OPINION: By Mitchell Young
Or does he?
Webster Bank Chairman and former CEO James Smith said on April 6 he wants to be Connecticut’s next Governor, but he still hasn’t announced.
This is nothing new.
Smith has mused about a run for Governor for years. Smith conservative by nature, has let his smarter angels win and he has steered himself away from what would most likely be capping his successful business career with a potentially humiliating political loss.
Webster insiders had told us that Smith’s move last fall to executive Chairman made that choice more likely. When we questioned if Smith had the raw ego for a governor’s run, we were assured he did. He has however, let many months go by without declaring in what was clearly an exceptionally open Republican race, with a wide lane for a powerful well known and well-thought of businessman, like Smith.
Like many others, we’ve been there for years helping to craft the James Smith narrative. We featured him in a wide ranging interview in New Haven magazine in 2009 where he retold the family success story. His dad Harold Webster Smith [the company was renamed after him] founded the bank at 26 years old during the depression as a depositor owned bank, to help fund mortgages in Waterbury. The family eventually converted the bank to a public company and Smith grew it to a multi-state banking leader with more than $25 billion in assets, a $5 billion plus market cap and 3,200 employees. It’s an entrepreneurial success that was recognized by us as well when Business New Haven declared Smith, Businessperson of the Year in 2013.
Smith has had his business challenges too, almost losing control of the bank when he led it into a questionable residential mortgage effort in Arizona, which cratered in the financial crisis. The company’s stock now in the mid-fifties, dropped to $2 per share.
The banking icon had apparently chose to hold back on a gubernatorial run, to wait for a reaction to the recommendations from The Commission on Fiscal Stability and Economic Growth, which he led with co-chair Robert Patricelli of Simsbury, a retired health-care entrepreneur.
If Smith was expecting that the council’s recommendations to “save Connecticut”, would propel his political career further he must be sorely disappointed. Outside of Connecticut’s apparatchik class, almost no one seems in favor of its proposals.
Smith who has been a mainstay of CBIA and a former board member has watched as the group tries to distance itself from the recommendations of the two Connecticut business leaders. The Council called for cutting taxes on Connecticut’s wealthiest taxpayers and replacing the funds with increases on middle class taxpayers and businesses and included a plan to allow regions within the state to set up new taxing authorities.
In a proposal excoriated by small companies the two big business leaders called for a $15 per hour minimum wage. When legislators suggested there were components of the recommendations that could be looked at, the former CEOs both insisted that the plan had to be adopted in its entirety “to work.”
Mr. Smith no doubt has many friends and fans within the business community, and we expect others wouldn’t want to cross publicly the still chairman of Connecticut's second largest locally owned bank. However, inside the voting booth we can’t see a successful Republican run promoting a $15 minimum wage, more business taxes and a new ability for politicians to impose new region wide taxes.
Mr. Smith and Mr. Patricelli also haven’t’ done much to explain why Connecticut should be cutting its top income tax rate and shifting the burden to business and the middle class and we expect it would be a debating challenge for even this articulate CEO.
The rallying cry that Connecticut is sinking and that a change from control by the Democrats should be enough for a solid moderate Republican in 2018 is there, but Smith is not the only one with that clarion call.
Perhaps it would be better if Mr. Smith decided to save Connecticut by helping one of its premier banks stay the course.