BusinessReport.com

John Diez is swamped. He’s reviewing direct mail pieces that lambaste Democrats and radio scripts that demonize liberals. His phones are ringing off the hook, creating a political ambience that is unmistakable.

It’s an election year, of course, and the polls open in just over a week. Everyone, from reporters to campaign managers, wants to know the skinny on the House race down in Houma or the Senate race in Westwego. And Diez has the answers, although he isn’t sharing. “It’s like broadcasting your war strategy,” he says. “Everybody wants to know, but it’s not going to happen.”

As executive director of the Louisiana Committee for a Republican Majority, Diez is the head of a well-funded operation that has one goal in mind: Helping the GOP capture more seats in the Legislature than Democrats do. To be certain, the feat would be astonishing. You would have to look back prior to Reconstruction to find Dems on the outs in the Louisiana House and Senate.

By most accounts and tallies, however, a Republican takeover in following runoffs is unlikely to happen, despite the fanciful predictions of recent months. But Diez and the folks behind the curtain at LCRM do have Republicans positioned to pick up more seats in the lower chamber, which will be enough to block certain bills and motions.

The group has raised in excess of $1 million for its mission, funded largely by the state’s conservative cream. Many donors, like Bob Perry of Houston, are forking over $100,000 in lump sums. Perry is best known for partly footing the bill on the “Swift Boat Veterans for Truth” attacks during the 2004 presidential race. Diez has taken lumps for the link, but rightly argues that Democrats have seedy ties as well if one digs deep enough.

But he can also point to a plethora of similar donations worth their respect in gold, like $75,000 from New Orleans philanthropist Phyllis Taylor, the only Louisiana resident on Forbes’ annual list of the 400 richest Americans. Even John Georges, a businessman from Metairie who switched from the GOP to independent to run for governor this year, ponied up $75,000.

Locally, there’s $50,000 from The Shaw Group, which was founded by Jim Bernhard of Baton Rouge, former chairman of the Louisiana Democratic Party who served on the transition team of Gov. Kathleen Blanco. It’s an unlikely place to find any loot connected to Bernhard, but it’s clear The Shaw Group is playing both sides of the fence; it also gave $50,000 to the Dems. Bernhard, the private citizen, chipped in $50,000 of his own money to the Democratic committee in June, revealing his true stripes.

And then there are relationships LCRM is quick to dissolve. It received $1,000 earlier this month from Greenberg-Traurig, which formerly employed the embattled and convicted Jack Abramoff as a lobbyist. Furthermore, Greenberg-Traurig is the same PAC that gave nearly $13,000 to Congressman Bob Ney. The Ohio Republican chose not to seek re-election last year following a guilty plea to charges of conspiracy and making false statements in relation to Abramoff’s Indian-lobbying scandal. After being informed of the donation by accountants, Diez says it was mailed back. “We’re not keeping that donation,” he says.

But there are certain checks staying in the bank. The GEO Group PAC of Florida gifted LCRM at least $25,000 during June and August. According to the Center for Political Accountability, a good-government group in Washington, D.C., the GEO Group is a world leader in privatized correctional and detention management—you might know them under their earlier alias of Wackenhut Corrections. In an analysis of GEO, the watchdog estimates that the PAC, or an extension of it, donated roughly $880,000 in 19 states during the 2002 and 2004 elections. “The company is a heavy giver in states in which it operates,” the report says.

It even hits up both sides of the aisle, as evidenced by a $3,000 donation to the Democratic committee earlier this year. But what, if anything, does GEO expect in return? “Like so many other companies that do business in Louisiana, they are concerned,” Diez says. “When we solicit donations, we tell people that we are recruiting conservatives and that there’s a spending problem in Louisiana. They never offer ‘X’ amount of money in exchange for us pushing a certain agenda. There has never been a dialogue like that.”

Late last month, LCRM likewise received a $100,000 contribution from a group called the American Justice Partnership, which is a Michigan-based front group for the National Association of Manufacturers. While critics contend NAM uses the partnership to politically funnel money, NAM argues it was merely set up to bolster legal reform on the state level. According to The Washington Post, Bernie Marcus, co-founder of Home Depot, is one of the founders of the American Justice Partnership. A recent CBS News report also labeled Marcus one of the top “bundlers” in the nation, meaning a person who collects money from various sources in his own name and makes a lump payment on their behalf to a political action committee. In short, bundlers get rid of that pesky paper trail.

Diez says the partnership is a perfect for LCRM because the organization wants to make an impact on the state level and LCRM’s sole mission is dedicated to the Legislature. “What’s so questionable about that donation?” Diez asks.

In 2006, the Justice Partnership funded a 527-like organization (meaning not regulated by the feds) in a state court race in Georgia, and it contributed to similar activities in New York, Oregon and Illinois. Why then is the partnership channeling money to LCRM? Is this any kind of indication of what’s to come? Diez responds that the curiosities are more about the process than the players, a statement not totally off-base considering the flimsy regulations Congress has placed on political fundraising.

According to the most recent campaign finance report on record with the state, LCRM had more than $811,000 available to spend heading into the final stretch. If you review every campaign finance report filed by LCRM this year, you’ll find a great deal of direct mail costs, strategy fees, polling and research. But there are no production expenditures or media buys. Additionally, actual spending on candidates has been minimal.

LCRM is presently spending about $20,000 per month with the New Orleans-based GCR and Associates for “computer database services.” Earlier this year, it also dropped an additional $90,000 for software development. It’s worth noting the GCR holds several contracts with the state and is at least a minor player on the recovery circuit. But the database system the company is developing may change the way Republicans win elections for some time. Diez admits that’s where all the money has been going, and its impact on the race shouldn’t be underestimated.

“We’re building a sophisticated modeling process,” Diez says. “This is all being geared toward Election Day. I think you’re going to find that our reports from the final week will be more detailed than anything else you’ve seen from us. That’s when you’ll see a lot of action.”