PALIN MEETS McCAIN STAFFERS WEARING ONLY A TOWEL

This Newsweek report sheds light on many things that never made the news including how Sarah Palin met McCain staffers at her hotel room on the night of the Republican Convention wearing only a towel.

Bill Corcoran, Editor: corksphere: http://corksphere.blogspot.com

Hackers and Spending Sprees
Highlights from NEWSWEEK's special election project.

Newsweek Web Exclusive
Nov 5, 2008 Updated: 5:01 a.m. ET Nov 5, 2008

URL: http://www.newsweek.com/id/167581

The computer systems of both the Obama and McCain campaigns were victims of a sophisticated cyberattack by an unknown "foreign entity," prompting a federal investigation, NEWSWEEK reports today.

At the Obama headquarters in midsummer, technology experts detected what they initially thought was a computer virus—a case of "phishing," a form of hacking often employed to steal passwords or credit-card numbers. But by the next day, both the FBI and the Secret Service came to the campaign with an ominous warning: "You have a problem way bigger than what you understand," an agent told Obama's team. "You have been compromised, and a serious amount of files have been loaded off your system." The following day, Obama campaign chief David Plouffe heard from White House chief of staff Josh Bolten, to the same effect: "You have a real problem ... and you have to deal with it." The Feds told Obama's aides in late August that the McCain campaign's computer system had been similarly compromised. A top McCain official confirmed to NEWSWEEK that the campaign's computer system had been hacked and that the FBI had become involved.

Officials at the FBI and the White House told the Obama campaign that they believed a foreign entity or organization sought to gather information on the evolution of both camps' policy positions—information that might be useful in negotiations with a future administration. The Feds assured the Obama team that it had not been hacked by its political opponents. (Obama technical experts later speculated that the hackers were Russian or Chinese.) A security firm retained by the Obama campaign took steps to secure its computer system and end the intrusion. White House and FBI officials had no comment earlier this week.

NEWSWEEK has also learned that Palin's shopping spree at high-end department stores was more extensive than previously reported. While publicly supporting Palin, McCain's top advisers privately fumed at what they regarded as her outrageous profligacy. One senior aide said that Nicolle Wallace had told Palin to buy three suits for the convention and hire a stylist. But instead, the vice presidential nominee began buying for herself and her family—clothes and accessories from top stores such as Saks Fifth Avenue and Neiman Marcus. According to two knowledgeable sources, a vast majority of the clothes were bought by a wealthy donor, who was shocked when he got the bill. Palin also used low-level staffers to buy some of the clothes on their credit cards. The McCain campaign found out last week when the aides sought reimbursement. One aide estimated that she spent "tens of thousands" more than the reported $150,000, and that $20,000 to $40,000 went to buy clothes for her husband. Some articles of clothing have apparently been lost. An angry aide characterized the shopping spree as "Wasilla hillbillies looting Neiman Marcus from coast to coast," and said the truth will eventually come out when the Republican Party audits its books.
A Palin aide said: "Governor Palin was not directing staffers to put anything on their personal credit cards, and anything that staffers put on their credit cards has been reimbursed, like an expense. Nasty and false accusations following a defeat say more about the person who made them than they do about Governor Palin."
McCain himself rarely spoke to Palin during the campaign, and aides kept him in the dark about the details of her spending on clothes because they were sure he would be offended. Palin asked to speak along with McCain at his Arizona concession speech Tuesday night, but campaign strategist Steve Schmidt vetoed the request.
The disclosures are among many revealed in "How He Did It, 2008," the latest installment in NEWSWEEK's Special Election Project, which was first published in 1984. As in the previous editions, "How He Did It, 2008" is an inside, behind-the-scenes account of the presidential election produced by a special team of reporters working for more than a year on an embargoed basis and detached from the weekly magazine and Newsweek.com. Everything the project team learns is kept confidential until the day after the polls close.

