Editor’s Note: I thank Robert Shaffer for offering this interview to AMG. It was slated for publication in a magazine. But Paul LePage’s announcing his candidacy for Maine governor changed the equation. If the magazine ran this interview all the other candidates for governor could ask for equal time.
The magazine layout had two “Sidebars,” each including part of Paul LePage’s story. Since I can’t do sidebars on AMG I have added “SIDEBAR A - Horatio Alger Lives Here” and “SIDEBAR B - Rumors of Augusta” at the end of the Q&A portion of this interview.
Paul LePage - Making Marden's a Maine Success Story
To say that Marden's has a cult following would be an understatement. More people know the words to the Marden's jingle (“I shoulda bought it, when I saw it, at Marden's...”) than know that Maine has a state anthem. As one wag put it: Marden's FAQ page should be the Maine Constitution
Marden’s, of course, is the legendary Yankee thrift emporium founded by former Albion mailman Harold “Mickey” Marden in an abandoned building in Fairfield as a an auction and liquidation service that he could run after making his postal rounds. By 1994, the business was grossing over $50 million dollars a year, and the clean but cluttered, catch as catch can style of shopping they spawned had become a Maine cult. With three ambitious sons, David, Harold Jr. and John, vying to succeed in the family business, Mickey decided to bring in some outside management savvy to keep the family enterprise on an even keel. Enter Paul LePage.
Paul LePage is the General Manager of Marden's, a Maine institution that has thrived since Mickey Marden brought Paul aboard to ride shotgun over the family business in 1996, expanding more than 100% in sales and size since then. A street kid from hardscrabble Lewiston, Paul has risen from poverty and a French language background to help general one of the brightest success stories in Maine retail history.
Paul Lepage squeezed our writer in between a 7:15 AM appointment with Peter Vigue and a dash to Waterville Town Hall to try and stop a spot zoning bylaw proposed in the hysteria following the Vassalboro Topless Coffee Shop, which was burned a week before this interview was taken. Yesterday (Monday) was a typical 9 hour strategy session with the Mardens; David, Harold and John. He has just finished a Mediation & Family Law course at the University of Maine and wrapped up the budget for the fifth largest city in Maine, Waterville, where he has been Mayor for 5 years and can look forward to 2 more years in office, having been reelected this past November.
The pace may have been breathless, but Paul settled in, turned down all offers of stimulants and food, and spoke like a man with all the time in the world at his fingertips, not a business executive running his own personal marathon. Our questions didn’t appear to phase him in the least
Q: Retail sales fell off a cliff last year. So what's going on with Marden's, businesswise?
LePage: Marden's is holding its own - we’re seeing an increase in the number of customers but a decrease in the size of the average purchase. Sales are up for everything except furniture and flooring - two of our Big Ticket items, so we’re expanding where the customer is demanding - food, hardware, home improvement items.
Beyond that, we’re looking at expanding our business in the Greater Portland market and in Ellsworth, which will triple our floor space in those two markets.
So the short answer is, Marden's is doing just fine.
Q: Aren't there a lot of companies that have fallen on the shoals because of ultra-fast growth? Are you worried about continuing your expansion?
LePage: No! Because Marden's has a philosophy that you only grow when you can afford to grow. We don’t take on debt for the sake of expansion. So we don’t have to worry on that score.
What we do have to worry about might surprise you - and that is product. As insurance companies become more efficient, there are fewer claims, and fewer claims means less salvage. We have to outscramble the other salvage companies out there, and we expect to continue to survive where others may not.
Q: You represent a Maine institution, but has Marden's ever considered expanding or refocusing its business outside of Maine?
LePage: Yes, more so in the last couple of years. We’ve been looking at New Hampshire, but at this point we haven’t made the leap of faith to go there. The advantages are real - simply no income or sales taxes, and they don’t have the kind of mindset that passes regulatory costs onto business. In Maine we work harder and harder every year to profit and prosper, and it may come to the point that despite our best efforts to be as productive and efficient as we can, there may be no bottom line at the end of the year in Maine, and no bottom line means no business.
