By Michael D. Shear, Dan Balz and Chris Cillizza
Washington Post Staff Writers
Saturday, July 14, 2007
After weeks of internal struggles over who would run John McCain's presidential campaign, three key aides went to the candidate in January and told him he had to take action. Rick Davis, the campaign's chief executive, they said, should be pushed aside, and McCain had to make it clear that Terry Nelson, the campaign manager and a veteran of President Bush's 2004 team, was in charge.
But the senator from Arizona refused, telling the three aides -- John Weaver, Mark Salter and Nelson -- that he would not strip Davis of his title or empower Nelson. "You're all equals," McCain told them, according to one participant. "Work it out."
For McCain, the onetime insurgent then firmly ensconced as the front-runner for the Republican presidential nomination, it was a fateful decision. Instead of easing tensions among his most trusted advisers, it only exacerbated them, and for the next six months two warring factions clashed repeatedly as McCain's fundraising stalled and his poll numbers dropped.
This week McCain finally took a dramatic step, as his aides had urged him. But instead of moving Davis aside, he put him in clear control of the campaign. Nelson quit, Weaver resigned, and a dozen senior staff members went with them. With their departure, virtually no money in the bank, and the layoffs of dozens of other staff members, a campaign that once seemed on an inevitable march to the nomination has been left struggling for survival.
Interviews with more than two dozen current and former McCain campaign staffers, many speaking on the condition of anonymity so they could talk candidly about internal deliberations, describe an organization with confused lines of authority and riven with petty jealousies.
On one side was Weaver, a political strategist who has served at McCain's side for a decade and is credited with engineering his presidential bid in 2000. A Southerner with a wry smile and a sharp wit, Weaver recruited Nelson, the political director of Bush's win over Sen. John F. Kerry (D-Mass.), to run the second try at victory.
Weaver had sold Nelson to McCain as an impartial manager, but others on the staff viewed him as "a Weaver plant," said one longtime McCain friend who regularly talks to the senator. "McCain never bonded with Terry Nelson. They just didn't click."
On the other side was Davis, a longtime McCain operative whose relationship with the candidate -- and with McCain's wife, Cindy -- rivals Weaver's. Observers initially expected Davis to head the presidential campaign, but after Nelson's arrival, his role as chief executive officer became unclear.
Nicolle Wallace, a former Bush communications director who is close to many of the people in McCain's orbit, lamented that "this whole thing is a very sad breakdown of decades-old relationships."
Many of McCain's current problems can be traced to factors outside the campaign organization, particularly his support for the Iraq war and immigration reform. And internal fights are nothing new in presidential campaigns -- Kerry fired his campaign manager before the primaries even began. But rarely has a campaign with such promise come tumbling down so quickly.
"I should have resigned in December when this wasn't settled and Terry wasn't given the authority any manager would need," Weaver said. "Every bad event in the campaign was a derivative of that event."
Money Woes Lead to Clashes
As chief executive, a nebulous job in a political campaign, Davis exerted his influence privately, often calling McCain or his wife as he traveled the country supervising the fundraising effort. He was the smooth Washington operative, going back to his days working for President Ronald Reagan. A former managing partner of a powerhouse Republican lobbying firm, he was a bit of an odd choice for a candidate who had routinely taken on "Washington special interests."
Weaver, in contrast, exuded earnestness, a la the McCain of 2000. The lanky Texan saw his work for McCain as a cause -- he was so dispirited after the loss to Bush that year that he even briefly left the GOP to work for Democrats.
That this campaign was going to be different from the guerrilla operation of 2000, when McCain was overwhelmed by Bush's vast superiority in endorsements and resources, was evident from the preliminary budget drawn up last November. A copy of the document, which includes page after page of detailed spending and fundraising projections, was made available to The Washington Post.
Put together under Davis's supervision, the budget envisioned first-quarter fundraising of nearly $48 million. It assumed that by now the campaign would have raised another $23 million and would have spent $26 million, leaving about $45 million in the bank. Instead, the campaign is broke.
Davis, in a phone interview yesterday, said the rosy fundraising projections were taken almost literally from a budget prepared for Bush's 2004 campaign. "Everybody agreed up until about January that the Bush model was a good model -- it worked," he said. "If we could raise as much money, we wanted to do what he did."
The initial blueprint called for numerous highly paid consultants and state directors, mega-offices in New York and California that were to open in the first months of this year, and state offices not just in Iowa and New Hampshire but around the country.
The campaign anticipated paying directors of the larger offices $140,000 a year and directors of headquarters in states such as Iowa and New Hampshire $90,000 a year.
But as January turned to February, it became clear that the campaign was bringing in far less than Davis and Carla Eudy, the finance chief, had predicted.
In part, that was the result of a difficult political environment that was far different than the one McCain faced in 2000. As the situation in Iraq deteriorated, his staunch support for Bush's troop increase became a drag on his national poll numbers. The problem became worse during an April trip to Iraq, where he walked through a marketplace -- protected by 100 soldiers and their vehicles -- and remarked afterward how safe it was. His comments were mocked by war critics for weeks.
McCain attended only a handful of fundraisers during January, and several lavish fundraising "town halls" for wealthy donors cost more and brought in less than officials had hoped. As top campaign aides received daily "cash sheet" e-mails, the fundraising staff began revising the projections downward.
The growing tension about money revived the argument inside the campaign about who was in charge -- and who was to blame.
"This budget is the result of mine and other people's labor," Davis said. "There was no division of attitude toward this budget when it started. I don't think there was any question that, getting started, we were optimistic about how much we could raise and therefore optimistic about what we could spend."
