Ten days ago IPR reported on criticism of the CEO record of 2008 LP Vice Presidential nominee Wayne Root, who is running for Chair of the Libertarian National Committee. Today Root responded with a detailed look at his career and finances:
During my run for Chairman of the Libertarian National Committee, perhaps the strangest criticism I have seen lobbed toward me (from a poster at IPR) is that I have failed in one of my businesses.
That comment shows a complete lack of understanding of the entrepreneurial process in a free market economy. The only person I ever met who has never failed was someone who never took a risk. I take risks. I succeed because I’m willing to fail, to lose my money, to learn lessons from my failures. That is the key to entrepreneurship. As John F. Kennedy said, “Only those who dare to fail greatly, can ever achieve greatly.”
I am not an employee. I do not collect a safe paycheck each week. I am a risk-taker, an entrepreneur. I take risks with my own money, boldly and courageously put my money where my mouth is, open businesses- often at a cost of millions of dollars, and create jobs. I often take no pay…sacrifice…work 14-16 hour days…risk my own money to make payroll on bad weeks, so others don’t have to take risks, so others can live the American Dream (and perhaps save their money and someday start their own business). Some of these ventures work, some do not. That’s why it’s called risk-taking. I do this because I believe without risk, there can be no reward. There are understandably going to be occasions when I rely on others to help me succeed. That is why I have always been so grateful for the legal support offered by a specialist business law firm.
Yes, I had a business fail during this depression, but it was a small part of my very complex and successful career (see below). It is misleading (and beneath Libertarians) to point to the one failure, without mentioning my many great successes. And without bothering to understand the circumstances of the failure. I sold my company to a $38 MM public company in 2007. My parent company- through no fault of my own- went out of business in the middle of a worldwide credit freeze- just as millions of other businesses did. I remain CEO of that public company, which is actively searching for a new business to acquire. All of the major investors in that company are fans of mine and have asked me to remain as CEO. Their goal is to find a product that fits my personality and allows me to be CEO and spokesman. They certainly have the votes to remove me, if that was their desire. I was hurt far more than any other shareholder by the failure- I lost millions of dollars in stock and options. It was devastating. But I am a Libertarian who believes in capitalism and free markets- I never complained and certainly never asked for a bailout. I don’t believe anyone owes me anything. All of us have to work for our success…and clean up the mess, pick up the pieces, and find a way to rebound when we fail. Government has no place in this process.
But the most important part of the story is what we produced with that company. I was CEO of that company for 10 years (from 2000 to 2009) and during that time we employed hundreds of people, made about 500 payrolls that allowed my employees to buy homes and cars, pay their bills, enjoy life, raise children, pay their medical bills, and live the American Dream. During those 10 years my company pumped $60 million dollars into the U.S. economy. I’d call that a success. It takes millions of daring entrepreneurial risk-takers like me, with millions of businesses just like this, to create jobs and make the U.S. economy grow. As Libertarians who believe in capitalism and free markets, we should be praising and encouraging the people taking these risks, and recognizing their courage- not denigrating them for their failures. Taking risks include investing in the your business and showing a willingness to adapt to the ever-changing market we find ourselves competing in. My friend owns a small food production company and masde the brave decision to invest his money in a industrialized equipment to help him expand his business (you can look for ruggedised industrial pointing devices today). This was a massive risk to as the investment brought financial pressure to succeed, but this is a risk is what will give him the opportunity to succeed.
But it’s not my loss that is important…it is what I did after that loss that should be celebrated. I picked myself up started a new business from the ashes, and built an industry leader, now more successful than my old company ever was. I’ve created a runaway success (by changing my business model) in the middle of a depression. I believe that’s the kind of leadership, entrepreneurship, and creativity that the LP now needs from its National Chairman/CEO.
Now to explain my career, so you can see the full picture. Last year (2009) I made just under $500,000 in what for me was an “off year.” I think I’m a pretty successful entrepreneur. I know Obama would define me as “wealthy” and super successful based on my income. Successful entrepreneurs know some things work, others don’t. That’s a major part of business success. As I say in business speeches across the globe, “What do you call someone that starts 7 restaurants…with 6 of them failing miserably…and only one succeeds? MILLIONAIRE. You only need one.” Often people who are not risk-takers or entrepreneurs don’t have an understanding of the key to business success: Without risk, there is no reward.
