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Austin Chronicle The Loyal Lieutenants

Bush Applies Litmus Test of Allegiance in Choosing Inner Circle

By Robert Bryce

MARCH 20, 2000:  Forget "compassionate conservatism." While you're at it, toss the "reformer with results." Education, taxes, welfare reform -- none of those things really matter. For George W. Bush, one issue matters: loyalty. You're with him or you're not. There's no in-between. It's a lesson that he learned from his mother, Barbara, a fiercely territorial woman who never forgets a slight, and from his father, former president George H.W. Bush.George W. has been fiercely protective of his father, and he believes part of the reason his father served only one term in the White House was the lack of loyalty among his staff members. During the elder Bush's four years as president, W. became his loyalty Doberman. It was George W. who sifted through his father's staffers, demanding that they either commit fully to their father or get the hell out. It was George W. who fired his father's White House chief of staff, John Sununu. The abrasive Sununu, George W. believed, simply didn't have his father's best interests at heart.

Loyalty has been a recurring theme of Bush's campaign for the White House. Look at the last few months. The Bush family was reportedly livid after Dan Quayle's wife, Marilyn, suggested last year that George W. wasn't prepared to be president. Mrs. Quayle called W. the "party frat-boy type," and said he "never accomplished anything. ... Everything he got, Daddy took care of." It was betrayal of the worst kind. After all the Bushes had done for Quayle -- the slightly goofy senator from Indiana whom George the Elder had plucked from obscurity and taken to the White House -- to be attacked by Quayle's wife was beyond the pale. And the Bush family let it be known that the Quayles would not be spending weekends at Kennebunkport any time soon. But what happened a few months later? Dan Quayle was endorsing Bush when Bush needed it most -- after his loss to Sen. John McCain in New Hampshire. There, in South Carolina, Quayle took a big helping of loyalty pie, and called on the GOP to rally behind Bush.

Quayle's words of encouragement were delivered just a few weeks after Sununu, George W.'s former foe and former Quayle backer, jumped onto George W.'s endorsement bandwagon. Sununu, the former governor of New Hampshire, endorsed Bush just two days before that state's Feb. 1 primary.

Everyone wants their friends and co-workers to be loyal, but politicians are particularly needy. George W. learned that from watching his father. And that may be why the governor has made certain that the trustworthiness of his closest campaign advisers is not in doubt. Don Evans, Karen Hughes, Joe Allbaugh, Mark McKinnon, and Karl Rove are orchestrating Bush's run for the White House. All of them are white, close to Bush in age, were educated in the South, and, except for Evans, all have long histories in politics. More importantly for Bush, all have taken the equivalent of the pinky swear when it comes to the loyalty question. In return, Bush has shown them that he is loyal to them: He has broken with longstanding custom and has refused to hire any Washington-based political consultants to advise the campaign. Instead, he has stuck with his Big Five. Together, they form the nucleus of Bush's campaign, and each has a clearly defined role: the money man, the flack, the trooper, the image maker, and the tactician.


Don Evans: Big Money

Bush has probably never questioned Don Evans' loyalty. Perhaps the governor's closest friend, Evans has known Bush for three decades -- since Bush was a struggling oil man in Midland during the 1970s. But the connection goes back even further: Bush and Evans' wife, Susie, went to grade school together.

Evans and Bush have many things in common: their age, 53, their roots in Midland, their physical stature. But there is also a big difference: While Bush was a failure in the oil business, Evans has made millions. He is the longtime chairman and CEO of Tom Brown Inc., a Midland-based oil and gas company that has the bulk of its production in Wyoming. The company is among several small, publicly traded oil companies that have seen their fortunes improve in recent months as the price of crude oil has skyrocketed. One of the largest individual shareholders in Tom Brown, Evans has an 800,000-share stake in the company, worth over $13 million. That's up nearly 30% over the past nine months. The recent uptick in crude oil prices has sent his company's stock soaring. Its price-to-earnings ratio is now over 100, giving it a valuation that exceeds some tech stocks, including Dell Computer.

