Paul's victory was widely seen as a rebuke to the GOP establishment and a sign of the tea party's strength. It would also prove to be a harbinger: Though Paul's libertarian politics differ significantly from Donald Trump's populism, both men benefited from growing divisions within the GOP and anti-Washington anger among the party's voters.
On Nov. 15, Grayson (now with the law firm Frost Brown Todd) and David Adams, Paul's campaign manager during the primary (now in the financial planning business), sat down with The Washington Post's Libby Casey to revisit that seminal race. (Paul declined our invitation to participate.) What follows is a transcript — condensed, edited, annotated and reordered for clarity — of the exchange. We start in April 2009, as then-Sen. Jim Bunning was considering whether to run again:
Grayson: A lot of people were worried if Bunning retires, who's going to run to take his spot? Mutual friends of mine and Bunning came to me and said, "We've got to do something." I flew up to D.C. to see Bunning about forming an exploratory committee. He said, "Yeah, I'm okay with that." I walked out of the meeting and was like, "I'm running for Senate, I guess."
Meanwhile, David Adams, director of Kentucky Votes at the Bluegrass Institute, a libertarian think tank, started hearing that Rand Paul was considering running, too.
Adams: I'd never met Rand. I had heard his name a couple of times. One night my boss at the Bluegrass Institute called me and said, "You need to talk to this guy out here in Bowling Green. I think he's going to run for U.S. Senate." So I called Rand and I set up a couple of events for him in Lexington, and they went really well. I thought, Rand, if you're going to run for the Senate you need a campaign manager, you ought to hire me, and so he did.
We had this fledgling campaign staff. We really felt at the very beginning we are going to get our butts kicked. But we didn't really care. We're going to go fight the good fight.
Casey: Going into the campaign, what did you think Rand's strengths were?
Adams: He is a super smart guy. He figured it out really fast. There at the very beginning, he wasn't electrifying crowds like he came to do later. But having his dad just having run for president and having a pretty decent following in Kentucky — that was a good start.
With pressure mounting from party leaders for Bunning to quit the race, he finally withdrew in July 2009.
Grayson: After Jim dropped out, he told me he was mad at me because he thought I had tried to run him out of the race by raising the most money. And I was like, "You told me to form an exploratory committee." He was like, "I'm not going to endorse Rand because he's never done anything for the party. I'm just going to stay out of it." But I think he was mad at me.
The first public poll that came out put Grayson ahead by 11 points. Adams said that was the first time he thought they had a shot at winning. Then in April 2010, Bunning endorsed Paul, after telling Grayson months earlier that he wouldn't.
Casey: Trey, when did you find out Bunning endorsed Rand?
Grayson: I was probably at a Lincoln Day dinner. There are 5 million Lincoln Day dinners in Kentucky. Every Friday and Saturday night from like mid-January until like mid-April, David [Adams], Rand and I were together.
At these joint appearances, stylistic differences between Paul and Grayson became apparent.
Grayson: Rand was connecting with a very blunt message. He would just jump into his speech. He was not beginning with, you know, "It's so great to be here." None of that. He would go —
Adams: "I'm here for the tea party. We're here to take our country back."
One of Paul's key campaign issues was the Troubled Asset Relief Program, or TARP, the federal government's $700 billion bailout of Wall Street during the Great Recession in 2008. Rand Paul's ability to raise money from supporters of his father and the tea party who were angry about the bailout proved to be a huge advantage.
Adams: What we were seeing at the tea party rallies, as sparse as they may have been in comparison to Republican events, the energy was palpable. It was the 2008 bailout that was a real energizer. And so, when Mitch [McConnell] did a fundraiser for Trey [in September], he had like 23 U.S. senators there. We went through and counted the ones that voted for the bank bailout and we called it the Bailout Ball.
Grayson: It was in Washington. Twenty-three senators put their names on the invitation. McConnell was obviously there. [Arizona's John] McCain was there. [Tennessee's Bob] Corker was there. [Alabama's Richard] Shelby was there. I raised a hundred-something thousand dollars at that event. It was kind of my coming-out party in Washington. It should've been an awesome day for me.
Back in Kentucky, Paul's campaign was busy sending out emails and messages on social media to supporters about the "Bailout Ball" and asking for contributions for a "money bomb," a short-term online fundraising drive that Ron Paul had used often in past campaigns. Rand Paul relied on several money bombs throughout the primary campaign.
Adams: It was so much fun. We told people to tell people to tell people to tell people. We had money coming in like crazy, from Alaska! It was just a 24-hour period. We raised close to $200,000.
Grayson: I don't know this is going on because I'm at this event. I'm meeting all these people. I'm like, "This is cool. These are going to be my peers." I remember Shelby saying, "I can't wait to have you here."
After Grayson returned home, he got a call from his campaign staff about the "Bailout Ball" money bomb.
Grayson: I was in my car at Target in Lexington and they were like, "Pull over. You need to hear this." They told me the bad news. I think, "Okay, this race is very different than what we thought it would be." We knew there's something going on here. But in the end, we still felt on issues, with the support of McConnell and [Rep. Hal] Rogers and the party structure, that we would win this thing. It was just going to be a lot harder slog than we anticipated.