This year (2010) is shaping up to be my best year ever. I am on track to make in the neighborhood of one million dollars, or close to it. The best news of all is that I’ve diversified my career. That money will be equally divided by my careers as CEO of a web company; my licensed brand name deals in the sports handicapping industry; my book royalties; business speaking royalties; TV producer fees for “Ghost Adventures” (the 2nd highest rated show on Travel Channel); my fees on the other reality TV shows I’m producing; host of web TV shows for Newsmax (the 12th most popular web site in the world according to Nielsen ratings); my spokesman roles for a national rare coin/gold bullion company, a global financial services and education company, and a large law firm in Las Vegas. If you ever find yourself in Las Vegas, you’ll see my billboards all over the fastest growing town in America for the past 25 years…and you’ll see my TV ads running all day and night during news and court shows.
I now hope to embark upon the biggest risk of my life … becoming CEO of the Libertarian Party. In many ways, the LP is a small business. The GOP and Democrats are our Fortune 500 competitors. I know how to compete on a limited budget with the big boys. I will use my past successes (and the lessons from my failures) to bring our party to the next level. I took a small start-up business…raised $20,000,000 (with small investors- one check at a time)…and took it public. Then I kept it alive for 10 years- despite being underfunded and close to death on a number of occasions (often writing personal checks to make payroll). My experience is a total match for running LP.
For those considering one of my fine opponents for this position, ask yourself these questions. Does he have a history of being successful as CEO in the business world or not? Has he disclosed in detail (as I just have) his record of success? Compare my record of achievements versus his record. Does his record indicate he can take the LP to the next level? What is his track record of turning a small business into a larger public company competing with the big boys? What is his track record of raising millions of dollars to fund a small company? Have any of my fine opponents ever “branded” themselves into becoming a national media celebrity on a limited budget? Have any of them ever produced best-selling books? What makes you think any of them has the skills to take the LP to the next level? Our party can never raise the kind of money that Republicans or Democrats can because we raise no money from lobbyists or major corporations. So we need to rely on “free exposure” provided by the national media to level the playing field. What would make you think that any of my opponents can help our party achieve the national media it so desperately needs, when none of them has ever achieved any major success in the media?
I’ve already become your Vice Presidential nominee- starting from ground zero with a limited budget, and without knowing a soul in the LP when I started. I am a proven campaigner. Who would you rather have come to your state to campaign by the side of you and your LP state candidates? Who has the potential to raise money at your state events? Who has the potential to attract media at your events? Who has the talents to train you and your candidates on the art of campaigning, media, marketing and fundraising? I believe I have the unique skill set to serve as CEO, chief spokesman and chief fundraiser for the LP. By my side will be Mark Rutherford to run the day to day operations of the LP, and serve in the specialized role as liason to LP state and county leaders. It’s quite a team.
Speaking of entrepreneur business, my friend recently hired an office for his small business and he was talking to me about business energy. He was wondering where he could get the best deal and after research on websites such as Usave, he got a fantastic deal!
This url http://espn.go.com/college-football/rankings/_/seasontype/3 list the top college teams . Many of the players in the NFL come from these schools and most of the schools from what I see are tax supported state institutions. Additionally if these schools were not playing on Saturdays lot of gamblers would not have much to pick from.
Take the tax dollars out of the schools and the decline in sports would be significant in my opinion.
I’ll let others use their imaginations as to what would happen then.
Here’s a couple of articles on the sudsidies issue and for the record I’m a Celtics, Red Sox, Bruins, Patriots fan born in the Boston area.
