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HPI Analysis: Party control key for winning governors


2/14/2012 9:54:00 AM

 This article was originally publishes in the Jan. 19, 2012 edition of Howey Politics Indiana.

By BRIAN A. HOWEY
    
INDIANAPOLIS - There was a vast difference in the way Mike Pence and John Gregg kicked off their gubernatorial campaigns.
    
Pence’s June rally in  Columbus drew several thousand supporters from across the Republican Party spectrum, and there was a catered fried chicken box lunch, a dozen or so tables where supporters could sign up to volunteer, get a T-shirt, or pick up a ballot qualifying petition.
    
Gregg’s kickoff came in November at a quiet Sandborn park shelter in his hometown. There were a couple hundred people - many friends, neighbors, teachers and local elected officials - coffee and doughnuts.
    
Both candidates talked emotionally about their families.
    
But the separation that many Democrats had feared about the size and scope of the Gregg campaign are beginning to be realized with the release of the candidates’ financial figures.
    
Pence reported a record $5.012 million raised from last May 5 to Dec. 31, and had a whopping $3.698 million cash on hand. Gregg reported a modest $1.7 million raised - only about $1 million more than he reported raising last summer - and has $1.2 million cash on hand.
    
An apt comparison comes with Gov. Mitch Daniels’ fledgling campaign in December 2003, when his team reported $4.71 million. And that came during a period when David McIntosh, Murray Clark, Luke Kenley and Eric Miller were still in the race and raising funds.
    
“The overwhelming support from Hoosiers who are committed to Mike’s vision for building an even better Indiana is very exciting,” said Kyle Robertson, campaign manager. “These financial resources combined with our grassroots organization will put us in a position to be extremely competitive during this election year.”
    
The Pence campaign says it has 4,030 donors from within Indiana, 5,337 new donors, 3,457 who gave $100 or less, and the campaign raised $2 million in November and December, traditionally weak money months due to the holidays.
    
The Gregg campaign received 1,385 individual contributions under $100 and 98% of all individual contributions are from Indiana residents.
    
“I’m so appreciative of the many working men and women who donated to our campaign,” said Gregg. “I know every one of them could have spent that money someplace else. The everyday Hoosier has a place in this campaign, and I’m proud of that.”
    
As for his total, Gregg told the Indianapolis Star, “If you’re a sitting member of probably the most unpopular elected body in the United States, you’d need more money to get people to vote for you. You’ve got to get the stink off of you, It’s going to take a lot of cash to scrub that congressional whiff off of him.”

High burn rates
    
What surprised some observers was the burn rate: $1.4 million for Pence and $500,000 for Gregg. With a week of statewide TV costing $600,000, it would take $5 million to run a weekly TV campaign from August through the Nov. 6 election. The problem is more acute for Gregg now that the UAW’s region office consolidated with Ohio and headquartered in Toledo while Mo Davidson has retired. That will have a huge impact on Gregg’s fundraising.
    
There are deeper reasons for the disparity between the two campaigns that officially kicked off exploratory committees within several weeks of each other last spring.
    
While Pence has a primary challenger in self-funder Jim Wallace - who reported $1 million and says he is capable of spending $2 million before the May 8 primary - the perception is that the GOP is a united party. A greater obstacle to Pence would have been Lt. Gov. Becky Skillman, who opted out of the race more than a year ago.
    
Some observers believe that Gov. Daniels helped clear the way for Pence so that the five-term congressman would leave the presidential race that Daniels appeared to be slowly building up for at the time. Conventional wisdom was that the presidential field was not big enough for both Hoosiers.
    
And while the Democratic decks were essentially cleared for John Gregg and U.S. Rep. Joe Donnelly’s U.S. Senate run early last Spring, the Indiana Democratic Party is hardly united. That became evident when Gregg tried to replace state Chairman Dan Parker in December with a former aide, Tim Jeffers. The Democratic Central Committee rebuked Gregg, signaling that the “days of someone telling us who to vote for are over,” according to one district chairman.

Making more cats
    
Gregg was forced to appear before the Central Committee and advocate a rescinding of Parker’s resignation. Parker then barely survived a vote, leaving both men crippled.
    
Gregg explained that mess in his typically humorous style, saying, “When you hear the cats in the alley fighting and all, what they’re really doing is making more cats. Well, when you hear Democrats fighting, what we’re really doing is making more Democrats.”
    
That’s a good spin, but what is becoming apparent is that Democrats don’t seem to be on the same page. The Central Committee showdown has alienated Lake County Chairman Tom McDermott Jr. and Marion County Chairman Ed Treacy. There have been rumors of recruitment of another gubernatorial candidate.
    
