Double Down: Game Change 2012 (40 page)

The morning after New Hampshire, at the Westin Boston Waterfront, Zwick gathered three hundred donors to hear from Romney, Newhouse, and Mike Leavitt about the road ahead. For a year, the campaign had stressed again and again that securing the nomination would require a
long slog, and Leavitt’s presentation on the path to the required 1,144 delegates, repeated the point.

In that heady moment, however, many in the room dismissed Leavitt’s sobriety as perfunctory kill-joyism. With Romney’s back-to-back victories, he had achieved the unprecedented. Gingrich had campaigned like crazy in New Hampshire and placed fourth again. Santorum, receiving no lift from Iowa, had come in fifth. The South Carolina primary, the winner of which had gone on to claim the Republican nomination in every election since 1980, was ten days away. And while the Palmetto State—with its intensely conservative and evangelical electorate—had always been Romney’s weakest link among the first four contests, Newhouse informed the crowd that Mitt had surged to a healthy lead both there and in the Sunshine State.

All of a sudden, the triumphal speech from the night before seemed like more than spin. All of a sudden, everyone was thinking Romney had a chance to run the table, and even Mitt allowed himself to drift into reverie.
If I can win South Carolina and Florida, it’s game over,
he thought.

But when Romney was told how far ahead Boston’s polling had him—34 percent to 15 over Newt in South Carolina, 45 to 15 in Florida—his usual doubts crept in.
The numbers are too good to be true,
he fretted. The question was what Gingrich would do next. Romney hadn’t a clue, but he feared it would not be pretty. As a Republican senator had said to him recently about Newt, “When that watermelon falls to earth, you don’t want to be anywhere around.”

•   •   •

G
INGRICH HIT THE PAVEMENT
in South Carolina with a splat, shaken to his core, and not just by his second straight rout. Romney’s defense of free enterprise had turned the conservative echo chamber into an amen corner. Limbaugh likened Newt to Elizabeth Warren and Oliver Stone. Giuliani compared him to Saul Alinsky. Even Romney’s nemeses at
The Wall Street Journal
weighed in against Gingrich and Perry. “These candidates are desperate,” noted the paper’s editorial page, “but do they have to sound like Michael Moore?”

Being compared to this lineup of left-wing loonies blew Newt’s mind. But with South Carolina now “make it or break it” for him, as he put it to
Callista, he was more convinced than ever that he had to render Romney septic, and that tarring the front-runner as an out-of-touch plutocrat remained his best chance. In a tactical retreat, Newt slunk away from his Bain attacks, calling on Winning Our Future to soften or take down its video—while in the next breath calling for Mitt to release his tax returns.

Romney’s personal finances were less the elephant in the room than a full herd of pachyderms. Since the start of his Massachusetts governorship, in 2003, most of Mitt’s assets had resided in blind trusts he set up for himself, Ann, and his sons. His fortune was not only staggering in size but Byzantine in structure: some $250 million or more wrapped up in a mazelike assemblage of holdings. There were stakes in more than a dozen Bain funds domiciled in the Cayman Islands; foreign accounts in other exotic locales—Switzerland, Luxembourg, Bermuda—that were notorious as tax havens; investments in offshore shell companies and so-called blocker corporations; an IRA that had somehow swollen in value to as much as $100 million.

Overseeing Romney’s trust was Brad Malt, the chairman of Boston’s largest law firm, Ropes & Gray, and Mitt’s personal attorney. Malt had great expertise in the area of private equity. (He and Mitt had met through Bain.) But he had no political background or orientation; he saw his responsibility as maximizing his client’s wealth, not protecting his public image. In 2007, when Romney’s foreign holdings first came to light, Malt told the
Los Angeles Times,
“I don’t care whether it’s the Caymans or Mars, if it’s organized in the Netherlands Antilles or the Jersey Islands. That means nothing to me. All I care about is whether it’s a good fund or a bad fund.”

Romney expressed no qualms about Malt’s management of his money or its potential political implications. He knew that his offshore investments and Swiss bank account would be targeted by the Democrats if he won the nomination. But Romney believed there was nothing untoward about the Swiss account, on which he paid full taxes. As for the Cayman, Bermudan, and other Bain-related vehicles, not only did they produce prodigious returns, but Romney (as a former partner in the firm) was allowed to invest in them without paying a management fee.
Just because someone is going to be critical, I’m going to pass up a deal that good?
Romney thought.
No, sir.