The campaign raised just $24 million in the first six months of the year and spent nearly all of it. Campaign officials reported last week that they had $2 million in cash still available, but GOP sources said that when debts are subtracted, the actual amount will be well under $1 million.
The largest early expenditures in the initial budget were for costs associated with fundraising -- almost $10 million through the first six months of the year. The campaign had contracted with fundraisers, paying them as much as $10,000 a month. One campaign source said the campaign actually lost money on some of those fundraisers, who produced less in contributions than they were paid to raise them. Their contracts have been renegotiated.
The cost of travel ate up more money. McCain travels by private charter, and because he is a stickler for rules, he pays the full cost of such jets. One Republican familiar with the campaign's spending said the cost of moving McCain from state to state amounted to between $250,000 and $300,000 a month.
Nelson loyalists, of whom by then there were many, blamed Davis and Eudy for devising a plan that was out of whack with reality.
One campaign source said Nelson, who came aboard as campaign manager after the initial budget was drawn up, sought to reduce the projected $154 million figure to a still-lavish $137 million. In early February, in the face of fundraising problems, the budget was reduced to $100 million for the primaries, and further reduced to $78 million in March as the disappointing first-quarter numbers were totaled.
Davis supporters blamed Nelson and Weaver for profligate spending and for mismanaging the day-to-day operations of the campaign. One high-level McCain official said Weaver and Nelson did not act aggressively enough. They made "minor cutbacks" and "figured this to be a fundraising problem, not a problem with the whole model he had for the campaign. They misunderstood the problem."
Nelson considered resigning in the spring, feeling he did not have the full authority to implement changes that he thought were required. Others say Davis complained to Cindy McCain that the team was not effectively managing the budget.
By mid-April, it was clear that something had to change. Nelson and Weaver urged McCain to remove Eudy as finance chief. Later that month, the senator did just that, replacing her with Mary Kate Johnson, a former Bush fundraiser and an ally of Nelson's.
At the same time, at Nelson's urging, McCain shifted Davis's duties to include traveling the country to meet with donors in an attempt to boost fundraising. As some in the campaign saw it, the move was an attempt by Nelson and Weaver to get Davis out of the way.
"He won Round One," said one Nelson supporter.The Bush Model Fails
The political strategists who rode the Straight Talk Express bus with McCain in 2000 referred to their national headquarters in Alexandria as "the Pentagon," a nickname that reflected their disdain for bureaucracy, which they felt could destroy McCain's insurgent bid.
Eight years later, some of those same strategists created a behemoth of a bureaucracy to support McCain's second try at the White House. The top four -- Davis, Nelson, Weaver and Salter -- believed that a competitive campaign required all the tools of a modern operation, otherwise it would be at a disadvantage against former Massachusetts governor Mitt Romney and former New York mayor Rudolph W. Giuliani.
"When [McCain] went into the campaign, it was like everyone was going to use the techniques the Bush campaign used in 2004," said one Republican who spoke on the condition of anonymity.
By the middle of the second fundraising quarter, it was clear to those inside the campaign that a mistake had been made. Without an enormous amount of money to fuel the spending, McCain's Bush-like operation was becoming a liability, not an asset.
Money became an all-consuming concern for those at the top, especially for Nelson, who often played a sound clip on his computer from the movie "The Big Lebowski," in which a Jeff Bridges character named "The Dude" is asked "Where's the [expletive] money?"
The mood picked up after McCain's speech on Iraq at the Virginia Military Institute in April and his showing at the first Republican presidential debate on May 3. His five-state announcement tour in late April was deemed a success.
And then came the immigration debate. McCain's support for a comprehensive immigration overhaul put him out of step with the party base and, by the estimate of one McCain insider, cost the campaign $4 million or more in fundraising dollars.
As the campaign's fundraising continued to falter in June, leaks to reporters led to something of a witch hunt within the campaign. A staffer was instructed to create dummy budget numbers and send them to suspected leakers in hopes of flushing them out.
By early June, according to several sources, McCain was urging his strategists -- Weaver, Nelson and Salter -- to go public with another round of massive cuts to the campaign's staff and operations.
The three begged him to reconsider, saying the move would almost certainly dry up efforts to raise more money in June. McCain relented and headed to Iraq over the Fourth of July holiday, his third trip of the year.
But while he was there, the campaign was forced to announce that it had raised only about $11 million in the second quarter and had only $2 million left in the bank -- a far cry from the $45 million the budget had once assumed.
Back in Washington, McCain was, by all accounts, enraged. He railed at Weaver and Nelson in a meeting that ended when Weaver stormed out of the office.
Nelson, feeling as if he had lost the confidence of his candidate, offered his resignation, and McCain accepted. Weaver resigned, too, followed by a rash of lower-level staffers who owed their allegiance to him and Nelson.
"People I really believed in and a leadership team I really believed in no longer exists now," said Edward Failor, one of McCain's team in Iowa, as he resigned.
On Thursday, Davis, newly empowered, hired back many of the staffers whom Nelson and Weaver had fired in April, including former finance chief Eudy.
A McCain friend who talked to the senator after the departures of Nelson and Weaver described him as "pretty low." The friend said McCain told him, "I'm really unhappy because I've been telling these guys not to spend so much goddamn money, and they spent it anyway."
McCain described himself as "tossing and turning" over a "tough" decision and "sad" about what happened.
"He's trying to take control of his own campaign," the friend said.
Staff writers Anne E. Kornblut, Howard Kurtz and Matthew Mosk contributed to this report.