Conservatives and Tea Party groups in recent weeks have come out stridently against Republican Senate candidate Jon Bruning primarily for two reasons. First, they say they believe he is a crony capitalist in the mold of Republicans of the past decade that gave rise to the Tea Party. And second, they believe his financial entanglements will make it difficult for him to defeat Democrat Bob Kerrey in the general election in a race Republicans must win to shift the balance of power in the U.S. Senate to their side.
Bruning was elected attorney general in 2002 and won reelection in 2006 and 2010. After he became attorney general, according to the Omaha World-Herald, Bruning and his business partners, in 2005, formed Frontier Holdings and Frontier Management. The latter would provide “management services to the banks” that Frontier Holdings acquired.
As the World-Herald story details, Frontier purchased the Bank of Madison in 2005; bought Pender State Bank for $12 million in 2007; and in 2011, Frontier raised nearly $20 million in private stock offerings and bought Richardson County Bank and Target Bank in Falls City, Nebraska for $12.7 million.
The World-Herald reports that Bruning’s ownership “of the management company has grown slightly over the years to 27.5 percent.” Frontier Management receives yearly management fees from the total assets of all the banks it runs. This management fee is 4 percent of each of the bank’s assets. Further, Frontier Management receives commissions on any bank that is purchased. And since Bruning also is a partner in Frontier Holdings, the holding company for the banks, that allows him to gain more income as the banks appreciate over time.
In financial reports filed by Bruning when he was contemplating a run for U.S. Senate in 2007, assets of between $500,000 and $1,000,000 for Frontier Holdings were indicated. In the same disclosure form filed in 2011 for his current candidacy, assets for Frontier Holdings are listed as between $5,000,000 and $25,000,000, an increase between $4,000,000 and $24,500,000 from the years 2007 to 2011, when Frontier purchased Pender State Bank, Richardson County Bank, and Target Bank.
There is a potential conflict of interest here, according to the World-Herald, in that Bruning, as attorney general, is responsible for investigating members of the banking commission–the very commission that oversees the banks that his company owns. That is a point that Republican rival Don Stenberg–who has since faded far into third in the U.S. Senate primary–brought up in one of the debates.
As the World-Herald wrote about Bruning, “Most millionaire politicians achieve wealth before winning office,” but “Jon Bruning blazed a different path, one in which an ambition for affluence led to involvement and investment in at least 17 private companies, nearly all while serving as Nebraska’s attorney general.
“Along the way, the Republican front-runner for the state’s open U.S. Senate seat built a multimillion-dollar net worth while drawing a salary that ranged between $75,000 and $95,000 as the state’s top lawyer. His business pursuits have emerged as an issue in the campaign, prompting critics to question how he could find the time to fulfill his public responsibilities.”
The World-Herald went on to highlight other questions about Bruning’s potential conflicts of interest–some dating back several years.
For these reasons, many conservatives have expressed doubts about whether Bruning would be the strongest candidate in the general election–and whether, if he were to win the Senate seat, he would challenge the culture in Washington that rewards the status quo and perpetuates a system of crony capitalism.