Robert Michael Duncan had been immersed in the machinery of politics since before Watergate, specializing in the money that fuels it. Both a walking encyclopedia of campaign finance and a master forecaster of what was coming next, he preferred to remain mostly in the shadows, where the real political money business was transacted.
Duncan, who always went by Mike, got his first taste of politics when he was still in elementary school. His father, Bobby Duncan, owned a general store in rural Kentucky, and the family lived in back of it for the first four years of Mike’s life. The store was near the state’s southern border, and the family owned a working cattle farm on the Tennessee side of the line. But when it was time to send the kids to school, Bobby Duncan built the family house in Scott County, Tennessee, where Mike and his younger sister could get a better education.
Mike was a curious boy with ambitions beyond the horses and ponies he and his sister coveted. At age eight, he threw himself into an uncle’s campaign for Scott County superintendent of schools. Young Mike spent weeks knocking on his neighbors’ doors with Uncle Clarence, distributing campaign cards with Clarence Smith’s platform. Mike and Clarence each would take a side of the street, and whenever the youngster was asked a question that was too hard or wasn’t covered by the cards, he would signal for Uncle Clarence to come help. His uncle lost by fewer than twenty votes. The next Sunday at church, when Mike was rehashing the campaign, he discovered that several of his relatives hadn’t voted. The experience taught him the value of not only communicating a message but also mobilizing supporters—both of which take resources and, at higher levels, money. That would come later. For now, all Duncan knew was that he was hooked on politics.
About a dozen years later, Duncan entered the big leagues, at least fleetingly. As a newlywed law student, he took a semester off to serve as Kentucky youth director for the president of the United States, Richard Nixon, who was running for reelection. Back then, “cash was king in politics,” he recalled nostalgically in his soft honey drawl.1 Duncan has an incredible recall of numbers and details from decades-old campaigns, and his political war stories unfold in an understated matter-of-fact progression. The only hints that he enjoys the tales are a sly little smile and an almost mischievous glint in his eyes when he reaches an amusing moment. “Frankly, in the 1972 campaign with Nixon, we had more money than we knew what to do with, so we wasted a lot of it,” Duncan said, eyes glinting, “Some of that wound up in Kentucky.”
Nixon primarily used his massive war chest—including $20 million raised in secret before new disclosure laws went into effect2—to run what amounted to the first modern presidential campaign. Sophisticated polling shaped a devastatingly effective two-pronged advertising strategy that softened Nixon’s humorless image while portraying his Democratic foe, George McGovern, as a dangerous liberal extremist. Nixon barely hit the hustings himself, making only eight campaign outings the entire fall.3 One of the trips, though, took the president to the declining coal town of Ashland, Kentucky, where Duncan had done the advance work for a rally that drew an overflow crowd of thirty-five hundred to a local high school gym. Only once that night did Nixon allude to his opposition, and he made no mention of the Watergate scandal, which by the time of the rally had been revealed as a vast plot involving political espionage and huge sums of cash. In the weeks before the Ashland rally, the Washington Post reported links between Nixon’s administration and the burglars who had broken into the Democratic Party’s headquarters in the Watergate complex. The paper revealed that Nixon’s attorney general controlled a secret slush fund that was used to spy on Democrats.
But Nixon’s team was acting as if there was nothing to it, and Duncan was only tangentially aware of it during the campaign. After the rally, as a reward for his stellar work organizing it, Duncan got five minutes with the president in a holding area behind the stage. Nixon gave him a pair of gold cufflinks with the presidential seal in blue, and answered a question the young law student asked about foreign policy.
Although twelve days later Nixon won in a landslide, not long after that the Watergate scandal started swallowing his presidency. But Duncan’s most enduring memory was the spigot of cash that Nixon had at his disposal. At least $1.65 million turned out to be illegal,4 but the campaign was better funded than any Duncan had seen before or since. Duncan was a witness not only to the power of political cash but also to what was at the time regarded—wrongly, as it turns out—to be the end of the Wild West era of campaign cash. Just ahead was the beginning of a new, highly regulated world, of which Duncan would become a preeminent navigator.
