Throughout the health-care debate, he downplayed speculation that he planned to run for president. But by that point, the scaffolding for his 2008 campaign was well under construction.

Seed money

In the summer of 2003, barely six months into Romney's governorship, Robert White, a confidant, had huddled in Washington with political strategists Michael Murphy and Trent Wisecup and a top GOP lawyer, Benjamin Ginsberg, to ponder Romney's next move. At Ginsberg's law office near Georgetown, and later over steak in a private room at Morton's, the seeds for Romney's presidential campaign were planted.

They conceived the Commonwealth PAC, a political action committee that enabled Romney to travel the country with a checkbook, currying favor with Republican leaders by contributing to their campaigns and causes.

Romney's advisers organized the PAC in an innovative way, setting up affiliates in six key states — including some states with no limits on contributions, which allowed Romney's wealthy associates to give five- and six-figure sums. In all, the PAC raised $8.8 million and doled out $1.3 million, much of it in key presidential-primary states.

Romney also positioned himself to lead the Republican Governors Association, advancing from chairman of the group's annual dinner in 2004 and vice chairman in 2005 and putting himself in line to be chairman in 2006. The job would give Romney visibility, contact with Republican donors and the chance to visit other states.

Meanwhile, his State House staff was collecting information to answer media inquiries about Romney's background, including his Michigan draft board records from the 1960s.

"I didn't know if I wanted to run, I didn't know what would happen, I didn't know who the opposition would be," Romney said of his early preparations. "But I knew I didn't want to foreclose the possibility."

Health-care opportunity

What the governor lacked, however, was a defining achievement after two years in office. He seized on health-care reform. The timing was right: Massachusetts was in danger of losing up to $585 million in Medicaid funds, because the Bush administration believed the state was spending money on services that were ineligible for federal assistance.

Aides to Romney and Kennedy had worked closely on the Medicaid issue, and on Jan. 14, 2005, the two leaders met for more than two hours to negotiate an extension of a regulatory waiver with Tommy Thompson, who was stepping down that day as U.S. health and human services secretary and whose support was in doubt. "It was touch and go," Kennedy recalled.