Gabrieli's record: taking a closer look
Pointing to achievements, candidate gilds the results
Christopher Gabrieli is running for governor on a ``record of results." The venture capitalist claims credit for helping create 100,000 jobs, convincing the state pension board to invest up to $600 million in the local economy, and pushing an embryonic stem cell research bill through the Legislature.
But a review shows that while he can lay claim to some achievements on those three fronts, they are more modest than some of his statements might suggest.
His claim of helping to create 100,000 jobs is disputed by some company executives and venture capital specialists, who say early investors generally cannot take credit for a company's employment record many years later. As for his claim of convincing the pension board to increase its investment in Massachusetts, Gabrieli conceded that on occasion he has misstated the magnitude of the investment. And in assessing his role on the stem cell legislation, two top lawmakers say Gabrieli was involved but not crucial to the passage of the bill.
Gabrieli vigorously defended his record last week in an interview with the Globe and through a spokesman. ``I believe the statements about my record are accurate," Gabrieli said.
``I'm proud of my record of results," he said. ``I'm proud to have helped create jobs, I'm proud to have helped defeat Governor Romney on stem cell research, and I'm proud that I helped convince the pension fund to expand their investment in our economy. It's unfortunate people want to attack those results, because they are the kind of results that help real people."
It is not unusual for political candidates to offer an overly generous interpretation of their records. In Gabrieli's case, the core of his campaign rests on one theme -- ``results" -- and in a campaign pamphlet, debates, and his website, the Democrat has boasted that he has made a difference on these key policy issues.
Gabrieli's claim stems from his 15-year tenure at Bessemer Venture Partners, a private venture capital firm that he joined in 1986.
When the Globe asked Gabrieli's campaign to back up his jobs claim, the campaign sent a list of current workforce numbers for 18 companies that he and his partners invested in. But Gabrieli was not personally involved in most of the deals, his campaign later conceded. Bessemer's website cites the work of other Bessemer partners in 14 of the 18 deals cited by Gabrieli's campaign.
The list of companies provided by Gabrieli includes
The Bessemer site lists two other Bessemer executives, not Gabrieli, as investors in the Staples deals.
``I'm very fond of Chris. He's a former neighbor, good guy," said Thomas Stemberg, the founder of Staples Inc. ``Bessemer as a firm was a supportive investor. Chris himself, to my best memory, was never involved."
Felda Hardymon, the Bessemer partner who led the Staples deal, said that all four of the firm's general partners consulted with one another on deals. While Gabrieli was working in the firm's West Coast office at the time of the Staples deal, Hardymon said, he would discuss investments with Gabrieli by phone or at partner meetings.
``It's a firm where every decision is made by a group the size of a small poker game," Hardymon said in an interview. He believes it's fair for Gabrieli to take credit for jobs the firm helped create.
When pressed, Gabrieli's campaign said that he was the lead investor in as many as 32 deals, and as partner he joined his colleagues in approving hundreds of other deals. But even if Gabrieli were involved in all the deals he cites, whether he or Bessemer could take credit for their later success is debatable, according to entrepreneurs and specialists.
In the venture world, executives typically are acknowledged only for companies in which they are directly involved. Gabrieli's own record, detailed on the firm's website, shows that he worked directly on 26 deals in his 15 years at Bessemer. Those firms now employ about 11,000 people.
``If I was not involved in the company directly, I can say it's a company my firm was involved with," said Todd Dagres, a general partner with venture firm Spark Capital. ``If you're going to say, `I created those jobs,' there's an extra test. Were you on the board? Were you the primary sponsor of that investment within your shop?"
Josh Lerner, a professor at the Harvard Business School who specializes in venture capital, said studies show that venture capitalists do create jobs. But as he sees it, venture executives are on the firmest ground when they claim credit for getting a company off the ground -- not its long-term successes.
``It's like if you home-schooled your child," Lerner said. ``If they get into Harvard, you can pat yourself on the back. But 30 years later, if they go on to be CEO of a company, you probably can't take credit for that."
Jack Smith, the founder of
``They're really stretching," said Smith, who remembered Romney and Bain as helpful in starting the business. He could not remember the name of the Bessemer partner who also invested in the start-up. ``I don't think they can say it at all. They could claim they helped me grow the business. I don't think you could put it into dollars or into heads."
Gideon Gartner, the founder of the Gartner Group, a company that accounts for 3,625 employees on Gabrieli's list, seemed baffled by the claim. He said the company has grown tremendously since he established it in 1979 and that when he left in 1992, it had only 1,000 employees.
``I can't take credit for 4,000 jobs. After I left, the company grew rapidly," said Gartner. ``None of these guys created 4,000 jobs. They can say they invested in companies that eventually grew to that. They can't take personal credit."
Gabrieli later acknowledged that he was not yet at Bessemer when it invested in the Gartner Group in 1979, saying what he had provided to reflect his record was a hastily thrown together list of publicly traded companies, whose employee numbers he could glean from websites. His campaign also noted that Gabrieli has said ``we helped create" 100,000 jobs, rather than taking full credit for the jobs.
``Our firm provided the start-up money to launch these companies, or provided the money to keep these companies afloat before they could sustain themselves," he said. ``Our support was essential to the creation of those companies and those jobs."
