The top three candidates running for the U.S. Senate in Nebraska are all millionaires, but the one Democrat in the race, Bob Kerrey, is easily the wealthiest of them all, according to his financial disclosure report.
Kerrey’s lists assets of between $5 million and $18 million and no liabilities — eclipsing the $3 million to $4 million that the top Republican contender says he’s worth. Since candidates are only required to disclose their financial information in broad ranges, it can be impossible to determine their net worth, but the top Republican in the race, Attorney General Jon Bruning, has said he’s worth $3 million to $4 million and State Treasurer Don Stenberg has said he’s worth about a million dollars.
Kerrey’s financial report — required of all U.S. Senate candidates — shows the former U.S. senator and Nebraska governor has earned millions as a consultant and serving on corporate boards of companies that do everything from sell women’s clothing to standardized tests to lottery games. High profile politicians often get cushy seats on corporate boards, where they’re well compensated for the handful of meetings they attend per year. However, Kerrey would have to step down from most of those positions if elected to the U.S. to avoid violating Senate ethics rules.
According to Kerrey’s financial report, in 2011-2012 alone he earned:
• $916,242 in salary from The New School in New York City, a liberal arts university where he is president emeritus, a post he could keep until 2016 and earn between $400,000 and $600,000 annually in salary and benefits.
• $965,354 serving on the board of directors for The Jones Group, Inc., a company that owns brands such as Nine West, Anne Klein and Easy Spirit. He has served on the board since 2002.
• $800,000 in consulting fees in 2011 from the Sidney Kimmel Revocable Trust to help an Israeli company research cold fusion.
• $415,859 in salary from Harland Clarke Corp., a payment and marketing services company that provides services to banks and credit unions. The company recently announced plans to lay off 200 workers in Maryland and Washington. Kerrey’s form indicates he has worked as a consultant to the company since July 2011.
• $250,000 in consulting fees from MacAndrews & Forbes Group, a New York investment firm he has worked for since 2010. Harland Clarke is a subsidiary of M&F Worldwide.
• $188,371 in deferred compensation from Scientific Games Corp., a gaming giant that makes instant lottery tickets, including Mega Millions and Powerball tickets. Kerrey served on the company’s board from 2008 until he stepped down in March.
• $148,700 from Tenet Healthcare Corp., a Dallas-based company that operates the nation’s second largest hospital chain, with 50 hospitals in 11 states, including Creighton University Medical Center in Omaha. Kerrey stepped down from the board in March.
• $111,250 working as an advisor to AM General of South Bend, Ind., a military contractor that says it builds “the toughest trucks on the planet,” both military and civilian. The company is perhaps best known as the maker of the Humvee.
• $10,000 from GNA Corp., doing business as Genworth Financial, an insurance company. Kerrey served on its board of directors from 2004 until he stepped down in March, earning between $160,000 and $215,000 annually.
All of that is in addition to the money he makes off his Grandmother’s restaurant chain, Prairie Life health clubs and partnership in a bowling establishment. Those assets were valued in the millions.
Kerrey’s financial report shows just how lucrative life after a political career can be: He has earned nearly $3 million consulting and serving on a half-dozen corporate boards in 2011 and the first three months of 2012 alone.
Kerrey’s campaign manager, Paul Johnson, said of Kerrey’s success: “Senator Kerrey has been a successful businessman since the early 1970s. Unlike others, he established his reputation in the business world before he entered public service. It shouldn’t come to anyone’s surprise that companies would seek his business expertise.”
Here’s a glimpse at some of the companies Kerrey has worked for:
Kerrey earned $800,000 in consulting fees helping an Israeli company called Energetics Technologies research low-energy nuclear reaction – or cold fusion – a controversial field of science.
In the 1980s, two electrochemists claimed to have created a nuclear reaction at a low temperature to release large amounts of energy – exciting the world with the prospect of a new cheap, clean source of energy. But the experiment has never been reproduced, and many mainstream scientists are skeptical of the idea.
The cold fusion effort Kerrey helped with was led by a controversial former surgeon named Irving Dardik, who believes everything in the universe is comprised of waves and we get sick when we stifle those waves in our body. He treated diseases with “wave technology” and while some patients claimed he cured them, the state of New York jerked his license to practice medicine after it was found he’d charged MS patients $30,000 to $100,000 for treatment.
However, news reports indicate Dardik’s team made great strides in its research.
The effort was funded by Sidney Kimmel, billionaire founder of The Jones Group, which owns brands such as Anne Klein, Nine West and Easy Spirit. Kerrey also served on the board of directors for the The Jones Group, earning $965,354 in 2011-2012. The cold fusion project has since been turned over to the University of Missouri, along with a $5.5 million grant from Kimmel.
