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ONE-ON-ONE - September 2006
by Ed G. Lane
'We Live in Kentucky – the Land of Politics'
Former Kentucky Gov. John Y. Brown, Jr. shares his thoughts on the state's business and political climates
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John Y. Brown, Jr.
John Young Brown, Jr. became Kentucky’s 51st governor in 1979, handily winning the election following a 60-day whirlwind campaign. As governor, Brown received national recognition for reducing the size of state government by 22 percent while projecting Kentucky as a leading state in attracting new industry.
Prior to serving as governor, Brown established an international reputation as a businessman and entrepreneur. The University of Kentucky graduate was only 29 when he and Jack C. Massey, of Nashville, purchased Kentucky Fried Chicken Corporation from its founder, Colonel Harland Sanders, building it into the world’s largest food service company between 1964 and 1971. Brown, along with McDonald’s founder Ray Kroc, is recognized with launching the dynamic growth of the fast food industry. |
Ed Lane: Our last interview was seven years ago. Since then, there have been a number of changes in your life. You recently sold your Cave Hill residence. Where are you going to live?
John Brown: Right now I’m not sure, but I’m inclined to stay here. Lexington is part of my heritage. I have a daughter here. Lexington is a special town. I’m not very active in the social scene here because I’m usually just with family. Most of my peers are people I was active or in business with from Louisville.
EL: You purchased Cave Hill after you married Phyllis George. Because of sentimental reasons, was it a tough decision to sell?
JB: It wasn’t for me, but men are different from women. Phyllis came and helped the kids pack up. Cave Hill was her castle. Phyllis wanted the children to get the little things they used when they were kids. But you know, the more the kids said, “Daddy, I had that shot gun on the wall over there. I remember playing with that toy when I was five years old,” then, I got a little sentimental, which is good because Cave Hill was a special place and probably the best old home in Kentucky. I would venture to say that some 40-50,000 people around the state have been to Cave Hill on one occasion or another. It was a great place; but to be alone, it was way too much for me. But, I do have a lot of fond memories.
EL: You have been married three times – (Eleanor Duvall Brown, Phyllis George Brown and Jill Louise Brown). Do you think there will be a fourth marriage?
JB: I never thought I’d see a second marriage. I don’t like being alone. I’m not really looking. I’m just going to do what I feel like doing.
EL: You have five children, three from your first and two from your second marriage. What careers have they entered into?
JB: John Y. III is a vice president with ResCare. He also served eight years as the Kentucky Secretary of State.
Sandy lives in Louisville and she’s a partner with and wife of a developer. They have been very successful. Sandy has four children.
Sissy lives in Lexington and has two adorable children. Sissy is teaching school at Lansdowne [Elementary School].
Lincoln works in New York and Los Angeles. He is the president of StarStyle (www.starstyle.com). If you see something on a TV show – a hat, coat, desk or a chair – Lincoln’s company can help you buy it. He has 15 TV shows signed up including American Idol.
Pamela just entered into a three-year contract with an ABC-owned cable station, to be a reporter/anchor. She’ll get a world of experience. I’m really proud of her.
All of my family are doing very well. I’m very proud of their successes.
EL: Do your children have “entrepreneurial genes”?
JB: I tried to talk Pam and Lincoln with every persuasion I had not to do what they are doing. They are determined to do it.
So on one hand I’m sort of teed off, and on the other I’m sort of smiling with their independence.
EL: What do your grandchildren call you?
JB: They don’t call me “granddad.” I don’t allow that. They call me “Big John.”
EL: You have been a lifelong resident of Lexington. What are some of the city’s best assets?
JB: I was born, raised and went to the school here. Lexington is home to me. The city’s philosophy is that we’re happy with what we’ve got – just don’t change it. I’ve been a believer that if you don’t grow you stagnate. Lexington is probably one of the best areas in the United States to locate a business. It was ranked in the top 10 by Forbes magazine as an attractive place to locate and No. 2 as far as the cost of doing business. The only major company Lexington has had in my lifetime is IBM. That was a springboard for Lexington to grow.
