Rauner mirrors campaign of Kentucky Democrat

By DOUG IBENDAHL • April 1, 2014

 

I realize some folks are only interested in the big stories of this governor’s race – such as the Bruce Rauner camp putting some poor kid on the streets in a cheap Pinocchio costume.

 

Of course that was last week. The latest fashion consists of noting how Rauner is modeling his campaign after Mark Kirk.

 

Sure, that’s true to some degree. Plus it’s a simple narrative for those in the media always eager for an excuse to fawn over Senator Kirk.

 

But the best comparison won’t be found in Illinois. For a more intriguing parallel we must look to our southern neighbor Kentucky. There we find another businessman Bruce. He’s Democrat Bruce Lunsford.

 

The similarities between Rauner and Lunsford are fascinating.

 

Lunsford only came on my radar screen thanks to an excellent recent article by James Berklan, Editor of McKnight’s Long-Term Care News. Mr. Berklan did a really nice job analyzing the Illinois governor’s race from the perspective of the assisted-living industry. He predicts nursing homes are about to suffer another image battering in this Fall campaign – and Berklan cites Kentucky’s experience with Bruce Lunsford from 2003 to 2008. I suspect Berklan is absolutely right.

 

Bruce Lunsford is now in private equity but before his three unsuccessful attempts at public office he made a fortune in health care. Lunsford founded Vencor, Inc. which grew to become one of the largest nursing home companies in the country.

 

Vencor spun-off part of its business in 1998. A new company, Ventas, Inc., became the owner of the real property and then leased nursing home space back to Vencor which handled operations.

 

Rauner and Lunsford have actually been in business together as evidenced by the close relationship between GTCR and Ventas. In February of 2004 Ventas crowed that its quarterly results had benefited from multiple factors including “increased rents resulting from Ventas’s annual lease escalations [and] income from the company’s 2002 investments with Trans Healthcare, Inc. (“THI”).

 

You may recall that Rauner’s GTCR founded THI in 1998 as a vehicle to buy-up nursing homes across the country. Rauner was Chairman of GTCR at the time and also when Ventas joined as a THI co-investor in 2002. Lunsford, who co-founded Ventas, was its Chairman in 2002 and retained that position until January 2003 when he relinquished the post to run for governor that year.

 

You also may recall that Ventas and GTCR are currently co-defendants in a lawsuit in U.S. District Court in Florida. In the current federal case the plaintiff alleges that GTCR, Ventas and others have been part of a fraudulent scheme to unlawfully hide assets from the plaintiff and other creditors. 

 

The 68-page federal complaint now pending in Florida contains scores of disturbing allegations against both GTCR and Ventas.  

 

Like Rauner’s GTCR, Lunsford’s company eventually saw its nursing home business flounder after years of growth and profit. Vencor sought Chapter 11 bankruptcy protection in 1999. However the operation eventually emerged and continued through the newly named Kindred Healthcare in 2001.

 

Lunsford ran as a Democrat for Kentucky governor in 2003. Some notable themes of that campaign:

 

• Repeated lashing out at “career politicians” and “special interest groups.” 

• Distanced himself from “habitual politicians” in state government. 

• A pledge to spend “whatever it takes” of his own money on his campaign – and in fact Lunsford spent $8 million of his own money in that 2003 primary race alone.

• “Our government is broken.”

• Promised to reorganize state government and a “top-to-bottom overhaul” – but was criticized for offering no specifics.

• Pledged to bring in “the brightest minds from Kentucky and America” once he was governor.

• Explained Vencor’s bankruptcy as “a case of a company that got blindsided by the government.”

 

Lunsford contributed thousands of dollars to both Democrats and Republicans over a period of twenty years.

 

When asked about allegations of negligent care at his nursing homes, Lunsford defensively responded, “I was involved in my life in a lot of complex industries and a lot of complex businesses . . . I find it difficult to believe in many ways that I would be accountable for every individual.”

 

Four candidates competed in 2003 for the Democratic nomination for governor – but Lunsford’s chief opponent was Ben Chandler (who would in fact win the nomination but go on to lose to the Republican that year).

 

In one particularly heated debate Chandler highlighted Lunsford’s six-figure contributions to the other team (i.e. Republicans), and said to Lunsford, “It seems to me you are in fact a special interest yourself.”

 

In response to Lunsford’s promises of state reorganization, Chandler quipped, “Mr. Lunsford’s experience in that area seems to be limited to Chapter 11 of the U.S. Bankruptcy Code.”

 

Any of that sound familiar?

 

Rauner even plays-up the country boy shtick just like Lunsford did in his campaigns. Of course in making that pitch Rauner has to skip over the inconvenient fact that he was raised in a wealthy Chicago suburb and that his father was a well-to-do executive with global giant Motorola. No matter. Rauner simply leapfrogs to visits with his grandparents in Wisconsin. Lunsford at least had legitimate hillbilly street cred – which presumably can’t be overemphasized in Kentucky. Lunsford’s parents reportedly borrowed money to buy a small tobacco farm and Lunsford claimed there was no indoor plumbing for five years growing up.

 

Lunsford’s position on Carhartt jackets is unknown.

 

By now you must be wondering, how did Lunsford do in that 2003 primary race? Answer: not very well.

 

Lunsford dropped out 4 days before the May 20, 2003 Democratic primary.

 

Lunsford’s withdrawal came just 2 days after Chandler began running a statewide television ad highlighting alleged abuse of patients in the nursing homes owned by Lunsford’s company. Lunsford acknowledged that his own tracking poll showed his unfavorable ratings had skyrocketed immediately after a new attack ad hit the air waves featuring the testimonial of a woman who claimed her mother was physically abused while a resident at a Vencor nursing home in 1997. Here is an excerpt from that ad: “My mother was abused in a Bruce Lunsford nursing home. Two broken fingers, skin tears, malnourished, blatant abuse. Bruce Lunsford didn’t care that my mother was abused. … She was just a dollar figure to him.”

 

In 2007 Lunsford tried again for the Democratic nomination for governor. Lunsford’s nursing home baggage was again a centerpiece of the campaign against him. Lunsford completed the race this time but came in a very distant second with only 21% of the vote.

 

In 2008 Lunsford took on Republican incumbent U.S. Senator Mitch McConnell. Despite it being a Democrat year and despite significant help from many national Democrats including Bill and Hillary Clinton, Lunsford lost by 6 points. Nursing home care remained a focus. McConnell eviscerated Lunsford with television ads like this one and this one.

 

Although it must be said that Rauner is successfully breaking the mold thus far. Rauner won his first primary while Lunsford collapsed just before the finish line in his first attempt.

 

Rauner appears to have studied the political experience of his former business associate and done some honing. Rauner may very well snatch the big prize which remained beyond the other Bruce’s grasp. With much of the media apparently unable to tear itself away from crucial issues like Pinocchio boy, it may in fact be a breeze.

 

Doug Ibendahl is a Chicago Attorney and a former General Counsel of the Illinois Republican Party.

END

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