While Bush went east for college, to Yale and Harvard, Evans, a Houston native, stayed closer to home. He got a degree in mechanical engineering from the University of Texas in 1969. Four years later, he finished his MBA here in Austin and then went back to Midland. Evans' close ties to Bush and his contacts with other members of "the Big Rich" made him a natural choice to be Bush's national finance chairman. And Evans has exceeded all expectations. He has coordinated an unprecedented fundraising drive for Bush. He helped organize the Pioneers, a group of Bush backers who each pledged to raise $100,000. The program has been remarkably successful. At last count there were more than 200 Pioneers who have reached the $100,000 goal.

As a reward for Evans' loyalty, Bush appointed him to the UT Board of Regents in 1995. Evans later became chairman of the regents, a prestigious position in which he oversees one of the largest public university systems in America. It's perhaps the most powerful patronage job in the state; the regents oversee some 76,282 employees and an annual budget of $5.4 billion. They also manage an investment portfolio of $14.2billion.

And under Evans' administration, the university has invested millions of UT's dollars with some of Bush's closest friends and financial backers. In 1995, Bush signed into law a measure allowing UT to create a new entity, the UT Investment Management Company, that is not subject to state laws that mandate open meetings and public records. Nor did the law require the members of the UTIMCO board to file personal financial disclosure documents like the ones required for other appointees to state commissions and agencies. The first chairman of UTIMCO was Thomas Hicks, the Dallas media magnate who, coincidentally, bought the Texas Rangers baseball team from a group of investors that included Bush. That buyout netted Bush $15 million in cash.

Under Hicks' guidance, UTIMCO made several deals that favor a select group of millionaires, including:

* Investing $50 million in a special partnership set up by the investment firm Kohlberg Kravis Roberts, whose founding partner is Henry Kravis, a corporate raider who has been a major GOP contributor throughout the 1990s. In 1992, Kravis was the financial co-chair of the Bush-Quayle campaign for the White House.

* Investing $96 million with Maverick Capital, a Dallas partnership whose general partners include Sam and Charles Wyly, the Dallas-based tycoons who are longtime friends of the Bushes. They have also been major contributors to Republican candidates, giving over $300,000 to GOP hopefuls between 1993 and 1998. (You may recall that it was the Wylys who, shortly before Super Tuesday, bought $2.5 million worth of TV ads to tout Bush's environmental record to voters in Ohio, California, and New York. The McCain campaign has filed a complaint with the Federal Election Commission, claiming Bush illegally coordinated the ads.)

* Investing more than $60 million between 1996 and 1998 with Hicks' former fraternity brother, Bruce Schnitzer, a New Yorker who set up a company called Wand Partners.

According to an article by Joe Conason in the February issue of Harper's magazine, none of the three deals has been very good for UT. None has matched the performance of the Standard & Poor's Index, and some have even lost money.

While it can be argued Evans is not responsible for any of the decisions made by UTIMCO, his position as head of the regents makes him one of the most visible members of the Big Five. And his profile will be even higher now that he must raise many millions more for his old friend, George W. The latest news reports say that the campaign has about $6 million left in the bank, which will not be nearly enough to last until August, when the campaign will be able to access federal matching funds of some $67 million. Between now and August, the Bush campaign will have to raise between $15 and $20 million.

Last year, Evans said that the goal in political fundraising is to "raise money early and spend it late." So far, that plan has failed miserably. Sure, Evans helped raise $70 million. But now it's up to Evans and his network of fundraisers to make sure that Bush stays solvent enough to take on Al Gore in November.


Karen Hughes: The Mouth

Before Bush decided to run for the White House, he reportedly met with Karen Hughes and told her that he wasn't going to make the run if she wouldn't agree to join the campaign. Hughes, a tall, talkative woman with a caffeinated personality, quickly agreed.