“During the 20th century, more than $20 billion has been spent on major league ballparks, stadiums, and arenas. This includes a minimum of $14.7 billion in government subsidies that has gone to the four major league sports —Major League Baseball, the National Football League, the National Basketball Association, and the National Hockey League —including more than $5.2 billion just since 1989.”
http://www.cato.org/pubs/pas/pa-339es.html
“Sports economist Robert Baade at Lake Forest College studied 48 metropolitan statistical areas (MSAs) over a 30-year period, and found “of the 32 MSAs where there was a change in the number of sports teams, 30 MSAs showed no significant relationship between the presence of the teams and real, trend-adjusted, per-capita personal income growth. In the remaining two cases, the presence of sports teams was significantly positive once (in Indianapolis) and significantly negative once (in Baltimore).”
http://www.heartland.org/policybot/results/9474/Article.html?articleId=9505
re: 26 Erik thanks for the criticism but I’ll hold to my point that college sports support the pros especially the NFL and the NBA. And lets not forget the anti-trust exemptions they get and the subsidies for many of the stadiums.
re: 28 Vegas is not the only place in the U.S. with casinos. There are at least three within half an hour of my home and the one I was in last week was filled with seniors. I was there to eat at the buffet only, no gambling for this old boy.
Some of what I have experience, I can’t believe some of the lies being said here. I will express one thing. people on social security unless they are addict do not gamble that much money, If you notice Las Vegas is more of a circus than a gambling town, Why, because people don’t have the money they use to and they had to build better than what it use to be. The ole days. Most people that spend a lot of money are the entertainers, high end people with money, boy you sure don’t have a clue.
Dr. Lieberman,
You write:
“I congratulate Mr. Knapp in his Wile E. Coyote attempts to throw the kitchen sink, the toilet, and the refrigerator at Mr. Root.”
Nice, try, but not only have I not “thrown the kitchen sink,” etc. at Root, I’ve defended and/or applauded him in some areas, and declined to pile on in others.
For example, I’ve defended him against the “newcomer wants to be in charge” slams, pointing out that he began publicly self-identifying as a libertarian in the late 1990s and had libertarian-themed letters to the editor published in Nevada newspapers in the early 2000s.
As a candidate for chair, Root has had two substantive criticisms leveled at him by me. Those criticisms are:
1) The fact that he’s provably a liar, coupled with the equivocal and contradictory nature of his statements on his status vis a vis the 2012 presidential race, make it impossible to be confident that he won’t turn the LNC chairmanship into a personal 2012 campaign power center.
2) The fact that he has a record of leading businesses into massive debt, default and insolvency as CEO makes it impossible to be confident that he’s the best choice to serve as CEO of an organization that’s already been walking the brittle, crumbling edge of the fiscal cliff for about a decade.
MHW,
“the gambling business is heavily dependent on the government….state run colleges are the backbone of the sports business.”
Um… no.
While *some* sports may rely upon college sports as ‘feeder’ systems, the notion that sports succeed *because* of this is ridiculous. For one, two of the four ‘major’ professional sports leagues (the NHL & MLB), rely more upon minor league systems than they do collegiate ones. True, there are collegiate programs in those sports, but they are considered inferior to the minor systems for development. Other major ‘sports’ (using the mainstream connotation) such as NASCAR and PGA golf essentially don’t rely upon collegiate sports much at all.
Moreover, the argument that college football or college basketball somehow enhances the NFL or NBA would be a stretch. If the American collegiate sports system somehow never developed, you’d likely see systems similar to ones in Europe, South Africa, New Zealand, or Australia, wherein athletes come up through clubs (playing U19, U23, A-side, etc.), or the Canadian system for hockey wherein players come up through ‘major junior.’
There are a lot of criticisms to hurl at the way sports are conducted in the U.S., but trying to link government-funded colleges that play sports with the success of sports gambling is a little silly, in my opinion.
Nick, I don’t know any more about it than what he said at that LPCA banquet. To see how many people were in the room, check out the end of the last video at http://www.calfreedom.net/2010/02/video-wayne-root-speaks-at-lpca.html. It was probably around 40. And of course, Root didn’t charge for his LPCA convention appearances, and I’m reasonably sure the LPCA didn’t pay for his expenses.
Root claims to he gets 15K to 25K a speech. How many people were in this audience? I’d put the over / under at 12 people.
The spin-meister continues to spin. This should all be a read flag for anyone who has been conned by his speaking abilities.
