Doug Ducey's Shady Salesmanship of Himself and the GOP Brand Signals Doom for Arizona
Doug Ducey's one of those guys who could make a living selling Bermuda shorts to Alaskan bush people.
So it's no surprise that he snookered Wall Street Journal writer Jason Riley, who recently traveled to Tucson to meet with the Republican gubernatorial wannabe as he campaigned in the Old Pueblo.
I should point out that I'm a fan of Riley's 2008 book Let Them In: The Case for Open Borders, which lays out an enlightened, libertarian argument for the free flow of immigrants into this country.
But the conservative columnist clearly fell hard for Ducey and the line of bull he's selling, judging from Riley's enthusiastic regurgitation of Ducey's propaganda in the Journal's pages.
Breathlessly titled "A Tax Reformer Rises in Arizona," Riley's piece praises Ducey's "Midwestern plain-spokenness" while observing the importance of Ducey's life history to his pitch.
"I grew up in Toledo, Ohio, son of a cop, very much a product of the working class," Riley quotes Ducey's telling a small gathering in Tucson.
Riley adds, "Biography is a major theme of [Ducey's] stump speech, along with the business experience he gained after moving to Arizona in the early 1980s to attend college and then running a successful ice cream company, Cold Stone Creamery, which he sold in 2007."
A confidence man (um, a politician) requires a lack of skepticism on the part of the mark, a willingness to be bamboozled. Riley and many others closer to home have demonstrated this trait when it comes to Ducey.
Perhaps Riley is unaware of the 30 percent failure rate of Cold Stone Creamery franchisees on Small Business Administration loans, though the Journal has written about Cold Stone's woes more than once.
He also may be unfamiliar with some of those franchisees' complaints of unethical business practices by Ducey and Cold Stone that left them shirtless.
I first reported on these allegations four years ago when Ducey ran for state treasurer against Democrat Andrei Cherny, ultimately besting Cherny by about 10 percentage points. Cold Stone has denied them, and other news outlets have covered the attendant lawsuits.
Plus, Riley must have missed the Arizona Republic's revelation a couple of months ago concerning Cold Stone's sale in 2007 to Scottsdale's Kahala Corporation.
According to the story, the $80 million deal ended up in arbitration, with the transaction amount being reduced by "less than 20 percent of the original purchase price."
Details of the sale remain under seal, though it's now clear that Cold Stone's success was not as sweet as Ducey advertises.
There are other reasons to doubt Ducey's business acumen. For one, his father-in-law Ken Burk's involvement in Cold Stone preceded his own by a full year. According to a history of the company published before the sale to Kahala, Burk took on a leadership role with the company in 1994. Ducey followed Burk in 1995, becoming president of Cold Stone in charge of "business development and strategic direction."
That's to say, Ducey did not come to Cold Stone all on his lonesome.
Aside from Cold Stone, there have been issues with Ducey's involvement in the Scottsdale company iMemories, which transfers customers' home movies, photos and videotapes into digital format.
Ducey was chair of iMemories' board of directors from 2008 to 2012 and once had an office at the company, sources say. He remains a major investor in iMemories, according to his financial declaration on file with the Arizona Secretary of State.
Until two weeks before his arrest in 2013 on allegations of molesting three little girls, one his own daughter, former Minuteman leader Chris Simcox was employed by iMemories.
The company claimed Simcox had no access to the home movies of clients, which often include innocent images of nude children bathing or playing.
But as I revealed earlier this year, a former iMemories employee who left the company on good terms said he knew Simcox when they both worked there, that Simcox had unfettered access to material being digitized and sometimes was alone at the company working a graveyard shift.
Simcox had been accused of child molestation in the past, and this information was online, often mentioned in articles critical of the nativist.
A Ducey representative insisted that Ducey had no involvement in the hiring and firing decisions of iMemories. Still, the thought of Simcox, left to his own devices at iMemories, monitoring the conversion of home movies to streaming video or DVD, is creepy.
Simcox remains in Maricopa County Jail, nonbondable, awaiting trial on the child molestation allegations.
