At first glance, the U.S. business community might view Republican Phil Gramm's bid for the presidency as a dream come true. After all, the Texas senator is a diehard conservative and he knows a thing or two about money. Before his election to Congress in 1978, Gramm was a Ph.D.-toting economics professor at Texas A&M University with a cult following among business leaders in the Lone Star State. Throughout the energy crisis of the 1970s, Gramm made a name for himself, captivating Rotarians and Jaycees in the oil patch with his stock speech that "the government is the enemy."

Twenty years later, having ridden that anti-government horse first to the House of Representatives and, in 1984, to the Senate, Gramm's message has never wavered. As co-author of the Gramm-Rudman budget reduction act in 1985, the free-market economist has been on a lifelong quest to amputate the U.S. government. This year is no exception: Gramm's budget-cutting conservatism is the centerpiece of his 1996 presidential campaign.

If elected to the country's highest office, "President Gramm" will eliminate the federal deficit, which has already shrunk to $155 billion this year - by the year 2000.

If he fads, Gramm promises, he will not seek re-election. At 52, Gramm is gambling that the country is hungering for his brand of anti-spending, anti-tax conservatism. Having raised a cool $10 million, plus $4.8 million in unspent money transferred from his senatorial campaign, Gramm has vaulted into the to tier of Republican presidential candidates. With that amount of ready, money - "the best friend that you can have in politics," he says in a reference to Benjamin Franklin that has been lost on critics less erudite than the professor - Gramm will be taking his brand of "redneck Republicanism" nationwide.

In 1996, the country will hear a message that has won Gramm huge majorities in Texas balloting. It is a message heavily weighted against the indigent and least fortunate. The millions of people receiving welfare benefits, food stamps and other forms of public assistance - who "have been riding in the wagon" - must now begin "pulling the wagon," he says. And Gramm pleads guilty to showing favoritism to the rich and successful. "A poor person never gave me a job," he says.

Gramm's presidential ambitions got off to a strong start. He won a string of early, straw-poll contests in Louisiana, Oklahoma, Arizona, California and elsewhere. For a candidate who is not supposed to play well "north of Kentucky," as one opponent's fundraiser told The New York Times, the California victory was especially telling, argues Karl Rove, an Austin, TX-based Republican political consultant. Not only was he the clear favorite of party activists, "he had them standing on the tables, screaming," Rove says.

But Gramm's candidacy has flagged since. Be-spectacled, stoop-shouldered and by his own admission, downright ugly, Gramm is turning out to be a tough sell in a media age when Americans are said to demand politicians who are, if not movie-star handsome, at least likable. Gramm's angry oratory, delivered in a red-clay, Georgia drawl, is divisive rather than unifying.

"He's not the kind of person who engenders fondness and affection," says Ross K. Baker, a Rutgers University political scientist. "Unlike Clinton, he spoils for a fight. He's not inhibited and he is not by nature a conciliator and peacemaker. That can be appealing to some people who say that, like Richard Nixon, this guy won't be pushed around."

Unlike most senators, says one admiring bank lobbyist, "confrontation doesn't bother the man. He gets charged by confrontation.

"Phil Gramm is too far above the average human being to use public relations or schmoozing," the lobbyist adds. "On the banking committee, he has been very much of a loner."

Which is one reason that, save for the Gramm-Latta budget resolution in the House and Gramm-Rudman in the Senate, there are very few bills that have borne Gramm's imprint in the more than 15 years that he has served in Congress.

[Expanded Picture]The Texas senator hasn't been able to make much headway against Senate Majority Leader Robert Dole, the Republican front-runner - even as both men make bold plays for support of religious conservatives. Gramm's candidacy was not helped by an embarrassing revelation dished up by a former brother-in-law. On the same spring day that Gramm paid obeisance to the agenda of the Christian Coalition, he was forced to admit that he invested $15,000 in a tawdry, R-rated film in the 1970s - for which The New Republic has dubbed Gramm "the porn-broker."

But underestimating Phil Gramm is one of the bigger mistakes you can make in politics. And the Georgia native and Democrat-turned-Republican is finding financial sustenance and a deep reservoir of political support from the well-to-do. Despite the Gramm campaign's insistence that his average donation is a scant $191, it's doubtful whether many poor people donate money to Phil Gramm.