The bruising fight in the Central Committee had some fearful Democrats remembering a move that essentially paved the way for White House Budget Director Daniels to return to Indiana in 2003 and seek the governorship. It was the creation of a “Phoenix Group” – a parallel organization that would eventually supplant the entrenched Central Committee. But without the big financiers in this - the post-Bren Simon finance era of the Indiana Democratic Party - and without Woody Myers, Steve Crane and Ann Stack involved, a parallel group would lack teeth.
    
In fact, if you look at the last three successful gubernatorial runs - Evan Bayh, Frank O’Bannon and Mitch Daniels - all three candidates were able to align the party interests to their own.
    
Bayh had managed his father’s final U.S. Senate run in 1980, with Sen. Birch Bayh losing to U.S. Rep. Dan Quayle. He attended law school at the University of Virginia, then returned to Indiana in the fall of 1984, campaigning on behalf of State Sen. Wayne Townsend’s unsuccessful gubernatorial run. The younger Bayh’s presence set off an air of inevitability, winning the 1986 secretary of state’s race against Rob Bowen, and setting himself up as a front-runner for the 1988 governor’s race. Bayh was able to make peace with O’Bannon in the late winter of 1988, joining forces for a dream ticket (though O’Bannon was still on the May 1988 primary ballot). In the process, Bayh had lined up enough Central Committee support that it became an extension of what would be a historic campaign. The party in 1988 ran the traditional GOTV efforts, while Bayh strapped on fundraising jets and was able to give the Democratic ticket an air war like none other in its history. And after winning in 1988, Gov. Bayh was the towering figure over the Central Committee, installing allies such as Ann DeLaney and Joe Hogsett as chairs.
    
And after two terms, there was no question that Lt. Gov. O’Bannon, with his burgeoning portfolio at Commerce, was the heir apparent. There was a seamless dovetailing from the Bayh governorship into the O’Bannon candidacy that ended with his 1996 upset of Indianapolis Mayor Stephen Goldsmith. The ‘96 campaign found O’Bannon facing a scenario similar to Gregg today: a massive dollar underdog.
    
The O’Bannon campaign pioneered the coordinated campaign between state party, the gubernatorial and other campaigns. “We have to figure out how to catch up and maximize our funds,” said Robin Winston, who worked on the O’Bannon campaign before becoming chair of the Indiana Democratic Party.
    
In Chris Matthews’ book “Jack Kennedy: Elusive Hero,” John F. Kennedy broke new territory in his 1946 Congressional campaign, essentially forming his own political organization outside of the state. “Kennedy was starting to create what Tip O’Neill called the ‘Kennedy Party’ one separate from the regular Democratic organizations. He was making it happen by asking citizens who’d never been involved before to come on board.” And there was also “womanpower,” which JFK described to O’Neill as the “untapped resource.”
    
Between 1948 and 1952, JFK traveled Masschusetts, hitting the small towns most candidates never visited. It was a prelude to his 1952 upset victory of U.S. Sen. Henry Cabot Lodge Jr. Again, a statewide organization was created parallel to the Democratic Party. Kennedy “teas” took place in hundreds of towns. Kennedy “secretaries” were selected in each community. “Kennedy had gotten traction from his early start in places off the standard grid for Democrats.”
    
It was a strategy that Mitch Daniels would use with extreme effectiveness in 2003-04 in Indiana.

The Phoenix Group
    
The Daniels’ scenario was more complicated.
    
Mike McDaniel had been Indiana Republican chairman for five years. There was some resistance to his continuation as chair when U.S. Rep. David McIntosh was drafted by a wide array of Republicans and members of the Indiana General Assembly. McIntosh’s team prodded at the McDaniel party in 1999 and ultimately failed to dislodge it. While O’Bannon was perceived as potentially vulnerable for reelection, a booming economy, a strong reelection campaign under the tutelage of Tom New and Robin Winston - and some campaign mistakes by McIntosh - helped O’Bannon win a second term by 14%.
    
In May 2001, State Rep. Robert Behning challenged McDaniel. “We need better backroom functions and a more succinct vision. My problem is not with Mike McDaniel,” Behning said. “My true goal is to change the direction of the state committee.”
    
“Outside of the state committee, nobody’s particularly happy,” said one former officeholder. “They view the state committee as in a mode to vote for self-preservation.”
    
Behning told HPR he had “between 10 and 12 votes,” but Howey Politics’ count indicated McDaniel should easily get the 10 votes needed to win. “I’m pretty confident I’ve got the votes,” McDaniel said. “The stuff he says we need to be doing we’re already doing.”
    
Taking note of all this was Mitch Daniels, who in December 2000 was selected to be President George W. Bush’s budget director.
    
On Aug. 14, 2001, the Republican Phoenix Group – the creation of Bob Grand, Jim Kittle Jr., Randall Tobias and Fred Klipsch – broke out into daylight at an event at Klipsch Audio Technologies headquarters. They essentially formed what would be that parallel organization. The money muscle made it so that the Phoenix Group couldn’t be ignored.
    
