National veteran McAuliffe turns his focus to Va.

In July 2007, when Terry McAuliffe was living and breathing Hillary Rodham Clinton's presidential candidacy 24/7, he squeezed in time as the headliner at a fundraising reception in Alexandria for an unlikely beneficiary: Brian J. Moran.

Moran, then-chairman of the Virginia House Democratic Caucus and readying to run for governor, was harvesting dollars for his personal political-action committee. Little did McAuliffe or Moran know, they would become opponents for their party's gubernatorial nomination.

But there was a flash of the rivalry ahead. McAuliffe, according to Moran aides, gently ribbed Moran for holding back on a pick for the White House. "I'll endorse you for governor," the Clinton campaign chairman reportedly told Moran, "if you endorse Hillary for president."

The quip -- McAuliffe has no recollection of it -- seemed a reminder that his political focus since breaking in 29 years ago has been almost entirely national.

And yet, almost overnight, McAuliffe -- high-decibel former head of the Democratic National Committee, Clinton defender and millionaire symbol of the knotty intimacy of business and politics -- has morphed into an early favorite for the nomination that Moran once considered his, if only because of the suburban Washington base he must now defend against McAuliffe, a fellow Northern Virginian.

McAuliffe, 52, and those who know him say it is no surprise the exuberant transplanted New Yorker is running for governor of the state that has been his home for only 16 years. Elective office has always been an option. McAuliffe, heavily bankrolled by out-of-state money, is exercising it now because of favorable circumstances.

Among them: a difficult economy that complements his jobs-jobs-jobs message and a successful, albeit disputed, record as a businessman, and a sense -- if not, fear -- among some Democrats that neither Moran, nor the third candidate for the nomination, state Sen. R. Creigh Deeds of Bath County, can win this fall.

"People felt the race needed some new energy, new excitement, new ideas -- that Bob McDonnell was going to be very tough to beat," said McAuliffe, referring to the former attorney general and all-but-official Republican nominee for governor.

The Rev. Roger M. Robillard, a retired Episcopal priest who turned out for two McAuliffe events in Richmond, sounds like one of those concerned Democrats.

"We've got to keep rebuilding the troops; we have to keep people active," Robillard said.

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Friends say the governorship is not a consolation prize for a guy who might have become commerce secretary had Clinton achieved the presidency. Rather, they say, the Virginia campaign is a logical next step for this son of a Syracuse, N.Y., leasing agent and Democratic wheel horse who introduced McAuliffe to politics when he was in primary school.

"Suddenly, the idea of being there for Hillary was off the table," said former business partner Edward E. Haddock Jr., a Richmond native whose father was the city's racially progressive mayor in the early 1950s. "It made sense he would take that desire to serve somewhere."

Given McAuliffe's ties to New York and Florida, base of his politically influential father-in-law, Richard Swann, a lawyer and Democratic fundraiser, there was speculation he would run in either nationally significant state.

But McAuliffe dismissed such talk. After all, he boasts, Virginia is home. He shares a century-old stone farmhouse in the Washington suburb of McLean with his wife of 21 years; their five private-school-educated children, ages 6 to 17; and two dogs.

Politics, for the 6-foot-2, 205-pound McAuliffe, is a cradle-to-grave pursuit, so it's no surprise he met his wife on a campaign.

In 1980, as a 23-year-old finance director for President Jimmy Carter's re-election effort, McAuliffe was dispatched to Orlando, Fla., to troll for funds with Dick Swann. McAuliffe bunked at Swann's house, where he met the 16-year-old girl he would marry eight years later.

Dorothy McAuliffe, a former banking and finance lawyer known as Dotty, says her husband rises around 6 a.m. and occasionally fixes breakfast for the children. He is fond of epic action films.

"When is he quiet? When he's sleeping," she says.

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The speed with which the McAuliffe candidacy came together reflects the man: kinetic (fueled by black coffee and protein shakes), an electoral thespian (he donned waders to muck about the gooey ponds of an algae-to-energy lab), and a hair-splitting political operator (he refuses donations from a utility because of its opposition to renewable fuels, but he welcomes checks from its current and retired executives).

McAuliffe first publicly hinted interest in the governorship during the Democratic National Convention in Denver last August. About the same time, he had discussions about it with Mo Elleithee, a senior strategist in the Hillary Clinton campaign and a longtime Virginia hand.

While campaigning for Barack Obama here, McAuliffe informally tested support for a possible run. "Internally, in my mind, I was keeping a notebook," he said.

So was Elleithee. He sought out prospective staff and donors -- the foundation of an organization that would draw heavily on newcomers inspired by Obama, the first Democratic presidential candidate to carry Virginia in 44 years.

Not that McAuliffe was welcomed by all as an Obama surrogate. Some worried that McAuliffe, as an emblem of the Clinton era and its many controversies, would turn off voters.

But a survey by Obama's Southern poll-taker, Anzalone Liszt Research, suggested otherwise. About 30 percent of Virginia voters knew of McAuliffe, and they were evenly split in their opinion of him. In other words, McAuliffe was nearly a blank slate, free to create his own profile.

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To some degree, McAuliffe entered the 2009 contest as Democrat Mark R. Warner did the 2001 governor's race: as a business type, with a big bankroll and bigger Rolodex. But there was a significant difference. Warner had established his Virginia credentials, having worked on campaigns, lost a surprisingly competitive race for the U.S. Senate in 1996 and led the state party.

"Terry McAuliffe has got that challenge in spades. I would say he's trying to copy the Mark Warner mold," said lobbyist William G. Thomas, a former state Democratic chairman who considered running for the Senate in 1982 and backed Republican McDonnell for attorney general in 2005.

McAuliffe says he demonstrated his political commitment to the state before knowing he would stand for office.

He points to the $5 million that, as DNC chairman, he steered to Timothy M. Kaine's successful gubernatorial campaign four years ago. Also, McAuliffe held fundraisers at his house for the local Democratic committee (one of which was attended by Moran) and pledged $100,000 to the state party to help buy its headquarters.

However, McAuliffe's spotty Virginia ties mean his business and financial activities face fresh scrutiny.

This includes an $18 million profit on his $100,000 investment in gone-bust telecom Global Crossing; a homebuilding company in Florida that, he says, generated thousands of jobs; his former law firm's lobbying for foreign governments; his $1.3 million loan to the Clintons that allowed them to buy their Westchester, N.Y., house; and most recently, five partnerships McAuliffe started and operates from his home.

Those Virginia enterprises haven't generated jobs, and McAuliffe won't divulge details, such as how much money he has invested or taxes paid by the ventures. A McAuliffe protégé and business partner, former Bill Clinton White House aide Peter O'Keefe, said the partnerships include real estate, an online and direct-mail marketing company and renewable-energy firms.

"Who do you do business with? The people you know from politics," said McAuliffe, when asked about the intersection of the commercial and electoral.

In the finale to the June 9 primary, Moran is running a television commercial questioning McAuliffe's business dealings -- a move that could foreshadow GOP attacks should McAuliffe win the nomination.

Anticipating the broadside, McAuliffe released an ad that turns a potential negative -- his claimed role in rescuing a failing Washington bank as its chairman in the late 1980s -- into a positive. It features former employees, who decry criticism of McAuliffe and praise him for saving jobs.

The commercial is a reminder that while McAuliffe is new to Virginia politics, in three decades at the national level, he's learned how to take -- and give -- a punch.

"The ebb and flow of campaigns doesn't rattle him," said Elleithee, whose firm has collected $53,000 from the McAuliffe apparatus. "He understands that there's a rhythm to these things."

Contact Jeff E. Schapiro at