GOP leader’s turn as Democrat remains unexplained

UK Sky News highlighted the bolder aspects of Bob Stefanowski’s resume – administrator of the venerable Victoria and Albert Museum in London, visiting professor at Oxford, top investment banker – reporting his arrival in late 2014 as a new boss of a decidedly low-end business: Making payday loans in the US, UK and Europe.

The job is a target at the top of the resume of a corporate expat who returned home to Connecticut and is now trying to convince Republican voters that he is the GOP’s strongest candidate for governor. Another is being the CFO of a Swiss bank once shaken by ethical and managerial failures.

Both times, however, Stefanowski arrived after shady lending practices, toxic asset buildups, and other mischief hit fans, drawing the attention of financial regulators on both sides of the Atlantic, as well as ‘a criminal investigation in the United States of UBS Investment Bank, the He joined the Swiss bank after a trader accumulated billions of dollars in trade losses.

Sky News described him as having “parachuted into UBS after scandal involving rogue trader cost him billions of dollars” and he arrived at DFC Global, owner of Money Shop in the UK and Money Mart in the United States, months after agreeing to repay. interest and late fees enticed thousands of customers to take out loans they couldn’t afford.

His stint at DFC Global is now fodder for an attack ad nicknamed him “Payday Bob”.

“At that point, I had no idea that I would ever run for governor,” Stefanowski said of taking over the DFC. “I wanted to roll up my sleeves and help people and turn a business around. I didn’t even think, well, would there ever be a potential stigma for the governor. “

A review of Stefanowski’s work history usually corroborates his claim that he arrived at UBS and DFC as the leader of the cleanup team, and not as the head of practices that nearly toppled UBS or scammed borrowers. who turned to expensive short-term DFC loans out of desperation.

But a key part of Stefanowski’s transformation from a politically indifferent business executive who didn’t bother to vote for 16 years – he skipped the 2016 presidential election – remains a puzzle for the candidate. makes no effort to unlock: a nine-month adventure as a Democrat that only ended last summer.

Stefanowski, now 56, left London for the United States in mid-2015, working for two years in the United States. headquarters in Philadelphia, returning to his Connecticut home in the coastal community of Madison on weekends to visit his wife, Amy, and their three daughters. After participating in the sale of the company’s European assets, he left DFC to become an independent consultant in September 2017.

For reasons he has yet to share publicly, he changed his voter registration to Democrat in October 2016, less than a month before voters went to the polls to choose between Hillary Clinton and Donald J. Trump. At the time, Republicans were backing down from Trump on the Access Hollywood tape in which he crudely bragged about his ability as a celebrity to assault women without consequence.

Reince Priebus, the national president of the GOP, is said to have urged Trump to quit the race. In Connecticut, State Senator Heather Somers, R-Groton, then running for a vacant seat in a competitive constituency, called on Trump to step down. Minority parliamentary leader Themis Klarides R-Derby didn’t go that far, but said of his sexual boast: “These are the words of an insecure man.”

It is in this context that Stefanowski, who says he has been a Republican for at least 25 years, became a Democrat.

“It wasn’t about Trump,” Stefanowski said.

So what ? Why then did the Democratic Party attract Stefanowski more on the eve of Trump’s resounding victory?

“I looked at this state and said ‘What happened to this state?’ and I quickly understood that my economic policy, my position on social issues were not going to go over to the Democratic side of this ticket, ”Stefanowski said. “I needed to be a Republican to do it.”

The response suggests that his change from registration to Democrat in 2016 and back to Republican in July 2017 came in the context of his entry into politics, but Stefanowski said: “I never thought about running for governor in as a Democrat. “

Pressed further, Stefanowski said there was nothing more to say.

“It’s like that.”

Stefanowski grew up in North Haven, graduated in 1984 from Fairfield University and joined Price Waterhouse in Hartford as an auditor, for five years. From 1990 to 1992, he worked as a litigation consultant while earning an MBA from Cornell University, then began a 13-year career with General Electric, before moving to London.

He left GE to oversee investments in the Americas and Asia for London-based 3i Group, a leading investment firm listed on the UK stock exchange, the FTSE.

