The Kingmaker
Terry McAuliffe has reinvented the rules of fund raising and
shattered all records, and he has become rich along the way. Is
he the poster boy for reform?
BY MICHAEL WEISSKOPF
If anyone can upstage Bill Clinton, it is the man who pays the
President's way. So when Terry McAuliffe got everyone hooting and
hollering at a Democratic National Committee barbecue last week,
Clinton was clapping the loudest. McAuliffe chaired what was
supposed to be a tribute to the only Democrat twice elected
President in 50 years. But many guests who paid $25,000 a table
at Washington's MCI Center also came to salute that other guy on
the dais: the fund raiser in chief.
Last month Republicans seemed on their way to overshadowing the
king of campaign cash when they raised $21.3 million in one night
for their presidential nominee, George W. Bush. It was the most
ever netted in a campaign event, but that record lasted only as
long as it took McAuliffe to announce his numbers to a standing
ovation Wednesday night. He topped the G.O.P. by 25% and in one
evening brought in a total that almost matched all the soft money
raised by the party in the 1992 presidential contest. "I want to
thank the greatest fund raiser in the history of the universe,"
said Vice President Al Gore, who hopes to boost his presidential
race with TV ads paid for by the proceeds.
Some guests were less sure of Gore's success than they were of
McAuliffe's importance in getting him on his way. In jeans and
cowboy boots meant to mock the G.O.P.'s black-tie formality, they
applauded the man they have come to regard as the party's Lee
Iacocca: the marketer who figured out how to diversify the
product line to attract new buyers. McAuliffe has succeeded in
broadening the Democrats' financial base, which consisted mostly
of organized labor, by selling the "New Democrat" gospel of
Clintonomics to entrepreneurs who have benefited from low
interest rates, investors whose fortunes have grown with the
stock market and trial lawyers who want to protect the right of
plaintiffs to unlimited damages from corporations. What better
evidence of the "Mack Magic," as he himself calls it, than the
balance of heavy hitters lined up for last week's gala: of the 26
donors of $500,000, just over a third represented labor unions.
But the triumph of McAuliffe this week seems on a collision
course with Americans' growing dissatisfaction about the ways in
which campaigns are financed. Voters know instinctively now that
Presidents and politicians may come and go, but the men who
collect the checks and rack up the favors amass the real power.
And so far, none of the proposed reforms from either party would
change that. While Clinton and his kingmaker have reinvented the
rules of Democratic fund raising, that achievement has also
brought scandal to the presidency and left McAuliffe with hefty
legal bills. "When it comes to political money, this is a period
when Rome is burning and McAuliffe is the fiddler," says Fred
Wertheimer of Democracy 21, a nonprofit group dedicated to
tracking the influence of money on politics. Wertheimer is
especially critical of McAuliffe for "connecting six-figure
donors with elected officials in a position to do favors for
them." But McAuliffe argues that what he does is simply grease
the great wheels of democracy. "You need money to get out your
message," he says. But what can donors expect out of their
President in return for their largesse? At most, a social outing
with him, McAuliffe contends.
McAuliffe breaks the mold of Washington fund raisers--and not
just because of the fund-raising records he has shattered. For
one thing, he is not as reserved and staid as presidential
moneymen tend to be. He once wrestled an alligator for a $15,000
contribution. He invites reporters, including this one, to watch
him do his thing. And he brags about his fund-raising prowess.
Deposed by G.O.P. investigators during the Senate's 1997
campaign-finance probe, he called himself "the guy who jumps out
of planes and falls through burning buildings" for political
cash.
McAuliffe is the rare moneyman who has linked his personal life
with his President. Not since Hollywood mogul Arthur Krim roamed
the Lyndon Baines Johnson White House has one fund raiser done so
much for one political family. He has raised more than $300
million for Clinton causes, including the presidential library
($75 million), Clinton's legal bills ($8 million), Hillary's
Senate campaign ($5 million) and the President's millennium
celebration ($17 million). When no one else came through to help
the First Family buy a house in New York's Westchester County,
McAuliffe interrupted a golf game with Clinton to arrange the
$1.35 million guarantee. The Clintons dropped the idea and
pursued a conventional mortgage after being criticized for
accepting such a large gift.
Aclose friendship has grown between McAuliffe and Clinton, two
men who share a passion for food, storytelling, golf,
three-dimensional Scrabble and ironic humor. When the 1994 G.O.P.
takeover of Congress seemed to doom Clinton's hope for a second
term, McAuliffe came to the rescue as finance chair of the
Clinton-Gore re-election campaign, raising cash early to stave
off challenges by Democratic rivals. Since then, the President
has turned increasingly to McAuliffe as a trusted adviser as well
as playmate, spending more time with McAuliffe than with anyone
other than his wife and top aides. He was one of three people
Clinton called after falsely testifying in the Paula Jones
deposition in January 1998. McAuliffe kept up the President's
spirits and immediately forgave Clinton after his public
confession scattered other friends.