Read what he states above: He took $20M in investors money. The value of this in the end? $0 – zilch – nada.
He tries to blame it on the recession. But that’s imply not true, as pointed out by Tom Knapp, this business was in the tank in 2006 – at the height of the boom! Yes, it was a complete failure during the peak of the economy!
He tries to spin that this colossal failure is somehow a success. This shows how much of a spin-meister he is. So he created jobs and made payroll. Big deal! Give me $20M and I’ll do the same thing.
The point here is that Root won’t accept responsibility for the truth. He failed in a massive way with his main business during a 10-year period in his life. He destroyed $20M in investors’ money.
Yet, he wants to be CEO.
To me, this experience dis-qualifies him for this very important position.
Root tries to pitch this as something normal. Something that all successful people do – fail before they succeed.
The problem is, he hasn’t succeeded following this massive flop! If he had gone on to run another big operation and prove that he is adept at management, great. Then, we could look past his earlier failures (as he is trying to get us to do now).
But, he hasn’t yet done that.
Sorry Wayne – we must judge you based on what you have done. That’s all we have to go by.
And what you have done is shown that you cannot run a large organization. You cannot manage the finances of a large organization. You cannot avoid losing $20M in money, turning it into exactly $0.
Which law firm?
Root told the story at his LPCA banquet talk: http://www.youtube.com/watch?v=FDke-4ex0GA
He told a lawyer at a dinner that lawyers are not good at selling, and offered to be the firm’s spokesman for free for three months so they could see what he could do for them. Now he’s been their paid spokesman for three years.
Someone may have addressed this and I missed it – apologies if I did. Did Mr Root say he makes money off a LV law firm? Does anyone know which firm or how he makes money from them?
Assuming Mr. Starr gets re-elected as LNC Treasurer, I can not imagine him, nor the rest of the LNC, developing some sort of fiscal blindness that permits Mr. Root to take sole control of the entire LNC budget, and steer us into bankruptcy.
Because they’ve done so well in growing the budget and staving off insolvency already. The LNC has never seen such revenue!
Electing the above people to LNC Office will help move the Libertarian Party from chump to champ over the next two years.
Because they have such a history of success — a failed former CEO whose business ran with negative working capital for at least three years, who ended his business in a creditor-stiffing $29 million bust; an LNC “treasurer” who has overseen a 73% net decline in overall revenues; other LNC long-termers who promised unprecedented fundraising and vote-winning in the 2008 election but delivered more of the same.
Scott, with your penchant for endorsing big-time fuckups, why waste time with the LP? Go for the big-time and endorse Carly Fiorina.
Wayne Root gave boiler rooms a bad name. He bled his publically traded company to death taking a huge 6 figure salary while the company was drowning in red ink every single year it was in existence.
I congratulate Mr. Knapp in his Wile E. Coyote attempts to throw the kitchen sink, the toilet, and the refrigerator at Mr. Root.
The Chair of the Libertarian Party National Committee can spend exactly $1000 per quarter without the approval of the LNC. The entire rest of the LNC, Inc.’s budget must be approved by the entire LNC.
Our current Treasurer, along with our ED, has done an excellent job of keeping the National LP solvent despite operating on a shoestring budget.
Assuming Mr. Starr gets re-elected as LNC Treasurer, I can not imagine him, nor the rest of the LNC, developing some sort of fiscal blindness that permits Mr. Root to take sole control of the entire LNC budget, and steer us into bankruptcy.
Mr. Root is superb at getting publicity for the LP and yes, for himself. Mr. Root is also good at raising money, either directly, or indirectly (just ask the Chairs of State Conventions where he has spoken). Mr. Rutherford is superb at managing ED’s. Mr. Starr is superb at keeping the National LP in the black.
Electing the above people to LNC Office will help move the Libertarian Party from chump to champ over the next two years. No, we won’t have any Congressmen in Dec. 2012, but I bet we will have a much higher number of Elected Officials than we have now.
Chuck,
I too agree that, to some extent, “holding failures against an entrepreneur misunderstands entrepreneurship.”
Many entrepreneurs fail many times before succeeding.
