The Morning Report
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Friday, May 20, 2005 | It was a puzzling start for a wealthy, unknown candidate running for a vacated mayoral seat in the United States’ most dysfunctional city.
Steve Francis, the candidate insider Republicans have been raving about since Dick Murphy announced his resignation April 25, was unveiled to the media Thursday outside City Hall on a cloudless morning.
And after a reading from a prepared speech with his wife and son at his side, Francis was quickly whisked away by his well-paid throng of celebrity consultants without taking questions from the bank of assembled journalists.
“Hey, Steve, we’re over here,” cried one journalist.
The reporters and cameramen then followed the rapidly retreating health care executive to the City Clerk’s Office, where he again refused to answer questions from reporters standing only inches away. He stood looking straight ahead, waiting for a clerk to bring him campaign papers.
“Why do you want to be mayor?” one quizzed, for example.
“…” Francis replied, not looking at the questioner.
“Why aren’t you answering questions?” another unsanctioned question came.
“…” Francis replied, not looking at the questioner.
George Gorton, a consultant who has run campaigns for Pete Wilson, Arnold Schwarzenegger and Boris Yeltsin, told reporters that Francis would not be answering questions Thursday and such an action was normal for campaigns.
Both of the other declared candidates, Councilwoman Donna Frye and former police chief Jerry Sanders, always answer questions and then regularly speak one-on-one with reporters after their press conferences.
Francis then went into a room in the clerk’s office to complete his paperwork. His consultants gauged the press’ discontent. They chatted to each other and on cell phones. After nearly 30 minutes of contemplation, they allowed Francis to take a limited number of questions from the press.
His handlers played it off as if Francis had to meet strict time guidelines, like business people do. But even as he waited around for a clerk he didn’t answer simple questions from reporters.
The tactic clearly backfired, leaving the press corps agape.
In his prepared speech and in the later questions with reporters, Francis portrayed himself as a successful businessman not beholden to special interests.
“I know I have the experience. I have built a business from scratch and led a large organization,” he said. “I have the financial background and the ability to work with Wall Street.”
In 1985, Francis founded AMN Healthcare, Inc., a $400 million company that provides temporary health care staffing. According to Standard and Poor’s, it is the largest provider of travel nurse staffing services in the nation. Nursing services account for 93 percent of the company’s services.
Francis served as president and chief executive officer of the company from June 1990 until May 2003 and as chief executive officer until this month.
He currently is listed as the company’s executive chairman of the board and a director.
Francis moved to San Diego from Nevada 18 years ago. There he served in the state assembly, which is a part-time body, from 1983 to 1987. At the age of 30, he was elected majority leader and served as such for two years, according to the biography provided by his campaign.
He has been married to his wife, Gayle, for 22 years. They have two children.
Francis’ jump into the race was welcomed by at least one of his opponents in the July 26 primary election.
“The more the merrier,” Frye said.
Also on Thursday, the other declared candidate in the race, Sanders, released a plan that he said will be the most sweeping reform of bureaucracy in the history of San Diego.
He said that a study conducted by his campaign over the past two weeks that included interviews with city employees helped him find about 50 management positions that could be cut from the budget at a savings of an estimated $10 million.
“Put simply, there is just too much distance between the needs of citizens and the city’s top managers,” Sanders said.
Carl DeMaio, a businessman and City Hall critic, announced Thursday that he wouldn’t run for mayor. In an interview after his press conference, he said he had two speeches prepared, but chose not to enter the race. Instead, he announced a campaign – which he will at least partially finance himself – to place two fiscal reform measures on the ballot in either November or June 2006.
Francis has already put up $500,000 of his own money to finance the beginnings of the campaign. He said he is prepared to spend more, but wouldn’t specify how much.
When asked why he would want to spend so much money to take over a city in such crisis, Francis replied: “This city has been very wonderful for me and my family.”
Francis promised a clear plan of action for repairing a City Hall tarnished by ongoing investigations by the Securities and Exchange Commission, U.S. Attorney’s Office and District Attorney’s Office. All of the investigations revolve around the pension system and its deficit, estimated to be between $1.37 billion and $2 billion.
The district attorney charged six former and current pension board members with felony conflict-of-interest violations Tuesday, and Mayor Dick Murphy announced his resignation April 25 under the pressure of the mounting fiscal and legal woes facing the city.
Fiscal year audits for 2003 and 2004 remain on hold as well pending investigations into wrongdoing. As long as the audits remain on hold, so will the city’s credit rating and, therefore, its access to capital markets.
Francis’ turnaround plan includes:
– Submitting a real balanced budget to the city every year.
– Renegotiating pension benefits “that could be illegal and we just can’t afford anyways.” He didn’t offer specifics of negotiating strategy.
– Demanding a long-term strategic plan.
– Consulting with the best minds in business finance and government, such as DeMaio.
“And if the parties that caused this mess refuse to come to the table or the City Council refuses to act, I will take these issues to the people and let them vote,” Francis said.
He said he will also cooperate fully with investigators.
“When elected officials have lied to the people, covered up or engaged in gross negligence or mismanagement, I will urge them to do the right thing and step down,” he said.
Francis owns more than 3 million shares of AMN Healthcare stock, according to the company’s May 9 filing with the Securities and Exchange Commission, and they were worth more than $46 million at the close of trading on Thursday. It’s unknown what wealth he has outside of his AMN stock.
His holdings represent 11.4 percent of the company’s outstanding shares. The stock has traded at between $10.70 and $16.85 in the last 52 weeks.
That wealth has allowed him to bring in some of the biggest names in political consulting in the world, including Gorton and other associates affiliated with past campaigns of Wilson, Schwarzenegger, President George W. Bush and international politicians.
Francis also serves on the boards for Father Joe’s Villages, the San Diego Symphony Orchestra Association and the San Diego Regional Economic Development Corp.
Please contact Andrew Donohue directly at