The friendship has turned McAuliffe into the man to see in
Washington, which explains the procession of lobbyists and
diplomat-wannabes who stop by his reserved tables at two favorite
luncheon haunts, the Palm and the Oval Room. Like every other
presidential fund raiser, he has a say in political appointments.
For ambassadorial jobs, Clinton has been known to give aides a
list of candidates and ask, "What does Terry think?" McAuliffe is
a centrist who claims he never takes up "issues" with the
President. But Democratic sources say he can take credit for
about 25 diplomatic postings from Madrid to Malta to the
Dominican Republic.
McAuliffe's success lies partly in the fact that he can tap the
treasuries of both labor and industry, the far ends of the
Democratic empire. While one of his mentors, former House whip
Tony Coehlo, got Washington lobbies to spread their largesse to
probusiness Democrats in the 1980s, young McAuliffe hit the road
to find new donors in law firms, mid-size businesses and real
estate brokerages. His recruits were people who were reliable
voters but were sometimes excluded from the established social
register--Jews, Irishmen and Asians. By 1993, McAuliffe had
boosted ninefold the D.N.C.'s club of business leaders who paid
dues of $10,000 a year. They became the roots of McAuliffe's
money tree, which keeps flourishing thanks to his continuous
stream of small kindnesses. No event passes without personal
thank-you notes to "my guys," as McAuliffe calls them. He attends
out-of-town funerals of their relatives, lines up White House
tours for their friends and arranges presidential notes for
special occasions. He puts together golfing foursomes with the
President. The joke among donors is that McAuliffe runs Clinton's
pro shop. He makes sure that Jews are invited to state dinners
for Israeli visitors and that Irish Americans are invited to
Clinton's St. Patrick's Day fete. He used to send out penny
Valentines every February until the number reached several
thousand.
It was as a favor for a powerful labor boss that McAuliffe agreed
to chair last Wednesday's gala. AFL-CIO president John Sweeney
had become so unhappy with D.N.C. leaders that he threatened to
stop affiliated unions from donating to the party unless
McAuliffe took over its reins. Only he could raise a lot of money
quickly to get Gore on the air during the lead-up to his
nomination, Sweeney argued. McAuliffe was unwilling to take the
full-time job, but he did promise to lead the drive for dollars.
At 9 a.m. on March 27, he and associate Peter O'Keefe sat around
a small table in D.N.C. chairman Ed Rendell's office. With an
alphabetical list of 150 names culled from McAuliffe's Rolodex,
they focused on Clinton's biggest helpers of 1996. The first call
went to Dan Abraham, chairman of Slim-Fast Foods Co. McAuliffe
told him about the tribute and asked, "If the world blew up
tomorrow, Danny, what can I put you down for?" Abraham promised
to send a check for $500,000 the next day.
McAuliffe racked up more pledges: $250,000 from Elaine Schuster,
wife of a Boston real estate executive who was honored by the
appearance of Hillary Clinton at a hospital tribute to her;
$500,000 from Chris Korge, a Miami lawyer who had a golf outing
with the President set up by McAuliffe. On Day Two, he visited
Sweeney. "John, as you can see, I'm here," he said. "You can
trust it." The labor boss signed on, clearing the way for about
$3 million in contributions for the gala and sending McAuliffe
back to the phones. For the next eight weeks, he led a team that
made about 200 calls a day. The scene could have passed for a
bookie operation, with lines jangling and commitment sheets
flying across the table. When he exhausted his own list,
McAuliffe was supplied with the names of past contributors.
Two weeks out, they had promises of $25 million but far less in
hand. It was collection time, a chance for McAuliffe to
demonstrate his trademark blend of cajoling and ribbing and his
use of fund-raising argot--an old hand never needs to say the
last three digits of the big dollar amounts. "You all pumped up
for the event?" he asked Niranjan Shah, an engineering-firm
executive in Chicago. "You got your 100 done?" Pause. "No, you're
right. You don't have a choice." O'Keefe found sport in the next
call as he dialed Cincinnati lawyer Stan Chesley. "Ten bucks you
can't close this guy," he dared McAuliffe. McAuliffe liked the
bet, nodded and picked up the line. "Stan, have you got 50 out
there for me? That's all I'm asking." McAuliffe's face lit up. "I
love you. You'll get it in before May 24. I thank you for your
$50,000 check. You'll be in all the action. You'll go arm to arm
with me in every event." The understudy threw several dollar
bills across the table. "I love spanking you young guys,"
McAuliffe said. "Twenty-one years I've been doing this, and they
try to smoke the Mack."
