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Buchanan Inc.

by MONTE PAULSEN

[from the November 22, 1999 issue]

When Patrick Buchanan swooped into a suburban Virginia hotel on October 25 to formally shred his ties to the Republican Party, a shiny new issue emerged awkwardly from his clutch of conservative concerns: electoral reform. Strongly felt tenets of the Reform Party such as ballot access and campaign finance reform suddenly became Buchanan's causes, too. "Our vaunted two-party system is a snare and a delusion, a fraud upon the nation," he told the cheering crowd of 350 supporters. "Our two parties have become nothing but two wings of the same bird of prey."

Buchanan is a late arrival to reform--both the party and the concept of clean elections. Together with his sister Angela "Bay" Buchanan, who perched at the edge of the flag-lined stage as he made his announcement, Buchanan has built one of the most rapacious political machines in the country. Pat is the peacock. Every four years he takes a break from his work as a television pundit to strut the campaign trail, throwing out sharp-tongued barbs as quickly as he can think them up. Bay tends the nest. As compulsively organized as her brother is freewheeling, she keeps the campaign running with an attention to detail that aides describe as obsessive. She "runs it like a general," Pat's wife, Shelley, told the Christian Science Monitor. "There wouldn't be a campaign if it weren't for Bay."

Pat and Bay have built a semipermanent organization that has promoted conservative causes while at the same time making them rich. They've become experts at the lucrative game of direct-mail fundraising and masters at qualifying for federal matching funds. In between presidential elections, they continue their issue-advocacy and fundraising operations through a tightly controlled nonprofit organization. In this fashion, Buchanan Inc. has been promoting Pat's television and publishing careers--and employing Bay full time--since 1992.

Having already embarrassed President George Bush in 1992 and briefly sidelined Senator Bob Dole in 1996, this predatory pair have now fixed their sights on the Reform Party. The hunt will not be easy: Bay must land Pat's name on ballots in twenty-nine states where Reform is not recognized and snag the largest number of mail-in votes in a chaotic open primary. They'll have to fend off attacks from Minnesota Governor Jesse Ventura and New York real estate tycoon Donald Trump. And they'll have to scrape together a minimum of $4 million more in campaign cash. But the prize they aim to snatch is meaty indeed: an extended campaign, a shot at presidential debates and an extra $12.6 million in party matching funds.

Clan Buchanan

Patrick Buchanan moved into his first White House office three decades ago, as a speechwriter and senior adviser for President Richard Nixon. There he coined the phrase "silent majority" and helped shape the middlebrow strategy that drew millions of hard-hat Democrats to Nixon. "We should move to re-capture the anti-Establishment tradition or theme in American politics," Buchanan wrote in a typical 1972 memo. The candidate who now calls for clean elections also popularized the phrase "political hardball"--proposing, for example, that the Internal Revenue Service be ordered to investigate liberal think tanks.

Watergate devastated Buchanan, who considered Nixon a second father. He unleashed his fury at traitorous "liberal elites" through a barrage of pugilistic punditry that subsequently transformed him into the nation's best-known Angry White Guy. Today he is a multimillionaire defined as much by his contradictions as his convictions. He paints himself as an outsider running against Washington, yet he's lived inside the Beltway for all but four of his 61 years. A devout Catholic, he appeals to evangelical Christians whose lives revolve around their families, though he himself has never had children.

Angela Buchanan is ten years younger than Pat. She earned a master's in mathematics at McGill University in Montreal and joined Nixon's 1972 re-election campaign as a bookkeeper. There she grew close to the big brother who called her Bay--toddler talk for "baby"--and a remarkable political partnership was hatched. After a post-Watergate sojourn in Australia, Bay went to work for Ronald Reagan's 1976 presidential campaign. The former actor lost the GOP primary, but Bay won the role that launched her career: For the next four years, she served as understudy to political mechanic Lyn Nofziger. Bay became controller of a nonprofit organization called Citizens for the Republic, created with money and mailing lists left over from Reagan's '76 campaign. Though aspects of CFTR were later determined to be illegal, the notion of using nonprofits between election cycles to pave the way for presidential campaigns has since become commonplace. Bay went on to become national treasurer of Reagan's victorious 1980 campaign.

