Orman is putting his business record front and center in his campaign. Orman's wealth gives GOP fodder

OLATHE, Kan. — Greg Orman wanted to turn the capital of shrimp cocktails into a shrimp-producing powerhouse.

A few years ago, the businessman-turned-independent Kansas Senate candidate had become a director of Ganix Biotechnologies. With the help of $2.5 million in federal loan guarantees and $128,000 in state tax breaks, he and fellow investors pledged to build a $5 million-$6 million organic shrimp farm smack dab in the Nevada desert.


“We consume more shrimp per capita in Las Vegas than anywhere else in the world — 22 million pounds of it annually,” Orman told Las Vegas’ KLAS-TV in 2011.

The venture collapsed within a year. Ganix defaulted on a $725,000 bank loan, and a Kansas bank foreclosed on the shrimp farm property, according to public documents. The project had been pegged to create 30 jobs and eventually pump millions into the coffers of financially struggling North Las Vegas, according to news reports at the time.

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The sudden frontrunner against GOP Sen. Pat Roberts in the most competitive Senate race no one saw coming, Orman is putting his business record front and center in his campaign. The 45-year-old Princeton graduate tells voters he knows what it takes to create jobs and that he’d bring much-needed business savvy to Washington.

And there’s no question about this: Orman has become spectacularly wealthy over the course of a two-decade-plus career that includes investments in ventures as far flung as energy-efficient lighting, spinal surgery screws and an obscure Jeff Goldblum film. Any successful investor is bound to have some failures, but Orman appears to have more wins than losses, creating several successful companies along the way.

But triumph in the business world, as Mitt Romney learned, doesn’t necessarily translate into success on the campaign trail. And Republicans are seizing on the less-flattering aspects of his business past to bring Orman’s campaign back to earth. In addition to his well-publicized business and personal relationship with a person convicted of securities fraud, Orman has ties to companies that took advantage of offshore or low-tax havens and was once sued by a woman who alleged that Orman threatened to wipe out her children’s college fund if he wasn’t included in a deal, records show.

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The outcome of the race may well turn on which portrayal of Orman’s background prevails: the non-ideological entrepreneur or the shady investor who won’t level with voters about where he stands on issues.

Going after a candidate’s business record is an unusual turn for Republicans, considering they’re typically the ones fending off rich-guy attacks. But it’s the hand they’ve been dealt and they are playing it.

“Greg Orman’s offshore tax havens, business partnerships with a convicted Wall Street banker and ties to liberal Democrats raise serious questions,” said Corry Bliss, campaign manager for Roberts.

Said Orman campaign manager Jim Jonas: “We’re happy to compare Greg’s successful record as a businessman creating jobs with Sen. Roberts’ failed record as a Washington politician any day.”

Orman’s emergence also puts Democrats in the peculiar position of at least tacitly backing the candidate of the 1 percent. Not that there’s another alternative.

Asked if Orman’s past business dealings might turn off Democrats, the party’s state chairwoman, Joan Wagnon, said: “Where would they go?”

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She predicted the GOP attacks “won’t work on Republicans because Republicans are not offended by rich people.”

Orman, who has avoided saying which party he’d caucus with in an evenly split Senate, declined to be interviewed for this story. At a coffee shop in Topeka, Kansas last week, he was asked if he thought his wealth would be an asset or liability for his campaign.

“You know, I haven’t thought of it,” he told reporters.

Orman has amassed a personal fortune of at least $21.5 million, according to his financial disclosure documents — and likely much more because assets and liabilities are reported in broad ranges. He would be the fifth-wealthiest senator, based on a 2012 ranking by the Center for Responsive Politics.

Fresh out of Princeton in 1991, Orman joined the consulting firm McKinsey & Co. and wasted little time methodically building a diverse array of business interests. He created Environmental Lighting Concepts in 1992, growing the firm to $10 million in annual revenue then selling it to Kansas City Power & Light in 1996. He created a successful Minnesota commercial real estate firm, FRM Associates, in which he now holds between $5 million and $25 million in assets.

Since 2004, Orman has worked at his private equity firm, Denali Partners, investing in small and mid-sized firms. In 2012, Orman purchased a Kansas boxing equipment company, Combat Brands, saying he helped “save the brand” and protect 50 jobs. (He owns between $1 million to $5 million in the company.) Orman is now named as a defendant in a $30 million lawsuit with a rival company, Everlast, which the campaign dismisses as frivolous.

All told, Orman reports holding assets and positions in 43 companies. At least 17 are incorporated in Nevada, two are in Delaware and one in the Cayman Islands; all three locales give corporations preferable tax treatments. (Other companies are incorporated in Kansas, Missouri and Minnesota.) Orman also has ties to Hollywood: he’s listed as executive producer of Goldblum’s 2006 film “Pittsburgh,” and one of his companies made a loan of $250,000-$500,000 to ROAR, the Hollywood talent management firm run by veteran showbiz executive Bernie Cahill.

Orman’s rise has been marked by multiple court battles, including a particularly nasty showdown last year stemming from a 2009 business deal.