Among the other revelations from the special project:
The Obama campaign was provided with reports from the Secret Service showing a sharp and disturbing increase in threats to Obama in September and early October, at the same time that many crowds at Palin rallies became more frenzied. Michelle Obama was shaken by the vituperative crowds and the hot rhetoric from the GOP candidates. "Why would they try to make people hate us?" Michelle asked a top campaign aide.

On the Sunday night before the last debate, McCain's core group of advisers—Steve Schmidt, Rick Davis, adman Fred Davis, strategist Greg Strimple, pollster Bill McInturff and strategy director Sarah Simmons—met to decide whether to tell McCain that the race was effectively over, that he no longer had a chance to win. The consensus in the room was no, not yet, not while he still had "a pulse."

The Obama campaign's New Media experts created a computer program that would allow a "flusher"—the term for a volunteer who rounds up nonvoters on Election Day—to know exactly who had, and had not, voted in real time. They dubbed it Project Houdini, because of the way names disappear off the list instantly once people are identified as they wait in line at their local polling station.

Palin launched her attack on Obama's association with William Ayers, the former Weather Underground bomber, before the campaign had finalized a plan to raise the issue. McCain's advisers were working on a strategy that they hoped to unveil the following week, but McCain had not signed off on it, and top adviser Mark Salter was resisting.

McCain also was reluctant to use Obama's incendiary pastor, the Rev. Jeremiah Wright, as a campaign issue. The Republican had set firm boundaries: no Jeremiah Wright; no attacking Michelle Obama; no attacking Obama for not serving in the military. McCain balked at an ad using images of children that suggested that Obama might not protect them from terrorism. Schmidt vetoed ads suggesting thatObama was soft on crime (no Willie Hortons). And before word even got to McCain, Schmidt and Salter scuttled a "celebrity" ad of Obama dancing with talk-show host Ellen DeGeneres (the sight of a black man dancing with a lesbian was deemed too provocative).

Obama was never inclined to choose Sen. Hillary Clinton as his running mate, not so much because she had been his sometime bitter rival on the campaign trail, but because of her husband. Still, as Hillary's name came up in veep discussions, and Obama's advisers gave all the reasons why she should be kept off the ticket, Obama would stop and ask, "Are we sure?" He needed to be convinced one more time that the Clintons would do more harm than good. McCain, on the other hand, was relieved to face Sen. Joe Biden as the veep choice, and not Hillary Clinton, whom the McCain camp had truly feared.

McCain was dumbfounded when Congressman John Lewis, a civil-rights hero, issued a press release comparing the GOP nominee with former Alabama governor George Wallace, a segregationist infamous for stirring racial fears. McCain had devoted a chapter to Lewis in one of his books, "Why Courage Matters," and had so admired Lewis that he had once taken his children to meet him.

On the night she officially lost the Democratic nomination, Hillary Clinton enjoyed a long and friendly phone conversation with McCain. Clinton was actually on better terms with McCain than she was with Obama. Clinton and McCain had downed shots together on Senate junkets; they regarded each other as grizzled veterans of the political wars and shared a certain disdain for Obama as flashy and callow.

At the GOP convention in St. Paul, Palin was completely unfazed by the boys' club fraternity she had just joined. One night, Steve Schmidt and Mark Salter went to her hotel room to brief her. After a minute, Palin sailed into the room wearing nothing but a towel, with another on her wet hair. She told them to chat with her laconic husband, Todd. "I'll be just a minute," she said.

The debates unnerved both candidates. When he was preparing for them during the Democratic primaries, Obama was recorded saying, "I don't consider this to be a good format for me, which makes me more cautious. I often find myself trapped by the questions and thinking to myself, 'You know, this is a stupid question, but let me … answer it.' So when Brian Williams is asking me about what's a personal thing that you've done [that's green], and I say, you know, 'Well, I planted a bunch of trees.' And he says, 'I'm talking about personal.' What I'm thinking in my head is, 'Well, the truth is, Brian, we can't solve global warming because I f---ing changed light bulbs in my house. It's because of something collective'."