In 2011 Stefanowski became CFO of UBS, which was on the verge of collapsing three years earlier, weakened by the rogue trade debacle, the 2008 recession and, as Reuters revealed in 2010, pressure from a U.S. criminal investigation into how the bank helped 52,000 Americans hide billions of dollars in untaxed assets in secret Swiss accounts between 2000 and 2007.

DFC sought his services in 2014 after its acquisition by Lone Star, an investment firm specializing in distressed properties. It is 100% owned by John Grayken, a billionaire born in Massachusetts who became an Irish citizen in 1999 to avoid US taxes. “Among the robber barons of the new millennium”, Forbes wrote in 2016, “Few are as secret – or as hated or as successful – as John Grayken of Lone Star Funds.” “

Stefanowski has little to say about Grayken. Laughing, he said, “I’ve never met him.”

In 2013, institutional investors in DFC alleged in a lawsuit that the company defrauded them by concealing that its lending practices relied heavily on hooking borrowers to short-term loans they couldn’t repay, locking them away. in a series of new loans with ever higher fees. and interest charges. (DFC would settle for $ 30 million in 2017.)

“The company had done a lot of bad things, like others in the industry, and the new owner wanted to clean it up. They did a search for a new CEO. They liked my GE pedigree, ”Stefanowski said. “I had worked in a regulated environment. I had cleaned up at UBS. I was attractive for this reason.

At best, payday loans are a business that consumer advocates say can easily be exploited. In the United States, payday lenders now operate in most jurisdictions under rules that prevent them from rolling over loans, impose cooling off periods on new loans, and set limits on the interest that can be charged.

Connecticut is one of six states that have never legalized payday loans, according to a state-by-state analysis by the Federation of Consumers of America. Otherwise, the rules vary by state. In California, borrowing $ 100 for two weeks will cost $ 17.65, or an annual percentage rate of 459%. In Rhode Island, the fee is $ 10, for an APR of 260%.

“It’s a category of consumers that needs the money, but I don’t want to take advantage of people,” Stefanowski told the corporate headhunter. “If I become your CEO, they have to let me clean up. They allowed me to enter this base.

Stefanowski, who had led business units at GE, was drawn to the chance to be the boss of an entire company for the first time.

“It was an opportunity for me to help a constituency that needs it,” he said. “It was an opportunity for me to be the CEO of a company and to be really responsible for it. It was an opportunity, as I have done my whole career, in the turn of events. It was a turnaround. This is what I love to do.

He said his gubernatorial candidacy arose out of a dinner conversation in early 2017, when he knew he would be leaving the DFC, with John Fund, a former Wall Street editor. Journal now writing for the National Review, and Conservative Magazine Editor, Jack. Fowler of Milford. The editor introduced it to former State Senator Tom Scott of Milford, a Conservative political agent who is part of his campaign team.

Stefanowski has taken an unexplored path to a campaign that appears to have placed him ahead of the pack. (No independent pollster has released a poll of the GOP primary, but sources in other campaigns, including negative votes, say their data shows him to be in the lead competing for the lead, with an undecided vote. important.)

Of course, a public measure, while unclear of his position in the polls, is that Stefanowski has been the main target of other candidates in two recent debates and in TV commercials, including one by former hedge fund manager David Stemerman who calls him “Payday Bob” and suggests that Stefanowski was to blame for the DFC abuse.

Stefanowski fired back, noting Stemerman’s own past as a Democrat – not to mention that was 15 years ago. And he turns Stemerman’s refusal to approve Stefanowski’s income tax repeal proposal as an endorsement of “Dan Malloy’s income tax,” something Stemerman did not fail to do. .

“I don’t like to get negative,” Stefanowski said. “I don’t mind fighting back.”

Like Stemerman, he sidestepped the state convention of the GOP, choosing instead to qualify for the August 14 primary through a petition campaign that observers said was well-organized and produced petitions with low voting rates. rejection.

His team includes Tom Scott and Virginia Imports, including 31-year-old campaign manager Patrick Trueman and senior advisor Chris LaCivita, who wrote some of the Swift Boat commercials attacking John Kerry’s military record in 2004 and has worked on the second of Linda McMahon’s two campaigns in the US Senate in Connecticut.

“People have underestimated us every step of the way,” Stefanowski said. “It was unconventional, and I’m not taking anything for granted, but in three weeks, we’re sitting here in the lead.”