Part 2: Rebel status has fueled front-runner's success

PALIN: Her reputation as a crusader has had perfect timing.

Anchorage Daily NewsOctober 24, 2006 

Editor's note:This story was originally published October 24, 2006

WASILLA -- The crisis that came to define Sarah Palin's political life came soon after she vaulted from local politics to the statewide scene. The bright rising star of the Republican Party found herself pitted against the political establishment that had been grooming her for the highest electoral offices.

Palin says her choice ultimately came down to right and wrong. But there was more to it than that as she agonized for months and consulted with advisers over how far she should go in exposing "corruption" to protect her reputation -- at the risk of being cast into the lonely wilderness of the Alaska political outsider.

For Palin, the outsider role was not really new.

She had cast herself before as the new candidate, the fresh face, the good old boys' worst enemy. Now she turned on her own generals.

She took on the Republican Party chairman, Gov. Frank Murkowski's attorney general, Murkowski's daughter, Sen. Ted Stevens' son, the North Slope oil producers and finally Murkowski himself.

It turned out Palin caught the temper of the times perfectly. She rode a wave of anti-Murkowski sentiment to a resounding Republican primary victory in August over the governor and the party's fallback candidate, former state Sen. John Binkley.

Days later, when the FBI's investigation of self-dealing by legislators burst into view, the party that had held absolute power for four years suddenly looked lucky to have a dynamic political outsider as its nominee.

In 2003, however, there was no telling how all this would turn out for Sarah Palin.

FIRST STATEWIDE RACE

Palin ran for lieutenant governor in 2002 at the age of 39. She was just finishing her second term as Wasilla mayor. Though she had less money than the other three candidates, she finished a strong second, within 2,000 votes of winner Loren Leman.

In the last two weeks of the general election campaign, she did her Republican duty, stumping the state and appearing on television for Frank Murkowski. She was still, as she herself put it later, "the golden child."

The victorious Murkowski offered her several jobs in his administration, she said, including commissioner of commerce or head of the state parks division. Her name turned up on the short list of possible appointments to replace Murkowski himself in the U.S. Senate.

Palin turned the governor down until he offered to put her on the Alaska Oil and Gas Conservation Commission. The body is responsible for overseeing state oil fields to be sure wells are operated safely and recover the state's resources efficiently. Two of the three commission seats were vacant.

Palin, who admitted to having little background in the field, was named chairwoman, with the $125,000-a-year seat designated for a "public" member. She said she took the job to learn more about the oil industry, vital for the state. It wasn't an obvious stepping stone, she insists. "As far as the resume goes, the Commerce job would have been better, gallivanting around the state," she said.

The other Murkowski appointee to the commission was Republican Party chairman Randy Ruedrich. He had a professional background as an petroleum engineer. But protests were heard immediately about having a fundraising partisan regulating the oil industry.

The crisis had enveloped Palin by September 2003, seven months after her appointment. The story eventually spilled into public view: staff complaints about Ruedrich doing party business on state time, a leaked document to a gas-drilling company, perceived favoritism toward companies the commission was supposed to be regulating.

"Because she's enthusiastic and positive, she can be misread as naive and someone who can be manipulated," said Tuckerman Babcock, a former Republican Party chairman, former AOGCC commissioner and a longtime Palin adviser. "I think Randy Ruedrich and (Murkowski chief of staff) Jim Clark misread her ... I think that people who wanted her to look the other way assumed that she would play ball."

Palin, acting as chairwoman and ethics supervisor, passed complaints up the ladder to the attorney general and the governor's office. By November, as the complaints compounded, Ruedrich resigned from the commission. But there was still no word on how the administration was handling the sensitive matter. Palin, who was asked to gather evidence from Ruedrich's computer, was bound by state ethics laws from saying anything publicly.

It was especially tough for Palin because one of the main issues Ruedrich had been promoting, shallow-gas drilling in the Mat-Su area, affected her friends and neighbors. She finally quit in frustration in January, months before specific allegations would become public. She had been on the job only 11 months.

"A good friend told me that in politics either you eat well or you sleep well," Palin said of those times. "I wasn't sleeping well."

CRISIS OF CONSCIENCE

Concerned that the matter might be dropped, she continued to talk to the state through a lawyer, Wayne Anthony Ross, the National Rifle Association board member who had made a right-wing primary challenge to Murkowski in 2002. A former national committeeman for the Republican Party, he knew what it was like to be outside what he calls the "power elite."

"It was a crisis of conscience for her," Ross said. "Her personal integrity is very important to her, and here it appears she's behind a cover-up."

Palin and her supporters say she was trying to grope through the state's secretive ethics- complaint process and did not fear political repercussions. But the potential consequences to her up-and-coming career were obvious.

