Doug Ducey’s Rocky Road To Defeat

To: Interested Parties
From: Brad Woodhouse, President of American Bridge 21st Century
Re: Doug Ducey’s Rocky Road To Defeat
Date: Tuesday, August 26, 2014

Primary season has come to an end in Arizona, and former Cold Stone Creamery CEO Doug Ducey managed to hole up down the stretch and emerge as the Republican nominee for governor. The Tea Party favorite poured nearly $3 million into his own campaign and skipped a slew of debates en route to his unceremonious victory tonight. But the shady businessman can hide no longer — and when the spotlight shines on his record, his political ambitions are bound to melt away.

Ducey has touted endorsements from the likes of Sarah Palin and Ted Cruz, but was spurned by conservative Governor Jan Brewer, who opted to support a less extreme candidate to be her successor. Perhaps health care is at the root of their chasm — Brewer worked to expand Medicaid in Arizona, calling it a “moral issue,” while Ducey has decried the expansion as a “middle class entitlement.”

But Ducey’s extremism is hardly limited to ensuring access to health care for his constituents. Ducey has close ties to the billionaire Koch brothers and their operatives, and unsurprisingly, he toes the Koch agenda line on nearly every issue. Ducey has opposed raising the minimum wage, expressed outrage that the poorest Americans aren’t paying enough taxes, supported the claim that Social Security is a Ponzi scheme, and the list goes on.

And beyond Ducey’s extreme policy positions, his checkered business career also leaves voters with many concerns. Ducey has been accused by former franchise owners of using “dishonest business practices to perpetuate a revolving-door system that lured in franchisees, bankrupted them and then pushed them aside to make way for new ones.” Under his leadership, Cold Stone’s sales fell throughout the mid-2000s, culminating with his sale of the company in 2007 — a sale whose details remain undisclosed and include a multi-million dollar dispute that Ducey still refuses to discuss.

Doug Ducey’s got a rotten record. There ain’t enough toppings in the world to fix that.

Read our full research on Doug Ducey here.

Background:

Doug Ducey at Cold Stone

Ducey Was The President Of Cold Stone. According to Nation’s Restaurant News, “Both Marble Slab and Cold Stone, which has 50 units open, make their ice cream and yogurt from scratch in their stores and tout their products as offering fresh, wholesome escapism. ‘We like to say a visit to Cold Stone is like a 10-minute vacation,’ says Doug Ducey, president of the 9-year-old concept operating primarily in the Western states.” [Nation’s Restaurant News, 2/2/98]

2000: Ducey Was Named Chief Executive To Lead Expansion Of Cold Stone. According to the New York Times, “Following the Starbucks model, the three chains are densely situating their stores, particularly Cold Stone. Founded in 1988, with its headquarters in Scottsdale, Ariz., Cold Stone has 1,400 franchises in the United States, Japan and South Korea — most opened in the last five years. A former Procter & Gamble sales manager, Douglas A. Ducey, was named chief executive in 2000 to lead the expansion.” [New York Times, 10/26/06]

1995: Ducey Was Brought In To Handle Business Development For Cold Stone. According to Retail Traffic, “Cold Stone’s founders, Don and Susan Sutherland, opened their first shop in the college town of Tempe, Ariz., in 1988. But the chain’s rapid growth didn’t begin until 1995, when Doug Ducey, who had previously held marketing positions at Procter & Gamble and Anheuser-Busch, was brought in to handle business development. The company began franchising the following year.” [Retail Traffic, 5/1/05]

Cold Stone’s Concept Grew From A Small Mom-And-Pop Shop In Tempe Run By Susan And Donald Sutherland, Who Remained Active In The Franchise. According to the Arizona Republic, “The growing concept grew from a small mom-and-pop shop in Tempe run by Susan and Donald Sutherland, who remain active in the franchise.” [Arizona Republic, 1/11/04]

  • Ducey: “The First Store Our Founder Opened The First Store In 1988 In Tempe, Arizona Down In Suzanne Sutherland. In 1995 We Began To Franchise The Concept Aggressively.” According to Finance Wire, “VELSHI: Everybody is singing and having a nice time. Ice cream has been around forever. When did you start and what made you think this was going to be different from every other place for ice cream?DUCEY: The first store our founder opened the first store in 1988 in Tempe, Arizona down in Suzanne Sutherland. In 1995 we began to franchise the concept aggressively. What we really wanted to do is differentiate ice cream it.” [Finance Wire, 9/1/04]

