Even as this year’s polarizing presidential race commands most of the attention from the press and pundits, restaurateurs also are keeping an eye on several of the 2008 congressional elections.
On Nov. 4, voters will decide who next will fill 33 Senate seats and all 435 House seats. The results could not only change the balance of power in Congress—especially in the Senate, where Republicans are defending 23 seats—but also could put into office a notable number of individuals with ties to the restaurant and hospitality industries.
Twenty-nine candidates—five contestants for the Senate and 24 for the House–are considered friends of the industry who might be counted on to defend or advance industry concerns. Among those industry issues that could be addressed in the next Congress are immigration reform, card-check union organizing, health care, food safety, menu labeling, depreciation schedules and many other accounting, tax and tort proposals.
But the irony behind the large slate of industry-favored candidates is that they are looking to join a body of legislators likely voters say they believe do a lousy job steering the country in the right direction, according to polls from several news organizations.
Whether conservative or liberal, polls from CNN, FOX News, the Wall Street Journal and others have been tracking voter approval ratings of Congress below 20 percent for the past month, a dismal report card darkened all the more by the uncertainty and divisiveness related to the Wall Street bailout as well as lawmakers’ general handling of the economy.
Of the 29 industry-related candidates, 18 are Republicans and 11 are Democrats. Twenty are incumbents. Of the five candidates running for Senate seats, all but one is an incumbent.
“We’re seeing an unprecedented number of people with links to the industry running for Congress this election,” Ned Monroe, the National Restaurant Association’s vice president of political affairs, said recently.
The need to put into office lawmakers who are sympathetic to the industry has attracted support from a broad swath of industry-related political action committees.
Among the most active PACs are those of the NRA; the International Franchise Association; the National Council of Chain Restaurant’s parent group, the National Retail Merchants Association; and nearly a dozen PACs run by the restaurant industry’s leading companies, such as McDonald’s Corp., Darden Restaurants Inc., Burger King and Yum! Brands Inc.
As has been the restaurant industry’s political tradition, financial support for Republicans outnumbers that for Democrats. For instance, as of Sept. 26 the NRA PAC had contributed to 17 Republicans and five Democrats.
Ed Tinsley III, former NRA chairman and owner of the Santa Fe, N.M.-based K-Bob’s Steakhouse chain, is perhaps the best-known foodservice operator seeking a congressional seat. He is running on the Republican ticket to represent New Mexico’s 2nd Congressional District, and has received $210,000 from the NRA, the biggest sum the group has ever given out.
Among lesser-known office-seekers drawing industry support is Jay Love, a six-year member of the Alabama Legislature who is running on the Republican ticket for a House seat in Alabama’s 2nd Congressional District.
Flush with NRA-PAC money, Love was previously a successful Subway area developer who sold his company in order to enter politics.
Love’s director of communications, Todd Stacy, says that there are many reasons why the restaurant industry is high on his boss, but perhaps the most important is his health care insurance financing plan for small companies and their workers.
Stacy says that as a state legislator, Love—who is 40 years old, married and has two children—consistently voted for or proposed legislation that supported small-business development and entrepreneurship.
Love’s signature piece of legislation, and one he wants to duplicate in Washington, is a schedule of tax deductions for small-business employers and their employees who pay health insurance premiums in group policies or individual coverage, respectively.
In a nutshell, Love’s proposal would allow small businesses that employ 25 or fewer workers to write off of their state income taxes 150 percent of what they spend annually on group health plans or individual policies, Stacy explains. The health insurance tax deduction became law in Alabama during the most recent session of the state Legislature, following a three-year fight for its passage by Love and other state legislators, Stacy notes.
“Support for small business is a natural fit for Jay because that is how he started,” Stacy says. “From a single Subway franchise as a young man, he became a multiple-store owner and regional developer who went on and sold his business.
“Now he is no longer in the restaurant business, but he speaks for small-business people like restaurant owners, auto repair shops, dry cleaners, franchisees and grocery store owners because he understands what they face and knows the issues they confront.”
Among the Democrats endorsed by industry groups is Rep. David Boswell, a six-year incumbent from Kentucky.
Although a brief biographical sketch of Boswell provided by the NRA reported that he formerly owned the famed Moonlight Bar-B-Q Inn in Owensboro, Ky., Boswell’s campaign manager Bill Cox insists that Boswell was never an owner and has no affiliation with the 45-year-old establishment. Instead, Cox speculates, the industry took notice of Boswell’s long tenure as a state senator, a successful convention and entertainment sales manager for a five-unit, multi-state Executive Inn Hotel franchise, and a long-standing agriculture commissioner.
“As a state senator with his lodging experience, he knew how difficult it was to run a restaurant or a hotel and was supportive of legislation that limited or reduced regulatory or tax burdens on those businesses and other small business,” Cox adds.
But of even more significance, Cox went on, Boswell for 19 years was a state commissioner of agriculture with oversight of Kentucky’s farm products and related food safety regulations.
Cox observes that when it comes to elections, Kentuckians dependably and overwhelmingly vote Democratic for state and local offices. But when it comes to presidential contests, the state has predictably voted Republican.
