Romney's quest for White House began years ago, costing $200 million; buying the presidency

Reply Mon 5 Mar, 2012 01:01 pm
March 4, 2012
Romney's quest for White House began years ago, costing $200 million
By Greg Gordon | McClatchy Newspapers

WASHINGTON — Since first setting eyes on the White House, Mitt Romney and his backers have spent over $200 million — including $44.6 million of his fortune — on a seven-year quest for the Republican presidential nomination.

Now, with victories that re-establish him as the front-runner heading into Super Tuesday's crucial balloting, the former private equity chief can credit much of his advantage to an expansive fundraising apparatus that's far outdistanced those of his rivals.

Romney, an ex-Massachusetts governor, also can thank former business partners and friends in and around Wall Street who've been among his earliest and biggest donors.

A look back shows the depth of Romney's investment in trying to win the nation's highest office, how his supporters circumvented federal campaign laws with huge, back-channel donations years before he declared his candidacy and who the benefactors are whom he might owe favors if he wins.

In this, his second run for the presidency, Romney's campaign has spent $54 million through Jan. 31, according to reports filed with the Federal Election Commission. It has been shadowed by a pro-Romney "super" political action committee (PAC) that's laid out at least $32 million, including $12 million on broadcast ads in February, mainly to pummel GOP challenger Rick Santorum.

Beginning in 2004, an array of other state and federal pro-Romney committees sprang up to spend millions on staff salaries and on political consultants, while creating a sort of patronage system that spread cash to politicians whose endorsements he coveted.

"When you look at his operation, you end up with two words: Romney, Inc.," said Fred Wertheimer, the dean of Washington campaign finance watchdogs as president of the nonpartisan group Democracy 21. '"It's as if Mitt Romney is integrating his business experience in the investment banking world into the political world and creating multiple ways in which to advance his presidency.

"This is a highly sophisticated, far-reaching money operation designed to curry favor with politicians and local and state political organizations, and it's financed by donors who are bound to have great influence with Mitt Romney if he's elected president."

Andrea Saul, a spokeswoman for Romney's campaign, rejected such assertions and said that the state committees "were completely separate entities having nothing to do with this campaign."

"We follow the letter and the spirit of the law," she said.

She declined to comment on details of Romney's fundraising, but said that "more than 125,000 Americans" have contributed to his campaign because they support his desire to make America "prosperous and secure."

Small donors, however, have played a marginal role in backing Romney. Through Jan. 31, his campaign collected more than 79 percent of its cash from those who gave $1,000 or more.

Romney's fundraising operation has included:

_ The committees formed in Iowa, New Hampshire and other early primary states beginning in 2004, skirting the $2,500 federal campaign donation limit long before court rulings unleashed a torrent of six- and seven-figure presidential campaign checks this year. The state committees raised more than $8 million and bankrolled pollsters, staffers and political consultants back in Massachusetts, where Romney's campaign would later be based. They also doled out more than $1 million to local and state politicians — largesse that wasn't always rewarded.

_ The Free and Strong America federal political action committee, which was organized to mirror the leadership PACs set up by scores of members of Congress. Since 2007, this PAC has raised $14 million, much of which funded Romney's profile-raising travel and political machinery before he became a candidate. The committee also has donated $1.2 million to Republicans holding or seeking congressional seats — $772,000 to 257 recipients in the 2010 election cycle alone.

_ Romney's presidential campaign, a fixture dating to Jan. 3, 2007, when he launched his first presidential bid, spent $105 million, including $44.6 million of his own money, in losing the GOP nomination to Arizona Sen. John McCain. Among the biggest donors to the current campaign, which has raised $62 million so far, have been executives of the Wall Street giant Goldman Sachs and Bain Capital, the private equity firm Romney co-founded.

_ Restore Our Future, the independent super PAC run on behalf of Romney that has to date reported raising $36.8 million from a few dozen large donors, including $3 million from Romney's former Bain colleagues and their wives. The committee has become the chief vehicle for bankrolling broadcast ads attacking Romney's rivals in primary states.

