On the day after President Reagan defeated Walter F. Mondale, H. Lee Atwater was a rich man.
The deputy campaign manager of the Reagan-Bush '84 Committee became a full partner in the political consulting arm of Black, Manafort and Stone, a firm that exemplifies a key element of the vitality of the Republican Party: the potential for young tough, savvy political operatives to move into the political market and make big bucks.
In just five years, Black, Manafort and Stone -- and now Atwater -- has become a major new presence in the capital, specializing in connections, influence and hardball politics. It combines a political client list of influential elected officials with a lobbying clientele of corporations, foreign governments and trade associations.
Atwater and his colleagues represent the cream of Republican inside operatives. Charlie Black was a senior adviser to the Reagan '84 campaign and the campaign strategist for Sens. Jesse Helms (R-N.C.) and Phil Gramm (R-Tex.). Paul Manafort was the political director of the GOP convention in Dallas. Roger Stone was Northeast coordinator for Reagan-Bush.
Candidates are lining up to buy the firm's campaign services, and the list of lobbying clients is growing steadily.
The list includes: the investment banking firm of Salomon Brothers, which last year paid $135,000 to Black, Manafort and Stone; Kaman Aerospace, which laid out $255,000; the Dominican Republic, which signed on at $69,788 a quarter, and Rupert Murdoch's Australia-based The News Corp. Ltd., which is paying $180,000 a year for what the firm describes as an "activity limited to internal conferences and phone calls with client."
The cash flow to members of the firm started at a trickle when it was formed in 1980. By 1982, each partner's annual income reportedly had reached six figures, and they are aiming at incomes of $450,000 each for next year.
Atwater's first-year income reportedly will be at least $130,000, with the prospect of bonuses for new clients. His income will match his partners' next year. He said that, for his first year, he has an arrangement requiring that "I don't have to work but five or six days a month" while completing a thesis on negative campaigning for his PhD.
Even working part time, Atwater may have to work hard for his money. He reportedly has lined up at least three candidates running for governorships and the Senate in 1986, who will have to pay the firm in the neighborhood of $100,000 each in consulting fees and $250,000 to $450,000 in media placement charges.
At the same time, Atwater is on retainer to the firm's lobbying arm, on the verge of bringing in three or four new clients, each of whom will pay a retainer of $10,000 to $15,000 a month or more.
The lobbying branch of the intensely Republican firm is not ignoring Democrats, hiring Peter Kelly, finance chairman of the Democratic National Committee, and James Healey, Jr., former aide to Ways and Means Committee Chairman Daniel Rostenkowski (D-Ill.).
All between the ages of 32 and 36, Black, Manafort, Stone and Atwater were adolescents and college students in the 1960s and early 1970s, when the civil rights movement and opposition to the Vietnam war animated many of the nation's youth.
These young Turks of the Reagan revolution went in a different direction.
During Barry Goldwater's presidential campaign "in 1964, one of my neighbors [in suburban Lewisboro, N.Y.] was doing Republican precinct work," Stone said. "She gave me a copy of Goldwater's book 'Conscience of a Conservative.' I was immediately transformed into a zealot. I was 12 or 13 . . . . I was attracted to the anticommunist position Goldwater took, I felt the government spent too much, too much on welfare. At 12 years old, I thought the world was going to hell."
That same Goldwater year, the year that politics came to life for a host of current GOP activists, Black, then a senior in a North Carolina high school, saw his conservative Democratic parents switch political parties.
"There was a general feeling of resistance or rebellion among white southerners to LBJ Lyndon B. Johnson , to the things he was doing," Black said. "I wasn't conversant with the policies, or why the civil rights act was bad, but it caused me to focus on it."
In the years that followed, these young men threw themselves into the trench warfare of the College Republicans and Young Republicans In 1977, at 25, Stone won the presidency of the Young Republicans in a campaign managed by Manafort.
Four years earlier, Atwater managed the successful campaign of Karl Rove to be president of the College Republicans, defeating John T. (Terry) Dolan, whose drive was run by Stone, Manafort and Black. Black and Stone were the founders of the National Conservative Political Action Committee in 1975, with Dolan.
At the same time they began to move up the ladder of political campaigns, working variously for Helms, Sen. Strom Thurmond (R-S.C.), James Buckley, who was then a senator from New York, Richard M. Nixon, the Republican National Committee and, ultimately, Ronald Reagan.
Black, Manafort, Stone and Atwater all come out of two current wellsprings of the Republican Party: northern, Roman Catholic suburbia and the middle-class, white South. Their colleges were not Ivy League: Newberry College in South Carolina for Atwater, the University of Florida for Black, Georgetown University for Stone, and George Washington University for Manafort.
Stone was born in Norwalk, Conn., and brought up in the Lewisboro section of Westchester County. He described his family as middle-class, blue-collar Catholics; his father owned his own well-drilling company. Black's father started out as a salesman and worked his way up to regional manager for Sealtest Foods in Wilmington, N.C.
Atwater, unlike Stone and Black, did not get into politics until college.
"I was a rock-'n'-roll musician [guitar] and almost didn't go to college. I was with [singer] Percy Sledge. I was the only white guy there," he said. "My parents forced me to go to college; I was really in the southern soul movement."