Similarly, Ducey's "son of a cop" routine ignores a far more interesting reality, as The Center for Investigative Journalism's Lance Williams and I recently documented in our New Times cover story "Sins of the Family."
Ducey, on his mother's side, is the scion of a notorious Ohio organized-crime family named Scott, anglicized from the Italian Scotti.
His maternal grandparents -- his "Gammy and Pa," as he refers to them -- were involved in a family enterprise of gambling and bookmaking in the 1960s and 1970s.
Ducey's great-uncle Tony Paul Scott co-owned several illegal gambling clubs in Toledo and was subpoenaed in 1951 by the legendary Kefauver Committee on organized crime.
When he avoided service of the committee's subpoena, the feds went after him, ultimately stripping him of his citizenship, though he was allowed to remain in the United States and was not deported home to Naples, Italy.
Ducey's uncle, Billy Scott, his mother Madeline Burk's brother, was a big-time bookie in Toledo who did time in federal prison in Arizona.
After his release, he fled to the Caribbean island of Antigua, where he renounced his citizenship and became an online gambling czar.
In 1998, Ducey's uncle was indicted in absentia on federal charges regarding his gambling venture, considered illegal by U.S. authorities. He returned to the States in 2012 to plead guilty to international money laundering as part of a deal wherein he forfeited $7 million.
Five months ago, Uncle Billy's lawyer asked that his client's probation be terminated, and that he be allowed to self-deport to his home in St. Maarten, a stone's throw away from Antigua.
But a federal judge declined the request, and Scott remains on probation in Florida.
True, Ducey's biological dad, Doug Roscoe, was a cop with the Toledo Police Department for about 12 years, from October 1965 to April 1977. But Ducey shrewdly omits that during the time his father was a police officer, the TPD, the FBI, and other law enforcement agencies were investigating his grandparents and his uncle for illegal gambling.
We took pains in the article to point out that we have no evidence that Ducey directly benefited from his family members' illegal activities.
This was leapt upon by critics of the piece, such as Arizona Republic opinion writer Laurie Roberts and editorial writer Doug MacEachern, the latter labeling the article "irresponsible hit-piece 'journalism.'"
Ducey's spokeswoman, Melissa DeLaney, never replied to New Times' requests for comment, but she did give a statement to Roberts admitting that the article was "correctly reported" and asserting that in America, people "judge you based on your life . . . not on the actions of relatives from previous generations."
If so, why does Ducey repeat like a mantra that "my dad was a cop"?
Why does he repeatedly tout his "Midwestern values" and even talk about, in one autobiographical article he penned, how his grandparents (his "Gammy and Pa") were "a very big part of our lives when I was young" and helped instill in him and his two siblings "the importance of family"?
Because this shtick sells, even to members of the Wall Street Journal's editorial board, like Riley, who concluded his piece by doubling down on Ducey's smarm, writing that Arizonans "could do a lot worse than the son of a cop from Toledo."
Of course, we could do a lot better.
Governor Jan Brewer and her possible replacement, Republican gubernatorial nominee Doug Ducey, who promises to continue Brewer's failed economic legacy.
Even some Democrats locally gave New Times flak for running the story, essentially playing defense for the Republicans, claiming we were engaging in guilt by association (or in this case, guilt by blood relation) and that the article therefore did not advance the lofty cause of electing their nominee, Ducey's rival, former Arizona Board of Regents Chair Fred DuVal.
Guilt by association is not a tactic Republicans shy from. From day one, the Arizona GOP's allies -- both "dark money" and otherwise -- have flooded the airwaves with millions of dollars' worth of attack ads, demonizing DuVal with links, however inaccurate and far removed, to Saddam Hussein, Puerto Rican terrorists, and illegal aliens gone wild.
When I asked the Arizona Democratic Party's executive director, DJ Quinlan, what he thought Republicans would do if DuVal's family had been involved in organized crime, he didn't pause for a millisecond.
"I have no doubt that if the shoe were on the other foot, the Republicans would've already had probably two or three television commercials about it," he said.
