Behind the grove of pecan trees and the iron gates, behind the whitewashed brick walls that surround the Texas governor's residence, a latticework of scaffolding, gangplanks, and ladders has risen around the fluted columns of the southern-style mansion. But inside there is a different sort of construction project taking shape: the George W. Project. To date it has cost more than $75 million (contributed in support of George W. Bush's two gubernatorial races and his quest for the presidency). And it's been test-run and honed to perfection by its two main engineers. First, there's George H.W. Bush, father of the candidate, whose pedigree has encouraged the Republican Party establishment to anoint his son its standard-bearer for 2000; and then there's Karl Rove, a savvy Texas political consultant and former Philip Morris intelligence operative who believes George W. is the one-size-fits-all presidential candidate for the millennium.
Bush's critics like to say that he is all style and no substance, that he's determined to appeal not only to every faction of the fractured GOP, but to independents and moderate Democrats as well. The irony is that his supporters don't seem to see things all that differently. To them, issues are less important than whether Bush has the combination of name recognition, personality, and fundraising ability to make him a winner. And enough establishment blue-bloods and Big Business types have already gotten on board that Bush's fundraising team has been able to assemble a formidable array of financial backers. "Bush," says one Democratic political consultant from Austin, "is coming to symbolize the Restoration: he's well-born, Christian, white—and they all say, 'He's one of us.'"
How different, in substance, is Bush's "compassionate conservatism" from the mean-spirited, curdled conservatism espoused by the Republican revolutionaries of 1994?
Thus far, Bush's compassionate conservative political brew has enabled him to finesse most of the abrasive wedge issues favored by social conservatives such as immigration, race, and abortion while, at the same time, downplaying, ignoring, or outright contradicting the IRS-abolishing, flat tax-propounding faction of the GOP's economic right. He's jettisoned the red-meat issues which repel swing voters and fill Republican fire-eaters with glee; and in so doing he has positioned himself as the champion of country club Republicanism and of its coterie of big-dollar campaign contributors, who support his agenda of cutting taxes, slashing welfare, backing tort reform, deregulating industry, and privatizing just about everything.
That is the sort of agenda Bush has pursued as governor of Texas. "In many ways," he told the Los Angeles Times last May, "public policy ought to bypass all government and focus on individuals." He has sought draconian changes in the state's welfare system, proposed a series of regressive tax cuts centered on reduced property taxes, and suggested that Texas privatize its education system through a controversial system of taxpayer-funded vouchers. He has also been engaged in a bitter and long-running battle with the Texas AFL-CIO from virtually his first months in office, over a wide range of issues; and he has angered environmentalists by caving in to the state's oil and chemical industry by supporting voluntary, rather than mandatory, emission standards for polluters. He has refused to ameliorate Texas's nation-leading penchant for executing wrongdoers and, according to civil rights activists in Austin, refused entreaties to reform the state's broken parole and pardon system. All of this, while stressing the importance of religion-oriented, "faith-based" alternatives to social service programs.
Ironically, one of the most telling aspects of Bush's tenure as governor is that, for all his talk of compassion, he has been most consistently stingy on policies affecting children. In 1999, he vigorously supported voucher legislation that would have allowed children from 80 public school systems in Texas's six largest metropolitan areas to opt out of the public school system with taxpayer-backed tuition credits. But despite the millions of dollars poured into lobbying for vouchers by the likes of Texas millionaire and Christian conservative voucher enthusiast James Leininger, the idea failed to make much headway in the legislature, where opponents warned it would drain money from public schools and erode support for public education.
Even more troubling was the governor's decision to try to block coverage for 200,000 children under the federally funded Children's Health Insurance Program (CHIP). Passed in 1997 on a bipartisan vote, CHIP is one of those programs that uses government money to help the children of parents who work but still can't afford health insurance—the sort of effort that a lot of Democrats and Republicans can feel good about voting for.
A number of states with Republican governors have been aggressively implementing the program. And the law would have allowed Texas to insure families at up to 200 percent of the poverty line while ponying up only 26 percent of the funds. Texas is hardly short on cash: the state is currently sitting on a $2 billion budget surplus and has billions more pending from its successful suit against the tobacco companies. But instead of trying to implement the program with the available federal funds, Bush instead proposed covering only those families up to 150 percent of the poverty line. As Cindy Mann from the Center on Budget and Policy Priorities put it, "They did the smallest amount they could without losing their claim to the funding."
