Karl Rove explains to donors how it all went wrong

>>> what do you do when you've squandered $325 million of someone else's money? unfortunately, this is the predicament now facing mr. karl rove . the erstwhile wonder boy of republican politics hasn't just been diminished by tuesday's emphatic vote for the president, he's been relegated to the role of party scapegoat. joining us is michael scherer from "time" and politico's chief investigative reporter, ken vogel. you have written a brilliant story and you say karl rove is holding a conference call today for his biggest super pac donors. he spent $325 million of their money. does he start by singing " sorry seems to be the hardest word "?

>> no, he didn't. and he doesn't appear to be sorry.

>> remarkable.

>> we've seen him a lot on fox news saying the result would have been dramatically worst for republicans had they not spent all that money and there's certainly an argument to be made.

>> that's a vote of confidence in their candidate mitt romney . they're saying if they hadn't spent $325 they would have lost even more?

>> and they say romney suffered through this very difficult proprapr protracted and bitter primary and had to raise a lot of money sort of in the late spring/early summer, and that he was sort of left exposed at that point and were it not for these outside groups coming in and providing him air cover and really going after president obama , he would have limped into the general election in even worse shape. as it was, it's arguable and the democrats have already made the case, including the democratic super pac which is dramatically outspent, that the work that they did to attack romney during that period and really frame him as this out of touch plutocrat, as haley barbour famously put, a plutocrat whose wife is a known equestrian, that that is determinative. i think we saw the outside spending cancel itself out but more importantly the power of on the ground organizing. all this money that karl rove spent was on television ads . they reached a point of diminishing returns. this was a turnout election. when donors demand answers, they're going to say why didn't you spend more on turnout and ground activities. why did you just spend this money on ads?

>> mike, outside groups spent more in 2012 than they did in the previous 11 election cycles combined. one calculation has karl rove 's hit rate at 1%. so did they waste their money?

>> you know, this is the real downside of the whole republican model right now, which is you don't go after small donors and you can build an extra party outside the party structure, outside the candidate structure. it was really -- the super pacs had their heyday in the republican primaries . they had a huge impact on that race. as we got closer to election day , you saw less and less their influence. i think what karl rove and the people behind him who really are the power base in the republican party , the party structure is still small than that extra party structure including crossroads, chamber of congress, the koch operations, they have to look at their whole strategy. they have two years before the next election, how to rebuild a structure that doesn't depend so heavily on outside spending for television ad that is end up being not only less strategically targeted than their opposition but also you're paying a higher rate in many of the races. it wasn't an efficient way of spending their money.

>> ken, as you mention in your piece, we did hear from billionaire uber donor sheldon adelson on election night . he was in norway of all places. take a listen.

>> how do you think your money was spent? was it well-spent?

>> by paying bills. that's how you spend money. either that or become a jewish husband. you spend a lot of money.

>> there you have it. mr. adelson laughs off $70 million. after all forbes estimates his worth i believe at greater than $20 billion. but we also read in politico today that other romney donors and --

>> that's right. i think there is a mix there, and there are folks who believe that karl rove and that the koch brothers operation, americans for prosperity, did spend their money as effectively as they could given the circumstances, and then there are others who really do want answers and who are probably less inclined to give that amount of money again because they think along the lines of what michael was just explaining, that these television ads were really infective, that this money was ill-spent and could have been spent better. i think we could see two possibilities. we could see something like we saw in 2004 where the big democratic donors gave so much money to try to unseat bush. when they were unsuccessful they basically packed up their checkbooks and went home and still haven't come back off the sidelines. or we could see them doubling it down. i have talked to some donors who told me that they are planning to support rick santorum in 2016 .

>> good old foster freeze. that 's wonderful . karl rove 's career as you know better than anyone has had its fair share of ups and downs . there was the victory in 2004 and then the scandal involving valerie plame but has there been a lower point in his career than right now.

>> i think he would say the valerie plame scenario was probably lower on a personal level and the implosion of the bush coalition. i think what you will see now is the donors themselves can now split. there really is disagreement within the donors about what strategic direction to take the republican party . you have the koch brothers, purist embracing of the tea party , the mantra wing. and then you have a more mainstream hedge fund centered donor base which really are pushing more towards like layoff these social issues, let's try to broaden the coalition. i think that's the discussion that's going to happen in the outside of the party class . the outcome of that will have a huge impact on how congress behaves, on how the primary process goes next time, and who vent the republican nominee is in 2016 .

>> michael scherer and ken vogel, thank you so much.