Jeb Bush’s busy role on corporate boards could become 2016 issue
During his transition from Florida governor to likely presidential candidate, Jeb Bush was on the boards or an adviser to at least 15 companies and nonprofits, a dizzying array of corporate connections that earned him millions of dollars and occasional headaches. Bush returned to corporate America after leaving the governor’s mansion in early 2007, and his industry portfolio expanded steadily until he began shedding ties late last year to prepare a run for president. Executives who worked alongside Bush describe him as an engaged adviser with an eye on detail. Yet experts question how anyone could serve so many boards at once effectively. “Board of directors and advisory boards are in charge of high-level oversight,” said law professor Elizabeth Nowicki, a former Securities and Exchange Commission lawyer. “You cannot possibly do that simultaneously for 10 or 15 entities.” There is no formal rule limiting the number of boards one person can serve. But in the wake of the Enron scandal, where flimsy board oversight contributed to the company’s infamous meltdown, and a federal law that increased liability for a public company’s director, common sense dictates a small number, Nowicki said. “If somebody starts serving on more than three or four boards that’s a problem,” she said. Three boards should be the maximum, agreed Zabihollah Rezaee, a University of Memphis accounting professor who has written books about corporate governance. “Board members are representing shareholders, and they are responsible to shareholders for financial integrity,” Rezaee said. “Best practices” dictate a small number, he said, “because of the amount of time it requires to be effective.” Bush was on the boards or as an adviser to 11 companies or nonprofits at a time each year from 2010 to 2013, The Associated Press found. Those ties were in addition to his own businesses, such as Jeb Bush & Associates, and the educational foundations he created. In 2010 Bush was on the board of directors of eight different entities, as adviser to a ninth company and advisory board member for two others. In 2013, he was on six boards, as an adviser to another company and on the advisory board of four more entities. “Gov. Bush has always conducted his business with the highest integrity and performance, just as he did when he served as Florida’s chief executive for eight successful years,” Bush spokeswoman Kristy Campbell said in a prepared statement. She noted that not all the corporate entities were the same — some were board slots, some advisory positions and others nonprofits — and suggested it was unfair to put all in the same basket. AP’s review found that Bush was on the board of directors of as many as seven for-profit companies at a time, well more than experts suggest — while at the same time serving as an adviser to other companies and nonprofits. Bush’s experience on corporate boardrooms could evolve into a theme during the 2016 race for the presidency. Among the issues the Florida Republican could be asked to explain: One company that paid Bush $15,000 a month as a board member and consultant, InnoVida Holdings, collapsed in fraud and bankruptcy, with the company’s CEO, Claudio Osorio, now serving 12½ years in prison. Bush joined InnoVida despite warning signs that Osorio’s prior company dissolved amid bankruptcy and allegations of fraud. At least five companies where Bush was on the board or an adviser faced class-action lawsuits from shareholders or legal action by the government. Some of the most sweeping cases, involving allegations of fraud or environmental damage, remain active. The Securities and Exchange Commission subpoenaed one of the companies, Rayonier Inc., in November, shortly before Bush’s exit. Bush earned $3.9 million from four companies alone since 2007, the AP found, plus $25,000 a year more from a medical company in Georgia, $9,600 annually from Bloomberg Philanthropies and zero pay from a drug addiction nonprofit. His earnings from eight other companies are unknown, and Bush has declined AP’s requests to disclose his compensation — raising questions about how open he would be as a presidential candidate. Bush was a board member or adviser to publicly traded health care, timber, gold mining and sanitation companies; for private firms involved in housing, finance, medicine, higher education and decontamination; and for nonprofits focused on drug addiction and philanthropy. He served on the board of directors for nine of the 15, and as an adviser or advisory board member for the others. Two of the 15 are nonprofits. Once Bush officially declares for president, he will have 45 days to file a public disclosure form listing his sources of income for the prior year. Those forms include broad ranges for the values of assets or salaries that can be used to estimate a politician’s net worth, but they will not be precise totals and will capture just the prior year. “Until you say the magic words ‘I am running for president,’ there are a whole lot of restrictions that don’t apply to you. I think this is an advantage he is taking,” said Bill Allison, a senior fellow with the Sunlight Foundation, a nonprofit that advocates for open government. “There just should be an expectation of transparency around anything that a presidential candidate is involved with, whether it’s a nonprofit foundation or their past employers.” Spokeswoman Campbell said, “If he becomes a candidate, he’ll comply with all necessary financial disclosures. That is an approach consistent with what he did in all three of his campaigns for governor.” Re-joining the corporate world Bush returned to corporate America less wealthy than when he took office. Bush’s net worth, $2 million when he was elected Florida governor in 1998, dipped to less than $1.3 million by the time he left office in the first days of 2007, his financial disclosure forms show. The decline came largely from a diminished investment portfolio. He also earned less as governor — $129,000 his last year in office — than in the private sector, where he had been paid $755,000 annually
