WASHINGTON -- You need not be a multimillionaire to be in the U.S. Senate. But the two most competitive Republican candidates in Ohio's 2018 race, Josh Mandel and Mike Gibbons, nevertheless would come with Brink's truck-worthy wealth if either was elected.
Both are competing to take on Sen. Sherrod Brown, the Democratic incumbent. Brown is among the minority of sitting senators who isn't a millionaire. Not counting his Cleveland house and federal retirement account -- both exempt from disclosure -- Brown's assets could be worth as little as $367,005, or as much as $830,000. In Senate terms, he's a commoner, even with those exemptions, and rather proud of it.
In fact, Brown has no investments outside his state retirement account (he served in state government before coming to Congress, and the account is disclosed), his bank savings (also disclosed) and whatever he may have in the government Thrift Savings Plan -- the equivalent of a 401(k) retirement account. That stands in contrast with the hundreds of stock and other investment holdings of both Mandel, who is currently the Ohio treasurer, and Gibbons, a Cleveland businessman.
Gibbons' 2016 income -- from salary, partnerships, S corporation distributions and self-employment wages -- topped $6.8 million, according to a new financial disclosure filing.
This sets up another contrast: Brown once tried and failed to keep members of Congress from owning stocks in companies that their legislation could affect. The holdings of Mandel and Gibbons are so vast that they cover nearly all sectors of society, from finance to health care to technology to federally regulated industries of all kinds. Gibbons even owns an alcohol and drug rehab center that treats opioid addicts.
That doesn't mean these potential challengers wouldn't avoid conflicts of interest. You could say they represent the American dream, especially Gibbons, who comes from blue collar roots, according to his campaign. And Brown is not making wealth an issue.
"The fundamental question for Ohio voters in 2018," says Brown's spokesman, Preston Maddock, is simply, "which candidate is on your side?"
Two other Republicans have said they will run in the GOP Senate primary in hopes of challenging Brown in November 2018 but have not filed disclosures.
Mandel's money:
Mandel's wealth initially came largely from his wife, a member of the prominent Cleveland family that founded Forest City Enterprises, a real estate investment and management company. But Mandel's most recent financial disclosure shows he now holds a number of investments jointly with his wife -- mostly corporate stocks, from McDonald's to Microsoft.
Holdings still exclusively in the name of his wife, Ilana Shafran Mandel, are concentrated in real estate, including shopping centers and apartment complexes around the state, and stock in Forest City Realty Trust.
Together, the couple's joint wealth has multiplied since Mandel's first Senate run in 2012. In late 2011, when he first filed a Senate financial disclosure, the couple was worth $1.95 to $7.1 million. They are now worth from $5 million to $15.7 million, according to Mandel's latest filing, in May.
While the filing makes it impossible to know precisely how much the couple's holdings have grown, the bottom and top ranges have grown in the neighborhood of 150 percent. If that's reflective of the actual growth, it suggests the couple beat a popular benchmark average. Money invested in the Standard and Poors 500 index in the same time frame would have grown by 118.5 percent with dividends reinvested.
Mandel's campaign did not respond to questions about the portfolio's managemment but attributed the gains to the stock market's performance.
The couple has almost no debt.
Gibbons' little-known interests:
Gibbons, the underdog in the Republican Senate primary, turns out to be wealthier than Mandel, with up to $195 million in assets. Although known as a partner and senior managing director of the Cleveland investment firm Brown, Gibbons, Lang & Company, if known at all, his holdings include ownership worth $5 million to $25 million in Luna Living, an addiction-recovery center in Chagrin Falls.
His stock portfolio is extensive, and he is a partner in numerous real estate investments.
Perhaps the biggest surprise from Gibbons' financial disclosure report, filed last week, is his role in underwriting a major new $60 million apartment and retail complex in Cleveland's Ohio City neighborhood.
Gibbons' personal investment in the $60 million project is no more than $100,000, although his firm plays a much bigger role. But Gibbons is the guarantor on most of the project's overall debt, assuring lenders will get repaid if something goes wrong, his financial disclosure shows. The guarantee helped the project move from planning to construction at West 25th Street and Detroit Avenue.
It is difficult to determine Gibbons' true net worth because these loan guarantees add up along with other liabilities. They make his liabilities total anywhere from $138.2 million to $315.5 million, against assets ranging from $42.7 million to $195.5 million. Assets and liabilities are disclosed only in ranges, not in exact figures.
