The walk to Vernon G. Buchanan's office is through a narrow, fluorescent-lit hallway above Sarasota Ford, just off busy U.S. 41. As executive wings go, it's more fitting, perhaps, for a car dealer than for a wealthy CEO who runs a host of companies-from an automobile dealer group to real estate firms and an aviation and charter yacht business. Nonetheless, the cramped hallway bespeaks power and more than a little bit of ego. Covering both walls are photographs of a smiling Buchanan with his arms around some of the most powerful people in the country. There he is wearing a cowboy hat, standing with President George W. Bush. Clad in a tux, he's beaming beside Gov. Jeb Bush at a Republican National Committee function. In others, he's side-by-side with such major powers as George H.W. Bush, Ronald Reagan, Karl Rove and Rudy Giuliani.
That Buchanan, 54, CEO of Buchanan Enterprises, which includes the Buchanan Automotive Group-one of the largest independent dealers in the country-is more interested in politics than cars at the moment is no secret. He's been gearing up for years to run for national office and finally found an opening when U.S. Rep. Katherine Harris announced she would run for U.S. Senate.
Buchanan won't be the only Republican on the slate. Affable Sarasota banker Tramm Hudson, former chair of the Sarasota County Republican Party and the district's only Bush Pioneer (meaning he raised at least $100,000 for the President's re-election), has coveted a House seat for years, and such heavyweight local Republicans as developer Pat Neal and former U.S. Rep. Dan Miller have endorsed him. Also running is well-regarded State Rep. Nancy Detert, whose eight-year term limit will be up in 2006. State Rep. Donna Clarke and Manatee County Republican chairman Mark Flanagan are also considering the race.
On the Democratic side, former banker Christine Jennings and attorney Jan Schneider are both running again, joined by first-time candidate Manatee County AIDS activist and deacon Michael LaFevers. But in Florida's heavily Republican 13th District (which includes all of Manatee, Sarasota, DeSoto and Hardee, and a tiny portion of Charlotte County), the toughest competition often comes in the primary.
Many politicos say that out of all the candidates only Buchanan and Hudson will be able to raise the $1.5 million that's probably necessary to win the primary on Sept. 5, 2006. Buchanan's company revenues are projected to be close to $800 million again this year and he owns a glamorous Gulf-front Longboat Key mansion, private jet and 110-foot yacht. He's hired pricey national political consultants, including leading RNC strategist Tommy Hopper as campaign manager, and national Republican media expert Adam Goodman, whose current and past client list includes Harris, Giuliani and Trent Lott.
Still, Buchanan is not a shoo-in. The consummate salesman will have to sell himself to voters, winning their affection and convincing them that he understands and can act on the issues that matter to them.
And he may even have to overcome the "rich-guy syndrome," as Detert describes it, the skepticism people often have toward the rich and powerful. When asked what differentiates him from Buchanan, candidate Hudson quips, "He's much taller than me and his boat is bigger," quickly adding that he owns only a 20-foot outboard speedboat. Detert retorts that both Buchanan and Hudson are millionaires. The difference? "Vern wears his money and Tramm banks his," she says.
And then there's another unexpected hurdle. A messy business failure from Buchanan's past has resurfaced just as he revs up his campaign.
Buchanan is a self-made man, a point he loves to make in conversation and public appearances. "His narrative is appealing," admits New College of Florida political scientist and Sarasota County Democratic Party vice chair Keith Fitzgerald. "He is the working-class guy who worked hard. A rugged individualist who made it on his own."
In person, he's courteous and earnest-almost too earnest, as though he only has a short time to convince people of his way of thinking. He rarely seems relaxed and his foot wiggles when he get impatient or uncomfortable. In contrast to Hudson, who often challenges visitors to a game of ping-pong on the terrace outside his office, loves to joke and can establish an easygoing rapport with almost anyone, Buchanan seems scripted in interviews, without any self-deprecating humor-or any sense of humor at all. In July, only weeks after he announced his candidacy, he was just starting to hone his political persona and fuzzy about his positions on national issues (see "Still Looking," below).