President Reagan rewarded Bay by appointing her Treasurer of the United States. At 32, she was the youngest person ever to hold the post. (Her signature can still be found on older greenbacks.) Brother Pat followed his younger sister into the Reagan Administration during its second term--he served two years as White House communications director--before returning to his career as a pundit.

It was Bay who transformed her brother into what columnist Jack Anderson called "the Energizer bunny of the Republican presidential primary." Pat had toyed with the idea of running against then-Vice President George Bush in 1988, but he stayed out of the race in deference to Jack Kemp. No sooner had Bush moved into the White House than Pat the pundit began attacking him for "betraying Reagan's legacy." The accusations grew sharper as the years wore on. After reading a particularly critical column in December 1991, Bay phoned her older brother and offered to manage his campaign. Bay's career as a political consultant had stalled after she managed a losing Senate campaign in 1986 and lost her own bid for California Treasurer in 1990. Her primary source of income was her salary at the nearly moribund Citizens for the Republic, which was staggering along by renting its aging contributor lists to marketers of everything from magazine subscriptions to cheese. And so it was that after decades of chasing each other around the White House lawn, brother and sister finally joined forces.

A Direct-Mail Gold Mine

The Buchanans ran in thirty-three state primaries in 1992 and won 3 million votes. They humiliated President Bush in working-class New Hampshire by winning 37 percent of the vote. They carried their conservative crusade to the GOP convention in Houston, where Pat recruited the conservative faithful to join his "Culture War."

As successful as they were at the polling halls, however, the Buchanans were even more so in the "caging rooms" where envelopes stuffed with campaign contributions were ripped open. By the time the '92 campaign was over, the Buchanans had raised at least $7.2 million, most of it through direct-mail solicitations. It was a record-smashing haul. Not since Reagan had a candidate used direct mail so successfully.

The Buchanans were naturals at direct mail. Out on the campaign trail, Pat wrote and refined his own speeches, effectively test-marketing his own rhetoric. Back at their McLean, Virginia, headquarters, Bay transformed her brother's battle cries into tightly written fundraising letters. Using techniques pioneered by legendary GOP fundraiser Richard Viguerie and refined by former mentor Nofziger, Bay helped her brother tap into a sea of small donors. Whereas most top-tier campaigns depend on $1,000 contributions harvested from clubby networks of upper-middle-class donors, the 1996 Buchanan campaign had an average "large" donation of only $416. And the vast majority of Buchanan donors gave far less. Bay estimates that the average donation to the current campaign is a mere $27. (An exact average is not publicly available because the Federal Election Commission does not require reporting of donations under $200.)

Few donors realize that in addition to giving money to the Buchanan cause, they are also signing up for years of junk mail. Buchanan Inc. routinely sells its mailing lists for extra cash, just as Citizens for the Republic did. At the end of the 1996 campaign, for example, the 162,000-name Buchanan for President list fetched $360,000. The current campaign is so oriented toward harvesting names for its mailing lists that callers to the toll-free 800 number are asked for their names and addresses immediately after the phone is answered--before they have a chance to state their business.

A bias toward extremism is inherent in the Buchanans' "join the fight" style of direct-mail solicitation. Donors don't respond to letters that cry, "All is well." Rather, they whip out their checkbooks in response to emergencies. So in order to keep the money rolling in, the Buchanans reduce every complex issue to a black-and-white crisis. This has attracted extremists from the most disfranchised fringe of US politics. Gun-rights advocate Larry Pratt, for example, was a co-chairman of the 1996 campaign until it was revealed that he had participated in white-supremacist rallies. Also supporting the 1996 campaign were William Carter of South Carolina, who had ties to former Ku Klux Klan leader David Duke, and Michael Bray, who spent nearly four years in federal prison for his role in a series of abortion clinic bombings. The Buchanans bristle at accusations that they, too, are extremists, and they defend themselves by noting that they don't have the resources to screen every donor. This point was proven for them by TV satirist Michael Moore, who mailed the '96 campaign a $100 donation from a fictional organization he dubbed "Abortionists for Buchanan." The check was promptly cashed.

