Re: Who business is betting on?
- From: "Calvin Jones & the 13th Apostle" <O_Mary_Dont_You_Weep@xxxxxxxxx>
- Date: Tue, 26 Jun 2007 01:49:20 -0400
Steve,
I have a question for you. Do you think it is fair that Steve Schwarzmann
pays less, percentage wise, on his income, than you do on yours? Of course
I am assuming that you or you and your wife combined, make a six figures.
"SMBalloon" <smballoon@xxxxxxx> wrote in message
news:be11835685982t7lakheds7cbn1jkg8jt5@xxxxxxxxxx
Who business is betting on
In a wide-open race, candidates are scrambling to get CEO
endorsements. Our exclusive Fortune survey goes behind the scenes from
Wall Street to Silicon Valley to find surprising alliances and
discover how they were forged.
By Nina Easton, Fortune Washington bureau chief
June 25 2007: 5:17 PM EDT
(Fortune Magazine) -- One of Hillary Clinton's most important
courtships began early last year, around a formal dinner table at
Georgetown's Four Seasons Hotel. Her targets were Morgan Stanley CEO
John Mack and his wife, Christy. Mack was already active politically -
but on behalf of Clinton's political opponents. A Bush "Ranger," he
had raised at least $200,000 for the President's reelection bid and
was one of the most prominent business names on GOP donor lists. At
one time his name had circulated as a potential Bush Treasury
Secretary.
But these are strangely fluid political times, with long-held
alliances shifting under the weight of an unpopular President, an
unpopular war and no obvious White House heir on either side.
Morgan Stanley (Charts, Fortune 500) chief administrative officer
Thomas Nides, a former Clinton trade official and one of the
Democratic Party's more astute strategists, understood the
possibilities better than most. That's why he had invited the Macks to
a fundraiser for Clinton's Senate reelection at his Washington home -
and then completed the evening by taking the trio to dinner at the
Four Seasons.
The subject of a Clinton presidential bid never came up that night -
except in Nides's whirling brain. He knew that the prospect of
persuading his Republican boss to support a Clinton presidential bid
was a long shot.
But he also appreciated the importance of trying. Adding such a
prominent GOP executive to the Clinton roster would counteract
business fears that the former First Lady is a big-government,
big-spending, big-taxing liberal. "It would say to the business
community, 'It's safe to swim here,'" Nides recalled.
The conversation that night ranged widely, but always returned to one
subject: health-care reform. John Mack chairs the board of trustees at
New York-Presbyterian Hospital. Christy Mack, the daughter of a
doctor, helped found the Bravewell Collaborative to promote health
care that treats "the whole person, not just the disease."
Hillary Clinton was on familiar territory - and managed to charm the
couple not only with her "intelligence and educated responses," as
Christy Mack recalls, but also with her one-on-one charisma. "You have
these preconceived ideas about people you see in the public eye," says
Christy. "But we were extremely impressed with her ability to connect
with every single person. She was an amazing listener, with tremendous
warmth."
The relationship could have ended there - a New York Senator engaging
her local constituents. But early this year Clinton upped the ante
with a phone call to the Morgan Stanley CEO, asking him to support her
presidential bid. When he demurred, she asked for a meeting. Once
again - this time over coffee - John and Christy Mack found themselves
enticed. When Mack returned to his office, he told Nides he was ready
to commit. "John, you can wait, you don't have to commit yet," Nides
responded. "No," Mack replied, "early support is better support." Days
later Mack picked up the phone and sealed the deal. Clinton, Nides
recalls, "put the time in."
Multiply that effort many times over, and you can understand why the
safe to swim signs are sprouting up all over Clinton Inc. Yet she is
not the only Democrat to achieve surprising success in a realm
traditionally taken for granted by Republicans. Her leading Democratic
opponent, Barack Obama, has made forays into Wall Street and Hollywood
to nab business support. He, too, has found admirers among top
Republicans, most notably John Canning Jr., CEO of Chicago
private-equity firm Madison Dearborn.
