Consultant profile: Olsen & Shuvalov

Introduction

Just days before the 2004 presidential election, a chilling political advertisement arrived in the mailboxes of voters in the key swing state of Pennsylvania.

Directly below a darkened image of the Democratic nominee, the front of the brochure carried the question: “How Can John Kerry Lead America In A Time Of War?” It charged Kerry with “changing positions,” “cutting defense” and “slashing intelligence,” and featured images of the front pages of nine newspapers, each with a photo of the World Trade Center ablaze and billowing smoke. Another image of the smoldering towers appeared on an inside page, detailing the charges against Kerry’s record on defense and intelligence.

The award-winning brochure — the ad was honored with a “Pollie” by the American Association of Political Consultants — was funded by the Republican National Committee, but was the work of Olsen & Shuvalov, an Austin, Texas-based consulting firm that traces its roots to Karl Rove, President Bush’s senior adviser.

The company that would go on to become Olsen & Shuvalov was formed in 1999 when Rove sold the assets of his direct mail firm, Karl Rove & Co., to Todd Olsen and Ted Delisi, two of his former employees. Now run by Olsen and another longtime Republican consultant, Heather Shuvalov, the outfit specializes in direct mail campaigns and fundraising. A subsidiary group, Praxis List Co., manages and rents out the mailing lists of potential GOP donors.

Over the last seven years, the firm has crafted political messages for candidates in more than 31 states, according to its Web site. Olsen & Shuvalov’s client list reads like a who’s who of Texas politics, including the state Republican Party and prominent Republicans Gov. Rick Perry, Attorney General Greg Abbott, Sen. John Cornyn and Rep. Tom DeLay. Clients during 2006 election cycle also include Pro Football Hall of Famer Lynn Swann, a GOP candidate for Pennsylvania governor, and Maryland Lieutenant Gov. Michael Steele, a Republican running for U.S. Senate.

However, the company’s highest-profile — and best-paying — client has been the Bush-Cheney re-election campaign. Olsen & Shuvalov and its affiliated companies received more than $42 million during the 2004 election cycle, with almost $35 million of the funds coming from various Bush re-election committees, according to the Center for Public Integrity’s analysis of 2003 and 2004 campaign filings. The firm’s total also includes just under $7 million from the Republican National Committee.

Olsen said that the figure, though, is not pure profit because the total includes the costs of expenses for postage and shipping.

Olsen & Shuvalov’s circuitous route to the center of the Bush re-election campaign started with Rove more than two decades earlier. While directing a political action committee for George H.W. Bush’s 1980 presidential campaign, Rove began to hone his acumen for using political mail to raise money and drive home a candidate’s message — both rarely used practices at the time.

Authors Carl M. Cannon, Lou Dubose and Jan Reid described Rove’s early campaigning techniques in their biography, Boy Genius: “He crafted letters with underlined zingers that fired up partisans to get involved, sign up, and write fat checks,” the authors wrote. “Just as important, he had an instinctive and highly-developed gift for knowing to whom to send those letters.”

Rove began to build a master list of Texas political donors, sometimes through unorthodox tactics. “He would go to the secretary of state’s office and get the reports on everybody who contributed to any race in Texas,” political consultant Royal Masset told PBS’ FRONTLINE in 2005. “And this was before computers, and there would be somebody there with their own Xerox machine. Nobody else had a Xerox machine. It was weird. You would go into the office, and this was Karl Rove’s machine in the secretary of state’s office.”

In 1978, Rove began building the foundation for his political consulting business, helping Dallas oil tycoon Bill Clements become the first Republican governor of Texas since Reconstruction. After serving as an independent political consultant and later, Clements’ chief of staff, he branched off on his own in 1981, opening Rove & Co.

His firm had a number of early successes in Texas congressional races. But, Rove’s prized client was George W. Bush. He guided Bush’s 1994 Texas gubernatorial campaign, ousting popular Democrat Ann Richards by focusing on four issues: education, criminal justice, welfare and tort reform.

