Kenneth P. Vogel and Jeremy W. Peters
WASHINGTON – Steve Bannon and two of his longtime benefactors are putting together a political coalition designed to ensure that the victory of a Republican insurgent in Alabama's Senate primary this week was just the beginning of the surprises that await the party establishment.
Bannon brings to the effort the political and promotional skills he showed as President Donald Trump's chief strategist and advocate for populist stances on issues like immigration and trade. His benefactors, billionaire hedge fund investor Robert Mercer and his daughter Rebekah Mercer, bring wealth and their own proven anti-establishment streak.
The obstacles Bannon and the Mercers face are formidable: the well-funded resistance of mainstream Republicans; a shortage of viable anti-establishment candidates like Roy Moore, the victor in Tuesday's Republican Senate primary in Alabama; an absence of political infrastructure for supporting them; and their own reputations for not always following through on big political plans.
But the Bannon-Mercer alliance is likely to be a potent factor in widening the divisions laid bare by the Alabama race and the intraparty battles that have crippled the Republican agenda in Congress. It could put Bannon and the Mercers on a collision course not just with the Republican establishment but also with other donor-driven political organizations, including the one built by billionaire brothers Charles G. and David H. Koch – and potentially with Trump.
At Moore's victory party, Bannon promised that "you're going to see in state after state after state, people that follow the model of Judge Moore, that do not need to raise money from the elites, from the crony capitalists, from the fat cats in Washington, D.C., New York City, Silicon Valley."
But Bannon acknowledges that fomenting disruption will not be easy.
"We've got a long haul in front of us," Bannon said in an interview at the Capitol Hill town house that doubles as his part-time residence and as the Washington headquarters of Breitbart News, the website owned in part by the Mercers and run by Bannon.
In particular, he singled out what he called the lack of "a deep bench" of polished candidates who could carry the "America First" banner into battle in Republican primaries against establishment favorites as effectively as Moore, who did not need any outside help to defeat Luther Strange.
"But look at how the conservative movement and the Republican establishment groomed the guys that the populist, nationalist Trump went through like a scythe through grass," Bannon said. "How long had they been groomed?"
He and Robert Mercer began hashing out a rough outline for a "shadow party" that would advance Trump's America First agenda – even if Trump himself strayed from it – during a five-hour meeting last month at the family's Long Island estate a couple of days before Bannon's resignation from the White House.
Early plans call for the creation of a sort of think tank to articulate the animating issues of the coalition, according to donors and operatives who have talked to Bannon, the Mercers or their allies. They say the coalition will ally with existing groups on specific issues and will support vetted candidates and causes.
Bannon has already forged an alliance with a super PAC and a nonprofit group – the Great America PAC and the Great America Alliance – which were among the biggest spenders on behalf of Moore in Alabama.
The goal is for approved groups and candidates to be funded not only by the Mercers but also by other donors recruited by the family and Bannon – a funding model similar to the one used by the Kochs and other major donor operations.
After the Alabama primary, Bannon flew to Colorado Springs to recruit donors and candidates at a conference of conservatives.
But the Bannon-Mercer coalition is much less organized at this stage than other major donor operations, particularly the Kochs' network, which resembles a privatized political party with offices in most states and which has spent more than $1.5 billion over the past dozen years trying to reshape U.S. politics around the brothers' free-enterprise ideals.
Bannon and the Mercers also stand out as more pugilistic in their tactics and ideology, bonding less over a shared cohesive political ideology than over a desire to disrupt the political establishment – the Republican establishment in particular.
That has led them in the past to support candidates as varied as Moore, a hard-line Christian conservative who has said "homosexual conduct should be illegal," and Trump, who rarely attends church and has been married three times.
To the extent that there is any ideological overlap among candidates the new coalition will support, it will probably be that they favor limiting immigration, making trade policies more advantageous to U.S. manufacturers and disentangling the United States from sweeping international agreements – and destroying the establishment.
The establishment does not seem concerned, at least not yet.
"We'll see," said Steven Law, the president of the Senate Leadership Fund, which backs establishment Republicans and spent more than $10 million in the Alabama race in support of Strange, whose campaign and allies drastically outspent Moore's supporters.
