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Entrepreneur warns against dangers of government in economics

PROVO—David Kirkham, the Utah Tea Party founder who helped make Bob Bennett a former senator and put himself on Sen. Orrin Hatch's speed dial, is taking a guest for a ride in a car he made himself. It's a replica of the famed Shelby Cobra, which is really nothing but a stripped-down, road-legal race car that goes from 0 to 60 in three seconds flat. G forces press Kirkham into the back of his seat as he guns the car onto I-15 and zips past a towering tractor-trailer.

There's nothing on a Cobra that won't help it go faster, which means there is no radio, no back seat, no heater, no air conditioner, no windshield wipers and no top; most of which would be handy now because it's raining and cold. Kirkham and his guest wear earplugs and six-point harnesses, like fighter pilots, with straps over both shoulders, between the legs and around the waist. The car's body is unpainted aluminum, which gives it a mirror finish and attracts stares everywhere it goes.

The car, he explains, weighs just 2,000 pounds — less than a Honda Civic — with a 643-horsepower engine, which is like putting a jet engine on a skateboard. "Ever scare yourself in this thing?" his guest shouts over the engine noise.

"Every time I take it out," he says.

When Kirkham is not conducting tea party business or taking calls from politicians or playing the piano or running mountain trails, he makes fine automobiles. Kirkham and the tea party could have more to say about the next election than anyone else in Utah, but in his day job, Kirkham owns and operates Kirkham Motorworks, a company he started as a BYU student in, of all places, an old MiG-airplane factory in Poland — a story that figures prominently in his midlife foray into politics. The company makes custom replicas, mostly of classic models from the '60s. They make about two cars a week, one at a time, by hand, with parts they make themselves, in a nondescript shop on Provo's west side, where they are neighbored by farms and railroad tracks.

"We are one of the few companies that actually makes cars," he says. "Most of the car companies sub out a huge chunk of their work and assembly-line them. We make close to everything on the car, even the gauges. We didn't like the gauges, so we made our own. We take flat pieces of aluminum and turn them into cars. We do our own metallurgy, our own heat treatment, all of it."

If you've never heard of the company, it's because you're not, well, rich. The average cost of a Kirkham car is $100,000, and that doesn't even include the engine or transmission. He sold one to Larry Ellison, the founder of Oracle, for $1 million. His other clients has included race-car driver Bobby Rahal, the late entrepreneur Larry Miller, Ford vice president James Farley, Ford Motors and the legendary Carol Shelby himself. The creator and original maker of the Cobra, Shelby has bought some 200 replicas of his own car from Kirkham, including 12 that will be official 50th anniversary Cobras.

"Most of our clients can just write a check, but some of them are just guys who have saved their money for years to buy their dream car," says Kirkham.

For the umpteenth time during this cold wet drive around Provo, Kirkham glances at his iPhone, which vibrates constantly with calls relating to tea party business. "Probably half of my day is eaten up by this," he shouts, as he turns the car up Provo Canyon. "A couple of weeks ago, I was interviewed every day of the week. The New York Times called. The Washington Post. Orrin (Hatch) calls me. Jason Chaffetz calls me."

Last week, Hatch called Kirkham and asked him to testify for the Senate finance committee on June 28 about the burdens and problems of the tax code for a small-business owner. This is heady stuff for a guy whose political involvement until two and a half years ago consisted of voting. "I never dreamed I'd be involved like this," he says. "I didn't even know who Glenn Beck was when I started."

How did a carmaker wind up testifying for Congress and calling senators by their first names and being quoted in the New York Times? You've got to know Kirkham's past to know how he got here.

Kirkham's is the classic American success story. The fifth of nine children, he grew up with an Air Force father and moved frequently, even by military standards. He attended three different high schools, graduating in Alexandria, Va. He entered BYU at the age of 17, then left school for two years to serve an LDS Church mission in Peru. The life he saw there as he walked streets that served as open sewers and revealed children eating out of garbage dumps made an indelible impression. Then, he got to see the inside of a government-run hospital after catching a nearly fatal case of typhoid fever. He was eventually transferred to the U.S. to recover and complete the last months of his mission in California.

He claims he didn't distinguish himself as a student until he returned from his mission. He majored in Spanish at BYU and planned to apply to medical school. Because the school required a minor for language majors, he studied manufacturing engineering and did it with a sense of urgency. He convinced professors to let him skip lower-division prerequisite classes — he didn't have time for them, he said — and jumped directly into upper-level courses of advanced composites, advanced tool design, advanced machinery, plus a heavy load of chemistry and physics. While other students were making chess pieces and animals in lathe and casting classes, he was making parts for Cobras with various alloys.

