Newsweek, January 24, 2000
Headline: The Money Machine
Byline: Michael Isikoff
You’ve probably never heard of
Heinz Prechter. The diminutive 57-year-old Bavarian
immigrant made a fortune by inventing the sunroof for the auto industry. He is
known by his friends for his good cheer and for driving expensive, German-made
sports cars through the streets of
Prechter and Freeman and a half dozen or so other
wealthy Republican businessmen deserve to be better known—as potential kingmakers.
If George W. Bush survives John McCain’s challenge and goes on to win in
November, the biggest single reason may be money. Through 1999 Bush had raised
a staggering $67 million, four times as much as McCain and more than the two
Democratic rivals, Gore and Bradley, combined. Bush has raised
so much that he has been able to forswear federal matching funds, freeing him
of campaign spending limits. After the primaries, when the Democratic nominee
will be tapped out, Bush can afford to keep his ads on TV up until the summer
conventions.
To hear the governor’s campaign
aides talk, he has been the beneficiary of spontaneous, down-home enthusiasm.
At last count, more than 170,000 individuals have written checks that, by law,
cannot exceed $1,000 apiece. "This has been a totally grass-roots,
broad-based individual effort across
The answer is: by knowing how to
manipulate the rules. Bush’s money machine has been carefully constructed by a
small group of men who are experts at the art of "bundling" $1,000 contributions.
All presidential campaigns exploit such techniques, but, profiting from flush
times, the Bush team has taken the game to a new level. The story of how these
champion fund-raisers chose Bush as their standard-bearer may be the most
important saga of the campaign. It reveals to what degree the governor has
benefited from a powerful network of wealthy businessmen, who are likely to
have his ear if he is elected president.
Their common bond is making money, giving
money to the Republican Party and manly pursuits, like hunting and golf. In
addition to Prechter, Freeman and Evans (who
recruited Bush to his Bible-study group), the core players include Peter Terpeluck, a high-energy Washington lobbyist; Tom Kuhn,
president of the Edison Electric Institute, lobbying arm of the electric-power
industry; Ray Hunt, scion of the Texas oil fortune, and John Hennessy, a Wall
Street investment banker. Their friends include pharmaceutical heir Robert Wood
Johnson, who this week bought the New York Jets for $635 million and
entertained his cronies on one Bush hunting trip by bringing along an elephant
gun. About 150 of these champion fund-raisers have been designated as
"Pioneers" by the Bush campaign. Each has raised more than $100,000
in $1,000 donations, and many have personally given hundreds of thousands of
dollars in "soft money" to the Republican Party.
Most of Bush’s core moneymen are
not likely to ask him for jobs or explicit favors. "I don’t have an
agenda—and I don’t give a hoot about being in government," Prechter told NEWSWEEK. One of Prechter’s
fund-raising associates remarked, "He does this because he loves being a
player, loves being a part of the action." Even so, Prechter
has profited in the past from his Bush associations. Named to accompany
President Bush on a trade mission to
Many
This money machine was gearing up
before Bush declared, even privately, that he was a candidate for president.
Some of the men behind the money are driven less by personal loyalty to Bush
than by the need to find an electable candidate—a
conservative without a hard edge. Prechter, who for
many years has been the principal fund-raiser for Gov. John Engler
of Michigan, began noticing Bush at meetings of the Republican Governors
Association during the mid-‘90s. He was struck by how the crowds parted when
the
Bush himself was coy about running.
At the dedication of the George Bush Presidential Library at Texas A&M in November ‘97, the moneymen were disappointed by
the younger Bush’s reluctance to give them a sign to start gathering checks in
earnest. The governor said that he was worried about exposing his teenage
daughters to the rigors of a presidential campaign, and he still had to get
re-elected in
Quietly over the next year the
moneymen expanded Bush’s financial reach—throwing gala fund-raisers for him in
Typical was this scene in Bush’s
private dining room last March. After the governor made his breezy presentation
to a group of two dozen pin-striped executives, Evans stood up and announced
that he hoped each of the guests would make "a significant
contribution." Herb Collins, a
Backed by his father’s national
network, Bush started out with a
The real key to Bush’s
unprecedented fund-raising success, however, has been his Pioneers. They use
their contacts to start a chain: one man recruits 10 friends willing to chip in
the maximum of $1,000 apiece. They in turn recruit 10 more friends each.