Watergate spurred Congress to create a host of new campaign restrictions, setting new limits on how much individuals, political parties, and political committees could give to campaigns. It also set in place a public financing system for presidential campaigns and established the Federal Election Commission to enforce it all.
Just around the time Nixon resigned, Duncan was settling in with his new wife, Joanne, whom he had met in law school, and embarking on a lifelong career in banking. The couple had honeymooned at the 1972 GOP convention in Miami, so there could be little doubt that a life of politics, in some fashion, was before them. They moved to the tiny eastern Kentucky mining town of Inez, where Joanne’s father owned about a third of a community bank. Mike went to work for him, and he and Joanne had a son. When his father-in-law died, Mike took over, becoming the youngest bank CEO in the state. Duncan and his wife borrowed money to gain control of the bank, and they launched a modest financial empire. Before long, they had acquired another bank and opened more branches. The banks’ assets—along with the family’s—kept growing. Mike, who had kept a foot in politics by raising money for Kentucky Republicans including the powerful Sen. Mitch McConnell, began thinking about a return to national politics.
In 1989, with the bank thriving and his son in his teens, Duncan took a sabbatical to go to Washington for a yearlong fellowship in President George H. W. Bush’s administration. The program enabled accomplished private sector executives to serve in high-ranking administration posts. Bush abolished it in 1991 amid charges that executives were chosen for political reasons and were lavished with expensive taxpayer-funded European trips, jewelry, and other perks.5 Duncan had left before the controversy hit, and was not implicated in it. When he returned to Kentucky, he decorated his office at the bank with photos of himself with the president,6 then set his mind to what seemed an improbable task for a community banker: becoming a top player in national GOP circles. He soon became finance chairman of the Kentucky Republican Party and was a national committeeman on the RNC. A few years later, he chaired Congressman Jim Bunning’s successful 1998 campaign for Senate. He even toyed with the idea of mounting what would have been an uphill race for governor himself in 19997 but decided against it, citing family, business, and political considerations.8
Instead, he accepted a volunteer gig as a regional chairman for George W. Bush’s 2000 presidential campaign. Bush, a storied bestower of nicknames, dubbed him “Dunc”—as sure a sign as any that Duncan had arrived as a bona fide national player. When Bush won, he tapped Dunc as RNC treasurer, giving him oversight of the national party’s bank accounts, including about $30 million left over from Bush’s campaign. “Hold on to that, I’m going to need it later and I want my interest,” the new president told Duncan.9 The job was unpaid and required him to commute from Kentucky to Washington, sometimes driving over the Appalachian Mountains in his black SUV, but Duncan threw himself into it.
He had arrived in the top tier of national politics just as another earthquake was about to rock the world of campaign money. Until February 2002, party committees like the RNC and the Democratic National Committee (DNC) and the congressional campaign committees could accept massive checks from individuals, corporations, and (in the case of Democrats) labor unions. This so-called soft money was the only stream of unlimited funds the parties had left after the Watergate-era reforms, and it was essential to funding the national parties’ efforts on behalf of their presidential and congressional candidates. So valuable was this soft money that President Bill Clinton famously welcomed major donors to the party into the White House for coffees and sleepovers in the Lincoln Bedroom—an unseemly practice that was nonetheless incredibly effective in getting rich Democrats to cough up mega-checks. What was so critical about this cash is not just its impact on who won but the power it gave to the individual political party committees. More than a third of the $5.2 billion the parties raised between 1991 and 2002 came from soft money.10 That bounty allowed the parties to maintain tight control of their messages, platforms, and even candidates.
