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GOP Senate candidate McGavick sued over Safeco package

Republican U.S. Senate candidate Mike McGavick's lucrative retirement package from Safeco emerged again as a campaign issue Tuesday when a shareholder lawsuit accused McGavick and Safeco's board of illegally paying him $28.4 million after he resigned as chief executive.

Knoll Lowney, a lawyer active in liberal causes, filed the suit on behalf of a great, great-granddaughter of a Safeco founder and denied it was motivated by McGavick's campaign to unseat Democratic Sen. Maria Cantwell.

Lowney said McGavick and Safeco executed an agreement last December, after he became a Senate candidate, requiring him to provide transition services for the first two months of 2006, that amounted to "an illegal giveaway of Safeco assets."

The state Democratic Party previously filed a complaint with the Federal Election Commission alleging that McGavick's compensation package, coming after he became a candidate, constituted an illegal corporate campaign contribution. The FEC hasn't acted on that complaint yet.

Posted by at August 1, 2006 1:04 p.m.
Comments
#9718

Posted by RationalThought at 8/1/06 2:23 p.m.

Gee - who should we trust to understand the needs of average people here in Washington State? Who best represents people who work for a living, who often are forced to go without health care, who have seen their pensions evaporate, etc.? Would you trust these concerns to someone who was the former executive of an insurance company, who just made $28 million simply by retiring? Or, would you trust these concerns to someone who's spent the vast amount of her career in public service, as a public servant? Yes, she spent a few years at Real Networks during the dot.com boom, but most of her experience derives from her career representing AVERAGE people in Olympia and in Washington, D.C.

If you think we need more CEOs running things in Washington, D.C., then go ahead and vote for McGavick.

If you think we need more real people running things in Washington, D.C., then make the smart choice and vote for Maria Cantwell!

#9724

Posted by BenSchiendelman at 8/1/06 2:45 p.m.

I'll be voting for Cantwell as well, but it's not as if she's not a millionaire herself. If you want to see someone who more accurately represents her constituents, look at Murray.

#9726

Posted by usesomelogic at 8/1/06 2:47 p.m.

Yeah because Maria Cantwell has never made any money in her life........Oh wait I forgot it's only okay for liberals to make money. It's obvious that the liberals in this state will do anything it can to make sure a democrat wins the election. They don't care who the right person is for the job, they don't even listen to you if you have a "r" next to your name. It's what's wrong with this state, we think based on a party not on the best candidate. Just think Maria Cantwell is part of the problem, she's in the Senate right now, voted FOR the war and against drilling in Alaska. A state larger than Texas Califonria and New York combined she voted against drilling because of a couple of Carribou.

It's time for a change.

#9727

Posted by Will in Seattle at 8/1/06 2:47 p.m.

Let me see, CEO/SrExec pay up 33 percent over last year, middle class wages DOWN 1 percent over last year, corporate profits up 11 percent.

Normally, it's CEO/execs 8 percent, middle class 6 percent, corporate profits 8 percent.

Something's rotten in the state of the USA.

#9729

Posted by serial catowner at 8/1/06 2:57 p.m.

Boy, what a sweet deal when you're in with the in-crowd!

"Mike, you've been such a sweet fellow, we'd like you to have about $25 million to remember us by."

"Gee, thanks fellows, and you bet I'll remember you, when I'm way off in Washington D.C., 'cause you guys are swell! Maybe some day I can do something for you too."

#9730

Posted by vhx7cbx02 at 8/1/06 3:10 p.m.

If you think we need more real people running things in Washington, D.C., then make the smart choice and vote for Maria Cantwell!

Uh, yeah, Maria Cantwell the Real Networks V.P. who is a millionaire herself... and bought her Senate seat with $10M of her own money by selling Real's stock. Is that what you meant by "Real" person? Real with a capital "R" and a TM after it?

If you want a real Democrat who actually supports the Democratic party platform, and isn't beholden to corporate interests with an entire career of working for nonprofit organizations doing public legal aid work, vote for Hong Tran in the primary.

#9731

Posted by progressivebulldog at 8/1/06 3:11 p.m.

Mike McGavick is a tool for the oil industry. He also has the support of Ted Stevens whose sneaky ANWR oil drilling amendment to a military funding bill Cantwell helped to defeat.

Rational Thought is right: a vote for McGavick is a vote for CEOs goverment. Take a look at the track record of our president who was also supposed to be in the CEO mold and maybe you'll think twice about McGavick.

BTW it is true that Cantwell made a lot form RealNetworks stock options but she used the money to finance her campaign. Where's the money for McGavick's campaign coming from?

#9735

Posted by usesomelogic at 8/1/06 3:31 p.m.

