Institutionalizing the buying of elections

On the evening of June 29, Amedeo Scognamiglio, a jewelry designer on the Isle of Capri, met friends for drinks at the elegant Grand Hotel Quisisana. Around midnight, Scognamiglio says, “I noticed some familiar American faces.”

He took to Twitter. “What,” he wanted to know, “is Karl Rove doing at the Quisisana with Steve Wynn?!” The answer came zinging right back from @KarlRove: “Part of a group enjoying really good Bellinis on a beautiful Capri night!” Bloomberg Businessweek reports in its July 30 issue.

Rove is a tech-geek. On Sept. 11, 2001, he was the only White House staff member connected to BlackBerry e-mail on Air Force One as the plane ferried President George W. Bush back and forth across a panicked nation.

When he made his Bellini Twitter message, Rove was on the Amalfi Coast honeymooning with his third wife, Karen Johnson, a Republican lobbyist. On Twitter, Rove didn’t refer by name to Wynn, though the two men are friends. Earlier in June, the casino mogul joined a select group of guests at the Rove-Johnson nuptials in Austin. All of this, be assured, has more than gossip-page significance: Wynn is just one of many mega-wealthy backers whose enthusiasm and checkbooks have fueled a Karl Rove Renaissance that’s redefining the business of political finance.

The bespectacled 61-year-old, once known as Bush’s Brain, left the White House five years ago. His patron was sinking in the polls, and Rove himself had barely escaped criminal indictment. Now he’s back -- big time, as his friend former Vice President Dick Cheney might say.

In a performance that rivals Rove’s nurturing of a famously inarticulate Texas governor into a two-term president, the strategist is re-engineering the practice of partisan money management in an effort to drum Barack Obama out of the White House.

Consider the case of Wynn, the founder, chairman and chief executive officer of Las Vegas-based Wynn Resorts Ltd. Variable in his political allegiances, the gambling magnate has said publicly that he voted for Obama in 2008, only to change his mind over what he came to perceive as the president’s regulatory hubris.

In swooped Rove. As first reported by Politico, he persuaded Wynn that the best way to oust Obama was to contribute millions of dollars to a Washington-based group Rove co-founded in 2010 called Crossroads GPS.

Wynn’s preference for anonymity in such transactions posed no obstacle. That’s the whole idea behind Crossroads GPS. Although its initials stand for “Grassroots Policy Strategies,” the organization was set up to receive unlimited, undisclosed contributions from industrialists, financiers, and other loaded insiders such as Wynn.

“We do not comment on specific donations,” says a Wynn spokesman.

In the realm of campaign finance, the Internal Revenue Service classifies Crossroads GPS as a nonprofit, nonpolitical “social welfare” organization -- a 501(c)(4) in tax code parlance -- that doesn’t have to identify its backers.

As they began planning how to make Obama a one-term president, Rove and Gillespie saw most Republican outside organizations as either one-shot affairs, like the Swift Boaters, or preachers to the base that pushed candidates to the extreme right. The anti-tax Club for Growth fit in the latter category. Some wealthy political benefactors had their own groups, Rove says, most of which were run by a single strategist who siphoned off enormous fees for as long as the sponsor would tolerate it.

Rove pitched his proposed startup as a more professional alternative, one built to have impact in 2010 yet endure long beyond.

“The business model of a consultant-driven, vendor-directed entity that hired itself increasingly lacked credibility with donors and was unsustainable,” Rove explains. Among those who were convinced and made big contributions: Richard Baxter Gilliam, a Virginia coal mogul; Houston homebuilder Bob Perry; and Harold Clark Simmons, a Dallas industrialist.

A vacuum at the once-mighty RNC made Rove’s work easier, and more urgent. At RNC headquarters, Michael Steele, the chairman for the 2009-10 cycle, was ineffective as a fundraiser and prone to mishaps, such as getting into public scraps with the radio host Rush Limbaugh and suggesting that Republicans needed a “hip hop” overhaul.

To guide Crossroads, Rove convened a board of directors of conservative notables -- Chairman Mike Duncan of Kentucky had served as chairman and treasurer of the RNC; Director Jo Ann Davidson of Ohio had also led the RNC and oversaw the 2008 Republican convention -- a signal that it would be beholden to no single candidate or contributor.

The board hired as chief executive officer Steven Law, an affable attorney and campaign veteran who had worked on Capitol Hill for Senator Mitch McConnell, a Kentucky Republican who’s now the chamber’s minority leader, and for President Bush in the Department of Labor. As general counsel of the U.S. Chamber of Commerce in 2007-08, Law spearheaded a successful drive to kill the proposed Employee Free Choice Act, a pro-union measure. The locus of the party’s financial strategizing shifted to Rove’s living room on Weaver Terrace in Northwest Washington.

During sessions of the “Weaver Terrace Group,” representatives of the embryonic Crossroads organization gathered with counterparts from groups such as the Chamber of Commerce, Americans for Tax Reform, and Americans for Prosperity, the funding vehicle affiliated with the billionaires David and Charles Koch. Crossroads served as referee, says CEO Law.

“Conservative activists tend to act like six-year-olds on soccer teams,” he explains, “with everyone grouping around the ball and getting in each other’s way. Karl’s idea was that all of these organizations should share information, coordinate polling, reduce redundancy.”