1977–1991
Rove's initial job in Texas was in 1977 as a legislative aide for Fred Agnich, a Texas Republican state representative from Dallas. Later that same year, Rove got a job as executive director of the Fund for Limited Government, a political action committee (PAC) in Houston headed by James A. Baker III, a Houston lawyer (later President George H. W. Bush's Secretary of State). The PAC eventually became the genesis of the Bush-for-President campaign of 1979–1980.
His work for Bill Clements during the Texas gubernatorial election of 1978 helped Clements become the first Republican Governor of Texas in over 100 years. Clements was elected to a four-year term, succeeding Democrat Dolph Briscoe. Rove was deputy director of the Governor William P. Clements Junior Committee in 1979 and 1980, and deputy executive assistant to the governor of Texas (roughly, Deputy Chief of Staff) in 1980 and 1981.
In 1981, Rove founded a direct mail consulting firm, Karl Rove & Co., in Austin. The firm's first clients included Texas Governor Bill Clements and Democratic congressman Phil Gramm, who later became a Republican congressman and United States Senator. Rove operated his consulting business until 1999, when he sold the firm to take a full-time position in George W. Bush's presidential campaign.
Between 1981 and 1999, Rove worked on hundreds of races. Most were in a supporting role, doing direct mail fundraising. A November 2004 Atlantic Monthly article estimated that he was the primary strategist for 41 statewide, congressional, and national races, and Rove's candidates won 34 races.
Rove also did work during those years for non-political clients. From 1991 to 1996, Rove advised tobacco giant Philip Morris, and ultimately earned $3,000 a month via a consulting contract. In a deposition, Rove testified that he severed the tie in 1996 because he felt awkward "about balancing that responsibility with his role as Bush's top political advisor" while Bush was governor of Texas and Texas was suing the tobacco industry.
Rove advised the younger Bush during his unsuccessful Texas congressional campaign in 1978.
In 1977, Rove was the first person hired by George H. W. Bush for his unsuccessful 1980 presidential campaign, which ended with Bush as the vice-presidential nominee.
In 1982, Rove returned to assisting Governor Bill Clements in his run for reelection, but was defeated by Democrat Mark White.
In 1982, Phil Gramm was elected to the U.S. House of Representatives as a conservative Texas Democrat.
In 1984, Rove helped Gramm, who had become a Republican in 1983, defeat Republican Ron Paul in the primary and Democrat Lloyd Doggett in the race for U.S. Senate.
Rove handled direct-mail for the Reagan-Bush campaign.
In 1986, Rove helped Clements become governor a second time. In a strategy memo Rove wrote for his client prior to the race, now among Clements' papers in the Texas A&M University library, Rove quoted Napoleon: "The whole art of war consists in a well-reasoned and extremely circumspect defensive, followed by rapid and audacious attack."
In 1986, just before a crucial debate in the campaign, Rove claimed that his office had been bugged by Democrats. The police and FBI investigated and discovered that the bug's battery was so small that it needed to be changed every few hours, and the investigation was dropped. Critics, including other Republican operatives, suspected Rove had bugged his own office to garner sympathy votes in the close governor's race.
In 1988, Rove helped Thomas R. Phillips become the first Republican elected as Chief Justice of the Texas Supreme Court. Phillips had been appointed to the position in November 1987 by Clements. Phillips was re-elected in 1990, 1996 and 2002.
Phillips' election in 1988 was part of an aggressive grassroots campaign called "Clean Slate '88", a conservative effort that was successful in getting five of its six candidates elected. (Ordinarily there were three justices on the ballot each year, on a nine-justice court, but, because of resignations, there were six races for the Supreme Court on the ballot in November 1988.) By 1998, Republicans held all nine seats on the Court.
In 1989, Rove encouraged George W. Bush to run for Texas governor, brought in experts to tutor him on policy, and introduced him to local reporters. Eventually, Bush decided not to run, and Rove backed another Republican for governor who lost in the primary.
In 1990, two other Rove candidates won: Rick Perry, the future governor of the state, became agricultural commissioner, and Kay Bailey Hutchison became state treasurer.
One notable aspect of the 1990 election was the charge that Rove had asked the Federal Bureau of Investigation (FBI) to investigate major Democratic officeholders in Texas. In his 2010 autobiography, Rove called the whole thing a "myth", saying:
The FBI did investigate Texas officials during that span, but I had nothing to do with it. The investigation was called "Brilab" and was part of a broad anti-corruption probe that looked at officials in Louisiana, Oklahoma, Los Angeles, and Washington, D.C., as well as Texas ... An official for the U.S. Department of Agriculture spotted expenses claimed by Hightower's shop that raised red flags ... enough to indict some of Hightower's top aides; they were later found guilty and sent to prison. ... The myth that I had something to do both with spurring the investigation and with airing all of this has stuck around because it is convenient for some to blame me rather than those aides who ran afoul of the law.
Rove was campaign manager for Florence Shapiro's 1992 campaign for District 2 in the Texas Senate, which included Collin County and counties in East Texas. Shapiro was the top vote-getter in the Republican primary against Don Kent and former Plano mayor Jack Harvard, then defeated Kent by 1 percentage point in a hotly-contested run-off election, during which vandals defaced her campaign signs with swastikas due to Shapiro's Jewish faith.
In 1991, United States Attorney General Dick Thornburgh resigned to run for a Senate seat in Pennsylvania, one made vacant by John Heinz's death in a helicopter crash. Rove's company worked for the campaign, but it ended with an upset loss to Democrat Harris Wofford.
Rove had been hired by an intermediary Murray Dickman to work for Thornburgh's campaign. Subsequently, Rove sued Thornburgh directly, alleging non-payment for services rendered. The Republican National Committee, worried that the suit would make it hard to recruit good candidates, urged Rove to back off. When Rove refused, the RNC hired Kenneth Starr to write an amicus brief on Thornburgh's behalf. Karl Rove & Co. v. Thornburgh was heard by U.S. Federal Judge Sam Sparks, who had been appointed by George H.W. Bush in 1991. After a trial in Austin, Rove prevailed.