Q: A large part of a Leader’s success comes from their ideas about how the world works. What are the basics of your world view?
LePage: Very simply, and I’m speaking nostalgically here, from the very beginning I’ve strived to lead the American Dream. I kept my eye on the ball, my nose clean, finished the task in front of me and moved on to the next one. And pray a lot [laughs]. And strangely enough, the harder I work the luckier I get.
Q: Do you agree that a successful leader is self- made, not born? What got YOU from the streets to the GM’s office?
LePage: Well, OBVIOUSLY, in my case [laughs] its not a matter of born with a silver spoon in my mouth. For me it was a matter of seeing the Haves and the Have Nots - and making a conscious decision to be one of the Haves.
How to get there? Incarceration was never an option, because I’m claustrophobic, so crime was out. My only option was to work hard and outsmart my opponents.
Q: The cost of energy in Maine has had a major impact on doing business here, How has Marden's tried to adapt? Have you gone Green?
LePage: Every year we retrofit our lighting systems. We go the extra mile in dealing with our heating, lighting and AC. We’ve taken advantage of, if fact we’ve been a leader in, Efficiency Maine. It’s a quasi-governmental agency that grants a rebate on capital costs for energy savings up to $50k - we pretty much top out every year.
Q: America is the only country on Earth that celebrated businessmen as heroes, but today’s political and cultural climate is more anti-business than ever, some say especially so in Maine. Despite the widely touted economic benefits of free markets, the government continues to expand its control over the economy. Is there any way to fight these trends effectively?
LePage: We have to find a way. No society in history prospered by limiting opportunity. The foundation of the US was a revolt against taxation aimed at businesses and people. I’m sorry to say, were heading down the same road today.
Even here in Maine, they haven’t figured out that you can’t kill the Golden Goose and expect to get eggs, too. California may be filing Chapter 11 shortly. The $500 million reduction in the state budget over the next biennium is not so much cuts in spending as it is running out of other people’s money.
Business needs capital to produce and grow, but state tax and regulatory policy punishes the people who have it [capital]. There are still a few havens in the US where people with money are welcomed, not taxed, and the Affluent vote with their feet. When you’ve got a people and money outflow, the burden of paying for the welfare state falls directly on the working man - and there are fewer of them every year. The very people the government claims they are helping are are the ones they are hurting - and this erodes the middle class.
Q: What are the chief drawbacks of Maine’s business climate to expanding and thriving in the retail niche you dominate? Or conversely, what changes can be made in state policy to enable you to grow faster?
LePage: Marden's relies solely on discretionary spending, so a state income tax system that taxes someone making $18,000 a year - well, any time the state taxes the working man or woman, that reduces discretionary income.
The other problem is the regulatory burden, and I mean as it applies at all levels. One of the chief cost disadvantages to business in Maine is health insurance, and the state is the real culprit. We’re a small state, and we cannot afford health care with the Cadillac mandates that have come down from Augusta. The concept that everybody should have insurance is a good one, but how does it help if you drive the rates so high that people drop their coverage because it’s unaffordable? If one of my cashiers is only paying 30% of her health care premiums, but that comes to $350 a month, that is a huge burden for someone making under $25,000 a year.
And by the way, when I say Cadillac mandates, that is exactly what I mean. The state mandates that I be covered for pregnancy. Not happening, but I’m paying for it. And so are you.
Q. You cite the regulatory burden in Maine. Can you give us any examples?
LePage: Please don’t get me started! [laughs] I remember in particular in order to get permitted for a project we had to do a survey of whether or not there had been any sightings of buffalo in Maine. We spent the money, and what do you know, we did find one. In the Acadia Zoo. I wish this was an isolated instance, but it’s just the tip of the iceberg when it comes to how Maine bleeds business when it comes to over regulation.
