Republican gubernatorial candidate Fred Lampropoulos is working a room of about 50 state GOP delegates gathered for breakfast at Mimi's Restaurant in Murray.
As he goes over his plan for economic revitalization, delegates are munching scrambled eggs and bacon, all on Lampropoulos' tab. The cost for hosting the event is somewhere in the neighborhood of $300.
He repeats the scene over lunch and later for dinner, sometimes for as few as 10 delegates, other times as many as 100. And every day, there are campaign spots on 12 radio stations around the state at a cost of $28,000 a month. Lampropoulos billboards line major Utah roads.
All of it is paid from the Lampropoulos campaign war chest, and all is part of a campaign strategy of wining and dining delegates that critics — mostly his opponents — say will have cost the businessman millionaire somewhere between $2 million and $2.5 million before the state convention convenes on Saturday. It may well turn out to be a record amount spent before a Utah gubernatorial convention.
If he comes out of convention — and he is one of the favorites to do so — will he have redefined how campaigns are run in Utah?
"I don't know, but would I have come out if I had not done this?" he counters.
Lampropoulos says that claims he has spent up to $2.5 million are inaccurate. He said reports due next week will detail his own giving. According to the last filing report in January, he had spent $1.5 million to that point, most of it his own money.
But Lampropoulos could spend $2.5 million if he wanted to, and then some. He estimates it could cost $5 million to run his campaign through the November elections. And he is prepared to spend it to win.
"It is unfortunate it takes this kind of money," he told the Deseret Morning News.
Lampropoulos has been freeing up cash toward that end. Over the past 15 months, according to filings with the Securities Exchange Commission, he has sold or otherwise disposed of $10.3 million of his personal stock in Merit Medical Systems Inc., the company he started in Sandy that is now worth an estimated $500 million.
As of early April, he owned 841,000 shares of Merit Medical, or 4.7 percent of the company's stock, worth roughly $25 million. A year ago, he owned 6.3 percent of the company, and two years ago it was 7.2 percent.
Of the $10.3 million in stock he has has sold or given away, a large portion was spent as contributions to various charities, tithes to The Church of Jesus Christ of Latter-day Saints or to pay taxes, he said. According to SEC filings, the amount of stock transferred by Lampropoulos to those various entities was $4.5 million since January 2003.
Of the remaining $5.8 million, he points out that he paid cash for new homes in St. George and South Jordan. He is helping his children with home purchases and college. He bought his mother a car and he has helped out charter schools, an eagle rescue organization and an arts organization.
"I also got married last November," he said, admitting he has sold a lot of stock over the past two years.
"I don't know what percentage (of stock) I have sold," he said. "I haven't looked at my holdings."
Huntsman has more
With a net worth of roughly $25 million, Lampropoulos could go toe-to-toe with another well-heeled candidate, Jon Huntsman Jr.
The Deseret Morning News estimates Huntsman could be worth about $92 million, although federal filings required when he became a U.S. trade ambassador two years ago showed his net worth closer to $25 million.
Huntsman says he won't be self-funding his race this year. So far Huntsman himself has only contributed $20,000 to his campaign.
But at least $337,000 of the $850,000 he had raised through mid-April came from himself, extended family members, Huntsman Chemical Corp. and current or former business associates, a report due Monday shows. Huntsman's pre-convention spending will be more than $750,000.
In interviews last year for a series on the Huntsman family in Utah and their vast chemical holdings throughout the world, the Deseret Morning News was told that the family owns 51 percent of Huntsman LLC. The Huntsman family's worth is estimated at $2.5 billion by Forbes Magazine. Since the elder Huntsman owns two-thirds of the company and his nine children split the other one-third, each of the Huntsman children would be worth about $92 million.
There are no public filings on individual stock ownership because the firm is privately held.
Both Lampropoulos and Huntsman, who hope to come out of next week's Republican convention and into a June primary, say their races could cost $5 million each through November. Neither plans on spending that much themselves.
It appears that Lampropoulos has sold or given to charities nearly half of his shares in Merit Medical over the past 18 months. At the same time, he also has used stock options to buy more than 180,000 shares at prices ranging from $2.07 per share to $3.76 per share at a time the stock was trading publicly between $20 and $27 a share.
While Lampropoulos' selling, buying and optioning of stock is confusing, he says it's all perfectly legal, common practice among corporate executives who own vast shares in their own companies. "I have an attorney and CPA doing this for me. If you don't do it right, you go to jail," he said.
In any case, public records show Lampropoulos got serious about selling or giving away Merit stock at the same time he got serious about his run for governor in January 2003.
For example, in the fourth quarter of 2002, just before he became a candidate, he sold only 13,000 shares valued at about $120,000. In the fourth quarter of 2003, when he was campaigning hard, he sold 162,300 shares valued at more than $4.1 million.
In the first quarter of 2003, he disposed of 17,069 shares of Merit stock valued at about $357,000. By comparison, in the first quarter of 2004 he disposed of almost 57,000 shares with a value of more than $1.2 million.
Long before other GOP candidates were spending much money, Lampropoulos in 2003 was spending around $28,000 a month on radio advertisements running on 12 radio stations around the state, including KSL. He does one- or two-minute homilies about what's good about America, ending with: "This is Fred Lampropoulos. Thought you might like to know."
Winners, losers spend big
Tapping personal fortunes for a Utah political race continues a tradition started by Merrill Cook in the mid-1980s. Over the years, Cook has spent more than $3 million on various campaigns and citizen initiatives. This year Cook jumped from the Republican Party, again, and is running for Salt Lake County mayor as an independent.
In 1992, current GOP state chairman Joe Cannon, chairman of the now-defunct Geneva Steel, spent more than $4 million in his bid for an open U.S. Senate seat, about a third of his wealth at that time. Cannon lost to Sen. Bob Bennett, R-Utah, in the primary election.
Bennett spent more than $1.5 million of his own money that year, wealth rooted in his Franklin-Covey stock. Bennett won the nomination and final election.
In 2000, Republican Derek Smith challenged then-Rep. Cook in the 2nd District. Smith spent $1.2 million of his own money, stock he had in his own high-tech engineering firm, and beat Cook in the GOP primary, losing the final election to Democratic Rep. Jim Matheson.
Since Smith's was a private company, he did not have to disclose to whom he was selling his stock to raise his campaign cash. When that became an issue in the campaign, Smith divulged the buyers, but still lost.
Lampropoulos' sales are public record because his company is publicly traded on NASDAQ. He said besides his campaign funding, he started selling more stock late last year because of personal expenses and because his "stock was at a value that I thought well to dispose of it." In other words, the price was right.
It remains to be seen whether his investment in politics pays off. But he's certainly got the attention of his rivals, evolving from an unknown in a crowded field of eight GOP candidates to be among the leading contenders.
If Lampropoulos and Huntsman come out of Saturday's convention, "It will send a chilling message that only the rich have a hope of winning in Utah politics," grumbled one official with a rival campaign.
E-mail: spang@desnews.com; bbjr@desnews.com