The Kingmaker

  • Share
  • Read Later
DIRCK HALSTEAD FOR TIME

McAuliffe received a standing ovation when he announced the $26.5 million take at last week's gala

(3 of 4)

McAuliffe learned the art of banter across the dining-room table of the modest home he grew up in in southwest Syracuse, N.Y. Terence Richard McAuliffe, the baby of the family, took an early interest in politics. Father Jack, treasurer of the Onondaga County Democratic Party, took the boy to fund raisers at age five and gave him tickets to sell a few years later. One of his dad's mottoes sank in. "You gotta show up" to gain the trust of people, he would tell young Terry. Jack, who earned a living in real estate, was the original networker, using his patronage and wide contacts to find jobs for people. Mother Millie pressed the work ethic with Terry, who by 14 had started his first company, sealing driveways with tar. He made his first $1 million 11 years later by investing those profits. Along the way, he graduated from Catholic University in Washington and in 1979 got his first job in politics working to re-elect President Carter. When the campaign's Florida finance chair, Richard Swann, asked Washington for help on a fund raiser, he got a 22-year-old kid named McAuliffe. Breaking a record for the event, McAuliffe was sent to California, where he worked closely with a pair of fund-raising legends: Hollywood's Lew Wasserman and San Francisco real estate magnate Walter Shorenstein. By the general election, McAuliffe was the top fund-raising member of the staff at the D.N.C., wearing fake horn-rimmed glasses to look older. Something else came out of McAuliffe's Florida initiation: a marriage to Swann's daughter Dorothy, with whom he has four children.

McAuliffe earned a law degree from Georgetown University, but except for a brief stint in a lobbying shop, he spent most of his early years not making money but raising it. And that is perhaps McAuliffe's most distinguishing feature as a moneyman--what separates him from those who've gone before him. People like Wasserman were multimillionaires before they got into politics. McAuliffe has done it the other way, using his political contacts to become a multimillionaire. In 1995 he acquired a bankrupt home-building business in Orlando, Fla., with the help of American Financial Corp. after soliciting its owner, Carl Lindner, for the D.N.C. "People like to do politics with me, and they like to do business," he says. Now that he's worth tens of millions, he says he's in a position to meet the donors as peers, exchange stock tips with them and serve on their boards. His wealth, he says, is the best argument for why he can't possibly extract much personally from his closeness with Clinton. "There's nothing he can do for me except be my friend," said McAuliffe.

McAuliffe's sprawling network of friends is one reason he has managed to escape the legal trouble that has sometimes befallen other moneymen. His relationships extend to top Republicans who came to his rescue during the Senate probe of White House coffees in 1996. When G.O.P. investigators found alleged discrepancies in McAuliffe's deposition, sources say, allies of Republican Party chairman Haley Barbour persuaded Senate Republican leaders to take him at his word. It worked. McAuliffe wasn't even called as a witness at the showcase hearings held in 1997.

But in weaving his business success out of his political one, he has had other questions to answer. The Labor Department has examined his role in getting an old campaign pal in control of a union pension fund to join McAuliffe in a Florida land deal. The fund, which provided nearly all the capital in an equal partnership with McAuliffe, bought back his shares for more than $2 million--a move the department called imprudent but did not blame McAuliffe for. Likewise, when Prudential Insurance Co.--a generous donor to both parties--paid McAuliffe $375,000 to help secure a government lease, U.S. prosecutors in Washington fined the firm but found no problem with McAuliffe.

His business-political nexus came up again in the federal investigation of Teamster efforts to swap contributions with the D.N.C. in the 1996 campaigns to re-elect both Clinton and union boss Ron Carey. McAuliffe had worked on a high-paying corporate issue with a political consultant who later hatched the swap plan on behalf of the Teamsters. But McAuliffe told prosecutors he had never agreed to a trade and says he has not heard from them since.

So McAuliffe keeps on his wild money ride. Last week he was back on the job meeting with Boston financier Howard Kessler, with whom he has investments. Of course, the two men had something else in common: a $100,000 check Kessler had recently sent to the D.N.C.

  1. 1
  2. 2
  3. 3
  4. 4