LAS VEGAS – In an exclusive interview with the Nevada News Bureau, Republican senatorial candidate and investment banker John Chachas sat down and talked about his campaign, his family and his concerns about Nevada and the nation.
NNB: So, when, where and how will your campaign begin in earnest?
CHACHAS: I don’t think we’ve decided on a location for an announcement, but by the end of January, in the next few weeks, we will be very actively engaged and our website will be updated.
NNB: You lent your campaign a million dollars last quarter; how much more have you raised since then? What is your campaign balance sheet going to show on January 15?
CHACHAS: I lent my campaign a little more than a million last quarter, yes. Michael Toner, our FEC lawyer, would say, I can’t tell you what that number is right now because I would be violating a rule. But I can say that we will show considerably more money raised externally and some more personal money put into the campaign as well.
NNB: And what is the ratio of in-state vs. out of state funds raised right now, can you tell me that?
CHACHAS: I think in-state funds are probably still about the same as Harry Reid’s, below five percent of the total. Ninety-five percent of the money I’ve raised so far has been out of state, so it’s a small amount that’s from inside the state. But then, I haven’t been here to do that. I’ve been here getting to know people, not running around asking for money.
NNB: And is the roof fixed on the house in Ely? When will you be moving to Nevada?
CHACHAS: It’s fixed; the yard is being put back in order; I’m making the transition now. I was there ten days ago making sure it was all in good order. I’m going back up there in another week for the Lincoln Day breakfast, and then I’ll also be looking around for a place down here because I seem to be coming in and out of Vegas an awful lot. So I’ll need a place here and then also in Reno. And Ely…well, if we could just get the airport fixed so I can get in there. Unfortunately, you can fly to Elko from here; you can fly to Reno from here; but you can’t fly to Ely from here. It was only eight below, though, (laughs) as I drove across the salt flats when I went there last; I drove across from Utah the last time I was there, because my parents were in Salt Lake City.
NNB: Tell me about your family in Ely. I read a story in the Ely Times the other day that mentioned former mayor George Chachas; I assume he is a relative of yours?
CHACHAS: I’m related to every Chachas up there. George is my second cousin. George’s father and my father are first cousins. He has a brother named John, who is a county commissioner. He has a brother named Jim, who is here in Las Vegas, and a sister named Betsy who is also here in Vegas, so they’re all second cousins. I have a group of first cousins who are also up in the Ely area, two also named John, so there are three Johns: John T, John A, and John G; I’m the John G.
NNB: So your family has been in Nevada for how long? Give me a quick family history.
CHACHAS: My grandfather and his brothers emigrated from Greece in the 1930s and ended up in Nevada in the late 30s/early 40s. My grandfather, whose name is John, bought and ran a large fenced cattle ranch in northern Nevada in the early 1940s. He owned the ranch for about 40 years until 1982 when the family – for a variety of reasons that had to do with the economic crisis of the late 80s – sold the ranch. He had four sons and a daughter, now deceased. My father and one of the other boys are still alive; the others have passed away.
So, yes, they ran a family ranch in White Pine County. My grandfather was, I have to say, one of these stories about self-made men who come from nothing. He really did come from nothing and by the time he had died, he owned a hotel in Ely; he put up the first General Motors/Cadillac car dealership in White Pine County; he owned the ranch; he owned a small shopping mall with the main grocery store in town; and he owned a small casino. He was a really productive, entrepreneurial guy who came to America not speaking the language. He put his eldest son through Harvard; he put his next son through Stanford; all three of his children went to professional school – his daughter, who died, he’d sent away for the best education he could get for her at the Bishop School in San Diego – so he was quite a man.
NNB: So, did you always think you’d end up back in Nevada at some point?
CHACHAS: Absolutely. I love the West. I think the West is a remarkable part of the country. It’s sort of indelible, I think, once you grow up with all this space. I had the good fortune of growing up on a ranch here with all that space. I had a horse there, and a horse in town; there was something magical about it. Even to this day, when I come spend time in the mountains, I just think it’s such a great place.
You know, living in the east has been an interesting run, and it’s been a great career run for me. I got a great education, and frankly, a better window on the American economy and how business is done than I could have gotten even here in Las Vegas. There is industry here, but this is a town that is highly dominated by one industry, which is the leisure industry. I’ve had the benefit of a career of working with both large and small companies of all sorts in all corners of the country, and you don’t get that everywhere. So, it’s been… I don’t want to make light of the fact that I’ve had a great education and a great business education working in industry this way. But, everybody has different chapters of their lives, and I knew there would be some time in my life when I would want to be back in the West.
NNB: And what would you say to those who say you are not really a Nevadan, that you are essentially a “carpetbagger” and back in Nevada for one reason – this senatorial race – and that you’ll be gone just as quickly if you don’t win?
