Ed Crane, the longtime president of the libertarian Cato Institute, said he met Paul for lunch during this period and the two discussed direct-mail solicitations, which Paul was sending out to interest people in his newsletters. They agreed that “people who have extreme views” were more likely than others to respond.
Crane said Paul reported getting his best response when he used a mailing list from the now-defunct newspaper Spotlight, which was widely considered anti-Semitic and racist.
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Benton, Paul’s spokesman, said that Crane’s account “sounds odd” and that Paul did not recall the conversation.
At the time, Paul’s investment letter was languishing. According to the person involved with his businesses, Paul and others hit upon a solution: to “morph” the content to capitalize on a growing fear among some on the political right about the nation’s changing demographics and threats to economic liberty.
The investment letter became the Ron Paul Survival Report — a name designed to intrigue readers, the company secretary said. It cost subscribers about $100 a year. The tone of that and other Paul publications changed, becoming increasingly controversial. In 1992, for example, the Ron Paul Political Report defended chess champion Bobby Fischer, who had become known as an anti-Semitic Holocaust denier, for his stance on “Jewish questions.’’
Paul has said he wrote portions of the economic sections. The people familiar with his business said there was no indication that he wrote the controversial material.
Rockwell was the main writer of the racial passages, according to two people with direct knowledge of the business and a third close to Paul’s presidential campaign. Rockwell, founder of a libertarian think tank in Alabama, did not respond to phone calls and e-mails requesting comment. In 2008, he denied in an interview with the New Republic that he was Paul’s ghostwriter.
Paul “had to walk a very fine line,’’ said Eric Dondero Rittberg, a former longtime Paul aide who says Paul allowed the controversial material in his newsletter as a way to make money. Dondero Rittberg said he witnessed Paul proofing, editing and signing off on his newsletters in the mid-1990s.
“The real big money came from some of that racially tinged stuff, but he also had to keep his libertarian supporters, and they weren’t at all comfortable with that,’’ he said.
Dondero Rittberg is no longer a Paul supporter, and officials with Paul’s presidential campaign have said he was fired. Dondero Rittberg disputed that, saying he resigned in 2003 because he opposed Paul’s views on Iraq.
The July 15, 1994, issue of Survival Report exemplified how the newsletters merged material about race with a pitch for business. It contained a passage criticizing the rate of black-on-white crime when “blacks are only 12 percent of the population.’’ That was accompanied by two pages of ads from Ron Paul Precious Metals & Rare Coins, a business Paul used to sell gold and silver coins.
“The explosion you hear may not be the Fourth of July fireworks but the price of silver shooting up,’’ said one of the ads.
Hathway, the former Ron Paul & Associates secretary, said: “We had tons of subscribers, from all over the world. . . . I never had one complaint’’ about the content.
Paul a ‘hands-on boss’
Hathway described Paul as a “hands-on boss” who would come in to the company’s Houston office, about 50 miles from his home, about once a week. And he would call frequently. “He’d ask, ‘How are you doing? Do you need any more money in the account?’ ” she said.
The company also had an office in Clute, Tex., near Paul’s home, which it shared with Paul’s foundation and his campaigns at various points, Hathway and Dondero Rittberg said.
In 1996, as Paul ran for Congress again, his business success turned into a potential political liability when his newsletters surfaced in the Texas news media. Paul was quoted in the Dallas Morning News that year as defending a newsletter line from 1992 that said 95 percent of black men in the District are “semi-criminal or entirely criminal” and that black teenagers can be “unbelievably fleet of foot.”
“If you try to catch someone that has stolen a purse from you, there is no chance to catch them,” the newspaper quoted Paul as saying.
Paul won reelection, then dissolved Ron Paul & Associates in 2001. His nonprofit foundation is still in operation.
Staff researcher Lucy Shackelford contributed to this report.
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