Steven Schier, a political science professor at Carleton College in Minnesota, said the record illustrates that "Romney has been aggressively pursuing ... and exploiting" loopholes in federal and state campaign fundraising laws.

Since Texas Gov. Rick Perry dropped out of the race, none of Romney's GOP opponents has been able to compete with his $100 million fundraising machine. Former Pennsylvania Sen. Santorum's campaign and main super Pac have raised a combined $9.5 million through Jan. 31. Texas Rep. Ron Paul and his super PAC have garnered $34.3 million. Former House Speaker Newt Gingrich's campaign and super PAC have rung up $31.2 million.

Schier said that without Romney's personal wealth and financial connections, "I don't even think we'd be talking about Mitt Romney today as a candidate. Take it all away and where is he? He's nowhere."

To whom might Romney owe favors? Goldman Sachs not only wrote his 2008 campaign a $2 million loan but its executives have donated more than $1 million to his two presidential campaigns and his federal PAC since 2008, according to a McClatchy analysis of data gathered by the Center for Responsive Politics.

The same committees collected over $650,000 from Bain Capital and its predecessor firm, Bain & Co.

Those are among a dozen major banks, hedge funds and private equity firms, some of which share a strong interest in preserving a special 15 percent tax rate on much of their income, that have given Romney's federal committees over $4 million.

Those donations, however, are outstripped by those arriving at the super PAC Restore Our Future, which collected $1 million each from at least 10 donors or couples, including New York hedge fund figures John Paulson, Paul Singer and Julian Robertson, and Romney's former Bain colleague Edward Conard, as well as Bain Capital Partner Paul Edgerly and his wife, Sandra.

Romney was in his second year as Massachusetts' governor in 2004 when his operatives took what critics call unmistakable steps to lay the groundwork for a presidential run by forming the first of a half dozen so-called "Commonwealth" committees.

By 2006, six of the committees were raising money in Iowa, New Hampshire, South Carolina, Michigan, Arizona and Alabama. Soon, they temporarily changed their names to Free and Strong America PACs, matching Romney's federal committee, with the stated purpose of supporting state candidates favoring limited government.

The first donor listed by the Iowa committee in the fall of 2004 was businessman Darrell Crate, a former chairman of the Massachusetts Republican Party who is now treasurer of Romney's presidential campaign, state campaign filings show. Crate's $6,500 donation was accompanied, on the same day, by $6,000 from Robert White, a co-founder of Bain Capital and close Romney friend who is a part owner of the Boston Celtics. More than $22,000 soon followed from others at Bain or its affiliates.

Those donations soon would be dwarfed.

A committee formed in Alabama, which places no limits on the size of contributions, reported in 2006 donations of $100,000 each from Goldman Sachs managing director Muneer Satter and B. Wayne Hughes, the chairman and founder of Public Storage, $84,330 from billionaire Cincinnati financier Carl Lindner, who has since died, and more than $124,000 from conservative chief executive J. W. Marriott, Jr. of Marriott International and his brother, Richard Marriott. Marshall Wallach, a Denver-based investment banker, gave $86,500, and Texas real estate magnate Bob Perry contributed $80,000.

The New Hampshire Democratic Party, later joined by Alabama Democrats, complained to the FEC that Romney was illegally using the state PACs to aid his presidential campaign. Romney spokeswoman Saul said that the Democratic complaint "has no merit," dismissing it as "a political stunt" initially aimed at ruining a Romney visit to New Hampshire.

The FEC has yet to rule on the complaint, but has never before penalized a presidential candidate for using state committees. The commission consists of three Republicans and three Democrats and often has been stalled by partisan impasses.

The consumer interest group Public Citizen, after obtaining the records of secret FEC votes through the Freedom of Information Act, recently reported that votes on enforcement matters ended in deadlocks 109 times from 2003 through 2010.

Despite its donations, the pro-Romney's PACs had mixed results in wooing endorsements.

