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Business titans shift to political arena
EXECUTIVES TURN POLITICIANS by Mark Gordon | Managing Editor
Businessmen Vern Buchanan and Tramm Hudson are leading Republican candidates to replace Katherine Harris as the party's nominee for the 13th District congressional seat in the U.S. House of Representatives. And since the district - which covers Sarasota, Hardee and DeSoto counties and parts of Manatee and Charlotte counties - is Republican-heavy, the winner of the Sept. 5 primary is considered a likely favorite to take the general election in November.
What's more, Buchanan and Hudson come to the election with a life built in entrepreneurism: Buchanan founded copy franchise American Speedy Printing in 1976 and the Buchanan Automotive Group in 1992. Hudson formed Enterprise National Bank in 1988, which later became RBC Centura, for which he was the head of the West Florida division.
Both candidates met with the Review to talk about why they would give up lucrative, lofty executive positions to be one of 435 congressional members chasing political glory. The discussion touched on many of the issues facing businesses on the Gulf Coast.
Here's a glance at why the candidates say they are running and how they feel about issues impacting the business community.
VERN BUCHANAN
Born: May 8, 1951; Detroit
Education: B.B.A. in business administration from Cleary University; M.B.A from the University of Detroit.
Family: Wife Sandy; sons Matt and James.
Business career: Founder of Buchanan Enterprises and the Buchanan Automotive Group, a chain of auto franchises with 18 dealerships in the Southeastern U.S. Founder of American Speedy Printing, a copy store franchise that grew into 730 outlets in 44 states.
Military career: Served six years in the Michigan National Guard.
Republican Party: Served as state finance chair for U.S. Sen. Mel Martinez' campaign and has been an active supporter and donor to President George W. Bush and Gov. Jeb Bush. Also served as co-chair of the Republican National Finance Committee.
Community service: Has donated time and/or money to the Boys and Girls Club, the Community Foundation of Sarasota County, the Walk to Cure Juvenile Diabetes, the American Heart Walk, the Mote Marine Laboratory and the Ringling Museum of Art.
Enough is enough.
Vern Buchanan uses that phrase several times in speaking about why he would be willing to give up his executive position to be one of potentially dozens of freshman representatives trying to make sense of Beltway politics. But Buchanan doesn't say it in a "throw the bums out of Washington" kind of way.
Instead, he means it about himself. He says since he's spent the last 30 years taking a pair of companies "from zero to something very successful," he's now seeking a new challenge, where he can use his skills in a different way. "At what point can I give something back?" Buchanan asks.
Just like his main primary opponent, Tramm Hudson, Buchanan says a chief reason for running is to promote the kind of entrepreneurial spirit that helped him succeed in business. "We want to create an environment that encourages risk-taking," he says. "That's the only way to win the global economic war."
Health care
Buchanan supports a wider use of Health Savings Accounts, tax-favored savings accounts that combine with high-deductible health insurance plans. That's one way small businesses can fight back against the rising costs of providing health care for employees.
"It's a big-time challenge," he says. People are living longer and while U.S. medical technology is at the forefront globally, some of the country's administrative systems are antiquated, Buchanan says, which further drive up costs.
Buchanan says he likes an idea that calls for small businesses to band together with each other so the combined entity can have stronger purchasing power. He also says curbing frivolous lawsuits that raise the costs of medical malpractice insurance is important, too.
Tort reform
Buchanan says putting an end to frivolous lawsuits would be a big boost to small businesses and entrepreneurs. "There's a general feeling in the country," Buchanan says, "that to get rich you either win the lottery or sue somebody."
He says that Florida took a step in the right direction in the last legislative session, when the Legislature and Gov. Jeb Bush passed a bill reforming class action lawsuits and repealed joint and several legislation, which had required businesses with deeper pockets to pay more in economic damages in negligence lawsuits.
Buchanan says he regularly hears from people that the British legal system gets is right when it comes to lawsuits: The loser of a suit pays the winner's legal costs. It's a good idea, he says, but probably wouldn't have large support in Washington.
Taxes
Buchanan says he supports a policy of cutting taxes that doesn't ignore balancing the federal budget. Specifically, he supports killing the estate tax, otherwise known as the death tax. His support is geared more toward protecting family farms that get penalized, he says then protecting the "Warren Buffetts of the world."
Buchanan also says he would be supportive of cutting the capital gains taxes to 15%, to boost further business investment.
Immigration
Buchanan's opinions on the immigration issues facing business owners stem from his main point that the "federal government has to follow through with the laws" already on the books. Past that, he supports building a high-tech fence along the portions of the U.S.-Mexico border that are the high-traffic spots for illegal alien crossings. The fence would include dual barriers and security cameras.
For solutions to the problem, Buchanan is against providing amnesty to illegal immigrants and says they shouldn't be rewarded with Social Security or guest worker programs.
TRAMM HUDSON
Born: Nov. 11, 1952; Montgomery, Ala.
Education: B.A. in history from Vanderbilt University, 1975; M.B.A from Emory University, 1981.
Family: Wife Sarah; daughters Glenn and Molly, son Harris.
Business career: Organizer and founder of Enterprise National Bank, which became part of Provident Bank and later, RBC Centura. Was the Florida division head at Provident and the West Florida division executive at RBC Centura.
Military career: Stationed in Germany as a cavalry officer in the Army's third infantry division and was later a company commander of an infantry battalion in the Florida National Guard. Retired in 1996 as a Lt. Col. in the Army Reserve.
Republican Party: Former chair of the Republican Party of Sarasota County; served as a Campaign Leader for Bush/Cheney in 2000 and 2004, as well as for the congressional campaigns of Porter Goss and Dan Miller. Served on the state finance committee for the Gov. Jeb Bush campaigns.