The College Board
Kerrey earned $50,000 in consulting fees from The College Board, which sells standardized tests, including the SAT and PSAT, and operates the Advanced Placement Program in which high school students can get college credit for good scores on the AP exams.
The company has been criticized for having a monopoly over testing — since many colleges and universities require SAT scores for entry – and paying its executives exorbitant salaries despite being a nonprofit. A consumer rights group that advocates for testing reform says The College Board’s CEO, the former governor of West Virginia, earns $872,000 per year and his 23 executives make an average of $355,000 per year.
In July, Kerrey was named chairman of M&F Worldwide Education Holdings, where he is responsible for the company’s education businesses. M&F Worldwide is the parent company of GlobalScholar, which provides services to students, teachers and administrators.
In announcing Kerrey’s post, MacAndrews & Forbes chairman Ronald Perelman (the billionaire business magnate who owns Revlon) said Kerrey brought “world-class leadership experience” to the company. Perelman’s holding company also owns Harland Clarke, AM General, Scientific Games Corp. and Global Scholar — all of which Kerrey has earned substantial money working for as a consultant or board member or advisor.
The company credits Kerrey with helping Nebraska become one of the first states to have every school connected to the Internet and founding one of the first virtual K-12 schools in the nation.
GlobalScholars sells products such as Pinnacle Suite, instruction management software that more than 1,000 school districts, including Lincoln, use to track and manage data.
Kerrey has served on the board of directors for Scientific Games Corp. since 2008 but recently stepped down from the board to make a run for the Senate. It’s one of three corporate boards he left in March, saying he didn’t have time now that he’s campaigning for Congress.
Scientific Games Corp. provides goods and services to lottery and gaming organizations – making instant lottery tickets, gaming systems, terminals and Internet applications.
The company has been the subject of controversy in Arkansas lately over its contract with the state lottery commission for scratch-off games. An auditor found that a 2009 amendment to the contract giving Scientific Games a larger percentage of ticket sales than necessary. The auditor alleged the change was made without the proper oversight and has cost that state $7 million so far and could cost the state up to $21 million through 2016.
However, the Arkansas Lottery Commission voted earlier this month to stand behind the controversial contract.
Big hospital chain
Kerrey has served on the board of directors for Tenet, the nation’s second largest hospital chain, since 2001. Not long after Kerrey came on board, the company was rocked by a series of scandals.
Tenet was the subject of several investigations in 2002 by state and federal agencies for overbilling Medicaid in the years before Kerrey came on board. The Kerrey campaign says he was brought on board in part to help right-size the company. In 2006, the company agreed to pay more than $900 million to settle claims it overbilled Medicaid and other federal health programs over the course of years. In announcing the settlement, a federal prosecutor said the Medicare program could “ill afford attempts by hospitals to manipulate and cheat the system… in pursuit of higher profits.”
More than $47 million of the settlement was to resolve claims that Tenet paid kickbacks to physicians to get Medicare patients referred to its facilities.
Kerrey’s financial disclosure shows he earned $148,700 serving as a board member for Tenet in 2011-2012 and is owed between $1.9 million and $2.2 million in deferred compensation.
According to Tenet’s proxy, Kerrey received $283,000 in total compensation in 2011 (minus the portion deferred by Kerrey) for serving on the board of directors.
As previously reported by Nebraska Watchdog, Kerrey served on the board of directors for Genworth, which in 2008 tried to buy small, struggling banks in order to qualify for money from the federal bailout program, the Trouble Asset Relief Program.
The Project on Government Oversight – a nonpartisan government watchdog group – was critical of the insurance company’s bid to buy banks, saying it was “trying to jump on the gravy train.” Kerrey’s disclosure form says he is still owed between $200,000 and $400,000 in deferred compensation from Genworth.
Ivy League-caliber online school
This year, Kerrey joined the advisory board of Minerva Project, a for-profit undergraduate online college that aims to compete with the Ivy League by offering courses taught by “academic superstars,” according to Reuters.
A former Silicon Valley CEO who previously ran the Snapfish photo-sharing website is launching the venture, set to begin offering classes in 2014. Kerrey’s financial disclosure form says in exchange for his services, he’ll receive restricted stock at an undetermined future date worth between $375,000 and $400,000.
Kerrey told Reuters he agreed to serve on the advisory board because it seemed like the kind of place he’d like to enroll his son some day. Although judging from his financial disclosure report, Kerrey would have no problem paying the tuition at any Ivy League school in the nation.
Reported by Deena Winter, firstname.lastname@example.org.
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