Rewiring the War Room Blogs have changed the way that politicians raise money--but Democratic activist Steve Rosenthal says databases will radically transform the way they spend it.
By John Heilemann

(Business 2.0) – Even before he became the overseer of the mother of all campaign contributions, Steve Rosenthal was a figure of considerable consequence in national Democratic politics. As the political director of the AFL-CIO from 1996 to 2002, Rosenthal earned a reputation as one of Washington's savviest strategists. He was credited with pulling off a borderline miracle: the rejuvenation of labor's enfeebled campaign operations. Then last summer, a certain Hungarian-born billionaire decided to pony up $10 million to finance a new political outfit, and Rosenthal got a new gig. Though his business cards don't describe him so bluntly, he's the guy who's spending George Soros's money to take down President Bush.

Rosenthal's fledgling organization is called America Coming Together. It's part of a kind of shadow Democratic party, comprising a coterie of left-leaning groups, that came together in the wake of the passage of the 2002 McCain-Feingold campaign reform law. Critics say ACT and its brethren are violating the spirit, and possibly the letter, of that long-sought piece of legislation, which bars the parties from taking "soft money"--big checks from corporations, unions, or fat cats like Soros. The critics certainly have a point. But what interests me about Rosenthal and ACT isn't how they're amassing their mound of cash ($55 million committed so far, with a target of $40 million more) but how they plan to use it.

The answer, put simply, is voter turnout, but that anodyne phrase doesn't really convey what Rosenthal is up to. From his corner office in downtown Washington, a stone's throw from 1600 Pennsylvania Ave., he's preparing to be a field general in what he predicts will be "the most intense ground war in memory in a presidential campaign." Not only will that war be unusually fierce, it will feature applications of information technology that in the long run, I suspect, will be more significant than the Dean campaign's use of the Internet to raise a ton of dough. As for the short run, if the election is as close as most experts now expect, the merger of high-tech and old-school organizing may well prove decisive. And that's why so many Democrats are counting on Rosenthal.

Given his record, it's not hard to see why. A 51-year-old Long Island native with a stubbly beard and hair that's passing from pepper to salt, Rosenthal saw his father organize a union and went on to make labor his livelihood. In the mid-1990s, convinced that the barrage of negative TV ads was driving voters out of the process, he aimed to revive the movement's influence with an aggressive field operation revolving around grassroots "voter-to-voter contact." The results were dramatic. In 1992, union voters made up 19 percent of the electorate. In 2000, at a time when overall turnout was steadily falling, that figure rose to 26 percent, and Rosenthal's efforts were widely credited (by Karl Rove, among others) with closing Bush's lead in the election's final days and giving Al Gore a popular majority.

Rosenthal told me he learned three big lessons in his time at the AFL-CIO: "One, you build campaigns around issues people care about. Two, you contact people as close to where they live as you can--on the phone, in their offices, at their homes. And three, you contact them a lot. It sounds pretty basic, but we found that when you do these things, people respond."

At ACT, Rosenthal is applying those lessons with a high-tech twist. In the 17 so-called battleground states, where the margin between Bush and Gore in 2000 was just a handful of points, ACT canvassers are starting to go door-to-door, asking voters questions, armed with Palm handhelds loaded with custom software that lets them record everything from voting history and party preference to issue priorities and demographic status. The answers are then synced to a central database in order to build up detailed Web-based voter files. By combining this information with census data, voter rolls, and geographic breakdowns of historical Democratic performance, Rosenthal said, "we'll be able to know exactly how many votes in every precinct we need to win. And we'll be able to make precinct-by-precinct decisions about how to target our resources--where to invest in registration, where in persuasion, and where in voter turnout."

But geographic targeting is just the start. In three states Rosenthal declined to name, a clutch of stat-friendly Democratic consultants and three top party pollsters--Geoff Garin, Anna Greenberg, and Celinda Lake--are conducting experiments in "microtargeting." Fueled by the rise of XML, with its ability to combine previously incompatible databases, microtargeting involves layering consumer and commercial data on top of electoral data, giving political marketers a more nuanced, granular view of voters and enabling them to pursue their quarry not precinct by precinct but one by one. "If we find that women who drive Volvos, have kids, and read certain magazines are persuadable with one of our issues," Rosenthal said, "we can go out and contact them individually, maybe with a custom-tailored piece of mail or media."

I couldn't help thinking, as I listened to Rosenthal and his high-tech brain trust describe their microtargeting work, that everything they were talking about is already common practice in the business world. But then, that's just the point. Since the advent of television, at least, campaigns have been profoundly influenced by developments in commercial marketing and media: first mass advertising, then direct mail, and now data mining and other niche techniques. Let's face it, you know something is changing in the practice of politics when you hear one of the consultants who's advising Rosenthal--an uncommonly tech-savvy character, to be sure, but also a Democrat who once worked for Jesse Jackson--giddily proclaim, "CRM tools are moving into campaigns. That's what this is all about!"

In none of this, of course, are the Democrats alone, or even necessarily ahead. In 2001, Rove and the Republicans, having received a wake-up call in the 2000 race, stole a page directly from Rosenthal's playbook and executed it with a vengeance. In addition to a massive voter registration drive, they instituted a concerted turnout operation dubbed the 72-Hour Task Force. The result: In 2002, Bush became the first GOP president to pick up congressional seats in a midterm election since Theodore Roosevelt in 1902. Today the Republicans are racing to gather, encode, and crunch reams of information in a party databank called the Voter Vault, as well as upgrading the 72-Hour project into a voter outreach effort that will surely rival, if not surpass, that of Rosenthal and ACT.

How much effect will these endeavors have? In terms of sheer numbers, not very much. Rosenthal says the most ACT can hope "to move the needle" in any state is a few percentage points. But those few points could make all the difference. Indeed, among pollsters and political professionals, the consensus is that the election is going to be supremely close and will come down to a handful of states. Rosenthal, in fact, thinks it may come down to four--Florida, Missouri, Ohio, and Pennsylvania--in which the margin of victory will be razor thin. For example, he says, "no Republican has ever been elected president without winning Ohio. Well, Gore got 60 percent of the union vote in Ohio in 2000. If we can push that number up to 66 percent, we stand a reasonable chance of winning the state." And, by implication, of winning the White House.

Yet no matter which side prevails in November, the larger trend is plain to see. Over the next few election cycles, I'd wager that we're likely to witness a sort of high-tech political arms race, as both parties strive, in the words of political writer Nicholas Lemann, "to figure out 21st-century means of achieving the 19th-century goal of establishing face-to-face relationships between political parties and voters." Oh, the air war will surely continue apace; TV spots aren't going away. (They drive too much free media for that.) But increasingly the action in American campaigns will take place at the intersection of the real and the virtual--and will usher in a whole new era in political communication.

As for Rosenthal, he likes to say that "the only two things that matter in politics are money and votes." If Howard Dean proved that the Internet is a powerful tool in the pursuit of the former, Rosenthal and his people are breaking new ground in putting the information revolution in the service of the latter. However this election turns out, Rosenthal is likely to be remembered not simply as the guy who spent George Soros's money, but as the one who took the Democrats back to the future.