Indeed, he is drawing support from senior corporate executives, the financial community and wealthy entrepreneurs. Not just in Dallas or Chicago but even in tony Park Avenue salons, the Gramm message, it seems, goes down well with hors d'oevres and crudites. Money-center bankers and Wall Street financiers were prominent in late March at the Waldorf Astoria, where a thousand-dollar-a-head cocktail party fetched Gramm $528,000. Signing on with Gramm, who is now the ranking majority member of the Senate Banking Committee, were Walter Shipley, chief executive officer of Chemical Banking Corp.; Roberto Mendoza, vice chairman at J.P. Morgan & Co.; and Harvey Golub, CEO of American Express Co.

About 400 actually turned up at the Waldorf to hear the Senator denounce the out-of-control federal government and promise to champion Newt Gingrich's "Contract with America" in the Senate.

Gramm's call for substitution of the income tax with a flat tax also won a spirited round of applause. One Gramm stalwart says the longer that Gramm spoke, the more the crowd's enthusiasm surged - something this person argues would not have occurred had it been Sen. Dole or former Tennessee Gov. Lamar Alexander, since they "are not true conservatives."

"Free-market types and supply-side types in the money business are excited about Phil Gramm for philosophical reasons," says former Goldman Sachs partner Thomas L. "Dusty" Rhodes, now president of National Review magazine and a board member of the conservative Heritage Foundation.

Former Treasury Secretary William Simon is similarly disenchanted with the performance of recent presidents who have run for cover "when the shooting starts." In particular, he seems to allude to George Bush - who promised "Read my lips: No new taxes." Says Simon, "Trappers in the 19th century used to have a saying that the American people are the only animal who can be skinned twice."

The former cabinet member sees Phil Gramm as not only someone who is unlikely to skin voters, but as a man who is thoroughly committed to "low taxation and less regulation and freedom from the burdens that Congress has put on us." Moreover, a Gramm presidency would be the perfect capstone to the Republicans' capturing both houses of Congress in 1994. "I've watched him in government and admired him," Simon says of Gramm. "He has the ability, experience and courage to push for the same things that I spent four and half years in government working for."

Although a Dole presidency certainly would not be a hardship for bankers, there is not another viable Republican candidate whose views are as finance-friendly as Gramm's. And yet Phil Gramm is a complicated man. Beneath his populist rhetoric about lower taxes, smaller government and a swift kick in the behind for welfare abusers - important lines in any sales pitch to the middle class - is a strong inclination towards economic libertarianism that might be a bitter pill for many Americans to swallow.

The Roll-up Case

"`Why is Gramm doing this?'" one Senate staffer remembers a quizzical clutch of Democratic senators, all members of the Senate Banking Committee, asking themselves as they milled around a hearing room in 1992.

At issue was legislation to curb abuses of limited-partnership "roll-ups." Congress had been hearing horror stories from constituents complaining about rip-offs when limited partnership ventures - typically in slumping oil-and-gas or real estate investments - were reorganized, or rolled up.

These investments were originally designed as long-term, non-tradable instruments. But financial houses were restructuring them into single, publicly traded vehicles that were supposed to have had more liquidity. In the public markets, however, roll-ups had fared poorly - suffering "an immediate drop-off of about 70 percent of their value," recalls Barbara Roper, director of investor protection at the Consumer Federation of America.

Losses to original investors were calculated at more than $1 billion, according to Congressional Quarterly. Critics like Roper asserted that the publicly traded investments lost a large part of their value because general partners paid themselves generous management fees and siphoned off money in other ways.

A roll-up reform bill had passed the House a year earlier, and the Senate version was milder and hardly controversial: seventy-two senators signed on as cosponsors. The widely backed bill would have eased federal proxy rules to make it easier for investors to contest a roll-up. It would also have required that limited partners who opposed a roll-up be given alternative compensation, or "dissenter's rights," to the new stock offering.

Enter Phil Gramm. Gramm's main objection to the legislation was the dissenter's rights section. He charged it would allow a minority of the limited partners to put the kibosh on a deal by granting rights unavailable in the original partnership. Sen. Christopher Dodd, a Connecticut Democrat who chaired the committee and wrote the bill, countered that it was the roll-up transaction itself that changed the rules in the middle of the game. But there was no mollifying Gramm. "I intend to do everything I can do to prevent this (bill) from becoming the law of the land," he declared.

That is no idle threat coming from Gramm, who "has a rare and complete understanding of the parliamentary advantages that a senator enjoys," notes Rutgers' Baker. When the Senate Banking Committee convened on May 21, 1992 to mark up the bill, Gramm was there to ambush it. By invoking a Senate rule that prohibits committees from meeting when the upper chamber is in session, the meeting was canceled.

