The Intimidation Game

by Kimberley Strassel

  The operating words here are “short-term.” For it happens that even as the FEC and Republicans were duking it out, a retired rear admiral by the name of Roy Hoffmann had himself discovered the merits of a 527. Hoffmann patrolled the Mekong Delta on Swift Boats during the Vietnam War. In early 2004, historian Douglas Brinkley published Tour of Duty, an account of Senator John Kerry’s “heroic” Vietnam service. Hoffmann read it. He didn’t like it. He remembered Kerry criticizing his fellow servicemen in the 1970s when he was spokesman for Vietnam Veterans Against the War.

  Mr. Hoffmann started calling fellow Vietnam veterans. The result was Swift Boat Veterans for Truth (SBVT), a 527 group that would receive generous conservative funding. SBVT launched a campaign against Kerry’s presidential bid, with hundreds of Swift Boat sailors signing a statement accusing the nominee of both distorting the conduct of his fellow servicemen and overstating his own contribution to the war. The group would continue to go after Kerry, publishing a book and running extensive advertising hitting him in swing presidential states during the campaign. The allegations caused a firestorm for the Democrat, who spent no small amount of time attempting to rebut the claims. And this time it was Democrats who went running to the FEC; liberal groups like Democracy 21 filed complaints with the FEC, as did the Kerry campaign itself. (The Bush campaign, for the record, also filed complaints about left-wing 527s. Tit for tat.)

  John Kerry lost the 2004 election, for a myriad of reasons, of which the Swift Boat allegations were but one. Democrats knew Kerry’s many flaws, but they needed someone or something to blame for his defeat, and they latched on to SBVT. Conveniently forgetting that Kerry had benefited immensely from their own well-funded 527 groups, the liberal left decried SBVT as a return of big and ugly money in politics, a skirt-around of all their carefully crafted finance rules.

  It’s worth noting the depths to which Democrats internalized SBVT as their downfall in 2004. They turned the organization into a verb, referring to any political attack that they viewed as unfair as “swiftboating.” They particularly resented the nature of the attack. Democrats had banked that Kerry, as a veteran, would prove a shield against the public perception that Democrats were weak on national security, especially after 9/11. And they were furious that Republicans had outmatched them in the 527 game, which they’d carefully nurtured as their path to the White House. Years later, the bitterness lingered. When Bush in 2007 nominated naval veteran and businessman Sam Fox as ambassador to Belgium, Kerry led Democrats in a filibuster. Connecticut senator Chris Dodd would spit that he could never give approval to Fox because of his “unwillingness to express regret for providing $50,000 to bankroll” SBVT. In Dodd’s view, Fox’s willingness to participate in an election made him unfit to represent the world’s greatest democracy.

  SBVT received financial contributions from well over fifty thousand Americans, mostly in small amounts. Democrats nonetheless obsessed on the contributions from a handful of wealthy Republican donors, including Houston builder Bob Perry, oil baron T. Boone Pickens, and businessman Harold Simmons. Soros had single-handedly given more to Democratic 527 groups than all three of those conservatives combined had given to SBVT. But there’s no accounting for a political party scorned.

  So they determined it wouldn’t happen again. Democrats had a good 2006 midterm election; they took control of the House (the first time since 1994), the Senate, and a majority of governorships. The GOP flailed against an unpopular war, congressional scandals, and the perception that it had lost its ability to effectively govern.

  * * *

  The country slid into the 2008 elections. The Democratic Party, and especially its newest force, Barack Obama, wasn’t taking any chances.

  Enter Bauer—who wasn’t taking any chances with Republicans or Democrats. His attack on the Clinton group during the primary caught a lot of headlines, but it wasn’t the first time the Obama maestro pulled this trick. Very early in the primaries, when North Carolina senator John Edwards looked to be a potent force, Bauer took his first steps toward using finance intimidation against an opponent.

  It was late December 2007, and Edwards was riding an unexpected surge in the Iowa polls. He was helped by a lot of positive airtime from 527 groups, one (the Alliance for a New America) run by a former Edwards campaign manager and another funded by the big carpenters’ union. In a memo released five days before the primary, Obama campaign manager David Plouffe took aim at both. Under the title “Flood of Washington Money in Iowa,” Plouffe slammed the “underhanded” financial support. He berated Edwards for exploiting loopholes and hinted that the groups were breaking finance laws. The goal of Plouffe’s memo was twofold: to send a warning shot to the 527s, and to make Obama look pure by comparison (no 527s were supporting him in Iowa). Obama had already joined in the attack, criticizing what he called “huge, unregulated contributions from special interests” and accusing Edwards of trying to get around finance laws. Obama ended up winning the caucuses decisively. Edwards collapsed, and dropped out of the race a few weeks later.

  With Edwards out, Bauer trained his fire on Clinton and her own 527 support. The whole campaign joined in. “News broke yesterday that a few wealthy Clinton supporters are gearing up for a massive spending campaign to boost her chances in the big upcoming contests in Texas and Ohio on March 4th,” Plouffe wrote in a February fund-raising e-mail. Knowing how scarred many Democratic voters still were over the Kerry experience, Plouffe took care to blow the dog whistle. “The so-called ‘American Leadership Project’ will take unlimited contributions from individuals and is organized the same way as the infamous Swift Boat Veterans for Truth.” Bauer would repeat the accusation, calling ALP a “Swift-boat wannabee.” And he issued his threats to haul the group in front of Justice and the FEC.

