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Tuesday, Nov 24, 2009
After lunch DeLay and Babin held a press conference at the Cloeren Inc. plant. And Pete Cloeren was an instant political player. On the ride to the airport, DeLay told Cloeren that Babin could win if he could raise enough money. He urged Cloeren to do all he could. It was here that fundraising became more sophisticated. As Cloeren listened, DeLay explained how the money could be moved.
DeLay campaign manager Robert Mills suggested that Cloeren contribute to Strom Thurmond's Senate campaign in South Carolina and Stephen Gill's House campaign in Tennessee. They would, in turn, donate money to Babin's campaign. Babin also made the "Triad connection" and Cloeren began writing checks to organizations he had never heard of: $5,000 to the Citizens United Political Victory Fund PAC, which would run issue ads supporting Babin; $20,000 to Citizens for Reform, yet another Triad operation. He also wrote checks to the Thurmond and Gill campaigns, though he had never heard of Gill.
Money was moving in circles: Cloeren wrote a $5,000 check to Citizens United and the PAC wrote a $5,000 check to Babin's congressional campaign. And the campaign committees of a South Carolina senator and a House candidate from Tennessee were suddenly contributing to a congressional campaign committee in Texas. If the requests were unusual, Cloeren at least had convinced himself he was doing nothing wrong. "I assumed that if a senior member of Congress said to do something that it would be legal, proper, and ethical to do it," he would later say.
According to Cloeren, Babin and his consultant Walter Whetsell used Triad, Citizens for Reform, and Citizens United interchangeably. Their comments led Cloeren "to believe that Triad might be composed of all these different groups." It was. Triad Management Services Inc. was a queer political animal, a for-profit corporation that earned no profits, sold no goods or services, and operated two nonprofit organizations: Citizens for Reform and Citizens for the Republic Education Fund. Both nonprofits were described as nonpartisan social welfare organizations. The "nonpartisan" designation allowed the groups to meet an IRS standard and run issue ads -- as long as they were not funded by or coordinated with a political candidate. Yet every dime of the $3 million that the two nonpartisan Triad organizations spent in the 1996 election cycle was spent on twenty-nine Republican congressional candidates. Neither the public nor the candidates attacked by the ads bought with Triad money knew what individuals paid for them. Because Triad was a corporation and not a political action committee, it was exempt from disclosure laws. It was a drop box where contributors who "maxed out" their federal giving could send additional money to help their candidates. And perfect cover for donors who didn't want their names in the public record.
Triad was also one of those shadowy political organizations that will make you believe Hillary Clinton's claim about "a vast right-wing conspiracy." Carolyn Malenick, Triad's sole proprietor, was a graduate of Jerry Falwell's Liberty University and a close friend of the Falwell family. Her entire professional life had been devoted to raising money for extreme right-wing causes and candidates. She began her career with direct-mail pioneer Richard Viguerie. Then she raised money for Ollie North's Freedom Alliance and for North's failed campaign for the U.S. Senate. Her main funder at Triad was Pennsylvania multi-millionaire Robert Cone, a zealous anti-abortion-rights crusader -- until his family toy company lost several personal injury lawsuits and he put his heart and political contributions into the tort reform movement. Cone even appeared in Triad's marketing video (though the corporation sold nothing and served only as a political operation).
For Triad, Pete Cloeren was a perfect mark: a guy with deep pockets and a track record (albeit a short one) of contributing to conservative Republicans. Even if it was just one candidate, he did have deep pockets.
DeLay and Babin were not Triad insiders; DeLay, in fact, was beginning to build his own huge fundraising operation. But he knew that Triad along with the Thurmond and Gill campaigns were conduits through which he could maximize Cloeren's giving. So he hooked Cloeren up with Malenick, who did for him what her corporation did for other big donors: took his money and moved it on to the candidate of his choice. A Senate committee looking at Triad found that "on occasions multiple PACs received checks from the same individual within a matter of days. All of the PACs receiving the contributions then made contributions to one candidate within days of one another." Precisely as the $5,000 Cloeren sent to Citizens United found its way back to the Babin campaign.
As the general election campaign began, Babin's opponent, Jim Turner, was blindsided by ads linking him to gay rights and early release of prisoners. ("God, guns, and gays" campaigns are formulaic fare in Texas; you remind voters that you favor God and guns and that your opponent is aligned with gays.) The ads attacking Turner were paid for by Citizens for Reform. Turner had no idea which "individual citizens" wrote the checks to pay for the attack ads.
