Here's the backstory behind Cheryl Musgrave's devastating GOP primary loss in Evansville

EVANSVILLE — Natalie Rascher walked out of a March 2021 caucus of local Republicans looking like anything but a rising political star. She had just lost an election for party treasurer to businessman Frank Peterlin.

Just 16 months earlier, Rascher narrowly lost her campaign for the 2nd Ward Evansville City Council seat. She was game to try again in the 5th Ward when that seat came open late last year — but fellow Republican Angela Koehler Lindsey, who was eventually appointed, says she likely would have beaten Rascher in a caucus. In between all that, Rascher's husband lost a race for a Vanderburgh County Board of Commissioners seat in 2020.

But Rascher's political fortunes started to change the minute she said yes to a campaign against fellow Republican Cheryl Musgrave for mayor of Evansville. Other Republicans said no to outgoing Mayor Lloyd Winnecke, his wife, Carol McClintock, and others who were trying to recruit someone to run against Musgrave, a county commissioner.

More: Primary made grudges, division clear in Evansville Republican race for mayor

Now, with her stunning victory by 28 percentage points over Musgrave in this month's GOP primary election, the 38-year-old Rascher suddenly stands at the pinnacle of local politics. The primary vaulted her all the way to the top of the Nov. 7 ballot to stand for Evansville's highest elected office.

You have to go back years to understand the conditions that allowed someone with so little political experience and success to mop the floor with one of Vanderburgh County's most experienced and successful politicians. And you have to account for Rascher's growth into a deft campaigner and organizer capable of presenting a plausible alternative to Musgrave.

There is no single reason for the fall of Cheryl Musgrave — winner of all eight countywide campaigns she has waged, former head of a state agency, survivor of a previous Winnecke-backed attempt to defeat her in a county race. Political observers point to the money and passion Winnecke poured into Rascher's campaign, Rascher's own energy and hard work, anti-incumbent sentiment in today's GOP — and the cumulative impact of enemies Musgrave has made over 30 years in local politics and government.

More: High-ranking local Republicans are lobbying people to run for mayor against Musgrave

Dottie Thomas, Vanderburgh County's elected treasurer and vice chair of the local GOP, pointed to Musgrave's decision to publicly support Democrat Jeff Hatfield against Republican Mike Duckworth in a hotly contested race for a Board of Commissioners seat in 2018. Duckworth's margin of defeat was 0.38 percent, losing to Hatfield by just 224 votes out of nearly 58,000 cast.

It earned Musgrave the lasting enmity of Duckworth, who admitted afterward that he wouldn't support her for mayor because she hadn't supported him. Unfortunately for Musgrave, Duckworth was named chairman of the Vanderburgh County Republican Party in 2021.

Karma, Thomas said.

"Did Cheryl think when she was standing outside of a vote center with a Jeff Hatfield sign that she may someday run for mayor?" Thomas said. "I want to say she probably did, but you have to think about those (decisions) affecting you."

Planting seeds of discontent

Musgrave, who declined to comment to the Courier & Press for this story, signaled from the beginning of her career in local government that she wasn't afraid to ruffle feathers if she thought it was justified. She touted that political fearlessness throughout her many successful campaigns to follow, and voters ate it up.

As county assessor in the 1990s, Musgrave made enemies by reviewing the property tax exemptions of churches, clubs and other nonprofit groups and recommending removal of exemptions where she felt they did not qualify.

"(The law) said, 'It's tax-exempt only if you're using it solely for the purpose for which your organization was established,'" former County Commissioner Mark Owen told the Courier & Press in 2016. "A lot of them had different facilities they'd rent out — and that's taxable income, so the property tax should not have been waived.

"They even hired Republican attorneys to try to influence (Musgrave), and it didn't work," said the late Owen, a Democrat. "She put them back on the tax rolls."

But the political reality is that Musgrave's fearlessness over the years has often put her at odds with leading members of the local business community, who prize stability.

When the Southwest Indiana Chamber of Commerce, the Growth Alliance for Greater Evansville and the Economic Development Coalition of Southwest Indiana voted in 2021 to merge into the Evansville Regional Economic Partnership (E-REP) with the goal of creating a leaner, more effective organization to recruit new jobs and investment, Winnecke, other elected officials and most business leaders were on board — but Musgrave vocally opposed it. She said the merger would lessen the input of Vanderburgh County government and citizenry.

In 2015, a Democratic City Council hostile to Winnecke appointed Musgrave, who was then out of elected office, to the Evansville Redevelopment Commission. Winnecke administration officials later said the council tapped Musgrave specifically to oppose the mayor's objectives.

Winnecke and his aides later complained about Musgrave's pointed questions and opposition to the Downtown Hilton DoubleTree development agreement, which was popular with the business community.

Like Winnecke, many business leaders wanted the Indiana University School of Medicine-Evansville located Downtown. But Musgrave unsuccessfully pushed for an East Side location, saying long-term population trends and transportation infrastructure made it a better choice for students. She later explained she had been representing the interests of a client in her local government consulting business.

Anti-Musgrave group was funded by business leaders

When the GOP mayoral primary hit its stretch run in early April, Republicans actively trying to thwart Musgrave's mayoral ambitions struck hard with financial support from a handful of business leaders.

Evansville's Future PAC, created in 2018 by Winnecke's deputy mayor and Interim Parks Director Steve Schaefer but since given to others to run, fired out a withering anti-Musgrave mailer.

Authorized by Rascher's campaign committee, the mailer accused Musgrave of "selling out our conservative values and working against Republican candidates." Musgrave called it a lie. Evansville's Future also contributed $5,000 directly to Rascher's campaign — and another $23,000 two weeks before the election.