Community service: Board service includes the Sarasota Family YMCA and the United Way of Sarasota. He's also a past trustee of Manatee Community College.
Tramm Hudson admits it's corny, but one of his first thoughts in why he's running for office goes back to the movie Mr. Smith Goes to Washington, the Frank Capra classic that profiles an idealistic senator taking on corrupt Washington politicians. Even Hudson's wife makes fun of him for getting all pumped up when he watches the film.
But the nobleness resonates with Hudson. And after 25 years in banking, he has no reservations, he says, in giving up the rewards of being the boss to blending in with power-hungry politicians.
Hudson says the past few months have taught him some valuable lessons on how to morph from a top executive who makes clear and quick decisions to someone who can compromise and play well with others. The biggest lesson: Listening.
"The campaign trail breaks you in," Hudson says. "It forces you to listen to people" and take other points of view into account.
Just like Vern Buchanan, his main opponent in the primary, Hudson says his successful business career has been an impetus to running for office. "I understand," he says, "the importance of a strong, vibrant economy."
Health care
Hudson says one overlooked aspect of the health-care affordability crisis is people doing more to be healthy in the first place, such as dieting and exercise. "Personal responsibility is at the cornerstone of it," he says.
Hudson is also a fan of two initiatives to help small businesses when looking for health care coverage for employees. First, he promotes a wider use of Health Savings Accounts, tax-favored savings portfolios that combine with high-deductible health insurance plans. Second, Hudson supports associated health plans, which would allow a pool of small business to join together to get better coverage deals from health insurers.
Tort reform
Tort reform is a cousin of health-care reform, in Hudson's view. "We need complete tort reform," he says. "Frivolous lawsuits drive the cost of health care out of sight."
Hudson says that Florida is becoming a model for national tort reform, although the Sunshine State still ranks in the lower third nationwide in most national listings of the legal atmosphere businesses are up against. Hudson hopes the theories in the bills on class action lawsuit reform and joint and several legislation that were passed by the Legislature and Gov. Jeb Bush can get traction nationwide. "In terms of a business agenda," Hudson says, "tort reform has to be on the table."
Taxes
Hudson says the current tax system is essentially a wealth redistribution plan that penalizes savers and hard workers. "Our tax system is the most arcane and convoluted system out there," he says. "We need a simple, fair way to raise revenue for the federal government."
Hudson's biggest beef is with the estate tax, otherwise known as the death tax. He supports full repeal. "The death tax is cruel and unusual punishment," Hudson says. "To think that the day the grim reaper comes to your door, so does the tax man..." Hudson says he's also in favor of cutting the capital gains taxes, to spur more business growth.
"An entrepreneurial spirit should be encouraged," he says, "and right now our tax policy doesn't do that."
Immigration
The borders are the beginning and the end of the complex problem, Hudson says, and the first step is to secure them before dealing with the issue of illegal immigrants already in the U.S. Hudson opposes amnesty for those already here.
Hudson says the "catch and release" policy of detaining and releasing illegal immigrants and then expecting them to just show up for court is a "ludicrous" failure. It should be replaced by a policy of "catch and return," he says, where those caught crossing the border illegally will be quickly returned home and never allowed to return.
Hudson says he recognizes small business owners could be caught in the middle of the problem, as the Florida labor pool relies on immigrants. He suggests entrepreneurs continue seeking solutions, starting with revamping hiring practices to fit the new situation.
Being Buchanan: Lawsuits come with the territory
(Editor's note: The Review didn't ask Tramm Hudson questions about lawsuits against RBC Centura. Hudson was not a corporate officer of the North Carolina-based bank named in the litigation.)
Vern Buchanan says he doesn't hide from being sued by others in past business dealings, considering it the cost of doing business in a litigious society. "I'm the guy out there taking risks," Buchanan says, and part of that means people are going to be unhappy with his decisions and look for a court to step in.
Still, even Buchanan recognizes that leaving a firm he co-founded right before it filed for bankruptcy is bound to leave bitter affected creditors and shareholders. And that's what happened when Buchanan exited American Speedy Printing Inc. in 1992. The post-Chapter 11 days of the national copy chain were filled with franchisees shutting down and suing Buchanan and others, in addition to a $20 million-plus reorganization.
Buchanan says he sold his interest in the company in 1989 after a record sales year. But he stayed on as president, chairman and CEO for two more years. His final, formal leadership role with the company ended just days before the February 2002 bankruptcy filing.
Hence, the bitterness, bad feelings and lawsuits.
In an interview with the Review, Buchanan says the problems at American Speedy arose after the new owners took control. They made decisions, he says, including the one to file for bankruptcy, even though Buchanan still held the lofty and decision-making titles.
Buchanan says he learned a lesson: After you sell control, get out.
On the bad feelings left in the wake of American Speedy's Chapter 11 and his walking away with the wherewithal to buy an auto dealership and build again, Buchanan takes the long view. He cites statistics about how most small businesses fail and anecdotes out of his own personal deals, that there are always a few that don't work out. That goes with the territory for any entrepreneur, he says. "The magnitude of what I've done is unbelievable," Buchanan says. "I'd compare my business career to anyone's."
Money & Politics
Here's a total of all the money the candidates for the 13th congressional District have received as of Aug. 15.
REPUBLICANS
Vernon Buchanan $2,208,883
Tramm Hudson $959,185
Nancy C. Detert $243,318
Mark G. Flanagan $146,005
Donna Clarke $58,980
DEMOCRATS
Christine Jennings $788,841
Jan Schneider $170,154
Source: Opensecret.org; the Center for Responsive Politics
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