One afternoon in late April, Karl Rove welcomed an elite group of conservative political operatives and moneymen into his home in Washington, D.C. Along with his protégé Ed Gillespie, who succeeded him as George W. Bush's top political adviser, Rove had gathered together the heavyweights of the GOP's fundraising network. In attendance were the political director of the U.S. Chamber of Commerce, as well as the leaders of two new megadollar campaign groups loyal to Rove: American Crossroads and the American Action Network. Rove's plan was straightforward: to seize control of the party from Michael Steele, whose leadership of the Republican National Committee was imploding in the wake of a fundraiser at a lesbian bondage club. By building a war chest of unregulated campaign cash – an unprecedented $135 million to be raised by these three groups alone – Rove would be able to wage the midterm elections on his own terms: electing candidates loyal to the GOP's wealthiest donors and corporate patrons. With the media's attention diverted by the noisy revolt being waged by the Tea Party, the man known as "Bush's brain" was staging a stealthier but no less significant coup of the Republican Party.Read more.
"What they've cooked up is brilliant," says a prominent Democrat. "Evil, but brilliant."
Rove and Gillespie, who effectively ran the Republican Party throughout the past decade, recognized that Steele's weakness represented an opportunity to stage a quiet comeback. But taking control of the party, they knew, would require a new kind of political machine. The Supreme Court, in its recent decision in Citizens United v. the Federal Election Commission, opened the floodgates for unlimited political spending by corporations and individuals. But the court left in place strict limits on contributions to party committees – and it preserved the legal firewall that bars campaigns from coordinating directly with the outside groups now empowered to spend millions on their behalf.
That's where Rove and Gillespie come in. As free-agent strategists, they are in a unique position to skirt such prohibitions and coordinate all parts of the GOP – both inside and outside the official party structure – because they're not officially in charge of any of it. In the run-up to November, they will be the ones ensuring that the many tentacles of the court-sanctioned shadow party – from startups like American Crossroads to stalwarts like the National Rifle Association – operate in concert. "They will be making sure that everybody is expending themselves properly, as opposed to duplicating efforts or working at cross-purposes," says Mary Matalin, who served with Rove in the Bush White House. "That's something that the committees and the campaigns really don't do – legally cannot do."
Notable is the role of Fred Malek, the Nixon aide who was a principal in the leveraged buyout and subsequent financial strangulation of Northwest Airlines in the 1980s. Malek most recently served as national finance committee co-chair of John McCain's 2008 presidential campaign - after a four-year stint as a director of Fannie Mae just prior to Fannie's spectacular collapse, and paying a personal $100,000 civil penalty in a May 2007 SEC civil fraud lawsuit against the private equity "investment" firm Malek founded in 1991, Thayer Capital Partners.
A third group integral to Rove's plan – the American Action Network – is so closely integrated with American Crossroads that it has moved into neighboring offices two blocks from the White House. Co-founded by private-equity titan and longtime GOP operative Fred Malek, who once helped Richard Nixon target a "Jewish cabal" in the administration, AAN bills itself as an "action tank" – a think tank that will also inject money directly into federal races. It plans to raise $25 million for its campaign efforts this fall – expenditures that will be directed by a former chief of staff to House Minority Whip Eric Cantor. "It's the beginning of the future," says Rollins. "Independent expenditures will play a very, very significant role. There are no rules anymore."Another important quote:
"This is the plutocratic wing of the GOP getting together and deciding that, in the era of unlimited corporate contributions, they don't need a formal Republican Party anymore," says a top Democrat.