Two weeks later, when the committee reconvened to consider the legislation, Gramm insisted that a quorum be present - again forcing adjournment. Dodd, his bill completely bottled up in committee, tried attaching it to an unrelated bill that stiffened regulation of government-sponsored enterprises (GSEs). Gramm challenged Dodd's effort, although the roll-ups amendment survived by a vote of 87-10.

A lesser man might have deferred to the outsized level of support that the roll-ups amendment had gathered. But Gramm persisted. Once the Senate passed the GSE legislation, he objected to the normally routine step of calling up the House bill and insetting the Senate language. That added another obstacle to the bill's going to conference. In the end, Gramm prevailed: a "clean" version of the GSE bill - without roll-ups or any other extraneous provisions - was passed.

As to why Gramm was "doing it" - fighting the roll-up reform bill with such stubborn determination - Gramm's colleagues remained puzzled. Most Democratic lawmakers, says one Senate staffer who was in on several conversations, assumed that Gramm was engaging in bit of quid pro quo, helping out investment firms who were chipping in to his campaign. Yet the national trade group for the sponsors and vendors of limited partnerships, the Investment Program Association, which includes investment houses like Merril Lynch & Co. and Paine Webber Group, was not encouraging Gramm. Indeed, they had even agreed to support Dodd's bill.

Principal, Or Principle?

After observing the Texan's actions through much of the roll-ups episode, some Gramm-watchers came to the conclusion that his take-no-prisoners opposition was largely philosophical and that the legislation was simply anathema to his laissezfaire views. "At one point - I can't remember whether it was in a hearing or during markup," one consumer lobbyist recalled, "Gramm said, `It's only in areas of finance and investment that two consenting adults can't do what they want without the government's interfering.'"

"It was really an esoteric side-issue in Congress," the Senate staffer says, "but Gramm put his energies into it. He made a crusade out of killing reform of the roll-ups bill, and I think it's because he wants capitalism to hurt. That's the best explanation that I could come up with. People should pay the price if they make stupid investments - even if it means the end of their life's savings."

Finally, in 1993, Gramm agreed on a compromise measure with Dodd - but not before investors lost from $500 million to $1 billion, reckons Richard Wollack, former chairman of Liquidity Financial Group. Wollack, who spent 3 1/2 years dealing with the roll-up issue, recalls a meeting with Gramm in which the senator suggested that investors should go to court. And when told that it might cost $50,000 to sue for losses of $10,000, Gramm said, "`Sometimes, it is just costly for the legal system to redress wrongs.'"

Adds Wollack, "It was like, `Let them eat cake.'"

Nothing defines Gramm quite so much as when he takes aim at legislation - particularly if it is of the "do-gooder" variety. Bills aimed at benefiting consumers and small investors have a way of dying or disappearing once Gramm gets them in his sights, and the bill reforming roll-ups fit snugly into this category. "There is no member of Congress who has done more to harm the interests of investors than Phil Gramm," contends CFA's Roper.

When Congress was fashioning a multi-billion-dollar bill to clean up the colossal losses incurred by insolvent thrifts in the late 1980s, Gramm served notice that he would "hate to see" the legislation derailed by "some of the old dogs and cats" such as "lifeline" banking services. True to his word, Gramm helped keep "lifeline" and "check cashing" out of the S&L bailout bill.

Gramm was equally adroit at "jamming" the Fair Credit Reporting Act during the last session of Congress. Edmund Mierzwinski, a consumer lobbyist at U.S. Public Interest Research Group, notes that the bill enjoyed widespread support and was "one of the most important pieces of consumer protection legislation before Congress."

A Gramm aide says that the fair credit legislation was "heavily regulatory" and merited its death, which came last autumn when Gramm threatened a filibuster. Wayne Abernathy, legislative aide on banking committee issues for Gramm, says: "In the name of making credit information more accessible, it would make it more expensive and would undoubtedly pass on costs to consumers."

It was the late Jesse Unruh, former speaker of the California Assembly, who said that if you can't drink a man's booze, eat his food, sleep with his women and still vote against his legislation, you don't belong in politics. One wonders what Unruh would make of Phil Gramm, who, despite an errant vote against a tax break for the oil industry a few years ago, is more likely to adhere to the Texas political adage that "you dance with him that brung you."