The American Cause

After the 1992 GOP primary was over, Pat rejoined the punditocracy. His quixotic campaign boosted the popularity of shows like CNN's Crossfire and Capital Gang, and his new ratings boosted his take-home pay. Before his first campaign he made $572,505 a year; by 1995 he was making $709,310. He now earns in excess of a million dollars a year.

Bay had no such career to which she could return. But there was enough money left over from the 1992 campaign to pay her a salary for two more years. She took home $112,538 from January 1993 through March 1995. In order to keep the rest of her staff intact between campaigns, Bay resuscitated Citizens for the Republic. In February of 1993 she changed the group's name to The American Cause and moved it to the Virginia office from which she had run the campaign. Just as it had done for Reagan, the nonprofit promoted conservative causes and kept Pat Buchanan's name in front of conservative voters between elections.

The American Cause also provided Bay with the means to squeeze more donations out of the mailing lists she had built during the campaign. The American Cause raised $2.5 million between the 1992 and 1996 elections, most of that from donors to the 1992 presidential campaign. (The group also resold the campaign mailing list several times.) Because it was not a campaign, The American Cause was able to accept donations far larger than the $1,000 maximum (for individuals) allowed under federal law. In 1994, for example, textile magnate Roger Milliken, who stood to be hurt by a flood of cheap textiles, gave $250,000 to The American Cause and another $1.9 million to a sister nonprofit called the Coalition for the American Cause. Buchanan Inc. helped Milliken lobby Congress against adopting the General Agreement on Tariffs and Trade, while Milliken helped boost Buchanan's image: The nonprofit bought a million dollars of television advertising, all of which starred a very presidential-looking Pat Buchanan.

With a staff and office in place, launching the 1996 Buchanan for President campaign was relatively simple. Late in 1994, Bay locked up the glass-and-concrete offices of The American Cause. When she returned the following week, the offices and accounts had legally been transformed into the campaign. The name on the door had changed, but the faces inside remained the same. Likewise, when the 1996 campaign was over, The American Cause was revived, mailing out "TAC-grams" newsletters. One such fundraising letter--mailed by a political nonprofit identical to those Buchanan had urged Nixon to sic the IRS on twenty years earlier--called for the abolition of a "rogue regime" at the IRS.

Matching-Funds Millions

Buchanan did even better in 1996 than he had in 1992. He won high-profile early victories in Alaska, Louisiana and all-important New Hampshire, and he almost won Iowa, in Senator Bob Dole's backyard. He was on the cover of Time in February and was briefly a front-runner until the GOP moderates steamrolled him on Super Tuesday.

And once again, Pat Buchanan's success at the ballot box was exceeded only by Bay Buchanan's at the mailbox. She collected a total of $16.3 million, mostly through direct mail. By the time they won the New Hampshire primary, the Buchanans had spent more than four times as much on direct mail as the campaigns of President Clinton and GOP front-runner Dole combined. And the Buchanans didn't stop there. Even after the nomination was hopelessly lost, they continued soliciting funds. On or about May 1--weeks after Bay had laid off half the campaign's 100 salaried workers--roughly 140,000 Buchanan supporters received a letter asking for money to continue Pat's fight for "the heart and soul of the Republican Party."

Why would the Buchanans continue asking for money even after they knew they had lost? Simple: They still had three months left during which contributions would qualify for federal matching funds. During those three months, every dollar given to the campaign would bring two dollars to Buchanan Inc.

Bay has proven herself a master at the finicky game of qualifying for federal matching funds. Federal Election Commission records show that in 1992 she collected $5.2 million in such funds. Only George Bush and Bill Clinton--the party nominees--qualified for more. And in 1996 the Buchanans took home nearly $11 million in matching funds. President Clinton, by way of comparison, collected only $13.4 million, and GOP nominee Bob Dole--who stayed on the campaign trail twice as long as Buchanan--received only $13.5 million.

