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Karl Rove and the Modern Money Machine
By Kenneth P. Vogel, July/August 2014
The nation was in crisis, and it was shaping up to be the best thing that had happened to Karl Rove all year. On October 2, 2013, President Barack Obama and congressional leaders were meeting at the White House into the evening, desperately trying to come to a deal to end the government shutdown, then in its second full day. A mile up Pennsylvania Avenue, a grinning Rove was plying his guests with premium liquor at the Georgetown Four Seasons. It was no surprise that Rove’s mood was said to be buoyant at the first-ever donor “summit” of his American Crossroads super PAC. Or even that his buoyance came “with a sort of contrite undertone,” as one participant described it to me.
For Rove, the famed “architect” of George W. Bush’s presidency turned financial mastermind of the post-Bush GOP, it had been a horrible year of reckoning. He had helped orchestrate an extraordinary $1 billion investment in 2012 Republican candidates through a web of groups like Crossroads, only to see his reputation suffer a devastating blow as bet after bet proved wrong. The humiliation was capped off by his memorable on-screen election night meltdown on Fox News, when the network refused to call the presidential race to his liking. More indignities followed: Two of his top donors died after the election. The big-money coalition he built in his Washington living room had crumbled. And the biggest names in the 2016 presidential sweepstakes had little use for him.
But now finally was a chance at redemption: He saw that the timing of the shutdown was … perfect. For months, in fact, Rove had been warning the Tea Party and its congressional standard-bearers to back off the shutdown idea. Don’t do it, he kept saying. It will be a political disaster. Now, that’s exactly what seemed to be happening—and Rove was very much in need of an I-told-you-so moment. Even one that came at the expense of his own party.
And it was just in time for his Crossroads summit, not so subtly titled “The Republican Future,” where Rove was busy selling himself all over again to the dozens of wealthy donors, establishment luminaries and schmoozing politicians like Sen. Marco Rubio and Rep. Sean Duffy who came to the Four Seasons for Rove-centric sessions including a reception dubbed “Cocktails, Conversation … and Karl.” This next election would be different, Rove told attendees. “They were going to create a better product and not make the same mistakes again,” as one later recounted to me.
But first there was the matter of the war within—Rove’s escalating battle for supremacy in a cutthroat big-money world that pitted him against the Tea Partiers and their deep-pocketed sometime backers, the billionaire Koch brothers, Charles and David. The Tea Party and the Koch network were being blamed for the shutdown, which was starting to look like a terrible mistake. Hundreds of thousands of federal workers were going without paychecks. Millions more Americans were at risk of losing their social services. The GOP’s poll numbers were cratering. Rove, my sources told me, was aggressively going around taking swipes at the Koch-backed groups that had pushed for the confrontational Republican tactics in the first place and disparaging Koch operatives to major donors who had given to both camps. (“Gang warfare,” the head of one Tea Party group had earlier complained to me.) This was Rove’s moment to take advantage, and he was determined to win the argument as he hustled for checks. “It’s time Republicans remembered that bad tactics produce bad outcomes,” he would go on to chide in his Wall Street Journal column as the shutdown ended in a clear-cut defeat for his party.
He had been right. But would Rove’s warnings, as early and often as they had been, prove sufficient to earn him the rehabilitation in 2014 he so craved?
It is somewhat ironic—but perhaps poetically just—that the money monster of American politics may have turned on Karl Rove; after all, Rove, more than anyone in America, was its Dr. Frankenstein. Thanks partly to the Supreme Court’s 2010 Citizens United decision, which opened the floodgates to huge amounts of loosely regulated political giving, Rove had personally overseen an astonishing influx of big money into the 2012 campaign, much of it in the form of massive, undisclosed checks from major donors. For a brief period, Rove had appeared to form a sort of shadow Republican Party all on his own, sustained by this new flood of cash.
But raising the money had proved easier than changing the country’s politics, and Rove had failed to achieve his goal of ousting Obama and installing a Republican majority in the U.S. Senate on Election Day 2012. Fox News anchor Chris Wallace drove the point home that nasty night. “We spent billions of dollars,” Wallace said to an exhausted-looking Rove. “Crossroads, which you helped found, spent—what?—$325 million, and we’ve ended up with the same president, the same Democratic majority in the Senate and the same Republican majority in the House. Was it worth it?”
Today, of course, that question is still hanging out there, looming large over this year’s congressional elections, and over Rove’s future. In June, House Majority Leader Eric Cantor’s stunning loss to a shoestring-budgeted nobody named David Brat once again proved that money doesn’t add up to much without the right message. All we really know for sure is that in the four years since the Citizens United decision, a few dozen enigmatic billionaires have effectively crowned themselves the new kings of politics. Even before the legal landscape shifted, Rove anticipated their rise, and he set himself up to be their keeper.
This is the story—based on dozens of interviews, hundreds of documents and some stealthy stakeouts and chance encounters—of how he did it, reinventing himself and, in the process, the modern American money machine. In many ways, it’s a classic American tale, of a college dropout from a struggling family who managed to become not only a president-maker but a billionaire-whisperer enveloped in a world of private jets and seven-figure pledges.
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But in the end, the biggest challenge for Rove might be to prove that he still has any control over the political process at all. He didn’t do much to convince donors of that at the October 2013 Crossroads summit, according to the Republican finance operative who attended. “People wanted to hear some very intense self-evaluation of what went wrong in 2012, but it was the same old stuff—‘just keep doing what we’re doing, and everything will be OK.’”
Once again, Rove has appeared to be wrong in projecting a new era of Republican dominance, though he continues to forecast a major realignment, telling a private group in May that “something is going to happen. You cannot remain this locked up for as long as we have without somebody gaining some kind of advantage.” Rove will need a huge electoral win this fall—including a return of the Senate to Republican control—to make his case.
For now, the only thing that is clear is that Rove has profoundly changed the way the political game is played. Thanks to him, no one can afford to stand down in what has become an arms race for money, and Rove and his rivals are left with no choice but to rapaciously solicit such checks from wider and wider pools of extremely wealthy supporters. If $400 million in anonymous cash spent by the Koch brothers’ network in the run-up to the 2012 election didn’t do the trick, will $1 billion from a small cluster of donors help elect a 2016 presidential candidate?
But that is the secret drama of politics, the one that unfolds in the opulent private places where big money and needy politicians meet to shape outcomes that the rest of us only dimly understand on election night. Karl Rove may delight in publicly taunting Hillary Clinton about her age or the Tea Partiers about their political tactics, but he doesn’t like to talk about this other part of his work. It is a tough business to stay on top. “He still wants to be The Decider,” a Republican fundraiser who has closely observed Rove told me not long ago. “He tries to be everyone’s gatekeeper. Other people have different ideas.”
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