"She could have ended up in as much of a political wilderness as Wayne Ross did for years," said Babcock.

The press was clamoring about the affair. Palin began responding to feelers from local news media. She said later that her college degree in journalism helped her focus on the public process, and she saw that the media could play a role. Once the story finally unfolded in public, press accounts made Palin the hero.

It was a sharp contrast to her attitude toward the Daily News expressed in a 1993 letter, in which a seething young Wasilla city councilwoman called the paper "dangerously biased" for its coverage of Sen. George Jacko, a key member of the Republican majority in Juneau. Jacko had been caught trying noisily to get into the room of a female legislative aide and was eventually censured by the Legislature.

"How can you justify your restraint in slamming the Clintons, Kennedys, Marion Barrys and other philandering, chauvinistic left-wingers of the world?" Palin wrote at the time. "Your yellow, liberal rag is so obvious. I pray we will someday have a choice in newspapers again."

Vindication in the Ruedrich affair didn't come for Palin until June 2004, when the Republican chairman admitted to breaking ethics laws and agreed to pay a $12,000 fine.

By that time, Palin was an outcast. The state Republican Party in May had just reconfirmed its support for Ruedrich, after party leaders assured the central committee that charges against him had been overblown by the media. Even Murkowski had voiced support for Ruedrich, calling him a "survivor."

One of Palin's Mat-Su mentors, district Republican chief Roy Burkhart of Willow, still thinks she went too far. When Palin came to him for advice, he said in a recent interview, he said she should pass along the evidence, which appeared serious enough.

"The impression I got was she didn't want to do it," said Burkhart. "But the evidence was there, and it was going to be worse if she didn't do it."

After that, however, she should have let state authorities handle the problem and kept quiet, he said.

Burkhart later filed a public-records request with the City of Wasilla, seeking evidence of to party officials from Palin's city computers. He said recently that he did this because there were rumors an ethics complaint might be filed against her for politicking on city time as mayor. He said he only wanted to see if his name was involved. He said he continues to support Palin for governor and Ruedrich for party chairman.

If Palin was worried about antagonizing the Republican Party hierarchy, she didn't show it. Quite the opposite: For the next two years, she took a series of high-profile stances challenging party leaders.

GROWING POLITICAL STATURE

In early 2004, Palin announced she was weighing a challenge of Lisa Murkowski in the upcoming primary for the U.S. Senate. In the end, during a teleconference with Alaska Right to Life, she announced she was endorsing Murkowski's conservative Republican opponent, Mike Miller, whose bid eventually failed. She said at the time that her then-14-year-old son had asked her not to run.

A measure of Palin's growing political stature came in the closing weeks of Lisa Murkowski's campaign against Tony Knowles. Voters started getting recorded messages from a chirpy woman saying, "Hello, this is Sarah," and urging their support for Murkowski and the Republican team. The calls were paid for by the National Republican Senatorial Committee.

Palin sent out e-mails telling people it wasn't her. When she heard the recording, she told a reporter, "She sounds chipper and annoyingly nasal, so I realize now why people think she's me. Ugh."

Two months after the Senate election, Palin was invited by Democrat Eric Croft to join him in filing an ethics complaint against attorney general Gregg Renkes, Frank Murkowski's longtime aide and campaign manager. The complaint charged he had a conflict of interest in an international coal deal that had been uncovered by the press.

"That one seemed optional. She could have been proven wrong," said Babcock. "It made a lot of Republicans nervous that she was helping Croft, a Democrat."

But the case against Renkes mounted, even after Murkowski issued a reprimand and declared it closed. In February 2005, Renkes resigned and Palin was one of the heroes again.

Palin found other, small ways to stay in circulation. She appeared on statewide television in an ad for Spenard Builders Supply and a public service announcement for the state fire marshal on home cooking safety. She also showed up on a local Web site wearing a "Valley trash" T-shirt as part of a humorous rebuttal to an e-mail slur by Ben Stevens that had been leaked to the public.

Palin was approached, meanwhile, by backers of an all-Alaska natural gas line to Valdez. She said she became convinced the project, which would liquefy the gas for shipping, had great potential for the state.

"I started reading up on it," she recalled recently. "I said, this is good. This is something the public needs to be listening to."

Palin appeared in advertisements in the spring of 2005 with three prominent Republicans: former Govs. Wally Hickel and Jay Hammond and former Senate Majority Leader Rick Halford, an old friend.