In his free time, Kirkham was restoring Cobras through an auto restoration business his father had started after retiring from the Air Force. One day, his brother-in-law asked him to look at an old Polish Iskra fighter plane he had bought.

"I had been restoring cars to get through college, so he thought I could repair part of the plane," says Kirkham.

As Kirkham studied the plane, he noticed its construction — sheets of aluminum riveted to an underlying foundation of tubes, same as a Cobra. "I realized these guys could make a Cobra," he says. He called the company in Poland but couldn't find anyone who spoke English. He sent them a fax instead: "Can you guys make an aluminum-bodied sports car?" Their reply: Yes.

In the middle of his final semester at BYU, in March of 1995, Kirkham flew to Poland and a car company was born. He still lacks one class for a degree.

"When I landed in Poland, I knew what I was going to do in life," he says. "I wasn't going to be a doctor anymore."

Kirkham established his company in a corner of the MiG factory (which he bought years later). He went to a family friend, Steve Oveson, for financing. "I had no business plan," he recalls. "I told him I was going to make cool cars and people will buy them." Oveson gave him his first loan of $10,000. The loan would eventually grow to $1 million. "I've often wondered why he believed in me," says Kirkham. "He was my angel investor. I eventually paid him back with interest."

Kirkham, who was joined in the venture by his brothers Thomas Jr. and Steven, didn't draw a salary for three years and lived in his parents' basement with his wife Lisa. He got his big break when Auto Week magazine got wind of a guy who was making cars in an old Cold War airplane factory. They made him the subject of a June 1996 cover story. "You can't buy that kind of advertising," says Kirkham. "The phone kept ringing after that." Since then, the company has produced about 750 cars. They are selling cars to clients as far away as Greece, England and Japan. They have been invited to build cars for auto shows in New York, Las Vegas, Europe and Dubai. They have been featured in countless magazines.

This is how esteemed Kirkham is regarded in the car industry: When Ford worried that Chevrolet was going to grab all the attention at the prestigious SEMA car show in Las Vegas in 2005 with the unveiling of its newest Corvette, they called Kirkham. They told him he could build any Ford he wanted and money was no object. Kirkham decided to produce a replica of a '40s Ford, a favorite of hot rodders, but with a few twists. He bought a plastic model of the car, took it to Poland and used it as a pattern to carve a life-size Styrofoam replica. At Kirkham's request, Ford gutted a Ford GT (a $150,000 car) right on the assembly line, sending everything but the body and frame to Poland. The finished product after 10,000 hours of work was a modified replica of an old Ford with the body made entirely of copper and a wheel base that was 16 inches wider than the original. The car, worth about $1 million, was put on the cover of Auto Week.

"Ford was ecstatic," says Kirkham.

During the process of establishing a car company, Kirkham had several experiences that shaped his political views about socialism and the merits of a free-market system unfettered by government. When Kirkham visited the Polish MiG factory for the first time in 1995, the lights were off and the machines silent — there was not enough money to pay the electric bill. Each morning, thousands of men came to work, dressed in rags, and did nothing all day. They simply stood by their machines until it was time to go home. Kirkham was so moved by the experience that he took a photo of the darkened factory, only to have a guard point a machine gun at him, forbidding him from taking more photos.

The Cold War and socialism had collapsed a few years earlier, but Poland was still trying to dig its way out of the past. "All the laws and legacies of socialism were still there," says Kirkham.

A couple of years later, he watched as 20,000 employees were ordered to leave the MiG factory — they were officially out of work. "I watched them get on their bikes and pedal home in the snow," says Kirkham. "This company that couldn't fail, failed. This factory was government run and government supported. The next few days, I had 100 men line up outside my door, begging for work."

If that didn't cement Kirkham's opinion of government intrusion during his early years in Poland, then an illness did. He contracted systemic strep infection, which left him with a temperature of 105 degrees. For the second time, he found himself at the mercy of government health care in a foreign country. After Kirkham was placed on a stretcher at the factory, Polish workers stuffed cash in his pockets so he could bribe doctors. He was forced to lie in a hospital hallway because no rooms were available. The nearest antibiotics were two hours away.

"Socialist hospitals are terrifying," says Kirkham. "They wont treat you unless you bribe them. In truth, though, they never asked me for a bribe — I was an American and employing a lot of people."

Jump ahead to the fall of 2008. When Congress passed the Troubled Asset Relief Program (TARP) to bail out the subprime mortgage industry, Kirkham immediately thought of the factory. "That was the moment I had to do something," he recalls. "I remembered when the lights were off in Poland." In his mind, he'd seen what happens to a country built around social entitlements, welfare, heavy taxation, uncontrolled government spending and government-controlled businesses.