Q: How do you keep good employees?
LePage: Treat them fairly, listen to them, compensate them appropriately (and that means the entire package!), and communicate, both to and FROM. Empower them to take ownership - Marden's really is a family.
Q: Would you resist a labor-organizing effort at Mardens?
LePage: We would, because it would totally end our family culture. Mr. Marden designed this whole operation to be run like one big family, and he REALLY meant it. His vision was a place that was as fun to work at as it was to shop at, and we give employees a part of Marden's they can take ownership of - and get out of their way. We offer full time employment, health insurance, a full match on 401k, a strong vacation policy, profit sharing - and we still give out turkeys at Thanksgiving and a gift at Christmas. There are benefits at Marden's you won’t see in any collective bargaining agreement, and we want it to stay that way
Really, our ideal of a well run company is when you can’t tell the workers from the bosses. A union shop can’t operate like that.
Q: How did you start out? Where did you go to school?
LePage: I was the oldest of 18 children in Lewiston - we were on welfare, no doubt about it. The years before I turned 18 were the toughest and most humiliating of my life, and I wouldn’t want to live them over for anything. I remember when I quietly left the hospital20on a Sunday evening just short of my 12th birthday - and I never went home again. Life on the streets was no picnic, and Thank God some wonderful families took me in after a few years of roughing it. I went to a French parochial school until the 8th grade, and could hardly speak English when I entered Jr High - I suppose you’d call me “English challenged” today. Graduated from Lewiston High School in 1967 and applied to maybe 40 colleges, and was quickly rejected by all 40. Chesley H. Husson, Sr. graciously granted me a personal interview, after I had called everyone else in the building. He said he would accept me on two conditions; 1) That I take an achievement test in French to prove that I had a brain (my English SAT score was only a little above what you get for putting your name on the paper) and 2) I would be on academic probation. It turned out I was on academic probation right up to the moment of my graduation 4 years later with a GPA of 3.0+.
In 1972 I went into the lumber industry as a finance guy in Canada, finding time to squeeze in a Fellowship in an MBA program at UMaine Orono, where I completed the 2 year program in 12 months (3.93 GPA). I worked in Canada until 1979, when I returned to Maine to work for Scott Paper until 1983. Scott redlined me in ‘83 because I turned down a promotion that would have taken me out of Maine (for the third time, so I guess they got tired of waiting for me to wi se up) so I started a consulting firm that I ran for 13 years, teaching classes on the side at UMA, Husson, Thomas College, KVCC, mostly finance and accounting but some ethics courses as well. I was what you would call a “turn around and work out” consultant, helping to pull companies out of bankruptcy.
And in 1996, I went to work for Marden's.
Q: Religion is always a sensitive subject. But do you feel there are values that you've learned in your religion that have helped you?
LePage: Two things I got from my religion (Catholic) is compassion for others and sharing what I’ve learned with others. And very strong family values, which is a perfect fit with Marden's corporate culture.
What did I learn that I can share with others? I learned that just because you’ve had it rough as a child doesn’t mean you are trapped in a pattern you can’t break out of. I raised 5 kids, the last one a Jamaican orphan my wife and I adopted 8 years ago, and none of them were treated the way my father treated me. Talked to death, yes - they all feared The Lecture. They seem to have survived it pretty well.
Q: What would you say are your most important intellectual influences?
LePage: Well, it’s been years since I re ad Tocqueville’s Democracy in America, but I think it might be time I read it again. [laughs] Maybe I can read it in English this time.
Q: Surprisingly, there are not a lot of successful businessmen and women in politics, but you have been elected as the Republican Mayor of Waterville, a Democratic stronghold, 3 times now. And managed to pretty much to get your way with the Council, cutting taxes every year for 5 years in a row, rebuilding the cash reserves to record levels, while spending unprecedented sums on infrastructure improvements. How do you explain your success?