But by the time Duncan pulled into town, the parties were facing the very real prospect of watching the soft-money spigot go dry. Congress was on the verge of passing the McCain-Feingold bill, which would ban soft-money donations to the parties and also restrict the types of cash that could be used to fund costly advertisements in the weeks before an election. The bill passed the House on Valentine’s Day in 2002. Duncan, out to dinner that night with a senior White House official and several congressmen, begged the White House official to stop Bush from signing the legislation.11 A month later, it passed the Senate. In a decision that rankled Republicans, Bush signed it into law, then almost immediately skipped town on a fund-raising jag to collect as many big checks as possible before the law took effect. Duncan was morose. “As treasurer of the party, I saw my life flash in front of me,” he recalled later.12 “I saw 40 percent of my revenue going out the door with that legislation.”13
Not long after Bush had signed the bill, Duncan quietly went to the White House and told the president that the RNC was contemplating a lawsuit against the bill. It was a bizarre twist, but it showed how critical these large donations had become: in order to keep the money flowing, the president’s own party would publicly challenge a law he had just signed. “To the credit of the White House, the president said,” Duncan recalled, paraphrasing Bush, “some of this legislation may be unconstitutional, so have at it.”14 And so the president’s party, with the stealthy okay of the president, sued to overturn it.
As Republicans pinned their hopes on fighting the law, the Democrats put their chips on finding a way around it. So Clinton acolytes like Harold Ickes and John Podesta joined with well-funded labor unions to form a network of nonprofit groups that would raise huge sums from rich donors for advertisements and organizing activities supporting Democratic candidates. About two months before the Supreme Court even heard arguments in the McCain-Feingold challenge, the billionaire currency trader George Soros hosted a dozen or so donors and fifteen Democratic operatives (including Ickes, Podesta, and labor leader Steve Rosenthal) at his $27 million Hamptons beach home for a two-day strategy session about using these new groups to defeat George W. Bush in 2004. Before the confab adjourned, Soros and billionaire insurance mogul Peter Lewis had made the first of their big pledges.15 They would eventually combine to donate the lion’s share of the then-unprecedented $200 million raised by a suite of political nonprofit groups to elect Democratic presidential candidate John Kerry.16
Duncan and other Republican Party leaders, meanwhile, were urging their big donors to stand down. They wanted to make sure that the official party committees continued getting their share, and they were also still fuzzy on the legalities of this new landscape, despite the fact that other well-placed Republicans were pushing their rich supporters to give to new soft-money groups, including a controversial Kerry smear group called Swift Boat Veterans for Truth. “Our donors were confused,” Duncan recalled. “And while we were doing that—sending a confused signal to our donors—the Democrats, to their credit, were out organizing and doing a very good job, and I give a tip of the hat to Harold Ickes and John Podesta. Both of them started immediately.”17
The Democratic nonprofit groups combined to outspend their Republican counterparts three to one during the 2004 campaign18—to no avail, since Bush eked out a narrow victory, helped greatly by a devastatingly effective Swift Boat Veterans campaign that raised doubts about Kerry’s military service in Vietnam. It also demonstrated to Duncan and other Republicans the stunning potential of mega-checks channeled to groups outside the party infrastructure.
In the months after Election Day, the Federal Election Commission went after the Swift Boat group and the major Soros-funded groups for flouting the new restrictions. The agency alleged that those groups and others violated the McCain-Feingold law by trying to influence the presidential race without properly registering. Had they registered, they would have been prevented from accepting such huge contributions. The ensuing investigations included talk of subpoenaing the big donors, which had a chilling impact on the big-money flow. The most active of the groups folded up shop, and the big-money sector of the political economy essentially went dark. After 2004, few major operatives were publicly pushing big-money election spending, and few major donors wanted the legal trouble that seemed to come with it. On the left, there were further disappointments. The failure to sway the election despite what was, at the time, a record spending spree left Soros, Lewis, and some top Democratic funders convinced that there had to be a better way to influence American politics.
So liberals and conservatives set out on different courses after 2004. The left shifted its money toward think tanks and advocacy groups that were less focused on elections. Big-dollar conservatives already supported a strong think tank network, so Republican Party officials like Duncan focused on building wider and deeper networks of big donors, urging them to give the maximum allowable contribution to the party committees—during the 2006 campaign it was $26,700 per year,19 and the amount was increased incrementally for inflation in each subsequent cycle.