Wages 

Refused To Pay Workers More Than Minimum Wage

Ducey: “McDonald’s Has Had A Great Influence On Cold Stone.” According to Nation’s Restaurant News, “Ducey, leader of the quickly growing Cold Stone Creamery ice creamchain, said he was happy to see Skinner and McDonald’s honored as the year’s top operator. ‘McDonald’s has had a great influence on Cold Stone,’ he said. ‘Wehave many former McDonald’s executives, and we’ve learned from the system’s longevity, their franchise model and their commitment to operations.’” [Nation’s Restaurant News, 10/30/06]

Ducey Claimed That He Came Up With Singing For Tips At Cold Stone In Order To Avoid Paying Workers More Than Minimum Wage. According to video of Doug Ducey’s response at the Arizona Hispanic Chamber of Commerce gubernatorial forum, “I built a company. Now I want to shrink your government and grow the state’s economy. The non-partisan Congressional Budget Office said that if we raise the federal minimum wage, America will lose 500,000 jobs. I don’t want to see us lose 500,000 jobs, I want to see us grow jobs and create the environment in which to grow jobs. So I’m opposed to it. Building Cold Stone Creamery, I believe minimum wage jobs is something that I know about. And I’m telling you, in the years we had rapid growth in developing that brand from 1996 to 2007, we had a tough time keeping a minimum wage employee. We had a booming economy in McDonald’s and In-N-Out Burger, Taco Bell and Smash Burger, all these new concepts were opening. Part of the reason we had this whole signing inside the store for tips was so that we could keep and retain these great high school kids that we brought on. So immediately wages were rising. So let’s have a booming economy, that’s the best way to get people out of a minimum wage situation.” [Arizona Hispanic Chamber of Commerce Gubernatorial Forum, 2/8/14]

Poor Performance In Early And Mid 2000s

Sold Cold Stone For Around $16 Million Less Than Original Price Because Of Poor Performance

Cold Stone’s Original Sales Price Was $80 Million, But After A Dispute, The Actual Sales Price Was Reduced “By An Amount That Was Less Than $16 Million.” According to Arizona Republic, “Ducey and his partner, Cold Stone Creamery founder Don Sutherland, became locked in a dispute with Kahala over the company’s value post-sale. […] Cold Stone’s original sales price was about $80 million. Ducey and his partner received ‘multiple payments over time,’ the intermediary wrote in an e-mail. During the arbitration process, the parties agreed to reduce the original $80 million price by an amount that was less than $16 million. ‘The parties to the transaction eventually reached a compromise which involved Kahala making a reduced final payment,’ the intermediary wrote in an e-mail. ‘The parties to the transaction have mutually agreed to waive confidentiality and have confirmed the reduction was less than 20% of the original purchase price.’” [Arizona Republic, 8/20/14]

Ducey Downplayed The Dispute, Said It Was A “Successful Sale.” According to Arizona Republic, “Ducey has downplayed the dispute involving the company’s sale. In an Aug. 12 statement to The Republic and 12 News, Ducey said, ‘It was a successful sale because we worked together and agreed on the outcome. Both sides signed off on the final terms and both were satisfied with them; indeed, the parties to the transaction continue to be satisfied with the terms of the deal.’” [Arizona Republic, 8/20/14]

Ducey Refused To Release The Details Of The Settlement And His Deposition From The Sale Dispute, Cited Confidentiality Agreements. According to Arizona Republic, “Jones, a former GoDaddy executive, and Smith, a former Mesa mayor, have called on Ducey to release details of the settlement and his deposition in the case. Jones and Smith say disclosure of documents related to the sale and arbitration would help voters judge for themselves whether Ducey’s leadership of the company was successful. Ducey has declined, citing the confidentiality agreements.” [Arizona Republic, 8/20/14]

From 2003 To 2006, Cold Stone’s Revenue Tripled, But Its Profits Decreased By 89 Percent, Its Same Store Sales Fell And It Went From Closing Three Percent Of Its Stores Compared To Store Openings To 28 Percent . According to Arizona Republic, “Financial statements show that in the years before the sale, Cold Stone’s profits were falling even as it was opening stores at a rapid pace. Documents filed with the California Department of Corporations show Cold Stone’s revenue from selling and servicing franchises nationwide more than tripled from 2003 to 2006, to $62 million, while profits plunged 89 percent, to $253,369. The average annual sales at Cold Stone stores dipped for three straight years, from $391,700 in 2004, to $354,700 in 2007. As stores were quickly opening, others were closing: in 2004, for every 100 stores that opened, three closed. By 2006, the year before the sale, 28 stores closed for every 100 that opened.” [Arizona Republic, 8/20/14]

