The recent indictments of Tom DeLay—on charges that he criminally conspired to launder $190,000 in corporate political funds—identify Karl Rove protégé Terry Nelson as the unindicted co-conspirator who oversaw the alleged money laundering in Washington, D.C. in 2002. What is largely unknown is that a consulting firm that Nelson founded has worked for another shadowy group accused of improperly influencing a special state senate election in Texas in 2003. Moreover, Nelson has enhanced his ties to the Bush administration since the time of these legally questionable efforts to influence Texas elections.
The DeLay indictment alleges that in September 2002 DeLay’s Texans for a Republican Majority PAC (TRMPAC) sent a $190,000 check to Nelson, the then-political director of the Republican National Committee (RNC). TRMPAC made out this check—drawn on corporate contributions that it received—to the RNC’s Republican National State Elections Committee (RNSEC). The indictment says TRMPAC sent the check along with a laundry list of seven TRMPAC-backed GOP candidates for the Texas House. Two weeks later, RNSEC wrote seven sequential checks to those candidates that added up to $190,000. The indictment charges that this transaction was a laundering conspiracy to hide the fact that TRMPAC was illegally channeling corporate funds into Texas campaigns. Both Nelson and then RNC Treasurer Jay Banning have testified before the grand jury.
After his alleged money laundering, Nelson quickly climbed the Rovian ladder, becoming political director of President Bush’s 2004 reelection campaign. There he drilled the army of volunteers charged with delivering Bush voters to the polls. Newsweek reported last year that Bush campaign field director Coddy Johnson cheered on these volunteers in weekly conference calls, even as “bad cop” Nelson harped on their failings, telling them that they “all stink.” Nelson played the tough guy so well that his campaign colleagues tagged him with a familiar nickname: “The Hammer.”
Nelson started in politics early. He was still two years shy of his graduation from the University of Iowa when he managed the 1992 campaign of Congressman Jim Nussle (R-Iowa). He ascended the ranks of the National Republican Congressional Committee in the late 1990s, graduating to the RNC the very year that DeLay’s TRMPAC came knocking with a $190,000 check.
Meanwhile Nelson had co-founded the GOP media shop Dawson McCarthy Nelson Media (DMNM) in 2001. Among the clients claimed on DMNM’s website is Americans for Job Security (AJS), a shadowy Virginia-based group that the American Insurance Association helped launch in 1997 by supplying $1 million in seed money. AJS takes out attack ads against liberal and moderate candidates nationwide without disclosing its political contributions or expenditures. This track record of spending large quantities of undisclosed funds on attack ads has fostered the perception that AJS is a for-hire corporate attack dog. Last year Austin-based Campaigns for People filed a complaint with Travis County District Attorney Ronnie Earle, urging him to investigate if AJS violated Texas’ prohibition on corporate electioneering. At issue were 2003 attack ads that AJS unleashed to help defeat moderate Tommy Merritt in the Republican primary for a vacated senate seat in 2003 (“Meet the Attack Dogs,” March 12, 2004).
Nelson and his partners at DMNM launched another firm this year, Crosslink Strategy Group, to manufacture “grassroots” campaigns for corporations and interest groups. Ironically, the firm’s website pledges to teach clients how to “increase your PAC fundraising” and ensure “compliance with campaign finance laws.” There is no mention that one of Crosslink’s founders is an uncharged conspirator in TRMPAC’s alleged money laundering scheme. Crosslink also employs Chris LaCivita, who helped design Swift Boat Veterans for Truth’s anti-Kerry ads, which some analysts said looked like trademark Rove attacks.
At DMNM, Crosslink, and at a new gig at the Akerman Senterfitt lobby shop, Nelson touts his past ties to the Bush administration—without advertising the ongoing nature of this relationship. President Bush’s No. 1 domestic priority as he entered his second term in January was a controversial plan to privatize Social Security accounts. Six months ago, The New York Times reported that the RNC was convening weekly Social Security strategy meetings attended by Rove lieutenant Barry Jackson and pro-privatization business groups with such nondescript names as “Compass” and “Progress for America.” The consultant that Compass picked to run its “grassroots” Social Security privatization campaign was Terry Nelson.
Following the AJS and Swift Boat model, business group USA Next set out earlier this year to produce attack ads against the leading opponent of Social Security privatization: retiree group AARP. USA Next initially wooed Nelson as its media consultant, the Times reported in February, but became worried that the White House was too connected to Nelson’s work at Compass (much as the Bush campaign took heat for sharing a common lawyer with Swift Boat). USA Next, which appointed DeLay’s indicted lobby pal Jack Abramoff (“Senatorial Courtesy,” August, 26, 2005) to its board, hired Nelson’s colleague LaCivita instead.
Bush’s Social Security privatization plan was a tough sell from the get-go. To enact it, the administration knew it needed all the corporate support and political capital that it could muster. Hope for this priority dwindled this year, as Bush’s political capital dried up under the combined weight of the Iraqi quagmire, soaring energy prices, Katrina, and cronyism charges. By disarming the Hammer’s heft in Congress, the DeLay indictments dispelled any last dying hopes for privatized retirement accounts in the near term.
The rapid ascendancy of Chris LaCivita and unindicted co-conspirator Terry Nelson do not mean that you need to engage in shadowy attack ads or money laundering to advance under Karl Rove. Clearly, however, such dirty tricks will not be held against you.
Andrew Wheat is research director of Texans for Public Justice.