CHACHAS: I don’t think that’s fair. I grew up here. I have family here. I want to be here. And I have a small mining project in Ely, which didn’t make a lot of sense when gold was $500 per ounce. But with gold at $1,100 an ounce, suddenly our little mine makes quite a lot of sense.
NNB: You’re the sole owner?
CHACHAS: It’s family owned; it’s in Ely.
NNB: The name?
CHACHAS: It’s a little mine called The Ballpark, and it’s 680 tons of gold and silver. But it has to be extracted from the mountain, and it has to be crushed and milled. And it’s never made any sense before, but thankfully Washington DC is doing a great job of sending precious metal prices up into the stratosphere, so it’s now quite valuable. So, my brothers and I are going to spend quite a lot of time focused on that, and there are others, like that.
I mean, I don’t know how to convince someone… I’m very interested in this race and in being back home. Do know where I will be five minutes after I win or lose? No, I don’t really know.
One of the hardest dilemmas of all has been considering my small children in all of this. If I’m doing the business of the state and living in Washington, my kids – I have little kids – are going to be with me. And some people might say, “Oh, well, he’s not even going to be here. His kids won’t be going to Gorman, or his kids aren’t going to be in whatever local school.” Well, I’m sorry, but what you see is what you get.
I am a dad, who in my time in New York, for example – when a lot of people who when they have kids move out to the hinterlands and Dad commutes in on the train, which means they are essentially weekend dads, they are gone first thing in the morning and don’t get home until after their children are asleep – well, I deliberately made a decision to own a home in Manhattan so I could drive my kids to school three or four days a week, which I do, and so I could go to every event that they have, which I do. That’s how I would want to continue to raise them, because they’re gone soon enough.
NNB: Their ages?
CHACHAS: My daughter, Annie, is thirteen. My middle son Christopher is 11 and in the 5th grade. My littlest one is John Jr., but we call him Jack; he is 8 and in the 2nd grade.
NNB: So, the primaries…
CHACHAS: Yes we only have, what, eight or nine people so far?
NNB: Can we expect you to participate in some primary debates?
CHACHAS: Listen, I am SO looking forward to a debate. I find this political process so amazing at times, that people are making choices about putting candidates in office without knowing what those people really bring to the table and what they really think, due to all this, sort of, labeling and the dissemination of sound bytes, and no real, specific dialogue about problems. So, you set it up, and I’ll show. You pick the date, time, place, topic, and I will be there. I wish someone would do it soon.
NNB: So, on the subject of specifics and policy, when the new John Chachas website launches later this month, what will we see?
CHACHAS: On our site now, there are four policy pieces that are up. One on the economy; one on health care; one on Iran, Afghanistan and the Middle East; and one on energy. And there’s another policy issue I’m working on which is financial services industry reform, a hot button issue of the political class right now. I have written an editorial piece on it, which I am going to put out to the press soon. It’s the first of three pieces on an economic recovery plan for Nevada, an actual plan focused on how do we actually fix the problem here.
I’ll tell you this, though, I’ve got more policy proposals up on my website right now than the other candidates combined. None of them have said an original word other than rehashing what the NRSC already publishes on this stuff. So what? So, yes, I have four policy proposals up, and I’ll have a fifth. And I’ll have a piece on what I would do about jobs.
NNB: And speaking of the NRSC, I assume you’ve met with them once or twice?
CHACHAS: (Laughs) Oh, I’ve met with the NRSC plenty of times. I’ve met with Senator Cornyn three times. I’ve met with Rob Jesmer four or five times. I’ve talked to them on many occasions, so the NRSC is well aware of my candidacy. And they’ve also heard about me from twenty of their largest donors who have given me money. So, I think they are paying close attention. They are well aware of me as a candidate and who has given me money as a candidate. I’m got a long list of people who have all given the NRSC $25,000 to $40,000 and who have all also written checks to me. I’ve spent a lot of time talking with the more well-heeled Republican donors who define races, and I’ve received a great deal of encouragement to run. And I’m trying to make sure that I win. It’s as simple as that. Look, I’m gainfully employed now; I have a nice life; I want to make sure all the pieces are in place both from a money and team perspective. I want to get out there and win.
NNB: So, once the campaign kicks off in earnest, how are you going to approach the rural, conservative voters, many of whom are the aforementioned skeptics about the fact that John Chachas is not “really” from Nevada?
CHACHAS: The rurals, you go spend time in. You get in your little truck…
NNB: Do you have a little truck?