2005: Sales At Cold Stone Fell 6.5 Percent. According to the Arizona Republic, “A bit of a chill came over Scottsdale-based Cold Stone Creamery in 2005. While the hot ice-cream franchise, ranked No. 12 by Entrepreneur magazine, opened another 338 stores, it saw same-store sales fall 6.5 percent, the first such drop in its franchise history. The company also initiated a layoff that left one-quarter of its workforce without jobs days before Christmas.” [Arizona Republic, 1/17/06]

  • Ducey: “I’m Happy We Had The Sales Issue. It’s Opened Our Thinking.” According to the Arizona Republic, “‘I’m happy we had the sales issue,’ Ducey told franchisees. ‘It’s opened our thinking.’” [Arizona Republic, 1/17/06]
  • Consultant Malcom Stogo: “The Clock Is Ticking On These Guys.” According to USA Today, “But away from the test lab, there have been some serious bumps recently for a company that some say is growing at an impossible rate. ‘The clock is ticking on these guys,’ says Malcolm Stogo, a consultant, who compares Cold Stone’s rapid expansion with other highfliers that fell to Earth, including Krispy Kreme, TCBY and Boston Market.” [USA Today, 6/9/06]

John Gordon, Restaurant Industry Analyst, Said That Cold Stone’s 2004 Sales Numbers Were “Ominous” And That Its Growth Was Apparently Unsustainable. According to Arizona Republic, “John Gordon, a restaurant-industry analyst and franchise expert from San Diego, reviewed the company’s financial disclosures. ‘They were declining as early as 2004, which is quite ominous,’ he said. ‘While the company was able to establish some early growth, it didn’t appear the growth was to be sustained.’” [Arizona Republic, 8/20/14]

Ducey Blamed Poor Performance On Recession, Even Though The Recession Did Not Start Until The Year After The Sale

Ducey Blamed The Recession For Cold Stone’s Problems, Even Though The Recession Did Not Start Until 2008 While The Company Was Sold In 2007. According to Arizona Republic, “Ducey has blamed the recession,which economists say started in earnest in 2008, for the store closures and the sales dispute. In his Aug. 12 written statement, he said ‘many companies that are in growth phases wind up investing much of their profits right back into the business. That’s how they grow.’ ‘And often times when companies are acquired they are valued for the strength of their brand and their future growth potential,’ he said. ‘That was certainly the case with Cold Stone.’” [Arizona Republic, 8/20/14]

Previously Said “I Think Ice Cream Is Recession-Proof”

Ducey: “I Think Ice Cream Is Recession-Proof… It’s A Comfort Food. It’s Something That’s Affordable, And It’s Something That Gets Back To Family And Simplicity.” According to Fast Company, “I think ice cream is recession-proof. I used to sell beer for Anheuser-Busch, and we had a saying: When the economy is good, the beer business is good; when the economy is bad, the beer business is better. I think some of those same ideas apply to Cold Stone in tough times. It’s a comfort food. It’s something that’s affordable, and it’s something that gets back to family and simplicity.” [Fast Company, 5/2004]

Poor Relationship With Franchisees

Claimed He Had A Good Relationship With Franchisees

Ducey: “The Definition Of A Happy Franchisee Is One Who Is Successful And Profitable.” According to Nation’s Restaurant News, “That philosophy applies to Cold Stone’s franchisees as well, he says. ‘The definition of a happy franchisee is one who is successful and profitable,’ Ducey explains. ‘They have to sign up to make the customer happy. That means delivering the ultimate ice cream experience. We do that through an interview process, and determine if it’s a goodfit for an individual who is coming into our system.’” [Nation’s Restaurant News, 10/16/06]

Ducey: “Franchisers Are Never In Control, No Matter What The Agreement Says. That’s Why You Need To Select The Best Franchise.” According to Inc., “Franchisers are never in control, no matter what the agreement says. That’s why you need to select the best franchisees. American Flatbread was right to focus on people with shared values in the beginning. It needs to continue doing that in selecting franchisees. When you have great franchisees who share your values, you won’t be spending money on attorneys’ fees. Doug Ducey CEO Cold Stone Creamery Scottsdale, Arizona” [Inc., 4/2007]