Not all Republicans are recipients of industry PAC money or support, however.
Despite a background that includes creating a fast-casual concept and 24 years in the state assembly on the Republican ticket, Robert Staniere has received no help from the NRA’s coffers in his bid to win New York’s 13th Congressional District, which comprises all of Staten Island and a few Brooklyn neighborhoods, in a race that has been laced with melodrama befitting Shakespeare.
For 30 consecutive years, the Staten Island seat has been the only one of New York City’s House delegation to be held by Republicans, much of it by Guy Molinari, currently the borough president and later his daughter, Susan. Although he enjoys chart-busting popularity and influence in Staten Island, Guy Molinari is seen as an arch-conservative and a polarizing personality in New York City’s more liberal political circles. He occasionally campaigns for the secession of Staten Island from the city.
During the spring, the Republican incumbent of Molinari’s seat, Vito Fossella, announced his decision not to seek a sixth term when a simple sobriety checkpoint led to a DWI arrest and turned up the shocking discovery that he fathered a child in an extramarital affair with a lieutenant colonel in the Army.
Enter Staniere, a lawyer and founder of the New York City Hot Dog Co., a fast-casual concept known for its diverse tube steaks and sauces in Manhattan’s chic TriBeCa section.
Staniere easily won the Republican primary with Fossella’s absence and the initial backing of the Staten Island Republican Party. But mindful that Staniere lost his own seat in the state Assembly four years ago after 24 years and of his rebel image, Republican leaders backtracked. The local GOP began urging Fossella, who still enjoys high popularity ratings, to reverse himself and run for office again.
Without Staniere’s knowledge, the GOP endorsed him for a judgeship, which the candidate reportedly did not know about until he read it in the papers. The endorsement was crafted as a way to compel Staniere to change ambitions so that the ballot could be opened to Fossella.
While all the political maneuvering may have an impact on Staniere’s chances, his campaign manager, Chris Hellstrom, says the candidate would be a strong ally for the foodservice industry in Congress.
“He is a small-business owner, started the New York Hotdog Co. and knows what it takes,” Hellstrom says. “I think the key to his agenda is he wants to lower taxes for small-business people because he knows that lower taxes make for a more conducive business environment.
“I’m not surprised the NRA included us among races to watch as so many of our business constituency in Brooklyn and Staten Island are family-owned restaurants, not chains,” he says. “We’re going to do good things for them.”
Another Republican candidate who is not receiving help from the industry is Tom Rooney, an heir to the family that owns the Pittsburgh Steelers and owner of several dog-racing venues with on-site foodservice in Florida. The NRA is supporting his Democratic challenger, Tim Mahoney, the incumbent in Florida’s 16th U.S. District.
Rep. Dan Boren, an incumbent from Oklahoma, is one of the few Democrats that has an infusion of NRA-PAC money in his campaign chest.
Bucking his own party’s mainstream consensus, Boren voted against the Employee Free Choice Act, which the NRA, IFA and other industry groups condemn as a blatant pro-union effort to undermine fair labor practices by making it easier both for workers to join unions and to punish employers who resist collective bargaining.
Part-owner of two Roly Poly wrap shops, Boren has espoused a strong pro-business agenda that has benefited the foodservice industry, says his spokesman, Cole Perryman.
Just 35 years old, Boren is married, has a daughter and has represented his district in Congress since 2004. He served in the Oklahoma House between 2002 and 2004. His grandfather, Lyle Boren, served in the U.S. House from a different district of Oklahoma from 1937 to 1947.
“You look at the fact that he was one of two Democrats to vote no on the Employee Free Choice Act and the high marks that he gets from the U.S. Chamber of Commerce and other pro-business groups, and I think it’s fair to say that he is a friend of your industry,” Perryman says.
Boren is also a co-sponsor of the Fair Tax Act, which replaces federal taxes with a flat sales tax. That legislation gained the support of 59 members in the 109th Congress, more than any other tax reform proposal.
Of the five senatorial candidates, two Republican incumbents and a Democrat are the beneficiaries of the NRA PAC’s largesse.
The Democrat is career politician, businessman and former governor of Virginia, Mark Warner. A short-lived presidential candidate, Warner is running for the Virginia seat formerly occupied by Republican Sen. John Warner, no relation, who announced he was not seeking re-election.
Mark Warner’s tie to the restaurant industry is that he is part-owner of the Majestic Café in Alexandria, Va.
Shifting political landscape leads NRA to broaden view of issues, seek new allies
For a sense of how the restaurant industry’s political challenges are shifting, says the trade’s chief lobbyist in Washington, D.C., look at what happened in Ohio.
In September one of the business’s most fearsome unions dropped its push there for paid sick leave because the Democratic governor decided the business community was hurting enough without that sort of wallop, explains John Gay, senior vice president of government affairs and public policy for the National Restaurant Association.
With the old political playbook, the situation would’ve broken neatly into the usual X’s and O’s. Democrats and unions? Normally, they’ve been inseparable allies and typically provide steadfast opposition to the restaurant industry on employment matters. But not this year. The Ohio Restaurant Association issued a statement praising the union for its assistance.