I also have to give credit to Hamburg development. I don’t hear much about Hamburg but that is the most exciting development I’ve seen in Lexington for 30 years. Hamburg is creating jobs and offers what the people want. Hamburg has every imaginable restaurant chain and retailer and to me it has been one of the major developments in Lexington.
EL: What should local government be going?
JB: Lexington’s one of the most beautiful places, and offers a good and safe lifestyle. Local government has an obligation to provide the best opportunities for its citizens as far as jobs and expanding the economic base. Lexington can be any kind of city it wants to be. A community can pick and choose; it doesn’t have to have any heavy industry.
EL: How would you compare Lexington’s business and political leadership over the last 15 years to Louisville’s?
JB: Louisville has had a wake-up call. The city has unity and its leadership is working together to build Louisville. They have a pro-growth mentality, which they didn’t have 35 years ago. Louisville has some really strong leaders, starting with Jerry Abramson. That community has really come together.
EL: How good a job is Louisville Mayor Jerry Abramson doing?
JB: Jerry is articulate. He has a passion for Louisville. He’s very popular and I think he’s brought that community together probably better than before. I don’t know if the voters are getting tired of him. He’s been there a long time, but I think Jerry has done an outstanding job and has been an asset. Leaders have to be great salespeople and unifiers. Louisville, over the next four years, has a lot of potential that it didn’t have it until the county and city merged.
EL: How would you rate Mayor Teresa Isaac in Lexington?
JB: I don’t want to fault my own community, because I live here. You know I’m at an age that I can say what I want. I don’t mean to be critical but I don’t think Lexington ever made an effort to be ambitious. Lexington has the bluegrass and the horse industry. Lexington’s horse industry came in and developed its own potential, which is a great asset. The University of Kentucky has everything that you’d want in a community, but there is a no growth mentality. I think local government is just shorting the people.
If Lexington ever got a leader who is ambitious and created more employment opportunities, the people would like it.
EL: What key point did you learn from your four years as governor?
JB: When I was governor, we ran Kentucky government like a business and it worked. We reduced the size of government 22 percent and had no tax increases. During that time, when inflation was 20 percent and interest rates 22 percent, Kentucky was the only state among the six surrounding states that didn’t raise a major sales, corporate, or personal income tax – while some raised all three. Our vision then was to attract business and jobs. In 1981, we attracted UPS to Kentucky in a matter of a couple of months with no financial incentive except some tax credits. I think today UPS is the largest taxpayer and employer in the state. UPS picked Louisville and Kentucky mainly because it is the best location in the country and within 500 miles of 68 percent of the U. S. population.
EL: On KET in August of 2005, in a roundtable discussion with the state’s former governors about Kentucky’s future in the 21st century, you said, “Kentucky has the assets; we need to sell them… our political leaders over the years have not been visionaries. We’ve been too political.” Could you elaborate on this comment?
JB: What I said is that “Kentucky has lived in the status quo for 50 years – strangled by politics. Very few towns across the state have changed or grown.”
I am a salesman at heart and to me it is not complicated what we need to do. Most every state in the country has lowered its corporate tax over the past 10 years. Kentucky ranks 44th among the states in tax burden to attract business. I want to see Kentucky eliminate its corporate income tax, which averages only 4 percent of tax revenues, and that would put the state first in line to be an attractive place to locate new business. I believe that the new business would generate substantial new tax revenue that would offset this loss in a short period of time.
EL: How would Kentucky taxpayers benefit with a corporate tax cut?
JB: The future of Kentucky is never going to be dramatically different until the state attracts industry and jobs here in a major way. Since Kentucky has no major national banks or insurance companies headquartered in Kentucky, we rank last among the states when it comes to borrowing for business development. If we eliminated the corporate income tax, Kentucky would have something powerful to sell when the governor goes to various business communities and says, “Kentucky wants your business – we have no corporate income tax.” We would quickly build an economic base that would substantially raise the level of income for our people as well as provide funding to compete with the best in education.
