Inside the secret battle to stop No Labels

WASHINGTON — Once upon a time, before the multimillion-dollar negative campaigns and allegations of running “a conspiracy to commit extortion, voter intimidation, and other criminal behavior,” they were friends. Good friends.

The people who run No Labels and Third Way, two of the most prominent centrist organizations in Washington, had all come up together in the small world of Clinton-era center-left politics.

Nancy Jacobson, an early Bill Clinton hire and the founder of No Labels, helped raise the initial money and secure the necessary political blessings to start Third Way. The think tank was co-founded by Jon Cowan, whom Jacobson viewed as something of a mentee. Cowan, now Third Way's president, even signed the ketubah (the Jewish wedding contract) at Jacobson's wedding to Mark Penn, whose firm conducts No Labels’ polls.

Then came the 2024 election — and No Labels’ decision to try to field a bipartisan “unity ticket” against both President Joe Biden and former President Donald Trump, backed by a reported budget of $70 million. Third Way, which may be centrist but is firmly Democratic, viewed this as a misguided, no-hope effort that could only spoil the election for Biden and help to re-elect Trump, with potentially disastrous consequences.

"There were deep personal stakes and relationships," Cowan said, adding: “Third Way took on this fight to expose the No Labels Party presidential bid as fraudulent centrism because we have long believed in and represented the sensible, vital center.”

Cowan said No Labels "stopped being moderate and centrist" when it included Trump on a list of “problem solvers” during his 2016 campaign, then tried to portray Biden as a leftist and "spent $60 million and two years promoting a false equivalency between Trump and Biden."

A centrist civil war broke out in the C-suites and steakhouses of Washington and Manhattan. Like so many insider conflicts, it was deeply personal. There were betrayal, a double agent, a secret team of political operatives, some very unlikely allies — and a decisive victory for one side that left the other seething and bitter.

Even some people close to No Labels acknowledge the campaign against it largely succeeded in its mission: dissuading any potential candidates from joining its ticket. But the cost, they say, will be a gaping wound at the center of what’s left of American centrism.

"What does Third Way go back to?" asked former Rep. Max Rose, a moderate New York Democrat who spoke to NBC News at Jacobson's request. "Because it doesn’t seem logical that an organization that considers itself a centrist policy organization randomly makes war on another organization like this."Or as Holly Page, a longtime moderate Democratic strategist who has worked for both groups but ended up in No Labels' camp put it of Third Way: “They sold out the center so they could get a seat at the table with [former Biden chief of staff] Ron Klain."

No Labels was so incensed by what Page referred to as the anti-No Labels campaign's "little fraternity games" that the group lodged a complaint with the Justice Department. In a letter and an indignant news conference, they accused their old friends and their new allies of violating anti-racketeering laws, typically used to prosecute the mafia, by engaging in an "unlawful conspiracy to subvert Americans’ voting rights." There is no sign the Justice Department took any action on the complaint.

Third Way and its allies, meanwhile, believe they’re the real moderates here. They forged an actual bipartisan coalition of groups spanning Republicans to progressives to support a moderate Democratic president and to stop Trump, few people's idea of a moderate.

“You’re not building a pro-Biden coalition; it’s an anti-Trump coalition,” said Sarah Longwell, a Republican strategist and publisher of the conservative website The Bulwark, who supported the anti-No Labels effort. “They absolutely would subtract people who, when push comes to shove, will vote for Joe Biden.”

In many ways, Third Way was an unlikely marshal for a No Labels counterstrike.

Both have long been dismissed by the left as stodgy corporatists and crypto-Republicans, and Third Way and No Labels exist in overlapping social circles, draw from similar funders and promote a common ideology. Third Way’s previous campaigns took on the left, like when it fought progressive challengers in House primaries and tried to stop Sen. Bernie Sanders, I-Vt., from winning the Democratic presidential nomination in 2020.

“Everybody in the centrist donor universe knew No Labels was doing this ticket, and everybody knew we were leading the opposition. You were on one side or the other,” Cowan said. “And on the other side were some of the wealthiest people in the country, and they were very angry at us.”

Third Way lost a board member who sided with No Labels, and its leaders received word from several other unhappy donors that they should not expect another cent.

But while Third Way is fundamentally a Democratic organ, Jacobson has fallen (or been pushed, depending on whom you ask) out of the party's ranks, and now, No Labels views itself as the only group righteous and innovative enough to think outside the red-blue divide.

Still, that familiarity meant Third Way spoke enough of No Labels’ language to understand it and the people funding it — and how to reach the potential candidates it tried to recruit.

And Third Way’s moderate credentials helped it pick off potential No Labels allies, from its affiliated members of Congress to New York Times columnist David Brooks — the first major voice to hoist the unity ticket flag, only to later lower it — to the Clintons, the first family of Democratic centrism.

The former president and secretary of state hardly needed convincing of the threat a third-party campaign posed to Biden — Hillary Clinton had partly blamed the Green Party for her 2016 loss. So over lunch last July at their home in Chappaqua, New York, the Clintons, each joined by a top aide, talked through strategy with Cowan and Third Way Vice President Matt Bennett and vowed to help privately through their networks, according to three sources familiar with the meeting.