"We are heading toward a cliff," he says. "We are spending more than we take in. Our debt is unsustainable. I know what happens. I've seen it.'

In November, Barack Obama was elected president, which meant more expensive government programs were on the way. In December, during a frigid campout with the Boy Scouts, Kirkham stood by a campfire in the snow at 2 a.m., expressing his concerns to the Scoutmaster — state legislator Chris Herrod, R-Provo. Kirkham told Herrod that Bennett, who had spent 18 years in the U.S. Senate, had to go because he supported TARP. Herrod laughed. "You don't understand politics," he said. "You can't beat the machine." Herrod gave Kirkham a crash course in the machinations of state politics, explaining caucuses and delegates and so forth.

In the ensuing months, tea parties began to spring up around the country, and Kirkham, who recognized them as political allies, began tracking their progress. On Feb. 16 that year, the first one turned up in Seattle, followed by others in Phoenix and Chicago. "I thought for sure one would be organized in Utah," he says. "I waited four days. Nothing happened." On Feb. 19, he watched CNBC commentator Rick Santelli deliver a scathing rebuke of Obama's government bailout programs in what came to be known as the Rant Heard Round the World.

"It was a galvanizing event," says Kirkham.

On Feb. 25, Kirkham began organizing a tea party in Salt Lake City and planned the first rally. He called local media, but none was interested in doing a story on it. Conservative radio star Sean Hannity wasn't, either. The only one to respond was political blogger Glen Reynolds, who promoted it on Utah's first tea party rally was held on March 6, 2009, the last day of the legislative session, just as legislators broke for lunch.

"I didn't think anyone would show up," says Kirkham. He wound up speaking for 10 minutes to a gathering of about 100 people. He told them he had seen where the government was headed; he told them what he had seen in Poland.

The tea party took off in Utah. About 20 rallies were organized around the state for Tax Day, including one outside Hatch's Salt Lake office. By then, tea parties had the full attention of Utah's senators. Jim Bennett, the senator's son, called Kirkham to ask if his father could speak at the rally. Kirkham replied, "You don't understand. Your father is the reason I started the tea party." After a long pause, Jim Bennett asked why. "He voted for TARP." He told Hatch's rep the same thing after he made a similar speaking request.

Two weeks later, Hatch made an appointment to meet with Kirkham in the senator's office. Kirkham showed him a book he had made for Ellison that chronicled the construction of his car and the work of Kirkham Motors. While thumbing through the book, they came to the photo of the MiG factory with the lights off.

"You want to know why I started the tea party in Utah?" he asked Hatch. "Because of this photo." Hatch leaned forward and studied the photo as Kirkham told him, "When you voted for TARP, you voted to turn off our lights."

Their meeting lasted three hours.

Weeks later, Hatch met with Kirkham again, this time in Provo, where he was given a full tour of the shop. The senator has continued to keep in close contact with Kirkham, and it's easy to understand why. In 2010, Kirkham and his tea party allies played a huge role in bringing down another powerful senator. Bennett, after three terms in the Senate, failed to win the Republican nomination for re-election. The tea party rejoiced. "The first casualty of the tea party was Bob Bennett," says Kirkham. "It was the first time the tea party ousted a sitting member of Congress. It was a wonderful moment. But the fight never ends. It's gone on since the beginning of time, with kings, dictators, presidents. They've taken from one group and given to another."

Kirkham told Hatch during their first meeting that because he voted for TARP, "I will do everything in my power to remove you from office."

It is not unusual for Hatch to call Kirkham several times a day to weigh his opinion on issues and legislation. He invited Kirkham to sit with him in a suite at a BYU football game last fall, and Hatch attended a picnic with Kirkham and other tea party members and has joined him for town hall meetings and economic forums.

Does Kirkham worry that he is being schmoozed by Hatch? "It's what I would do," he says. "If you want to get re-elected, you have to talk to those who vote or those who can influence votes. I have to give him credit. He has reached out. And he reached out four years before elections. I think he is sincere. Is he sincere because he wants to get elected again or because this is what he believes? The voters will have to decide. None of this absolves him of those votes he's made. TARP was a bad vote. But he came out and said he's sorry for that. I still haven't made up my mind about him. I don't know who else is running."

Hatch says this of Kirkham: "I still remember the first time I met David. What was supposed to be a half-hour discussion turned into hours. … He is a hard-working businessman who understands the economic challenges facing our nation, and together we have serious concerns about out-of-control federal spending and the massive deficit. He's passionate about making this country a better place, and I believe he's done a lot of good."