From 2004 to 2010, the Iowa PAC gave $541,000 to county Republican committees and GOP candidates for the state legislature and statewide office, topped by $130,000 to former congressman Jim Nussle's 2006 gubernatorial campaign. Romney's PAC and Nussle even worked together to fund five county Republican operations. Nussle lost the governor's bid and then endorsed Rudy Giuliani in the 2008 presidential race.

In 2010, the Iowa PAC gave $30,000 to Terry Branstad's successful bid to return to the governor's office. Branstad, however, declined to endorse anyone before the recent Iowa caucuses, which Romney barely lost.

In South Carolina, where Romney's election prospects were bleaker, his Commonwealth PAC raised less money and donated modestly, except for a $4,000 contribution to Tea Party candidate Nikki Haley before she won the governorship. Haley has endorsed Romney.

In Michigan, Romney won endorsements from seven U.S. House members who got $2,500 in 2010 from his federal PAC, but donations of $4,500 each in 2010 and 2011 to Reps. Candice Miller and Justin Amash went for naught. Miller endorsed Perry and Amash backed Paul.

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Reply Thu 29 Mar, 2012 01:58 pm
Mar. 28, 2012
How Mitt Romney wielded power as Massachusetts' governor
Lesley Clark | McClatchy Newspapers

BOSTON — In 2006, 12 tons of concrete dropped from the roof of a tunnel on a major Massachusetts artery, killing a woman and terrifying drivers. Gov. Mitt Romney cut short a New Hampshire vacation and raced back to work.

The Republican governor promised a top-to-bottom review of the project, pressed for emergency legislation and the ouster of the turnpike's director. He held press conferences and briefed lawmakers, displaying a flair for detail.

"He called me in for a meeting, I figured there'd be engineers and contractors, but the governor did the whole show," said state Sen. Steven Baddour, the Democratic chair of the transportation committee. "He walked us through what had transpired and why. What had happened to the epoxy that was supposed to be holding up the ceiling. It was impressive."

The response was vintage Chief Executive Officer Romney. Focused and direct, an approach he honed at the private equity firm Bain Capital and applied to the governorship — with mixed results.

Romney's campaign touts what it says was his success at turning the state's economy around — patching a massive budget shortfall while keeping a campaign promise to not raise taxes. And there's his signature achievement: working with Democratic lawmakers to pass the state's landmark health care law, which he signed in 2006 with the man he'd tried to unseat in 1994, Sen. Edward Kennedy, at his side.

Lawmakers and political observers, though, paint a portrait of a chief executive who was uncomfortable with Massachusetts' clubby politics and never seemed invested in the state.

"Ultimately he's a disappointment because of the great expectations," says Thomas Whalen, a political historian at Boston University. "The general attitude was, this was a stepping stone for him for something bigger."

Republican lawmakers credit Romney's focus on the bottom line for averting disaster when he took office.

"We were in crisis, the budget was in freefall," said Dan Winslow, a Republican state representative who served as Romney's chief counsel for his first two years. "We didn't have political power, we were vastly outnumbered, but Mitt pledged no new taxes and we were able to turn it around."

Policy experts in Massachusetts agree that Romney didn't increase income taxes, but he did increase fees and fines. Business groups also gripe that he raised corporate taxes (the administration says it closed loopholes). They agree he balanced the budget — but note it's a requirement of state law.

The health care law — which came together late in Romney's term — was Romney at his wonky best. He got personally involved in hammering out the complex details of how to provide coverage for the state's uninsured.

But it came together after Romney already had declared he wouldn't seek a second term and as his aspirations for higher office grew more evident. The Boston Globe found he was out of state 212 days his last year in office — including a trip to Ames, Iowa, the site of that state's Republican presidential straw poll — just three weeks after the tunnel accident. Such detours left many in the state frustrated — and the feeling persists.

"Mitt Romney was governor of Massachusetts. Briefly," Rep. Stephen Lynch, a Massachusetts Democrat, said to laughter earlier his month at the legendary South Boston St. Patrick's Day Breakfast.

Romney was elected fresh off his success with the 2002 Winter Olympics from a financial scandal, campaigning as a political outsider. He promised to close the state's yawning budget shortfall and boost jobs. He was the fourth Republican governor in a row: analysts say Massachusetts voters like to keep the overwhelmingly Democratic legislature in check.