On his campaign website, and in some public statements, Gabrieli has been careful to say he convinced the state pension board to invest ``up to" 2 percent of the state pension fund, which would have equaled about $600 million at the time. But in other instances, such as the debate and in a campaign brochure, he did not use the ``up to" caveat.
In interviews over the last several days, Gabrieli and his campaign aides acknowledged that the candidate misstated the amount of money the state pension board had agreed to spend to create new jobs. But they also say their underlying point is the same: Gabrieli encouraged the pension board to invest more money in local companies.
State Treasurer Timothy P. Cahill and a top executive of the pension board said in interviews that at the time Gabrieli first made the claim in April the state had invested $135 million under what's known as the Economically Targeted Investing Program, and planned to approve $35 million in additional investments this month.
Any more, they said, would be too risky.
``Six-hundred-million is a lot to invest in one state. I don't think there are enough opportunities in the pension fund world of venture capital or real estate development. It would be too risky," Cahill said in an interview.
Cahill and Pension Reserves Investment Management Board executive director Michael Travaglini said the board approved the investment program in 2003, but never agreed to a quota or target of 2 percent of the billion-dollar pension fund's assets -- which at the time amounted to $600 million.
``I don't know what he's referring to," said Cahill. ``There is no dollar figure attached. The $600 million is obviously more than we're doing or will probably ever be comfortable doing."
Cahill said he proposed increasing local investments of pension money during his 2002 campaign. As a member of Cahill's transition team, Gabrieli persuaded the McKinsey & Co. consulting firm to study the issue at no charge to the state. Working with Gabrieli, the consultant concluded the state could direct a slice of its assets toward economic development in Massachusetts without hurting its investment performance, as long as it applied certain criteria to its investment choices.
Gabrieli said he met with McKinsey frequently for ``three or four months" and made a presentation to the Investment Committee, an advisory panel made up of PRIM board members and outside investment experts.
Then, at an August 2003 pension board meeting, Cahill, not Gabrieli, pitched the idea to the pension board, according to minutes of the meeting. Cahill credited Gabrieli with getting McKinsey involved and presenting the study to members of the Investment Committee.
In an interview, Gabrieli conceded a misstep in the way he described the amount of the investments and explained that he and his campaign had relied on the 2003 annual report of the treasurer's office. That report said the Pension Reserves Investment Management Board had voted ``to invest up to 2 percent of its assets in economically targeted investments."
Gabrieli acknowledged that he did not check to make sure the board had indeed made the investments it claimed. ``It was sloppy," he conceded.
Overall, though, he said: ``I was involved throughout the process from start to finish, but it was a team effort. I'm incredibly proud of the huge new investment by our pension fund to grow our economy."
In late March of last year, with legislative votes looming on a comprehensive bill to legalize and regulate embryonic stem cell research, Romney vowed to veto some sections. Gabrieli jumped into the debate with a lobbying campaign to mobilize support for the bill. For several days before the first vote in the Senate, Gabrieli aired TV and Internet ads urging passage.
Romney's principal objection was to the endorsement of the creation of embryonic cells through so-called therapeutic cloning, or somatic cell nuclear transfer, for research purposes.
Because embryonic stem cells can potentially become any cell in the body, scientific researchers hope the procedure will some day produce cures or new treatments for a variety of diseases. Massachusetts, the national leader in biotechnology, faces competition from other states seeking to lure local researchers and companies.
Gabrieli contributed about $90,000 of his own money and raised another $96,000 from others, according to Joseph Ganley , senior adviser to his campaign and head of the non profit corporation was that was established to lobby on stem cells. About $130,000 was spent on TV and Internet ads over several days before the first major vote in the Senate.
Ganley said there was no way to know how many votes Gabrieli, who has said he spoke to about 30 legislators, personally influenced. But the veto-proof margin was relatively small, ``so we like to think he played a significant role," Ganley said.
``Would it have passed by a veto-proof margin without our help? I don't know," Ganley said.
None of the six legislators interviewed by the Globe remembers Gabrieli's effort having a decisive effect.
``He did make an effort, and it did make a little bit of a difference," recalled House Speaker Salvatore F. DiMasi , for whom the vote was an early test of his leadership. Asked how much of a difference, DiMasi, who backs Attorney General Thomas F. Reilly in the governor's race, said: ``I couldn't quantify it." The bill ultimately passed the House by a 117-37 margin.
``I don't want to downplay the fact that when the bill was going through he came out strongly for it," said Representative Daniel E. Bosley , the House chairman of the Joint Committee on Economic Development and Emerging Technologies, which shaped the bill. ``But at that point, I'm pretty sure we had the votes anyway."
Bosley supports Deval Patrick in the Democratic contest for governor.
``I wouldn't put him in the critical category, but he was helpful," Senate President Robert E. Travaglini said of Gabrieli's effort. ``I never viewed the bill as being in jeopardy, but it was in need of a process of education and familiarization."
The bill passed the Senate by a 35-2 margin. Travaglini is also a Reilly supporter.
Globe staff writer Beth Healy contributed to this report. Andrea Estes can be reached at estes@globe.com 