Kittle and other Republican financiers had grown frustrated over what they saw as a four-year cycle of “reinventing the wheel” when it comes to statewide races. “It seems like we start from scratch every time,” Kittle said. And there had been growing frustration over high-level campaigns run by John Mutz, Stephen Goldsmith, David McIntosh and Sue Anne Gilroy where a lack of money hadn’t been a problem. What had hamstrung Indiana Republicans had been top-flight competition, poor strategy and execution, and a lack of competitive technology.
    
Kittle downplayed the “takeover” aspects of Phoenix and the GOP at the time, but acknowledged the party’s technology problems with lists and vowed to surpass the Indiana Democrats. TPG’s headquarters at the Klipsch headquarters looked like a state party headquarters – not unlike the Democratic digs at One North Capitol – with an array of fundraisers, computer technicians and aspects of the “coordinated campaigns” the Democrats had run. There were signs from statewide, congressional and Marion County campaigns adorning the walls. There was also room available to house an additional major statewide campaign.
    
But by December, McDaniel decided to step down and while Kittle emerged as the financier’s choice, he was left to battle for the chair against 5th CD Chair John Earnest after Clerk of Courts John Okeson and 6th CD Chair Jean Ann Harcourt dropped out. But Kittle was no slam dunk. “There are concerns that he has no precinct level experience,” observed former Chairman Rex Early. “If being rich was the most important criterion, then Steve Hilbert would be chairman.”
    
Kittle developed a “Blueprint 2002” plan and campaigned on it. “The Blueprint lays out his vision,” said Larry MacIntyre of the Phoenix Group. “He is calling for a lot more activity from the state committee. He believes they should be much more involved in governor and legislative campaigns.”
    
Kittle defeated Earnest for the chair in January 2002, and by early February OMB Director Mitch Daniels emerged as a potential gubernatorial candidate. Howey Politics reported on Feb. 14, 2002, under the headline: Daniels tantalizes victory starved GOP; He’d ‘walk on coals’ for Kittle: OMB Director Mitch Daniels tantilized those attending the Indiana Republican Congress of Counties last weekend. The deadpanning Daniels set the crowd up, saying, “I don’t intend to be a candidate for governor ... of New York.” Those in attendance told Howey Politics that Daniels spoke about the War on Terror, the new morality in the White House, and then a homeward view of Indiana, which Daniels deems to be at a decisive economic and, ultimately, cultural crossroads. The speech sent the GOP rumor mill in full bore. Several county chairs told HPR that Daniels “sounded like a candidate.”
    
Kittle explained, “All sorts of people came up to me after he spoke and said I should recruit Mitch. What I’m doing is creating a political party that will be strong enough to help great candidates when they become available. We want to recruit best of class candidates. But there was no clear signal that Mitch has changed his position.”
        
Daniels said he never “left” Indiana. “I never say I ‘came back’ because I never left ... the only home I owned was here, the family was here, and I commuted as much as the work permitted, 33 trips in 2001 and something less than that after 9/11. Our youngest was starting senior year in 2003 and I first decided to be here for that.Then came the question of what to do vocationally.”
        
As for whether he would have run for governor without Phoenix, Daniels said, “It would have depended, I guess, on the degree of recruitment and who did it. Bill Oesterle, for instance, would still have been agitating, I’m pretty sure, in the absence of Phoenix. But Kittle and people he instigated were a big part of it. So unless those appeals had happened spontaneously, maybe not. I was in no position, time-wise or even legally, to lift an exploratory finger on my own.”

Who recruited who?
    
The reality isn’t so much Kittle recruiting Daniels, but the opposite.
    
Indiana Republican Chairman Eric Holcomb, visiting Washington before McDaniels’ resignation, paid a visit to Daniels at OMB with Vincennes Mayor Terry Mooney during the Phoenix Group’s emergence. Holcomb, then on the staff of U.S. Rep. John Hostettler, had drawn up an position paper on the state of Indiana Republicans and what he felted needed to be done. Holcomb said Daniels accepted the paper and begged off a lengthy visit, saying he had another commitment. Holcomb returned to his hotel room, and turned on C-SPAN only to see Daniels calmly fending off a barrage of questions from U.S. Sen. Trent Lott. Holcomb figured Daniels had little interest in his thoughts about the Indiana GOP, that is until the following morning. That’s when Daniels called him, asking a number of questions, and then soon offering him a political job, a precursor to what would become a full-fledged gubernatorial campaign in 2003.
    
The lesson is quite clear: had the Republican financiers not taken over the Indiana GOP, Daniels would probably not have returned to seek the governorship. The party on the same page was a prerequisite Daniels needed for what has become the most emphatically powerful party since the Bulen-Durnil heyday a generation ago.
    
That GOP juggernaut core is there for Pence, who is building off it in historic fashion. It’s much too late for Gregg to do the same.


 

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