So why not do likewise?
"We're always really cautious when there's not a direct connection with the person right away -- you know, when it's just family," he said. "I think we have a little higher standard with the truth than the Republicans have, in terms of going right to the guilt by association."
So far, the only Dem to use the info has been DuVal campaign consultant Rodd McLeod, who made a passing reference to the organized crime story in a comment to the Arizona Republic.
McLeod was addressing Republican attacks regarding DuVal's work for the influential lobbying firm Hill & Knowlton Strategies.
Because DuVal once worked there, GOPers argue that he was tarnished by some of the firm's controversial clients, though DuVal himself did not handle those accounts.
"Fred has about as much responsibility for clients of Hill & Knowlton as Doug [Ducey] does of his mobbed-up uncles," McLeod cracked.
Thing is, we never said Ducey was responsible for his "mobbed-up uncles." Rather, we were targeting Ducey for being disingenuous about his background.
Which, as Riley's column demonstrates, is a big part of Ducey's appeal.
I'm not saying DuVal would zoom in the polls if the Democrats were to use Ducey's family against him. But the situation is illustrative of a common theme when it comes to Democrats.
That is, their apparent desire to have a gentlemanly bout of fisticuffs while the Republicans act like they learned the art of war from ISIS.
Take the polls from pro-Ducey dark-money groups showing the ice cream tycoon up over DuVal by as much as 10 points, while polls coming from other sources have shown the race tighter, sometimes within the margin of error.
Or take the recent cheap stunt by Maricopa County Republican Chairman A.J. LaFaro, who, with the help of various right-wing sites, disseminated a video showing a Latino man "stuffing" a ballot box.
LaFaro suggested something nefarious was at work, when, in reality, picking up people's mail-in ballots and delivering them to county elections is 100 percent legal. Hell, the Republicans do it, too, as LaFaro well knows.
But promulgating the idea that "ballot harvesting," as some call it, might be illegal, could help deter volunteers for Latino groups from participating in the practice. In other words, classic voter suppression.
Quinlan and other Democrats could be right. Sinking to the Republicans' level could be a mistake that would backfire.
And the DuVal camp lacks the support from outside sources to do the kind of commercial carpet-bombing GOPers and their allies are doing on local TV.
"If you look at the negative ads, they're like 7-to-1 anti-DuVal," Quinlan said. "I have no doubt that if we were equally funded on the negative attacks . . . DuVal would be up six or seven points right now."
All the more reason to bring a gun to the knife fight.
Because the Nation magazine and YouTube site The Undercurrent released secret recordings of a June retreat for rich right-wingers sponsored by billionaire brothers Charles and David Koch, we know Ducey spoke at the event and got all chummy with the brothers Koch.
The Kochs have been linked to some of the same dark-money groups that currently treat DuVal the way the Luftwaffe treated London during The Blitz.
In other words, the Ducey camp ain't playing fair. Though that's to be expected from GOPers.
So allow me to come to DuVal's assistance as pseudo-badass Ducey kicks sand in his face and remind Ducey of something he told the Kochs as he kissed up to them at the posh St. Regis Monarch Bay Resort in Dana Point, California, where their fat-cat fiesta was held:
"In this business, you're judged by the company you keep."
So isn't it interesting, given Ducey's family tree, that for the four years he was studying finance at ASU (from 1982 to 1986), Ducey worked at Hensley & Co., Arizona's Anheuser-Busch distributorship, now owned by Cindy McCain, wife of U.S. Senator John McCain?
In a July interview for www.startupgrind.com, which features YouTube chats with well-known entrepreneurs, Ducey said he worked his way through college at the beer distributorship, describing it with a smile as "a great job to have in college; you can only imagine."
No doubt the gig made him popular with his frat brothers at Pi Kappa Alpha, where he eventually served as chapter president.
In Ducey's senior year at ASU, Hensley & Co. took out a full-page ad featuring photos of Ducey and other Budweiser reps.
The ad touted Hensley & Co.'s "sponsorship and participation" in Sun Devil sporting events and other college wingdings, like "Greek Week" and "fraternity, sorority, and residence hall" get-togethers.