Many succeed, then go back to failing in the future.
But let’s talk about “understanding entrepreneurship.”
An entrepreneur, per Merriam-Webster, is “one who organizes, manages, and assumes the risks of a business or enterprise” (emphasis mine).
While it’s possible to be both a CEO and an entrepreneur, the two words do not mean the same thing.
Root was CEO of a publicly traded corporation. The stockholders in general, not Root alone, assumed the risks of the enterprise.
Root is running for CEO of the Libertarian Party. If he is elected, he will not be an “entrepreneur” as chair — the risks his decisions create will be borne by the party’s members, donors and supporters.
Anyone who does not take a prospective CEO’s record as a CEO into account before hiring him is a fucking idiot.
It’s not a matter of “blame,” it’s a matter of looking at a person’s past performance and deciding whether or not you want to trust him with management of your organization’s affairs.
Do I know everything about Root’s record as an executive?
No, I don’t.
I really only have two sources of knowledge about his record as an executive: His promotional claims, and the publicly available records.
The conclusions those sources lend themselves to reaching are …well, let’s just call them “widely divergent.”
In general, I trust publicly available records more than I trust promotional claims … especially when instances of the latter on which light is shed by the former turn out to have been questionable at best.
>>I agree that holding failures against an entrepreneur misunderatands entrepreneurship.<>The business in question (W Technologies, formerly known as Winning Edge, etc.) was failing long before “this depression” began.<<
From the moment it entered negative working capital status (2006 at the LATEST), it was failed. In most countries, it would be legally required to shut down — declared insolvent — at that point.
Wayne's excuses after his "I'm a successful entrepreneur" schtick was proven false sound just like the protests of the irresponsible spenders of the last ten years. Just like them, Wayne insists that his profligate expenditures of other people's money "put money into the economy!"
Just like all those second mortgages against inflated real estate values "put money" into the economy via new cars and fancy vacations.
If Wayne is a "successful businessman," all those people who spent credit like there's no tomorrow who ended up defaulting are "investors."
It seems Root is well- loved in the sports world:
As Maynard G. Krebs, the “G” was for Walter, used to say, “What an age we live in.” When we enter voting booths Tuesday, we’ll see notorious TV time-buy scamdicapper Wayne Root’s name on the ballot as a legitimate candidate for Vice President of the United States (Libertarian Party).
Root has the endorsement of the NBRO (National Boiler Room Operators).
Says Phil Mushnick of the NY Post on 10/31/08
Says Phil Mushnick of the NY Post on 10/31/08
Wayne we do not have a free market in this country and the gambling business is heavily dependent on the government.
Seniors with their Social Security checks keep the casinos open and state run colleges are the backbone of the sports business.
It seems to me that Root’s business or businesses are sort of sketchy. Just Googling around, you don’t find much but negative things about Root’s businesses. Since he is so big on promo, why aren’t his promotions more visible when you actually try to seek out what exactly he does?
Some of the negative comments you find about Root’s gambling related activities are also troubling.
Root is the one who has made an issue out of his success at business and I believe most people understand about entrepreneurship and failures, but there seems to be scant information available about his successes and a fair amount about his failures.
His comments above reek of condescension and hyperbole. He must be used to dealing with people that aren’t too bright.
I often take no pay…sacrifice…work 14-16 hour days…risk my own money to make payroll on bad weeks, so others don’t have to take risks, so others can live the American Dream
What a load of manure. He’s doing it all for others. Right.
I never complained and certainly never asked for a bailout.
Who would he complain to and who would he ask for a bailout?
It seems the more Root talks, the higher the bullshit meter registers. But, I guess as long as the rubes continue to show up at the carnival, Root will be successful.
“Yes, I had a business fail during this depression”
The business in question (W Technologies, formerly known as Winning Edge, etc.) was failing long before “this depression” began.
See, for example, Note 3 of the company’s form 10QSB for the quarterly period ending April 30th, 2006:
“The Company incurred a net loss of $37,195 for the nine months ended April 30, 2006 and
has an accumulated deficit of $27,539,104 at April 30, 2006. The operating losses, as well as uncertain sources of financing, create an uncertainty about the Company’s ability to continue as a going concern.”
