Bush Adviser Rove Has Ties to Swift Boat Donor Perry(Update1)
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Sept. 24 (Bloomberg) -- In 1994, when George W. Bush first ran for governor of Texas, Karl Rove was one of his chief strategists. Rove's friend, Houston homebuilder Bob Perry, contributed $26,100, campaign records show. Perry, 71, has been the largest single donor to Republicans in Texas since 1998, contributing $5.4 million, records show.
Rove and Perry have worked together -- Rove as a strategist, Perry as a moneyman -- for 26 years on more than 15 Republican campaigns, starting with Bill Clements's successful bid in 1978 to become the first Republican governor of Texas since the Reconstruction era after the U.S. Civil War.
Today, Perry and Rove are working to get Bush elected to a second term as president.
Rove, 53, is a senior adviser to Bush, who has raised $260.6 million as of Aug. 31 for his re-election campaign against U.S. Senator John Kerry of Massachusetts. Federal filings show Perry gave $200,000 to help start Swift Boat Veterans for Truth, a group that says it has no ties to Bush, while paying for advertisements attacking Kerry, 60.
Under U.S. law, independent groups that buy advertising to affect federal elections can't coordinate with official campaigns.
Rove was the person most responsible for shifting Texas from a Democrat-controlled state to a Republican one, says Reggie Bashur, Clements's former press secretary and now a consultant in Austin. He says Rove is a methodical political strategist who plans campaigns months ahead of time.
`One-Man Band'
``Rove really was the intellectual force behind the rise of the Republican Party in Texas,'' Bashur says. ``For a number of years, he was a one-man band. By sheer will, he turned the state Republican.''
Rove found scores of Texas Republicans to finance Bush's rise in Texas politics, and he carefully selected people he could mold into successful candidates, says Robert Stein, dean of social science and a professor of political science at Rice University in Houston.
Rove first helped Bush's father, George H.W. Bush, in the late 1970s, when he was preparing to run for president in the 1980 election. ``Rove was grooming George W. Bush long before Bush knew he was going to run for president,'' Stein says. ``Rove was persistent in his belief that this guy could go all the way.''
Rove's Legwork
In answers to written questions, Rove said he's known Bush, 58, and his father, 80, since 1973. He says he met Perry in 1978 during the Clements campaign. Bill Miller, Perry's spokesman, agrees that Rove's legwork led the way for Bush to run for governor of Texas in 1994 and president in 2000.
``Karl was in the trenches doing strategy,'' Miller says. ``Karl deserves the credit. Karl found a lot of people like Bob Perry.''
Perry, who contributes $2 million to $3 million in each election cycle, has been one of the largest contributors to Rove's clients, Miller says.
Perry was the largest contributor in 2002 to the Texas Republican Party, donating $840,000. He also contributed $225,000 to Texas Governor Rick Perry, no relation to him; $115,000 to Lieutenant Governor David Dewhurst; and $387,600 to Texas Attorney General Greg Abbott. Rove has worked for each of those men as a political consultant.
Now Perry is financing Swift Boat, a so-called 527 political organization, named after the section of the U.S. tax code under which it operates.
Television Ads
The law enables independent groups not tied to official party campaigns to raise as much money as they can from individual contributions. Under campaign law, individuals are limited to contributing $2,000 per election to a federal candidate.
On Aug. 4, Swift Boat began running television advertisements accusing Kerry of lying about his military record. The group says Kerry didn't deserve the three Purple Hearts, Silver Star and Bronze Star he received after commanding two swift boats -- the name swift stands for shallow water inshore fast tactical -- in Vietnam in 1968 and 1969.
The group also says Kerry made phony war-crime charges against the U.S. when he returned from Vietnam.
On Aug. 19, Kerry said in Boston that the accusations are false and Swift Boat is doing ``dirty work'' for Bush. U.S. Navy records verify Kerry's military medals.
`Frivolous Complaint'
The Kerry campaign, Kerry-Edwards 2004 Inc., filed a complaint with the Federal Election Commission on Aug. 23, saying: ``This group's campaign of outrageous lies has been coordinated with the Bush campaign and the Republican Party from the outset. This sham organization is funded by the same Republican operatives who are helping to finance and run Bush's campaign.''
Kerry-Edwards 2004 asked the FEC to stop Swift Boat ads and fine the group. U.S. Senator John Edwards, 51, of North Carolina is Kerry's vice presidential candidate.
``This is a frivolous complaint,'' Bush spokesman Steve Schmidt says. Bush-Cheney `04 Inc. has asked the FEC to dismiss the complaint. Schmidt says the Kerry campaign is connected to so- called independent groups opposing Bush. Dick Cheney, 63, is running for re-election as vice president.
