As Another Pence Runs for Congress, His Business Record Raises Questions

Greg Pence, the brother of Vice President Mike Pence, attended a rally in Indianapolis where President Trump spoke about tax reform in September.

COLUMBUS, Ind. — When you have the best known name in your congressional district and your younger brother is a heartbeat away from the presidency, it is difficult to run a stealth campaign. But Greg Pence is doing a pretty good job of it.

Mr. Pence has skipped candidate debates and declined to give interviews or release a public schedule, instead posting after-the-fact campaign snapshots on Twitter or Facebook, often smiling, wearing a red fleece vest with his name on it. His first television ad featured President Trump and did not mention his brother, Vice President Mike Pence.

His inspiration for running? “I looked in the mirror and said, ‘If not me, who?’” he told The Columbus Republic in February in the only extensive interview he has granted.

Hardball it is not. Legacy politics it is.

Hardly the first candidate to run on a famous name, Mr. Pence, 61, extols two central credentials in his House bid: his service in the Marines and his success as a business executive. But an examination of his record in business shows decidedly mixed results. He was the president of a convenience store chain — making key strategic decisions — that filed for bankruptcy protection and was assessed penalties of $8.4 million by the State of Indiana for environmental damage, caused primarily by leaking underground storage tanks.

A local bank, where he also served on the board of directors, was forced to sue him to recover $3.8 million in debts that he had personally guaranteed, only to have to settle for pennies on the dollar.

But when he needed a second chance, one seemed to be waiting for him.

Mr. Pence’s race in a safely Republican district where he has lived most of his life — stretching from the far eastern suburbs of Indianapolis to Muncie in the north and the Kentucky line to the south — shows the durable power in politics of a famous name and insider connections even in an outsider era.

The older Mr. Pence has the same white hair, genial bearing and deeply conservative politics of his brother, and his campaign is tethered to the Trump administration. He pledges to help advance Mr. Trump’s “Make America Great Again” agenda in Congress. The vice president held a fund-raiser for him at the Trump International Hotel in Washington recently, and Donald Trump Jr. will headline another later this month in New York.

The race is Mr. Pence’s first for public office, and he has largely avoided attention and scrutiny. But that strategy will be tested as the Republican primary on May 8 approaches. He faces at least one serious challenger, Jonathan Lamb, who has put more than $800,000 of his own money into the race and calls himself a serial entrepreneur. He said Mr. Pence’s run smacked of nepotism.

“No amount of money in the world can buy the name ID that Pence has,” Mr. Lamb said. “But with name ID, you step on toes. People don’t want to see this dynasty, like the Kennedys and Bushes.”

Mr. Pence has never displayed the political ambitions of his brother, who was elected in 2000 to the House seat that he now seeks, then Indiana’s governor in 2012, before joining Mr. Trump’s ticket in 2016. The elder Mr. Pence’s campaign says he is “ready to serve again,” a reference to his enlistment in the Marines in 1979 after he graduated from Loyola University in Chicago.

He also highlights his business experience, which he said showcased how he cared for his employees, putting their interests ahead of his own. His most prominent position was when he served as president of Kiel Brothers Oil Company from 1998 until 2004.

Kiel Brothers was a growing family business in Columbus when its founder, Carl Kiel, asked Edward Pence, the father of Greg and Mike, to join the company in 1965. They sold fuel to service stations, then eventually went into the convenience store business, which grew to more than 200 outlets, primarily in Indiana and Kentucky, mostly under the name Tobacco Road.

“Want a smoke, a Coke or a tank of gas? Kiel Brothers Co. is there to serve you,” a company description in Hoover’s said. The company prospered, building a corporate headquarters in Columbus, where it held a place of esteem.

When Mr. Pence died in 1988, the Kiel family turned to Greg Pence to join the business. Mr. Pence steadily took on more responsibility until he became president in 1998. With that came other obligations to the company, and he and a younger member of the Kiel family, Theodore, each signed personal guarantees to the local Home Federal Bank to obtain loans to continue to expand.

A year later, Mr. Pence was named to Home Federal’s board of directors. As he was becoming a more prominent member of the Columbus business community, Mike was a rising power in the Republican Party.

Mr. Pence signed another guarantee in 2001, records show, promising to repay any outstanding debts from his personal assets if the need arose.

Three years later, it did — the company filed for Chapter 11 bankruptcy protection, facing $100 million in claims from creditors.

At the next regular board meeting of the bank, with the officials seated around a wooden conference table, Mr. Pence told them about the bankruptcy and said he would not be able to honor his personal guarantee to repay company loans. He acknowledged the obvious conflict of interest, board members said, and resigned from the board.