So why did George W. pass on federal funds for what is clearly a pressing problem in his state (Texas ranks second in numbers of children left uninsured)? One reason, certainly, was that he was very focused on passing a $2.7 billion tax cut before heading out on the campaign trail. Another was that Texas conservatives, and those in the nation as a whole, are strongly opposed on principle to further state, let alone federal, involvement in the provision of health care and health insurance. But whichever reason was paramount, his decision makes crystal clear that for George W. Bush, compassionate conservatism doesn't preclude placing tax cuts and principles over helping the children of working families get health care, even at a time of unprecedented national prosperity.
An all-points privatization thrust will likely be the signature theme of a George W. Bush presidency. As his campaign geared up, Bush endorsed privatization of Social Security and supported privatization of Medicare through so-called medical savings accounts and a premium support system designed to facilitate the proliferation of for-profit managed care companies in Medicare contracting. Several years ago, he battled (and lost) in an effort to privatize Texas's welfare system by allowing contractors like Lockheed Martin to determine the eligibility of Texas welfare and food stamp recipients. And a centerpiece of Bush's term as governor has been an unceasing campaign to encourage religious groups to provide a range of social services, such as child care, job training, and prison counseling. Intermixed with frequent references to his own faith, and to how he "came to the Lord" in the mid-1980s after a weekend with Reverend Billy Graham, Bush constantly trumpets his support for "faith-based initiatives." A great deal of it is inspired by Indianapolis Mayor Stephen Goldsmith, now Bush's chief issues strategist, whose support for privatization and faith-based services has become the governor's model.
What's novel about "compassionate conservatism" is the effort to repackage socially moderate money conservatism as a forward-looking philosophy of government. And much of that repackaging comes by way of Karl Rove, the man who hatched the idea of enveloping George W. in the mantle of compassionate conservatism in the first place. It was Rove who took the inexperienced and untested Texas governor and transformed him into a front-running candidate by playing on the GOP's passionate desire to nominate a winning presidential candidate in the year 2000. While the Sphinx-like Bush kept silent on many national issues (and many Texas ones too), Rove built up an aura of inevitability around his candidate with a well-orchestrated drumbeat of endorsements from what seems like almost every living elected official and political operative in the Republican Party.
Rove has been more than the virtual alter ego for George W. during his political career, he has also been a key player in the astonishing growth of the Texas Republican Party. In the mid-1970s, the Texas GOP boasted only one senator, two members of the House of Representatives, and no statewide office holders; today, both senators, 13 members of Congress, and all 29 statewide elected officials, from governor on down, are Republicans. Most of them—such as Lieutenant Governor Rick Perry and Attorney General John Cornyn—were Rove clients. And when George W.'s presidential prospects started to brighten back in 1997, Rove played a key role in applying a veneer of credibility for George W.'s electoral repositioning. He created what amounted to a one-student seminar in conservative policy studies with appearances by intellectuals and theoreticians like Myron Magnet of the Manhattan Institute, author of The Dream and the Nightmare, and Marvin Olasky of the University of Texas, author of the similarly minded The Tragedy of American Compassion.
Magnet, whose book is a screed against the culture of the 1960s, met with Bush about a year ago, in a meeting set up by Rove. Magnet's thesis is that the "dysfunctional culture" of the 1960s is largely to blame for the burgeoning of the "underclass." Referring to Bush's well-known history of having lived a somewhat wild and reckless young adulthood, Magnet says, "He has the fervor of a convert. He lived through the '60s and saw the error of his ways." The cause of society's woes, he says, is that the anything-goes philosophy of the Woodstock generation filtered down to the poor, who stopped taking responsibility for their own actions—especially when it came to having children out of wedlock. "(T)he new culture held the poor back from advancement by robbing them of responsibility for their fate and thus further squelching their initiative and energy," writes Magnet. "The new culture told the Have-Nots that they were victims of an Unjust Society." Asked whether his work had influenced Bush, Magnet says, "Karl Rove told me that it had quite an effect on him."
For Olasky, welfare represents "false compassion," a system that must be replaced with "warm-hearted but hard-headed" free market approaches that make use of church- and faith-based services. Olasky says that he rejects the "social Darwinist" Republicans, who would cut welfare and let people fend for themselves, for "Biblical conservatism." He says that he first got together with Bush in 1993. "Karl Rove called, and we met over in Karl's office," Olasky recalls, adding that Rove is a "thoughtful guy" who was able to "translate [my] ideas into practical proposals." The result: Attempts to reduce spending on welfare, prison counseling, schools, and drug rehabilitation while bringing in religious groups and providers. Olasky is the first to admit that traditional, business-oriented GOP types see the utility of his ideas, whether or not they necessarily agree with his approach. "Some of them who saw this as a bunch of nonsense still saw it as politically useful," he notes.