In 2007 and 2011, Romney had filed the personal financial disclosure
statements required by federal law. But they provided nowhere near as clear a picture as would his taxes, which he had refused to make public all throughout his political career. With Democrats agitating on the topic, Romney was asked in separate appearances on MSNBC in December if he would release his returns. “I don’t intend to,” he told Chuck Todd; questioned by Andrea Mitchell, he declined to commit to doing so even if he became president. For Chicago, those replies were chum in the water. From Obama’s official Twitter account came a tweet—“Why won’t Mitt Romney release his tax returns?”—with a link to a DNC video entitled “What Is Mitt Romney Hiding?”

Romney’s private stance was a bit more yielding than his public one. If he became his party’s standard-bearer, he told Malt, Bob White, and Rhoades, he would feel compelled to release at least a summary of some of his tax returns. But he and Ann (who was even more emphatic about the privacy issue than her husband) wanted to reveal as little as possible as late as possible, and certainly nothing unless and until he had the nomination sewn up. In Rhoades’s mind, that translated to
Let’s get to April.

What Romney hadn’t counted on was that his Republican rivals would take up the Democratic banner on his returns, just as some of them had done on Bain. In the run-up to a Fox News debate in Myrtle Beach on Monday, January 16, Santorum joined Gingrich in seizing on the issue, and at the first opportunity onstage, Perry raised it unprompted. “Mitt, we need for you to release your income tax so the people of this country can see how you made your money,” he said. “We cannot fire our nominee in September. We need to know now.”

Romney’s debate prep on the tax question had been weak and inconclusive—and it showed. “I looked at what has been done in campaigns in the past with Senator McCain and President George W. Bush and others,” Mitt said when asked the question. “They have tended to release tax records in April, or tax season. I hadn’t planned on releasing tax records, because the law requires us to release all of our assets, all the things we own. That I have already released. It’s a pretty full disclosure. But, you know, if that’s been the tradition and I’m not opposed to doing that, time will tell. But I anticipate that most likely I am going to get asked to do that around the April time period, and I’ll keep that open.”

While Mitt was serving up a mile-high stack of waffles, Gingrich was tossing chunks of raw red meat to the well-lubricated crowd, which had availed itself of cocktails aplenty at the pre-debate receptions. Discussing the merits of negotiating with the Taliban, Gingrich blood-lustily invoked a favorite son of the Palmetto State: “Andrew Jackson had a good idea what to do with our enemies—kill them.” He argued that Obama aimed “to maximize dependency” and did not believe “work is good.”

Gingrich was challenged by the African American moderator, Juan Williams, who asked if he could understand how some of his rhetoric, including his suggestion that poor kids be put to work as janitors, might be seen “as insulting to all Americans, but particularly to black Americans.” Newt replied sternly, “No, I don’t see that,” and launched into a soliloquy that ended with the claim that “only the elites despise earning money.”

Williams brought up Gingrich’s frequent references to Obama as “the food-stamp president” and suggested that “it sounds as if you are seeking to belittle people.”

Newt’s eyes flashed like twinkle lights on a Christmas tree. “Well, first of all,
Juan,
” he said in a tone dripping with condescension, “the fact is that more people have been put on food stamps by Barack Obama than any president in American history.” The crowd roared approval. “Now, I know among the politically correct, you’re not supposed to use facts that are uncomfortable,” he went on, lecturing Williams for another sixty seconds. The audience hooted, hollered, and delivered Gingrich two standing ovations.

Looking down from the stage, Newt saw the bodies rising from the back of the hall and rippling toward him like a wave. In his years at the intersection of politics and performance art, Gingrich had encountered his share of wonders. But he had never witnessed anything like the scene at Myrtle Beach—and he found it hard to imagine that he ever would again.

•   •   •

R
OMNEY HAD NEVER SEEN
anything like it, either. Afterwards, Stevens told Mitt he thought that Gingrich’s mau-mauing of Williams played to an ugly side of politics. Romney didn’t disagree, but he knew that Newt’s onstage fireworks exhibition was bound to affect the polls; on Fox News, they were already calling the debate a “game changer.”