But Buchanan's employees and acquaintances describe a generous, high-energy visionary who does deals on napkins, eschews ponderous documents in favor of face-to-face negotiations and respects his employees but is ruthless when it comes to results. "I tell everybody, I love them all, but you've got to perform. If you don't, then you can't hang out with the group," Buchanan says. He likes to point out that in both the quick-printing industry, where he made his first fortune, and in car sales, he started out without a shred of experience. "I never worked a day in either business before I started," he says.
His rise in the auto industry has been remarkable. He bought his first dealership in Ocala in 1992 and now employs 1,100 people in 20 dealerships in three states. Last year his company sold more than 30,000 new and used cars and reported revenues of $789 million. Automotive News' 2004 survey of the top 100 dealer groups ranked Buchanan Automotive No. 27 in sales among privately owned groups. Buchanan structures his business differently from most other auto groups: Rather than hiring general managers who are employees, he believes in owner/operators at each dealership, individuals who risk some of their own capital to buy in, although he'll never give any owner more than 49 percent controlling interest. He says this business model is what's allowing him to run for office. "I've got partners and owner/operators I don't need to babysit," he says.
As the oldest of six children, Buchanan grew up in the working class town of Inkster, Mich. His father, Jess, a Democrat and a union man, worked for 32 years on an assembly line, and his mother, Esther, was a homemaker. Buchanan was one of those scrappy, ambitious kids who delivered papers, bagged groceries and mowed lawns. "He was competitive," remembers his brother Darryl Buchanan, 53, who lives in Detroit. "Really competitive." And he didn't experiment with the normal adolescent behaviors-"I've never seen him drink a beer, ever, to this day," Darryl says.
"I haven't ever had a beer or a cigarette," confirms Buchanan, who also doesn't drink coffee. "I like green tea."
After graduating from high school in 1969, he briefly tried Henry Ford Community College before joining the Air National Guard. He trained in Biloxi, Miss., for three months, and then went back to Michigan, where he attended Eastern Michigan University and transferred to Cleary College in Ypsilanti, where he studied business. By that time, Buchanan had focused his energies. He became president of the student council and his fraternity and graduated in three years with a 3.6 GPA.
In a math class, he also met Sandy Cudnohufski, a pretty co-ed from Pontiac, Mich., who had ambitions to become a lawyer. They found they had much in common. "We were both raised by solid parents, liked health and fitness, were positive about life," she says. And for Sandy, whose faith has always been central to her life, Vern's parallel feelings about the church were essential to their partnership. "He's a Christian. He knows who he's accountable to, ultimately," she says. They married five years later; Sandy was 24 and Vern was 26.
Upon graduation, Buchanan took a job as a junior marketing salesman for Burroughs and sold computers to small and mid-sized companies for about a year. Sales suited him. He had a winning personality and a drive to be the best, and Sandy says he outgrew the company quickly.
Perhaps that's why, when he saw an advertisement in a magazine for a Texas-based company called Success Motivation Institute, he was intrigued. SMI was selling franchises in what it called the sales and management consulting business. Buchanan invested $5,000 of his own savings, borrowed $6,000 from his father and began knocking on the doors of small companies, selling them materials on how to become successful entrepreneurs through planning and positive thinking. After 18 months, Buchanan says he was the No. 1 franchise in the network and he became convinced the franchising concept was his future. "I love the idea of being in business for yourself but not by yourself," he says.
One of his clients owned several Kwikie Duplicating franchises, and Buchanan surmised the climate was good for the quick-printing industry. Small businesses wanted more desktop publishing and four-color printing services, and technology had evolved to the point where small print shops could handle the jobs. So in 1976, at the age of 24, Buchanan and his partner formed a new company, called Speedy Printing, eventually adding the name American to make it American Speedy Printing. "I started my company with $1,500 and never put another dime in," he says. American Speedy Printing eventually grew to 750 stores in 44 states with $160 million in sales, according to Buchanan.
Newspaper and magazine clippings from those days portray a dashing young rising star. By the age of 36 he was living in a 14,000-square-foot cream-colored mansion in Bloomfield Hills, a posh Detroit suburb, and working out in his private gym while his two young sons played on a $4,000 swing set. He bought a 110-foot yacht, the Entrepreneur, which he still owns and keeps in the Caribbean. It has five staterooms and can host a party of 100.
