Capital Campaign

How Texans are cashing in on George W. Bush’s run for the White House.

September 1999By Comments

High guy: His business has nearly doubled since Bush decided to run.
Photograph by Wyatt McSpadden

When George W. Bush formally launched his presidential campaign in June amid a sea of red, white, and blue balloons, many Texas businessmen immediately saw green. Take Ray Guy, who owns a fourteen-year-old communications services company based in Austin called Guycom. Political speculation about Bush’s ambitions had sparked a surge in Guy’s business, as network and cable television stations clamored for live TV shots of the governor and interviews with local political pundits. When Bush made his candidacy official, Guy knew his boomlet would continue—at least through November 2000. “My business has almost doubled,” says the 45-year-old, who plans to spend up to $500,000 this year to hire local video crews to keep up with the Bush-generated demand. “It started heating up in January, and we’re not hot yet. We’re just sizzling.”

Forget gun control, abortion, and environmental standards. Forget Democrats and Republicans. Unofficial polls show that Texans overwhelmingly approve of Bush’s Austin-based campaign since it promotes an activity dear to their hearts—making money. Putting the Texas governor in the White House may mean compassionate conservatism to some, but to dozens of hotels, printers, personnel companies, real estate agents, and various vendors employed by the campaign, it’s an opportunity for profitable patriotism.

After all, as Joe Allbaugh, Bush’s campaign manager, points out, the race for the White House has essentially brought a new $140 million business to Austin, one with one hundred employees and plans to expand into all fifty states. Talk about your trickle-down economics: Bush, Inc., established its presence in Austin last March by picking up a sublease for 28,000 square feet of prime downtown office space for $40,000 a month in rent. Since then, it has spent money on computers and office furniture, chartered airplanes and automobiles, and paid for printing and dinner meetings at local restaurants. Vendors have been hired to handle travel arrangements, investment services, and human resources tasks. “This business is not peanuts. This is a big-time company,” notes Allbaugh. “The chamber of commerce folks ought to be tickled pink that we’re in town.”

And, as one might imagine, they are. “It certainly benefits the city,” says Earl Maxwell, the chairman of the Greater Austin Chamber of Commerce. “Any operation with one hundred employees is important.” Maxwell says measuring a company’s economic impact generally allows for a “multiplier effect” of 1.6 to 2 times the company’s revenues, though, in Bush’s case, much of the money will be spent out of state. Regardless, the campaign is responsible for bringing in other forms of revenue, such as the dollars spent by visiting dignitaries and the news media.“How do you measure all of that? I don’t know, but it’s very positive in the short term and long term,” Maxwell says. Aside from the dollars the campaign will pump into the economy, one intangible benefit is that for the next fourteen months, assuming Bush wins the Republican nomination, people from Iceland to Japan will pay attention to Austin. “Suddenly, the whole world is watching,” he says. “That kind of advertising is very costly, so we’ll take all the exposure we can get.” That exposure can lead to profitable business deals in the future. For example, many Austin software and semiconductor companies export 25 percent to 50 percent of their goods internationally, but business leaders still have to educate some potential clients that Austin “is not a desert and so forth,” he says. “It doesn’t hurt our community to receive international press.”

Allbaugh, an imposing man with a military-style crew cut, happily warms to the business analogy—right down to his company’s “product”: delegate votes at the Republican National Convention. “That’s what we’re in the business of, securing delegates,” he says. “If anybody loses sight of that, we’re in trouble.” And while it would be easy for some people to view the Bush campaign as a cash cow—after all, newspapers have been filled with stories about the governor’s phenomenal fund-raising successes, which has already brought in an eye-popping $37 million—Allbaugh considers it part of his job to act as Bush’s primary penny pincher. “I’m in the business of saying ‘no’ a lot,” he says gruffly. “It’s not how much you raise; it’s how you spend it.”

Television consultant and campaign strategist Mark McKinnon, who formed an advertising agency named Maverick Media for the sole purpose of producing television spots for Bush, knows Allbaugh’s frugality firsthand. After setting up what McKinnon thought was a no-frills office—right down to the bare cement floors—Allbaugh marched in, surveyed the place, and asked, “How much for the fancy chairs?”