Ducey: “The Franchising Business Is Different Than The Business Of Operating Stores. I Do Think Both Can Be Done Simultaneously, But You Want Everyone To Think They Are Part Of The Same Team, The Same System. You Don’t Want Your Franchisees To Feel Like Second-Class Citizens.” According to Inc., “Doug Ducey President and CEO Cold Stone Creamery, a Scottsdale, Ariz., ice-cream store franchiser with 569 franchises These guys need to realize there is a learning curve. The franchising business is different than the business of operating stores. I do think both can be done simultaneously, but you want everyone to think they are part of the same team, the same system. You don’t want your franchisees to feel like second-class citizens.” [Inc., 2/2004]

  • Ducey: “If You Give The Franchisees Some Room, They Bring A Lot Of Entrepreneurial Juice To The Company.” According to Inc., “If you give the franchisees some room, they bring a lot of entrepreneurial juice to the company. Help them understand that. If they bring a good idea, you need to let them know it’s a good idea, apply it, and shout it from the roof.” [Inc., 2/2004]

Former Franchisees Accused Ducey Of Dishonest Business Practices

Group Of Former Cold Stone Franchise Owners Accused Ducey Of Using A Raft Of Dishonest Business Practices To Perpetuate A Revolving-Door System That Lured In Franchisees, Bankrupted Them And Then Pushed Them Aside To Make Way For New Ones. According to Arizona Capitol Times, “A group of former Cold Stone Creamery franchise owners accused Republican state treasurer candidate Doug Ducey, the company’s former CEO, of using a raft of dishonest business practices to perpetuate a revolving-door system that lured in franchisees, bankrupted them and then pushed them aside to make way for new ones.” [Arizona Capitol Times, 10/7/10]

  • Former Cold Stone Franchisee: “Cold Stone Didn’t Make A Lot Of Money Selling Ice Cream. They Made Money Selling Franchises.” According to the Arizona Capitol Times, “‘Cold Stone didn’t make a lot of money selling ice cream. They made money selling franchises,’ said Harold ‘Hal’ Hickman, who owned Cold Stone stores in Las Vegas and St. George, Utah.” [Arizona Capitol Times, 10/7/10]
  • Ducey Would Not Address The Specific Allegations Made By The Former Franchise Owners. According to the Arizona Capitol Times, “Ducey accused Cherny of ‘grasping at straws’ in his bid for the Treasurer’s Office, and said the former assistant attorney general and ex-White House aide was unfairly maligning Ducey’s former company. He would not, however, address the specific allegations made by the former franchise owners.” [Arizona Capitol Times, 10/7/10]
  • Former Cold Stone Franchisee: “We Were Pretty Much Set Up To Fail.” According to the Arizona Republic, “‘We were pretty much set up to fail,’ said Ed Normand, who ran a store on 75th Avenue and Lower Buckeye Road.” [Arizona Republic, 10/8/10]
  • Former Cold Stone Franchisee: “Franchisees Receive A Two-Week Training On How To Make Ice Cream, Manage Finances And Earn A Profit.” According to the Arizona Republic, “Franchisees receive a two-week training on how to make ice cream, manage finances and earn a profit, said John Link, who was not a part of the news conference but was provided by Ducey’s campaign.” [Arizona Republic, 10/8/10]

Numerous Franchisees Were Quoted Saying Cold Stone Had A “Defective” Business Model That Pushed The Cost Of Running A Store So High That It Was Difficult For Individual Owners To Make A Profit.According to the Arizona Republic, “Numerous franchisees were quoted in a 2008 Wall Street Journal story saying the company had a ‘defective’ business model that pushed the cost of running a store so high that it was difficult for individual owners to make a profit. The franchisees said rapid expansion – the company grew from a local scoop shop to more than 1,400 outlets – crowded stores too close together and brought in inexperienced franchisees.” [Arizona Republic, 7/17/14]

Salmonella Poisoning

2005 Salmonella Poisoning

2005: 14 Customers Got Salmonella Poisoning After Eating Cold Stone’s Cake Batter Flavor. According to Nation’s Restaurant News, “Cold Stone Creamery hit a serious speed bump this summer in its bid to be viewed as the nation s premier parlor for premium ice cream: salmonella poisoning. About 14 people, all of whom have since recovered, got sick in four Midwestern states after eating one of the brand’s most popular flavors, cake batter.” [Nation’s Restaurant News, 10/31/05]