Talk about Big Man on Campus. It's a wonder he wasn't voted Keg King of Pi Kappa Alpha.
Ducey's little brother, Nick, who lives in Cincinnati, would go on to work as a Budweiser sales rep for more than 21 years, according to the latter's LinkedIn page. Nick also attended ASU and pledged the PiKE, as the frat's sometimes called.
Ducey left Hensley when he left ASU, moving on to work in sales and marketing for consumer-goods giant Procter & Gamble, but he maintained his connections to Hensley.
A recent profile of Ducey by the Arizona Capitol Times notes that Ducey's "introduction to politics came in 2008 during U.S. Sen. John McCain's presidential campaign," when "some of Ducey's friends at Hensley Beverage Company, the liquor distributor founded by McCain's father-in-law, asked Ducey to get involved in the race."
Ducey was part of the senator's leadership team in Arizona and helped raise money for the effort.
Somewhere along the line, he got the notion to run for state treasurer in 2010.
His pals in the liquor industry have helped him with his political goals, contributing nearly $55,000 to Ducey's campaigns for treasurer and governor.
Andrew McCain, the senator's son and chief financial officer for Hensley & Co., has given Ducey $1,752.
Hensley & Co. president Robert Delgado and his wife, Denise, have donated $5,680.
Additionally, Ducey's received generous financial support from other Hensley employees, as well as from trade associations for the beer and liquor industry and other alcohol distributorships.
McCain himself stayed neutral during the Republican primary for governor, but Arizona's senior senator embraced Ducey's campaign on primary night, heralding Ducey's win in remarks from the podium at the Hyatt Regency in downtown Phoenix, where Republicans had gathered to watch the results.
The senator's wife, Cindy Hensley McCain, heiress to the Hensley fortune, now co-chairs Women for Ducey and was quoted endorsing Ducey in an October press release announcing formation of the group.
"Doug is committed to advancing issues that are critical to our families," she stated in the release, adding, "I have endorsed Doug because I know we share those same values and care about the future of not just our state but our country."
U.S. Senator John McCain and Arizona Treasurer Doug Ducey at a 2013 town hall event in Phoenix. Both McCain and Ducey once were employed by and have benefited from their association with area Anheuser-Busch distributor Hensley & Co., owned by McCain's wife, Cindy.
The intertwining of Ducey and McCain's political fortunes is a fascinating development, one flush with coincidences.
For instance, in 1982, when Ducey found employment with Hensley & Co. as a college freshman, McCain worked for Hensley & Co. as a public relations rep, as he ran for a U.S. House seat from Arizona's First Congressional District.
According to a New Times cover story from 2000, authored by former staff writer John Dougherty and current managing editor Amy Silverman, McCain used his new wife's six-figure income from "Hensley-related enterprises" to assist in his election to congress. (Note: The McCains wed in 1980.)
McCain's father-in-law, Hensley & Co. founder James Hensley, his wife, and their employees donated $11,000 to McCain's congressional campaign. Anheuser-Busch's PAC chipped in $1,000.
The ex-Navy pilot and former Vietnam POW was successful. McCain won re-election in 1984, and in 1986 ran for Barry Goldwater's U.S. Senate seat after Goldwater announced his retirement.
In 2016, when McCain again will be up for re-election, he will be 80 years old and will have served 30 years in the U.S. Senate.
Many anticipate that he will run again, and his operatives have been laying the groundwork, in part by running moderate GOP candidates for precinct committeeman positions against rabid Tea Partiers, for whom McCain is anathema.
If so, Ducey may be able to stump for him as the state's governor.
Another oddity: Both men have family members who were implicated in organized crime.
For Ducey, it's the Scotts. For McCain, it's his in-laws, specifically Jim Hensley, who died in 2000, leaving his entire fortune to Cindy.
As Dougherty and Silverman wrote in their piece a few months before the 80-year-old died, Hensley had "embarked on his road to riches as a bootlegger," selling black market whiskey to anyone willing to pay top dollar in the years just after World War II.