If Bush prevails next November, Hughes may be the next White House press secretary. A summa cum laude graduate of Southern Methodist University in Dallas, Hughes is what one source inside the campaign calls Bush's "touchstone. He has a great deal of trust in her. He is more comfortable when she's around." A fast-talking former reporter at KXAS-TV in Fort Worth, Hughes, 43, can sometimes be seen mouthing the words to Bush's speeches as he delivers them. Indeed, the two share what may be the closest thing to the Vulcan mind-meld. Last year, Hughes told a reporter that she knows Bush so well that when he is asked a question, "the vast majority of the time, I can predict what his reaction is going to be."

As the Bush campaign's communications director, Hughes has spent many hours coaching her candidate on interacting with the press. It shows. Bush's ability to remember reporters and call them by their first names is uncanny. Since the start of the campaign, Hughes' influence within the camp has grown considerably. And while her influence with Bush has grown, she hasn't endeared herself to the press. Several reporters have complained about her overzealous efforts at spin control. One Texas-based reporter remarked that Hughes would continue to spin stories "even when the facts of the situation are completely the opposite of what she's telling you." That lack of credibility has hurt her. The campaign was also hurt by the decision -- presumably made by Hughes -- to put Bush on one airplane and the press on another. That separation, which the campaign justified by saying that Bush needed a smaller plane that could fly into smaller airports, angered many reporters who were accustomed to having more access to candidates.

Hughes also may have blundered in her efforts to make Bush look too presidential before he was president. It was a clever idea, and for a time it worked well. But the George-is-already-president routine caused some backlash, particularly after New Hampshire, when Bush was drubbed by McCain. Once the bubble of invincibility was burst, Bush had a hard time regaining credibility. But Hughes and the others quickly shifted gears. Within days, Bush and his staff were flying on the same plane with the reporters and Bush was giving reporters more opportunities to ask questions.

Over the coming months, Hughes' role will likely grow as she takes on an even more public role in pushing Bush toward the White House.


Joe Allbaugh: The State Trooper

You can't miss Allbaugh. At 6'4" and 270 pounds, Allbaugh, who sports a crew cut and is usually wearing cowboy boots, looks more like a Marine drill instructor or an Oklahoma state trooper than a political operative. Give him a pair of mirrored sunglasses and he would be one intimidating-looking hombre. One source in the Bush campaign calls him "Sgt. Rock." And indeed, though Allbaugh's business cards say he's Bush's campaign manager, his real job is chief enforcer. Armed with his intimidating size and sandpaper demeanor, Allbaugh plays the bad cop to perfection.

His loyalty to Bush has never been questioned. Allbaugh knows his role. And he expresses it more like a bodyguard than a political hire. "There isn't anything more important than protecting him and the first lady," he told a reporter last summer. "I'm the heavy, in the literal sense of the word."

By all accounts, Allbaugh, 46, is a good manager. Referred to Bush by a mutual friend, Allbaugh moved to Texas in 1994 to manage Bush's gubernatorial campaign and has been a Bush insider ever since. After Bush won that race and became governor, Allbaugh became his chief of staff. Before coming to Texas, he was the deputy secretary of transportation in Oklahoma. A veteran of campaigns in 39 states, Allbaugh, 46, is a graduate of Oklahoma State University, where he got his degree in political science.

Although he's a key player, Allbaugh does carry some baggage. A lawsuit filed against the state last year by a former state employee alleges that Allbaugh tried to intimidate her into halting an ongoing investigation into several funeral homes. According to the suit, Allbaugh called the woman, Eliza May, into his office, where he and others demanded that she reveal details of her investigation while the owner of the funeral company sat in the same office. Although Allbaugh is not a defendant in the suit, he will be a key witness. His first deposition in the suit will be taken over the next few weeks. Depending on what emerges, the suit could be embarrassing for Bush, who will likely be deposed some time this spring.