For their part, top GOP candidates like Rudy Giuliani, John McCain and
Mitt Romney have lined up a small army of pinstriped pitchmen. But
what's different this time is that CEOs are up for grabs on both
sides. A Fortune survey of where business leaders are lining up in the
2008 race, based on dozens of interviews with top executives, reveals
a concerted push by Democratic candidates to secure the blessing of
big business while they continue to take their swipes at corporate
America on behalf of the little guy.
Even at this early stage of the primary race, the business
endorsements of Clinton alone rival - in size, scope and prestige the
list of CEOs publicly supporting the Kerry-Edwards ticket in the 2004
general election.
The more than 150 top executives who have raised money for Clinton
represent such brand names as Anheuser-Busch (Charts, Fortune 500),
Comcast (Charts), Estée Lauder, Palm (Charts), Sun Microsystems
(Charts, Fortune 500) and Qualcomm (Charts, Fortune 500). Venture
capitalist James D. Robinson III, the former CEO of American Express
and a longtime Republican, told Fortune he now supports Clinton for
President, citing her "breadth of experience, especially on the
international level, which is critical for going forward."
Crossing party lines
A difficult war tests loyalties among business leaders, just as it
does among other voters, who increasingly identify themselves as
Democrats. But Iraq is only one factor behind this year's wide-open
race for business support. With the scandals of the early part of the
decade behind them, corporate leaders are once again emerging as
opinion leaders - not only speaking out on such issues as health care,
taxes and the environment, but calling for government action.
"This has been an important period for businesses of all sizes,"
Clinton told Fortune. "They really can't control health-care costs."
And Clinton's Senate tenure has been a significant antidote to her
controversial stint as a First Lady proposing health-care reform,
which critics decried as an attempt to nationalize medicine. "There
has been a real opportunity to know me and work with me," she says,
"and to develop personal friendships."
Not to be discounted is that corporate America likes to bet on
winners. Coming on the heels of the Democratic takeover of Congress,
the party has a real shot at winning the White House. For Republican
candidates, a sour political environment is only the beginning of the
battle.
With several strong candidates and no clear front-runner, a business
community that largely united behind George W. Bush in 2000 and 2004
is now more fractured, with most major Bush donors still sitting on
the sidelines. "Even in 2000, Bush was the presumptive nominee," notes
longtime GOP fundraiser and Thayer Capital chairman Fred Malek.
"Signing up with Bush was a no-brainer."
Business leaders can provide added heft to a candidate's fundraising
efforts - the major candidates are expected to raise a record $1.4
billion in this race - but they also help a candidate's image
branding. Democrat John Edwards, who offers sharp-edged populism, is a
tougher sell to business. But Clinton and Obama view CEO support as a
key part of their crossover appeal.
A roster of business endorsements "says to voters that you'll be
strong on the economy," says Clinton campaign chair Terry McAuliffe.
Most of the top-tier candidates - Republican and Democrat - have made
pilgrimages to the Business Roundtable's offices in Washington to
pitch some 60 CEOs at a time.
Longtime Republican Harry Sloan, chief of MGM Studios, told Fortune he
had been approached by Obama and Clinton, as well as supporters of
second-tier candidates Christopher Dodd and Joseph Biden. But he's
sticking with McCain, whom he calls "the most principled political
leader of our generation."
Still, Sloan notes that McCain is a more difficult sell than in his
2000 run, when he even drew admirers from liberal-dominated Hollywood.
Those days are over. "Because of the Iraq war and John's position on
the war right now, the same people aren't prepared to fully support
him," says Sloan. "And many haven't given money for that reason."
Despite Democratic inroads into the business community, the three top
declared GOP candidates have long careers that give them connections
to name-brand players. Former Massachusetts Governor Romney has used
his deep roots in business to enlist the likes of Miami Dolphins owner
H. Wayne Huizenga and Utah Jazz owner Larry Miller, as well as Staples
founder Tom Sternberg.
In Silicon Valley he counts on eBay CEO Meg Whitman and Next Solutions
CEO Doug Wilson, while onetime colleagues like Bain & Co. founder
William Bain, his former boss, stand by their man. "It's the strength
of his leadership ability, his get-it-done attitude," says Marriott
CEO Bill Marriott.
