Verbatim transcript from tape:

AL FROM: You all know Terry McAuliffe, he's chairman of our party, he is a legendary fundraiser. Most of you have probably had your arms twisted by Terry. I don't know what it is, but whenever people see Terry coming, they put both hands behind their back. But he is a legendary fundraiser in our party, he's chair of the convention in Los Angeles. He was probably as instrumental as anybody in helping President Clinton raise the resources necessary to run two successful elections. And now he, as chairman of our party, I think is doing an incredible job of rebuilding our party's infrastructure, our technology. You know, it is just incredible that the party that is really the party of innovation is the party that lags in political technology. And Terry has set out to change that, and he's going to do it. And I think this fall, as we sweep these elections, we will all look back and say that Terry McAuliffe has been a great leader of our party. So, I'm delighted to welcome Terry McAuliffe here.

TERENCE McAULIFFE: Thank you, Al.

(Applause.)

TERENCE McAULIFFE: Thank you. Good morning. Come on, folks, this is not a Republican fundraiser. Good morning.

(Chorus of good mornings.)

TERENCE McAULIFFE: It's great to be with you. I want to thank all of you, Senator Bayh, Al From, I want to thank you for your dynamic leadership here. After I got elected chair of this party, one of the first visitors that came over to see me was Al From, and he and I stay in constant touch, and I thank you for everything that you do to Bruce Reed, and to all the elected officials who are here today, and who have been at the conference. It's great to be here.

Let me first off by saying, I know this is a conference that is supposed to talk about the Red State, Blue Governors, but, folks, if you look at the political reality today, it is going to be blue state, blue Republicans, because, today, folks, the Democratic Party is in as good a shape as it has ever been. I will tell you, I would hate to be a Republican in America today.

(Applause.)

TERENCE McAULIFFE: You know, if you look at where we are today, you know, summers have not been particularly good for George Bush. If you remember last summer, he spent the month of August down in Crawford with his dog Barney walking amongst the cedar trees. And it was a summer where obviously the deficits, we'd gotten rid of the surpluses left over from the Clinton-Gore administration, we had record deficits, he was spending the Social Security trust fund. And here we are this summer again, and he's off to Crawford again for another month, taking Barney out for the walks through the cedar trees again.

But today, if you look at where we stand in the political landscape, people are very worried. The concern over our economy today, the market is in turmoil, has George Bush in a serious problem today. We have disappearing resources. And Republicans have some very tough choices to make.

I will actually say that July, this month, has probably been the worst month of the Bush presidency. Most Americans now think that our country is on the wrong track on handling the economy. You see the numbers, Bush's numbers are now under 50 percent. The debate over corporate reform has exposed the Achilles' Heel of the Bush administration, and the Bush Republicans have no plan to restore economic security, and the Americans know that.

I just ask you, where is Bush's economic plan? Where are the economic team of George Bush's administration today? You can't find these folks with a hound dog. Where is Larry Lindsey? Paul O'Neill, as you know, last weekend, he wanted to go on another overseas trip. They kept him back. He actually went on television, and when all the commentators asked some tough questions on the economy, he had three simple words, I don't care. Well, folks, that's not what we expect of our administration today in Washington. We want leadership on the issues. We're going to win all over the country this year. Not because of George Bush and the lack of response and the lack of interest in the economy, because the Democrats are working on the issues. The pocketbook economic issues, let it be Social Security, let it be pension reform, prescription drug benefit for all seniors, those are Democratic issues.

So, the political environment is terrific today for our party, and I'm proud to say that your DNC has put all the tools in place, and the mechanisms, so that we can take advantage of this and win across the board 98 days from today.

(Applause.)

TERENCE McAULIFFE: A year ago, when I spoke to you in Indianapolis, I outlined a lot of things that we needed to do at the National Party which, for one reason or another, had not been done, and the Republicans had spent 30 years building up their infrastructure. And I said that we were no longer going to be a presidential campaign committee, that we were going to be an up and down the ballot campaign organization helping candidates at all levels. And it was gratifying to walk in here today and speak to about 20 local officials who came up and thanked me for what the DNC had done for them last year, and has done for them this year, because that's what I promised, that we would help candidates at all levels.