One conservative who certainly sees it as quite useful is Grover Norquist, Rove's friend who heads Americans for Tax Reform and who was closely associated with Newt Gingrich's 1994 revolution. "You can be against welfare because welfare costs money, or you can be against the welfare state because it kills poor people," says Norquist. "One makes you sound like a green-eye-shade Republican, and the other means you're touchy-feely. But to boring people like me who want to know what happens at the end of the day? Same policy."
This is the political stew of privatization, conciliation, and obfuscation that has allowed Bush to lock up the support of most of the party's big money contributors and raise an astonishing sum of campaign cash. But there is a dynamic at work in Bush's startling success that is easy to overlook. What we are seeing in Bush is not so much the work of a consummate fundraiser or master politician as the ability of the GOP's big money establishment to coalesce around one of its own. Indeed, if some Republicans see a potential George W. presidency as a restoration of the pre-Clinton era, a lot of establishment GOPers look upon it as a restoration of their rightful place within the party.
From his very first venture into electoral politics back in 1978, when he ran for an open congressional seat in Texas's Nineteenth District, George W.'s campaigns have run on big checks from well-heeled establishment Republicans and his father's political friends. In that first campaign Bush gathered his campaign's seed money from a network of oil men from the district's oil boomtown of Midland. His first Federal Election Commission report, still visible on worn microfilm at the FEC's public records office in Washington, shows that he raised $13,350 during September and October 1977 from oil interests, a handful of lawyers, his family—various Bushes gave a total of $2,650—and $100 from Harlan Crow, of the Trammell Crow real estate family, who would be consistent financial backers of Bush pere et fils for decades. Over the next 12 months, scores of Midland and Houston oil men would help Bush collect more than $446,000, a very considerable sum then, enough to allow Bush to outspend his ultimately successful rival, Democrat Kent Hance, who raised $314,000.
The hand of the elder George Bush was, of course, also at work, leading political and business associates who wouldn't be expected to contribute money to an unknown candidate in a backwater district, including future Reagan-Bush officials George P. Shultz, Nicholas Brady, and Robert Mosbacher; top executives like A.W. Clausen of Bank of America, Don Kendall of PepsiCo, and members of the Ford Motor Company's namesake family. Not surprisingly, many of these early supporters of George W. show up as backers of his two races for governor and among the early contributors to the Bush 2000 effort.
By 1990, Bush's oil ventures and minority ownership of the Texas Rangers baseball club had made the future governor a rich man, and would soon catapult him into the ranks of the extremely wealthy. That year, aided by Karl Rove, Bush briefly toyed with the idea of running for governor, but passed. Three years later, when he did choose to run, Bush used money to clear the decks of potential GOP rivals; by late August 1993, all of Bush's potential opponents had bowed out, ceding the race to Bush. Presaging the coming together of GOP leaders around Bush in 1999, the Dallas Morning News noted then that Bush had become "the Republican 'golden boy' around whom party faithful are rallying," and the then-Democratic Party chairman said a primary reason was that Bush had "access to tons of money." "Bush scared off some key Republicans with his ability to raise funds," says one leading Democratic consultant. "He went to the big hitters. And having Karl Rove, the architect of the Republican resurgence in Texas, on his side was a big plus."
By the end of 1993, in just three months, Bush and Rove had collected $2 million, and the candidate was well on his way toward a total of $16 million. Under Texas law, there is no limit on the amount that donors can contribute to a candidate, and it is not unusual for a single individual to fork over $10,000 or more. In the 1994 race, the campaign collected 523 contributions of $2,500 or more from wealthy individuals, 127 of whom contributed upwards of $10,000 each, with many in the range of $25,000 to $100,000. Dozens of Bush's 1993-1994 donors were members of President Bush's so-called Team 100, a group of 249 big GOP money men who had contributed at least $100,000 in soft money to support the senior Bush's presidential campaign in 1988. And among these, Trammell Crow and the Mosbachers were backers from Bush's 1978 campaign. "Having supported his father as president," Crow told a reporter in January 1994, "it would be impossible that that wouldn't spill over onto his son."
Right Man, Right Time, Right Wing
Up until George W. won the governorship in 1994 he was simply the favored son of a former president who had benefited mightily from his father's name and big money political connections. But then good fortune smiled on George W. again, in a new way. He emerged as an establishment moderate just as the Republican revolution of 1994 was faltering. By early 1997, it was clear that the rowdy, ultraconservative members of Congress and their backers among the Christian right, the National Rifle Association, and militant, hard-right small businessmen had overreached. After the GOP's 1996 electoral defeat, key members of the GOP establishment, especially a cluster of its wealthy, Big Business contributors and the Washington, D.C., lobbying elite turned against the excesses of the "Republican revolution." In other words, the same sort of establishment Republican money men who had helped George W. so much in the past were now searching for a way to wrest back control of the party.
