Revelations from the Campaign

Barack Obama is just ten days away from completing the first year of his presidency, but surprising revelations about the historic campaign that got him there are still coming to light.

It turns out Hillary Clinton was so confident she would become president, that a full year before the election she had already started planning for her transition into the White House.

That's in a new book by reporters Mark Halperin and John Heilemann, who have also brought details to light about the Republican campaign; some of them directly contradict what Sarah Palin wrote in her book.

Palin said she had been misunderstood and mishandled by top McCain staffers. The new book quotes McCain staffers saying Palin created most of the problems.

John McCain's chief campaign strategist Steve Schmidt had a major role in choosing Sarah Palin. Just days before the Republican National Convention, John McCain thought he'd be running with Joe Lieberman.

Schmidt told CNN's Anderson Cooper why McCain pivoted from Lieberman to Palin.

Revelations from the Capaign
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Web Extra: Senator O'Biden
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Web Extra: What About Sarah Palin?
Web Extra: Couric Interview
Revelations From The Campaign
On The Road With The Obama Campaign
On The Road With The Palin Campaign

"Roughly up to a week before the convention, we were still talking very seriously about Senator Lieberman. But once word leaked out that he was under serious consideration, the blowback was ferocious," Schmidt remembered.

"Ferocious," because many conservatives thought Lieberman was far too liberal. Schmidt says they feared the Republican National Convention might reject him.

McCain couldn't risk that, so they needed a last-minute replacement.

"So, suddenly you're in a jam," Cooper remarked.

"We were," Schmidt acknowledged.

"That's the state of desperation they're in as they sit down with McCain that Sunday night over a dinner of deep fried burritos and say to him, 'What about Sarah Palin?'" author John Heilemann told Cooper.

Heilemann, of New York Magazine, and Mark Halperin, of Time, covered the campaign and spent the last two years interviewing 200 political insiders for their book, "Game Change."

Among their revelations is how McCain's campaign manager, Rick Davis, spotted Sarah Palin while searching the Internet for possible female vice presidential candidates.

"Rick Davis saw one interview she did with Charlie Rose where she was very much the Sarah Palin that people find appealing. She was lively, she was engaging, she popped off the screen. And he said, 'Wow, she jumps out,'" Halperin said.

"McCain boxed himself in. He needed a game-changing pick for vice president. And that left them with a last minute pick of someone who was, to McCain, a virtual stranger, and was, to his senior staffers, an absolute stranger," he added.

Just two days before McCain publicly announced his choice, Palin arrived in Arizona to meet with the senator and his top staffers, including chief campaign strategist Steve Schmidt.

"I said, 'If this project goes forward you'll be one of the most famous people in the world by Friday. Will you be able to live with that?' She said she would be able to," Schmidt remembered.

Asked how Palin responded after McCain asked her to be his vice president, Schmidt said, "She was very calm. Nonplussed. I said, 'You don't seem nervous at all about this.' And she said, 'No, it's God's plan.'"

"In terms of vetting, was there enough time to do the kind of vetting you would have liked?" Cooper asked.

"I'm not going to second guess the process," Schmidt replied.

The process, according to the authors, was so rushed the background check was little more than one lawyer searching the Internet; no one went to Alaska.

"I wasn't the vetter on the campaign," Schmidt pointed out.

"Early on, though, you apparently said, 'She doesn't know anything,'" Cooper remarked.

"In the immediate aftermath of her selection, it was clear to us that we had a lot of work to do," Schmidt said.

Asked what kind of information Palin didn't know, Schmidt said, "A broad scale of national security issues. But we expected that that would be the case with any of the potential nominees."

In her first major speech at the convention, Palin seemed perfect.

"She gave a great convention speech. And we came out of that convention ahead in the polls," Schmidt recalled.

In public, Palin looked like the game changer McCain had wanted, but in private, the authors say she was struggling to learn too much too fast.

"Her foreign policy tutors are literally taking her through, 'This is World War I, this is World War II, this is the Korean War. This is the how the Cold War worked.' Steve Schmidt had gone to them and said, 'She knows nothing,'" Heilemann told Cooper. "A week later, after the convention was over, she still didn't really understand why there was a North Korea and a South Korea. She was still regularly saying that Saddam Hussein had been behind 9/11. And, literally, the next day her son was about to ship off to Iraq. And when they asked her who her son was going to fight, she couldn't explain that."

Still, Schmidt says she was a quick study. "And her focus was extraordinary. She was working 15, 16 hours a day," he said. "And we were pleased with the result. We were very pleased with the results."

Pleased, he said, until that interview with Katie Couric.

"When you consider even national security issues with Russia. As Putin, rears his head and comes into the air space of the United States of America, where do they go? It's Alaska. It's right over the border," Palin told Couric.

In her book, Palin accuses CBS News of editing the interview to make her look bad. But Steve Schmidt told us Palin did poorly because she didn't do her homework.

"I made the case to her that in my view, the reason that that interview was a failure was because she did not prepare for it. She was focused that morning on answering ten written questions from a small newspaper in Alaska called the Matsu Valley Frontiersman," Schmidt said.

"She thought Katie Couric was kind of going for 'gotcha' questions," Cooper remarked.

Schmidt replied, "I don't think that Katie Couric asked a single unfair question in that interview."

Over on the Democratic side, Halperin and Heilemann report that early in the campaign, a full year before the election, Hillary Clinton was so sure she'd win, she had already started preparing for her presidency.

"She had two top advisors start to plan her transition for after she won the general election, even before she was the nominee. That's how confident she was that things were headed in that direction," Halperin said.

What Clinton didn't realize, according to the authors, was that some of her fellow Democratic senators - whose support she thought she had - actually preferred Obama.