``No one in the Bush campaign has coordinated with the Swift Boat Veterans,'' Rove told Fox News on Aug. 25. The same day, Benjamin Ginsberg, an election lawyer for Bush's campaign, quit after he disclosed that he had also advised the Swift Boat group. At the time, Ginsberg said he didn't do anything wrong. Ginsberg declined to comment.
Campaign Connections
Ginsberg wasn't the only one connected with Bush's re- election campaign with ties to Swift Boat.
On Aug. 21, Bush spokesman Schmidt said Colonel Ken Cordier, who was on a military veterans' steering committee for the Bush campaign, had failed to inform the campaign that he would appear in Swift Boat ads. Cordier declined a request for comment.
The attacks on Kerry may have cost him support among voters, according to a Los Angeles Times poll taken Aug. 21-24. Bush led Kerry by 47 percent to 44 percent in that poll, with a margin of error of plus or minus 3 percentage points. In a survey by the newspaper just before the July Democratic convention, Kerry led Bush by 2 percentage points.
Seven of the 10 people who initially funded Swift Boat have contributed to Bush, federal contribution records show. The biggest donors include Harlan Crow, a retired Dallas investor, who contributed $25,000, according to Swift Boat filings.
Boone Pickens Contributes
Crow, 54, is a trustee of the George Bush Presidential Library Foundation, which runs the presidential library and museum in honor of former President Bush.
Since the initial donations, Boone Pickens, who runs two hedge funds through BP Capital LLC in Dallas, has given the group $500,000, eclipsing Perry as the largest contributor, federal filings by the group in September show.
Pickens, 76, became the center of controversy over hostile takeover bids in the 1980s when he launched efforts to acquire Gulf Oil Corp. and Cities Services Co. He made the contribution to Swift Boat in response to hedge fund billionaire George Soros's contributions to groups opposing President Bush, says his spokesman Jay Rosser.
``Mr. Pickens does not think the use of 527 organizations is good for the political process and hopes they will not be a part of the political landscape,'' Rosser says.
``But he is also convinced that the more than $63 million spent by George Soros and other Democrats on 527s had to be countered now so that the conservative perspective on the issues would be included in the current debate,'' he says.
Texans for Truth
Bush spokesman Schmidt says the Kerry campaign is violating campaign law by working with political organizations under the 527 rule to oppose Bush. Texans for Truth has been running advertising questioning Bush's service in the National Guard during the Vietnam War.
A commercial that began airing in Arizona, Michigan, Ohio, Oregon and Pennsylvania on Sept. 13 features a veteran of Bush's Alabama Air National Guard unit who says he never saw Bush on the base.
Republican U.S. Senator John McCain of Arizona says the Swift Boat campaign and anti-Bush efforts by Democratic 527 groups use the Vietnam War to distract voters from more important, current issues.
``I wish we would end all this conversation about a war that was over 30 years ago and concentrate on one that just passed 1,000 young Americans killed,'' McCain says. ``It's my belief President Bush served honorably and John Kerry served honorably.''
Dirty Tricks
Three former aides to the late President Richard Nixon say Swift Boat reminds them of the so-called dirty tricks conducted in Nixon's 1972 re-election campaign.
John Dean, Nixon's White House counsel; Jeb Magruder, deputy director of the campaign to re-elect Nixon in 1972; and Donald Segretti, a Nixon administration lawyer, say the political maneuvers used during Watergate were planned so they couldn't be traced to the Nixon administration.
Watergate, named after the Washington hotel and office building that housed the Democratic National Committee headquarters in 1972, led to convictions of more than a half- dozen men who burglarized the headquarters to plant electronic bugs and conducted pranks such as distributing false campaign literature. Nixon died in 1994.
Dean, 65, who served four months in federal prison for obstruction of justice in Watergate, says his experience and knowledge of the people involved suggest that Rove may have laid the groundwork for the Swift Boat Veterans for Truth without coordinating efforts.
`Sleeper Cells'
``What we're seeing are Karl Rove sleeper cells that have been out there for a long time and ready to go into action,'' Dean says. ``These are not strangers to Karl Rove.''
In his written response, Rove ridiculed Dean's suggestion. ``Only an overactive imagination and a tendency to exaggerate could produce such a silly theory,'' Rove said.
Segretti, 63, who served 4 1/2 months in prison after pleading guilty to illegally distributing campaign literature during Watergate, says the Watergate plan was created by carefully keeping details away from top Nixon administration officials so they could say later that they hadn't known about the scheme.