  All of this was designed to scare off ALP’s donors, and the initial attack nearly worked. The ads that ALP planned for Texas and Ohio didn’t appear for days, and then only after some funding from a large union came through. The threat was particularly rich given that Obama was in these states benefiting from significant independent help himself. The Service Employees International Union (SEIU) had moved to his camp, and was spending some $1.4 million to support his candidacy in Ohio and Texas. A separate 527, the Fund for America, bankrolled (yet again) by George Soros, was pouring money into ads attacking John McCain on his behalf.

  Bauer’s threats against ALP nonetheless did scare donors, and he’d continue to play the finance card to Obama’s advantage, lambasting “special interest” money even as his boss gained from it. Obama would go so far as to use 527s as an excuse to break his own promise to abide by the presidential public financing system; he was the first presidential candidate of a major party ever to opt out. “The public financing of presidential elections as it exists today is broken, and we face opponents who’ve become masters at gaming this broken system,” Obama would declare in June 2008. “John McCain’s campaign and the Republican National Committee are fueled by contributions from Washington lobbyists and special-interest PACs. And we’ve already seen that he’s not going to stop the smears and attacks from his allies running so-called 527 groups, who will spend millions and millions of dollars in unlimited donations.” Democrats would also benefit from “millions and millions of dollars in unlimited donations,” though the press largely failed to note it. And McCain himself stayed in the presidential financing system.

  Hillary Clinton’s supporters railed against the Bauer attacks. They were floored, and somewhat disgusted, that Bauer would stoop to a Swift Boat characterization of her groups, or that he’d go so far as to threaten her donors with prosecution. But as the primary ended and the party healed, the entire left realized the power of Bauer-like threats and the potential they held to handicap Republicans.

  One guy paying attention was Tom Matzzie, a committed liberal political activist. Matzzie’s background gave him insight into the power of money and ways to stop it. From 2000 to 2004 he worked as the online mobilization
director for the giant AFL-CIO union, building an Internet army of labor activists. He shifted to director of online organization for the Kerry/Edwards campaign in 2004, where he saw up close the Swift Boat attacks. He then moved to Washington director for MoveOn.org, the liberal online mobilization group. He also ran a group called Americans Against Escalation in Iraq, and is credited with raising more than $150 million for various causes.

  In August 2008 he founded a new group called Accountable America. As the New York Times reported, the organization had but one purpose: to put Republican donors on notice. Matzzie explained that his group intended to send a “warning” letter to ten thousand GOP donors, alerting them, as the Times put it, to “a variety of potential dangers, including legal trouble, public exposure, and watchdog groups digging into their lives.” The Times noted that the goal was to “create a chilling effect that will dry up contributions” for the GOP side. Matzzie told the liberal publication Mother Jones (in a quote eerily reminiscent of Bauer’s), “We’re going to put them at risk.” He also offered a $100,000 reward to anyone who could gin up a credible civil or criminal case against a conservative independent group.

  Matzzie was able to come up with his list of ten thousand GOP donors because of disclosure laws. In the age of the Internet, Matzzie could have his list in a few hours.

  And his threats were an escalation of even Bauer’s. Like the Obama counsel, he suggested that donors might face prosecution. But he took the warning to a new level, explaining that the left intended to make Republican donors the targets of public smear campaigns—poking into their lives, elevating their profiles, making the world difficult for them. In the gradual escalation of the intimidation campaign, this was a moment.

  Meanwhile, Bauer himself was only getting started. He’d tried out his tactics on Edwards and Clinton, and they’d largely been successful. As the Obama campaign moved into the general election, he honed that strategy against John McCain.

  Around the time Matzzie announced his intent to harass GOP donors, a conservative group, a 501(c)(4) organization called the American Issues Project (AIP), went on the air against Barack Obama. The organization highlighted the Chicago politician’s ties with Bill Ayers, the former Weather Underground member who went to jail for helping bomb the New York City Police Department, the Pentagon, and the Capitol. AIP was partly funded by Harold Simmons, one of the same men who’d given money to Swift Boat Veterans for Truth.

  The Obama campaign was livid, and demanded, as is common practice in campaigns, that TV stations pull the ad. Bauer announced that Team Obama would in fact organize supporters to target every station that ran the ads, as well as their advertisers. The campaign mobilized its supporters in particular to go after Sinclair Broadcasting Group, which had dared to run a documentary in 2004 critical of Kerry. Obama spokesman Tommy Vietor bragged that Obama supporters had slammed Sinclair stations with ninety-three thousand e-mails calling for the ad to come down. Some outlets, like CNN, succumbed to the pressure.

  Bauer went much further. He sent a letter to the criminal division of the Justice Department demanding an investigation into AIP, “its officers and directors,” and its “anonymous donors.” He claimed the AIP project was a “knowing and willful attempt to violate the strictures of federal election law,” and wanted “action to enforce against criminal violations.”