  • Ducey: “It Reinforced That Food Safety Is Utmost To Cold Stone Creamery And Always Has Been.” According to Nation’s Restaurant News, “What’s the big lesson learned from your salmonella outbreak? It reinforced that food safety is utmost to Cold Stone Creamery and always has been. It reinforced the value of continuing to stress food safety with our franchisees and serving the safest and best products every day to our customers.” [Nation’s Restaurant News, 10/31/05]
  • Ducey: “It Was An Unfortunate Incident That Involved One Of Our Suppliers.” According to Nation’s Restaurant News, “How did it happen, salmonella getting in your cake batter ice cream? It was an unfortunate incident that involved one of our suppliers. But the product has been reformulated, and it is better and safer than ever.” [Nation’s Restaurant News, 10/31/05]
  • Ducey: “The FDA Truly Has Consumer Safety In Mind And So Do We. We Were Both Successful Containing What Could Have Been A Bigger Problem.” According to Nation’s Restaurant News, “I guess a bit too late given the illnesses, but the FDA truly has consumer safety in mind and so do we. We were both successful containing what could have been a bigger problem.” [Nation’s Restaurant News, 10/31/05]

Layoffs

December, 2005: Cold Stone Announced It Was Cutting Nearly A Quarter Of Its Corporate Jobs. According to the Arizona Republic, “Fast-growing ice-cream franchiser Cold Stone Creamery announced it was cutting nearly a quarter of its corporate jobs on Wednesday.” [Arizona Republic, 12/15/05]

  • Company Said It Was Refocusing Its Strategy Toward Building Sales At Existing And New Stores Rather Than Concentrating On Developing New Franchisees. According to the Arizona Republic, “The company said it was refocusing its strategy toward building sales at existing and new stores rather than concentrating on developing new franchisees.” [Arizona Republic, 12/15/05]
  • Fifty-Three Employees Were Laid Off. According to the Arizona Republic, “Fifty-three employees, from entry to executive level, in various divisions were laid off, leaving the company with 183 workers. Those laid off will be paid through the end of the year and given a severance package according to years of company service, said company spokesman Kevin Donnellan.” [Arizona Republic, 12/15/05]

Taxes And Shady Business Practices By Ducey

Cold Stone Filed Its Required Annual Reports Late Each Year From 2000 To 2005, Missing The Deadline. According to the Arizona Republic, “Cold Stone filed its required annual reports late each year from 2000 to 2005, missing the deadline by as little as 10 days (in 2002) and as much as eight months (in 2005).” [Arizona Republic, 8/19/10]

  • Ducey Said That The Filing Of Annual Reports Was A Task Delegated To The Company’s Legal Department. According to the Arizona Republic, “Ducey, who led Cold Stone from 1995 to 2007, said through a spokeswoman that the filing of annual reports was a task delegated to the company’s legal department. ‘As CEO, Doug was responsible for how the company ran,’ Sara Mueller said in an e-mail. ‘Routine administrative matters such as this seldom reached his desk, nor would they reach the desk of a CEO of any comparably sized company.’” [Arizona Republic, 8/19/10]
  • Twice During Ducey’s Tenure, The Corporation Commission Threatened To Dissolve Cold Stone For Failing To File Its Reports On Time. According to the Arizona Republic, “Twice during Ducey’s tenure, the Corporation Commission threatened to dissolve the ice-cream retailer for failing to file its reports on time. Companies that are dissolved lose their legal authority to do business in Arizona, said Rebecca Wilder, a spokeswoman for the Corporation Commission.” [Arizona Republic, 8/19/10]

Cold Stone Creamery Capital Was Dissolved By The Corporation Commission In 2006 After Failing To File Its Annual Report For More Than Two Years. According to the Arizona Republic, “But the pattern of late filings extended to Cold Stone’s other business entities. Cold Stone Creamery Capital was dissolved by the Corporation Commission in 2006 after failing to file its annual report for more than two years. It had previously been threatened with dissolution in 2002 and 2003.” [Arizona Republic, 8/19/10]

  • The Corporation Commission Could Not Find A Valid Mailing Address For The Company. According to the Arizona Republic, “According to records, the Corporation Commission could not find a valid mailing address for the company.” [Arizona Republic, 8/19/10]

Cold Stone Creamery Leasing Company Filed Its Annual Report Late 10 Times Between 1995 And 2006, And In 2002 The Corporation Commission Threatened It With Losing Its Right To Do Business.According to the Arizona Republic, “Another subsidiary, Cold Stone Creamery Leasing Company, filed its annual report late 10 times between 1995 and 2006, and in 2002 the Corporation Commission threatened it with losing its right to do business.” [Arizona Republic, 8/19/10]

Cold Stone Creamery Real Estate LLC Was Still Listed In Ducey’s Name After He Left The Company. According to the Arizona Republic, “A third subsidiary, Cold Stone Creamery Real Estate LLC, is still listed inDucey’s name even though he left Cold Stone’s parent company in 2007.” [Arizona Republic, 8/19/10]