Giuliani's Wall Street support isn't as broad as that of fellow New
Yorker Clinton, but he has culled important business support in Texas
and elsewhere. Billionaire hedge fund manager T. Boone Pickens has
raised nearly $1 million for the candidate. "In New York he cleaned up
the city, ran Mafia convictions, then [handled] 9/11," Pickens says.
Giuliani also has the support of Texas Rangers owner Tom Hicks,
billionaire investor Sid Bass, and superstar activist Carl Icahn.
McCain has won the backing of FedEx chief Fred Smith, Cisco CEO John
Chambers, New York Stock Exchange chief John Thain, and Boston
Scientific's Pete Nicholas. In contrast to the grass-roots
conservative voters McCain is trying to woo in his primary battle, top
executives applaud the Senator's willingness to work with Democrats on
issues like immigration reform.
Mixed loyalties
This year's scramble for the business seal of approval can make it
hard for candidates to pin down a loyal commitment. Blackstone Group
CEO Stephen Schwarzman and Amgen CEO Kevin Sharer have written checks
to McCain - and to Romney. Verizon CEO Ivan Seidenberg has donated to
John McCain - but also to Clinton. Among Democrats, too, looks can be
deceiving. Much attention was lavished on hedge funder Paul Tudor
Jones's splashy May 19 fundraiser for Obama at his waterfront mansion
in Greenwich, Conn. Less noticed was the $2,300 check he wrote to
Giuliani just two months earlier.
David Geffen invited presidential prospect Michael Bloomberg to his
Beverly Hills home June 19 for an intimate dinner - but he's formally
supporting Obama. "I'd say 75 percent of the donor community in
Hollywood has given to multiple candidates," says Andy Spahn, longtime
political advisor to top entertainment figures. "For these people
$2,300 [the legal cap on donations] is not a stretch."
Regardless of their personal feelings, many CEOs avoid publicly
aligning themselves with a candidate, concerned about offending
boards, employees and customers.
"If you're a consumer products company and you get your head up too
high, you're going to alienate some customers," notes Malek. "Even if
you produce industrial products - there are customers who are
Democratic and customers who are Republican."
But FedEx CEO Smith insists that his personal support for McCain
aligns with his company's interest in reducing America's dependence on
foreign oil and maintaining a robust free-trade stance. "Those would
be two of the issues that loom very large in this election that would
be directly on point with FedEx's business interests," he told
Fortune. Likewise, supporters of Democratic candidates say their
companies would benefit from federal action to reform the health-care
system.
When I told a leading GOP fundraiser the news that John Mack had
thrown his weight behind Clinton, she was stunned. "You're kidding me,
right?" (Actually she expressed the sentiment more graphically.) Says
GOP veteran Malek, a McCain supporter: "It concerns me that any
solid-thinking top businessperson would go the Democratic route, given
the party's liberal ideology."
Clinton's critics say a close reading of her Senate record should give
business leaders pause. The Chamber of Commerce estimated that she
voted with that group's position 45.8 percent of the time; for the
National Association of Manufacturers, it was 16 percent in the last
Congress. Still, notes a conservative investment banker, "I don't
think Hillary Clinton scares people the way she did in the '90s." And
that gives her an opening with former opponents.
Jeffrey Volk, global head of Citigroup's agency and trust business,
was with his wife and freshman daughter at Tulane University when
Hurricane Katrina struck. (Like others interviewed for this story,
Volk stressed that his political views are personal and not his
firm's.) The family was stranded in a hotel room, fearful - like
others - as power faltered, water levels rose and chaos engulfed New
Orleans. His many efforts to reach Washington officials ended in a
black hole of automated voicemail.
That was when this lifelong Republican called his home-state Senator's
office. The Clinton staffer who took his case wasn't able to produce
an airlift for stranded New Yorkers and others, as Volk requested, but
he did call the family several times a day to check on them. "When I
was in harm's way, her office was there to help me and my family,"
Volk says.
When he returned to New York, Volk made it a point to meet Clinton at
a small event at the home of a mutual friend in White Plains. He went
there simply to thank her, but at the end of a two-hour policy
discussion, Volk - who once helped Ronald Reagan craft an economic
platform - had decided he wanted to support her.
What converted him: "Her knowledge of issues, the tradeoffs you have
to make for a pragmatic policy, her grasp of details on subjects
ranging from fiscal policy to taxes and trade."
