Could Rand Paul’s Shadowy Fundraising Machine Sink His Presidential Ambitions?

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March 31 2014 7:32 PM

Paul, Inc.

Could the shadowy network of Rand Paul’s old fundraising machine sink his presidential ambitions?

Rand and Ron Paul
Sen. Rand Paul talks to his father Rep. Ron Paul on Capitol Hill in 2011.

Photo by Alex Wong/Getty Images

The race for the 2016 Republican presidential nomination looks, for the moment, like the race to beat Rand Paul. At the start of last week, the New York Times reported that Paul could claim “contributors from all 50 states,” despite his own skittishness about organizing. A few days later, the Washington Post published a sort of rebuttal—a guide to the “mainstream coalition” that had coalesced around Paul while his possible rivals pandered, stumbled, or slumbered.

David Weigel David Weigel

David Weigel is a Slate political reporter. 

But Paul’s network is older and stranger than they know. Six months ago, for example, hundreds of diehards in the “liberty movement” (the catchall term often used to refer to people who agree with Ron and Rand Paul’s politics) gathered in Chantilly, Va., for the annual Liberty Political Action Conference. Rand Paul showed up, as did his father, but the most revealing moment of the weekend came when a man named Mike Rothfeld took the stage. His speech, he said, was supposed to be about leadership. Halfway through it, he pivoted.

“Money!” said Mike Rothfeld. “Oh, that’s a dirty word, isn’t it?”

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Rothfeld, founder of Virginia-based Saber Communications was delivering his pitch at the annual conference. In Paul-world, Rothfeld is an important figure; of the $40.6 million raised for Ron Paul’s 2012 presidential campaign, nearly $7.7 million went to Saber. Rothfeld’s firm had basically mastered the art of direct-mail fundraising, and some people in the liberty movement—some very loud people—had a problem with this.

We shouldn’t really need money to fight for our liberty,” said Rothfeld, imitating the voice of a whining critic. “Bless your little socialist hearts. I don’t like that direct mail, because all they do is ask for money. And then they earn a living. Outrageous! People that spent 40, 50, 60, 70 hours a week of their lives, who have wives and children, husbands, dreams, sicknesses just like you do. How dare they earn a living, huh? And you know who you are, bless your heart, that think like that.”

Bless your heart, Rothfeld explained, was “Southern” for “you’re an idiot.” He was talking to activists that had already shelled out to learn how to campaign harder for their causes, and who now had the option of paying $250 to enter an LPAC reception with Ron Paul or $550 for a “private briefing.” They needed to know how campaigns actually worked.

Only the volunteer is pure? You better be darn glad there’s professionals doing it. It’s hard work. It’s unpleasant work sometimes. And yeah, we didn’t take a vow of poverty, most of us. We’re free market guys. If we’re really good at what we do, we want to be paid more for it.”

Rothfeld went on, rebutting his critics, explaining the costs of snail mail and Internet ads. “When you spam people to the sum of 50 or 60 or 70 million pieces of spam a month, as my shop does—those of you who get Rand Paul spa—” Rothfeld smiled at his intentional verbal gaffe—“uh, email, or Campaign for Liberty or National Association for Gun Rights or National Right to Work or National Pro-Life Alliance, that is all my spa—uh, email!”

Rothfeld had given a guided tour of a little-understood sector of the Ron Paul/Rand Paul universe. (He later told me that he does not talk on the record to reporters.) Critics on the right call it Ron Paul, Inc., the byzantine array of organizations that helped create and staff the “liberty movement.” Some of these critics insist that the network will sink Rand Paul’s ambitions in 2016, either through misdirection of funds or scandal, and they point to an ongoing grand jury investigation of a former Iowa state senator who allegedly solicited a bribe from Paul’s 2012 deputy campaign manager.

Rand Paul is approaching his new network more carefully. He didn’t linger at LPAC, for example, giving his speech then flying to Michigan to meet with a more elite group of Republican donors. His national fundraisers include a 2004 Bush–Cheney bundler and veterans of the Club for Growth and FreedomWorks. But the new organization is built on the foundation of a group of long-term staffers activists, who are mistrusted by some in the “liberty movement” and linked to a 2011 campaign finance scandal that was equal parts Byzantine and brazen.

“Rand can learn, from his dad’s campaign, who to rely on for good support that will be totally above board and ethical,” says Drew Ivers, a former Iowa Republican Party official who’s considered one of the nascent campaign’s top men in the caucus state. “I always look for the silver linings, and here’s one—people become transparent in hindsight.”

The starting point of the scandal that could dog Rand Paul is the anti-union National Right to Work Committee. Founded in 1955, it really sprung to life in 1965, when a re-elected Lyndon Johnson attempted to strengthen unions by gutting the Taft-Hartley Act. The committee, as Lee Edwards recalled in his 1999 history of conservatism, “concentrated on two objectives: to arouse public opinion at the grass roots, which would in turn influence members of Congress, and to provide sympathetic members of Congress with every possible assistance.”  

It did this by lobbying, and by building a sprawling network of donors via direct mail. National Right to Work was an early client of Richard Viguerie, the godfather of conservative direct mail. By the mid-1970s, when he helped National Right to Work kill legislation that would have expanded the right to picket construction sites, Viguerie claimed to have 15 million names on 3,000 rolls of magnetic tape. These were conservatives who could be activated by the right pitch or warning about what would happen if they didn’t join up.

National Right to Work was effective. In good years, it raised eight-figure sums and spawned spinoff groups across the country. It created an infrastructure outside the “Republican establishment” and “consultant class,” one that existed for years, with little hype, as individual Republican stars rose and plummeted. From 1987 to 1991, Mike Rothfeld oversaw National Right to Work’s direct-mail program. He left to form Saber Communications, which would run mail operations for the National Association for Gun Rights and the National Pro-Life Alliance, and then do direct mail for Ron Paul’s presidential campaign Different groups, same strategy: reaching out to the maximum number of conservatives to bring them aboard a campaign for (usually hopeless) legislation the establishment wouldn’t touch.

This network, little understood even inside the right, would supply some of the key talent to Ron Paul’s growing organization. John Tate spent 14 years at National Right to Work, six of them as vice president. He went on to become the political director for Ron Paul’s 2008 campaign, and has led the Campaign for Liberty (the main organization that grew out of the 2008 run) since 2010. Doug Stafford, who was Rand Paul’s chief of staff until he left to run his RANDPAC, came directly from National Right to Work. So did Dimitri Kesari, who was National Right to Work’s government affairs director until he became deputy campaign manager of Ron Paul 2012.

Ron Paul’s 2008 campaign marked a turning point in the history of direct mail. He started, as he had started his 1988 Libertarian presidential campaign, as a fringe candidate with a mailing list. In the summer of 2007, especially after an explosive debate confrontation with Rudy Giuliani, Paul became the master of Internet fundraising. A December 2007 “moneybomb” for Paul raised $6 million, all from small donors logging onto his campaign site.

When the 2008 campaign ended, its vigorous organizing and fundraising drew on the lessons of National Right to Work. Activists interested in the Campaign for Liberty could be trained in $35 workshops run by the Foundation for Applied Conservative Leadership, an outfit led by Mike Rothfeld. Some of these graduates went on to swamp the GOP establishment in Kentucky, helping Rand Paul win an upset in the 2010 primary for U.S. Senate. Rand Paul’s campaign paid nearly $800,000 to Saber Communications. In 2011, when Ron Paul started another run for president, it called Rothfeld a key adviser.