HARTFORD — With a career in finance spanning more than 30 years, Republican Bob Stefanowski cites his business accomplishments as his calling card to become Connecticut’s next governor.
But Democrats have been hammering at Stefanowski’s record for more than six weeks, taking aim directly at his top asset in a rematch of a race he lost by just three percentage points to Democrat Ned Lamont four years ago.
While touting his own business career at big companies like UBS and General Electric Co., Stefanowski also questions Lamont’s experience in founding a company that bore his name and previously specialized in installing cable television at more than 220 colleges and universities 40 states The company was sold in 2015.
Standing Thursday near the State Pier in New London, where major renovations have resulted in nearly $150 million in cost overruns, Stefanowski said the spending problem would never have arisen had he been governor. Private companies involved in the deal would have paid for the cost overruns instead of letting the state foot the bill, as is being done under Lamont.
“He doesn’t have the experience. He ran a small cable company,” Stefanowski said. “He’s never done multi-billion dollar deals. I have. … That’s the difference between a business leader and a guy who ran a small cable company who could care less about Connecticut’s taxpayers.”
The money from the cost overruns, he said, could have been spent on better causes.
“Do you know what that $150 million could have been used for? To improve education,” Stefanowski said, surrounded by Republican lawmakers. “We lost 400 state police officers. Do you know what that $150 million could have been used for? To fill up the ranks of the soldiers and protect the people. Absolutely disgusting.”
The Democratic Governors Association aired commercials via a Super PAC to remind voters of Stefanowski’s years as chief executive officer of a payday loan company known for making high-interest loans to working-class borrowers.
“What do you really know about Bob Stefanowski?” asks a narrator ominously in a commercial. “He made millions running a payday loan company that charged working people up to 450% interest. His economic plans are so extreme that they would create a massive budget deficit.”
Before running the lending firm, Stefanowski spent 13 years in key positions at GE, which was based in Fairfield in its heyday before moving to Boston and essentially collapsing; GE will break up significant parts of the company over the next two years.
Stefanowski also worked in London for three years as Chief Financial Officer of UBS Investment Bank – one of the giants in the investment world.
While the Democratic governors have focused heavily on Stefanowski’s business background, Lamont said he has no immediate plans to target Stefanowski’s business background in the same manner as the Democratic governors.
“Me? I don’t think so,” Lamont told The Courant. “DGA is doing its thing. I’m off it. I’m sticking with what we’ve gotten really going for the state over the next four years. Its business is his business.”
But Lamont addressed Stefanowski’s tenure at GE, which was once routinely among the nation’s most valuable and well-known companies. The company was worth more than $500 billion at its peak in 2000, but the company’s value has since fallen to about $82.5 billion.
“If his argument is, ‘I’m going to do for Connecticut what I did for GE,’ that’s not a great story,” Lamont said. “Look what happened to GE. … It has been smashed, sold to China and other places.”
During his long career, Stefanowski, now 60, also worked for three years at 3i Group, a venture capital and investment firm based in London. He served as chairman and managing partner for the Americas and Asia, overseeing $1.5 billion in investments.
One of the companies owned by 3i during Stefanowski’s tenure was called Buy As You View.
In an interview, Stefanowski acknowledged that the retailer was unusual in that it made loans for TVs, furniture and appliances – and actually raised money by installing a meter on the borrower’s TV. Low-income customers would pay off high-interest loans by inserting coins into the meter, and the television could be turned off if the borrower didn’t pay. The item could also be repossessed.
While the concept may sound strange in the United States, it has become common in the UK in low-income areas.
But customers complained bitterly about sky-high interest rates, prompting an investigation by the financial services regulator known as the Financial Conduct Authority. Buy As You View finally decided in 2016 to pay the equivalent of approximately $1 million to almost 60,000 customers spanning the period from 2001 to 2015.
Stefanowski was chairman from 2008 to 2011 but noted that he had left 3i before the settlement in 2016. Buy As You View was bought by 3i in 2004.
