The Fighting 29th

All about New York's 29th Congressional District

The obvious pratfalls in David Nachbar's City Newspaper interview
-- dismissing a Navy veteran as a "government employee" and
saying that endorsements are "silly" -- have been discussed here and
elsewhere. Instead of dwelling on Nachbar's apparent
foot-in-mouth syndrome, I'd like to concentrate on two broader
issues raised by his interview: the difference between suppressing
a candidate and criticizing one, and the challenges faced by a corporate officer who wants to become a candidate for
public office.

Let's begin with this exchange:

How do you respond to criticism that your candidacy will rob Democrats
of money and manpower and that it will ultimately hurt Democrats'
ability to take the seat?

Elections are good. Choice is good. It tests candidates, it vets
them, it makes sure that all of the arguments are heard, and it makes
sure that the voters are well-informed. This is not the old communist
Soviet Union, this is America. This is about candidates, this is about
open debate, and this is about having people who are going to get into
the mix. And I think all of that's a good thing.

The notion that it's somehow un-American for party members to want to avoid a primary is laughable. Nachbar has a right to run for any office, from dogcatcher to President. Those who think it's a bad idea for him to run for office also have a right to oppose his candidacy. The debate on this blog and others has been a healthy expression of dissenting opinion. Unlike the Soviet Union, and unlike the hierarchical corporate world, dissent is tolerated in politics. As for the "openness" of the debate, Democratic Committee meetings are open to the public. It's Nachbar who refuses to participate in an open process.

Also notice that Nachbar didn't answer the question. His campaign
will consume money and manpower in a district that has
precious little of either. At best, it's a diversion. At worst, it
will ensure Randy Kuhl's election in 2008. Earlier in the
interview, he says that he believes he can "make the greatest
impact" and "serve the best" as a Member of Congress. That's great,
but sometimes it isn't just about where you think you fit the
best: it's also about where the party can use your talent. In
this cycle, the 29th isn't that place.

Moving on to Nachbar's corporate background, it's a sure bet that his
candidacy will be dogged with issues raised by his association with
Bausch and Lomb. For example, those who are tempted to believe
his assertion that he's "the only candidate in the race who knows
what it's like to create jobs" might want to take a peek at the following
paragraph
in B&L's
2006 10-K [pdf]:

Employee Relations As of December 30, 2006, we employed approximately
13,000 people throughout the world, including approximately 4,400 in
the United States. In general, we believe our employee relations to be
very good. Less than five percent of our U.S. employees (mainly in
our surgical products manufacturing facilities) are represented by
unions.

Apparently, David Nachbar excels at creating non-union jobs in
foreign countries. That might be good for investors and management
at Bausch and Lomb, but Nachbar will have to work hard to convince voters that he "knows what it takes" to create jobs in this area.

As for the overall performance of B&L, of which Nachbar is a highly
compensated member of the core management team, take a look at this
stock chart:

The time period is roughly the period of David Nachbar's employment.
The red line is the performance of Alcon, B&L's major competitor.
B&L's performance, represented by the blue line, has consistently
lagged Alcon's. Though
B&L's overall performance is lackluster, it took a big
hit in the past year because of possible problems with its
ReNu lens solution. B&L's answer to this problem was
a $4.5
billion private equity acquisition by Warburg Pincus.

A better-managed company might have created more jobs and probably wouldn't sell itself to a firm that might want to cut jobs to raise profits. Nevertheless, B&L has managed to stay in business, remain profitable, and, most importantly, compensate David Nachbar.

Nachbar has received a number of option and stock
grants under different complex incentive plans. Examples of these
grants are shown in SEC filings for
in May,
2007
and February,
2007. Some of these incentive compensation plans include
"phantom stock" that vests years in the future. If I'm reading the
most recent filing correctly, Nachbar's deferred compensation plan has a total value of
around $900,000 at today's price if Nachbar sticks around to
pick it up. In addition, Nachbar's recent sale of around
$400,000 of B&L stock included the disclosure that he still
owns about $900,000 of stock at today's price. In other words, over and above his (I assume) generous salary, Nachbar has
accumulated deferred and actual stock worth over $2 million in less than
five years of work at B&L.

I'll wager that primary voters in the 29th might want to know why a five-year tenure as the head of personnel for a mediocre company should net Nachbar millions. More importantly, they'll also want to understand whether he'll be working for the voters or for B&L. If Mr. Nachbar remains part of the B&L management team after the
buyout, what sort of incentives does he have to stay there? Does he plan
to quit B&L to campaign in the primary? In the unlikely event that
he does win the primary, will he be free to campaign full-time, or
will he work at B&L and campaign at the same time?

These are all fair questions. Mr. Nachbar has answered none of
them. Perhaps if he deigns to visit a Democratic Committee in the
29th, someone will ask him one or two of them.