By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
"They dismissed the charges, ratified me as chairman, and gave me a job," Rove recalls.
In 1977, Rove moved to Houston, where he served as director of The Fund for Limited Government, a PAC chaired by James A. Baker, former secretary of state, and the soon-to-be-Vice President Bush.
For personal reasons, Rove stayed out of Bush's 1980 bid for president. In 1976, he had married Valerie Wainwright, the daughter of a prominent Houston family. The wedding was so extravagant that his sister and father still recall it with awe. But the marriage of the society daughter and the hardworking political hack didn't last long. (His second marriage in 1986 to Darby Hickson, a graphic designer who worked for Rove & Co., has proved stronger. The couple has a 10-year-old son.) Hoping to save his first marriage, Rove headed for Austin instead of joining the campaign. His sacrifice didn't pay off. Soon afterward, in 1980, the couple divorced.
In the meantime, Rove had hooked up with the first Texas governor he served as a strategist--William Clements. In Clements' first term, Rove worked as chief of staff and launched his consulting business on the side.
During the next decade, Rove & Co. grew in tandem with the Republican Party in Texas. You name the state officeholder, and Rove has probably advised him or her. He counseled U.S. Sen. Kay Bailey Hutchison when she ran for state treasurer. Her colleague, U.S. Sen. Phil Gramm, has also tapped Rove. Tom Phillips, the chief Texas Supreme Court justice, is a Rove product, as is the current state attorney general, John Cornyn.
It was Rove's role in George W. Bush's stunning upset of incumbent Gov. Ann Richards in 1994 that gave the consultant his legendary status. At the time, Bush was indisputably a novice. His only credentials--business, political, or otherwise--were his role in the Texas Rangers baseball team, an unremarkable stint as an oilman, and a defeat in a 1977 congressional race in Midland. (In that contest against then-Democrat Kent Hance, Bush garnered only 47 percent of the vote despite outspending his rival.)
In his first campaign for governor, Bush seemed stuck at the bottom of the learning curve when it came to public appearances. The Dallas Morning News reported that Rove told his staff in an internal campaign memo in October 1993 to "limit GWB's public appearance [sic]...to reduce the attention of the Capitol press corps" until Bush had more miles on the road.
Rove battled against the campaign strategies of fellow Austin consultant George "Dr. Dirt" Shipley, who represented Richards, and so effectively outmaneuvered his opponent that Bush's victory would help Rove shed his image as a junkyard dog. The consultant had tapped into one of Bush's greatest assets: that he comes across as a gentleman, a truly nice guy. (Of course, Rove had also seen Richards' previous gubernatorial opponent, Clayton Williams, get slaughtered at the polls after conducting a particularly nasty campaign against the silver-haired grandma.)
A top advisor says Rove also dictated the four issues that the candidate would talk about publicly. "The experts came up with 40 issues," this source says. "Karl says, 'We're gonna go with four.'"
During the campaign, an Observer reporter sat in Rove's office just after Bush had delivered a speech that was supposed to needle Ann Richards about her alleged misuse of state phones for political purposes.
"You did good," Rove told his candidate, even though moments before he'd complained to another aide that Bush had blown it. "I think you could have done better..." Rove started to say, then stopped in mid-sentence, interrupted by Bush.
"I got it confused. You did great," Rove said, correcting himself.
With Bush in the governor's mansion, Rove has made a good living with his consulting and direct-mail business, which does particularly lucrative work renting out lists of George W.'s contributors. When Rove unloaded his business this year, he had 11 employees.
But Rove & Co. has also caused some embarrassing snafus for Bush. During the most recent gubernatorial campaign, Rove's direct-mail staff inadvertently solicited contributions for the governor from his opponent and a convicted felon who was still in prison.
Rove's consulting contracts have also presented potential conflicts for himself and the governor. From 1991 to 1996, he advised tobacco giant Phillip Morris, ultimately earning $3,000 a month. In a deposition, Rove testified that he severed the tie because he felt awkward "about balancing that responsibility with his role as Bush's top political advisor" at a time when Texas was suing the tobacco industry. Rove told his questioners, who were lawyers representing the state in its case against the cigarette makers, "I was receiving information and privy to information that I felt uncomfortable sharing with [his client Phillip Morris]."
In the most recent statewide election, Bush told Rove to stay out of contested primaries. "I've become an adjunct of him," Rove says, rationalizing the edict.
The consultant nonetheless played a significant, albeit unpaid, role in several races. New Attorney General Cornyn, who entered the race to compete with former state Republican Party Chairman Tom Pauken--an arch-enemy of Rove--told the San Antonio Express-News that Rove had encouraged him to run.
Pauken remains convinced that Rove worked behind the scenes, with Bush's nod of approval, and engineered his defeat. Pauken claims that Rove had Barry Williamson, a former Rove client and railroad commissioner, launch an exhaustive negative television ad campaign at the end of the race to make sure Pauken failed. (Rove and Pauken's feud has its origins in 1994, when Rove recruited Joe Barton, now a congressman, to run against Pauken in the election for state party chairman. As soon as he won, Pauken terminated Rove's direct-mail contract with the Texas Republican Party.)