But Clinton doesn't always go over with business executives -
especially outside Wall Street, Silicon Valley, and Hollywood. Obama
Democrats insist that Clinton remains a polarizing figure, which gives
their candidate - with his "let's all get along" theme book - his own
opening in the business community.
Obama's inclusive style is often an easier sell to corporate leaders
looking for someone with whom they can do business. Obama supporters
say that while Clinton is relying on establishment Democratic players,
they've tapped into a new pool of business leaders who weren't
politically active before now. "That pool of people is vastly larger"
than the usual suspects, says Boston Provident partner Orin Kramer, a
leading Democratic figure in New Jersey.
Wall Street in particular began leaning Democratic in the 2006
congressional election, making it a ripe target for Obama and Clinton.
Their GOP foes are bemused by the trend. "A lot of hedge fund managers
and others who are younger don't remember when you had bad tax policy
and how powerful the negative effects can be on the economy," says
investor James Higgins, co-founder of the conservative Monday Meeting
in Manhattan.
Indeed, on tax policy especially, most business leaders are out of
sync with Democrats, who want to limit the Bush tax cuts, penalize
companies that build plants overseas, and increase taxes on private
equity and tax funds. Asked about this, Clinton's GOP business
supporters say they have other priorities. Volk wants to see the
federal budget balanced. Robinson wants healthcare and education
policies that will improve America's competitiveness. Hillary Clinton
says simply, "It's important not to have a tax discussion separate
from [deciding] what are our goals."
For Clinton, there is an underlying tension between the candidate who
can do business with business - and the candidate who must curry
support from the party's left wing to win the nomination.
At a speech before grass-roots activists in Washington on June 20, she
was booed by antiwar activists but applauded when she took corporate
America to task. Deriding the country's "highest concentration of
wealth ... since 1929," she declared,"Let's start holding corporate
America responsible, make them pay their fair share again. Enough with
the corporate welfare! Enough with the golden parachutes! And enough
with the tax incentives for companies to ship jobs overseas. We have
to make sure there is not a single benefit they would get for doing
that."
Five hours later she was on the phone with Fortune - and her tone was
far more measured. Asked how she could balance an appeal to business
with that sharp rhetoric, the Senator answered, "To me it's about
getting back into balance. It's the search for that balance that's
appealing to a lot of business leaders. They know I'm trying to figure
out how we can have shared prosperity." As any CEO can tell you, it
ain't as easy as it sounds.
Hillary Rodham Clinton
Through persistence and patience, Clinton has assembled what is
probably the broadest CEO support among the candidates, ranging from
Wall Street to Hollywood.
John Mack CEO, Morgan Stanley Winning over the longtime Republican
sent a signal about Clinton's clout on Wall Street.
Sheryl Sandberg VP, global online sales, Google "I was always hoping
she'd run for President. She's uniquely qualified."
Steve Rattner Managing principal, Quadrangle Group "I've been a
longtime supporter of the Clintons. I knew I'd end up in her camp."
Steven Spielberg Co-founder, DreamWorks The mogul co-hosted a
fundraiser at the home of News Corp. president Peter Chernin.
Haim Saban CEO, Saban Capital Group "I endorsed Hillary before Hillary
decided to endorse herself. I'm on a mission."
James D. Robinson III General partner, RRE Ventures The former AmEx
CEO likes her "breadth of experience, especially on the international
level."
Rudolph Giuliani
The former New York City mayor has built a team of fundraisers he has
known since early in his career, but his support on Wall Street
suffers a bit from lingering feelings that he was overzealous as a
prosecutor.
Carl Icahn Billionaire investor and activist "Republicans have to pick
the candidate most likely to beat Hillary Clinton. Rudy is the one."
T. Boone Pickens Founder, BP Capital hedge fund "Every time they rang
the bell, the guy was there. He finished every fight."
Paul Singer Founder, Elliott Assoc. hedge fund "I believe the mayor is
the strongest and most conservative candidate in the race."
Bill Simon Venture capitalist "When you're the mayor of New York, you
do have a foreign policy."
James Turley CEO, Ernst & Young Besides creating a business alliance
with Giuliani in 2002, Turley is a fundraiser.