  • The LLC Was Not Listed On Ducey’s Financial Disclosure With The Arizona Secretary Of State’s Office As Required. According to the Arizona Republic, “The LLC is not listed on Ducey’s financial disclosure with the Arizona Secretary of State’s Office as required.” [Arizona Republic, 8/19/10]

Ducey Said The Criticism Was Just A “Sideshow” To Distract From The Issues At Hand. According to Arizona Daily Star, “Ducey’s annual corporate filings to the Arizona Corporation Commission were late for the six years from 2000 to 2005, from 10 days in 2002 to eight months in 2005. Ducey, who was in charge of the ice cream company from 1995 until he sold it in 2007, said that paperwork never reached his desk, adding the criticism is just a ‘sideshow’ to distract from the issues at hand.” [Arizona Daily Star, 9/14/10]

Ducey Apologized For The Late Taxes, But Said While The Corporate Filings Also Were Late, That Paperwork Was Handled By Paralegals. According to the Arizona Daily Star, “Ducey has apologized for the late taxes, but said while the corporate filings also were late, that paperwork was handled by paralegals. ‘Those never came to my desk,’ he said. ‘This is the sideshow my opponent likes to create rather than talking about qualifications and background and ideas.’” [Arizona Daily Star, 10/6/10]

Close Ties To The Koch Brothers

Koch-Backed Groups Released Ads Attacking Ducey’s Opponents

Ducey Ally Sean Noble’s Firm DC London Ran An Ad Attacking Christine Jones. According to the Arizona Capitol Times, “A conservative veterans group is running ads attacking GOP gubernatorial hopeful Christine Jones for praising former Secretary of State Hillary Clinton just months after 2012 terrorist attack on the U.S. consulate in Benghazi that has become a cause celebre among Republicans. […] The ad was produced by consulting firm DC London, which is run by Sean Noble, an ally of Jones rival Doug Ducey.” [Arizona Capitol Times, 5/29/14]

Ducey Denied Involvement With The Ad. According to the Arizona Republic, “A Ducey spokeswoman says he had nothing to do with either of the dark-money ads targeting his opponents or a third one by Conservative Leadership for Arizona, a pro-Ducey group that ran ads accusing Jones of lying about her resume. ‘Frankly, I have a hard time understanding how any of the ads you mention exclusively benefit Doug when there are six other candidates in this race,’ said Ducey’s spokeswoman, Melissa DeLaney.” [Arizona Republic, 6/2/14]

Ducey Ally Sean Noble’s 60 Plus Association Ran Ads Attacking Scott Smith On Global Warming. According to the Arizona Capitol Times, “A Virginia-based conservative group is airing ads in Phoenix and Tucson attacking Republican gubernatorial candidate Scott Smith for supporting an international agreement to combat global warming. […] 60 Plus Association has strong ties to Phoenix political consultant Sean Noble, an ally of Republican state Treasurer Doug Ducey, who is also running for governor. One non-profit group Noble founded sent the Virginia-based 60 Plus Association nearly $11 million in the run up to the 2010 elections.” [Arizona Capitol Times, 7/1/14]

Close Ties With Koch Operatives

Ducey Met With Koch Operative Sean Noble. According to Doug Ducey – Twitter, “Thx Sean! You too. Good to be back in AZ. RT @SeanNobleDC: It was great spending time w/ @dougducey in DC this week. He’s a model conservative leader.” [Doug Ducey – Twitter, 3/23/13]

Ducey Thanked Koch Operative And President Of AFP-Arizona Tom Jenney For Supporting The Campaign Against Making The Temporary Sales Tax Increase Permanent. According to Doug Ducey – Twitter, “THX! RT @TomJenneyAFP: AFP-AZ stands with @dougducey and the rest of the No on Prop 204 campaign! AFP-AZ stands with @dougducey and the rest of the No on Prop 204 campaign! Please check out our official endorsement!!” [Doug Ducey – Twitter, 10/8/12]

Ducey Thanked Koch Operative Gretchen Hamel For Her Support. According to Doug Ducey – Twitter, “Thx Gretchen! ‘@DCgretchen: .@dougducey named one of the Arizonians that could change the state” [DougDucey – Twitter, 12/26/13]