By the 2006 midterm election, fatigue with George W. Bush and war weariness helped Democrats take control of Congress for the first time since 1994. Looking to stabilize the Republican Party and its base of big donors, Bush tapped Duncan to cochair the RNC with Sen. Mel Martinez of Florida. Martinez was to be the public face of the committee, with Duncan running the operations. But Martinez stepped aside within a year, leaving Duncan alone at the helm. He had risen to the most prominent position he had ever held, but he was inheriting another crisis. Instead of diving into a Scrooge McDuck–style vault of soft money, he was scrambling to secure precious capped hard-dollar contributions ahead of a tough 2008 election cycle. Duncan rented an apartment just around the corner from the RNC headquarters and spent three or four hours every day making cold calls to big donors.20 With Bush’s help and without competition from the mostly mothballed big-money outside groups, Duncan’s RNC was able to raise enough to subsidize the 2008 campaign of the Republican nominee to replace Bush, Arizona senator John McCain. McCain not only was an unenthusiastic fund-raiser personally but, as one of the two architects of the 2002 bill, had helped crush the parties’ fund-raising ability. Still, Duncan’s committee, relying on a carefully cultivated network of big donors, overwhelmed the DNC in fund-raising during the 2008 election cycle, $445 million to $278 million.
Yet fund-raising was changing again, and this time there was nothing Duncan and the Republican Party could do to keep up. Their haul wasn’t nearly enough to help McCain offset the pioneering small-donor-powered fund-raising of Barack Obama’s presidential campaign. Fueled by an anti-Washington message that capitalized on public weariness with Bush as well as the historic prospect of electing the nation’s first African American president, Obama’s tech-savvy campaign raised a record $750 million. That dwarfed the $204 million brought in by McCain,21 though he also received $84 million through a Watergate-era public financing program that Obama declined to participate in. Obama handily won the presidency and took office pledging to empower regular folks over deep-pocketed interests that had long had an outsized voice in politics.
Obama’s unprecedented success tapping the often modest bank accounts of grassroots supporters left many Republican activists wondering whether the old-boy big-donor model represented by people like Mike Duncan was outdated. A few months after the election, Duncan lost his bid for another term as RNC chairman to a relative outsider named Michael Steele. The first African American to assume the post, Steele cast himself as a breath of fresh air who was going to broaden the party’s appeal and fund-raising base from the wealthy Bush crew to minorities and grassroots activists. The race left some ill will between the new chairman and Duncan’s allies (including Karl Rove), who suddenly found themselves without access to the party reins for the first time in twenty years.
Duncan packed up his apartment in Washington, D.C., crossed back over the Blue Ridge Mountains, and returned to the family bank. It seemed his high-flying Washington days were a thing of the past. He wasn’t expected back in the capital anytime soon. He did, however, still chat fairly regularly with the old Bush crew—including Rove. Duncan and Rove knew each other from way back in their College Republican days, and they had worked together while Rove was in the White House and Duncan was at the RNC. A regular topic of conversation in the weeks and months after Steele’s election was the new chairman’s dereliction of the big-donor network built and maintained by Bush, Rove, and Duncan. Duncan and Rove knew they needed to find a way to raise big checks outside the party structure, to supplement the RNC’s donor cash and compete with the political muscle that well-funded labor, environmental, and abortion rights groups supplied to Democrats. But the conversations were still abstract, and it wasn’t clear when something official might happen.
Then came Citizens United.
A few months after the Supreme Court decision, Duncan found himself sitting before several dozen election lawyers and operatives from both parties who had convened in the wood-paneled downtown Washington conference room of a top political law firm. These were his people, which perhaps explained why he had consented to a rare post-RNC public speaking appearance as the main attraction on the panel. I had agreed to moderate. The subject was both simple and complicated: what did Citizens United mean for the political world—operatives, lawyers, donors, candidates, party committees, and interest groups?
Duncan, of course, had lots of insight on the subject, but he started with a story about his childhood, going back to his days on the family farm in Scott County, Tennessee. When he and his younger sister were kids, they were given calves as pets to look after until they were full-grown and sent off to slaughter. But what they really wanted were “horses and ponies and things like that,” Duncan told the group, momentarily baffling me. Where was he was going with the childhood recollections?