Great response! I agree that holding failures against an entrepreneur misunderatands entrepreneurship. You have to take risks to succeed in business and most entrepreneurs fail several times before they hit a homerun.
This begs the question though: if Root is such a good businessman/CEO, why make Rutherford the administrator?
I don’t mean to denigrate Root or Rutherford… it just seems like a logical inconsistency to me and I’m curious at the reasoning.
>>Is Root willing to lose his money, or his investors money?<<
It's worse than that. If Wayne's company's financial statements are accurate, it was his CREDITORS who lost money — including people who were current creditors (or short-term creditors).
Those aren't just banks, they can include short-term creditors like landlords, utilities, even employees.
Wayne has consistently refused to release a list of the people his business stiffed, despite running for three years with negative working capital. He also hasn't released any plan on how he plans to make them whole and fulfill the payment promises his "successfully bankrupted business" made to them.
And now he wants to do for the Libertarian National Committee what he did for his business. Sounds like a great thing!
Wayne, according to the public filings your company made in at least its last three financial statements, the firm operated with severe negative working capital (current liabilities greatly exceeded current assets).
That’s the classic definition of insolvency, except in a few limited weird circumstances (McDonald’s once showed negative working capital for a quarter because it sold burgers faster than it can book the revenue for them one quarter). However, three years of negative net working capital is just plain irresponsible (at best).
Your company was knowingly entering new current liabilities, such as rent and payroll, without the ability to pay the liabilities it had already incurred, let alone new ones.
How is that ethical? How is that “a credit crunch problem?”
It’s not. It’s an ethical problem.
How many of the people who had current liabilities that you couldn’t pay were employees? How many of those creditors stiffed were folks who were naively assuming your “parent company” was operating in a solvent way?
The irony here is that in most other western countries, operating with negative working capital is considered criminal fraud. In America, it’s certainly not criminal, but it is fraud. That’s not a “record of success in business.”
too smart or does not have any ? If you make 500000 bring home then spending 10000 on becoming Nat chair is no big deal. But you got to have it to spend it .
Root: “I’m willing to fail, to lose my money…”
Is Root willing to lose his money, or his investors money?
I’ve heard these infomercial success gurus advise using OPM — “other people’s money.”
I suspect Root is too smart to lose his own money when there’s OPM out there.
Yes Spin that George. I am also running for an LNC spot to represent the south or an at large spot. I believe my Libertarian activity speaks for itself
I have ran for office twice I have been political director in Georgia for many years and sat on the ex comm for many years.Also was membership director
I ran the Garret Hayes campaign 4 years ago for Governor we got over 100000 vote we ran over 2500 tv ads .Did about 15 radio interviews did about 30 interviews with newspaper.Polled as high as 9%
Ihave done a ton of LP tables at gun shows and tax rallys (have won Lights of liberty award)
I run (ceo/owner)a very succesful bussiness in Atlanta.
We do almost 3 million a year in biz. I have about 20 employees.BTW If I was running for chair I would show you my tax returns. many Libertarian have been to my shop because I run flyers for free on my copiers and have stored yard signs there for other campaign. (BTW if you worked on the Ron Paul campaign in Georgia you have come to my shop because all of the campaign stuff was there)
Doug Craig, the same Doctor George Phillies Phd whom has spent a life time ‘sand papering’ others and proclaims the LP as the one and only peace party? THAT George Phillies ?????????
Wayne, did you ever answer David Nolan’s challenge to pledge not to run to be our presidential candidate?
let me tell you if I bought home 500,000 a year you guys would know. Everyone would grt a nice letter in the mail asking for you to vote for me . I would be giving money to candidates who showed promise.I would show up at convention with nice signs and fancy brochures.
I would like to know which candidates he has raised money for.
I want to know what campaigns he has helped.
I like Waynes energy but he has not gained my vote
It will go to George Phillies because I know he has helped many campaigns in the past and I like his vision.
In and out of the LP
lots and lots of folks
could care less ’bout
da dead presidents!
They are appalled by
the GOP neo-con-ness!