Health care is a good example; Gramm has claimed full credit for the failure of health care legislation last year, which he railed against as "good, old-fashioned socialized medicine."

As one would expect, Gramm was treated well by the crowd that ran last year's omnipresent "Harry and Louise" advertisements on television, reports the Center for Responsive Politics. In the 1987-1992 period, the health care and insurance industries made Gramm their "top recipient" of campaign donations, reports the Center. Gramm took in $869,461 during this six-year stretch. And in the intervening years, reports the non-profit, Washington-based group, Gramm has collected another $250,000 from those interests, easily pushing him above the $1-million mark.

Although the oil-and-gas industry has been Gramm's No. 1 fan, at least if money is the yardstick, his seat on the banking committee has not hurt him, either. Indeed, the Senate Banking Committee has long been seen as a plum assignment because, to paraphrase famed bank robber Willie Sutton, "that's where the money is."

"Many people are on the banking committee as a way of raising campaign money," says Bert Ely, a Washington-area consultant. "It's well-accepted."

It did not hurt Gramm, either. Commercial banks and their PACs ranked fourth in donating $392,546 to Gramm in 1990, trailing off and gas, lawyers and health professionals, reports the Center for Responsive Politics.

But a tally of banks, miscellaneous finance, real estate, insurance, and securities and investment firms - the industries that regularly petition the Senate Banking Committee - accounted for a whopping $1.7 million, well ahead of the $1.04 million from the "petroleum club." Indeed, First City Bancorp. was Gramm's single largest contributor. Individuals and PACs at the failed Houston institution, which is expected to attempt yet another comeback, combined to donate $52,403 for his 1990 campaign.

From the day that he entered Congress as a Democrat in January 1979, Gramm was a darling of political action committees. He led all members of that year's freshman class in the House of Representatives, with PAC contributions totaling $119,387. Ever since, his Texas campaigns have been marked by his ability to overwhelm the opposition with a seemingly endless supply of "ready money."

In dropping out of their campaigns, both former Vice President Dan Quayle and ex-HUD Secretary Jack Kemp cited the distasteful task of raising money. Kemp went so far as to call the process a "grotes-querie." On the other hand, Gramm relishes the task of soliciting money and boasts of his fund-raising prowess. He even calls potential contributors from his car phone and, in spare moments from his Senate office, The Wall Street Journal reported, he dials for dollars using a non-government credit card number. While Gramm argues that he is not doing anything improper, Public Citizen has filed a complaint with the Senate Ethics Committee, citing a law barring political fundraising on federal property.

As "a guy with indefatigable fund-raising capacity," in the words of political scientist Baker, Granim has emerged as an independent operator able to pursue his own agenda. Money helped him thumb his nose at Democratic Party leaders, resign his House seat in January 1983 and reclaim his Congressional seat in a special election the following month. And, in recent years, it has given Gramm the freedom to blaze his own trails in the Senate.

With his own power base, Gramm is the very epitome of "a political entrepreneur," says Bruce Buchanan, a University of Texas government professor. "His career has been one of self-promotion, and he's extraordinarily adept at it in an organizational and developmental sense," adds Buchanan. "In terms of organization, he's built a huge network of advisers, supporters and financial contributors. And by `developmental,' I mean he's crafted a coherent set of issue positions, complete with resonant sound bites to symbolize each position.

"This guy's thought it through carefully," Buchanan went on. "His product is himself, and he's marketed and deployed that product in a way that would impress the marketing department at any U.S. company. If he were a product, he wouldn't be a brand name: Gramm would be something completely unexpected, like a hula hoop."

Friend or Foe?

The Texas banking establishment has always supported Phil Gramm. John Shivers, CEO and chairman of Southwest Bank in Fort Worth and son of former Texas Gov. Allen Shivers, likes Gramm because "his message of fiscal conservatism has always been the same, as long as I've known him." Both he and his late father - who as governor pressed the state Democrats to support Republican Dwight D. Eisenhower in the 1950s and whose wing of the party became known as "Shiverscrats" - have always been behind Gramm. "He understands banking, understands what an important part banks play in the overall economy. And if you want the economic engine to run well, you need a steady supply of capital.'