Once again it's okay for Democrats to make money but not a republican. Apparantely working your tail off to make it to a CEO position is a bad thing. Apparantely it would be better to vote for someone who has had no success in there lives than someone who knows what it takes to make a major corporation go from almost certain bankruptcy to one of the leaders in the insurance marketplace.

I guess everyone would be happy if Mcgavick took his fortunes and bought his way into the senate, or once again is that only okay for Maria Cant"vote"well?

#9736

Posted by WayneSeattle at 8/1/06 3:44 p.m.

Perhpas some of the questions we should ask are:

Do we want to see another 2, 4, or 6 years of a republican controlled house and senate?

Do we support record the high pay scale of the american CEOs?

If your answer is yes to either of the above then by all means vote for Mike. But if you think that the republicans have had their chance and they have failed to support the common working stiff then vote for the democrat.

If you think that a CEO making about 12 Mil a year is just fine then . . .

So you don't get a raise or if you do it's 3%. You have to pay more for healthcare insurance as you employer is not taking up the slack. And you are expected to work 50 hours a week if you are on a salary.

The American CEO make over 400 times the average income of the line worker. Every other country in the world pays the CEO 150 to 250 times the average wage of the typical corporate employer.

Take that into consideration in additon to the other countries give their employees at least 4 weeks vacation and as much as 10 weeks. Not to mention the much better pay in relation to the work, realistic support for families, shorter work week, etc.

A vote for Mike is a vote in support of all american CEOs everywhere. A vote for Mike is a vote for republican control of the house and senate.

You want that?

#9737

Posted by THeller at 8/1/06 3:51 p.m.

serial catowner sez: "Maybe some day I can do something for you too."

What serial neglects is that insurance companies are subject to state, not federal, laws and regulations. How one federal lawmaker could 'do something' for the property & casualty insurance industry is beyond me.

---
Will in Seattle sez: "Normally, it's CEO/execs 8 percent, middle class 6 percent, corporate profits 8 percent."

So, last year wasn't precisely an 'average' year. Why would that surprise anyone? How many 'precisely average years' have we had in, oh, the last 30? Have you determined whether any of those %'s to CEO/execs, middle class and corporate profits fall three standard deviations from their norms? If so, then you've got the basis for questioning the scales of economic justice.

I'll never forget Maria Cantwell on the Senate floor calling for 'low-friction tires' as an energy-conservation effort back in 2001. Yeah, that's the ticket -- you wouldn't suspect she comes from a wet state. Kind of gives another meaning to the term 'crash program'.

#9744

Posted by northwestddawg at 8/1/06 6:16 p.m.

What a Hoot!!! How many jobs were saved and people kept working when he saved Safeco? Wasn't Cantwell the one who in her 1st Senate race siad she would never accept outside money, then as soon as elected, statrted holding fund raisers and picked up hugh piles of dough? As someone said, all you have to do is have a "D" next to your name and you win. Just look at the mess Seattle is in with transportation problems alone.

#9745

Posted by Jim King at 8/1/06 6:19 p.m.

What it really boils down to is that Cantwell is getting beat, and the D's are already resorting to desperation tactics. The internal polling must be showing that the public polls are accurate...

#9746

Posted by unregistered user at 8/1/06 6:28 p.m.

Someone can check all the proxy statements, but I believe McGavick got the $28M because he had a 5 year vesting schedule on stock options granted when he took over as CEO in early 2001 (when the stock price was in the low $20s). So, by staying on as an employee those extra 2 month he vested in options given years earlier. It's not like Safeco just said "here's $28 million!" He would have received that money has he stayed on as CEO anyway.

#9748

Posted by unregistered user at 8/1/06 6:49 p.m.

If it's true that could really hurt his campaign. I still don't feel like I know much about his stance on important issues like the Millennium Goals.

#9753

Posted by nattydred at 8/1/06 7:22 p.m.

We do not need another Senator who will rubberstamp the Executive branches insanity.

Reagan and Clinton both had to deal with a Congress controlled by the other party. Divided government works better than what we have now.

#9754

Posted by issaquah at 8/1/06 7:32 p.m.

The fact that the AP has picked up the story (pasted into the wire from the PI) means that this is a real issue for the McGavick campaign. The fact that the AP is also promoting the web link to the group that organized the lawsuit (along with the sites for both campaigns) is also an odd use of the AP's resources that can do nothing but harm to the McGavick campaign. It will be interesting to see how the newspapers around the state treat it tomorrow and whether the issue sticks. Given the nature of the lawsuit, it appears that it will last through several news cycles.