“I had nothing to do with it,” Stefanowski told The Courant. “I need to look at the data, but I had nothing to do with it. The deal was finalized before I got there. I was never on the account. I hardly knew about it.”
The details about 3i were never released during Lamont’s controversial 2018 gubernatorial campaign – when Stefanowski was criticized for running a separate payday loan company.
“That sounds like democratic opposition research,” said Stefanowski. “Tell them to keep digging. … These guys are incredible.”
Stefanowski said he awaits further investigation into his business background in the final two months of the campaign.
“I got a root canal like that the first time, let them dig,” he said.
Lauren Gray, a spokeswoman for the Connecticut Democrats, said the problems at 3i are similar to those at DFC Global, a payday lender where Stefanowski served as chief executive officer from 2014 to 2017.
“No matter what he says, it all happened while he was there,” Gray said of 3i. “He’s still responsible for what his company did. … He knows in which companies he was involved. The reason he thinks he got a root canal last time was because he was the CEO of shady companies.”
Referring to the candidates’ business records, Gray said, “He wants to beat Lamont for his business, but Lamont has not taken money from vulnerable people and vulnerable families. If he wants to criticize Lamont’s business experience, Bob is nothing but bad for business and bad for Connecticut.”
After the 2016 settlement, the Buy As You View chief executive officer was quoted on a website as saying he apologized to consumers.
“We worked closely with them [financial regulator] over the past few months to address these issues and I feel sorry for all of our customers who may have had difficulties because we did not achieve the high standards that we have set for ourselves,” said CEO Graham Clarke. “We have gone beyond the recommendations in the review by making additional changes to our operations. As we continue on our transformational journey, our goal is to be the most responsible lender in the industry.”
In a video still available on YouTube, Stefanowski talked about why he became CEO of the payday loan company after working at much larger companies.
“My previous role was CFO of UBS Investment Bank in London,” Stefanowski said in a panel discussion at a conference in 2016. “And when I took that role, everyone was like, ‘What? Are you crazy? Would you like to go from there to manager of a pawn shop?’ There are a number of reasons why I did it. What I want to talk about today is that I really believe there is a segment of the population that needs our product. The banks don’t currently serve it. Most of our customers cannot get a bank account.”
He added: “The public sector has not found a solution to the problem. The problem with the industry is that they got a little greedy and took advantage of people when they didn’t have to. … So what are some of the tangible things we’ve done? We launched a term loan product in California and Canada. It’s still a 60% APR, but not 1,000% like a payday loan.”
Citing the cost overruns in New London and other problems in the state government, Stefanowski cited his corporate experience and said Lamont had to solve problems by firing employees or going to their managers to coerce them.
“I used to do that in the corporate world,” Stefanowski told reporters. “It’s not much fun.”
Stefanowski held senior positions at GE under then-CEO Jack Welch, at a time when the company was known for firing underperforming employees.
“When I was in the company, there were two rules,” said Stefanowski. “Either they didn’t know about it and you should have known – and you’re fired. Or you knew about it and didn’t say anything, and you’re out again.”
Stefanowski returned to Lamont, where he ran a 100-person cable company, which he did prior to his current role as head of a massive state bureaucracy with about 50,000 employees and an annual budget of $24.2 billion.
“First, I think it’s pretty clear that Governor Lamont is overwhelmed,” Stefanowski said. “I guess he’s a decent guy, but he’s not up to the job.”
But Lamont’s campaign spokesman, Jake Lewis, said Lamont immediately made changes and mandated Treasury oversight when problems arose at the New London state pier.
“With his chaotic campaign, Bob Stefanowski is once again leaning towards desperate attacks that have no basis in reality,” Lewis said. “The facts speak for themselves. Within six months of taking office, Governor Lamont installed new leadership and instituted tight controls to further enhance accountability and transparency. … [The] Stefanowski’s sideshow is just the latest attempt to distract from his own struggling campaign.”
Christopher Keating can be reached at [email protected]