He says he sees a similarity with Swift Boat. ``It's the old concept of plausible deniability,'' Segretti says. ``Don't tell me, so I don't know.''
`Put the Dots Together'
Rove has enough experience planning campaigns that he could have made sure supporters were ready to attack whoever became the Democratic presidential nominee, Dean says. ``People are smart enough not to have -- at least in the last many months -- any direct conversations about these things with anybody at the White House.''
That so much Swift Boat money comes from Bush supporters makes it hard to separate Swift Boat from the presidential campaign, says Magruder, 69, who served seven months in prison for obstruction of justice during the Watergate investigation.
``When you put the dots together, you're going to find it leads back to a candidate's political people,'' he says. ``They're all Bush's friends.''
President Bush has publicly urged that all political ads by independent groups be halted, including those by the Swift Boat veterans.
In a March 31 complaint filed with the FEC, Bush-Cheney '04 alleged that 527 groups such as America Coming Together, backed by Soros, were illegally coordinating with Kerry-Edwards 2004 and the Democratic Party. The FEC hasn't acted on the complaint.
Rove Fired
Rove has hit some bumps as he's successfully built up the Republican Party in Texas. Tom Pauken, 60, a Dallas attorney who was chairman of the Texas Republican Party from 1994 to 1997, fired Rove in 1994 as a consultant for the party.
Rove's job had been to run the party's direct-mail program. Pauken says he felt Rove was more interested in campaign tactics than political and social issues.
``Karl is one of those guys who says if you're not with us, then you're on the other side,'' says Pauken, director of the White House Fellowship Program in the Nixon administration. ``Karl is about winning an election as opposed to making substantive policy.''
Rove and Perry first worked together in 1978, on Clements's campaign for governor, Perry spokesman Miller says. Clements owned Sedco Inc., a Dallas-based oil company, and served as deputy secretary of defense from 1973 to 1977.
``In 1978, Perry liked to support Republicans,'' Miller says. ``Clements called him. He raised money for him and has been writing checks ever since.''
Dominating the State
Rove was a volunteer in the 1978 campaign, which Clements won. He started Karl Rove & Co. in 1981, which was hired as a consultant on Clements's later campaign.
Rove became chief campaign strategist for aspiring state Supreme Court justices, U.S. senators and other Republican candidates who came to dominate the state, including Bush, according to the Texas Ethics Commission, which keeps data on political consulting companies and their clients.
One of Rove's key tools was a mailing list of Republican fund-raisers who could be counted on to contribute to his clients' campaigns, says former Clements spokesman Bashur. In 2001, after Rove followed Bush to Washington, all 29 statewide elected officials were Republicans.
Perry made his millions from Perry Homes, a Houston-based privately owned homebuilder he started in the 1970s. The company's 2003 revenue was about $400 million, according to Professional Builder, a trade journal based in Oak Brook, Illinois.
State Supreme Court
Perry's company, which builds houses in Houston, Austin, Dallas, San Antonio and south Texas, has faced lawsuits. Those cases were one reason he contributed to Rove's state Supreme Court clients in the late 1980s, Miller says. He also has given to two groups that lobbied for amendments to the state constitution that voters approved in 2003 to limit damages in lawsuits.
Perry contributed his first $100,000 to Swift Boat after he was called earlier this year by John O'Neill, a leader of Swift Boat, Miller says. Perry was happy to contribute, Miller says. ``If he likes what he hears, he will write a check,'' Miller says. Perry declined to comment.
Miller describes Perry as fit and trim, with white hair and ruddy cheeks. He says Perry likes to stay out of the spotlight in politics and in his real estate work. ``He's not one to talk about his own success,'' Miller says. ``You can't draw him out.''
`Unfit for Command'
Unlike most Texas businessmen, Perry has no photos of himself with politicians on display in his office, Miller says. ``Perry isn't real complicated,'' he says. ``He's very happy in business and with his family.''
The Swift Boat story began when O'Neill took over command of boat PCF-94 in 1969, when Kerry returned to the U.S. from Vietnam, according to O'Neill's book, ``Unfit For Command: Swift Boat Veterans Speak Out Against John Kerry'' (Regnery Publishing, 2004).
Kerry had won clearance to go home early after receiving medals for injuries in the war.
Now a Houston attorney, O'Neill, 58, created the Swift Boat group earlier this year with Roy Hoffmann, 78. Hoffmann, a rear admiral who served on eight ships during his naval career, is chairman of the group's steering committee, according to its Web site.
