Business credentials lose political luster
Corporate scandals create voter distrust
LOS ANGELES AND BOSTON — Where American voters are concerned, a political candidate's once-sterling tagline of MBA is morphing into the ignominious acronym, BTA: "Better Think Again."
Thanks to the freefall of the stock market and the corporate scandals of Enron, WorldCom, Adelphia, and others, the political aspirant with a business background promising to clean up government mismanagement is running head-on into a new level of public distrust.
Whereas holding a Master of Business Administration degree or running a successful company has long been a calling card for competence, it's now often seen as an indicator of dubious accounting, elite dealing, tax dodging, or other ethical breaches.
"Possession of an MBA or business background has become as much a detriment today as it once stood for qualification," says Alan Heslop, professor of government at Claremont McKenna College. "It now certifies membership in a corporate elite that is rapidly losing the trust of American voters."
Exhibit A includes the candidacies for governor in at least three key states: New Hampshire, Texas, and California, where last week's civil fraud conviction of the GOP candidate's family business threatens the party's hope of winning any top seats in the most populous state's leadership.
In Texas, home of Enron, GOP Gov. Rick Perry and his Democratic challenger, Terry Sanchez, are tearing into each other for past business practices. Mr. Sanchez has hit Mr. Perry for accepting campaign contributions from WorldCom and Enron, while Perry says Sanchez was unethical in his past as a banker and oilman.
In New Hampshire, the Republican candidate for governor is Craig Benson, founder and former CEO of Cabletron Systems Inc. His opponent, US Sen. Gordon Humphrey, is peppering the airwaves with TV ads accusing Mr. Benson of running Cabletron into the ground while lining his own pockets. The ads claim that Benson led Cabletron while company stock dived 90 percent and 85 percent of its New Hampshire workforce was laid off.
"Retirements are threatened," says the ad. "But not Craig Benson's. He's been selling off stock for years, pocketing over $400 million."
While typically thought of as a bigger minus for Republicans than Democrats, the new climate of business distrust is hurting both parties simultaneously.
"To run for office as a businessman right now, Democrat or Republican, ... may be as bad a strategy now as during the Depression of 1929," says Joe Cerrell, a California political consultant.
Perhaps the highest-profile example of a businessman-candidate running into trouble is Bill Simon, who won the GOP primary in March at least in part because he said his business credentials could help get California, currently struggling with economic and budgetary woes, back on track.
But Mr. Simon, son of former US Treasury Secretary William E. Simon Sr., has stumbled since the primary, including refusals to publicize his tax returns, releasing them, but then raising suspicions by refusing to answer key questions about them.
His candidacy entered an even darker period last week with a jury's multi-million dollar civil fraud verdict against his family investment firm. The Los Angeles Superior Court jury found that the firm, William E. Simon & Sons LLC, saddled the plaintiff Pacific Coin, a private, pay-telephone company "with excessive amounts of debt" after acquiring controlling interest in 1998. The jury awarded Pacific Coin $13.3 million in compensatory damages, plus $65 million in punitive damages.
Analysts in both parties say the verdict is a crushing one for Simon, although Gov. Gray Davis leads him by only 7 percentage points in the latest poll, and carries one of the biggest negative quotients of any modern California governor. The Davis campaign, with reportedly six times the funds of the Simon's, launched a new statewide attack on Simon last week, criticizing his business ethics and accusing him of tax dodging.
"The current trial finding is a blow to the very reputation Simon has been trying to push, namely that he is the business outsider that can set this state straight economically," says Mark Di Camillo of the California Poll.
Simon says the verdict is "fatally flawed" and that he's confident it will be overturned.
But Simon presents a dilemma for President Bush himself an MBA holder who only recently backed Simon and is scheduled to visit the state Aug. 24.
"Part of the problem for Bush is that he is also trying to be seen as someone who is trying to clean up the climate of corporate corruption in America," says Mr. Cerrell. "So how do you go about associating yourself with someone who was just found guilty of fraud and ordered to pay $78 million?"
Business background hasn't become a total political red letter. In Democratic Massachusetts, GOP businessman Mitt Romney enjoys strong popularity precisely because of his business credentials established in his management of the Salt Lake City Olympics.
Nonetheless, experts say, business-related candidates have a tougher row to hoe. "You're immediately on the defensive. You're immediately scrambling to make sure that your accounting was valid and your tax returns are clean, because now the whole world is watching," says pollster John Zogby. "Voters are angry. Now Enron and Worldcom have made them jaded, disgusted."