CHACHAS: Well, I was on the web last night, and I’ve got it narrowed down to a tan Chevy Suburban – used, because I’m really cheap – and the problem is that I kind of want one that I don’t have to take to a General Motors dealership because now that the government owns GM, they will soon be out of business – so I may have to buy a Lincoln Navigator or something. So, yes, you have to spend time. You have to go to the Rotary lunch, and the Elks lodge, and speak at the school, and just spend time with people. And I’m going to spend a whole bunch of time in Ely, and in Elko and Fallon and Winnemucca and Goldfield; there’s just no other way to do it.
NNB: So, on the social issues, which have come up a little bit in the primary already because Sue Lowden came under fire for past abortion positions and votes vs. present – and perhaps she’s an easier target because she’s been in office and has a record to actually look at, as opposed to many of the other GOP candidates, which could be said about you as well – so, then, where do you stand on social issues, starting with abortion, and what do you think about this “Personhood Initiative” that is before the courts here in Nevada?
CHACHAS: First of all, I am not going to comment on a pending initiative like that. When it gets to be an issue that is actually a matter of law, I’ll comment on it then. Let’s see whether it actually has any legal standing first. Nobody is in favor of abortion as a policy matter, and neither am I. I think that there will be great discussion in this country for a long time about this very personal matter, and I think all the restrictions that are here in Nevada are appropriate. There are credible reasons for exceptions, naturally. There are very real reasons for restrictions. No federal funding, no loopholes for federal funding, restraints that when women are under the age of adulthood, they have to inform their parents. I believe those things are deeply appropriate, and should stay as part of law. I don’t like it theologically. I am an Orthodox Christian; I don’t believe it is a moral or good thing. But I don’t think this race is going to be defined by these issues.
NNB: But it is a polarizing issue -
I know that every time we talk about abortion, we divide people both in and out of the Party. Fortunately, when we talk about growing the economy and ways to create jobs, we can unite people and bring them one step closer to the representation that they deserve. And in fact, that is key, in an economy where I think Nevada will be the last to come out of this recession, and last by a long way. It could be several years of real malaise, bad economic performance.
NNB: Because?
CHACHAS: We have an economy in Nevada that is so tightly correlated to the consumer, and so tightly correlated to one industry, which is leisure. We’re economically driven by corporate conferences from Sunday to Wednesday and then people who come for entertainment value Friday, Saturday and Sunday. Corporations have dialed their spending back wildly; all you have to do is look at CES this week. It’s the largest single corporate event in the country every year; what’s it down by, 100,000 people?
Now, is it a big successful event? Of course it is. The town feels busy. But it’s nowhere compared to what it was, so your very best week is miles away from what it was two years ago, and entire conferences have been canceled. There are lots of events that people are not going to anymore. The National Association of Broadcasters, which I’ve come to for 22 years in this town, I can’t tell you the number of broadcasters I’ve spoken to who aren’t sending anyone come this April; you are just not allowed to go.
So you have this backdrop from a corporate perspective that basically, unlike the federal government – run in part by Senator Reid – has ratcheted down what they are allowed to spend, all the Travel & Entertainment, and even important events and conferences in Las Vegas are dramatically downsized from where they used to be. And that’s the good part of the business model…
The bad part of our business model, which is the consumer, is a catastrophe. The average person in the country went from – I go to the aggregate numbers here, I can get you the per capita – in 1997, this country had 6.2 trillion dollars of household debt, that is, mortgages plus credit card debt, and that was about 78% of GDP. In 2007, a decade later, it was 14.3 trillion dollars or 107% of GDP. And by the end of 2008, that number was up another trillion. So we’re a country, and a state, that is debt laden and the consumer was sitting here trying to figure out – you know, it’s Christmas – how they were going to spend what they spent before, and then, they didn’t. They spent and are spending markedly less than they did before. And they aren’t going to pick up and come to Vegas for a 3-day trip, either. It’s not happening. And we don’t have another industry here.
NNB: Well, just to switch gears to talk about another industry and Nevada’s tax base for a moment, since you’ll be a tax paying resident here and also own a gold mine, and since there are ongoing discussions both about taxing the mining industry and about how to attract industries that could help provide sustainable tax revenues for the state…
CHACHAS: Mining is an important industry, but it’s not an industry that generates 80% of your state GDP. Mining is important, but everything is dwarfed compared to the leisure and casino industry in Nevada. So, start there. 75% of what happens in this state in terms of GDP – I think that’s probably close to the right number – is connected in some way to the leisure/hotel/casino industry. And that can’t come back until corporates feel better; it can’t come back until the general economy comes back. So, as long as the general economy is struggling and the consumer is debt laden, I think Vegas has a long, long time to go before we come out of this.
NNB: So what policies can make the recovery wait time shorter?