He had resigned abruptly from the company as well, leaving the restructuring work to the chief financial officer, David E. Roll, who, bank officials said, worked tirelessly, sometimes until midnight, trying to keep the company afloat. Attempts to reach Mr. Roll were not successful.

Last Monday, in a video on Twitter in which he discussed his views on the economy, Mr. Pence said of his business experience: “You have to put your employees and customers before yourself. I’ve always done that.”

That is not how former bank and company officials said Mr. Pence acted when it mattered most. While businesses fail all the time, said one former bank official who spoke on the condition of anonymity to discuss internal matters, such failures reveal the character of those involved, and Mr. Pence had “bailed.”

Another bank board member, Harold Force, who runs a construction company in Columbus, had no criticism of Mr. Pence, but acknowledged the consequences of the failure of a homegrown company that he described as a “pillar” in the town of 46,000 in southern Indiana.

“When a company like that comes to an end, there are probably a lot of loyal people who are let down in some ways, heartbroken in some cases,” Mr. Force said, adding, “I think everybody regrets that.”

Jay Jaffe, a lawyer in Indianapolis who represented the company in the bankruptcy proceedings, defended Mr. Pence’s actions. “I would not say he ran away because he wanted to run from a bad situation,” Mr. Jaffe said. “He stuck around for a long time to try to make the situation work.”

Kyle Robertson, the spokesman for Mr. Pence’s campaign, said in a statement that “prior to his departure, Mr. Pence negotiated and secured a KERP (Key Employee Retention Plan) that would help employees going through the eventual transition. Mr. Pence voluntarily forfeited his KERP when he resigned.”

The account of Mr. Pence’s actions and the bankruptcy is based on interviews with a half- dozen former bank officials and others with ties to the company, along with a review of hundreds of pages of court records, including in the bankruptcy case. One of the creditors in the case was the Indiana Department of Environmental Management, which said that the company had caused $8.4 million in damage to the state.

In a separate legal action, Mr. Pence also refused several attempts from the bank to collect money based on his personal guarantee, forcing the institution to go to court.

Pence campaign officials defended the candidate’s actions.

“Mr. Pence chose to resign in order to pursue other opportunities,” Mr. Robertson said in response to written questions. “Everyone knows the oil and gas industry changed rapidly in the 1990s and early 2000s, and many small, independent companies like Kiel Brothers were not able to survive because of the national consolidation.”

Records from the Superior Court in Indianapolis show that Home Federal Bank won a $3.8 million civil judgment against Mr. Pence to satisfy the personal guarantees. But former bank officials said he settled the matter for a small fraction of that amount. In contrast, Theodore Kiel lost his primary residence as part of his effort to satisfy his guarantee.

Mr. Robertson declined to discuss those actions except to say that they were unrelated to bankruptcy court action against the company. Those “personal guaranty liens” were “released after being satisfied,” Mr. Robertson said.

The Indiana Department of Environmental Management claim against the company was withdrawn after insurance payments and remediation efforts. Mr. Robertson said that Mr. Pence played no role in settling the action brought by the state.

Six months after Mr. Pence resigned from the bankrupt company, the state’s governor at the time, Mitch Daniels, seemed to offer him a lifeline, appointing him deputy commissioner of the same state environmental agency that had sued his company. But Mr. Pence stayed in the job at the agency, known as IDEM, for only two and a half months.

“Governor-elect Mitch Daniels asked Mr. Pence to help with transition work at IDEM,” Mr. Robertson said, later adding, “There was never a discussion how long Mr. Pence would stay.”

Mr. Pence and his wife now own two antique malls in southern Indiana, valued at between $5 million and $25 million, according to financial disclosure statements he filed with the House in January.

Mr. Lamb, his opponent in the primary, said he could draw a sharp contrast between his business success and Mr. Pence’s record. “I’m an entrepreneur and have had success,” Mr. Lamb said. “He was handed a very large corporation that he ran into the ground.”

While Mr. Pence’s business record may become one focus of the campaign, his hearty endorsement of the Trump agenda could provide another.

Columbus is a rare Rust Belt town that continues to have a thriving manufacturing economy, with an unemployment rate of 2.7 percent. Its downtown is bustling with small businesses, and its modern architecture has drawn international acclaim.

A Brookings Institution study last year ranked Columbus as the No. 1 metro area measured by exports as a share of local gross domestic product — 50.6 percent. As such, it is heavily exposed to the kind of wild trade gyrations that Mr. Trump’s policies have generated.

The district also has a large agricultural presence that could be hurt by them as well. “We can’t be getting into a tariff war over soybeans,” Mr. Lamb said. “That’s why people are looking for someone who can be their voice.”

When asked about the Brookings study, Mr. Robertson replied, “Mr. Pence supports the Trump administration in its defense of American companies who have been subjected to decades of illicit trade practices and unfair policies.”

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