Why agribusinessman is bankrolling fight against Sacramento arena subsidy
02/09/2014 12:00 AM
10/06/2014 5:02 PM
Chris Rufer didn’t set out to become the main money man in the most divisive political campaign Sacramento has seen in years. It’s just that, as a registered Libertarian, he says he passionately believes the public shouldn’t spend a dime to help pay for the construction of a new Kings arena.
With little fanfare, Rufer, a wealthy 64-year-old agribusinessman, has contributed more than $93,000 to the political and legal campaign against the city’s proposed $258 million subsidy for the downtown arena. As of Dec. 31, only one person had given more: Chris Hansen, the hedge-fund manager who secretly donated $100,000 while trying unsuccessfully last year to move the Kings to Seattle.
Rufer, founder and owner of a successful Woodland tomato processor called The Morning Star Co., said it comes down to personal philosophy.
“I’m against subsidy, period,” said Rufer. “It’s simply a moral argument. ... If it was a subsidy for a fish pond, I’d be against it.”
His contributions make him one of the largest donors to a Sacramento political campaign in recent memory, but the arena fight is merely the latest political cause to grab his attention. Over the past two decades, he and his wife, Melodie, have contributed more than $1 million to Libertarian and Republican candidates across the country, as well as conservative political action committees and ballot initiatives. The couple live on Garden Highway just outside Sacramento city limits.
Rufer’s donations highlight the strange-bedfellows quality of the arena subsidy issue, which has united conservatives and liberals in a fight against the city’s proposed contribution. The main anti-subsidy group, Sacramento Taxpayers Opposed to Pork, was co-founded by two Democrats, Julian Camacho and Jim Cathcart.
Camacho, a former labor organizer who ran for Congress in the 1970s in Salinas, said he welcomes Rufer’s support.
“The commonality is fairness,” Camacho said. “In today’s world, the way things are moving, it’s hard to tell the left from the right.”
After Rufer made his initial donations, he and Camacho met last summer for lunch at Il Fornaio in downtown Sacramento. In the months since, Rufer said, he’s had no personal contact with leaders of the anti-subsidy movement.
“I don’t know much about his politics,” Camacho said, though he added that he’s aware of his ally’s libertarianism. “He’s a very good man.”
The head of the political action committee launched by Mayor Kevin Johnson and funded by the Kings describes Rufer as “another outsider” trying to torpedo an arena project that he says will create thousands of jobs and cement the Kings’ long-term future in Sacramento.
“Rufer’s funding of STOP is supporting STOP’s effort to steal 4,000 jobs, steal a once-in-a-generation opportunity to transform downtown and makes him an accomplice in Seattle’s attempt to steal the Kings,” said Joshua Wood, executive director of The4000, the pro-arena PAC trying to keep the subsidy question off the ballot.
Rufer’s contribution to the anti-arena campaign is by no means his largest political expenditure.
In 2012, he gave $490,000 to a Utah PAC that supported the Libertarian Party’s presidential candidate, Gary Johnson. He has given thousands of dollars to conservative icons including Sen. Ted Cruz of Texas, former GOP presidential candidate Ron Paul and Paul’s son, Sen. Rand Paul. In 2010, he gave $34,000 to an unsuccessful ballot initiative that would have slashed sales-tax rates in Massachusetts. And in the late 1990s, he bankrolled a nationwide advocacy group, led by a former computer salesman from Fresno, that pushed the idea of ending all government funding for schools.
Jim Gray, an Orange County judge who was the Libertarian vice presidential candidate in 2012, said Rufer is well-known among party leaders.
“He doesn’t just give money, he looks into issues and gives his perspective as well,” said Gray, who stayed at Rufer’s home during a recent trip to Sacramento.
For all that, Rufer has kept a low profile around Sacramento, and the arena issue represents a significant coming-out party for him in regional politics. While he said he spoke up against the city’s decision to loan the Kings more than $70 million in 1997, he has sat out many other battles over redevelopment subsidies. He didn’t get involved in the City Council’s decision to hand out millions of dollars in assistance to development projects along K Street.
The difference this time, he said, is the enormousness of the arena deal.
“The size of the subsidy ... gives me an opportunity to market my ideas,” Rufer said.
‘A little tomato business’
Rufer gave a total of $93,000 through Dec. 31 to STOP and and a second anti-subsidy group, Voters for a Fair Arena Deal, according to campaign disclosure statements. Since Jan. 1, he said, he has given additional funds to help finance the groups’ lawsuit against Sacramento city officials. The suit was filed after the city clerk rejected signed petitions supporting a June vote on sports subsidies, contending the wording was flawed. Rufer wouldn’t say how much he has contributed since Jan. 1, and the law doesn’t require him to disclose the sum until March 24.
After Rufer, the largest donors have been several nonunion electrical contractors angry with the Kings’ decision to build the arena with union labor. They donated $44,500 last year and have contributed additional funds since Jan. 1 to help finance the lawsuit, said Eric Christen, the head of an association representing nonunion builders. Like Rufer, the contractors don’t have to disclose the size of their 2014 contributions until March 24.