O'Neill says in his book that he was driven to speak out by Kerry's antiwar testimony on April 22, 1971, before the Senate Foreign Relations Committee. Kerry described a meeting held in Detroit at which Vietnam veterans testified that they had committed atrocities during the war.
Free-Fire Zones
``They relived the absolute horror of what this country, in a sense, made them do,'' Kerry told the committee. ``At times, they had personally raped, cut off ears, cut off heads, taped wires from portable telephones to human genitals and turned up the power, cut off limbs, blown up bodies, randomly shot at civilians, razed villages in fashion reminiscent of Genghis Khan.''
Kerry added: ``We rationalized destroying villages in order to save them. We learned the meaning of free-fire zones, shooting anything that moves, and we watched while America placed a cheapness on the lives of Orientals.''
O'Neill says in ``Unfit for Command'' that the testimony prompted him to seek out other veterans who disagreed with Kerry. He became part of a group called Vietnam Veterans for a Just Peace.
`Still Offended'
``People are still offended by his war crime charges,'' says O'Neill, who says the current Swift Boat campaign is the first time he has spoken out about Kerry in 30 years. ``If John Kerry were running as a Republican, we'd still be here.''
President Nixon became aware of O'Neill in June 1971, says Magruder, who worked at the time in the White House. Nixon adviser Charles Colson found O'Neill and introduced him to the president, Magruder says. Colson declined to be interviewed.
``Colson used O'Neill to go after Kerry,'' Magruder says. Nixon met with O'Neill and encouraged him to publicly attack antiwar protestors such as Kerry, Magruder says.
Kerry and O'Neill debated on Dick Cavett's TV talk show on June 30, 1971. Kerry said in his opening statement that the criticism of the war was directed toward change.
``What we're doing is we're trying in a sense to show where the country went wrong, and we believe that as veterans who took part in this war, we have nothing to gain except to try and point the way to America.''
War Crime Testimony
O'Neill said Kerry was lying in his testimony of war crimes by U.S. soldiers in Vietnam. ``Never in the course of human events have so many been libeled by so few,'' O'Neill said in his opening statement on the show, according to a transcript. He said U.S. soldiers didn't commit atrocities.
Kerry responded that he was telling the truth and that he was one of a group of 20,000 former U.S. soldiers who were opposed to the war.
In January 1973, Rove says he met the senior Bush, who took over the chairmanship of the Republican National Committee from Senator Bob Dole of Kansas. Rove, who dropped out of the University of Utah in 1971, ran for chairman of the College Republicans, a group of young Republicans, in 1973.
Balloting at the group's convention disintegrated amid disputes over valid credentials, according to the Washington Post. In the end, it was up to RNC Chairman Bush to decide who won.
Before Bush could announce his decision, the Post ran a story that threw Rove's chances of winning into doubt. The story said Rove was under investigation for teaching dirty tricks at seminars for College Republicans.
`Free Beer, Free Food'
``It is important enough in terms of my desire to keep this place clean to look into this thing in further detail,'' Bush told the Post. Bush cleared Rove and decided the election in his favor.
``He represented the most reasonable, effective wing of the College Republicans,'' the elder Bush says. ``I was impressed early on by his interest in, and knowledge of, politics.''
Files at the National Archives contain a transcript of a tape of one seminar the Post said may have taken place in Lexington, Kentucky, in August 1972. In the transcript, Rove and his colleague Bernie Robinson describe how Rove had posed as a supporter of Alan Dixon, an Illinois Democrat running for state treasurer.
Rove went into Dixon's campaign office in Chicago and took two reams of Dixon campaign stationery, according to the transcript.
Rove then printed up a set of 1,000 invitations to the opening of the Dixon campaign headquarters in Chicago, the transcript shows. On them, he wrote, ``Free beer, free food, girls and a good time for nothing.''
Cleared the Path
He handed out the invitations at a free Sly and the Family Stone concert in Chicago, according to the transcript.
Robinson, 57, now a lobbyist at Livingston Group in Washington, says he and Rove told stories at the seminar in 1972 to provide humor. He says he considers Rove a friend and doesn't believe Rove would do anything unethical.
Rove has come a long way since the early 1970s. From being a young Republican, he's cleared the path for Texas Republicans to take control of the state and for Bush to serve as president.
His denial that the Bush campaign coordinated with Swift Boat may be literally true, former Nixon campaign strategist Magruder says. It is also another in a long line of political dirty tricks, he says.
``We never learn from our mistakes,'' Magruder says. ``We've had Watergate, and you would think we would learn from it, but of course, we don't.''
Last Updated: September 24, 2004 13:51 EDT
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