The New GOP Money Stampede

How Republicans are outraising and outspending Democrats with the help of a network of little-known conservative political outfits based in D.C.

  • Photograph by Finlay MacKay for TIME

    In recent days, Ohio voters have probably seen a TV spot ripping Democratic "stimulus and debt" policies, courtesy of a group calling itself Crossroads GPS. They may also have caught an ad by an outfit called the American Action Network praising Republican Congressmen Pat Tiberi and Dave Reichert for "standing up for fiscal responsibility." Meanwhile, Ohio Governor Ted Strickland, a Democrat, is under attack from the Republican Governors Association (RGA) for being a "bad governor," while the U.S. Chamber of Commerce has been touting the "pro-business" record of GOP Senate candidate Rob Portman.

    All of these groups are based in D.C., not Ohio. And only one of them, the RGA, is required to disclose its donors — and only a few times a year. Which makes Ohio look less like a boxing ring for the candidates than a chessboard for invisible well-funded operatives hundreds of miles away.

    Ohio is hardly unique. From Washington to Florida this election season, candidates risk being drowned out by a flood of advertising from a robust new network of little-known conservative political outfits. "Shadow Republican groups formed by longtime party officials and party operatives are raising and spending hundreds of millions of dollars in this election," says Fred Wertheimer of Democracy 21, a nonpartisan campaign-finance-reform group, "most of which is going to come in the form of secret undisclosed contributions."

    While the 2010 campaign narrative has focused on grass-roots Tea Party activists defying the Washington GOP establishment, a potentially more important story involves that establishment's quiet creation of what amounts to a new kind of unofficial but totally coordinated national Republican campaign machine. The result, Democrats fear, could be a $300 million Republican spending blitz this year, as well as a network of GOP groups primed and ready for the 2012 presidential election. The liberals' alarm is compounded by the Democrats' failure to create a similar operation of their own. While Democrats have their own firepower in the form of big-spending labor unions, the new GOP effort now appears certain to outmatch them. "These groups," says a Washington Democratic operative, "are a punch to the stomach."

    At the Crossroads
    One way to understand how much has changed since 2008 is to visit one office building in downtown Washington. On the 12th floor are the offices of American Crossroads, which plans to spend more than $50 million influencing the midterm elections. American Crossroads was the brainchild of a group of top Republican insiders, including two of George W. Bush's closest White House political advisers, Karl Rove and Ed Gillespie, both of whom remain informal advisers. (Neither would talk for this article.)

    Running the group's day-to-day operations, with a staff of about 10, is a GOP establishment insider named Steven Law. A silver-haired, genial veteran of Republican politics — he is a former chief of staff to Senate Republican leader Mitch McConnell — Law sits behind a tidy desk as he boasts about his group's grand plans. They include a fall advertising blitz that in the past month has already targeted Democratic candidates in at least six states, including Colorado, Nevada, Missouri and California, as well as a monster $10 million national get-out-the-vote campaign that will include 40 million pieces of political mail and 20 million phone calls to voters in key states. "I catch my breath every time I say it," Law says of the huge numbers.

    At the same time, American Crossroads is helping coordinate a network of some two dozen conservative independent groups, planning ad campaigns and mailers, to ensure that they aren't duplicating or interfering with one another's work — "like kids' soccer, where they all run to the ball instead of spreading out," Law says.

    Sometimes that coordination is as easy as walking across the hall. Sharing office space with American Crossroads is the American Action Network (AAN), a group led by former Minnesota Senator Norm Coleman, a Republican, which may spend up to $25 million this year. Originally billed as a conservative think tank, the AAN has increasingly turned to raw politics, having spent more than $1 million on ad buys targeting Democrats such as Senators Patty Murray in Washington and Russ Feingold in Wisconsin. ("We definitely can't afford him," an AAN ad says of Feingold and his alleged free-spending record.)

    Or it can be as simple as picking up the phone and calling a friend. Mississippi Governor Haley Barbour, the current chairman of the RGA, is an adviser to the AAN. The RGA, in turn, is on pace to spend even more than American Crossroads this year — at least $65 million and perhaps far more — in an effort that will be coordinated with Law's group. A key RGA fundraiser is Fred Malek, a top GOP moneyman who is also on the board of the AAN. (Gillespie has joined Malek on at least one fundraising trip to New York for their respective outfits.) To make things really easy, Gillespie, Malek, Barbour, Law, Coleman and several other Republican fundraisers gather regularly to coordinate strategy. The attendees, who first convened at Karl Rove's home, even have a nickname for themselves: the Weaver Terrace group, named for the Washington street on which Rove lives.

    Adding more potency to this conservative network is the U.S. Chamber of Commerce, the Washington arm of the business community, whose 2010 political budget is likely to reach $75 million — more than double what the group spent in 2008. The chamber, which is furious with Democrats over health care reform and Wall Street regulation, has already run blistering ads against California Senator Barbara Boxer and Democratic Pennsylvania Senate nominee Joe Sestak and in support of Republican Senate candidates in Ohio, Florida and Illinois. And should the chamber ever have a question about what other conservative groups are doing, it won't have trouble getting an answer: before he joined American Crossroads, Steven Law was the chamber's general counsel.

    Mystery Money
    That Washington insiders are directing this money pipeline is something of a reality check at this moment of Tea Party mania. The Republican establishment may be under attack from within. But it is still directing the heavy firepower — much of it funded by big corporate and Wall Street interests for whom the Tea Partyers have little love — that could decide who controls Congress after election day. This hustling is necessary, Republicans say, in part because of the weakened state of the Republican National Committee (RNC). The RNC's chairman, Michael Steele, has been defined more by his verbal miscues and reports of dubious spending (including an infamous $2,000 strip-club tab) than by consolidation of his party's position. "The RNC has the worst chairman in our history," says one prominent Republican fundraiser. "And that created a vacuum" — which restless party operatives have filled by reviving old groups like the RGA and creating new ones like American Crossroads.

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