Jim Hensley and his brother, Eugene, were partners in crime, bootlegging together. In 1948, both men were convicted in federal court of conspiracy and filing false liquor reports to the government, an effort to cover up their trade in illicit booze.
They were each fined $2,000, with Eugene doing a year behind bars and Jim scoring a suspended sentence.
The brothers also ran into a little trouble over their co-ownership of a horse-racing track in New Mexico with ties to organized crime.
Jim Hensley sold his stake in the business when federal and state scrutiny got too hot. Eugene kept his, but ultimately he was convicted in federal court of income tax evasion in connection with the track.
As native Arizonans and some of those who've been here a while are well aware, Jim Hensley's name is inextricably linked to that of Kemper Marley, an infamous Arizona land baron who was involved in gambling, prostitution, and the wholesale liquor business.
Dougherty and Silverman sum up the connection, thus:
"James Hensley profited handsomely from his association with liquor magnate Kemper Marley, a man police suspect ordered the 1976 murder of Arizona Republic reporter Don Bolles, who had written about Marley's business and political dealings.
"The man convicted of placing a bomb beneath Bolles' car testified that Marley also wanted former Arizona Governor and then-Attorney General Bruce Babbitt murdered because Babbitt had filed an antitrust lawsuit against the liquor industry in 1975."
Hensley's Budweiser distributorship was "reportedly bestowed upon him by Marley," the New Times story states.
Marley died in 1990.
Babbitt, a Democrat, ran unsuccessfully for his party's presidential nomination and served as U.S. Secretary of the Interior during the Clinton administration.
Irony of ironies: DuVal was a senior aide to Governor Babbitt and ran Babbitt's 1988 bid for president.
There ends the history lesson.
Before someone accuses me of blaming Don Bolles' murder on Doug Ducey, I should state that, yes, such connections appear to be either happenstance or fate, take your pick.
And yet a confluence of coincidences tells us something about what side people are on, and how they should be viewed. A kind of gestalt portrait.
A DuVal governorship would be as welcome as Babbitt's was back in the day, and it would end a six-year trifecta by Arizona Republicans, with that party's owning the executive office and both chambers of the state Legislature.
For part of this time, the GOP even had a supermajority in the state Senate and the state House.
What did they do with all of this power?
You know, other than offering up divisive, sometimes bigoted, and often downright nutty legislation, from the anti-immigrant Senate Bill 1070 to the anti-gay SB 1062 to the anti-Obama "birther" bill to a bill that would have made it a criminal offense for transgenders to use the "wrong" bathroom?
Well, they cut taxes and they cut government services. A lot!
The tax cutting was justified partly as a way to make the state more attractive to businesses and also as a way to spur growth and spending in the private sector, which hypothetically would result in more taxes getting collected.
Those who grew up in the Reagan era will remember this as supply-side economics, "voodoo economics," as Republican President George Herbert Walker Bush once called it.
How has this long-discredited economic theory worked for Arizona? Not well, according to a new economic report, released recently by ASU's Morrison Institute for Public Policy.
"The tax cuts that have been implemented in Arizona have had no measurable impact on economic growth," states the Morrison Institute's report. "That is, the loss of revenue resulting from tax cuts has not begun to be offset by greater economic growth, even years after the reductions were implemented."
Evidence for these statements lies in various economic indicators, where Arizona continues to lag behind most other states, which are recovering from the Great Recession faster.
Arizona's economy has recovered only 60 percent of the jobs lost during the recession, according to the Morrison Institute report.
And Arizona's unemployment rate is a full point behind the national unemployment rate, almost on par with that of California, often maligned by Arizona Republicans as some sort of failed socialist state.
According to a report in the Phoenix Business Journal based on U.S. Census data, Arizona currently suffers from the fourth-highest poverty rate in the nation, with nearly 20 percent of the state's population living below the poverty level.
What does the Morrison Institute recommend? Restoring cuts in spending made by the Republican Legislature, particularly in education.
