Even now, people wonder how a straight arrow like Mike Pence could serve as vice president to the infamously profane and reckless Donald Trump. The question assumes the two men have little in common, and Pence is far more trustworthy. This assumption is wrong.
Like Trump, who is all about marketing himself, Pence devoted decades to building a public image that would help him succeed. His arena was Republican politics in Indiana, so he offered the public a veneer of pious rectitude. Behind it was opportunism not so different from Trump, as the case of a Pence business bankruptcy reveals.
Though big by Indiana standards, the $100 million bankruptcy of the Kiel Brothers oil company was unremarkable, except for the fact that state officials decided that taxpayers would pay most of the $20 million cost of cleaning-up pollution at the company’s properties. Also, Kiel Brothers was owned, in large part, by Mike Pence and his family. The Pence connection makes this case of dump-and-run a vivid illustration of how the rich and powerful shrug-off their debts and get the taxpayers to pay for their messes
At its height, Kiel Brothers operated more than 200 stations – most branded as Tobacco Road stores — in Indiana and neighboring states. With sales of beer, smokes, and junk food added to the dollars spent at the pumps, the cash flow eventually topped $300 million per year. For brother Greg Pence, who took over after his father Edward died, business was good enough to make him a leading figure if his hometown of Columbus, Ind. He bought a huge house in the city’s best neighborhood and became a fixture at the local country club.
Although he was a shareholder who received profit-sharing payments, Mike Pence rarely talked about the business that should have been a point of pride for a Republican who boosted the capitalist system at every opportunity. In his first winning campaign, Pence’s official biography made no mention of Kiel Brothers or Tobacco Road. However, he has often said he worked at his father’s gas station, as if it the family had depended on a shop, and the experience gave him a homey connection to regular folks.
Kiel Brothers failed when, according to one of the firm’s lawyers, Greg Pence failed to keep up with competitors who ran spruced-up stations in better locations. By the time the company sought protection in bankruptcy, vendors, and contractors were clamoring to get paid. After years of reaping dividends, the Pences saw their share value erased. However, thanks to bankruptcy laws they bore no personal responsibility for the firm’s collapse. With creditors circling, it was left to the courts to sort things out. This included the contamination at its properties.
The pollution left behind by Kiel Brothers threatened neighbors and depressed the value of its properties, which were to be sold to pay creditors. But who would want to buy properties saddled with the liability of the clean-up costs? Enter Republican Governor Mitch Daniels, who dropped the state’s claim against Kiel Brothers and committed taxpayers to paying for the environmental remediation. He also named Greg a commissioner of the Department of Environmental Management. Though he had run Kiel brothers into the ground, Greg said he was appointed for his business acumen. He served just a few months before returning to the private sector.
Although actual human beings make fateful decisions when it comes to pollution, executives are rarely linked directly to the problems caused by pollution that occurs under their watch or the damages done by bankruptcy. The gas and oil company that went broke in Indiana wasn’t called Pence Brothers. Indeed, only someone in-the-know would make the connection between the family, Kiel Brothers, and the Tobacco Road stores that were fixtures on the Hoosier landscape.
The cover that comes with corporate branding served Mike Pence well years before the bankruptcy. In 2000 the future vice president published an op-ed article that argued that “despite the hysteria from the political class and the media, smoking doesn’t kill.” Pence urged readers to reject anti-tobacco efforts as official overreach that would one day harm people who eat hamburgers or drink coffee. “A government big enough to go after smokers is big enough to go after you.”
As he denied the science that links smoking and death Pence failed to mention that he was a shareholder in Tobacco Road where the profit from tobacco purchases was converted to the dividend checks he received. This made him a participant in the great scheme that saw tobacco companies increase the addictive quality of their products to set the hook of addiction in their customers while dodging the pain, suffering, and cost of medical treatments occasioned by their business.
Big Tobacco was eventually brought to account by state authorities who sued alleging fraud and deception. More typically the public harm done by corporations — Kiel Brothers is an example — is simply absorbed by taxpayers. The fact of a moralizing, anti-welfare politician like Mike Pence being among the beneficiaries of a system that amounts to socialism for those responsible for the damage done by corporate entities makes the case worth reconsidering. It is not as an exception, but the rule. It also makes Mike Pence more like Donald Trump than most people know.
And, the man at the helm when the company went bust was — his brother Greg — is now running for the seat Mike once held in Congress.Michael D’Antonio and Peter Eisner are authors of “The Shadow President, The Truth About Mike Pence.”