Among those most concerned was John A. Moran, a Texas oil man and former Republican National Committee finance chairman, who early in 1997 sent a letter to leading Republican money men, including some of the RNC's Team 100, warning that the party was "in jeopardy" because of the "influence of the Christian Coalition and the 'far right.'" "Unless we bring women and moderates back to the Republican Party," added Moran, "it will be a long time before we see a Republican president."
Soon afterwards, Moran helped start the Republican Leadership Council, a collection of moderate Republican office holders backed by an all-star executive committee comprised of blue chip campaign contributors and lobbyists. In writing about Moran's effort to find a presidential candidate with broad, Clinton-like appeal, the Dallas Morning News noted in March 1997, "That is why there is so much talk in party circles these days about Texas Gov. George W. Bush." During 1997 and 1998, many of the RLC's leaders began funneling money into George W. Bush's 1998 re-election campaign. Bush was getting so much attention from well-heeled Republicans from out of state that his 1998 campaign took in three times the amount of out-of-state contributions than his 1994 campaign had. "We're cautiously optimistic," says Matt Miller, executive director of the RLC, when asked whether Bush's candidacy could help wean the party of its far-right proclivities. "He appeals to the entire Republican Party, because he's emphasizing an inclusive message rather than a divisive one."
By 1999, when Bush began his so-called "yellow rose garden" campaign from Austin, the stage was set for the governor's remarkable fundraising offensive. Limited to pulling in maximum contributions of $1,000 per donor, Bush and Rove began amassing money at a record-setting pace, setting a goal of $50 million by the end of 1999. That amount, hinted Don Evans, a Midland oil man who chaired Bush's 1978 congressional campaign and who now runs the Bush 2000 finance effort, might allow Bush to bypass the presidential matching funds system and its attendant campaign spending limits in primary states. Bush raked in the staggering total of about $3 million per week beginning in April and, again, prominent contributors associated with President Bush, including Team 100 players, were in the lead. But Bush was also tapping into Rove's gigantic national database of high-dollar donors, meanwhile building a team of erstwhile fundraisers called "pioneers," each of whom pledged to collect $100,000, and a state-by-state network, built on state GOP machines. Campaign cash is the oxygen of modern American politics; and Bush locked up so much of that money that he left the rest of the GOP field gasping for air.
Chinks in the Armor
With his presidential campaign off to such a promising start, George W. looks almost unstoppable short of an outbreak of scandal or some titanic gaffe on the campaign trail. But for opponents looking for weak spots in the governor's political armor, a closer look at the money politics George W. and Karl Rove have been pursuing in Texas reveals vulnerabilities which could cause him big problems in 2000: the twin issues of tort reform and Big Tobacco. Though Karl Rove has heretofore been best known for his direct mail fundraising skills, from 1991 to 1996 he was a paid consultant on political intelligence for Philip Morris, even as he worked with Bush as candidate and governor to weaken the ability of injured plaintiffs to recover damages in court. Tort reform was considered vital by a wide spectrum of industries in Texas seeking to limit their vulnerability to lawsuits. Bush's school voucher ally James Leininger, for instance, was the largest donor to the PAC Texans for Lawsuit Reform (possibly because one of his companies, Kinetic Concepts, has been hit with lawsuits and FDA complaints that say its high-tech, oscillating hospital beds have thrown, crushed, and strangled patients). But no one has more at stake in tort reform than the tobacco industry—which in the mid-1990s began a life-and-death struggle against a battery of lawsuits by individuals, class action lawsuits, and eventually state-sponsored actions designed to recover taxpayer money spent caring for victims of tobacco.
Rove was Philip Morris's eyes and ears in Texas; and he was irreplaceable. Yet in a deposition two years ago in connection with tobacco wars in Texas, Rove admitted that he had been paid up to $3,000 per month for five years to provide Philip Morris with intimate details about the political landscape in Texas. According to Rove, during that period he was "retained by Philip Morris in an ongoing capacity to basically advise them on elections, to give them my best feelings about what was going to happen in elections, what was shaping up in terms of candidates, political gossip about who was raising money and who was likely to get elected." One early project for Philip Morris, Rove says, was to "compile a list of political or community leaders in select legislative districts . . . and provide an analysis of which of those districts were in play in the '90s." Not only was Rove's work for the firm known to Bush, but throughout this period the tobacco companies were significant donors not only to Bush's campaign treasury but to the Texas Republican Party as well.
