Britain’s Sky News emphasized the plummier aspects of Bob Stefanowski’s resume — trustee of London’s venerable Victoria and Albert Museum, visiting professor at Oxford, top investment banker — in reporting his arrival in late 2014 as the new boss of a decidedly down-market business: Making payday loans in the U.S., the U.K. and Europe.
The job is one target at the top of the resume of a corporate expatriate who’s come home to Connecticut and is now trying to convince Republican voters he is the GOP’s strongest candidate for governor. Another is being the chief financial officer of a Swiss bank once rocked by ethical and management lapses.
Both times, however, Stefanowski arrived after shady lending practices, accumulations of toxic assets, and other misdeeds hit the fan, drawing attention from financial regulators on both sides of the Atlantic, as well a criminal investigation in the U.S. of UBS Investment Bank, the Swiss bank he joined after one trader ran up billions of dollars in trading losses.
Sky News described him as having “parachuted into UBS after a scandal involving a rogue trader cost it billions of dollars” and arriving at DFC Global, owner of the Money Shop in the U.K. and Money Mart in the U.S., months after it agreed to refund interest and default charges to thousands of customers enticed to take out loans they could not afford.
His time at DFC Global is now fodder for an attack ad dubbing him “Payday Bob.”
“At that point in time, I had no idea I’d be running for governor some day,” Stefanowski said of taking over DFC. “I wanted to roll up my sleeves and help people and turn around a business. I didn’t even think about, well, is there going to be a potential stigma running for governor some day.”
An examination of Stefanowski’s work history generally corroborates his claim of arriving at UBS and DFC as a leader in the cleanup crew, not someone responsible for practices that nearly toppled UBS or gouged borrowers who turned to DFC’s expensive, short-term loans out of desperation.
But a key element of Stefanowski’s transformation from a politically indifferent corporate executive who didn’t bother to vote for 16 years — he skipped the 2016 presidential election — remains a puzzle the candidate makes no effort to unlock: A nine-month fling as a Democrat that didn’t end until last summer.
Stefanowski, now 56, left London for the U.S. in mid-2015, working for two years in American headquarters in Philadelphia, returning to his Connecticut home in the shoreline community of Madison on weekends to visit his wife, Amy, and their three daughters. After helping to sell the company’s European assets, he left DFC to become an independent consultant in September 2017.
For reasons he has yet to publicly share, he changed his voter registration to Democrat in October 2016, less than a month before voters went to the polls to choose between Hillary Clinton and Donald J. Trump. At the time, Republicans were recoiling from Trump over the Access Hollywood tape in which he crudely boasted about his ability as a celebrity to molest women without consequence.
Reince Priebus, the GOP national chairman, reportedly urged Trump to quit the race. In Connecticut, state Sen. Heather Somers, R-Groton, then a candidate running for an open seat in a competitive district called for Trump to step aside. House Minority Leader Themis Klarides, R-Derby, didn’t go that far, but said of his sexual boasts: “Those are the words of an insecure man.”
It was against that backdrop that Stefanowski, who says he had been a Republican for at least 25 years, became a Democrat.
“It was not about Trump,” Stefanowski said.
Then what? Why then did the Democratic Party hold more appeal for Stefanowski on the eve of Trump’s stunning victory?
“I looked at this state and I said ‘What the heck happened to this state?’ and I quickly realized that my economic policy, my stand on the social issues is not going to go through on the Democratic side of this ticket,” Stefanowski said. “I needed to be a Republican to get it done.”
The answer suggests his registration change to Democrat in 2016 and back to Republican in July 2017 came in the context of his weighing an entrance into politics, but Stefanowski said, “I never thought about running for governor as a Democrat.”
Pressed further, Stefanowski said there is nothing more to say.
“It is what it is.”
Stefanowski grew up in North Haven, graduated in 1984 from Fairfield University and joined Price Waterhouse in Hartford as an auditor, staying for five years. From 1990 to 1992, he worked as a litigation consultant while getting an MBA from Cornell University, then began a 13-year career at General Electric, eventually transferring to London.
He left GE to oversee investments in the Americas and Asia for the London-based 3i Group, a blue-chip equity firm publicly traded on the British stock exchange, the FTSE.