With much of the state's business elite leaning toward a gas line through Canada, this was another provocative outsider position. Today, as the Republican nominee and frontrunner, Palin has tempered her enthusiasm, saying the proposed pipeline to Valdez has virtues that must be weighed against other options. But she says she was so proud of the chance to associate with the independent-minded Republican governors that she keeps a framed copy of the ad as one of her few pieces of political memorabilia.

INSURGENT ENERGY

None of these maverick positions were taken with the goal of setting up a run for governor, she says. When she appeared in the all-Alaska ads, she said, she still didn't know whether she might run for lieutenant governor in 2006 or make a run for governor as an Independent, as former Republican legislator Andrew Halcro decided to do.

Instead she decided to enter the Republican primary last October, with Frank Murkowski still on the fence about whether to run himself. She said publicly that powers inside her own party wanted her "crucified." Her independence and her high profile on ethics issues captured an insurgent public mood, and by summer she was leading in the polls.

Those qualities also left her vulnerable to charges of hypocrisy. Public-record requests of the City of Wasilla revealed Palin campaigning for lieutenant governor in 2002 on city time. The records -- obtained originally by the Voice of the Times' Paul Jenkins and distributed by Murkowski's campaign -- showed Palin arranging campaign travel from the mayor's office and using her administrative assistant to write thank-yous to campaign donors.

The mayor in Wasilla is not just a figurehead with an office. Palin was being paid $68,000 a year to manage the city.

Ruedrich dug out some e-mails to him that had come from Palin's city office during her campaign and distributed them -- though he said he otherwise stayed out of the party's primary.

Palin responded by calling the accusations exaggerated and not at all comparable to Ruedrich's transgressions on the oil and gas commission. She said she apologized for any mistakes. Mostly, she dismissed the charges as last-minute smears by desperate opponents.

The attacks seemed to rally her supporters, her campaign staffers say, with campaign contributions spiking after each burst.

On primary night, Palin swept to victory with 51 percent of the vote in the three-way race. Ross, giddy during her celebration at Hickel's Hotel Captain Cook, said it was quite a contrast to his own failed effort against Murkowski four years earlier.

"I didn't get help from the party, either, but I didn't get the crowds," Ross said. "She's lovable. I was never lovable."

STILL A GADFLY

Leading Knowles by double-digit numbers as she came out of the primary, Palin continued to run as the self-made candidate.

On the night she won the party nomination, she asked for Ruedrich to step down as Republican chairman -- he declined -- and also called for the resignation of national committeeman Sen. Ben Stevens. She touted the endorsement of Tom Irwin, the former Department of Natural Resources commissioner fired by Murkowski for refusing to go along with the governor's unpopular gas line deal.

The party friction has not made life easy, Palin said.

"One of the challenges in our campaign is being up against those who run our party," she said last week on a radio call-in show. She's sticking with the party because she believes in such Republican planks as equality and free enterprise, she said, but she's not dropping her call for change of the party hierarchy.

"At this point, he's not listening to me," she said of Ruedrich.

The clash has cost her campaign funds: "We've been told the Governor's Fund in the Republican Party of Alaska is empty," Palin said. "That's fine with us. We'll go about it another way."

Ruedrich says that the party hasn't had much money to put in the race directly. But affiliates such as Republican Women's Clubs around the state have added contributions to make the party total for Palin around $70,000. Some $20,000 of that was in-kind contributions from the party for voter identification and other such services offered to candidates.

That contrasts with more than $190,000 -- the legal limit for the party is $200,000 -- the party contributed to Frank Murkowski in 2002, he said. But four years ago, Republican coffers were stuffed by a fundraiser held here by President George W. Bush. No similar mega-event was held this election, Ruedrich said.

In addition, Ruedrich said, Palin and other state candidates will benefit from the party's statewide get-out-the-vote and absentee-ballot efforts, which are paid for with a separate fund raised under federal law to help re-elect U.S. Rep. Don Young, R-Alaska.

"There are folks working to raise funds directly for the candidate. That's a very efficient way of raising money," Ruedrich said.

Palin said she and her running mate, Sean Parnell, will do fine without the party fundraising machine. "Sean and I have kind of moved on," she said.

The Palin campaign had raised $788,319 as of the most recent state report, filed Oct. 9, compared with $857,865 for Knowles. Palin also had the benefit of a television advertising blitz in early October, courtesy of the Republican Governors Association. Knowles, whose campaign estimated the RGA commercials cost more than $250,000, has spurned help from a similar Democratic group this election.

CLOSE-KNIT STAFF

Palin has turned away from party regulars not only for fundraising but for the campaign itself. Her core group of paid staff includes the same team that ran her insurgent campaign in the primary.