While bankers who know Gramm applaud his macroeconomic message, particularly Gramm's crusade to trim the size of the federal government and reduce spending and taxes, there are elements of dip cord. Both the Independent Bankers Association of Texas and the Texas Bankers Association have opposed the "too big to fail" policies of bank regulators, which Gramm's endorses. That policy has tended to favor big banks and their customers over the smaller banks and, say many bankers, has led to some corporate and high-dollar customers silently "redlining" small and mid-sized financial institutions in favor of banking behemoths. In Texas, independent bankers also opposed the nationwide banking bill, which Gramm backed wholeheartedly.

"While he accepts community banking, I don't think we're really part of his agenda," says James T. Chambers, president and CEO at Town and Country Bank, a $53-million-asset bank in Stephenville, TX. "He says, `There will always be a place for independent banking,' but he concentrates on the role of the U.S. banking system to be pre-eminent in the world. I've listened to him and he always stresses the need for U.S. banks to be competitive globally, which is why he says we need nationwide banking."

At present, Texas bankers, who laud Gramm for his accessibility and good staff, applaud two of Gramm's current positions. He advocates appointing a state regulator on the board of the Federal Deposit insurance Corp. And he has been a staunch foe of federal rules that bankers say bog them down in paperwork.

Gramm has always endeared himself to Texans as a like-minded ally in their cold war against government regulation. From handguns and assault weapons to environmental controls, the hostility to Washington and federal bureaucrats remains an abiding staple of Texas political culture. While Gramm has insisted to bankers that bank safety-and-soundness regulations are needed to protect FDIC-insured deposits and guard against bank failures, it is a footnote that is often lost m the midst of his broader theme that "government is the enemy," a rallying cry of many of Gramm's colleagues at Texas A&M as well.

Take economist Tom Saving at Texas A&M. Not just any economist, Saving is Gramms business associate - the pair are partners in Gramm-Saving Investments and together own duplexes and rental properties in the Bryan-College Station area. Not only are they close friends, but Gramm serves on the board of the Private Enterprise Research Center, a think tank at Texas A&M. Professor Saving is the director.

Asked whether he recalled the Gramm speech of 20 years ago, Saving asserted of his close friend: "I've heard that speech many times, and he would still give that speech today. Because the government is die enemy - the federal government that is. When states intrude into the marketplace, people can move to another state. But when the federal government does it, you have to move to another country."

Saving had much more to say about the federal government's pernicious meddling. He called taxation "legalized theft" and even warned that a government out of control could repeat the atrocities of Nazi Germany. But bankers would be interested to know that the Texas A&M economist thought that government had erred in cleaning up the S&L debacle, which should have been paid for by stockholders, he argues. And the Aggie economist thinks that deposit insurance should be eliminated completely. Indeed, Saving contends that it was partly because of bank and thrift insurance that there was so much fraud in the 1980s: "There's no question that, with deposit insurance, your depositors weren't watching you," he says. Their friendship notwithstanding, Gramm is on record as supporting deposit insurance.

Such libertarian views, which are still fundamental to Gramm's message, represent a retum to the "social Darwinism" of the 19th century, says Bany Bosworth, an economist at the Brookings Institution and former chairman of the President's Council of Economic Advisers. "The view that you should eliminate regulation is saying, `let the buyer beware,'" he observes. "Saying that a factory worker should be knowledgeable (about the workings of financial institutions) is saying that there's nothing wrong with taking advantage of his ignorance."

Whelling and Dealing

In Texas, where such anti-government attitudes are financed and nourished by the state's freebooting oilmen, among others, the wheeler-dealer mentality and antipathy to government oversight converged. Without regulation, many S&L owners - and some bankers-turned their financial institutions into gambling casinos. The result? The collapse of the oil patch in the 1980s was far worse than necessary.

Consider: In 1984, Texas had 270 thrifts. Today the count has dwindled to 60. It also lost 450 commercial banks from 1981 to 1990-among them once-venerable name-plates such as Republic, MBank and First City. To understand the failures, however, the state's bankers, thrift executives, business leaders and professors have not looked inward. Most blame their woes on plummeting oil prices, 1986 tax laws that made real estate investments suddenly more costly and restrictive state banking laws.

But some admit that Texans have a tendency to overreach. "Do we do things to the extreme in Texas?" asks Charles P. "Chuck" Doyle, board chairman of Texas Independent Bancshares in Texas City, where he is also the mayor. "Well, I think we have a larger degree of risk-takers than in most areas of the country. We've got people out here trying to make it big all the time, and that's part of the romance of Texas."