But a ballpark estimate, putting aside those loan guarantees, puts Gibbons' net worth around $80 million to $90 million.
What it means:
The job of United States senator pays $174,000 a year. Some candidates and lawmakers need that pay more than others.
But wealth can be tricky. Before Tom Price became secretary of the Department of Health and Human Services and then quit during a controversy over his use of private and military jets for his travel, he was a congressman from Georgia and a stockholder in various companies. Owning stock wasn't a problem.
Stock trading was.
And although Price never felt legal consequences, he was accused of ethical lapses in the House because he traded in health stocks while dealing with health matters in Congress.
Similarly, in 2009, The Plain Dealer reported that members of the House Financial Services Committee, including then-Rep. Charlie Wilson of Ohio, made bank stock trades on the same day the banks got a government bailout -- from a program Congress approved. The transactions may not have been illegal or against congressional rules, but securities attorneys and congressional watchdog groups said they raised flags about the appearance of conflicts of interest.
This doesn't mean traps lie ahead for Mandel or Gibbons if one of them should win the 2018 Senate election after prevailing in the Republican primary. The aforementioned issues concerned stock trades, not stock ownership.
But subjects coming up for discussion in Congress, and perhaps sticking around in 2018 and 2019, include tax rates for partnerships and S corporations -- the source of some of Gibbons' income. And money for opioid addiction treatment, one of Luna Living's specialties, is already the talk of hearings.
Other caution signs:
Drug companies are likely to face continued pressure over prices, prescription practices and patents that could affect their fortunes, and Mandel (Abbott Labs, AbbVie, Merck, Pfizer) and Gibbons (Abbott Labs, AbbVie, Merck, Bristol Myers Squibb) each have a personal stake, although in Gibbons' case it is small. Mandel and his wife have a stake in Merck worth $50,001 to $100,000.
Congress is starting to get tough on Facebook and Google, with questions over the role the online and social media giants played in Russia's attempt to interfere in the 2016 presidential election. Mandel and Gibbons both are Facebook shareholders.
Gibbons has $15,000 or less in the stock, but Mandel and his wife have joint holdings in Facebook worth $100,001 to $250,000. And Gibbons has stock in Alphabet, the parent of Google, worth anywhere from $2,002 to $30,000.
Brown, the incumbent Democrat, tried to pass a law in 2012 restricting lawmakers from owning stock in companies affected by their official dealings. Under his proposal, Congress members could have had to put their holdings in blind trusts or buy broad-based mutual funds if they wanted. Brown was never a major investor anyway, but he sold the stocks he owned before then, and has since sold even the few mutual funds he once had.
But Brown's Stock Act was doomed from the start. Too many lawmakers would have been affected. Stat, a news website that covers the medical industry and its politics, found that as Congress debated numerous changes and restrictions for the pharmaceutical industry in 2014, 30 percent of senators and 20 percent of representatives held assets in biomedical and health-care companies or in specialty funds set up to invest in those industries.
The potential for conflict exists not only with elected officials but also with senior staff aides, Politico reported in an investigation in September.
What this says:
This is not to say most Congress members are ethically challenged. Nor does it suggest Mandel or Gibbons wouldn't put self-interest aside for the good of the country.
If anything, says Chris Schrimpf, a spokesman for Gibbons, experience in building businesses has taught Gibbons valuable lessons that could serve Ohioans well.
"Mike comes from a blue-collar family; his dad was a wrestling coach," Schrimpf said. "One of Mike's very first jobs was shoveling manure on a farm. From those beginnings Mike built the businesses he has today."
Asked whether Gibbons' would benefit from tax reform, Schrimpf said the candidate couldn't "care less what the impact on himself is."
"He wants to see tax reform because he wants to see more jobs created for Ohioans. No one has done an analysis of what the impact would be on Mike's tax bill because he doesn't care. Unlike the career politicians in the Ohio Senate race, Mike won't be beholden to special interests. He's able to focus solely on the people of Ohio."
If he doesn't make it, however, his income won't suffer. He might even be better off financially -- not that losing is his intent.
"Mike's income will be reduced significantly when he's elected to the Senate," Schrimpf said, "but that will be worth it because he will be able to provide a voice for the people of Ohio and not the special interests."