But McKinnon is not complaining. He estimates that Maverick Media, whose only client is the governor, will see $20 million to $50 million in revenues before the end of the campaign. Besides his ten full-time employees, McKinnon plans to hire between twenty and fifty additional people from the film industry—cameramen, directors, lighting and sound experts, film editors—to produce the television ads, and he expects to use homegrown talent. And though the campaign is short-lived, McKinnon knows that the professional benefits will continue after the election in November 2000. “There’s nothing like a presidential seal of approval,” McKinnon says.

For Guy, McKinnon, and dozens of other Texas businessmen and entrepreneurs, the Bush campaign offers not only new clients but also the opportunity to showcase their talent in a national arena. “Somebody’s got to do it, so it might as well be me,” muses Guy. “I’ll chase him all the way to Washington.” The campaign has increased business for Guycom directly and indirectly: Bush used its resources for satellite time with out-of-state television reporters during the legislative session when he wasn’t available for travel. Guy’s main clients, however, are television networks and cable news shows covering the White House race. Before the campaign, Guy mainly set up interviews for academic experts discussing the economy or other matters. An occasional natural disaster or major news event in Texas or the rest of the country would bring demand for one of his satellite trucks. Now, he says, “Opinions out here are important, and Bush is leading the momentum.” Guy’s exposure through the campaign has snowballed into other work as well. The networks have called on him to help supplement local supplies of satellite trucks, and he was even asked to send a crew to cover the John F. Kennedy, Jr., memorial in New York City.

Likewise, Paul Sarvadi, the president of Houston-based Administaff, which handles human resources for the campaign, sees his relationship with Bush, Inc., beyond the immediate payoff, though Federal Elections Commission filings showed that the company had been paid $100,000 for services just through June. Administaff handles payroll and benefits for a company’s employees, operations critical to a presidential campaign, which will be quickly hiring employees in different states with a variety of employment laws and taxes. A successful relationship with such a far-flung organization will help spread the word about the company’s services. “This particular company, with the main mission that they have, demonstrates the value of what we do,” Sarvadi says. “We do the things in the background that keep the organization running. That gives them the ability to focus on their strategic objective.”

The Bush campaign has also inspired capitalist efforts of the most creative sort. Think merchandise. Allbaugh and his staff have been approached by nearly three dozen companies selling everything from baseball caps and key rings to nuts. Literally. Kim Peacock, the president of GNS Foods in Arlington, seized the campaign as an opportunity to combine her entrepreneurial and political instincts. GNS, a nut, snack, and candy processing company, has marketed a 2.5-ounce bag of mixed nuts called Nuts About George. Bush’s famous grin graces the front of the bag of nuts, and according to the front of the package, a portion of the profits will be donated to “Republican causes.”

“The label is just as cute as it can be,” Peacock says proudly. “I had the idea back before he declared. We’re a Texas manufacturer, and he’s a Texas governor. I thought, ‘What a cool tie-in that would be.’” Showcasing the packages at a specialty-foods show in New York gave her the opportunity for some Bush boosterism, she says. “People would walk up and say, ‘Is he a good guy? Is he honest?’ I think people are looking to Texans for opinions.”

Some Austin businesses, however, have only seen spikes in new activity because of the campaign. Paul Cherrett, the general manager of one of Austin’s premier hotels, the Four Seasons, says he recognized the names of many frequent hotel guests on the list of “Bush Pioneers,” a group of volunteer fundraisers, after it was printed in the local newspaper. Though he hopes that the campaign will help keep his rooms full, he recalls a conversation he had with a reporter from Newsweek who had spent a good deal of time at the Four Seasons last spring. When Cherrett thanked him for staying at his hotel, the reporter said he wouldn’t be back much. “Why is that?” Cherrett asked. Now that Bush has hit the campaign trail, the reporter replied, “he’s coming to us.”

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