  AIP patiently explained to Justice why it was not in violation, noting that it operated exactly in the same fashion as dozens of liberal groups such as NARAL Pro-Choice America. It pointed out that it had willingly disclosed its donor, Harold Simmons. Bauer’s response was a second letter calling for the direct prosecution of the Texas businessman. He sent a third letter on September 8, again calling for action, again slamming AIP’s “illegal electoral purpose.”

  On the same day, he went to the FEC, demanding that the regulator do something about AIP and Simmons. He also went to the IRS seeking tax documents (to which he had a public right). And he sent a letter directly to AIP hounding it for confidential information (to which he had no legal right). Outside liberal groups piled on, with Democracy 21 filing its own FEC complaint against AIP.

  AIP didn’t take down its ads. It had the counsel of one of Washington’s most hard-charging and effective free-speech lawyers, Cleta Mitchell. But Bauer’s effort nonetheless had an effect. A long-ranging one, as it happens.

  The Justice Department never did prosecute AIP. Mr. Simmons never backed away from his donations. But the FEC did take note of Bauer’s complaint.

  Months after the election was over, after Barack Obama was already sitting in the White House, activist FEC attorneys sent an e-mail to an IRS official requesting that she share “any information” she had about the conservative organization the American Issues Project. A mere nine minutes after receiving the inquiry, that IRS official directed her staff to fulfill the request.

  Her name was Lois Lerner.

  Chapter 5

  The Big Banana

  Larry Tribe is a very smart man. So when the liberal Harvard law professor pronounces, a lot of folk on his side pay attention. Quite a few were reading raptly what Tribe had to say on January 24, 2010.

  The left had just suffered an enormous political blow. Three days earlier, the Supreme Court had issued its opinion in Citizens United, knocking down a central plank of McCain-Feingold. That finance law had restricted corporations from endorsing candidates in broadcast ads in the run-up to elections. Five justices found this a clear abuse of the First Amendment and struck down those rules.

  The president and his party went bonkers. For more than a decade they’d worked to shut up their corporate nemeses, and John McCain had finally got them over the finish line. They’d privately credited the law with aiding in their stunning election victories in 2008. Barack Obama had crushed McCain in fund-raising, and the Democratic congressional election committees had stomped all over their Republican counterparts. The best measure of the law’s success, from the Democrats’ perspective, was the final tallies of spending from independent groups. Liberal organizations had vastly outspent conservative ones. Shutting up business had been worth the legislative struggle.

  And now here was the Supreme Court, undoing all that hard work. Within hours of the ruling, Obama was scolding the justices: “The Supreme Court has given a green light to a new stampede of special interest money in our politics,” the president said. “It is a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans.” Obama would a few weeks later, at a nationally televised State of the Union address, again publicly rebuke the Supreme Court justices sitting in the audience.

  Democratic representative Chris Van Hollen joined Obama to complain that the decision would “allow the biggest corporations in the United States to engage in the buying and selling of elections.” The press largely failed to note that Van Hollen ran the Democratic Congressional Campaign Committee, the group charged with electing and reelecting Democrats to the House. Van Hollen knew all about the “buying and selling” of elections, and was frustrated that the price of his buying had gone up.

  His outrage was matched only by that of New York senator Charles Schumer, who had only just left the top job of electing and reelecting Senate Democrats. The decision was “poisonous to our democracy,” he complained. The Schumers and Van Hollens were given covering fire from a phalanx of left-leaning groups. Fred Wertheimer of the campaign finance reform organization Democracy 21 pronounced the decision to be nothing less than “a disaster for the American people.”

  It didn’t matter to Democrats that the Court had in its ruling also freed up their union allies to reengage in elections. Democrats knew that (at least at this time in history) labor unions mattered more in terms of people than in money. They were the boots on the ground, the folks who knocked on doors. Nor did it matter to Democrats that the Court had left in place the long-standing ban
on corporations contributing money directly to candidates. (All the Citizens ruling did was allow companies to run their own endorsements of candidates in the run-up to an election.)

  At least some liberal commentators were honest about why they were so annoyed—and it had nothing to do with clean elections. Jeffrey Toobin, the legal affairs writer for the New Yorker magazine, gave his immediate reaction to the ruling: “Two thoughts. First, Republicans will benefit, of course. Corporations have vastly more money than unions and corporations by and large prefer to support the G.O.P.” Toobin consoled himself that perhaps companies might face consumer boycotts if they spent too much money in support of “Barack Obama’s opponent in 2012.”

  But what most worried the left about the ruling was the political climate. In August of the prior year, Democrats had gone home for summer break to face a tsunami of outrage over Obamacare. Public anger hit breaking point in the late fall, as both the House and Senate passed versions of the bill. And then in January, Republican Scott Brown won a special election to the Senate in deep-blue Massachusetts. Democrats saw in that GOP victory in Massachusetts the makings of an electoral revolt that might sweep them back out of Congress, and perhaps out of the White House. Two days later, the high court issued Citizens United, turning Democratic worry into panic.