EL: How important is it to grow the state’s tax base?
JB: Politicians don’t like to talk about it, but it’s all about the money. It takes money to do everything that government does. So, it is time to be entrepreneurial and change our approach so Kentucky can compete and win in the business community. This tax plan could be phased in over a five-year period with a 1 percent reduction yearly. It shouldn’t require tax replacement – if other fiscal matters are handled efficiently. I see Kentucky attracting the best of United States’ corporate, regional and national sales offices, light manufacturers, and national headquarters. The fact UPS is here and successful speaks volumes about what Kentucky has to offer.
 EL: Earlier this year, you offered to mediate a settlement between Attorney General Greg Stumbo and Gov. Ernie Fletcher. What was the outcome of your efforts?
JB: I got no response. I talked with him like I would a younger brother. I said to the governor, “When you get in a hole, stop digging. This merit system issue has been blown way out of proportion. I don’t like the stories on the front pages of the papers. It’s embarrassing to Kentucky. It’s media overkill as far as you and your administration. I’d like to get it settled, I’d be glad to go to Greg Stumbo. I think he’ll listen to me.”
The governor said, “Will you come over tomorrow morning?” Because of a death in the family that morning, the governor couldn’t be there. I met with several members of his staff. I told them, “What the governor needs to do is send this matter over to the personnel board and direct them to follow the law. Everybody’s got their job, let them handle it and get it out of your lap.”
Of course, you know how I feel about patronage. Democrats have been doing it for years. Nonetheless, I can’t blame Greg Stumbo for enforcing the law. I met with Greg and it wasn’t easy communication. “Do you want them to go to jail or be impeached?” I said to Stumbo. “Step up to the plate and let’s get this settled. This matter doesn’t reflect well on you, the Democrats, or the Republicans.” Finally about after one and a half hours, we shook hands. I do know how to make a deal. Stumbo wanted to have confessions, and I said, “No, you don’t have to have a confession from the governor, just get it settled.” He finally agreed.
I went back to the governor’s chief-of-staff (Stan Cave) and his lawyer. He said in the paper he didn’t know why I stopped by the governor’s mansion. But in any event, they said, “The governor thanks you so much,” and I said, “Have the governor call me and I’ll get them (Fletcher and Stumbo) together. I’ll sit in as a mediator.” To my shock and amazement, in three days he announced the firing of nine people. The governor just didn’t understand what he needed to do or should do. And I think ego may have been involved. Reminds me a lot of George Bush saying he never made a mistake. And it’s sad, because I want Gov. Fletcher to be successful.
EL: For years, prior to Gov. Fletcher’s election, patronage has carefully controlled by the Democrats. What missteps did the Fletcher administration make?
JB: The Democrats created the patronage system in Kentucky. They had a patronage manager in every county. That is one reason I ran for governor. I wasn’t making any promises. As far as I know, not a single person got a job for political reasons and no one asked me for political favors in four years – except one person. That was my father – who taught me that you don’t give away jobs, you don’t sell out the people for a special favor. It’s a cute story. He was 84 and wanted to know if I could help him get a liquor license in Ashland.
EL: Did having a Democrat attorney general and a Republican governor exacerbate political issues regarding the merit system matter?
JB: I think politics is the cause. When was the last time Kentucky had a Democrat governor and Republican attorney general? I’m sure politics entered into it. Then again, my Attorney General Steve Bashear tried to get publicity when he sued my administration for charging people $10 to go through the mansion to help pay for the renovation. We live in Kentucky – the land of politics.
EL: How has Jerry Lundergan performed as the state’s Democrat chairman?
JB: I’ll tell you what, Jerry has done an incredible job. He took a job nobody wanted and just because of his tenacity, persuasion, pushing and knocking on doors, he’s got the party back in action and fully vitalized. My hat is off to him.