By 1987, American Speedy Printing seemed poised to go international. According to an article in the Detroit Free Press, Buchanan had a goal of increasing the number of stores from 450 to 2,000 by 1994. And he was winning awards. The United States Jaycees named him one of the nation's 10 outstanding young men and one of Michigan's top five young men. Harvard Business School Club of Detroit presented him with its entrepreneur award. In 1989 he won an Ernst and Young's Entrepreneur of the Year award in the state of Michigan. "He was a public figure," Sandy says.
In 1989, Vern says, he sold American Speedy to Merrill Lynch. The market for quick printing was faltering, he explains, and he wanted to move near the water. Florida, where he had been vacationing for years, was the top choice.
But though Buchanan has often described that transaction as a proud success, there's more to the story than that. American Speedy Printing ended up in bankruptcy-a failure few businesspeople, especially those who have positioned themselves as big-league successes, want to bring up-and it left a trail of unhappy and angry people.
Hints about this period in his life began arriving last summer at the offices of media and community leaders in anonymously sent letters, alleging that Buchanan acted less than honorably during the period before American Speedy's bankruptcy. "I totally disagree," Buchanan says.
American Speedy's troubles began in the mid-to-late '80s, when Buchanan still dreamed of growing it to 2,000 stores. He had started selling master franchises, huge territories such as the Mid-Atlantic region or the Pacific Rim, to well-known Michigan businessmen with large, successful companies. The master franchisers would be responsible for selling individual franchises in their territories. This strategy appealed to Buchanan, who likes to decentralize his business, and the territories brought in big money. In contrast to the $166,000 it cost to buy a single store, each territory cost "probably about $2 million," says banker Mark Gregory, who is the executive vice president of Comerica in Detroit and who financed many of the deals about 17 years ago.
"Speedy was cranking along," Gregory remembers. "Vern sold a lot of these things fast. He sold maybe 12 to 18 of them."
Ben Maibach III, president and CEO of Barton Malow, a large Detroit construction firm, was one of the master franchisers. Maibach bought the Mid-Atlantic region (Maryland, Virginia, West Virginia, and parts of New Jersey, Delaware and the District of Columbia) in 1988 for $1.6 million, according to court records.
About the same time, in 1989, Buchanan received a $15.4 million non-recourse loan from Merrill Lynch Interfunding, a subsidiary of Merrill Lynch set up to do middle-market leveraged buyouts, many of which ended up in bankruptcy like American Speedy. American Speedy looked like a fast-growing, profitable company at that point, ready to expand to Europe and Asia, and Buchanan says some estimates valued the company at $50 million. According to Buchanan, Merrill Lynch Interfunding saw an opportunity to create additional value and possibly take the company public in two years.
Buchanan moved to Florida shortly after receiving the loan, although he stayed on as CEO and as chairman of the board. "If it was a successful buyout, I had an opportunity to pay Merrill Lynch off and participate in any upside," he says.
But then, says Buchanan, the perfect storm hit. The savings and loan industry crashed, war broke out in the Middle East, and the economy slid into recession. Some of the smaller franchisers had trouble getting financing for their territories or paying back their loans. The larger, master franchisers weren't able to sell franchises and the revenues of the existing stores weren't as strong as they had anticipated. American Speedy began having problems paying its bills.
"As profitability began to decline, Merrill Lynch stepped in to save their interest," says John Tosch, who was general counsel for American Speedy during that period and after the Chapter 11 reorganization, and now works for Buchanan as chief operating officer of Buchanan Automotive. Merrill Lynch forced Buchanan out in 1991 (although Buchanan says he resigned because he didn't like the direction the company was headed).
But many of American Speedy's master franchisers and creditors didn't blame the economy; they blamed Buchanan, Merrill Lynch, accounting firm Deloitte and Touche and other American Speedy parties. They accused Buchanan of misrepresenting the health of the market and the company's revenues when they purchased their franchises. They claimed that Buchanan was improperly using money from American Speedy to make payments on the loan, bankrupting the company.