Last year I spoke all over the country, and predicted great gains for the Democratic Party. Most people thought I was crazy. Now, I know you folks here didn't think I was crazy. Al would never think I'm crazy. But, you know what, folks, I wasn't crazy, and the Democratic Party swept this country last year. George Bush at 92 percent, the Democratic Party won 92 percent of the elections across this country.

Mark Warner, Governor of the Commonwealth of Virginia.

(Applause.)

TERENCE McAULIFFE: Jimmy McGreevey, Governor of the great State of New Jersey.

(Applause.)

TERENCE McAULIFFE: We won 39 of 42 mayors races across this country. I actually will call it an even 40, because Michael Bloomberg was a lifelong Democrat until he switched to run here in New York City. But 39 of 42 mayors races. We went out, we picked up two state legislative chambers, Washington State and New Jersey. So, for the first time since 1996, guess what? The Democrats control more state legislative chambers than the Republicans do.

(Applause.)

TERENCE McAULIFFE: And then, for the fun of it, we wanted to pick another race out there, we picked Nassau County here in New York, had a great dynamic young leader, DLC member by the name of Tom Suozzi. We went up there. Your DNC spent thousands of dollars on local races. We sent three staffers up there for the whole election. You know why? Because we wanted to show that we could win anywhere in America, and the last time we won and controlled the government was in World War I in Nassau County. And, guess what, folks, we swept the entire county government in Nassau County last year.

(Applause.)

TERENCE McAULIFFE: So, we're out there, we're putting our resources out there. But I also talked to you about a couple of fundamental things we had to do at the party. So, I'm here today to ask you to give me a report card on what we promised we would do, and I'm here to tell you that we've accomplished those goals.

Let me talk briefly about the voter file project. You've probably read a little bit about this in the newspaper. But when I became chairman of this party 18 months ago, the Republican National Committee had 110 million name voter file. Do you know how big the DNC's was? Zero. We didn't have one. We had 50 state parties, and 50 different voter files, with 15 different consultants. So you had no cohesive organization and framework to put these voter files together.

So, I went to the state chairs and said, folks, those days are over. We need to have the best voter file in America. If you don't know who your voters are, folks, guess what? You can't educate them, and you can't get them to the polls. So, your DNC has spent over the last seven months millions of dollars. We are cleaning every single voter file in America. And, by August 15, the entire country will be done. And the results, my friends, are astounding.

Today, as of this morning, we had finished 35 states. We take the voter file, we run it through a data enhancement, so that you have the right address, the right phone number, and you have appendages to know who your voters are. Folks, we never had data birth center voter files. You know what, it's pretty stupid to send out Social Security appeals to people who were born in 1975. You need to know who your audience is. And as of this morning, 35 states, 90 million records have been cleaned, Democrats and Independents. Let me tell you, folks, the results are astounding. Of that, 16 million Democrats had an incorrect address and phone number on the voter file. Do you know what that means? That means 16 million people did not get a message from our party or our candidates because we didn't know how to reach them.

To really add insult to injury, in the State of Florida, 1,578,000 Democrats had an incorrect address and phone number on the voter file in 2000. That means 1.6 million people did not get a letter or a phone call from Al Gore, Joe Lieberman or the Democratic Party. Folks, that is unacceptable.

We've fixed that. We've gotten rid of 400,000 people who are deceased. I didn't get rid of them in Illinois, because some states want them.

(Applause.)

TERENCE McAULIFFE: But it's working, the whole country will be done. And by August 15th of this year, 130 million records will have been cleaned by your DNC, so that every candidate, no matter at what level, sheriff, county executive, county legislature, has access so that you are no longer wasting money. This is a magnificent project that the party has done. If you talk to Jeanne Shaheen up in New Hampshire, who is in a big Senate race; Ray Buckley, the vice chair of the party, he called me the other day and said that the phone match in New Hampshire went from 22 percent phone match to over 80 percent.

Right now, there are over 115,000 people in New Hampshire that we can now contact that we could not do six months ago. So, I promised you that, folks, a year ago, and I'm here today to tell you that we've delivered. And then from today going forward, every single six months, we'll get a list of every Republican, Democrat and Independent that lives in that state, so that you know how to mail them and send them a message. That was my first promise to you, and we have met that promise.

I promised you vigorous new programs.

(Applause.)