In a way, you can be left to wonder what the heck is up. Did McGavick simply borrow a page from the Cantwell story? She also earned a ton in the private sector after a career in public life - backed in part from a Democrat leaning boss. After Slade's defeat (which the Gorton camp thinks is the result of Maria's private fortune), did the GOP set McGavick up for his SAFECO windfall? Did they take a page from the Democrat's playbook? Quite possible.

This lawsuit is obviously political. But it also seems real. It benefits Cantwell by leveling the discussion on this subject. Her defeat of Gorton would not have been possible without her own windfall from another locally based corporation, RealNetworks.

If this is all true, is this the best way to grow our Senators? Hard to believe it is. Both Cantwell and McGavick have benefitted in politics from special treatment by corporate interests. That's probably not the best way to grow representation for the people of the state in Washington, DC and the United States Senate, which matters to all of us.

It looks like McGavick has been late to respond, which is troubling.

#9755

Posted by unregistered user at 8/1/06 7:38 p.m.

my vote is for Cantwell

#9761

Posted by dottikg at 8/1/06 8:22 p.m.

Well, isn't that special. He gets 28.4 million? Yet, when my daughter was in an serious auto accident, caused by an uninsured motorist, we had to sue Safeco to get them to pay all her medical costs....and it took over 5 years. Let's see....oh yeah, it's because all their money went to Mike so there wasn't any left for the middle class, law abiding citizen. Gosh, I'm glad that was cleared up for me because I couldn't understand why they were withholding $50,000 due her.

#9764

Posted by unregistered user at 8/1/06 9:32 p.m.

Bigcugr shouldnt post when he is Mel Gibson'd

#9766

Posted by Distant Replay at 8/1/06 9:38 p.m.

I just have one question:
Should Alaska really have three U.S. Senators?

#9772

Posted by unregistered user at 8/1/06 11:26 p.m.

I'd have an exclamation point after my name as well if I made that much money.....and once again "republicans-light" (all the republicans in the west cost) go back to mud slinging......"your candidate is worse than my candidate so my candidate is better."

It comes down to supporting your constituents. Although, I'm not altogether happy about Cantwell, at least she supports this region's concerns (for the most part).............and I don't give a whoop whether she makes more money than the next candidate.....after all, the US is a capitalist country last time I remember.

It would be nice, however, if she comes to the East Side of the State more often (sending one of her reps doesn't cut it)...after all she is supposed to represent this part of the state. Yup, I'm more to the left of the left but I give Doc Hastings credit for sticking up for this side of the state.

For all you republicans-light, go to the rest of the country and then check your values. You'll find out that you're really a centrist democrat. If you look at values, more democrats are becoming "states rights" people than "big government" people......you can't tell me that the current administration is NOT big government (e.g. - Homeland Security). In sum, don't get caught up in the party politics. Vote using your values to make this country better, not stagnant.

Sincerely,

A gun-totin', god-fearing, states rights-advocate, social justice-oriented, capitalistic liberal Democrat from Eastern Washington

#9889

Posted by Runestar at 8/3/06 12:49 p.m.

I'm a Safeco employee. Our clueless management is laying off co-workers and slashing budgets in an effort to prop up the stock price. Savvy employees are bailing left and right. Our new CEO bleats "We need to become a low-cost provider" and "Our expenses are too high. We must cut costs to be competetive."

And yet despite all this, the Safeco board rooted through the virtual sofa cushions and managed to come up with $28 million dollars in loose change to give McGavick on his way out the door.

Despite this, management can't figure out why morale in the company is so poor.

Yeah, it's tough at the top. Mike had to work 5 whole years, and now he's got enough money that he won't ever have to work again. I'm sure my co-workers who were laid off to help pay for this little bonanza feel good about it. I know I do (rolls eyes).

#10503

Posted by unregistered user at 8/13/06 9:05 a.m.

When Mike McGavick came to Safeco it was in serious financial distress. He took immediate measures and brought it back from the brink - at least on paper. What he didn't address, what he in fact increased, were the underlying problems of entrenched fiefdoms, extremely outdated disparate IT infrastructure (some dating back to the 60's!) a severe case of silo mentality and incomprehensible bureaucratic practices that rival many of our favorite federal agencies. He mitigated the damage of fires the stockholders and board happened to notice, but he never addressed the underlying causes of those fires. Students of business watch and learn! Safeco is fast becoming a textbook example of how a successful business kills itself. That is his legacy. His strengths are public speaking, pretty mission statements, making nice with people, and reacting to load noises. Instead of facing the looming disaster created in part by his inaction, he chose to change horses, save face and apply his aforementioned strengths to a system where true accountability is difficult to trace. Safeco is a for-profit business and is suffering mightily under Mike's legacy, but we all suffer for it often enough in politics.

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