Monday night Bridget and I watched the first debate of the governor's race. Both Gov. Jennifer Granholm and challenger Dick DeVos were disappointing. When they weren't shoehorning preprogrammed talking points into their answers like the robotic political hacks they are, they let the panel of reporters bait them into slinging mud at each other. Mind you, I'm not prissy about politics. There's nothing wrong in principle with so-called negative campaigning or raising issues of character. But that doesn't mean tarring your opponent can't be pointless, which most of Monday's attacks were.
However, Guv Jen did launch one attack that revealed a lack of character in Dick. She asked him why he failed to report on his public disclosure of assets an investment in Alterra Healthcare Corp. Alterra operated a chain of nursing homes in the U.S., including Michigan, until it collapsed into bankruptcy in 2003 amid allegations of patient abuse. Dick retorted that Alterra was a publicly traded company in which he and his wife made an investment and had no control of it because they owned less than one percent of the company's stock. In fact, Dick stressed the sub-one-percent figure twice. In doing so, he characterized his investment as akin to owning some shares in GM or Microsoft or any other ordinary investment in a public company. Befuddled by this, Guv Jen retreated.
Although Granholm's attack didn't work the way she had expected -- did she really think that DeVos somehow OK'ed the abuse of patients at Alterra nursing homes? -- DeVos's response showed us something we should know about his character. He lied. If not blatantly, he did so in fine Clintonian fashion, which is just as reprehensible for its deliberate slipperiness.
DeVos's characterization of his investment in Alterra was dishonest. In 2000 Jerry Tubergen -- at the time president of RDV Corp., the DeVos family asset management firm -- was a member of Alterra's board. He persuaded the DeVos family, including Dick and his wife Betsy, to collectively invest $173 million into Alterra to bail out the financially troubled company. The investment purchased only a small amount of the company's stock. Most of the investment was in the form of Alterra bonds (i.e., unsecured loans to the company) that were convertible into stock. If the DeVos family had exercised their option to convert their bonds into stock, they would have owned 40% of Alterra's stock, including 90% of its Class A stock. Control of that stock controls the company's board of directors.
So DeVos and his family were in fact THE major players in the financing of Alterra. Their bonds allowed them to take that control of the company whenever they wanted, and so gave them a great deal of informal influence over Alterra if not direct control -- and that assumes none of the Alterra boardmembers other than Tubergen answered to the DeVos family. That situation is rather different from how DeVos described it in the debate. He and his family had rather more influence over Alterra than owning less than one percent of the stock in a publicly traded company would suggest. While DeVos's statement about ownership of stock in Alterra was technically true, it was so incomplete as to the real stake he and his family had in the company that it was a deception.