TERENCE McAULIFFE: A new Hispanic outreach program. I promised you that, and we have delivered on that. We have a whole team in place, George Bush goes around talking about he has to go after the Hispanic vote, does all his photo opportunities. He knows what we know, there were 7-1/2 million Latinos in 2000, we get 66 percent of the vote. In 2004, 12 to 13 million Latinos will go to the polls. If we get two of every three votes that time, guess what, four more states will switch over to the Democratic column. So, we have an aggressive Hispanic outreach program all across America to go out, and the second you register to vote, you walk outside, you will now be met by a DNC member, or a state party official there to say, will you join the Democratic Party. Everywhere in America, we're doing that today.

(Applause.)

TERENCE McAULIFFE: And it's important ?? good morning, Governor.

Let's hear it for the great governor of the great State of New Jersey who just joined us.

(Applause.)

TERENCE McAULIFFE: He's a little late because I don't know if you all happened, I happened to be watching this morning, my wife had the TV on Today, you saw the morning show, he was on TV actually with Matt Lauer and Bruce Springsteen. Some governors have all the luck.

Who did you have in Virginia this morning, Mark?

So that program will work. But, listen, folks, we're going to continually go out with the Hispanic program, I told you how important it is. Just listen to this statistic, starting this year, going forward, there will be 750,000 Hispanics becoming voting age population for the next 20 years. You know what that is? That's 15 million votes. So we have to aggressively be out there. But just remember, there are 5,000 Hispanic elected officials today, 92 percent of them are Democrats today. And you look at Republicans, they had that big conference the other day, they have 50 officials running this year, we have 500. Just remember that.

And in Texas this year, 14 Hispanic candidates ran on the Republican ticket. Guess how many won and got through the primaries? Zero. Just remember that, folks.

So, the Hispanic program. The Women's Vote Center is up and running. Ann Lewis is now the chair of that. I promised you we won't talk on women's issues two weeks before a presidential election. You talk women's issues every single day. They are 52 percent of the vote.

(Applause.)

TERENCE McAULIFFE: I promised you the Voting Rights Institute up and running. These two governors can tell you about the DNC Voting Rights. We were in both places. In Jim McGreevey's state this year, in the election in 2001, I got a call early in the morning. They started counting absentee ballots. This isn't just Florida, folks, this is all over America, where Republicans are trying to deny people their right to vote. In New Jersey, in one county, they started counting the absentee ballots, two Democrats and two Republicans are supposed to be in the room. Guess who wasn't invited to the party? The two Democrats. They had thrown out over 300 ballots by the time we got the calls. Guess which political party they all belonged to? You bet. People fought and died for the right to vote in this country, and I'll be damned if one Republican will take that right away from any individual in this country.

(Applause.)

TERENCE McAULIFFE: Technology infrastructure, you've heard me talk, it's up and running. The web site is in, and I want every person in this room to make me one promise, that you will go on the DNC web site in the next week and sign up. This is the most interactive web site, automatically sends you email, we want you on radio, we want you on TV, here's the message of the day. If you don't get on it, it's your fault, because we now have the best technology to get our message out all across this country.

Eighteen months ago, we had 70,000 emails. We're over a 1.2 million today on emails. And by the time we get to the presidential election, we're going to have 10 million email addresses. So when the Republicans spew their garbage out about our party, we're going to be right there getting our message out instantly.

(Applause.)

TERENCE McAULIFFE: These Republicans, they want to play tough, I promise you, we'll play tougher. You punch us, we'll punch you harder, because I am sick and tired of the Republicans distorting our position on guns, on immigration. We know we're right on the issues, but for far too long we've let them use their technological superiority to defeat us, and to get their message out. Those days are over, folks.

Redistricting, I promised you last year we'd do it, $5 million dollars your DNC put up all the money. And for those of you whose social life isn't what it should be, and were watching C-SPAN two weeks ago and saw Martin Frost and I do a press conference, we were supposed to lose 14 to 16 seats in redistricting. Guess how many we lost? Zero. So we only need six seats to get the United States House of Representatives back.

(Applause.)