The campaign manager is an old Wasilla friend, Kris Perry, who describes herself as "nonpolitical." The two got to know each other well in 1993, when both young women were active in civic affairs and balancing family and public lives. Palin was on the Wasilla city council, and Perry was head of the Wasilla Chamber of Commerce. Both were pregnant.

"She's faced a lot of challenges, but she's been able to prove her critics wrong," Perry said, recalling the days when people said Palin was too young to be Wasilla's mayor. "My admiration continues to increase."

Marshalling a legion of volunteers, Perry works closely with Frank Bailey, coordinator of the primary campaign, and two staffers with modest political experience, campaign spokesman Curtis Smith and issue coordinator John Bitney, who went to middle school with Palin in Wasilla.

Smith, a partner in the Anchorage advertising agency Lottsfeldt-Smith, had worked as a reporter at KTUU-Channel 2. Bitney, a former legislative staffer and registered lobbyist who dropped his clients when he took the job, had to get clearance from the Alaska Public Offices Commission to work on the campaign and was told he couldn't raise funds for her.

The campaign added former Binkley campaign manager Mike Tibbles last week. Tibbles worked on Frank Murkowski's campaign in 2002 and served as the governor's legislative director and deputy commissioner of administration until quitting to work for Binkley.

Outside the inner circle is an orbit of better known political figures who, Palin says, provide occasional advice. Prominent among these names are campaign co-chairmen Wayne Ross and Hickel. Each is associated with a set of initials full of meaning for this year's race: Ross with the NRA, whose position on subsistence is controversial in rural Alaska, and Hickel with the LNG pipeline project that failed to win support in the 1990s.

Others include lobbyist Paul Fuhs, former state Sen. Rick Halford, Babcock, and Jeff Lowenfels, the former president of Hickel's Yukon Pacific LNG gasline project.

HOME STRETCH

Her supporters remain avid, and Palin's bright red signs -- the school color of the Wasilla Warriors -- line the roads of Southcentral Alaska. But the campaign has wobbled at times.

Palin missed a few scheduled events and, at others, came off as unprepared or over her head. After an education forum last week, she was mocked by her opponents for submitting a folksy three-year-old essay about her schoolteacher father instead of a plan for improving schools. She found herself in the middle of the Mat-Su Borough mayor's election earlier this fall, choosing sides in a race between friends that left some conservatives bitter and some supporters elsewhere in the state, such as radio talk show host Rick Rydell, asking why she couldn't keep focused on her bigger mission.

Then last week she told a hometown crowd in Wasilla she would favor them as governor. "Certainly, people will assume I'm biased toward the valley in the decisions I make. So be it, because I will be."

Knowles knocked her for the "careless" statement -- "Does this mean," he asked in a statement sent out to reporters, "that Alaskans from other regions of the state can expect to take a back seat?" But her supporters said she meant it lightly, as the kind of sentiment a former Miss Wasilla might be expected to share.

"People believe she has the right attitude in her heart, even if she doesn't always express it exactly right," said Babcock.

The defiantly grass-roots nature of the campaign may have distanced her from certain traditional centers of power in Alaska. The oil industry is one -- but the campaign says it is counting on her lieutenant governor candidate, Parnell, a former oil lobbyist and legislator, to help there.

Some Republican-leaning business leaders have also expressed anxiety about Palin's contrarian attitudes and allies, fearing they could complicate negotiations over construction of a gas line. The latest defector was Rydell, a staunch Republican who announced on the air Monday he was pulling his support for Palin.

Another disconnect is with the state's Native corporations. Palin backed away from a scheduled meeting with Native executives several weeks ago, her campaign conceding she wasn't ready to talk about tribal recognition and other Native concerns raised by the group. Subsistence was prominent on the executives' list.

Palin's ties are strong to the Alaska Outdoor Council, whose calls for "equality" and hunting access sound different in rural Alaska than they do in the Mat-Su. It's unclear where the candidate would turn for advice on Native political matters. On the other hand, her husband, Todd, is Native his grandmother is Yup'ik -- and Palin is actually doing well with individual rural voters, according to her pollster, Dave Dittman.

Since her 1996 run for mayor, when signs saying "Positively Palin" adorned Wasilla, the candidate has said she hates negative politics. But with her substantial lead in the polls slipping in the last few weeks, Palin has started to go after Knowles more directly. She plans to stick to her pledge, campaign manager Perry said, which means no negative personal ads. But Knowles' own campaign missteps and his record as governor are fair game, campaign officials say.

"People are expecting some feistiness," Dittman said.

Still, no national consultants have been brought in to hone Palin's message or protect her frontrunner status with carefully scripted appearances.

"It's the most remarkable campaign I've ever seen," said Babcock. "She's just running as Sarah Palin and talking about what comes up."

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