In addition to using a mailing list of past political donors, Karl Rove & Co. pioneered in targeting contributors by focusing on the consumer habits of likely Republican voters. For example, it acquired the mailing list of subscribers to Economist magazine and solicited contributions from its readers. (A similar strategy was used by Republican firms such as TargetPoint Consultants and National Media, Inc. during the 2004 presidential campaign.)

Rove explained his strategy, telling a reporter from the Christian Science Monitor in 1994 that the key to direct mail is having “the right list, with the right message, at the right time. It has to grab attention, and it has to be based in fact and need.”

Although Rove exercised great influence, he did not join Bush’s gubernatorial staff. But when the governor began his presidential campaign, he told Rove that he wanted his undivided attention and asked him to sell his company.

“Bush doesn’t want my focus diluted,” Rove told the Associated Press in March 1999, shortly after completing the sale. “If he’s going to make the run, he’d like to have me available.”

Federal financial disclosure documents Rove filed in 2001 indicate that the sale’s proceeds were paid in installments during 1999 and 2000, reported as $579,000 in “payroll distrib[ution]” and $108,156 in “attributed income.” Asked about the sale, Olsen refused to specify whether this was all that was paid for the Karl Rove & Co. assets.

Olsen & Delisi opened shop in February 1999. The two operatives had worked with Rove & Co. for several years, with Olsen serving as the company’s executive vice president. Almost immediately, Olsen & Delisi began working on the Bush presidential campaign, garnering direct mail contracts worth millions of dollars.

Olsen & Delisi also worked alongside Rove during the Florida presidential recount, receiving an additional $161,000 from the Bush-Cheney campaign, according to IRS records. In late 1999, Delisi was criticized for accepting funds from the Bush presidential campaign while also serving as press spokesman for Cornyn, then Texas’ attorney general. Two months after the relationship was reported by the Austin Chronicle, Delisi resigned from Cornyn’s staff.

Delisi left the consulting firm in February 2003 to become chief executive officer of HillCo Direct LLP, an Austin-based company that focuses exclusively on grassroots campaigns. He also runs Delisi Communications, a direct mail firm whose client list includes Texas’ Perry and the Volunteer Political Action Committee, a fundraising group affiliated with Sen. Bill Frist, R-Tenn., and his possible run for the presidency in 2008.

According to its Web site, the company now known as Olsen & Shuvalov has ten employees, half of them holdovers from the Karl Rove & Co. era. The site includes an e-mail contact for Praxis List Co., and documents filed with the Texas Secretary of State’s Office indicate at least two other business names associated with Olsen & Shuvalov. The firm’s most recent franchise tax certification lists four managers: Olsen, Shuvalov, Robert Thomas and Rod Richburg.

Shuvalov had worked for Rove & Co. for ten years as account executive, production manager and later executive vice president.

Thomas is the president of Thomas Graphics, a printing and graphics company that worked on Bush’s 2000 campaign.

Richburg, meanwhile, is the president of RSD Advertising Design, an Austin business that printed promotional material for the 2004 Bush-Cheney campaign. The company’s Web site lists Olsen & Shuvalov as the client for at least two of those campaign projects.

Although Karl Rove & Co. was completely liquidated as of Sept. 1, 2001, the political guru’s business still exists, at least on paper. Despite the company’s half decade of inactivity, Rove has continued to pay the franchise tax on his old consulting firm, essentially keeping the company — and its prospects for a rebirth after Bush leaves office in 2009 — alive. The most recent business activity by Karl Rove & Co. was in November 2003 when Rove relinquished his role as the firm’s registered agent to David Herndon, who served as treasurer of the Bush-Cheney 2000 campaign committee.

In addition to Rove, the only other name to appear on recent Karl Rove & Co. corporation papers is Harry M. Whittington, the company’s secretary and a director. Whittington, who also filed the certificate of incorporation in September 1981, is better known to the world as the man Vice President Dick Cheney accidentally shot during a quail hunting trip last February.