LIKE MANY ELECTION CAMPAIGNS LAST FALL, the race in Colorado’s Seventh Congressional District between Democrat Ed Perlmutter and Republican Rick O’Donnell was a bruising affair. Personal attacks and negative advertising were the order of the day. According to Perlmutter, O’Donnell was a right-winger with dangerous ideas who wanted to privatize Social Security, while pro-O’Donnell ads attacked Perlmutter for being soft on immigration. One such thirty-second spot was especially pointed, claiming that, as state senator, “Ed Perlmutter sponsored legislation giving taxpayer money to illegal immigrants.”
On its face, this ad seemed typical, one of thousands run last fall in an unusually hostile political season. Closer inspection, however, revealed that the ad was, on just about every level one can imagine, not what it seemed. For one thing, it wasn’t true. The legislation that Perlmutter sponsored did concern taxpayer-funded benefits, but they were for legal immigrants, not illegal ones. The casual viewer might also have assumed that the advertisement had been produced by or in cooperation with O’Donnell’s campaign. But his staff had nothing to do with its content, nor was it produced or financed within a thousand miles of Colorado. The ad’s genesis, in fact, was a sort of miracle of remote control. Reporters who dug into the story found that funding for the ad had come from a 527 group called Americans for Honesty on Issues (AFHOI). The past several election cycles have seen a large number of these so-called 527’s, which are named after the section of the federal tax code that exempts certain political groups from paying taxes.
Normal campaign finance limits in raising and spending money do not apply to 527’s, a loophole through which millions of dollars have flowed. Due in part to this lack of oversight, 527’s have developed a reputation for being shadowy, and AFHOI was no exception. In 2006 the group produced adversarial television ads in nine congressional races across seven states, but when the press started probing, it seemed to vanish into thin air. Its address was a post office box in a UPS store in Alexandria, Virginia; its “contact” was a conservative political consultant in Houston named Sue Walden who didn’t return calls.Reporters studying the story were unable to determine exactly who had come up with the idea for the ads, who had produced them, or how the Perlmutter-O’Donnell race had been targeted in the first place.
The one thing they did find out was the identity of the man who had pumped $3 million into AFHOI and was its sole benefactor: a wealthy Houston homebuilder named Bob Perry. Perry is the nation’s largest individual political donor. In 2004 and 2006 he gave a total of $29 million to state and federal races. Last year, more than $9 million of that was channeled through three 527’s that aggressively targeted races for the U.S. Senate and House of Representatives. In spite of such a massive political presence, Perry is as mysterious as some of the groups he funds. He never talks to the press, rarely appears in public, and remains an inscrutable figure even to people to whom he has given hundreds of thousands of dollars. He might have maintained this relatively low profile indefinitely, except that in 2004 he was the largest funder of the Swift Boat Veterans for Truth, the controversial 527 that many people credit with derailing John Kerry’s presidential campaign. Almost overnight, Perry became a poster boy for the notion that a cabal of wealthy donors, shady consultants, and unaccountable 527’s was taking over American politics.
Perry first appeared as a real force in Texas politics in 2002, when he dropped $3.8 million into campaigns, most of it aimed at taking over the state legislature and ultimately recarving Texas into Republican-friendly congressional districts—a gambit coordinated by then-House majority leader Tom DeLay and also heavily funded by San Antonio doctor James Leininger and other wealthy Republican donors. He later became the largest single contributor to Governor Rick Perry’s reelection campaign. But in spite of such lavish giving, he is the odd political donor who seems to want none of the conventional perks in exchange for his money. He never attends fundraisers, never calls up candidates to solicit votes, never threatens or cajoles. He has not asked the governor for the usual appointments to state boards that accompany this sort of giving. Nor does he, unlike many other political patrons, demand that certain consultants be used exclusively as conduits or as media contractors.
The money comes, say politicians who get it, without strings. “He has been a major contributor of mine,” says Texas land commissioner Jerry Patterson. “Over the years he has probably donated more than two hundred thousand dollars to my campaigns, and he has never called me. When I was in the Senate, he never called me to vote one way or another or to say, ‘Hey, I would really like you to take a look at this,’ or ‘I am really opposed to that.’ ”
Unseen by the public, uninvolved with his candidates, the most powerful political donor in the nation has until now remained largely an enigma. Few apart from a small circle of close friends in Houston know much about him. What they do know may surprise some people. For instance, Perry favors affirmative action. He has given money to Democrats, particularly black and Latino Democrats. He opposes his party’s hard line on immigration rights. He is a large-scale donor to an inner-city Houston foundation sponsored by a liberal black minister and to an educational scholarship program for Hispanic students founded by a liberal professor. So who is Bob Perry? Is he the monolithic, unyielding, far-right ideologue he is often portrayed to be? A philanthropist who gives generously to causes he believes in? Some hybrid of the two? Almost nobody knows, and that’s the way he likes it.
BEFORE THE SUMMER OF 2004, few people outside the state of Texas had ever even heard of Bob Perry. National fame—or infamy, depending on your political views—did