Allbaugh's wife, Diane, has also gotten in the middle of some problematic deals. In 1996, after a couple of Bush staff members quit jobs to lobby for companies seeking state contracts, reporters began raising questions about the lobby contracts held by Diane, an attorney. Although she had only been in Austin for a few months, she quickly landed several lucrative lobbying contracts from companies like AT&T and Texas Utilities, the giant electric company. Despite her lack of experience and knowledge of the Texas legislative process, her lobby clients were paying her very well. Reports showed her clients were paying her up to $250,000 a year. The furor over the spate of lobbyists passing through the revolving door in Bush's office forced Diane Allbaugh to quit lobbying.


Mark McKinnon: The Image Maker

Of all Bush's insiders, Mark McKinnon has taken some of the heaviest shots. The reasons are many: He's a former Democrat; he once wrote in Texas Monthly that he had sworn off political campaigns; and he'll likely make more money off of Bush than any other adviser. For all those reasons, and maybe some others, he's been pilloried. It's not that McKinnon has a nasty temperament. Quite the contrary. Instead, it probably stems from some jealousy among his former Democratic allies and the perception that he's simply an opportunist. Or it may have to do with McKinnon himself. He's got one of the best media jobs imaginable, he's getting paid well, and yet, when asked about what he'll do if Bush gets elected president, McKinnon talks about quitting politics again to work as a musician.

That kind of talk makes McKinnon an Austin archetype: the guy who appears to have everything but still yearns to play Saturday nights at the Hole in the Wall.

McKinnon has also been the butt of some snickering among Austin politicos because of the way he discusses his admiration for Bush. In an interview with Talk magazine, he compared his friendship with Bush to cheating on his wife. He told the Dallas Observer, "I believe so strongly in Governor Bush that I would cut the lawn at the Mansion if he asked me to."

If McKinnon does get out his lawn mower, he would be Austin's highest-paid yard man. Media advisers typically get a percentage of the money a candidate spends on electronic media. Percentages vary, but the cut is typically 1% to 7%. And if Bush spends $50 million on TV and radio, each percentage point is worth a cool $1 million. McKinnon refuses to talk about the terms of the deal with Bush, saying only that it's a "lean contract." But even if McKinnon is only earning 1%, he could still make far more than Hughes, Allbaugh, and Rove, each of whom is making about $2,200 per week.

Of course, all that raises questions about loyalty. But McKinnon, 45, never faced a loyalty test because he was admitted into the Bush camp largely on the strength of Bush's friendship with McKinnon's former boss, the late Bob Bullock. A hard-living, hard-drinking Democrat from the old school, Bullock, who served as comptroller and later as lieutenant governor, took a liking to Bush shortly after Bush was elected, and it was Bullock's recommendation of McKinnon that helped secure his place in Bush's inner circle.

Despite Bullock's recommendation, McKinnon -- a slightly built man with dark curly hair that is going gray -- will always be the newest member of the Big Five, and as such, he'll likely be the first to go if something goes awry. As a result, he's been the subject of nearly continuous rumors that he's being tossed by the campaign. Harvey Kronberg, writer/editor of the political newsletter Quorum Report (http://www.quorumreport.com), puts out several e-mail updates per week on news items. Shortly after the New Hampshire primary, Kronberg put out an alert with a headline reading "McKinnon Keeps His Job." McKinnon is well aware of the rumors and has even begun joking about them, asking people to "call me if I get fired." But joking aside, McKinnon knows the loyalty issue is always lurking. He recently told a reporter that one of the things he admires about all of the Bushes is that "the loyalty to their friends and staff is deep, real and genuine." And he notes that some of his friends who went to work for Bill Clinton later regretted it because he wasn't loyal to any of them. With the Bush family, McKinnon told me, loyalty is "part of the Bush DNA."