Mitt woke up grouchy the next day. On his schedule was an early-morning rally in Florence, a long bus ride away. Arriving at the Florence Civic Center, he found a cavernous room and a sparse crowd—space for a thousand, fewer than a hundred in attendance. Romney cooled his heels backstage as his traveling crew scurried to prevent photographers from capturing a bird’s-eye view of the embarrassing turnout. (A photograph in the next day’s
New York Times
testified to the futility of their efforts.)

After his speech, Romney met the press by his bus—and was immediately hit with a question about his taxes. What was the effective rate he paid? a reporter asked. “It’s probably closer to the 15 percent rate than anything,” he answered, going on to explain that his income came mainly from investments. “And then I get speaker’s fees from time to time, but not very much.”

In Boston, Rhoades was monitoring the proceedings on a live feed, with a mounting sense of horror. Fearing that the tax questions would just keep on coming, he started frantically texting and calling the troops on the ground: Kill it! Kill it now!

By Wednesday morning, Romney’s riches had eclipsed all else in the headlines and on the trail. The press seized on Mitt’s definition of “not very much” regarding his speaking fees: $374,327.62 in the past year. On
Today
and
Morning Joe,
Chris Christie was offering unsolicited advice: Mitt should release his tax returns, as Big Boy always had. Meanwhile, the fallout from Myrtle Beach was showing up in Boston’s internal polling—and starkly. When Romney had walked onstage that night, he was ten points ahead of Gingrich. Thirty-six hours later, he was narrowly behind.

Romney would have a chance to stop the slide on Thursday, when the next debate was set to take place in Charleston. Instead, the dawn greeted him with another sharp stick in the eye: a call from Iowa notifying him that he was no longer the winner of the caucuses. After a recount, it appeared that Santorum had won more votes, though the situation was sufficiently unclear that the Republican Party in the Hawkeye State wanted to declare the contest a tie. Romney considered that ridiculous and called Santorum, leaving a message on his cell phone, conceding, “You came out on top, so nice work.”

With Romney attempting to resist a downward spiral, Gingrich was joyfully hanging ten atop a breaker. That morning, Perry at last called it
quits and tossed his support to Newt. Around the same time, ABC News put out word that it had snared a scoop: Newt’s second wife, Marianne, was claiming that in 1999, while he was engaged in his affair with Callista, he had asked for an “open marriage.” But that night on the debate stage, Gingrich spun the sewage into sunshine, lacerating the moderator, CNN’s John King, when the newsman led off with a question about the story.

“The destructive, vicious, negative nature of much of the news media makes it harder to govern this country, harder to attract decent people to run for public office,” Gingrich thundered. “And I am appalled that you would begin a presidential debate on a topic like that.”

As Gingrich piled on the adjectives and the crowd went bonkers, à la Myrtle Beach, Mitt and Ann caught each other’s eyes and exchanged knowing nods.
Yet another moderator giving Newt exactly what he wants,
Romney thought.

Mitt was waiting for the inevitable question about his taxes, having finally spent some time in debate prep rehearsing his answer. When King introduced the topic, Romney answered with more aplomb than he ever had before: “When they’re completed this year in April, I’ll release my returns in April and probably for other years as well.”

But King would not let go. “In 1967, your father set . . . a groundbreaking standard in American politics,” the moderator reminded Mitt. “He released his tax return. He released them for not one year, but for twelve years. And when he did that, he said this: ‘One year could be a fluke, perhaps done for show.’ When you release yours, will you follow your father’s example?”

“Maybe,” Romney replied with a forced laugh and a forged smile. The crowd jeered.

Watching on Commercial Street, Rhoades couldn’t avoid the thought:
We’re not going to make it to April.
Unlike Stevens, with his what-me-worry optimism and ability always to find a pony in there somewhere, Rhoades was Boston’s designated realist and bearer of bad news. When potentially troubling stories flared up, Rhoades instantly placed them into one of two categories: they were either nothingburgers or shitburgers. To his mind, the tax-return dustup was inescapably the latter.