Bill Clinton joined the anti-recruiting team working against No Labels, making personal appeals to two prominent No Labels targets — Democratic Sen. Joe Manchin of West Virginia and former Maryland Gov. Larry Hogan, a Republican — that a third-party candidate could not win.

'Pearl Harbored'

Jacobson expressed anger, dismay and a sense of betrayal about Third Way’s actions. “We were Pearl Harbored,” she told supporters on a call, first reported by Puck.

Bill Clinton’s lobbying effort was part of a broader campaign, which included dozens groups and prominent figures from the left, the center and the anti-Trump right, built around Third Way’s “war room.”

As Bennett put it in the first large gathering of the group, they had to “build the idea in the minds of the political elites and the people that they talk to ... that if you get involved with this ... you’re really risking your entire reputation and your legacy.”

Third Way identified a long list of potential No Labels targets and set about finding common friends and allies between the potential candidates and the anti-No Labels coalition — people who would be seen as credible messengers. No Labels said it spoke with 30 potential candidates. And by the end, the opposing coalition says, it reached every name that surfaced.

Third Way leaders worked the Democratic side of the aisle after securing the blessing of party leaders in the White House, on Capitol Hill and in the Democratic National Committee. Meanwhile, its anti-Trump GOP allies and a clandestine team of 10 to 20 Republican operatives worked to “surround” potential candidates with appeals, including survey research commissioned from former Rep. Liz Cheney’s pollster, which concluded that they could not win running with No Labels.Every potential candidate got a message tailored to their pressure points — their financial needs, their legacies, their future political prospects — from credible figures like local business leaders, clergy and former aides.

The chief goal was to make it impossible for No Labels to deliver the kind of big-name ticket it had promised.

"This was elite-driven," Bennett said. "We knew they had enough donors that we couldn’t deny them money. But we also knew enough about their donors to know they would expect a high-level candidate with a certain stature and would not accept someone who was not obviously credible."

Their targets included highly publicized suspects like Manchin, Hogan and former South Carolina Gov. Nikki Haley, though they were particularly worried about Bill Haslam, the former governor of Tennessee, because he is a billionaire who could self-fund.

Unlikely allies

It wasn’t just anti-Trump Republicans like the Lincoln Project and former Weekly Standard editor Bill Kristol who joined Third Way’s efforts to brush back No Labels. Mainstream Democrats like Klain and former Democratic Sen. Doug Jones of Alabama were joined by leaders on the left who were used to warring, not collaborating, with Third Way.

Lunching with Bennett and working with his group helped “humanize” people she had viewed as “an enemy,” said Melissa Byrne, a left-wing activist who has often sparred with moderate Democrats over issues like student debt.

Byrne stressed — “print this in all caps, bold,” she said — that she will go to war again with Third Way over policy if and when the time comes.

Bennett and the executive director of the liberal group MoveOn, Rahna Epting, ended up working together closely, playing up an odd-couple routine in a series of meetings on Capitol Hill, in the media and even in a public debate against No Labels strategists.

“Our partnership with Third Way to come together and stop No Labels may be surprising to some, but it is a testament to how high the stakes are to keep Trump out of the White House,” Epting said.

Meanwhile, some Republicans joined a campaign run by Democrats thanks to a similar calculation: Despite their policy differences, they were united by opposition to Trump and a shared belief that a third-party candidate could be a decisive boon to him.

"If you want to go experiment with third-party stuff, go crazy — just not this year," said Rick Wilson, a co-founder of the Lincoln Project, another cornerstone of the anti-No Labels campaign.

The broad coalition even included a secret member from the most unlikely of sources: No Labels itself.

No Labels did its best to keep the names of its delegates, donors and potential candidates under wraps. But the anti-No Labels campaign felt it had a good idea what was going on behind the curtain, thanks to a No Labels delegate who had grown disillusioned and started leaking to the other side.

The turncoat, whom Cowan and Bennett would only say was an “average citizen” who initially joined No Labels out of a sincere belief in its mission, “was incredibly helpful to us and did so at some personal sacrifice and risk,” Bennett said.

People familiar with No Labels' thinking did not dispute that they had a leaker and said they were unaware of who it might be.

But No Labels allies say these kinds of cloak-and-dagger tactics highlight the hypocrisy, as they see it, of supposed champions of democracy and voting rights opposing another party's ballot access.

“It’s just discouraging to see partisans and politicians protecting their turf,” said former Rep. Joe Cunningham, a Democrat from South Carolina who worked with No Labels.

Rose, the former New York congressman, said No Labels' presidential ticket was always a long shot, so its opponents' victory lap is just "someone seeing where things were going anyway and trying to claim credit."

"No Labels considered something that didn’t really have legs and made a pretty noble decision to not pursue it,” he said.

While No Labels’ 2024 push is over, third-party candidates are still in the campaign, especially another ex-Democrat who could affect Biden’s chances in November: Robert F. Kennedy Jr. Countering Kennedy, though, will be a very different kind of conflict, even as Third Way remains committed to battling Biden’s third-party foes.

Third Way turned out to be the right group for the job of taking down No Labels. Can they take down an outsider, too?

This article was originally published on NBCNews.com