More: Mayoral primary: Anti-Musgrave mailer calls her a 'phony conservative'

The PAC reported raising $39,000 through April 7 — almost all of it from business leaders. The biggest chunk — $25,000 — came from Barry Cox, owner of Posey County-based Cox Group. Cox disavowed knowledge of the anti-Musgrave mailer, saying his $25,000 contribution was merely meant to contribute to Evansville's improvement.

Others who contributed to the anti-Musgrave group included Mark Rolley, president of Advanced Network & Computer Services, Inc.; Deaconess Health System CEO Shawn McCoy; Dr. James Porter, president of Deaconess' Physicians Division; and Curt Begle, president of Berry Global's Health, Hygiene and Specialties Division.

Pete Paradossi, president of the Evansville Regional Business Committee, gave $500 directly to Rascher's campaign. The committee, which Paradossi said "operate(s) kind of quietly," is comprised primarily of CEOs of local businesses. Paradossi didn't offer a list of members, but Cox acknowledged he's a member.

For Paradossi, perpetuating Winnecke's brand of leadership was more important than the yawning gap between Musgrave's political and governmental experience and Rascher's.

"I saw it as an opportunity to continue the great work that our current mayor had continued and, as I talked to Natalie and I listened to Natalie talk, I felt that was in her vision to continue on that same path," he said.

'Nice matters'

As the campaign wore on, it became clear that Musgrave was running against Winnecke, not Rascher. Her mailers spoke of poorly maintained parks, high crime, high water bills, bad roads and infrastructure and a need to "manage city government better."

"No more controversies. No more scandals," one mailer on parks promised. It was an apparent reference to pending criminal charges against former parks executive director Brian Holtz, who was appointed by Winnecke in 2016.

Winnecke, whose political estrangement from Musgrave dates back more than a decade, had tried and failed to defeat her with another candidate in the 2016 GOP primary for her Board of Commissioners seat. The popular three-term mayor wasn't going to miss this time, if he could help it.

More: Musgrave, Winnecke haven't buried the hatchet in Evansville. Here's why.

Thirteen days before the election, Winnecke's political committee pumped $25,000 into Rascher's campaign to see her across the finish line. The mayor had already made nearly $57,000 in in-kind contributions to Rascher by paying for events, research, polling and commercials. With Winnecke's support came contributions from companies doing business with the city plus money, votes and word-of-mouth from a small army of people who work in his administration.

For many of those people, the problem wasn't Musgrave's record as a public servant, her intelligence or her command of the nuances of local government. The problem was Musgrave herself.

Denise Johnson, manager of Winnecke's 2011 campaign and parks director in his first administration, said she has found Musgrave to be brusque and dismissive. Johnson remembers the two meeting at a luncheon when she was parks director. Musgrave had just been appointed president of Keep Evansville Beautiful.

"When I went to introduce myself at the table, she said, ‘I know who you are,'" Johnson recalled with a chuckle.

Johnson told Musgrave they should meet to discuss how they could work together to maintain city parks.

"I gave her a business card. She said, ‘I don’t have one.’ And I said, ‘Well, here’s one of mine. You can write your name on the back of it and give it to me before the lunch is over,’" Johnson said.

"And after the lunch was over, she didn’t do that. She left mine on the table."

Johnson respects Musgrave's political skills. But she wouldn't have voted for her in November had she beaten Rascher.

"I really do believe what (Winnecke) says, that 'nice matters,'" Johnson said. "I think we should all be a little kinder to each other. Everybody. And I think that Cheryl comes across a little combative at times."

A double-edged sword

U.S. Congressman Larry Bucshon gave Rascher's campaign $4,500. Bucshon, an Evansville resident and a longtime political ally of Winnecke, has known Rascher since her 2019 City Council campaign. He's known Musgrave a lot longer.

"We don’t always see eye-to-eye on things, but I have a professional, cordial relationship with Cheryl," the 8th District congressman said.

A politician with years of experience — like Musgrave — can look like a symbol of the establishment to some conservative voters with revolutionary sensibilities, said Bucshon, who has been in office since January 2011. That dates to even before Donald Trump changed the face of today's Republican Party, he said.

More: Evansville GOP mayor hopefuls pull in hundreds of thousands of dollars from donors

"My best guess is that people on the Republican side (in the Musgrave-Rascher contest) felt like they wanted to vote for someone that had not been kind of, what I’ll call an 'insider,'" Bucshon said.

But while Musgrave had three decades in public office to Rascher's none, it was Rascher who was backed by the local Republican establishment — the mayor, party leaders and Bucshon himself. To the extent that voters wanted a new face, Musgrave managed to be on the opposite side of the GOP's reformist political climate while also battling the party's establishment — likely another factor in her loss.

Unlike Denise Johnson, Bucshon said he would have been happy to support Musgrave in the fall election if she had defeated Rascher.

But he also apparently can relate to complaints about her personality.

Musgrave told supporters on election night that they had suffered through "lies, blatant deceit and character assassination from the opposition."

Former County Commissioner Marsha Abell Barnhart, a friend of Winnecke and one of Musgrave's most vociferous critics, pounced on those remarks in a Facebook post later that night.

"Sorry to see Cheryl Musgrave could not graciously accept her defeat. instead she blamed everyone else. That attitude is why she lost," the post stated.

Twenty-two people "liked" the comment, including Rascher's husband. And Larry Bucshon.

This article originally appeared on Evansville Courier & Press: How did Natalie Rascher beat Cheryl Musgrave in Evansville primary?