McKinnon has had an interesting life. He ran away from home right before his senior year of high school, made his way to Nashville, and tried to make it as a singer-songwriter. He hung around with Kris Kristofferson a little and then returned to his home in Denver to finish high school. He moved to Austin in the mid-Seventies and made a living off his musical talents before enrolling at UT. He was elected editor of The Daily Texan, the student newspaper, a high-profile job that briefly landed him in jail for refusing to turn over some photographs of Iranian students who had disrupted a speech on campus. He left UT without finishing his degree to work for a long string of Democrats including former state senator (now U.S. Representative) Lloyd Doggett, Texas governors Mark White and Ann Richards, and Louisiana governor Buddy Roemer. He also did work for Bullock, the man who eventually passed him to Bush.

By 1996, McKinnon was worn out. He wrote in Texas Monthly that he was tired of "desperate candidates, manic campaign managers, and the last minute attack and response ads." He quit politics and joined Public Strategies Inc., a powerful Austin-based company that advises clients like phone giant Southwestern Bell and the government of Mexico on politics and media strategies. In a recent interview, McKinnon said he "didn't want to increase the speed" of his life. "The last thing I wanted to do," he said, "was to get back in politics." But then McKinnon had dinner with Bush, and the two started talking about education. At the time, McKinnon was working on a documentary film about a charter school in Houston that has had great success in teaching students who live in poor neighborhoods. McKinnon says he and Bush "really engaged on the issue of schools."

Over the next few months things fell into place. Bush's media consultant, Don Sipple, was forced out after Mother Jones magazine reported allegations that he had beaten his ex-wives. Bush asked McKinnon to be his media guy, and after talking to his pals, including former Clinton adviser Paul Begala, McKinnon agreed.

Now, just four years after swearing off those last-minute attack ads, McKinnon is preparing to launch another barrage of ads. This time, they'll be aimed at Gore, and they'll be loaded with the same fury that McKinnon and the rest of the Bush campaign used to attack and defeat McCain. And he knows that there are a lot of people in Austin who are hoping that he fails miserably. But McKinnon isn't fazed. "Bush is a thoughtful, decent, substantive guy," he says. "He has rooted philosophies and ideas that are deeply felt."

And if Bush can take those philosophies all the way? Then what? McKinnon won't talk about any job he may covet at the White House. Instead, he says, "I'm thinking of picking up my guitar and going back to Nashville." But given his attraction to power and politics, look for McKinnon to be singing a different tune if Bush prevails.


Karl Rove: The Tactician

It may have been the only loyalty test Bush has ever given Karl Rove, but it was an important one: Last year, before Bush announced that he was running for president, he asked Rove to sell his political consulting firm, Rove & Co., a very lucrative business that has done political work for candidates all over the country. It also owns a number of very valuable mailing lists that can be rented to politicians and fundraisers of all types. Faced with the choice, Rove didn't think long. He sold the business to two Austinites, Ted Delisi and Todd Olson, and hasn't looked back.

While the other members of the Big Five are vital parts of the Bush operation, Rove, Bush's chief strategist, may be its most important and most recognizable asset. His ties with the Bush family go back to 1973, when he was executive director of the College Republicans, and the chairman of the Republican National Committee was a Texas oil man named George Herbert Walker Bush. Four years later, Rove was the first person the elder Bush hired when he decided to run for president. Rove has another claim to fame: He introduced the late Lee Atwater to former president Bush. Atwater went on to become chairman of the Republican National Committee and one of Bush's closest political advisors.

Rove, 49, has been guiding the younger Bush's political trajectory since the candidate's first shaky press conferences in November 1993, when he announced he was running against the popular incumbent Democrat, governor Ann Richards. Bush has grown enormously as a candidate since that time, but it was Rove who guided him through those first few months of the campaign, when Bush was unsure of himself and his message.

A Utah native, Rove is an avid student of history, and probably knows more about the American political process than many college professors. Despite that fact, Rove has never had time to finish his college degree. Over the past three decades, he has attended nearly half a dozen colleges, and he's currently within spitting distance of getting his degree in political science at UT. He has been provisionally accepted into the school's doctoral program in government.