Many filed fraud lawsuits. Joe Kaiser is one of the former master franchisers. The chairman of Gallagher-Kaiser Corp., a large design-build paint contractor for the auto industry, Kaiser bought American Speedy's California territory and the Pacific Rim region that included 127 stores in the United States, 20 in Japan and three in the Philippines. Still angry today, he claims he lost $6 million with American Speedy.
Barton Marlow CEO Maibach also filed a fraud lawsuit against Buchanan, claiming he lost $600,000. He says Buchanan made a verbal promise to him that if Maibach were ever unhappy with the deal, Buchanan would buy back the territory. Maibach took the suit to trial. "Within an hour, a jury convicted him," says Maibach; but a judge overturned the verdict. Maibach's attorney, Tom Porter, says after taking the case to an appeals court, "there was some settlement reached."
The IRS went after Buchanan as well in 2000, claiming he owed $4.7 million in additional 1993 taxes because of the sale. Buchanan eventually paid $1.26 million.
Detroit attorney Robert Weisberg, who was the lead attorney for the unsecured creditors, says his clients-everyone from the window washer to the master franchiser-"received 20 to 25 percent of what they were owed." And while he argued in court that Buchanan overstated earnings, illegally distributed dividends to himself, set up corporations with obligations to American Speedy that could never be paid off, and neglected his fiduciary relationship to American Speedy for his own benefit, Weisberg seems philosophical about it all today: "Vern structured a transaction and somebody else took a risk. That's what business is about."
Banker Gregory believes the master franchisers deserve most of the blame. "They were all high-profile businesspeople. I told them the forecast was too risky. I asked, 'What are you smoking?' They said, 'Vern said we were going to make a lot of money.' They thought it was like picking money off a tree. When one or two rich people jump on the bandwagon, others follow. Nobody was holding their feet to the fire. Vern never did anything illegal. If he did anything, it was overzealous selling of his product. That's a long way from lying and cheating and stealing."
Buchanan says contrary to running away, he put $3.5 million back into American Speedy to keep it afloat. And when the company filed for bankruptcy, he tried to buy it back. "But because of the dynamics-everyone was too emotional, too many competing parties, too much friction-it didn't work out," he says. "The company had $3 million in cash. I think the company could have been restructured. Things just spun out of control."
Sandy, who worked for the company until she had her first child in 1981, says, "The franchises were our families. When the leadership changed, the whole environment changed for us. It was very painful for Vern to see his baby get in this situation."
"It was a difficult period for me. I'd never had any setbacks," Buchanan says. "Emotionally, I feel bad about it. I did lose control of my company and, looking back, I'll never do that again. The most important asset I have is my reputation. It was a painful lesson."
American Speedy emerged from bankruptcy the next year as a profitable company, and today it is part of the Allegra Network. "It's still a good company," Buchanan says.
What will this new information mean to Buchanan's campaign for Congress? It's too early to tell. So far, Buchanan has plenty of civic leaders supporting his campaign. State Rep. Bill Galvano, Manatee County Sheriff Charlie Wells, former Florida Sen. John McKay, former Sarasota Chamber president Tim Clarke, and John Saputo, president and owner of Gold Coast Eagle, are all enthusiastic boosters.
And like many politically ambitious people, Buchanan has invested considerable time and energy in building a high-profile image and connections. After moving to Sarasota in 1998, he quickly assumed leadership posts at important institutions, such as the John and Mable Ringling Museum of Art, and established a reputation for philanthropy, giving "well over" $1 million annually to dozens of arts and education groups. "We give back 10 percent of what we earn to the community every year," he says.
He is a former head of the Greater Sarasota Chamber of Commerce (the chamber building is named after him), the current chair of the Florida Chamber and a board member on the U.S. Chamber. Since June 1999, he and Sandy have contributed $270,450 to Republican candidates and committees, according to the Federal Election Commission. He wrote a check for $100,000 for Bush's 2004 inauguration and attended dinners that gave him face time with the President. "He has a relationship with Republican leadership in Washington," says Rep. Galvano. "As a freshman, he can go in and have access that others won't have."