  • Hamel Was Listed As Program Leader For Koch Brothers Group TC4 Trust. According to the Washington Post, “The Washington Post and the Center for Responsive Politics identified a coalition of allied conservative groups active in the 2012 elections that together raised at least $407 million, backed by a donor network organized by the industrialists Charles and David Koch. Most of the funds originated with two groups, the Freedom Partners Chamber of Commerce and TC4 Trust, both of which routed some of the money through a Phoenix-based nonprofit group called the Center to Protect Patient Rights (CPPR). The makeup of the coalition may change going forward, but in 2012 the network consisted of: […] Public Notice, a policy nonprofit that highlights the impacts of government spending. Its executive director, Gretchen Hamel, was listed as a program leader for TC4 on the group’s first tax filing.” [Washington Post, 1/5/14]
  • Charles And David Koch’s Political Network Received More Funding Than Other Independent Groups On The Right As Well As Labor, Channeled Through A Number Of Politically Active Nonprofit Groups And A “Maze” Of Groups That Hid Its Donors. According to the Washington Post, “The political network spearheaded by conservative billionaires Charles and David Koch has expanded into a far-reaching operation of unrivaled complexity, built around a maze of groups that cloaks its donors, according to an analysis of new tax returns and other documents. The filings show that the network of politically active nonprofit groups backed by the Kochs and fellow donors in the 2012 elections financially outpaced other independent groups on the right and, on its own, matched the long-established national coalition of labor unions that serves as one of the biggest sources of support for Democrats.” [Washington Post, 1/5/14]

Koch Brothers’ Seventeen Group-Network Received At Least $407 Million During The 2012 Campaign. According to the Washington Post, “But they have substantial firepower. Together, the 17 conservative groups that made up the network raised at least $407 million during the 2012 campaign, according to the analysis of tax returns by The Washington Post and the Center for Responsive Politics, a nonpartisan group that tracks money in politics.” [Washington Post, 1/5/14]

1% Comments

Raising Income Taxes On Those Who Did Not Pay Net Income Taxes

Ducey Tweeted “Shouldn’t ALL Pay SOME Into Our System?” According to Doug Ducey – Twitter, “Shouldn’t ALL pay SOME into our system? MT @AEI: Top 20% pay 94% of income taxes. Bottom 40% Zero” [DougDucey – Twitter, 8/11/12]

  • James Pethokoukis: “Just How Progressive Does The U.S. Income Tax Code Need To Be To Satisfy The Redistributionists?” According to a blog post by James Pethokoukis, published by the American Enterprise Institute’s blog, AEI Ideas, “Just how progressive does the U.S. income tax code need to be to satisfy the redistributionists?” [James Pethokoukis – American Enterprise Institute, 7/13/12]
  • Tax Foundation Report: Top 20 Percent Paid Majority Of Taxes While Bottom 80 Percent Paid A Smaller Percentage Of Taxes In 2009 Than They Did In 1979. According to James Pethokoukis – American Enterprise Institute, “Not only do the top 20% pay almost all the taxes, but the share of taxes paid by the top 1% has increased from 18.4% in 1979 to 38.7% percent in 2009. And as the Tax Foundation also points out in a new study, the share of income taxes paid by the bottom four quintiles has decreased since 1979, particularly since 2007. Finally, according to TF, the share of income earned by the top 1% is now back to where it was in the mid-1990s.” [James Pethokoukis – American Enterprise Institute, 7/13/12]
  • Ducey’s Home Was Worth $1.4 Million. According to Arizona Republic, “The Ducey home, which sits on a 2-acre lot in the 6500 block of North Desert Fairways Drive, is worth $1.4 million. Ducey lives there with his wife, Angela, and their three children.” [Arizona Republic, 8/8/10]

Ducey Tweeted Out An Op-Ed By Harvey Golub In Response To Buffett’s Call For The Buffett Tax. According to Doug Ducey – Twitter, “In response to Warren Buffet’s op-ed–former CEO of AMEX said this:http://on.wsj.com/qZA49O” [Doug Ducey – Twitter, 8/22/11]

  • Harvey Golub Op-Ed: The Nearly Half Of Americans Who Paid No Income Tax Should Pay Income Taxes. According to Harvey Golub – Wall Street Journal, “Today, top earners—the 250,000 people who earn $1 million or more—pay 20% of all income taxes, and the 3% who earn more than $200,000 pay almost half. Almost half of all filers pay no income taxes at all. Clearly they earn less and should pay less. But they should pay something and have a stake in our government spending their money too.” [Harvey Golub – Wall Street Journal, 8/22/11]

“Corporations Are People Too”

