Walters said that she “resigned as treasurer well before the meeting, recused herself from the process entirely and it passed unanimously.”

But that has done little to tamp down criticism of Walters among some Democrats.

“Even being there is a way to exert influence, especially when it was already announced that she was going to TargetSmart,” said the Democratic campaign veteran.

Walters submitted her resignation as treasurer of the ASDC on May 20, the person close to her said. The ASDC passed the resolution unanimously on May 29.

Walters is also on the board of a linked “co-op” made up of state party officials that manages its voter file data. She is expected to leave that entity and as head of the Ohio Democratic Party next week.

President Donald Trump on Thursday threatened Elon Musk’s federal contracts, a remarkable escalation in a public feud between the president and the world’s richest man, his former ally.

“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts,” Trump wrote on his social media platform Thursday afternoon. “I was always surprised that Biden didn’t do it!”

The president’s relationship with Musk has deteriorated rapidly since Musk left the White House last week. The acrimony went public when Musk publicly slammed Trump’s sweeping domestic policy package on Tuesday.

He’s continued to lash out at the White House in the days since — with Musk baiting Trump by name earlier Thursday, and Trump responding by chastising the Tesla CEO from the Oval Office later in the day.

Still, Trump’s criticism from the White House — where the two men less than a week ago shared a laudatory sendoff for Musk — was not as pointed as the president’s barbs on social media.

“Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate.,” Musk wrote on X Thursday, the social media site he owns. “Such ingratitude.”

Musk’s companies have significant ties to the federal government, even before the Trump administration. SpaceX is one of NASA’s largest contractors. And his car company Tesla benefitted from a clean energy subsidy that is on the chopping block in Republicans’ reconciliation package.

“Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!” Trump posted.

“Such an obvious lie. So sad,” Musk fired back.

Trump has previously boosted Tesla because of his close relationship with Musk. In March, with the company’s stock at a low after public anger over job cuts fueled by Musk’s DOGE initiative, the president toured different Tesla models at a makeshift car show on the White House lawn. Trump later purchased his own Tesla, “a show of confidence and support” for Musk.

Trump has routinely wielded the power of the executive branch against institutions that he deems are misbehaving. He’s frozen billions in federal grants to some of the country’s top universities, Harvard chief among them, as punishment for alleged antisemitism and civil rights violations. And he’s secured multimillion dollar deals with law firms weary of his threats to tank their business.