Atwater's father, in Columbia, S.C., was an insurance adjustor and his mother was a schoolteacher.
"I decided I wanted to be a Republican simply because I was always an antiestablishment-type guy and all the establishment-type people on campus and in the state were Democrats," Atwater said. "The young Democrats in South Carolina were an elite group that went around in three-piece suits, Gant shirts and smoking cigars, acting like big shots."
Ten years later, serving as deputy political director at the White House from 1981 through the start of 1984, Atwater would bring such figures as singers James Brown and Wilson Pickett and cultural analysts John Nasbitt and Alvin Toffler to White House Friday luncheon sessions.
Atwater's antiestablishment views color his assessment of the current struggle between Republicans and Democrats.
"For 150 years, the establishment has always been business. [Franklin D.] Roosevelt came in and established another establishment, and it was government. So, for the first time, you have two establishments," Atwater said. "In 1980 we were able to define the establishment, insofar as it is bad, as government, not big business. Democrats tried [in 1984] and in 1982 to define the establishment as big business and corporations . . . .
"I read the National Enquirer every week. The National Enquirer readership is the exact key, swing voter I am talking about. If you read those National Enquirer stories, there'll be about four or five about wasteful government projects, spending $400,000 to study some flying tree lizard. But at the same time, there'll be some stories in there about some millionaire that has five Cadillacs and hasn't paid taxes since 1974, or so-and-so Republican congressman who never paid taxes. It's which one of those establishments that the public sees as the bad guy" that determines election outcomes.
For these young political operatives, Watergate, a disaster for the Republican Party, was a blessing, clearing out of GOP ranks an entire generation of consultants, media specialists and tacticians, a generation just 10 to 20 years their elders.
The firm was formed out of political upheaval in the 1980 campaign. Immediately after the New Hampshire primary, Reagan fired his top staff, including Black, his field director. Black then founded the firm and Manafort and Stone joined, continuing work for the campaign as consultants.
One of the key talents they bring to a campaign is a killer instinct for what is known in the trade as "driving up the opposition's negatives."
"When I first got into this, I became a polling junkie," Atwater said. "I just stumbled across the fact that candidates who went into an election with negatives higher than 30 or 40 points just inevitably lost. One of the conclusions I've reached is that in a two-man race, if one of the candidates can't win, and the other one is yours, you are going to come out all right."
In 1978, this translated into the Atwater-designed destruction of Charles D. (Pug) Ravenel, the Democratic nominee challenging Thurmond.
"I got a call from Roger Stone, who had found a story in a little publication in New York called something like The Village Thing," Atwater said. "Ravenel had gone to a Park avenue fund-raiser without realizing that any press was there. The story said: 'Pug Ravenel, appearing at a plush penthouse party of limousine liberals and Porsche populists, said he was embarrassed to be from South Carolina and that he would make a good third senator from New York.' I felt like a guy standing on top of a 20-story building and seeing a $100 bill."
Atwater persuaded a dissident Democratic state senator to do a television commercial telling South Carolina voters: "This year we've got something more important than party. We need Strom Thurmond, instead of a third senator from New York."
Ravenel's negative rating went from 12 percent at the start of the campaign to 43 percent on Election Day.
Similarly Black, who served as campaign strategist for Gramm's successful fight for a Texas Senate seat against Democrat Lloyd Doggett in the recent election, recalled:
"Doggett got the endorsement of the big gay PAC in San Antonio. That wasn't unusual, but then we got onto the fact that the gays had a male strip show at some bar and Doggett takes that money. That became a matter of his judgment, so we rolled it out there."
Although the members of the firm have ties to various potential candidates, the odds are that their support will go to Rep. Jack Kemp (R-N.Y.), if there is a contest.
"I see these guys just relishing the chance to drive George Bush's negatives right off the map, starting out with his gun-control votes and his membership in the Trilateral Commission," said one close friend of the partners. Atwater, however, said that his own loyalties are toward Bush.
The firm is at a critical juncture. What began as a collection of conservative Republican insurgents whose theme has been a deeply rooted resentment of both the Republican and Democratic establishments, has become a multimillion-dollar operation in which partnerships bring with them memberships in their country club of choice, and Mercedes Benz automobiles.
Stone, now a GOP authority on winning the votes of working-class, ethnic Catholic voters, gives lawn parties catered by a French chef, with a special consultant to arrange flowers.
It is with a sense of irony that Atwater contrasts the affluence of his partnership with the economic problems facing the Republican Party's key political target group, the baby-boom generation of voters born between 1946 and 1964.
"All of a sudden, these people who grew up thinking they'd get white-collar jobs get what, in fact, are blue-collar jobs," Atwater said. "Here I am, No. 2 in my home town Rexall Drugs, making 28 grand and I know if I stay here another 15 years I can be the No. 1 guy, making 36 grand."
Stone contended that the firm's affluence is a byproduct of struggle.
"We fought for a long time in this revolution in this party and in this country," he said. "The fact that it may also bring us individual economic prosperity comes as a little bit of a surprise . . . . I know what it was to be laughed at as an outcast. I remember when we couldn't get a framed picture of Ronald Reagan hung in the Republican National Committee."