EL: In our 1999 interview you said “Republicans need to field better candidates.” Do the Democrats now need new blood? What is your assessment?
JB: The Kentucky Democrats have some good potential candidates – more than the Republicans. People like Bruce Lunsford, Ron Geary, Jerry Abramson, and Ben Chandler. These are all people with substance and I don’t know who the Republicans are going to have to replace Fletcher. They are talking about some no-names as far as I’m concerned.
Politics is salesmanship. The other governors we’ve had have been good salesman. Wallace Wilkinson had the lottery on this side. Brereton Jones put “Happy” Chandler on one side and Ned Breathitt on the other. Martha Layne Collins had a different kind of sales appeal. Paul Patton was a tireless worker and salesman.
EL: There wasn’t much negative comment about your administration after you left office.
JB: I made enemies. Looking back, I believe the key is recruiting top people to work for state government. You never heard of (W.T.) Bill Young until our administration. He was very modest, very shy. He was a great neutralizer because he could say “John, you can’t do that.” Most governors are used to being told how brilliant they are, what a genius they are. I’ll say this about being governor: I’ve never done anything I’ve enjoyed as much.
EL: If you had someone working for you and found out that they had stolen something or had been unethical, how would you deal with that?
JB: I would terminate them. A person can’t be a little bit honest or a little bit dishonest. You are either one way or the other. If you have the tendency to be dishonest once, you’ll probably do it at every convenient opportunity. The individual has to decide which way he or she is going and that’s it.
EL: You sold KFC 35 years ago. Now KFC is part of Yum Brands, which is headquartered in Louisville. How is KFC faring?
JB: I sold in 1971. In the last few years, KFC has done a much better job at merchandising. The menu is the same, crispy and original. Our philosophy was just keep it simple; it was just a great concept. Yum is doing a great job with it now. I might not have said that 10 years ago, but now I think they have their act together.
I use KFC in all my speeches about what someone from Kentucky can do. How an old colonel, who had a fourth-grade education and an idea, changed the eating habits of the world.
EL: Are you planning to start a new business or do you have other plans for your future?
JB: Yes, I’m in the process of putting a new business together, one that I’m really excited about. I’ll probably be announcing it in the next 60 days. And I plan to stay in Lexington if it takes off like I anticipate. Most of my business was in Florida because that’s the best place to franchise. People visit Florida from all over the world and have the opportunity to see the business in operation.
EL: Any political or government effort you would be interested in?
JB: I probably have more of a passion today to make a difference. I just want to see Kentucky be successful. I want to get the first “principal academy” underway. Nobody in the United States has created a school for high school principals; that is why I’m excited. If you want change in high school education, you start at the top – not the bottom. Once you build the first facility – just like business schools did 50 years ago – principal academies will spring up all over the place.We will put a prototype plan together and document it with research before we take it to the Kentucky General Assembly for additional funding.
EL: The principal academy and the elimination of state corporate income tax are your two big ideas?
JB: Those are two ideas that would make the biggest difference in Kentucky. If I can pull this off and change education, that would be more important than being governor. Thirty-five percent of our high school students don’t graduate.
EL: How is your health?
JB: I’ve had everything done. I’m a marvel of mankind. I don’t deserve it but I have great genes. My dad was 95 when he died. I’m going to live a long time. As Mickey Mantel said, “If I had known I was going to live this long, I would have taken better care of myself.” I’m in unbelievably good health and very fortunate.
EL: How much is success in business based on skill, experience and knowledge and how much is just being at the right place at the right time with the right product or service?
JB: A lot of good fortune is based on timing. I would probably have been successful because I was motivated by my father to reach out and achieve.
Luck has a lot to do with it. But you have to be prepared when opportunity comes, so you can take advantage of it.
Ed G. Lane is chief executive of Lane Consultants Inc. and publisher
of The Lane Report.
edlane@lanereport.com
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