"The sort of mythology is that Hillary Clinton was the establishment candidate. That Obama had to run kind of a guerilla campaign against her. In fact, Obama was the establishment candidate. There were a number of United States senators, Democratic leaders, who secretly and privately encouraged him to run behind the Clinton's back," Halperin said.

The authors say several of her Senate colleagues thought she would be too divisive, that Obama would be a stronger candidate. Even Democratic Senator Bill Nelson of Florida, who endorsed Clinton, thought Obama should enter the race.

"I had no doubt that this was somebody that was gonna be like a magnet wherever he went," Sen. Nelson told Cooper.

Asked if there were a number of Democratic senators who were privately urging Obama to run, the senator said, "It is my understanding that they were. And you would often see these clumps of senators talking, or maybe it was one-on-one, talking with Barack on the floor of the Senate. Yes."

Schmidt told us about a recurring problem later in the general election the campaign had with Sarah Palin: "There were numerous instances that she said things that were not accurate that ultimately, the campaign had to deal with. And that opened the door to criticism that she was being untruthful and inaccurate. And I think that that is something that continues to this day."

Schmidt said he thinks it is fair criticism.

After an ethics investigation of Palin, when the Alaska legislature issued a report, Schmidt says she mischaracterized that report. "She went out and said that, you know, 'This report completely exonerates me.' And in fact, it didn't. You know, it's the equivalent of saying down is up and up is down. It was provably, demonstrably untrue," he told Cooper.

And Schmidt said it just kept happening. "Stuff like the Alaska Independence Party that her husband had been a member of for seven years. She wanted to put out a statement saying that he was not a member of it. He was a member of it," he said.

Palin declined to be interviewed for this report or to respond to any specific allegations, saying she had dealt with a lot of this in her book.

In their book, Halperin and Heilemann say though Palin always seemed upbeat in public, in private to campaign staffers she was anything but.

"As things started to go bad, particularly after the interview with Katie Couric, she was feeling a lot of pressure. The debate was coming. She became what they called 'the other Sarah,'" Halperin said. "They said, 'There's one Sara who you see in public.' Upbeat. But the other Sarah was the one that frightened them. It was someone whose eyes were kind of glazed over. Who was literally not responding to questions. Who was keeping her head down."

The authors say she hit bottom trying to prepare for her vice-presidential debate. The person in charge of her debate prep made a desperate call to Schmidt.

"He told us that the debate was going to be a debacle of historic and epic proportions. He told us she was not focused. She was not engaged. She was really not participating in the prep," Schmidt said.

So Schmidt and campaign manager Rick Davis sat in on the debate prep, and Schmidt says Palin seemed overwhelmed.

"Rick Davis and I sat in the back of the room for a few minutes and suggested everybody take a break and asked everybody to leave the room, and we had a conversation with her," Schmidt remembered.

Asked what he said to her, Schmidt said, "I said to her, 'Governor, this doesn't seem to be going very well to me.' And she assented. She agreed. She said, 'You know, I think that's right.'"

They flew her to McCain's ranch in Arizona. Schmidt said he took over the debate prep and simplified it. And Palin began doing well, except for one persistent problem: she kept confusing Joe Biden's name with Obama's, calling him "O'Biden."

"It was a verbal tic. And it was subconscious. But when you had gone through the Tina Fey parodies, you certainly cannot be in a position where you walk out onto the stage and refer to him repeatedly on national television as 'Senator O'Biden.' It would have just been devastating beyond words," Schmidt said.

How did they get around that?

"It was multiple people, and I wasn't one of them, who all said at the same time, 'Just say, Can I call you Joe,' which she did," Schmidt explained.

"So the 'Can I call you Joe,' which people at the time thought was some sort of strategy, was really just a way for her to be able to say his name without messing it up?" Cooper asked.

"Correct. Absolutely," Schmidt replied, laughing.

But one "O'Biden" did slip out.

Still, McCain staffers were delighted. "She did a good job in the debate against Senator Biden. I think she more than held her own," Schmidt said.

But Schmidt now believes if Palin is the Republican presidential candidate in 2012 it will be catastrophic for the party, even though he is one of those most responsible for making her a national figure.

"For you picking Sarah Palin was about winning an election, not necessarily about who's gonna be best as vice president? Cooper asked.

"My job was to give political advice," Schmidt said. "We needed to do something bold to try to win the race."

"If you had it to do over again would you have her on the ticket?" Cooper asked.

"You don't get to go back in time, Anderson and have do-overs in life," Schmidt said.

"I guess a viewer would read into the fact that you that you didn't say, 'I would do exactly the same thing,'" Cooper remarked.

"I believe, had she not been on the ticket, our margin of defeat would've been greater than it would've been otherwise," Schmidt said.

After the race was over, Heilemann and Halperin report that Hillary Clinton initially turned down Obama's offer to become secretary of state. But in a late-night phone call, he tried to change her mind, telling her that he and the country needed her.

"At that point she says, 'You know, there's one last thing that's a problem, which is my husband. You've seen what this is like. It will be a circus if I take this job. There will be a new controversy every day that you'll have to deal with. And Obama says to her, 'I understand. But I want you so badly that I'm willing to live with your husband,'" Heilemann told Cooper.

"It's this extraordinary moment. On the one hand you have Hillary Clinton saying something she says to almost no one, admitting that her husband is a problem, at the same time Obama comes back and shows vulnerability to her," Halperin added. "He says to her, 'Given the economic crisis, given all I have to deal with, I need your help.' And that bond, I think, that trust that was built in that call, according to the people who were familiar with the call, built up enough that overnight, she was able to change her mind and take the job."

Produced by Robert Anderson