Rufer called the city arena subsidy a form of “crony capitalism” and said it should draw the scorn of everyone, regardless of political affiliation. The Kings’ owners “are getting financial gain, sucking money out of the people of Sacramento,” Rufer said. “I’m just trying to point out to my neighbors that this is not a good deal.”
Rufer can well afford his political contributions. His business empire includes processing and trucking companies, and he maintains offices in Woodland, Williams and Los Banos. Together the companies generate about $700 million in annual revenue, he said, supplying tomato paste and diced tomatoes to customers including Kraft and Frito-Lay. It’s a family business; Rufer’s two adult children have recently started working there.
Despite his success, Rufer, raised in a blue-collar family in Merced, takes issue with labels like “tycoon.”
“We run a little tomato business,” he said. “Compared to major companies, we’re nothing.”
Rufer said he doesn’t know what his net worth is, but he talked about being part of the “1 percent” that has been vilified by some liberal activists. He railed against government policies that he said confiscate money from the well-to-do.
“We produce food for people,” he said. “Taxes punish me for doing that.”
Rufer spoke with The Sacramento Bee for 90 minutes last week in a 20th-floor conference room in 500 Capitol Mall, where he rents a suite of offices with a view of the proposed arena site at Downtown Plaza.
The office suite also houses a nonprofit he launched to espouse libertarian ideas, the Foundation for Harmony and Prosperity. The waiting area is decorated with framed paintings of bighorn sheep; the coffee table features pocket-sized copies of the Declaration of Independence and the U.S. Constitution, alongside a book on the history of ketchup. Michael Sertic, who works at the foundation and is a member of the Sacramento chapter of the Bastiat Society, devoted to defending the rights of “wealth creators,” sat in on the interview.
Rufer is tall and lean, with an almost perpetual smile and a silver hank of hair partially obscuring his forehead. He was dressed in a blue button-down shirt and a beige V-neck sweater with elbow patches. He maintained steady eye contact and at times resembled a preacher trying to win over a skeptical audience.
Rufer said he is generally shy. But he was clearly in his element talking at length about the fall of the Roman Empire, the presence of slavery in ancient Greece and the forces tearing at the fabric of American society. He declined to be photographed because “it should be the ideas, and not the person,” taking center stage.
His ideas revolve around a limited role for government – defense and a justice system, mainly – along with low taxes. He said his companies have never taken a government subsidy and he doesn’t plan to collect Social Security. He said welfare creates a culture of dependency, while minimum-wage laws effectively lock people out of the job market.
‘It takes millennia’
Rufer said his companies pay plant employees around $13.50 to $22 an hour, depending on the occupation, plus benefits. He said he doesn’t object to people wanting to join a union, although he gave $10,000 to the failed 2012 statewide initiative that would have stripped unions of much of their political power. His only encounter with unions came in 2004, when the Teamsters tried unsuccessfully to organize his plant in Williams.
Deep down, he said, “99.99 percent of Americans are Libertarians.” They just don’t realize it yet, and that’s why Libertarians rarely win elections.
“It takes millennia and centuries for people to change their mind-set,” he said.
Rufer has been going against the grain for a long time. Armed with a master’s degree in business from UCLA, he founded Morning Star in 1970 with a single truck and an unconventional idea.
At the time, he said, tomato processors mostly made finished products like spaghetti sauce. Rufer decided instead to produce intermediate products: tomato paste and diced tomatoes. It was cheaper and more efficient, and it eliminated a huge headache: Morning Star wouldn’t have to predict which finished product would be in greatest demand. That was for his customers, companies like Kraft, to figure out.
Rufer revolutionized the industry, but at first he struggled to get financing for his plants. “I was laughed out of rooms constantly,” he said.
Morning Star had the last laugh. By the mid-2000s, it controlled 40 percent of the market for those intermediate products. Rufer also gained notice as a pioneer in a flat-hierarchy managerial style in which employees set goals for themselves and don’t answer to bosses. The concept has been written up in the Harvard Business Review, Forbes and other national publications, and spawned a Rufer-funded think tank, the Self-Management Institute.
Rufer’s other bit of fame came in a brush with the criminal justice system. A competitor, Scott Salyer, owner of SK Foods in Monterey, was sentenced to six years in prison last February in a price-fixing and bribery scheme that effectively pried three main customers away from Morning Star: Frito-Lay, Kraft and Safeway.
It was an ugly case. Court records showed that Salyer once asked an associate if he “knew someone in New Jersey who could take care of Rufer.” Morning Star complained in court papers that it lost $18 million in profits to Salyer. Although customers came back after Salyer’s scheme was exposed, Rufer is pursuing civil claims in court.
Asked about the experience, Rufer said he was impressed with the FBI’s caution in not trampling civil liberties. But he was dismayed that it took years for the criminal case to make its way through an overburdened, lawsuit-crazed system.
As for the arena battle, Rufer said he thinks his side will win. The Kings will get their new playpen, but on his terms.
“If I had to hazard a guess, this stadium is going to be built without a subsidy,” he said. “It can be built without a subsidy.”
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