Ducey Tweeted Out A Blog Post By Scott Adams, The Creator Of Dilbert. According to Doug Ducey – Twitter, “Notable & Quotable http://tinyurl.com/3o9cw3k” [Doug Ducey – Twitter, 9/27/11]

  • Scott Adams Op-Ed: Romney Was Correct That Corporations Were People, Too. According to Scott Adams – Wall Street Journal, “Is it my imagination, or has the liberal wing of the media’s attacks on conservatives turned into a bunch of cheap gotchas involving nitpicked analogies and quotes taken out of context? […] Consider Mitt Romney’s quote in the context of taxes that corporations are people too. That quote was reported as if Romney is so out of touch with ordinary humans that he doesn’t know the difference between an artificial legal structure and a living person. Only a robot could say such a thing! But of course his point is one that 100% of real humans agree with: Corporate profits flow into the pockets of employees and shareholders. I remember a time when a gaffe meant you were wrong. But apparently being 100% right isn’t a defense if you’re also a conservative.” [Scott Adams – Wall Street Journal, 9/26/11]

Medicaid Expansion

Ducey Opposed Arizona’s Medicaid Expansion, Claimed It Was A “Middle Class Entitlement.” According to Ducey 2014, “Helping those who truly need it. We want to care for our most vulnerable and needy citizens, and we want our health care options in Arizona to be the best in the nation. Medicaid is a program originally designed to take care of the destitute and disabled, but it’s now being expanded as a middle class entitlement. We need to focus our efforts on people who genuinely need the help and can’t do without it.” [Ducey 2014, Accessed 8/22/14]

  • Ducey Supported Expanding Medicaid Based On The Waiver Model, As Seen In Arkansas And Indiana. According to Ducey 2014, “State Control. There’s no reason we need to be stuck with the policy options the feds want to impose on us. States such as Arkansas and Rhode Island have sought and received waivers to do things differently. In Indiana, then-Gov. Mitch Daniels enacted innovations like Health Savings Accounts into Healthy Indiana, the state’s Medicaid program, in a way that has not only promoted personal responsibility but also kept costs down – while having a 96% satisfaction rating among participants. It will be a top priority of the Ducey administration to learn from the best practices of other states and to get out from under the federal government’s thumb. I will lead the effort to negotiate a Medicaid waiver for Arizona and to protect our state from Obamacare, one of the worst laws ever signed by any American president.” [Ducey 2014, Accessed 8/22/14]

Reproductive Health

Ducey Said The Hobby Lobby Supreme Court Decision Was “A Win For Religious Freedom.” According to Doug Ducey – Twitter, “Today’s #SCOTUS decision is a win for religious freedom and yet another blow to #Obamacare.” [Doug Ducey – Twitter, 6/30/14]

Minimum Wage

Ducey Opposed Increasing The Minimum Wage. According to video of Doug Ducey’s response at the Arizona Hispanic Chamber of Commerce gubernatorial forum, “I built a company. Now I want to shrink your government and grow the state’s economy. The non-partisan Congressional Budget Office said that if we raise the federal minimum wage, America will lose 500,000 jobs. I don’t want to see us lose 500,000 jobs, I want to see us grow jobs and create the environment in which to grow jobs. So I’m opposed to it.” [Arizona Hispanic Chamber of Commerce Gubernatorial Forum, 2/8/14]

Social Security

“Ponzi Scheme”

Ducey Tweeted Out A Blog Post By Scott Adams, The Creator Of Dilbert. According to Doug Ducey – Twitter, “Notable & Quotable http://tinyurl.com/3o9cw3k” [Doug Ducey – Twitter, 9/27/11]

  • Scott Adams Op-Ed: Social Security Was A Ponzi Scheme; “Literally No One On Earth Disagrees With The Central Point Of Perry’s Analogy” That Social Security Was A Ponzi Scheme. According to Scott Adams – Wall Street Journal, “Is it my imagination, or has the liberal wing of the media’s attacks on conservatives turned into a bunch of cheap gotchas involving nitpicked analogies and quotes taken out of context? […] Consider Rick Perry. He called Social Security a ‘Ponzi scheme.’ As analogies go, that’s a good one. I believe I have used it myself. It’s a colorful way of saying the math doesn’t work well when the population of retired people greatly increases and the number of workers funding Social Security does not. Literally no one on Earth disagrees with the central point of Perry’s analogy. But I keep seeing Perry’s Ponzi scheme quote reported as if it were some sort of idiot misunderstanding or conspiracy theory or foreshadowing of evil. . . .” [Scott Adams – Wall Street Journal, 9/26/11]