McAuliffe learned the art of banter across the dining-room table
of the modest home he grew up in in southwest Syracuse, N.Y.
Terence Richard McAuliffe, the baby of the family, took an early
interest in politics. Father Jack, treasurer of the Onondaga
County Democratic Party, took the boy to fund raisers at age five
and gave him tickets to sell a few years later. One of his dad's
mottoes sank in. "You gotta show up" to gain the trust of people,
he would tell young Terry. Jack, who earned a living in real
estate, was the original networker, using his patronage and wide
contacts to find jobs for people. Mother Millie pressed the work
ethic with Terry, who by 14 had started his first company,
sealing driveways with tar. He made his first $1 million 11 years
later by investing those profits. Along the way, he graduated
from Catholic University in Washington and in 1979 got his first
job in politics working to re-elect President Carter. When the
campaign's Florida finance chair, Richard Swann, asked Washington
for help on a fund raiser, he got a 22-year-old kid named
McAuliffe. Breaking a record for the event, McAuliffe was sent to
California, where he worked closely with a pair of fund-raising
legends: Hollywood's Lew Wasserman and San Francisco real estate
magnate Walter Shorenstein. By the general election, McAuliffe
was the top fund-raising member of the staff at the D.N.C.,
wearing fake horn-rimmed glasses to look older. Something else
came out of McAuliffe's Florida initiation: a marriage to Swann's
daughter Dorothy, with whom he has four children.
McAuliffe earned a law degree from Georgetown University, but
except for a brief stint in a lobbying shop, he spent most of his
early years not making money but raising it. And that is perhaps
McAuliffe's most distinguishing feature as a moneyman--what
separates him from those who've gone before him. People like
Wasserman were multimillionaires before they got into politics.
McAuliffe has done it the other way, using his political contacts
to become a multimillionaire. In 1995 he acquired a bankrupt
home-building business in Orlando, Fla., with the help of
American Financial Corp. after soliciting its owner, Carl
Lindner, for the D.N.C. "People like to do politics with me, and
they like to do business," he says. Now that he's worth tens of
millions, he says he's in a position to meet the donors as peers,
exchange stock tips with them and serve on their boards. His
wealth, he says, is the best argument for why he can't possibly
extract much personally from his closeness with Clinton. "There's
nothing he can do for me except be my friend," said McAuliffe.
McAuliffe's sprawling network of friends is one reason he has
managed to escape the legal trouble that has sometimes befallen
other moneymen. His relationships extend to top Republicans who
came to his rescue during the Senate probe of White House coffees
in 1996. When G.O.P. investigators found alleged discrepancies in
McAuliffe's deposition, sources say, allies of Republican Party
chairman Haley Barbour persuaded Senate Republican leaders to
take him at his word. It worked. McAuliffe wasn't even called as
a witness at the showcase hearings held in 1997.
But in weaving his business success out of his political one, he
has had other questions to answer. The Labor Department has
examined his role in getting an old campaign pal in control of a
union pension fund to join McAuliffe in a Florida land deal. The
fund, which provided nearly all the capital in an equal
partnership with McAuliffe, bought back his shares for more than
$2 million--a move the department called imprudent but did not
blame McAuliffe for. Likewise, when Prudential Insurance Co.--a
generous donor to both parties--paid McAuliffe $375,000 to help
secure a government lease, U.S. prosecutors in Washington fined
the firm but found no problem with McAuliffe.
His business-political nexus came up again in the federal
investigation of Teamster efforts to swap contributions with the
D.N.C. in the 1996 campaigns to re-elect both Clinton and union
boss Ron Carey. McAuliffe had worked on a high-paying corporate
issue with a political consultant who later hatched the swap plan
on behalf of the Teamsters. But McAuliffe told prosecutors he had
never agreed to a trade and says he has not heard from them
since.
So McAuliffe keeps on his wild money ride. Last week he was back
on the job meeting with Boston financier Howard Kessler, with
whom he has investments. Of course, the two men had something
else in common: a $100,000 check Kessler had recently sent to the
D.N.C.
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Kadosh, Kadosh, Kadosh, YHVH, TZEVAOT
FROM THE DESK OF: <[EMAIL PROTECTED]>
*Mike Spitzer* <[EMAIL PROTECTED]>
~~~~~~~~ <[EMAIL PROTECTED]>
The Best Way To Destroy Enemies Is To Change Them To Friends
Shalom, A Salaam Aleikum, and to all, A Good Day.
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