Though Rove insists he kept his duties for Philip Morris entirely separate from his work for Bush, there is little doubt that they converged over tort reform. Rove reported directly to Jack Dillard, Philip Morris's representative in Austin, who served on the board of directors of two of the main industry groups supporting tort reform, the Texas Civil Justice League and the Texas Association of Business and Chambers of Commerce (TABCC). And in 1994, under Rove's guidance, Bush made tort reform one of four issues that became the centerpiece of his campaign—along with education, juvenile justice, and welfare.
After Bush's election, in 1995, the Texas legislature passed a wide-ranging package of tort reform bills that Bush eagerly signed, and since then the governor has claimed tort reform as one of the chief accomplishments of his tenure. In 1997, and again this year, the governor backed additional tort reform measures, but with no success.
Both of the tort reform advocacy groups, which were so crucial to Bush's tort reform success, also have ties to Philip Morris. More staid and establishment, and concentrating on old-fashioned lobbying at the state capital, is the Texas Civil Justice League, an Austin-based coalition with 6,000 corporate members, from the Chamber of Commerce and the Texas Medical Association to Shell Oil, Dow Chemical, Pfizer, and, of course, Philip Morris. More feisty and brash, and more connected to the New Right, is Texans for Lawsuit Reform. Founded in 1993, TLR came out of nowhere to emerge as Texas's largest political action committee, spending more than a million dollars per election cycle. (One of TLR's links to Philip Morris surfaced in 1996 when a Virginia-based public relations firm, the State Affairs Co.—later exposed as a secretly funded front group for Philip Morris—joined with Texans for Lawsuit Reform in a campaign to discredit several consumer and environmental groups, including Public Citizen and the Sierra Club, by depicting them as beholden to plaintiffs' lawyers.) Much of the financial muscle for TLR comes from just a handful of conservative political activists, wealthy Texans from industries like health care, oil, and construction that often battle plaintiff's lawyers in cases regarding deaths and injuries involving their workplaces, products, or services. And, many of TLR's biggest backers are also among Governor Bush's leading campaign contributors as well.
These efforts on behalf of tobacco coincided with a lawsuit brought against the tobacco industry by Texas Attorney General Dan Morales, a Democrat, that eventually achieved a settlement bringing Texas more than $17 billion in damages. As part of that settlement, the private attorneys who worked with Morales struck a deal for 15 percent of the take, or more than $2 billion. Not surprisingly, Texans for Lawsuit Reform—along with the Chamber of Commerce and Citizens for a Sound Economy—formed a coalition called Texans for Reasonable Legal Fees to fight the lawyers' commissions. At the same time, Governor Bush took the more surprising step of filing his own lawsuit to block the payment to the lawyers, demanding that it be reduced by more than 90 percent. At the time, Morales—who ended up suing Bush, his own governor, over the fracas—said that Bush's action "is about one thing, and one thing only: a Republican presidential campaign and political contributions from big tobacco."
What made Bush's action even more remarkable is that, were he to succeed, it might blow up the entire agreement, forcing Texas to renegotiate a deal with the tobacco companies that would probably end up causing Texas to lose as much as $8 billion, according to University of Texas Professor Charles Silver, who worked with Morales on the settlement. "My suspicion is that [the tobacco industry] did approach the governor over this lawsuit," says Silver. "They are enormous donors to political candidates in Texas. The tobacco companies, the governor's people, and Attorney General Cornyn's people have been working together all along. I'm not a conspiracy monger, but it's a conspiracy." Cornyn, who was elected in 1998 to succeed Morales, was hand-picked by Karl Rove.
As primary season nears, of course, the scrutiny of George W. will become increasingly intense. Tobacco politics probably won't slip under the political radar as easily as other parts of his money-conservative political agenda. But tobacco and tort reform are merely two on a long list of issues on which Bush will be held accountable, along with education vouchers, the environment, gun control, health care, Social Security, and more. The real question is whether George W.'s opponents will find a way to take him to task for his warmed-over efforts to dismantle or degrade government programs that most Americans support. To do so, Vice President Gore will have to adopt some form of populist, old-style Democratic attack strategy, the kind Republicans love to denounce as class warfare. But with Gore echoing Bush on the value of faith-based services and courting many of the same wealthy backers as Bush, it's unclear whether that will happen. Meanwhile, count on Bush to stay "on message," running as issues-free a campaign as he can.