Mark Jacobs visits with Dave Cushman, a member of the Republican Party of Iowa’s state central committee, at Morrison Brothers Co. in Dubuque. Photo by the Mark Jacobs exploratory committee.
URBANDALE, Iowa—Mark Jacobs, a 51-year-old businessman from West Des Moines, is exploring a bid for U.S. Senate. If he runs, the former CEO of a Fortune 500 company could dramatically reshape the crowded race to take on Rep. Bruce Braley, the likely Democratic nominee.
In a wide-ranging interview with TheIowaRepublican.com, Jacobs said that his experience turning crisis into success at Houston-based Reliant Energy provides a solid foundation for fixing gridlock in Washington.
In 2002, Jacobs joined Houston-based Reliant Energy as the company teetered on the verge of collapse. The company faced federal indictment over an energy trading scandal related to the California electricity crisis. It owed $8.5 billion in debt to various banks and the bill was coming due in six months.
Jacobs, then the company’s chief financial officer, helped assemble the diverse stakeholders involved to iron out a deal to restructure and repay the company’s debt within two years.
Mark Jacobs
“It’s not enough to know what you want to do,” he said. “The art of leadership is knowing how to get there. As I’ve thought about the problems that we have in Washington and the dysfunction, someone with Iowa values and common sense business principles is needed. There’s no magic sauce to that.”
It might be conventional wisdom that a former CEO would appeal to business-minded, well-educated voters, but those who know him Jacobs say he has a unique ability to connect with people of varied backgrounds.
“Mark was always a ‘boots on the ground’ leader. He wanted to know if the plant personnel had the tools to get the job done,” said Mike Sowko, the chairman of IBEW Local 29, a Pittsburgh-based labor union that represents Reliant employees. “When I say tools, it means not only the wrenches and hammers but also the technical information, IT support, payroll issues, benefits, were the guys getting enough time off to be with their families?” he said. “When he came and met with the employees, he had his work pants, shirt and boots on and investigated for himself. That was his style and it earned him the utmost respect of the plant workers.”
When Jacobs became CFO of Reliant, he faced the challenge of knitting together a corporate culture as Reliant emerged from a combination of several companies. Jacobs was tasked with getting employees on the same page despite complex technologies, diverse geographic locations, and different corporate cultures.
Soweko, a former Marine who works the night shift, said Jacobs’ focus on building consensus and educating employees toward a common goal set him apart from every other executive he has dealt with as a union steward.
“I have 33 years in this business, and I’ve seen the leaders come and go,” he said, calling Jacobs a “game changer.” “Nobody made such a positive impression on my members like Mark did—nobody.”
Jacob wants Republican primary voters to judge him on his ability to turn around a struggling enterprise, not his political experience.
“I’m not a politician,” he told 60 GOP activists Wednesday at the Westside Conservative Club breakfast group at the Machine Shed. “If there’s one takeaway from today, that’s what I would like you to remember.”
Jacobs plans ‘significant investment’ in campaign
Jacobs has crisscrossed the state for months to talk about the economy and education issues. Last Monday, he held seven events in five counties; later in the week he logged more than 1,000 miles on his car meeting potential voters. Jacobs, who noted that the Senate already has 57 lawyers, wants to see if Iowans are receptive to an anti-politician with a business background.
Jacobs has already impressed one Linn County GOP activist, and he’s looking to build on that during his kick-the-tires phase of the campaign.
“He is an outstanding listener, and he wants to make a difference,” said Joni Scotter, who has volunteered on numerous Republican campaigns. “Education and bringing jobs to Iowa is music to my ears. I find him refreshing, earnest and thoughtful.”
Jacobs entry in the race could shake up the race, which includes state Sen. Joni Ernst, former U.S. Attorney Matt Whitaker, Sioux City-area economics professor Sam Clovis and David Young, a former chief of staff to Sen. Chuck Grassley. Young led the field in fundraising last quarter with about $150,000. In contrast, Braley is sitting on more than $2 million.
Jacobs, a former managing director at Goldman Sachs, says he would partly self-fund his campaign.
“If I make the decision to run, I would be prepared to make a significant investment in myself,” he said. “It would also be important to me that I have others co-invest with me to do this.”
Jacobs said that if he chipped in to his own campaign it would lessen the ability of his opponents to paint him as dependent on any interest.
“I’m my own guy,” he said. “When you look at where Bruce Braley has raised his money, it’s predominantly from trial lawyers. So, who do you think Bruce Braley is going to be sticking up for when the vote comes down? If I’m going to do this, I’m going to be independently minded and do what’s best for my constituents, not what some special interest wants.”
Jacobs’ built track record advocating on education issues
In January, Jacobs founded Reaching Higher Iowa, a nonprofit focused on improving education in Iowa. The organization focused on public engagement to raise awareness on education issues, holding 30 events across the state. Jacobs also lobbied the legislature and worked with the administration of Gov. Terry Branstad to pass education reform last session.
“I’ve got a long track record of supporting opportunity,” said Jacobs, who served on the board of KIPP, a national network of public charter schools in Houston. “I’ve seen firsthand how a great education for a low-income student can dramatically change not only their life, but generations to come. In essence, it breaks the cycle of poverty.”
Almost 90 percent of KIPP’s students qualified for free and reduced lunch and two-thirds of students were Hispanic.
“Mark joined [KIPP] because he shared a passion for our mission to eliminate the ultimate achievement gap: having low-income children go to and through college at the same rates as other children,” said Mike Feinberg, the co-founder of KIPP.
Jacobs “basically saved our hides by putting in place a much more disciplined structure for board oversight and how we ran our board meetings,” Feinberg said, adding that Jacobs helped the district grow to be the organization’s largest region in the country with 22 schools and nearly 11,000 students.