Randy Levine President, New York Yankees "He did an outstanding job
during and after 9/11. Overtime he's become a great leader."
Barack Obama
The Illinois Senator has a solid base of business support in Chicago
but has also fared well with Hollywood media moguls and has
aggressively moved into Clinton's turf among East Coast financiers.
Oprah Winfrey Founder, Harpo Productions Her endorsement of Obama was
the first ever forthe billionaire media powerhouse.
Penny Pritzker Chairman, Classic Residence by Hyatt "I've watched him
dialogue with CEOs. Heads are nodding, people are excited."
David Geffen Co-founder, DreamWorks He endorsed Obama - but first took
a public swipe at his old friends, the Clintons.
Jeffrey Katzenberg Co-founder, DreamWorks "His sense of right and
wrong, what's just and fair, is what's needed for these times."
James S. Crown President, Henry Crown & Co. The investor says his
family, one of Chicago's wealthiest, "is solidly behind" the
candidate.
Orin Kramer General partner, Boston Provident "We're tapping into
people in business who haven't been involved in the process."
Mitt Romney
Romney has accumulated an impressive business lineup just by courting
the "low-hanging fruit," as Bill Marriott puts it, of friends and
associates from private equity, Boston, and the Mormon community.
Bill Marriott CEO, Marriott International Tapping his deep Rolodex in
the hotel industry. "People like what he did with Massachusetts."
David Neeleman Founder and former CEO, JetBlue Trying to bring Mitt
into the middle ground. "I think he's moderate in a lot of ways."
Bill Bain Founder, Bain & Co. Über-consultant and longtime mentor.
"Mitt understands why companies decide to invest."
Meg Whitman CEO, eBay Serves as campaign chair. "Democrat or
Republican, he would hire the right people."
Wayne Huizenga Owner, Miami Dolphins Courted by Rudy, but likes Mitt's
"conservative principles, like smaller government."
Bill Harrison Former CEO, J.P. Morgan Chase Hosts Greenwich, Conn.,
and New York City events. "Mitt connects unbelievably well with
people."
John Edwards
As a former trial lawyer campaigning on a pro-union platform, Edwards
is not the go-to guy for big business. Yet he has important allies,
including many at a hedge fund where he once consulted.
James Sinegal Co-founder and CEO, Costco stores The lifelong Democrat
threw his support behind Edwards after hearing his plans on health
care.
Wesley Edens CEO, Fortress Investment Group About 100 of the secretive
financier's employees have donated to Edwards's campaign.
Leo Hindery Chairman, InterMed Advisors Edwards has made the former
cable-TV magnate his senior economic advisor.
Howard Schultz Chairman, Starbucks The coffee mogul hosted a
fundraiser at his Seattle home for about 150 potential donors.
Andy Rappaport Venture capitalist, August Capital "I believe that if
the 2004 ticket had been reversed, John Kerry would be Vice President
today."
Jason Flom CEO, Capitol Music Group Flom has sought support for
Edwards within the music industry by hosting fundraisers.
John McCain
The Senator from Arizona has gone head-to-head with the Senator from
New York to win Wall Street support. A key ally is Lew Eisenberg,
former chief of the Port Authority and powerful Bush fundraiser.
Fred Smith Founder and CEO, FedEx "He does what he thinks is right,
The most current example is the immigration issue."
James B.Lee Jr. Chairman, J.P. Morgan Chase Investment Bank This
captain of Wal I Street is a national co-chair of the campaign.
David Pottruck CEO, Red Eagle Ventures "He's not afraid to do the hard
things. He has the character and the energy and commitment."
James Chambers CEO, Cisco Systems "He understands the value that
technology contributes to economic prosperity."
John Thain CEO, NYSE Euronext Another campaign co-chair, he's working
with Lee to make inroads on Clinton's turf.
Harry Sloan CEO, MGM movie studio "I made the decision to support him
before there were any other candidates."
Full disclosure: Writer Nina Easton's husband is a consultant to the
McCain campaign.
Reporter associates: Telis Demos, Joan L. Levinstein, Jenny Mero and
Christopher Tkaczyk
From the July 9, 2007 issue
(end of article)
.
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- NBC: Who business is betting on?
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