Fact Check: Is Schultz the Right Businessman to Run for President?

Is Schultz the Right Businessman to Run for President?
Is Schultz the Right Businessman to Run for President?

It’s getting more common to hear people complain about professional politicians. Our leaders used to be men with real-life experience, but increasingly they’ve never done anything much outside politics. These days, even a stint as a lawyer is seen as pretty radical. We really need congressmen, secretaries and presidents who’ve done something else for a while and remember what it’s like to not work in government. But are outsiders always better than career politicos? Some people are saying Howard Schultz might not be.

Highlights

  • Howard Schultz, a former CEO of the Starbucks coffee chain, is considering a 2020 run at the White House as an independent. On the face of it, he’s exactly the sort of person we want in the race — a successful businessman who, as a refreshing bonus, isn’t tied into the party system. Yes, we prefer a Republican president, but the system needs a shakeup every so often.
  • However, since he started dropping hints of his presidential ambitions, Schultz has faced both scrutiny and criticism. Some people say he’s not such a great candidate after all; others think it doesn’t matter how good a candidate he is — running is still a bad idea.
  • One black mark against Schulz is that a venture capital group he helped to found is tied to a controversial for-profit college that’s ripped the federal government off for hundreds of thousands of dollars of taxpayers’ money.
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  • Finance group Maveron invested $7.5 million in Minnesota’s Capella University — which then went on to overcharge the federal student loan program by close to $600,000.
  • While it’s harsh to judge Schulz for what recipients of his group’s investments do, it’s since emerged that he personally owns 50,000 shares in the college.
  • More seriously, Maveron has also invested heavily in a firm that specialized in setting up tax shelters. Quellos Group managed around $20 billion in funds and wasn’t too scrupulous about its dealings with the IRS. It’s estimated that between 1999 and 2006, Quellos helped clients evade about $240 million in US taxes. One of the group’s co-founders and a senior attorney ended up in jail.
  • Schulz could certainly make some good arguments about how the best way to make tax shelters go away is to simplify our tax code, but thanks to what we now know about his investments, he’s lost a lot of credibility before the race even starts.
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  • To make matters worse, senior Democrats don’t want him to run. As a “progressive” candidate with real-world experience, he’s likely to suck up a lot of anti-Trump votes and weaken the Dems. Given the pressure their famously heavy-handed party machine can bring to bear, it doesn’t look like Schulz’s 2020 campaign will go anywhere.