Tom Narak, the former superintendent of the West Des Moines school district and a lobbyist for the School Administrators of Iowa, attended an event Jacobs’ nonprofit put on in May, the Conversation on Closing the Achievement Gap. He praised Jacobs’ approach of having “school improvement come from the ground up instead of from the top down.”
“I was not quite sure what to expect because we have seen others come to Iowa with some thoughts and ideas about improving education, and the approach was often perceived as negative,” said Narak, a political independent who generally doesn’t support charter schools. “Mark’s approach appears to be just the opposite. His deep understanding of some very complex educational issues was quite impressive to me. There are many factors influencing student learning and success. Mark has placed his efforts and resources into some effective school improvement strategies without coming off as a person who is critical of the entire educational system. His focus is on what is best for the students and the type of commitment that is needed for success.”
Jacobs to focus on economic opportunity
Jacobs said that his priority as a Senator would be to tackle economic issues. He says that Congress needs to solve the chronic underemployment and unemployment problem nationally, roll back excessive regulations that strangle growth, reform the tax code to stop incentivizing companies to ship jobs oversees and reign in wasteful spending.
“If we’re able to get people back to work, we’ll also be able to make progress on family issues that are so important to us as Republicans,” said Jacobs, who described himself as pro-life and for traditional marriage.
Jacobs centers grounds his economic views in the concept of opportunity, rather than wealth leveling.
“People are justifiably upset at the direction of the country. I think there is a strong sense that we have on the wrong track as it relates to providing opportunities,” he said. “On our 125th birthday as a nation, we had become the largest economy in the world. That’s a stunning accomplishment. That happened because America has always been the land of opportunity, where if you go and work hard, you can dramatically change your life. We’ve always had that incentive for people to work hard and add value. It’s that incentive that I hear from people that we’ve lost, that this culture of dependency on the government for support is eroding that very principle that made America great.”
Before leading Reliant, Jacobs spent more than a decade in the financial services industry in New York, advising companies on mergers and acquisitions for Goldman Sachs. Jacobs said that the position gave him a deep understanding of financial markets and budgets.
“The president gets on the bully pulpit and he demonizes businesses that move factories and jobs offshore,” he said. “I think about that differently. I look in the mirror and I think about why companies are making those decisions. One of the particular reasons is that we have an uncompetitive tax code that incentivizes companies to take jobs overseas.”
Jacobs’ business record in the spotlight
Predictably, Iowa Democrats have already attacked Jacobs for his stint on Wall Street.
“We need an Iowa problem solver like Bruce Braley in the U.S. Senate who represents main street values, not a New York banker who made a fortune on Wall Street,” Iowa Democratic Party Executive Director Troy Price said in a press release. “Mark Jacobs’ Wall Street background couldn’t be more out-of-step with Iowa. In the short time Mr. Jacobs has lived here, you’d think even he would have realized this.”
Jacobs laughed at the attack, noting that his early business experience included a paper route when he was 12 and a year stocking shelves at Hy-Vee during high school. Jacobs’ older brother Steve still runs the family company started by their parents 55 years ago, Des Moines-based Infomax Office Systems, which employs 65 Iowans. Jacobs worked odd jobs at Infomax growing up, spent a summer at the company in sales and still helps his brother with business projects.
“For me, Iowa values have translated very well into common sense business practice,” Jacobs said. “Business sometimes gets painted as not caring. That’s a bad rap.”
Jack Sullivan, the managing partner of BP Real Estate Group in Johnston, has known Jacobs for almost 40 years. He offered a defense of Jacobs against carpetbagger charges by Democrats, noting that the 1984 farm crisis during his generation sent a lot of Iowans out of state to find their fortunes but that he always knew Jacobs would return to Iowa.
“He is very adept at working through complex issues and finding common ground,” he said. “He is very careful and not flamboyant. He is much more comfortable working through problems and finding an equitable solution than he is calling attention to himself. This is so 180 degrees from so many people in the political arena.”
Jacobs said that he expects more attacks on his business record, and that Republicans need someone who can provide a contrast with Braley.
“His voting record is more liberal than Tom Harkin and it’s close to the line of Nancy Pelosi. I think that’s very out of step with what Iowans want,” Jacobs said. “We’re not going to fix Washington with Washington. We’re not going to fix Washington with another trial lawyer.”
Register columnist attacks Jacobs on climate change
At the Westside Conservative Club, Jacobs took a question from the audience about climate change. His response provoked an attack by Des Moines Register columnist Kathie Obradovich. She dinged Jacobs for not kneeling at the altar of climate change.
“Our planet warms and cools all the time,” Jacobs said. “I’m not convinced that man-made causes are causing these cycles we have and I’m, in addition, even further less convinced there is anything we can necessarily do about that. I think that’s an area we need to continue to study to understand,” he said.
Jacobs said that his experience at Reliant, a major energy provider, has made him skeptical about the ability of bureaucrats in Washington to effectively manage the problem.
“The Environmental Protection Agency has a very one-sided approach. It is making it increasingly difficult to run a business,” Jacobs said. “I don’t think there’s any sense of appreciation for the impact of some of the regulations that they promulgate. In the energy business, the result for all of us is going to be significantly higher electric rates because the Obama administration’s policy is to close a number of the generating stations that produce a lot of energy and good-paying jobs.”
Jacobs said that more cost-benefit analysis is needed to determine the impact of regulations.
“I absolutely stand for the fact that we need a clean environment, and that we have a moral obligation to be stewards of our environment to our children, but we also have to balance that with the costs and jobs impacted,” he said.