“I remember the year that she got the pony,” Duncan continued, taking off his glasses and placing them on the table in front of him. “And I was really happy for her. But,” he went on, “I was envious of my sister, because I believed that I should have had that pony.” Then he got to his point: back when he was at the RNC, Duncan said, the pony he had wanted was for the Supreme Court to overturn the soft-money ban in McCain-Feingold. But the justices rejected Duncan’s lawsuit seeking that result. With the Citizens United case—which challenged the other major part of McCain-Feingold, the restrictions on outside advertising—Duncan said, “I was also hoping that my turn would come next.” That, Duncan said, was “the way I felt when I heard about Citizens United. I’m happy for the First Amendment rights. I think it was the correct decision. I’m a proponent of lots of money in politics and full disclosure in politics.” Duncan, in other words, had finally gotten his pony.
It was more than just a philosophical victory. He was ready to act. Three months after the Supreme Court’s decision in Citizens United, a lower federal court issued a ruling in a complementary case called SpeechNow.org vs. Federal Election Commission that paved the way for a new breed of political committee. The new groups, which came to be known as super PACs, allowed individuals (as well as unions and corporations) to spend as much as they wanted backing or opposing candidates as long as they didn’t coordinate with the candidates. Three days after the SpeechNow decision came down, Duncan’s name appeared on an Internal Revenue Service (IRS) filing as director of American Crossroads. It was the realization of the conversations Duncan had been having with Rove, and it was conceived as the flagship of a massive fund-raising, organizing, and advertising machine to be launched in time to influence the 2010 midterm elections.22 Besides Duncan, the other main folks behind it were Rove, former Bush-era RNC chairman Ed Gillespie, and a former US Chamber of Commerce official named Steven Law. On the very morning of the panel where Duncan waxed metaphorical about ponies and Citizens United, a colleague and I had published a front-page story in Politico about American Crossroads, and Duncan was carrying the print edition with him. “I hope you get a chance to look at that,” he said, holding it up proudly for the assembled operatives. American Crossroads, the story said, was “based on the model assembled by Democrats early in the decade, and with the same ambitious goal—to recapture Congress and the White House.”
The new landscape, Duncan predicted, would give rise to a new class of “cause donors”—businesspeople “who are going to give above and beyond. They can give to the parties and they can also give to some of these third party organizations.” He paused to stress that he wasn’t out to cannibalize the party or extract revenge on the man who had ousted him as RNC chairman, Michael Steele. “I lament, as a former party chairman and someone who’s been involved in the party literally all my life, the relative decline of the party structure in this country. . . . So I lament the fact that we’re in this situation, but I recognize that we have to do something about it. And so we have created an organization—and a series of organizations, as you reported on—that will be highly transparent, that will be above and beyond what the party system does. We want the parties to continue to prosper. But we want it to be above and beyond.”23
The Crossroads team’s level of commitment to Duncan’s two assertions—that he wouldn’t undermine the party and that he wouldn’t hide the names of donors from the public—would soon be tested.
Duncan’s successor as RNC chairman, Michael Steele, was wary of Crossroads and allied groups from the beginning. He saw them as a power grab, a cynical ploy to create a shadow party that would snatch control and cash away from the official Republican Party and redirect it to a small group of well-connected operatives including Duncan and Rove. “Karl Rove and his crew—Ed Gillespie and a sitting member of the [Republican National] Committee, former chairman Mike Duncan—form American Crossroads,” Steele complained to me.24 “Where are they going to go to get some of that money from? They are going to go to the base that they’ve cultivated for the last fifteen or twenty years. And that largely rests in the base of the RNC,” Steele went on. It was partly business, Steele contended, but also partly personal. “I know some of that was to ding me.”25
Then again, Steele’s struggles to win over big donors helped create a new niche for Duncan, Rove, and their allies. As the influential conservative blogger Erick Erickson told me at the time, “If Michael Steele weren’t swallowing his foot on a weekly basis, they wouldn’t be able to do what they’re doing.”26