While Bannon "has made a lot of noise about attracting capital from the Mercers," Law said, "as we've seen ourselves, money alone is not the dispositive factor."
The alliance between Bannon and the Mercers began six years ago when they were introduced by Andrew Breitbart, the founder of Breitbart News who died in 2012. The timing was fortuitous. Mercer had recently been elevated to become a chief executive of Renaissance Technologies, one of the highest-grossing hedge funds in the world.
And under the stewardship of Rebekah Mercer, the Mercer family was beginning to expand its political involvement. The family invested in a variety of groups across the conservative spectrum, hinting at a less defined political ideology than the Kochs' libertarian-infused conservatism.
Nonetheless, Bannon arranged for an invitation to the Koch network's January 2012 gathering, where Rebekah Mercer pledged $10.2 million to the network's efforts – $200,000 from her and $10 million from her father – and was effusively thanked by Charles Koch, according to attendees.
But she soon began expressing dissatisfaction with the network's strategy and leadership, and the family began striking out on its own politically.
In 2013, the Mercers started a small-government advocacy group with Bannon called Reclaim New York that in some ways mimicked the Kochs' lead group, Americans for Prosperity. And the Mercers steered candidates and groups they funded to a data firm in which they are major investors, Cambridge Analytica. The company competes with the Koch-backed firm i360.
The Mercers had largely withdrawn from the Koch network by the beginning of the 2016 presidential campaign, donating $13.5 million to a super PAC supporting Sen. Ted Cruz, R-Texas, in his primary race against Trump, while the Kochs sat out the presidential campaign. When Cruz dropped out, the Mercers quickly threw their support – and $2 million in super PAC money – to Trump.
After Trump's victory, Rebekah Mercer joined his transition team and the pro-Trump nonprofit group America First Policies, but she clashed with the group's operatives and left it to create her own nonprofit group called Making America Great.
But after starting a $1 million television advertising campaign urging support for Trump after the failure of his initial health care overhaul push, the group has shown few signs of activity.
A representative for the Mercers declined to comment.
Among the donors who have been briefed on – or expressed interest in – the coalition being assembled by Bannon and the Mercers are several who have given to the Kochs' efforts over the years, including high-frequency trading pioneer W.E. "Ed" Bosarge of Houston, as well as Texas oilman Harold Hamm and Dallas businessman Thomas O. Hicks Jr.
Bosarge said that Bannon "has the capacity, the knowledge" to lead his own donor network, "and he certainly has a wide following of people."
Also expected to play a key role in the coalition, according to people involved in it, is Silicon Valley entrepreneur Peter Thiel, a significant donor to Trump's campaign and an informal White House adviser, who is close to both the Mercers and Bannon.
In the meantime, the coalition will not be afraid to call out Trump when he wavers on campaign promises like building a wall along the border with Mexico, said people familiar with the plans.
"We want to be supportive of him, and we believe the agenda he ran on was correct," said Chris Buskirk, publisher of the online journal American Greatness, who has been recruited to help articulate and defend the policy positions espoused by the coalition. "We also want to lay the foundation for political change that both outlives this administration and expands upon it."
Eric Beach, who started Great America PAC and Great America Alliance, said that "enforcing" Trump's vision was only part of the goal.
"Our efforts are about replacing the GOP establishment," he said.
The groups spent about $175,000 backing Moore by airing ads, placing robocalls and staging a rally last week featuring speeches by former Alaska Gov. Sarah Palin and former Trump White House adviser Sebastian Gorka.
Already, Bannon, the Mercers or their deputies have had talks with at least seven Republicans who are eyeing Senate campaigns, and the Mercers have donated $500,000 to super PACs that could support three of the candidates.
Mercer also donated $50,000 to a super PAC called Remember Mississippi that is affiliated with an aide to Chris McDaniel, a Mississippi state lawmaker who is considering challenging Sen. Roger Wicker in a primary next year.
McDaniel, who was accused of racism during an unsuccessful 2014 primary campaign, met with Bannon after a rally for Moore in Fairhope, Alabama, where he was asked if he was invited by Moore's campaign or by Bannon.
"Aren't they one in the same?" McDaniel responded, according to a reporter on the scene.