It is clear that Kirkham and the tea party have Hatch's ear and that they wield some influence. According to Kirkham, Hatch called him last December from the Senate floor as a vote was about to take place on an omnibus spending bill. Republicans worried that lame-duck Democrats would pass a huge spending bill as a parting shot. Kirkham could hear other senators lobby Hatch in the background as they talked on the phone. As Kirkham recalls it, "Orrin said, 'This thing is about to go on the floor. What do you want me to do?' I told him, 'Orrin, you can't do this. We can't keep spending money; they're going to destroy us. You have seniority, friends and power; we need you to use it.' We talked for 15 to 20 minutes. I thought we had no chance to stop it. But a half-hour later, it was on the news; Harry Reid pulled the bill. He didn't have the votes. Did Hatch have an effect? I'm sure he did. I heard later from other sources that he went to the Senate floor and got into a fight with Bennett in front of everyone. Bob voted for it, but the others didn't."

Similarly, Kirkham received another call from Hatch minutes before the Senate was going to vote on a ban of earmarks. After stating some of the merits of earmarks and worrying aloud that he would lose money to other states if he didn't support them, Kirkham told him, "That's the problem. Earmarks are used as bribes to pass bad legislation. You've got to get (Republican minority leader) Mitch McConnell on board. If you vote for earmarks, I will no longer be able to support you. The B-52s are circling overhead, and anyone who votes for this is going to be carpet-bombed."

Later in the day, McConnell announced that earmarks were banned. Says Kirkham, "I feel like we really did change his vote. To me, that was every bit the victory of beating Bennett."

Today, Kirkham is considered a leader of the tea party movement in Utah, which consists of some 10,000 people. Early on, he was asked by the tea party to be the face of the movement with the media. He also helps organize rallies, talks to politicians, attends weekly meetings, writes articles and gives speeches.

"It's been amazing to see his growth and influence on politics in Utah," says Herrod. "Who would have thought less than two and a half years ago that it would lead to this? He's quoted around the nation and has a tremendous amount of influence. He's learned the ropes fast."

No one who knows Kirkham doubts his sincerity and his passion for a government-free economic system. He has seen the roadblocks governments present. He traveled to Tanzania and Haiti to build low-income housing, but after years of trying, he finally gave up because of government bureaucracy, including bribes, a 200 percent import duty on donated items such as materials for an orphanage, legal snafus and other government red tape.

"People are living in poverty, and we can't get housing built," says an exasperated Kirkham.

In 2002, Kirkham was invited by the U.S. Department of Energy and the Russian government to establish his car business in Snezhinsk, Russia, a closed city that once made the country's nuclear bombs.

"They hadn't paid their engineers in months," says Kirkham. "They had seen that we had taken people who had worked in a MiG factory and made cars. They wanted us to do the same thing in a weapons factory. I was trying to get those guys to make car parts so they wouldn't sell their bomb secrets to terrorists."

After years of work, the project finally died, again because of bureaucracy.

Lynn Bayles, a friend and customer of Kirkham's, is not surprised by such stories. "He's one of the most charitable people I have ever met," he says. "He's an incredible person."

The 44-year-old Kirkham, who has four children, still marvels at this turn his life has taken into politics. He works long hours to meet the many demands on his time, typically arriving home at 7 or 8 each night. He frequently sends emails to himself from his iPhone, whether they are tea party ideas or how to make a car faster, or a quote he read that he wants to remember.

Burdened with stress and weight gain, he followed a doctor's advice and took up a musical instrument and running. He hired a piano teacher who immediately began to teach him simple songs. Just as he told the BYU professors, Kirkham said, "I'm too busy for that. I want to play Chopin." Within four months, he was playing Chopin's Nocturne Opus 9, No. 2 in E flat major.

"Unfortunately, I haven't learned any new songs since I started the tea party," he says.

He has shed 50 pounds with an exercise and running routine. With his usual impatience, he ran the Snowshoe Marathon in February, which was 21 miles farther than his longest previous run. Now, he's training for the Squaw Valley 50-miler.

Kirkham, an analytical sort who speaks Polish and Spanish and some Russian and Portuguese, is not so much a car aficionado as much as a tinkerer and an idea guy with engineering training. He has a patent pending for body armor and a bulletproof helmet. At his car shop, he makes sniper mounts for the military that enable more accurate shooting from moving vehicles. He's the kind of guy who found a way to turn a 13-piece car hub into one piece and once drew up plans for the design of a low-income home for Haiti on the back of a church program during Sunday meetings.

"I don't understand people who don't wake up, jump out of bed and want to go to work," he says. "I just love to make things and push myself every day. Every day, we have new ideas, new projects, new problems to solve. I love the challenge."