LePage: Common sense governance. I don’t ask anyone in government to do anything I wouldn’t do, and I don’t believe in cutting out needed programs - but they must have a ROI to the taxpayers. If a program has no fiscal or social benefit, then it’s expendable.
My main success has been as a man who does what he says. I’m not a polished pol who can dazzle you with words. I have been accused of being blunt, and I have to say I’m guilty. But even the Waterville Sentinel editorialized that: “LePage’s type of leadership gets things done.”
Campaign promises kept, did what I said I would do, from election day to the present time. I’m most proud of the fact that I never had to cut services to get to where we are fiscally - we just delivered them more efficiently.
And it doesn’t hurt that I don’t believe there is a person in Waterville who doesn't know where I stand on an issue. I’m an open book.
Q: What keeps you up at night? When you wake up at 3 a.m., what are you worried about?
LePage: Truth is, I worry about how to figure out a way to have my children live in Maine and prosper. And at the current time, that’s not gonna happen unless someone steps up to the plate and makes it happen.
Too many of my friends have to travel long distances to see their grandchildren. I don’t want that guy to be me.
SIDEBAR A - Horatio Alger Lives Here
Paul LePage carries a 50 cent piece on his person at all times. And has since he was 11 years old.
Describing Paul’s early life as the oldest of 18 in Lewiston as “welfare, hardscrabble” is just the tip of the iceberg. At age 11, his father beat him so badly that he ended up in the hospital with a broken nose and a dislocated jaw. When the elder LePage came to see Paul in the hospital, he fished a 50 cent piece out of his pocket and gave it to his son, saying, “Tell the doctor when he comes that you fell down the stairs.”
Paul never went home. He snuck out of the hospital shortly before his 12th birthday and lived on the streets behind an establishment catering to sailors on leave, shining shoes for the young soldiers while they visited the ladies inside. After a few years of this brutally realistic life, DHS took an interest in the young man, and he barely escaped their clutches through the charity of two families, one of whom took him in for three days a week, the other for 4. And paid his way through parochial school before he entered Lewiston public schools on his way to a high school diploma.
And the other 17 children? “Welfare and the dependency it spawns got its hooks into them early, and they never escaped” explains LePage today. “The system is designed to breed dependency - once you’ve become skilled at milking the system, breaking free is almost impossible. To this day I have no idea what people mean when they say they are for more welfare in order to “help” people, or that cutting welfare will “hurt” people. You want to know how destructive and corrupt welfare is? Ask anybody who’s on it.”
SIDEBAR B - Rumors of Augusta
People who’ve been observing LePage as he crisscrosses the state have been drawing the conclusion that Lepage would be a formidable candidate for Governor in 2010 - and not all of them are sanguine at the prospect of a LePage Administration. In 2008, the Democrats mounted a strong e ffort to dislodge The Mayor in Waterville, running the top staffer to Mike Michaud (D-2nd District) against LePage in a Democratic landslide year, but still falling short, even though Waterville was one of only a handful of communities in Maine to vote against Susan Collins.
What would a LePage Administration look like?, I asked him. “While I might go along with a gas tax increase to rebuild the roads, absolutely no other taxes would go up. The business climate and how to improve it would be a top priority. There would be no unfunded mandates - on anybody. Welfare reform would begin Day 1. Energy would trump enviromentalist ideology - no more destroying dams or NIMBY crusades against alternative energy. And health insurance premiums would be lowered the way everything else is lowered in this country - competition. Throw the market open and watch the rates drop. Of course I’d have to think of something to do my second week in office [laughs]. To be honest, it took us 30 years to get to the bottom of the heap, and we aren’t going to fix it overnight.”
LePage, as one of the only city officials in Maine to support the tax limitation measure Tabor, is very well known both inside and outside the Republican Party. Confidential sources told this reporter that LePage has been asked by powerful individuals to run both as a Republican - and as an Independent. No word yet on whether anyone in the Democratic hierarchy has approached Paul yet.