One of Orman’s companies, Design X Studios, had been brought in to help restructure a graphics company’s outstanding loan. But the arrangement went south, and a Kansas businesswoman, Jennifer Hopkins, accused Orman of trying to bleed dry her children’s college funds by seeking to withhold money into her bank accounts, according to court documents. Hopkins alleged that Orman had been “harassing” her colleague and violated an attorney-client privilege.

“Since July 2012, if not earlier, Greg Orman has attempted to strong-arm Jennifer Hopkins,” Hopkins’ attorney, Robert Flynn, alleged in a March 2013 court document. “If Ms. Hopkins didn’t agree to cut Orman into the deal, Orman threatened that he could delay the distribution of litigation proceeds, thereby causing Ms. Hopkins to incur financial damages.”

Orman’s attorney said in court filings it was well within the norm to target her bank accounts and denied he took such hard-ball actions against Hopkins. The case was settled out of court, Hopkins said. “I consider Greg a friend today,” she said last week.

The most controversial issue from Orman’s business past has been in the spotlight for weeks: His long-standing partnership with Rajat Gupta, a once-powerful Wall Street executive convicted in 2012 on insider trading charges and later sent to federal prison. Orman was never accused of wrongdoing by the government.

The Orman-Gupta relationship dates back to the early 1990s when the two worked together at McKinsey and continued in 2009 when they were listed as two of four owners in Exemplar Wealth Management, a financial advisory firm. It even continued after the former Goldman Sachs executive’s conviction when the candidate served in 2013 on the two-member board of Gupta’s $1.2 billion private equity fund New Silk Route, which is incorporated in the Cayman Islands.

“Rajat Gupta is a friend of mine. He made a mistake. He’s paying the price for it,” Orman told reporters at a Topeka press gaggle his campaign limited to less than four minutes long. “I’m the kind of person who doesn’t throw a friend away when they make a mistake. I believe in forgiveness. I believe in redemption, and I think Kansans are with me on that.”

Gupta invested in FRM Associates, Orman’s corporate real estate firm that has renovated and built gleaming office complexes in downtown Minneapolis. The company also has received roughly $18.5 million in federal and state contracts. (Orman, who has donated to political candidates over the years, now says that companies winning government candidates should be prohibited from donating to candidates.)

Orman’s father owns a furniture store named “Orman’s 3 Day” in the Kansas City suburb, Overland Park. He grew up with his mother in Mankato, Minnesota and five siblings in a house with one bathroom, returning to Kansas during the summers. Orman moved to Kansas in 1996, though in 2002, he purchased a 7,336-square foot home worth $1.26 million in Orlando and sold it for $3.1 million four years later, according to public records. He now lives here in Olathe in an upscale neighborhood with a golf course, manicured lawns and a waterfall along the street.

Orman wasn’t on the Roberts’ campaign radar until a month ago when the Democratic candidate, Shawnee County district attorney Chad Taylor, unexpectedly dropped out of the Senate contest. That created an opening for Orman, who had aired about $1 million in ads promoting himself as a pragmatic problem solver.

Roberts had just survived a bruising primary against tea party challenger Milton Wolf, had been dogged by questions about his Kansas residency and did virtually nothing to prepare for a tough general election race. He didn’t even have working Internet in his campaign office.

With Roberts’ sagging approval ratings and no Democratic candidate, Orman is now the favorite in the race; an NBC/Marist poll out Sunday had him up 10 points over Roberts.

Though he’s keeping his party options open, Orman’s political views — and the fact he ran as a Democrat against Roberts in 2008, before quickly dropping out — suggest he’d line up more naturally with Democrats. He backs abortion rights and a comprehensive immigration measure with a pathway to citizenship for undocumented immigrants. He says the government shouldn’t ban same sex marriage and is open to broader background checks on gun purchases. He wouldn’t say last week if he would vote to repeal Obamacare, instead saying he’d work to fix the law, a common Democratic mantra.

While he’s given money to some GOP candidates, he’s given more to Democrats, including to both Barack Obama’s and Hillary Clinton’s 2008 presidential campaigns as well as to Senate Majority Leader Harry Reid. He says he voted for Mitt Romney in 2012 and has been registered as a Republican in the past.

Last week, Orman tried to showcase distance from Reid, criticizing him in a TV spot and telling reporters in Topeka that he agrees with criticism that Reid “has been running the Senate like a dictatorship.”

But as the spotlight intensifies and he assumes the frontrunner mantle, Orman looks intent on sidestepping tough questions.

At back-to-back events in Kansas last week his campaign only notified the media of 90 minutes before they started, Orman refused to talk to reporters after the first event and took just a handful of questions after the next. When a reporter followed up to ask if he’d oppose any tax increases as a senator, an aide cut him off and pushed aside his recorder to escort Orman away. (The aide later apologized, calling the contact inadvertent.)

Even as he remains a blank slate on many issues, Democrats said they would put their faith — and possibly their fragile majority — behind Orman.

“I’m going to vote for Greg Orman, said Wagnon, the party chief, “because I’m sure not going to vote for Pat Roberts.”