In 2011, Stefanowski became the chief financial officer of UBS, which had been on the verge of collapse just three years earlier, weakened by the rogue trading debacle, the 2008 recession and, as Reuters revealed in 2010, the pressure of a U.S. criminal investigation into how the bank helped 52,000 Americans hide billions of dollars of untaxed assets in secret Swiss accounts between 2000 and 2007.
DFC sought his services in 2014 after it was acquired by Lone Star, an investment firm with an eye for troubled properties. It is wholly owned by John Grayken, a Massachusetts-born billionaire who became an Irish citizen in 1999 to avoid U.S taxes. “Among the robber barons of the new millennium,” Forbes wrote in 2016, “few are as secretive — or as loathed or as successful — as John Grayken of Lone Star Funds.”
Stefanowski has little to say about Grayken. Laughing, he said, “I never met him.”
In 2013, institutional investors in DFC alleged in a lawsuit that the company defrauded them by hiding that its lending practices relied heavily on hooking borrowers into short-term loans they could not repay, locking them into a series of new loans with ever-escalating fees and interest charges. (DFC would settle for $30 million in 2017.)
“The company had a done a lot of bad things, as have others in that industry, and the new owner wanted to clean it up. They did a search for a new CEO. They liked my GE pedigree,” Stefanowski said. “I had worked in a regulated environment. I had cleaned things up at UBS. I was attractive for that reason.”
Under the best of circumstances, payday loans are a business that consumer advocates say can easily be exploitative. In the U.S., payday lenders now operate in most jurisdictions under rules that bar them from rolling over loans, impose cooling off periods on new loans, and set limits on what interest can be charged.
Connecticut is one of six states that never legalized payday lending, according to a state-by-state analysis by the Consumer Federation of America. Otherwise, the rules vary by state. In California, borrowing $100 for two weeks will cost $17.65 — an annual percentage rate of 459 percent. In Rhode Island, the fee is $10, for an APR of 260 percent.
“This is a category of consumer that needs money, but I don’t want to be taking advantage of people,” Stefanowski said he told the corporate headhunter. “If I come in to be your CEO, they’ve got to let me clean it up. They allowed me to come in on that basis.”
Stefanowski, who had run business units at GE, was drawn by the chance to be the boss of an entire company for the first time.
“It was an opportunity for me to help a constituency that needs it,” he said. “It was an opportunity for me to be a CEO of a company and truly be in charge. It was an opportunity, like I’ve done my entire career, in turnarounds. It was a turnaround. That’s what I like to do.”
He said his run for governor grew out of a dinner conversation in early 2017, when he knew he would be leaving DFC, with John Fund, a former Wall Street Journal editor who now writes for the National Review, and the conservative magazine’s publisher, Jack Fowler of Milford. The publisher introduced him to former state Sen. Tom Scott of Milford, a conservative political operative who is part of his campaign team.
Stefanowski has taken an uncharted path to a campaign that seems to have landed him at the front of the pack. (No independent pollster has released a poll of the GOP primary, but sources in other campaigns, including some down-ballot, say their data shows him either leading in competition for the lead, with a significant undecided vote.)
Of course, a public, if imprecise measure of his standing in the polls is that Stefanowski has been the prime target of the other candidates in two recent debates and in television ads, including one by former hedge-fund manager David Stemerman that calls him “Payday Bob” and suggests Stefanowski was to blame for DFC’s abuses.
Stefanowski has hit back, noting Stemerman’s own past as a Democrat — not mentioning it was 15 years ago. And he turns Stemerman’s refusal to endorse Stefanowski’s income-tax repeal proposal as an endorsement of “Dan Malloy’s income tax,” something that Stemerman has not come close to doing.
“I don’t like going negative,” Stefanowski said. “I don’t mind striking back.”
Like Stemerman, he bypassed the GOP state convention, instead choosing to qualify for the Aug. 14 primary by a petition drive that observers said was well-organized and produced petitions with a small rejection rate.
His team includes Tom Scott and imports from Virginia, including a 31-year-old campaign manager, Patrick Trueman, and a senior advisor, Chris LaCivita, who wrote some of the Swift Boat ads attacking the military record of John Kerry in 2004 and worked on the second of Linda McMahon’s two U.S. Senate campaigns in Connecticut.
“People have underestimated us every step of the way,” Stefanowski said. “It’s been unconventional, and I’m taking nothing for granted, but three weeks away, we’re sitting here on the lead.”