Jeb Bush preparing to delegate many campaign tasks to super PAC
Jeb Bush is preparing to embark on an experiment in presidential politics: delegating many of the nuts-and-bolts tasks of seeking the White House to a separate political organization that can raise unlimited amounts of campaign cash. The concept, in development for months as the former Florida governor has raised tens of millions of dollars for his Right to Rise super PAC, would endow that organization not just with advertising on Bush’s behalf, but with many of the duties typically conducted by a campaign. Should Bush move ahead as his team intends, it is possible that for the first time a super PAC created to support a single candidate would spend more than the candidate’s campaign itself — at least through the primaries. Some of Bush’s donors believe that to be more than likely. The architects of the plan believe the super PAC’s ability to legally raise unlimited amounts of money outweighs its primary disadvantage, that it cannot legally coordinate its actions with Bush or his would-be campaign staff. “Nothing like this has been done before,” said David Keating, president of the Center for Competitive Politics, which opposes limits on campaign finance donations. “It will take a high level of discipline to do it.” The exact design of the strategy remains fluid as Bush approaches an announcement of his intention to run for the Republican nomination in 2016. But at its center is the idea of placing Right to Rise in charge of the brunt of the biggest expense of electing Bush: television advertising and direct mail. Right to Rise could also break into new areas for a candidate-specific super PAC, such as data gathering, highly individualized online advertising and running phone banks. Also on the table is tasking the super PAC with crucial campaign endgame strategies: the operation to get out the vote and efforts to maximize absentee and early voting on Bush’s behalf. The campaign itself would still handle those things that require Bush’s direct involvement, such as candidate travel. It also would still pay for advertising, conduct polling and collect voter data. But the goal is for the campaign to be a streamlined operation that frees Bush to spend less time than in past campaigns raising money, and as much time as possible meeting voters. Bush’s plans were described to The Associated Press by two Republicans and several Bush donors familiar with the plan, who spoke on condition of anonymity because the former Florida governor has not yet announced his candidacy. “This isn’t the product of some genius thinking,” said a Republican familiar with the strategy. “This is the natural progression of the rules as they are set out by the FEC.” Bush spokeswoman Kristy Campbell said: “Any speculation on how a potential campaign would be structured, if he were to move forward, is premature at this time.” The strategy aims to take maximum advantage of the new world of campaign finance created by a pair of 2010 Supreme Court decisions and counts on the Federal Election Commission to remain a passive regulator with little willingness to confront those pushing the envelope of the law. One reason Bush’s aides are comfortable with the strategy is because Mike Murphy, Bush’s longtime political confidant, would probably run the super PAC once Bush enters the race. Meanwhile, David Kochel, a former top adviser to Mitt Romney‘s campaigns and an ally of Bush senior adviser Sally Bradshaw, would probably be the pick to lead Bush’s official campaign. “Every campaign is going to carefully listen to the lawyers as to what is the best way to allocate their resources and how to maximize them,” said Al Cardenas, former chairman of the American Conservative Union and a Bush adviser. “Nobody wants to relinquish any advantage.” For Bush, the potential benefits are enormous. Campaigns can raise only $2,700 per donor for the primary and $2,700 for the general election. But super PACs are able to raise unlimited cash from individuals, corporations and groups such as labor unions. In theory, that means a small group of wealthy Bush supporters could pay for much of the work of electing him by writing massive checks to the super PAC. Bush would begin a White House bid with confidence that he will have the money behind him to make a deep run into the primaries, even if he should stumble early and spook small-dollar donors, starving his own campaign of the money it needs to carry on. Presidential candidates in recent elections have also spent several hours each day privately courting donors. This approach would not eliminate that burden for Bush, but would reduce it. “The idea of a super PAC doing more … means the candidate has to spend less time raising money and can spend more time campaigning,” said longtime Mitt Romney adviser Ron Kaufman, who supports Bush. The main limitation on super PACs is that they cannot coordinate their activities with a campaign. The risk for Bush is that his super PAC will not have access to the candidate and his senior strategists to make pivotal decisions about how to spend the massive amount of money it will take to win the Republican nomination and, if successful, secure the 270 electoral votes he will need to follow his father and brother into the White House. “The one thing you give away when you do that is control,” Kaufman said. Bush will also be dogged by advocates of campaign finance regulation. The Campaign Legal Center, which supports aggressive regulation of money and politics, has already complained to the FEC that Bush is currently flouting the law by raising money for his super PAC while acting like a candidate for president. Others are on guard, too. “In our view, we are headed for an epic national scandal,” said Fred Wertheimer, president of the pro-regulation group Democracy 21. “We intend to carefully and closely monitor all the candidates and their super PACs, because they will eventually provide numerous examples of violations.” All of the major candidates for president
