Candidates' job claims come up short
Published 1:08 am, Friday, July 9, 2010
Most of the state's six gubernatorial candidates offer personal experience creating jobs and navigating the marketplace as reasons to become the next governor, especially the millionaire businessmen Tom Foley, Ned Lamont and Lt. Gov. Michael Fedele.
But while business success has put them into expensive homes in Greenwich and Stamford, their modest corporate offices and job-creation histories don't hint at it.
Their outfits are small and, in the case of Lamont and Fedele, most of their workers are out of state.
Dannel Malloy, the former seven-term Stamford mayor, doesn't take direct credit for the more than 5,000 jobs, most in financial services, which located in Stamford during his tenure.
But he likes to say he created a business-friendly climate to attract them and local business advocates agree.
Foley's NTC Group, a private investment company, once had upwards of 6,000 employees in a Georgia textile complex, when he made $4 million a year in management fees. Then the bottom dropped out of the market for American-made towels and linens.
Foley walked away with tens of millions of dollars as the company went bankrupt in the mid-1990s. Foley still retains an unrelated aircraft maintenance and repair operation based in Greenville, S.C., with dozens of employees in several states.
Foley's Connecticut office, which once occupied a suite on Greenwich's posh East Putnam Avenue, has actually operated out of his home since he became ambassador to Ireland in the last years of President George W. Bush's administration.
Lamont's third-floor office in a glass-and-steel downtown Greenwich building is shared by a pair of lawyers. A reporter's visit there last week found several empty offices on Lamont's side and an abandoned reception desk. There seemed to be only one office occupied on Lamont's side of the suite.
Fedele's national headquarters for his Pinnacle Group, an information-technology firm, occupies the second and third floors of a landmark 1855 Victorian home on Stamford's Richmond Hill, where four employees work.
Last week, a second-floor ceiling was ripped open, exposing rough original beams, following a water-heater malfunction on the third floor.
Since Fedele, Foley and Lamont's companies are privately held, there's not much public information available on them.
Manta, a business-research company, estimates that Foley's 25-year-old firm has two employees and annual sales of about $230,000.
The seven-year-old Lamont Digital Systems has between 20 and 49 employees and between $20 million and $50 million in annual sales. Fedele's Pinnacle Group, which began 17 years ago, has an estimated 99 employees and sales of between $10 million and $20 million, according to Manta.
"I acquired businesses that ultimately ended up employing 6,000 people under my ownership," Foley recently told the editorial board of the Connecticut Post. "I didn't create those jobs, because a lot of those jobs existed when I bought the business."
Foley said his 1985 purchase of the Bibb Corp. in Macon, Ga., was a good buy at the time, but the domestic fabric industry (NTC was also known as National Textile Corp.) quickly changed and the company went bankrupt 11 years later.
"Well, the textile business is a business that I think you have to look at relative performance," Foley said. "Virtually all that business in the last 25 years has moved offshore."
He said running Bibb gave him the management experience needed to run a large organization such as the State of Connecticut, with its 55,000 employees.
Fedele and Lamont said that the vast majority of their employees work outside Connecticut, selling information-technology equipment in Pinnacle's case and wiring college campuses for cable television for Lamont's Digital Systems and related companies.
Lamont said he has about 40 full-time workers, including seven or eight in Connecticut.
"Over the last 25 years it has changed a bit, depending on how many systems we're building," Lamont said recently, estimating that his firm has installed about 200 TV systems, mostly on college campuses, where he discovered a niche in being able to undercut local cable-TV providers.
"We found that college systems were extraordinarily unique," Lamont said. "In the old days, a cable-TV operator looked at a college as if it was just like a residential town, but we had a different model and provide cable service like a utility, so everybody got it with a substantial discount, including foreign languages and distance learning."
Fedele said his historic building with its slate roof and first floor rented out to haircutters is not an unlikely location, since he grew up in the former solidly Italian neighborhood of Stamford's West Side, after his parents emigrated from Italy when he was a small boy.
Now, the section is occupied primarily by residents of Central American and South American descent.
"It's a natural place for a high-tech company," Fedele said in a recent interview. He said that in all, Pinnacle has about 50 employees, most of whom sell services to consolidate computer systems and provide computer security.
"We have people who sit, watching systems and fix them while not going on site," said Fedele, who went to grade school in the neighborhood, but now lives in North Stamford.
"I would say over the years we've had hundreds of employees," Fedele said, adding that Pinnacle has 13 active offices across the country, including Massachusetts, Ohio, Pennsylvania and Colorado.
Malloy, endorsed last month during the statewide Democratic convention, routinely estimates that 5,000 private sector jobs were created during his 14 years managing the city's 1,000 employees.
"The reality is, in new jobs we created more than 5,000 jobs but I always stuck with a conservative number," Malloy said during a recent interview, acknowledging that when the recession hit, Stamford employment totals fell like most places in the state. During his tenure, Malloy cut the city workforce by 107 jobs, more than 8 percent.
"We created an environment attractive for job creation and retention," Malloy said. "I'm not sure that there's another city that built three hotels, consolidated the financial industry and lowered crime during the term of one mayor."
Malloy and Lamont were involved with a campaign-related controversy this week when the Greenwich millionaire's gubernatorial campaign asked that Malloy stop referring in TV commercials to the 5,000 jobs because of the subsequent job losses in the recession. Malloy, who didn't run for re-election last fall, refuses to stop the campaign ad.
He said that while UBS' interest in the city began under the previous mayor, Malloy closed the deal. Malloy's administration was in place when RBS moved to Stamford.
"He was very involved in making it work," McGee said. "Those two companies alone are 7,000 jobs. That's indisputable."
McGee said that since the recession, Stamford now has a 25-percent vacancy rate in office buildings. "I think Dan worked very well with business," he said. "He reaches out to business."
R. Nelson "Oz" Griebel, a former banker on leave from the MetroHartford Alliance, which represents dozens of towns and cities in the north-central region of the state, said he routinely works to bring new companies to the region.
As CEO of BankBoston Connecticut, Griebel estimates that about 1,200 employees worked under him in this state and western Massachusetts. As chief operating officer of the Waterbury-based MacDermid Inc., he had 2,500 employees worldwide, including 500 in Waterbury.
"I don't want to come across and say I had responsibility for 500 people," he said. "It's different than creating a company."
At the MetroHartford Alliance, which Griebel has led since 2001, there are two dozen employees. "What the alliance does is the recruiting of companies to stay here, so we interface at the Capitol and with municipalities on a lot of policy-oriented things," Griebel said recently.
Chester First Selectman Tom Marsh, who's running an independent petition campaign to get on the November statewide ballot, has experienced ups and downs with the cleaning company he owns, but says as town leader he has brought dozens of new jobs to his town on the west bank of the Connecticut River.
His commercial cleaning company reached a high of 17, mostly part-time employees, plus a management staff of three with benefits.
As town leader, Marsh says he's proud that the town no longer has a reputation for being unfriendly to business.
"Downtown's vibrant and has a 100-percent occupancy rate," Marsh said this week, adding that recent activity in a nearby industrial park include two new entities, although others lost jobs.