If the campaign does narrow down to Buchanan and Hudson, both candidates will be able raise the $1.5 million experts say will be required for TV ads and direct mailings. But grassroots campaigning is also crucial to reach voters, and some political insiders see Buchanan as more comfortable hobnobbing with power players than doing down-and-dirty door-to-door campaigning and endlessly working the phone banks. The genial Hudson, on the other hand, will probably relish doing the rodeo, trailer park community and Kiwanis luncheon circuit, smiling and shaking hands wherever he goes.
Dan Miller, the former Congressman from Manatee County-and a Hudson supporter-predicts it will come down to personality. "There's not a huge difference between candidates," he says. "All are fiscally conservative. It will probably boil down to the likeability of a candidate and what is your background."
And already Hudson, who doesn't have Buchanan's impressive background of empire building, is trumpeting his "unblemished business record." Is that a pointed reference to Buchanan's past business troubles? "I have an unblemished business record," Hudson repeats.
Still, Buchanan has a powerful rags-to-riches story that resonates with voters. And he has one more asset: that positive, can-do attitude that helped propel him to success. "I'm 54 and I'm in good health," he says. "I think our country's at a crossroads and there are a lot of issues in Washington. I have the skill set and a common sense in business issues. I can weigh in and make a big difference."
Private, serene and polished, Sandy Buchanan could be Buchanan's hidden weapon. She describes herself as "a prayerful woman" and is an active member of First Baptist Church in Sarasota. "I've always had my faith. It's probably the greatest passion I have next to my family," she says. That includes the Buchanan sons, James, 23, who just graduated from Florida State University, and Matt, 21, a sophomore at Stanford University.
Sandy grew up in Pontiac, Mich., the daughter of another self-starter, her father Sal Cudnohufsky. Now 89, Cudnohufsky was No. 11 in a family of 17 children. Forced to quit school in fifth grade to help feed the family, her father managed to become a machine tool inventor with at least 25 patents to his name and eventually owned his own successful company. "He's my hero," she says.
The campaign will not be easy, she acknowledges. "But if God calls you to serve, you serve."
Buchanan on the issues.
House committees you would like to sit on: I guess I haven't looked at it. Top Priority: Terrorism. The Iraq War: I support the president. We are where we are. We need to get that wrapped up as soon as it makes good sense and get our kids home. The current system of rotating National Guard service: We need to find a way to find more people to serve so there's not so much pressure on the people who are there. Are you encouraging your own sons to serve? I don't discount it out. On overturning Roe v. Wade: I'm pro-life. Florida's growth: We should be looking out 50 years and get some infrastructure in place. It does concern me because [otherwise] you kill the golden goose. The Guest Worker Program: I'm looking at it right now. Stem cell research: I'm looking at it, but I'm pro-life. Medicare: We've made commitments to seniors and we need to honor those. However, we need to be more efficient. I haven't spent a ton of time on it. The Supreme Court's latest ruling on eminent domain: I'm against it. Offshore drilling in the Gulf of Mexico: I'm totally against it. The role of religion in politics: I don't know that it's something you need to wear on your sleeve. I'd like [for] people, regardless what religion, [to] practice something, because otherwise who's to say what's right and what's wrong?
In addition to his auto dealerships, Buchanan also owns 24 other companies, including:
THE MET, a fashion house, spa and salon on St. Armands Circle.
SARASOTA-BRADENTON AVIATION, INC., a charter-jet business at the Sarasota Bradenton International Airport.
V.B. MOTOR YACHTS, LLC and V.B. CRUISE CHARTERS, LLC.
GRAHAM CONSTRUCTION, LLP, a Sarasota contracting firm that builds commercial buildings and some of Buchanan's dealerships.
JAMATT REALTY, INC., a Sarasota brokerage that handles Buchanan's real estate projects.
MOBLEY HOMES OF FLORIDA, a Tampa home-building company, which has built more than 1,000 homes in the last 14 years.
CANREY, a Sarasota home-building company run by his brother Ed Buchanan.