Romney elected to forgo a salary and brought an analytical, bottom line-focused intensity to the job, surrounding himself with a tight circle of loyal aides, many from Bain. His Cabinet picks drew plaudits; reflecting, observers said, a preference for competence above ideology. For example, one appointment was Douglas Foy, a leading environmental advocate in the state.

By all accounts he ran a tight ship.

"It was very much the model of a chief executive officer," said Democratic state Rep. Ronald Mariano, the majority leader of the Massachusetts House who chaired the insurance committee when Romney was governor. He rarely met with Romney but dealt with his office and "quickly learned his position by how entrenched his staffers were."

Romney regarded the overwhelmingly Democratic legislature as a foreign country, observers say, and the Democrats felt likewise about him. Romney's presidential campaign boasts that "Mitt cast more than 800 vetoes as he brought conservative principles to state government," but it doesn't mention that legislators voted to override more than 700 of them.

Former Republican state Sen. Brian Lees, who was House minority leader at the time, acknowledged the tension.

"I used to stand up and say, 'He may be wrong a lot, but not every time,'" Lees said.

Romney "certainly didn't like the clubby, good old boys style of politics in Massachusetts, where you solve problems over a few stories and a few beers," said Tufts University professor Jeffrey Berry. "He was business world. You go in and do a deal, you don't have to be friends."

His approach was not always well received.

An early effort to redesign the state's sprawling education system landed with a thud. The administration had turned to what it knew best — a consultant — and delivered a data-driven analysis to a state House more accustomed to clubhouse politics than boardroom deals.

"It was done the way you'd do it if you were deciding what to invest in," said Michael Widmer, a veteran statehouse watcher with 40 years at the Massachusetts Taxpayer Foundation. "The actual input from the education community, from the stakeholders, was minuscule, if any. It went nowhere."

Officials from cities and towns say they were forced to bear the brunt of Romney's cuts, and Boston's Democratic mayor, Tom Menino, said he's baffled as to why Romney wanted to be governor.

"He was concerned more about the bottom line than anything else," said Menino. "All we ever heard is what he was going to cut, cut, cut. I didn't hear anything about creating housing, improving education, helping people."

Even though Romney campaigned as business friendly, tax activist Widmer said business groups were angered by a move to raise corporate taxes — without alerting the business community.

"Most governors would give a call: 'Hey, here's a heads up for what we're going to do," Widmer said. "The Romney administration did very little to seek input, and that style would prevail."

Beth Myers, a former Romney chief of staff who now serves as a senior campaign aide, pushed back against suggestions that Romney had raised corporate taxes, contending that his administration had targeted tax loopholes that were "pretty glaring."

She also rejected suggestions that his administration was insular, saying its approach was "exemplified by the health care law," when it "reached out in every direction," including talks with the medical community, legislators, insurers and the insured.

Myers described Romney as analytic and focused, noting that he developed benchmarks to measure the administration's progress toward its goals.

"He looked at the budget, the number of employees, what kind of services are you providing, are you doing your job, are you doing it with fewer people and are you doing it within your budget," she said. "Those are the kinds of things he cared about and those were the things we measured."

Still, lawmakers say relations could be frosty. House leader Mariano notes that before the jubilation over passing the health care law had faded, Romney made it clear to House leaders that he planned to veto eight sections of it, including a requirement that businesses offer insurance or pay a fee. Critics saw Romney's stand as a sop to conservatives as he prepared for a presidential bid.

"I was so angry I wanted to gavel back into session that moment" to override the veto, said Mariano.

Lawmakers also were put off by what they perceived as slights, including the administration's move to reserve an elevator in the state House for the governor by blocking it with a red rope. Some lawmakers say Romney didn't bother to get to know them. Democratic state Rep. Kathi-Anne Reinstein, who was elected to the House in 1999, said three years into his term Romney greeted her as a new face at an event for new members.

"I said, 'Governor, I was here before you,'" she said. "And I knew I'd be there after him. There was just a sense he didn't want to be bothered with us. You could feel it."