Adams: Trey's greatest strength was that he had Mitch McConnell in his corner. And Rand's greatest strength was that Trey had Mitch McConnell in his corner. And it was a bigger strength for Rand than it was for Trey.
Quite a few outsiders also inserted themselves into the race, including 2008 GOP vice presidential candidate Sarah Palin, who endorsed Paul in February 2010.
Adams: That really was a major turning point for us. And the way that came about was an interesting story. You had a mailman in western Kentucky who was a Ron Paul fan, who became a Rand Paul fan. And he sent a letter to Sarah Palin and said, "We need you to support Rand Paul. We need you to endorse him and come here and help him." One day, he gets a letter mailed to his house from Sarah Palin saying, "How do I get ahold of Rand Paul?" And so, he calls me. He was completely freaked out. He said, "You're not going to believe it. Sarah Palin wants to help Rand Paul." And her name was just solid gold at that point.
Grayson: She endorses Rand kind of out of the blue and we're like, "What's up with that?" We actually leaned on McCain, and she was quiet for a while. And then I made a mistake. I mean, I don't regret saying it, but the Courier-Journal in Louisville decided to live-stream their editorial-board meeting for their endorsement. And in the meeting, they asked me about Sarah Palin, and I said she wasn't qualified to be president. [Makes explosion noise. Adams laughs.]
Casey [to Adams]: When did you realize you had momentum?
Adams: We felt things were pretty in hand in March. Right before the May primary — I tend to drive very fast — I got pulled over by police twice in the same week. Both times the police officer walked around to the driver's side window, glanced in the back seat full of Rand Paul signs and said, "Son, I see what you are doing. Be careful." When it happened the first time, I thought, well, that was cool. And then the second time it happened, I thought, we're really onto something. And every time we hit Trey, I mean, bless his heart, every time he did something that was ordinarily a good move, we'd flip that around on him, too. So yeah, we were confident.
After the "Bailout Ball," Paul had pulled ahead of Grayson in public polls. But as primary day approached, Grayson thought the race was closer, and he made a fateful decision.
Grayson: In our polls, we were basically even between the undecideds and the margin of error. We thought if McConnell and Hal Rogers publicly endorsed me, given their popularity in the party, that would put it over the top. So, on the Sunday after the Kentucky Derby, McConnell cut an ad where he looked right into the camera and said essentially this: I need Trey Grayson by my side in Washington to defeat Barack Obama. And then the other half of the ad was: I'm Trey Grayson, you know, I'm awesome. Vote for me, whatever. And that was our closing ad.
The primary was held on May 18, 2010.
Grayson: I ended up losing by over 20 points. I just got destroyed everywhere. And then I went back into the office and there were a couple of the younger staffers who were working for my campaign. And they'd just become unemployed. They weren't going to go to Washington. And I remember feeling terrible about that. And then that night I came back to our house, and my wife and I, we each took our campaign stickers off our cars, crying. And then I got back in my bedroom and there was a note from my older daughter. You know, like a note of encouragement. And then the next day, my younger daughter says, "I guess that means we're not going to the Taylor Swift concert in Washington —"
Adams: Whoa, oh no!
Grayson: Taylor Swift was going to be at the Verizon Center in June. We got a suite there. They were going to come up and go to this Taylor Swift show, and we were going to raise money for the campaign for the fall. And I'm like, "No, we're not going to Taylor Swift." So I unemployed these people and broke my kid's heart. Then Saturday, I went down to Frankfort and we had a unity rally [to support Rand Paul's campaign]. I gave a speech. I get mad about people who want to be a party nominee and lose, and then they're a baby. I may never run again, but people are going to know I handled it gracefully and that's important.
Casey: How much of Rand's appeal was his last name?
Adams: He said many times that he could not have done it without his father being who his father was. Rand grew up the son of a congressman. So, it paved a lot of roads for him. It certainly didn't hurt. His dad did come in to Kentucky to campaign for him.
Grayson: If it was an ophthalmologist from Bowling Green named Dr. Adams, you couldn't have gotten the money to become credible. [Adams laughs.] That said, Rand really showed that he got it. He could speak. He could grow as a candidate.
Casey: Trey, what are the lessons you take from the 2010 campaign?
Grayson: The voters clearly wanted to give the finger to Washington, but it wasn't just the Obama administration. It was Republican leadership. And we didn't understand that in the race.
Casey: Talk to us about the way the country has shifted. And how you guys might have seen an early glimmer of that. Do you feel you saw what was coming on the horizon, nationally?
Adams: Yes. The opposition that the tea party presented really started about that time. Those fights continue.
Casey: And has Washington changed Rand Paul?
Adams: Has Rand developed an establishment bone in his body? No. I don't think that that's the case. Is he perhaps playing well with others in a way that he couldn't have done a decade ago? Probably. But me, too. Trey, too.
Libby Casey is a Washington Post video journalist, covering politics.