CHACHAS: Part of the reason I wrote that op-ed piece I told you about, and how I think about changing things, is that the solution is really a four or five year plan. You basically have to really focus on economic incentives and motives to generate more and bigger industry apart from the casino and leisure industry. Because we have no control, really, frankly, over the national landscape that’s going to change how the American consumer feels. And I do not see a scintilla of evidence coming out of Washington DC that there’s any policy discussion of how to make it easier for people to pay down debt, get out from under debt.
Some of it is happening organically. I mean, we’ve seen two and half trillion dollars of national consumer debt paid down in the last year. People have been scared out of their pants, and so they’ve been ratcheting it down, putting their credit cards in a drawer, and so we’ll eventually get to some point where it starts to turn up again, but it’s a long way away before people start hopping on a plane to fly out to Vegas for the weekend.
I think that means that this issue of putting people back to work… Well, take the second largest industry in Nevada, construction, which was built on the back of the first largest industry, active growth in casinos and leisure. Find me a project in casinos and leisure that will be green lighted in the next 24 to 36 months in this state. You can’t find it. So, if that can’t happen, then growth in construction can’t happen, which is why we actually saw unemployment go down in November, not because the numerator went up, but because the denominator went down – people are leaving the state; there’s no employment.
So, when you have those two facts: a consumer-driven leisure industry highly correlated to the general economy, and a construction industry that is highly correlated to your first industry; it is a long wait. And all you can do is try to really induce investment.
What really changes employment in America is investment, people actually deploying dollars: buying a building, building a plant; if they’re a telecommunications company leasing space and putting people at desks. And until you create incentives for those kinds of things to happen, I just don’t think the employment outlook in the state is very good. It’ll change a little bit. It’ll improve a little bit, because the organic paying down of the debt will happen, but it’s not going to be a fast recovery. It’s a long wait.
NNB: Doesn’t sound like a lot of good news…
CHACHAS: No, and I think the sad part for people in the state is that because we are a state where constitutionally we have these very significant limitations on the tax base, imagine what happens to the tax base as those core businesses erode. In this state, the budget deficit problem is going to be a big one in the coming two years. Big. And Clark County, being the fifth or sixth largest public school district in America, services are going to decline, quality of life is going to decline, and all of that comes back to people working and people spending.
NNB: So what’s a Nevada voter to do?
CHACHAS: Ok, so in the primary, look, the social issues are going to come up, but the average person I talk to is worried far, far more – even the ardent Republican – is worried about the behavior of the government, loading our balance sheet up with debt. It’s so irresponsible what’s happening in Washington. It just makes me see red. It’s irresponsible, and we’re all going to pay the piper for that. And then there is really very little out of these other candidates about what they would do change it. What would they do? I’m going to give the voters some things I would do to change it.
One of them, if I were a senator in this state, I would go to DC and I would bang the door to get ten million acres back from the federal government. The federal government controls 70% of the land in this state. There is no reason why – even if you cordoned off every wilderness area, every national park and every military installation in this state – there are still 25 or 30 million acres of land that are just warehoused under the administration of the Bureau of Land Management. Why?
NNB: And we would do what with the land?
CHACHAS: We would put it up for auction and privatize it. We would invite people who are looking to invest, and we would pair it with tax policy. We would give tax deferrals to companies that deploy capital to build businesses here. So, for example, you buy 5,000 acres in Nye county in the flat lands, and you put up a solar panel plant, and for five years, we’ll give you tax exemption on anything you make. Go put the money in the ground. There is nothing like a tax incentive to get people to deploy capital. And when businesses and people start to put money in, it spreads. That business puts someone to work, and that person needs services, and so on.
And it’s the one resource that’s available in the state – there are other things you can do, of course, to induce investment, from a water perspective, and also a mining perspective – but the biggest resource and asset that the state has that it should grab back from the federal government is its land. And essentially that land dividend, combined with, for example, if you front loaded the receipt of the proceeds from the auctioning off of that land – it’s not enough to just give it back to Carson City; you have to sell it, of course – so the first thing I’d say is, you have to get the land back, and then put it up for sale. And it’s not about whether or not you sell it at some clearinghouse price so that someone after the fact says, oh, we sold it for $100 an acre, that’s such a low price. That’s not the point. Put the asset in the hands of someone who has put some risk capital in it, and that will burgeon into jobs.
NNB: What else?
CHACHAS: And the state, then, needs to do something about housing prices, because you’re never going to really see economic activity improve if 75% of the people in Clark County feel like the mortgage they have is worth more than the value of their house. And today, nearly every person I talk to, they are upside down on their mortgage. And they are fine as soon as long as they are earning something. But the minute they stop earning, they send their keys to the bank and they go start over somewhere else. The move to St. George; they leave. And I don’t think we have even seen the full next wave of that.
NNB: Final words?
CHACHAS: My campaign is about honest leadership that will help prepare our state to compete for better jobs, more efficient services and a better quality of life. That’s it. And I look forward it.