“Of course,” Gay observes with irony, the union “said it backed off in Ohio to focus its lobbying for paid sick leave on the federal level.” No sooner did the situation come into focus than friend resorted back to foe. The picture scrambled again.
With worsening business conditions, an imminent change at the White House, the frequent interchange of national and local legislative issues, a newfound eagerness for certain regulation, and an increase in the sheer number of political concerns, the restaurant industry is facing a perfect storm in more than the macroeconomic sense, Gay says.
Overlay a new orientation that’s being adopted throughout the NRA under a strategic overhaul approved just a few weeks ago, he says, and the break from the status quo becomes even more pronounced.
“It’s a sea change in the way we provide advocacy and other services to our members,” he says.
The changes are being driven in no small part, Gay suggests, by the blurring of national and state or local issues.
“There are very few issues now that are just state issues or just federal issues,” he says. “There are just issues, with multiple levels.”
He cites the example of immigration. An NRA-supported push for updates in federal regulations failed, leading a number of states and even cities or towns to propose their own reform measures.
Under the NRA’s new strategic plan, Gay says, he and his Washington, D.C.-based staff will work in a more integrated fashion with state restaurant associations and all other facets of the organization.
“Part of the plan is to take a broader view of measures, to integrate local members early on, so we’re not fighting some issue in Florida, then in Maine and then in Montana,” Gay says. “We’re not looking at these anymore as brushfires. It’s more a matter of working with the [state restaurant associations] to work against the arsonists, so to speak.
“So if we’re talking about health and nutrition, we’re looking at sodium, we’re looking at changes in the regulatory activities of the FDA, and we’re working on the LEAN Act.”
The latter measure, the Labeling Education and Nutrition Act, was introduced in the U.S. Senate with the support of the NRA as a way of pre-empting a hodgepodge of state and local menu-labeling and disclosure requirements. In a step that might have been unthinkable for the industry a few years ago, it calls for more regulation by federal authorities.
As important as the integration, Gay explains, is the foresight warranted by the new strategy: “We’ll focus on some issues more ahead of time, so we’re more proactive instead of reactive.”
That offense-as-defense mind-set was evident in the association’s planning for the elections. Months ago, the NRA board approved an initiative to encourage restaurateurs’ involvement in the campaigns of both major political parties. That act of prudence was indeed completed, Gay says.
“There are restaurateurs involved in both campaigns,” he says. “We want [both candidates] to know early on the agenda we favor. You can’t wait until something happens and it’s coming up for a vote.”
Still, “it’s a challenge regardless of who comes in,” he says. “You have to start over no matter who.”
To avoid starting over on Capitol Hill, the NRA encouraged the introduction of the LEAN Act even though the closeness of the election lessens the chances of the bill being considered by the current Congress.
Similarly, Gay notes that restaurateurs who recently visited Washington for the NRA’s annual Public Affairs Conference were encouraged to inform their senators and congressmen of the industry’s position on immigration reform and the so-called card-check unionization bill. Because of those issues’ complexity, he says, neither is likely to be put to a vote during Congress’ remaining time in session. Yet, Gay explains, “you lay down markers for the next Congress to take up.”
Mustering rank-and-file industry involvement in those or other issues can be complicated by the economic hardships weighing on restaurant operators, Gay acknowledges. As political pundit Charlie Cook put it during the association’s Public Affairs Conference, “The NRA is one of the most influential lobbying organizations in Washington,” and is particularly “effective on the grassroots level. But that was in pretty good times.”
“In some respects, it’s easier,” Gay says, adding that elected representatives may be more sympathetic to business constituents when they’re struggling with a bruising economic environment. “In boom times, it’s easier for lawmakers to put on increased regulation or an increased cost.”
But, he continues, “the flip side is that state and local governments are not doing as well, so they’re looking for new ways of making up what they need financially,” often through new fees and taxes. “We are looking at that more than we did two years ago,” he says.
In general, Gay says, “there is more on our plate than ever,” and that sometimes gives rise to some unusual alliances.
For instance, Service Employees International Union, the force that dropped its effort to put a paid-sick-leave initiative on the ballot in Ohio, ultimately took the course favored by the industry. But it left no doubt it would be a foe again.
“We’re with SEIU on immigration reform, but not with them on paid sick leave,” if it is resurrected on Capitol Hill, Gay says. “On immigration, we’re also aligned with the U.S. Council of Catholic Bishops,” hardly the traditional ally of a nondenominational business group.
The NRA reportedly spent $700,000 during the second quarter of 2008 to promote the industry’s interests in federal matters ranging from renewable-fuel policies to food safety. With the group spending another $735,700 during the current election cycle, according to filings cited by the lobbying watch-dog group OpenSecrets.org, it presumably remains a sought-after partner in the shifting political scene.
“They speak loudly and are very well-respected in Washington,” says David French, vice president of government relations for the International Franchise Association. “We work very closely with them, and they are a very highly valued ally.”
And the prospect of being allied against the NRA? “I can’t imagine that happening,” he says.— Peter Romeo