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Posts Tagged ‘Al Checchi’



Why Rich Guys Don’t Win Top Offices in California

Monday, May 4th, 2009

poiznerAs the 2010 field for governor takes shape, the top Republican contenders are a pair of successful former Silicon Valley businesspeople, each armed for the campaign with a self-made fortune.

megcropBoth Meg Whitman, who scored big at eBay, and Steve Poizner, who made his pile as a high-tech innovator, begin the race with the wherewithal to spend whatever it takes to win. If past is prologue, however, Whitman and Poizner will both end up political losers.

Pity the poor billionaire seeking high office in California : Not once in modern political history has a self-financed candidate captured a top-of-ticket party nomination and gone on to be elected governor or U.S. senator in the state.

This historic trend again marks California as a great exception, in contrast to states like New Jersey and Texas , where multimillionaires routinely prevail.
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Industrialist Norton Simon set the bar low for wealthy candidates in California when he tried and failed to oust Senator George Murphy in the 1970 GOP primary. Liberal shipping magnate William Matson Roth kept the losing streak intact when he lost the 1974 Democratic gubernatorial primary to a guy named Jerry Brown.

Since then, three wealthy businessmen who would be governor – Al Checchi (1998) Bill Simon (2002) and Steve Westly (2006) spent big but finished out of the money. So did Michael Huffington, who spent $100 million in losing to Sen. Dianne Feinstein in 1994, and Darrell Issa, who forked out millions of his car alarm fortune to stumble in the 1998 GOP Senate primary.

Gov. Arnold Schwarzenegger is the only self-funded candidate who’s made it to a top slot. However, he short-circuited the odds by avoiding a primary, where the Republican right wing would have battered him, to capture the governorship in the anomalous 2003 recall (funded largely by Issa) of Gray Davis.

“The problem is that there’s an innate suspicion about people running without a history in politics,” said Bill Carrick, a California-based political strategist who crafted Feinstein’s 1994 campaign defense against Huffington’s millions.

It is instructive that Feinstein prevailed with a bit of political ju-jitsu, transforming Huffington’s limitless resources from an asset into a liability, with TV attack ads that labeled him “a Texas oilman Californians just can’t trust.”

“There’s a group of voters who find the outsider, business candidate attractive,” Carrick said. “They’re white men over 50, with anti-establishment political views, who don’t like the status quo. But it never gets beyond that universe.”

Garry South, San Francisco Mayor Gavin Newsom’s chief strategist — who helped Davis defeat former Northwest Airlines CEO Checchi in the 1998 primary, and Republican financier Simon in the 2002 general election — cited several reasons for the failure of Golden State silver spoon candidates.

“They have too much money,” South said, noting that without normal budget constraints, rich candidates often fail to develop a coherent message or target it to voters. Checchi’s consultants, for example, produced a staggering 102 TV spots in 1998, airing 42 of them. Said South: “They think they can say everything about themselves to everybody.”

Unlike professional politicians, wealthy rookies lack a group of seasoned advisers, “so they go out and hire everybody in the Western Hemisphere and wind up with a big bloated campaign team with no real chain of command,” South said, adding that successful executives often underestimate the difficulty of running for office.

“They think because they’re successful in business, they’re smarter, better and more clever than anybody in politics,” he said. “They honestly don’t get that the things that they’re most proud of in their business life don’t compute in the political world.”

But Republican consultant Rob Stutzman, who works for Whitman, the richest of the current candidate crop, argued that as political reforms have squeezed contribution limits, individual wealth is almost a prerequisite for running in California .

“You have to have self-funding in order to run credibly statewide,” he said. “You can’t raise enough money at a fast enough clip to compete.”

Whitman strategists emphasize that she (like her rival, Insurance Commissioner Poizner) is aggressively raising money to supplement self-donations.

“Meg believes there have to be investors in the message and the mission,” said spokesman Mitch Zak, predicting that she will raise $5 million in outside contributions to go with $4 million she’s kicked in herself, by summer.

Although a third wealthy candidate – Guess Jeans co-founder Georges Marciano – plans to run as an independent, polltaker Mervin Field foresees that the economic meltdown will create a daunting political climate for rich candidates of every stripe.

“The state is in one hell of a mess,” Field said. “I believe voters will be looking for someone with a different resume.”

This article is also scheduled for publication in the San Francisco Chronicle on Monday, May 4.

Poizner Blasts Whitman on eBay Management

Thursday, April 16th, 2009

Steve Poizner lashed out Thursday at Meg Whitman, his chief rival for conservative support in the battle for the Republican nomination for governor, charging that the former eBay CEO has a “disastrous record of fiscal mismanagement” in business.

Citing a Wednesday Wall Street Journal report (subscription required), Insurance Commissioner Poizner’s campaign spokesman put out a release that said eBay’s 2005 acquisition of the online telephone service Skype during Whitman’s tenure has resulted in a $2 billion loss for shareholders and left her successor to “clean up the failure.”

“If past performance is indicative of future results, Californians can’t afford Meg Whitman’s disastrous record of fiscal mismanagement,” said Poizner spokesman Kevin Spillane.

Coming 14 months before the GOP primary, the sudden attack reflected not only the aggressive style of campaigning that Poizner has adopted in the early going but also the potential vulnerability of political candidates who come directly to politics from the world of business and finance. The shot at Whitman is surely only the first that will be aimed at her management record.

“She’s making her business career the entire rationale for her candidacy,” Spillane told calbuzz. “And this is the cornerstone of her record at eBay.”

The Journal story, by Geoffrey Fowler, reported that “the online-auction giant purchased Skype in 2005 for about $2.6 billion in cash and stock, on the premise that eBay buyers would use Skype’s service to communicate. But two years later, eBay took a $1.4 billion charge for Skype, reflecting the unit’s shrinking value.”

Whitman spokesman Mitch Zak would not venture to explain why Poizner had decided to attack the former eBay CEO.

“Meg Whitman has a tremendous record of accomplishment in her decade leading eBay. She joined the company when it had 30 employees and $4 million in revenues. When she left it had 15,000 employees and $8 billion in revenues,” Zak said. “She has been recognized throughout the world as one of the most impressive and accomplished business leaders,” he said.

The salvo against Whitman recalled the troubles that faced former Northwest Airlines Chairman Al Checchi in 1998 when he attempted to use his business acumen as the fundamental rationale for his candidacy for the Democratic nomination for governor. News articles and research by competing candidates delving into his tumultuous leadership of the airline undercut the central argument for his candidacy.

The Poizner statement also took on former Skype President Henry Gomez, now a key Whitman adviser, calling him “her campaign majordomo.” Through his spokesman Poizner said that current eBay chairman John Donahoe is “now cleaning up the failure” of Whitman and Gomez.

Zak elected not to reply to any of the charges.

“Meg doesn’t need to do anything more than share her vision for California and demonstrate that she’s not a Sacramento politician but a leader who will bring this state back,” he said.