Why education? Because the Morrison Institute finds that a sound system of public education and a skilled workforce are far more likely to encourage businesses to move to Arizona than lower taxes.
This, by the way, is exactly what DuVal has argued on the stump.
What does Ducey want to do? He wants to persist in the folly of the last six years and keep cutting taxes and spending.
During the primary, and on his website, Ducey promises, if elected, to "submit legislation to reduce taxes every year, with the goal of pushing income tax rates as close to zero as possible."
During the general election contest, Ducey's backed off this promise just a tad, calling it "aspirational" during one debate with DuVal.
Still, Ducey pledges to cut spending even further, by going "line by line" in the state budget and by not replacing some of the state employees set to retire in coming years.
But in talking to the Wall Street Journal's Riley, Ducey suggested that he remains hopelessly devoted to the supply-side theories of much-debunked voodoo economist Arthur Laffer.
"The evidence is overwhelming for a state that has no income tax in terms of positive economic direction and growth," Ducey told Riley, referring to an analysis by Laffer.
Such gusto for helping the rich get richer is one reason Riley, and for that matter, the libertarian Koch brothers, love Ducey so damn much.
Arizonans, however, should look to the state of Kansas for a cautionary tale.
There, Republican Governor Sam Brownback and the GOP-led Legislature drastically slashed taxes in 2012, part of what Brownback called a "real live experiment" in supply-side economics.
Well, pretty much what you would expect. Revenues took a major dive, resulting in downgrades to Kansas' credit rating, and a state government scrambling to meet its obligations.
Arizona doesn't need any help in this department. The state's already facing a $1.5 billion deficit for the next two years.
Remember that one-cent temporary sales tax that Ducey fought from becoming permanent?
That money sure could have come in handy.
Ducey also promises to keep fighting a court order to restore funding to Arizona's public schools.
This is the sort of thing businesses consider when deciding whether to relocate to a state -- whether schools are inadequate.
Currently, Arizona ranks 48th in the nation in per-pupil spending. Though Ducey believes our schools are terrible because we don't spend the money in the right way, not because we spend so little of it.
Ducey told Riley, as he has many of late, that getting the income tax down to zero "will take some time, a term or two as governor."
Basically, Ducey is attempting to sound reasonable. He doesn't want to scare off voters who may still swing his way.
But DuVal is telling people to fear buyer's remorse when it comes to Ducey.
The promises Ducey gave the Koch brothers are the ones that bind. That's why Ducey is supported with massive amounts of outside spending.
"I think he successfully pandered to [the Koch brothers'] ideological agenda," DuVal told me when I caught up with him at a rally for Democrats in Mesa. "And there is an implicit understanding that he will govern to their liking."
It says something about DuVal, who is about as approachable and open as a politician gets, that he has taken such massive punishment from pro-Ducey attack ads and yet is still standing, still in the running to replace Jan Brewer this January.
And it says something about the public, which is far more skeptical of Ducey's sales pitch than the Journal's Riley or the editorial board of the Republic or the Arizona Chamber of Commerce, all of whom have uncritically swallowed what Ducey is shoveling.
Yet there remain plenty of unanswered questions about the GOP nominee for governor, questions Ducey keeps dodging:
Like when was the last time he saw his money-laundering Uncle Billy, why does he use the surname Ducey when he was born with the surname Roscoe, how much dark money has come to him through his association with the Koch brothers?
From divorce paperwork on file in Toledo, we now know the answer to one of these: Ducey and his siblings were adopted in 1976 by his stepfather Michael Ducey, his mom's second husband, whom she divorced in 1981.
Should voters trust a politician who refuses to discuss his biography with reporters, who remains devoted to crackpots like Arthur Laffer, and who claims -- despite telling his plutocrat patrons otherwise -- that his goal of cutting income taxes to zero is "aspirational"?
It is courting disaster to do so. The Republicans have had their chance at leading Arizona, and they have made a mess of it.
The state needs new leadership, a new direction. Electing Doug Ducey governor will only ensure further economic catastrophe.
Note: Thanks to freelance reporter Amanda Pitrof in Toledo for her research assistance.
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