Live from the Roasterie: Large-scale affinity fraud!
: GOP Billionaires Can’t Seem to Buy This Election: "You’d think buying an election would be easy...
...This is, after all, the rough pitch that political consultants deliver when persuading donors to part with their money.... Take the 2012 contest between Mitt Romney and Barack Obama. Celebrated political strategist Karl Rove assured a murderers’ row of Republican megadonors that, with enough funding, his super-pac could put Romney in the White House. ‘I had every expectation we would be the victors,’ says Home Depot co-founder Kenneth Langone, who gave half a million dollars to Rove’s American Crossroads. In the closing weeks of the campaign, Crossroads circulated a top-secret presentation to a small group of billionaires that projected Romney could win a ‘mandate’ if they contributed an additional total of $25 million to fund a ‘surge’ of negative ads. A handful ponied up, and on Election Night, they assembled in Boston certain they would be watching their investment pay off. Instead they watched Rove’s infamous Fox News meltdown as their $117 million grubstake went up in smoke.
To many of the billionaires it felt like a mugging.
A few days after the election, New York hedge-fund manager Daniel Loeb, who’d helped finance Rove’s surge, tried to sue Crossroads and Fox News for misrepresenting the facts. ‘Loeb felt this was like an investment bank committing fraud on a road show,’ a friend of his told me. After conferring with a securities lawyer, Loeb discovered that there are no investor protections in politics....
Donors have awakened to the realization that topflight consultants can earn millions from campaigns regardless of whether they win.... California winemaker John Jordan, a former Rove donor. ‘Crossroads treated me like a child with these investor conference calls where they wouldn’t tell you what was really going on. They offered platitudes and a newsletter.’... Perhaps Bush is the perfect case study: The candidate who has underperformed the most is the one with a 2012-style campaign, who steered all his major donors into one super-pac. That organization, Right to Rise USA, is run by the grizzled strategist Mike Murphy, who succeeded in bundling a $100 million war chest and is now finding himself on the receiving end of donor backlash. Last month, for instance, a group of major Bush supporters held a conference call to vent about Murphy after he outlined his strategy in an interview to Bloomberg Politics. ‘These guys got rip-shit,’ said one person briefed on the call...
