For a political party leader battling through an election campaign, the only thing more important than claiming underdog status is to highlight your working-class roots.
Both Prime Minister Julia Gillard and Opposition Leader Tony Abbott have worked hard at this, emphasising their migrant backgrounds and the fact they come from modest means. And after watching how former Opposition leader Malcolm Turnbull was criticised for having a fortune of more than $185 million, who can blame them.
But wealthy entrepreneurs still like to have some influence on the political process. Usually this is done through large political donations – Westfield’s Frank Lowy, property developer Chau Chak and the Millner family are regulars on political donation registers – but we have also seen rich business people become involved in the inner workings of political parties. The most notable is Queensland-based mining billionaire Clive Palmer, who formerly advised the National Party.
And while having a lot of money is usually a major political liability for a would-be leader, that doesn’t stop every wealthy entrepreneur from trying to win office.
In California, former eBay chief executive Meg Whitman, who is worth more than $2 billion, has poured an estimated $80 million into her campaign to become governor of financially stricken California
Meanwhile, down south in Florida, billionaire property investor Jeff Greene – who made a fortune shorting the sub-prime boom – is expected to spend an estimated $40 million on his bid to become a senator for the state.
But the transition from the boardroom to the corridors of political power is not easy, and more than a few entrepreneurs-turned-politician have questioned why they ever left business for the cutthroat, thankless world of politics.
Aside from the constant wealth-based attacks from political opponents, entrepreneurs who take to the political stage also face the difficult question of what to do with their business interests. There are three basic options: sell everything; hand over control of your interests to someone else and try to keep everything at arm’s length; or just keep running your business and making money.
But even where a politician does effectively step away from their business or investment, the conflict of interest issue never completely goes away.
Victorian Opposition leader Ted Baillieu has discovered this in recent days, when the Labor Government launched a stinging attack on his business interests. While Baillieu says his affairs are handled by an independent manager, the Government claims that unless he sells his shares in companies like Bluescope Steel and CSL, the potential for conflicts still exists. Baillieu has so far refused to place his investments in a blind trust.
Given the majority of super-wealthy politicians are overseas, let’s start by looking at how other billionaire politicians have handled this issue:
New York mayor Michael Bloomberg is clearly the richest politician in the world, with a fortune estimated by Forbes to be $19.9 billion. The former Wall Street trader founded the financial market information services firm now known as Bloomberg in 1981 and went on to build a global empire. Bloomberg controversially switched his political allegiance from Democrat to Republican in 2001 and become mayor in the same year. He is now serving his third term in the job – a feat he only managed after changing the rules which previously prevented mayors from serving three terms.
If Bloomberg is the richest billionaire politician in the world, then Italian Prime Minister Silvio Berlusconi is probably the most powerful. Berlusconi’s wealth, estimate at about $10 billion, stems from his interest in the media sector, while he also owns interests in everything from advertising agencies and sporting teams to insurance firms and movie production houses. While Berlusconi has been PM on three separate occasions, his Government is again in something of a crisis, with a “confidence vote” to be held in September set to decide whether he resigns or remains.
Lebanese Prime Minster Saad Hariri followed in the political footsteps of his father Rafic Hariri, a two-time prime minister and entrepreneur who was assassinated in a bombing in 2005. On top of helping to run the country, Hariri also runs a telecoms, construction and real estate empire called Saudi Oger, which is the cornerstone of his $2.1 billion fortune.
South American entrepreneur Sebastian Pinera was elected president of Chile in January, and has been forced to deal with the prickly issue of being worth about $2.5 billion in what remains a developing country. Since becoming president-elect, Pinera has sold a number of his investments (including a big stake in Chile’s main airline) and put a reported $US400 million in a blind trust.
French industrialist Serge Dassault, who is worth about $8 billion, is the chairman of media and software company Groupe Dassault and the owner of French daily newspaper, Le Figaro. He has also had a long career as a conservative politician, serving as a French senator since 2004 and also as the mayor of the city of Corbeil-Essonnes, a southern suburb of Paris. However, he was stripped of this latter role last year after it was found he had made “gifts of money” to voters as part of the re-election campaign.
Australia also has its fair share of wealthy entrepreneurs who are or have been involved in politics. Here are the most prominent examples:
Former Liberal leader Malcolm Turnbull, whose fortune is estimated at $186 million by BRW, is the most prominent wealthy-businessman-turned-politician in Australia. Turnbull, a former lawyer and investment banker, is something of a serial entrepreneur, although as leader he was regularly attacked as being too close to business.
Toowoomba-based entrepreneur Clive Berghofer is worth $340 million, thanks to his large property portfolio. Berghofer served as mayor of Toowoomba from 1982 to 1992.
Victorian Opposition leader Ted Baillieu is part of one of Melbourne true blue-blood families, who were valued at $466 million earlier this year by BRW. Victoria’s Labor Government has regularly attacked Ted as a “Toorak toff” but it remains to be seen whether he can shake the tag and win November’s state election.
Former federal Liberal minister Geoff Prosser made his debut on the Rich 200 earlier this year with a fortune of $186 million, thanks to his property investments. Prosser won office in 1987 and later served as small business minister in the first Howard government, but resigned as minister in 1997 due to perceived conflicts of interests. He left politics in 2007.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