Rove has a long history in Texas politics. He worked for Bill Clements, the Republican who broke the Democrats' century-long stranglehold on the governor's office in 1978. Four years later, Rove began working for Phil Gramm, who was in the U.S. House of Representatives and a Democrat; two years later he helped get Gramm elected to the U.S. Senate as a Republican.

During the 1984 election, Rove did direct-mail work for the Reagan-Bush campaign. Two years later, he helped Clements win a second stint in the governor's office. In 1988, he advised Tom Phillips, who became the first Republican ever elected to the Texas Supreme Court (within a decade, the GOP would take all nine seats). McKinnon calls Rove the "Bobby Fischer of politics. He not only sees the board, he sees about 20 moves ahead."

But Bobby Fischer couldn't reach across the chessboard and pull his opponent's pants down. Rove can. And he's done it lots of times. During his days with the College Republicans, Rove organized conferences that instructed young operatives on dirty tricks, including dumpster-diving to get inside memos and contributor lists. While working for Clements, Rove passed around a mock newspaper that suggested that Democratic challenger (and later, governor) Mark White was drinking when he was in an auto accident in college. In 1990, he ended populist Democratic agriculture commissioner Jim Hightower's career in politics when he spread information about Hightower's involvement in an alleged contribution kickback scheme. (Hightower was never charged, but three aides were convicted on federal charges.) In 1992, Rove found out that railroad commissioner Lena Guerrero, a prominent Democrat and close ally of Gov. Ann Richards, had lied about getting her college degree. Rove passed the tip to The Dallas Morning News. Today, Guerrero is a lobbyist. Rove's name came up more recently when there appeared to be a whisper campaign aimed at McCain, which suggested that McCain was mentally unstable because of the torture he endured while a prisoner of war in North Vietnam. An article in The Dallas Morning News mentioned the possibility that Rove was behind the ads, which led to a finger-pointing shouting match between Rove and the paper's Austin bureau chief, Wayne Slater.

Rove's longtime friend Atwater, the man who made Willie Horton famous, swore off such trickery as he slowly died from brain cancer nine years ago. "Mostly," Atwater wrote shortly before his death, "I am sorry for the way I thought of other people." That attitude grew out of Atwater's self-confidence and his realization that he "didn't care what anyone called me so long as we won."

Rove has the same killer quality that Atwater had. He's super-confident, and a bit of a show-off. He loves to recount facts and figures regarding delegates, historical vote counts, and presidential election strategies from the past 100 years. That pedantic style, combined with lots of winning campaigns, has made him, without doubt, the most powerful political consultant in Texas. And although many politicos look to him for guidance, he denies that consultants create an image for a candidate. "That assumes you can fool everybody," he told me during an interview several years ago, "that the masses are asses. People are pretty damn smart. What you've got to do is present your case in the best light possible, with credibility and integrity."

Now that his candidate is heading toward a fight with Gore, Rove is the highest-profile political strategist in America. On Super Tuesday night, Rove was walking on air. Numerous analysts had criticized his hyper-expensive national strategy, which burned through an estimated $64 million. But on March 7, Rove was proven right. His plan -- to organize and develop grassroots campaigns in as many primary states as possible -- worked like a charm. McCain simply couldn't compete with the organization that Rove had established. And two days later, McCain announced that he was suspending his presidential bid.

Now, Rove is in the driver's seat of a campaign that could take him from Austin to the White House. Last year, Rove called Bush "the kind of candidate and officeholder political hacks like me wait for a lifetime to be associated with."

Bush certainly appears to have what he needs to win. He has the name. He has the staunch backing of the GOP establishment and his father's old money network. Big Business is behind him. He's from a state that will give him more than a tenth of the electoral votes he needs. His brother, Jeb, is governor of Florida, which should give him another tenth of those electoral votes. And from Bush's point of view, he has a cadre of loyalists who'll stick with him. Now those loyalists have to show they have the right stuff to put their man in the Oval Office.


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