And a few critics argue that the state would have profited from better regulation. Harris Kempner Jr., chairman of the board emeritus at U.S. National Bank in Galveston, holds the heretical view - for a Texas banker, at least - that a tougher federal presence in the 1980s would have stanched the financial bleeding. Federal regulators who signed off on the 1987 merger of InterFirst and Republic, he says, helped paved the way for what was the largest bank collapse of the 1980s. "Regulators would have had a salutary effect if they had done their job," he says.

The Stiles Problem

If a Gramm Administration were to succeed Bill Clinton's, one thing might not change: An S&L scandal could once again dominate the headlines coming out of Washington. "President Gramm" might have some explaining left to do about his association with Jerry Stiles, a Dallas developer and owner of three failed Texas thrifts, including Hallmark Savings and Loan, which cost the federal government - and taxpayers - some $200 million when it was shut down in July 1989. In a front page story on Nov. 29, 1992, The New York Times detailed an arabesque tale in which a crew of Stiles' workmen trekked north from Texas to the Maryland shore, stayed in motels for a couple of months and, without any contract or written agreement, performed home-improvement work on Gramm's vacation house to the tune of $117,000. Yet Gramm was billed only $63,000.

Federal investigators had been trying to ascertain whether the remaining $54,000 might have come out of federally insured dollars and whether the money could be seen as a payoff to Gramm, who appealed to regulators at the old Federal Home Loan Bank Board for government financing to keep Stiles' three thrifts open.

While Gramm claimed that he met with Stiles to counsel him in his capacity as a Ph.D. economist, Stiles told the FDIC that "the purpose of meeting with Phil was the system is nothing but political. The regulatory industry is nothing but political." Investigations by regulators and the Federal Bureau of Investigation were called off, in part because the Senate Ethics Committee determined that Gramm had done nothing improper - although the Senate committee made this determination without conducting interviews with important witnesses.

Gramm can boast that he was among the early advocates of closing down a higher number of bankrupt S&Ls in 1987, when he voted for the $15 billion solution. And he escaped the notoriety of the "Keating Five" - the five senators who accepted money from convicted S&L swindler Charles Keating and tried to intervene on his behalf.

Even so, Gramm's efforts on behalf of Texas thrifts could come back to haunt him. His Senate office was the scene of meetings in which Texas S&L operators met unannounced with surprised regulators who were encouraged to "ease up" on their regulation of insolvent thrifts, as Joe Arendes, a former assistant director at the Federal Home Loan Bank Board, told The Times. it is not clear whether Stiles - who last year was convicted on 11 counts of conspiracy, bank bribery, misapplication of bank funds and making false entries in bank records - was among thrift executives attending these meetings with regulators, although Gramm's deafings with Stiles could still prove to be uncomfortable under the hot glare of the media spotlight.

Gramm, who was a Clinton Administration tormentor last year by virtue of his place on the Senate Banking Committee, has removed himself from further Whitewater investigation, citing the fact that he is running for the presidency.

In New Hampshire, site of the first presidential primary next February, commercial bankers were among the groups whom Gramm targeted first, circulating among a Granite State bankers' gathering at the Mt. Washington Hotel two years ago. "I think he struck a chord with some people," says Jerry Little, president of the New Hampshire Bankers Association. "From a banking point of view, Phil Gramm can say the right things and push the right buttons."

But Gramm lags well behind Dole in the Granite State - Dole having widened his lead among Republican voters there since February from 19% to 44%, according to a preference poll by American Research Group in May. Indeed, Gramm, with just 7%, continues to trail conservative commentator Pat Buchanan, who finished second with 13%. It seems that Gramm is failing to catch on with voters. Not only are they quick to perceive him as callous, but one Washington political advisor goes so far as to argue that Gramm, has negative charisma."

It is still early, however, to ascertain just how Phil Gramm will fare next year. While he is likely to be the front runner in money-raising, skeptics point to John Connally - also a Texan, also a Democrat-turned-Republican, also a man with a pipeline to super-rich donors - who spent $12 million in 1980 to pick up one measly delegate from South Carolina. Save for that instance, the money leader usually wins his party's nomination. And in 1996, when the campaign season begins earlier and is much more compressed, with many states holding primary elections on the same day, the probable nominee is likely to emerge over the first six weeks.

With $40-50 million, including federal matching funds, Phil Gramm should not be written off. "While his intellect is impressive," says Rutgers political scientist Baker, there are other qualities that make him formidable. "He's got the fortitude of Oliver Cromwell and the hide of a rhinoceros.

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