Mariano said Romney liked elaborately staged press conferences. Lawmakers were instructed where to stand — their spots often marked with masking tape.

"There was nothing ad-libbed about him," Mariano said.

Former Romney counsel Winslow said the governor was not a "backslapper, not a good old boy," but had productive relationships with the two lawmakers who mattered most: House Speaker Sal DiMasi and Senate President Robert Travaglini.

"In terms of legislative relationships, he focused on what he needed to do to get the job done," Winslow said. "He could've been best buddies with the back benchers, but at the end of the day, they would've voted with the speaker and the president.

"He knew who he needed to know," Winslow said of Romney. "Everyone else is just a munchkin."

Winslow attributed much of the opposition to partisan politics. He said that Romney — who was always looking to cut back government — proposed merging the state's transportation agencies to improve efficiencies. Lawmakers balked then but went along with it under Romney's successor, Gov. Deval Patrick, a Democrat.

Winslow describes Romney as a manager who expected solutions. He credited Romney for settling a bitter police union dispute ahead of the 2004 Democratic National Convention.

"He was clear to his team, 'Guys, just get it done, solve the problem,'" Winslow said.

Political observers speak of the 2004 election as a turning point. Hoping to boost the number of fellow Republicans in the state House, Romney launched an aggressive campaign that fall, recruiting candidates and spending an estimated $3 million.

He suffered a crushing, embarrassing defeat: Republicans ended up with a net loss of seats.

Even as he campaigned for governor in 2002, there was speculation that Romney wanted the position as a launching pad for higher office. But critics say it became apparent after the election.

They say he tacked to the right on a host of social issues, including abortion, gay marriage and climate change, developing a reputation for changing his stance to fit the audience. But Lees said that Romney's positions have evolved, not that he's flipped.

"Isn't that a good thing, for your positions to evolve?" Lees said.

Romney also turned his focus to securing a win on health care, becoming "seriously, heavily, publicly engaged" when it became apparent that the state could lose nearly $1 billion in federal Medicaid dollars without a fix, said John McDonough. He's director of the Center for Public Health Leadership at the Harvard School of Public Health and helped devise the health care law when he ran the consumer group Health Care for All.

"He's strategic. He picks his target and he works toward it," McDonough said. "He's a CEO, all the way. He surrounds himself with smart, capable people, he gives orders and it gets carried out."

Skeptics say that Romney assessed the damage after the 2004 election and decided he needed a singular achievement — a health care overhaul — before leaving office.

But Romney wrote in his book, "No Apology," that he started "without fanfare or public announcement" to "see if we could find a way to insure the uninsured and make sure that no citizen in our state would ever need to worry about losing their health insurance."

Romney had willing partners: Kennedy was eager to see a health care expansion enacted, and Senate President Travaligini had a proposal of his own. Those who worked with Romney describe him as a tenacious champion.

"He is the hero of health care reform, we don't have health care reform without him," said Massachusetts Institute of Technology economist Jonathan Gruber, a Democrat who helped shape Romney's plan and later advised the Obama administration on its proposal.

Gruber, who met Romney only once, describes him as "incredibly pragmatic and really interested in solving puzzles."

Romney tussled with his policy advisers during their two-hour meeting, Gruber said, explaining to them how the health care plan would work.

"It was like a meeting with an engineer, or a management consultant," Gruber said. "He was explaining to them, 'Check this out, see how this would work.'"

The governor also did some lobbying on his own. Late in the process, with the legislation stalled over a controversial provision, Romney went to the homes of the House speaker and the Senate president to push for a deal.

"For a guy who was pretty aloof most of the time, to travel to East Boston and the North End, that said something," says Maurice Cunningham, a political science professor at the University of Massachusetts at Boston. "He really got into his head that this needed reform, and when he's committed, he learns it and he works it, inside and out."

Romney's pride in the law is evident in Boston. His official state House portrait features him perched in front of a desk, on which sits a picture of his wife, Ann, and a leather folder embossed with a medical seal — representing the health care law.
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