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Smelly Nelly

IN THE SUMMER of 2004, when the Swift Boat Veterans for Truth attacked John Kerry with a series of ads challenging his service in Vietnam, the hapless candidate had a defender across the aisle: John McCain. Shortly after the ads hit the airwaves, the Arizona senator called the smear campaign “dishonest and dishonorable” and urged President Bush to condemn it. McCain made no secret of his motives: “It was the same kind of deal that was pulled on me,” he fumed in an August interview, referring to the 2000 South Carolina primary, when Bush supporters had spread a notorious rumor that McCain had fathered a black child. McCain had lost the state, and his 2000 candidacy lost its momentum.

But, these days, McCain seems to have achieved a Zen-like peace with the past. After all, last March his presidential exploratory committee hired Terry Nelson. As national political director for George W. Bush’s 2004 reelection campaign, where he managed the much-admired (and much envied) get-out-the-vote effort, Nelson is a certifiable catch. But he also regularly produces—right down to the racial undertones—the kind of campaign hatchetry that used to make McCain, by his own admission, “really angry.” Nelson hasn’t exactly given up his old tactics since boarding the Straight Talk Express, either: In September, The Washington Post reported that the Republican National Committee (RNC) had enlisted Nelson to run an ad campaign that would present the “best of the worst” in opposition research. He didn’t disappoint. A few weeks later, Nelson’s operation produced a now-infamous ad targeting Tennessee senatorial candidate Harold Ford Jr. The spot featured a scantily clad white woman reporting that she met Ford, who is black, at “the Playboy party” and urging him to give her a call. The fallout was bad enough that no less an ethical paragon than Wal-Mart, which also had a contract with Nelson, cut its ties with the consultant soon after the ad’s release.

The Ford ad was the latest notch on a well-scarred bedpost. Over the past 15 years, Nelson has made an art of aggressive campaigning—and that’s led to his name surfacing in relation to some of the most spectacularly embarrassing Republican scandals of the decade, including Tom DeLay’s Texas money-laundering escapades and the 2002 New Hampshire phone-jamming conspiracy, in which GOP operatives executed a scheme to jam phones Democrats were using to get out the vote. But, despite his yen for campaign finance reform and clean politics, McCain has so far been willing to overlook Nelson’s unsavory past—and even his more recent mudslinging. In fact, he promoted him: A month after the Ford ad ran, McCain chose Nelson to manage his presidential campaign.

IN 1992, TWO years before the Iowa native finished college, Nelson was already running a congressional campaign for Iowa Representative Jim Nussle. In 1995, after he managed Nussle’s 1994 reelection, his skills caught the attention of Ed Brookover, then political director of the National Republican Congressional Campaign (NRCC), who hired him as a field representative. Four years later, Brookover left to pursue private consulting, and Nelson was the obvious choice for a replacement. “I sure recommended him,”says Brookover. It’s not hard to see why. “You can always expect [Nelson] to go on the attack,” remembers David Nagle, a former Iowa representative who ran against Nussle in 1992 and 1994. “He does not win on the virtues of his candidate. He wins on the supposed sins of his opponent.” (Nagle should know: During the 1994 campaign, a Nussle ad falsely claimed that he “did not pay one penny” in employee payroll taxes.)

By the 2002 election, Nelson was deputy chief of staff for the RNC, overseeing many of the day-to-day regional operations for the election, including those of the New England director, James Tobin. By Nelson’s own account, the most important state in Tobin’s region was New Hampshire, which had one of the most ferociously contested Senate races in the country. Tobin, along with several employees of the state party, developed a plan to ensure victory: They hired a telemarketing company to repeatedly call phones that Democrats were using on Election Day for a get-out-the-vote operation in order to tie up the lines and interfere with their efforts. The Republican candidate, John Sununu, won by almost 20,000 votes. But, three months later, the Manchester Union Leader uncovered the rudiments of the plot. Four people, including Tobin, have since been convicted and sentenced in connection with the scheme, and, in late November, the RNC settled a civil suit brought by the New Hampshire Democrats for $150,000.

For his part, Nelson testified at his civil deposition that he “doesn’t recall any specific recollections” of discussing the phone-jamming incident with Tobin, and he told the FBI that he could not remember who informed him of it. But Tobin was supposed to be reporting directly to Nelson, and phone records made public during his trial show that Tobin made at least five calls to the RNC’s campaign headquarters on the day the jamming took place. Tobin and Nelson are also old friends. According to Nelson’s own deposition in the civil case, he hired Tobin at the RNC, the NRCC,and to work on the 2004 Bush campaign. And they remain close. “It’s something the Department of Justice should continue to look into,” says Paul Twomey, who served as co-counsel for the New Hampshire Democrats. “Do I think Nelson was behind it? No. Do I think he knew something before law enforcement did? That’s more likely.”

IF NELSON’S INVOLVEMENT in the phone-jamming scandal remains circumstantial, his involvement in the Tom DeLay money-laundering scheme—the type of ethical lapse that is supposed to infuriate the reform-minded McCain—is blissfully simple: When Tom DeLay and his buddies allegedly wanted to launder money, they went straight to Nelson.

In the run-up to the 2002 election, DeLay and the heads of his PACs conspired to circumvent Texas state law—which prohibits corporate donations to state legislative candidates—by passing the money through the RNC. DeLay had pushed for an aggressive new redistricting scheme that led to GOP control in the Texas House of Representatives, and he wanted the same result in the Senate. So, according to the criminal indictment, a DeLay associate named Jim Ellis got in touch with Nelson and proposed that, in exchange for an equivalent sum, the RNC make contributions to the candidates that the Hammer wanted to back. A few days later, Ellis sent Nelson a wish list “that contained the names of several candidates for the Texas House of Representatives,” along with a check for $190,000. Early the following month, the RNC sent checks of $20,000 to $40,000 to each of the seven candidates on Ellis’s list.

Despite playing a starring role in the exchange, Nelson wasn’t indicted along with Ellis and DeLay. Stan Brand, a former general counsel to the House Democrats and an expert on campaign finance law, lists several reasons why the Texas prosecutor might have spared Nelson. It could be that there isn’t enough evidence to obtain a conviction. It could be that the prosecution doesn’t want to damage a potentially cooperative individual. Or it could be that Nelson is enough of a small fry that time and resources are better spent taking down DeLay. (The prosecutor in the case declined to comment.) But, despite his lack of an indictment, Nelson, who testified at the grand jury proceeding, looms large in virtually every document related to the case. And, since a government witness list has not yet been created, he could still be called to testify at the trial.

Sadly, the prospect of John McCain’s campaign manager on the stand in the biggest campaign finance criminal trial in history is not an irony that McCain’s office seems to appreciate. Straight Talk America has refused to answer virtually any question related to Nelson’s history, much less make him available for comment. McCain, for his part, has been asked publicly about Nelson only a few times. When Don Imus prodded the senator about Nelson’s connection to the Ford ad, McCain falsely claimed that Nelson had resigned from the RNC in protest. And, when asked about Nelson’s connection to the DeLay case on a Seattle radio show later that month, McCain mumbled something about “those charges” being false and made the garden-variety promise to “check it out.” Perhaps Terry Nelson has already taught him a thing or two about politics—his way.

This article appeared in the February 12, 2007 issue of the magazine.