TERENCE McAULIFFE: And it was the state legislatures all over this country that we did the lines. What was great about it is that people knew if the DNC would give the money, they could be aggressive in drawing lines early on, because we'd go in and fight them. We have a new world coming up, post-McCain-Feingold. No more soft money. DNC had $100 million in 2000. We've got to replace that with hard money. People talk about 527s, and all that. Forget it. The only entity that legally can support our nominee is the DNC. We're the only ones that can pay for the busses, pay for the phone calls, do the ads. It's a felony for any independent group to do it. So, the challenge we've got to meet, and I'm proud to tell you today that we're meeting that challenge because of the technology, we now have 130 million data files at the DNC. That's up from zero 18 months ago. So, we can get our message out every single day across this country. And I'm proud to report that the DNC took 20 years to get 400,000 donors. Today in six months, we are now over 1.2 million donors giving an average contribution of $38. And last year, 2001, the first time since 1974, the DNC raised more federal money than non-federal money. Folks, we are taking this party back to the grassroots, and building it with the small donors of our party. And that's our future.

(Applause.)

TERENCE McAULIFFE: We're funding our national polling and our message and research, which our party, I can tell you the relationship between the DGA, the DCCC, the DSCC, DLCC has never been better than it is today. We're excited about our future. We've started a new rural project that Kent Conrad and Byron Dorgan are all working on this together, because I'm sick of seeing a sea of red out there across America. We know we're right with rural voters, but now we have the ability to get our message out.

We have an aggressive new research department. I promised you we'd triple the size of it, and we've done that. But they have been very aggressive. I won't go into everything our research department does, but I can tell you this, they're very aggressive. And when you want to know facts about Harkin and Halburton, we just make sure that the people just have the facts, because, you know what, for 20 years they've been sending stuff to the press on the other side. We are now making sure that we get the facts out about a Republican administration and all the shenanigans that they've been up to.

And, finally, I will tell you, we've talked about the party infrastructure, the new building. Since I met you last time, we raised all the money. On December 15th, we start construction. It will take 10 months. And the beginning of October, we will move into a new state-of-the-art facility, tripling the size of our TV studio. Call centers that we'll build, 100-seat call centers. So, you know what, when Judy Olsen, the State Chair of South Dakota calls me up like she did several months ago to say that the Republicans on orders from the Bush White House to go after Tom Daschle and to run television ads comparing him to Saddam Hussein, where in the past we would sit back, now we can pull up that 130 million name data file, get a message with our communications research, get our phone lines working, and, you know what, we can call every single person in South Dakota now and say, they're lying about Tom Daschle. Here are the facts you need to know. And that's what our future holds for us.

Our party has never been in better shape. We've got the right message. We have got the right candidates. But now, folks, we've got the tools to deliver on that. And that's what I'm excited about. And let me say this in conclusion, we are going to have a great year this year. I predicted it last year, I'm going to predict it again. And next year, if Al invites me back, let me tell you, if the elections were held today, we would net four to seven new Democratic governors, including great states like Pennsylvania, where Eddie Rendel is going to be the next governor.

(Applause.)

TERENCE McAULIFFE: Like Illinois, like Michigan, you know those three states alone where we have double-digit leads, that's close to 60 electoral votes right there. Go out to Wisconsin, New Mexico, Arizona, and Maine, just to name a few where our challenges are up today, and we're going to pick up seats.

And in the United States Senate, think of it, not one Democratic incumbent is down today, and we've got Mark Pryor up four to six in Arkansas. We've got, listen to this one, if this doesn't get you jacked up nothing will, we've got Ron Kirk up four to eight points in the great State of Texas.

(Applause.)

TERENCE McAULIFFE: Jeanne Shaheen in New Hampshire.

(Applause.)

TERENCE McAULIFFE: Folks, I like New Hampshire, man, this is good stuff.

See what happens when you don't change the primary calendar, and you leave New Hampshire alone, you get good applauses. You guys want the convention up there?

And in the House of Representatives, only six seats. So, I ask you, my fellow Democrats, let us all come together toward election day here, let us mobilize the vote. We will not have an opportunity like this again. We are a big political party. We are different than the Republicans. They all think alike. We have conservatives, we have liberals, we have moderates. But, you know what, that's what makes this party great, the mosaic tile of America, we all come together and fight on the issues and what we truly believe, and if we do this, we are going to have a spectacular year this year, and George Bush is going to wake up in the morning on November 6th, and he's going to see newspapers screaming about Democratic sweeps all across this country. And, you know what, he's going back to bed, he's going back to sleep, because he knows we're coming after him next.

Thank you very much.

(Applause.)

TERENCE McAULIFFE: Thank you. Let's go get them. Thank you. I love the DLC.