"It’s sort of like an Amway deal," says Louis A. Beecher Jr., a
Under federal law, corporations
can’t contribute directly to a candidate. But by bundling, the Pioneers work
around those rules. Consider Vinson & Elkins, the blue-chip Houston-based
law firm (which also lobbies in
As long as employees aren’t overly
pressured, bundling is legal, and all campaigns do it. But Bush’s Pioneers have
done it more vigorously than most. Take FirstEnergy Corp., an
This fall, while the press was
following John McCain around
How They Did It: Here Are Two
Letters Used to Solicit Funds for George Bush’s War Chest
Through 1999, candidate George W.
Bush had raised a staggering $67 million, four times as much as John McCain and
more than his two Democratic rivals, Al Gore and Bill Bradley, combined.
What’s his secret? A money machine that has been carefully constructed by a small
group of men who are experts at the art of soliciting contributions.
Here are excerpts from two letters
mailed by political heavy hitters, aimed at drumming up cash for the Bush
campaign.
The first is from Tom Kuhn,
president of the Edison Electric Institute, a lobbying arm of the electric
power industry. The memorandum was written on George Bush’s Presidential
Exploratory Committee stationary.
TO:
FROM: TOM KUHN
RE: JUNE
22 RECEPTION WITH GOV. GEORGE W. BUSH
DATE: MAY 27, 1999
My personal
thanks to all of you for taking a leadership role in gathering support for the
June 22 reception honoring Governor George W. Bush. I believe that it will be a great evening,
and I know that the electric utility industry will show their continued support
and enthusiasm for the Governor’s exploratory campaign committee.
Enclosed is a copy of the June 22
invitation, along with a list of cities and dates for upcoming fundraising
events. We can give you as many invitations as you need to mail out to friends
and colleagues...
As you know, a very important part
of the campaign’s outreach to the business community is the use of tracking
numbers for contributions. Both Don Evans and Jack Oliver have stressed the
importance of having our industry incorporate the #1178 tracking number in your
fundraising efforts. LISTING YOUR INDUSTRY’S CODE DOES NOT PREVENT YOU, ANY OF
YOUR INDIVIDUAL SOLICITORS OR YOUR STATE FROM
RECEIVING CREDIT FOR SOLICITING A CONTRIBUTION. IT DOES ENSURE THAT OUR
INDUSTRY IS CREDITED, AND THAT YOUR PROGRESS IS LISTED AMONG THE OTHER
BUSINESS/INDUSTRY SECTORS. If you have any questions about your industry’s
tracking information, please do not hesitate to let me know.
I look forward to working with you
and will help in any way that I can to support your efforts on behalf of our
industry...
The second is from Ken Lay,
chairman of Enron, an energy conglomerate. He wrote top company executives
asking them to make the "maximum" contribution to Bush-and ended up
collecting $92,000.
May 6, 1999
Dear [First name],
Earlier this month, Governor George
Walker Bush formed a committee to explore the possibility of running for
President in 2000. The reaction across
As Texans, we have witnessed first hand
the tremendous ability and tenacity of our Governor. Instead of offering
opinions on everything under the sun, he focuses on tangible results and
achieves them...
That is why I want you to join me
in telling the governor, "You would be a great President. You should run
in 2000."
I hope you will join me as a
volunteer and affirm your strong support for his race by making the maximum
contribution of $1,000 per person or $2,000 per couple...
Thank you for your consideration.
Sincerely,
Ken Lay
P.S. I invite you to join me as a
volunteer fundraiser if you are supportive of this effort. Due to the ever
increasing demands of the numerous early state primaries and limits of
contributions, Governor Bush will be required to reach people who have
previously never been involved in a presidential campaign. If you would like to
try to raise some additional money for Governor Bush from your friends and
family, please contact...
Professor’s
Notes: For the 2004 Presidential campaign, the new
elite of the donors are the rangers, people who raise $200 thousand dollars for
the Bush campaign. Because of his
ability to raise large amounts of campaign money, George Bush has once again
decided to forego accepting public financing for the Republican primary so that
he will be able to raise and spend as much as he wants; present estimates are
that the Bush campaign intends to spend $200 million to secure an uncontested
Republican nomination for President.
Ken Lay (who wrote the letter
above) CEO of the Enron Corporation was associated with one of the biggest
business scandals in recent years. After years of phony accounting to show
profits where there were none, the Enron Corporation (
The 2008 election promises much of
the same. According to a February 7,
2007 article in the Washington Post, Senator Hillary
Rodham Clinton invited about 70 top fundraisers [billionaire Hollywood moguls,
millionaire lawyers and venture capitalists from around the country] to a
reception at her
Questions:
1.
Why do you think that Congress passed limits on the amount of money an
individual can contribute to federal candidates? Does the ability of politicians to raise
large amounts of money reflect popular enthusiasm for a candidate or an end run
around the spirit of campaign finance limits?
If the latter, what, if anything, would you do to curb this
practice? Explain why.