Buchanan Inc.'s success at the matching-funds game stems from the way in which much of the money is raised. Only the first $250 from each donor qualifies for federal matching funds. As a result, candidates such as Clinton and Dole--each of whom received many contributions at the $1,000 limit--qualify for a lower percentage of matching funds than do candidates such as Buchanan, whose direct-mail solicitations produce greater numbers of smaller donations.

With Lamar Alexander, Elizabeth Dole and Dan Quayle out of the 2000 race so early--and with George W. Bush and Forbes choosing to forgo matching funds--the Buchanan campaign expects to do even better this time around. It had collected almost $4 million in contributions through the end of September, and was on track to file for more than $3 million in matching funds by the end of October. Bay hopes to raise and match another $6 million between now and the Reform convention next August. Thus, over the course of three presidential primaries, Buchanan Inc. may collect $26 million worth of matching funds. Add a $2 million Reform convention fund and the $12.6 million that will flow to the Reform Party nominee after the convention, and the Buchanans could wind up with some $40 million in taxpayer subsidies--making Buchanan Inc. the top beneficiary of public campaign financing this decade.

A Win-Win Situation

None of that money flows directly into Pat's pockets. But nearly all of it promotes his media career and book sales, which as of August 1999 had provided him with a net worth of more than $4.4 million. He lives in a white-columned mansion in Virginia, across the street from CIA headquarters. Senator Ted Kennedy, Gen. Colin Powell and the Rev. Sun Myung Moon live down the street.

Pat also keeps the sizable royalties from his book sales. He has published two books in the past two years: The Great Betrayal in 1998 and A Republic, Not an Empire late this past summer. Republic, a $30 hardcover, was No. 23 and climbing on the New York Times bestseller list in late October. This success is due in part to the relentless manner in which the campaign promotes Pat's book--through speeches, press releases, direct mail and via the Internet. In an e-mail distributed on September 25, for example, Pat wrote: "Reports are coming in here that giant chain bookstores are not carrying A Republic, Not an Empire. Please call your local bookstores in every city and town in America, and demand to know if they are carrying A Republic, Not an Empire, and if not, why not?"

Buchanan Inc. promotes Bay, too. Shortly after the 1996 GOP convention she replaced Mary Matalin on the talk show Equal Time, and she remains a popular guest on cable's burgeoning pundit shows. On the afternoon of President Clinton's 1998 testimony before Kenneth Starr's grand jury, the Buchanans appeared on two TV networks at the same time--Pat on MSNBC and Bay on CNN.

Bay has also feathered her nest directly. In addition to her $100,000-a-year salary as campaign manager, she paid herself an estimated $320,000 during the 1996 campaign through a media-buying company she set up on the side. Bay was owner and president of a private Virginia firm called WTS Media--after her three sons William, Tommy and Stuart--which took an 8 percent commission on the roughly $4 million worth of broadcast advertising Bay bought on behalf of the campaign. WTS had no full-time staff, no office and no clients other than the Buchanan campaign. And Bay appears prepared to do it again. Early this year, she changed the name of WTS to Carmel Consultants. Asked whether Carmel will work for the 2000 campaign, Bay said: "They could put in a proposal." Such insider dealing is legal, and officials with campaigns of both parties have done it. But--like the myriad practices of Buchanan Inc.--it seems to fly in the face of Pat Buchanan's born-again commitment to campaign reform.

Both Buchanans know Pat will never be President. Even the most optimistic polls show him finishing a distant third as Reform candidate. But Pat is visibly energized by the prospect that he could actually win a presidential nomination, a prize that has long eluded him. And within the Reform Party, even those cool to his conservative social views are eager to see him win the 5 percent of the national vote they need in order to retain their status as a major party.

The new campaign will buoy both Buchanan careers. And Bay will gain access to dozens of new state party mailing lists, contributor lists, e-mail lists and eager volunteers. That means that no matter what else happens, Buchanan Inc. wins.