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Published: Friday, 9/10/2010

Iott decries search for 'dirt'

BY TOM TROY
BLADE POLITICS WRITER
Rich Iott says Marcy Kaptur's campaign is using an opposition researcher to seek derogatory information about him. Rich Iott says Marcy Kaptur's campaign is using an opposition researcher to seek derogatory information about him.
THE BLADE/AMY E. VOIGT Enlarge | Buy This Photo

With a recorded phone conversation in hand from a self-described "Democratic Party consultant," Republican congressional candidate Rich Iott Thursday accused his opponent of trying to find "dirt" on him in connection with his former control of the Seaway Food Town chain.

"It's obvious that my opponent is out trying to dig up dirt and trying to make something of the Food Town story," Mr. Iott said.

He spoke to reporters at his Oregon headquarters to address what he said were distortions about his role in the demise of Food Town.

Mr. Iott, 58, is running against U.S. Rep. Marcy Kaptur (D., Toledo) for the 9th Congressional District.

The Kaptur campaign is set to air its first television commercials tonight, focusing on the Iott-Food Town connection.

In the spot, a preview of which was obtained by The Blade, a female voice says, "Rich Iott took over Food Town from his father and ran it straight into the ground," costing 5,000 people their jobs, health care, and retirements.

The ad goes on to say that "now Iott's using that money to lie about Marcy Kaptur and call himself a job creator."

The Kaptur campaign Thursday refused to comment on the charge it employed a Washington man who was recorded in a telephone call trying to find information to use against Mr. Iott.

The campaign criticized Mr. Iott for the loss of jobs in 2003, three years after Mr. Iott oversaw the merger of Food Town with Spartan Stores Inc. of Grand Rapids, Mich.

"The truth is, Rich Iott is no job creator, he is a job destroyer. Rich Iott sold Food Town and more than 5,000 people lost their jobs. Iott can gloss over it all he wants. Rich's rush to cash out on his dad's business cost more than 5,000 families their livelihoods," said Nicole DeFreitas, the Kaptur campaign's newly named spokesman.

"Marcy Kaptur fights every day for jobs for this district and in just one day, Rich Iott sold out more than 5,000 families. That's his record. He can't run away from it," Ms. DeFreitas said in the statement.

Mr. Iott was president and chief executive of the grocery chain that had 47 supermarkets and 26 Pharm deep-discount drug stores when it was sold to Spartan.

During his news conference, he explained why he supported the transaction, calling it a merger and not a "sale" - even though it was consistently reported at the time as a sale - and said he was trying to maneuver the business to a safe haven.

The Blade had reported the deal as a $179 million purchase by Spartan.

Mr. Iott said the goal of the merger was to form a company big enough to compete with the rising power of Wal-Mart, but Spartan ignored his advice on how to run a food-store chain.

"Food Town was a great success story, but it ultimately fell victim to the Wal-Mart effect that we see ravaging Main Street across the country," Mr. Iott said.

Mr. Iott, a conservative who has attacked the Obama Administration's loans to General Motors Co. and Chrysler Group LLC as unconstitutional, said he did not wish for legislation that would curtail Wal-Mart.

Mr. Iott is the son of the store's late founder, Wallace D. "Wally" Iott, who was a partner with four others.

Mr. Iott said he was not the majority shareholder when the business was sold, but declined to identify the other large shareholders.

Mr. Iott denied accusations that he sold the business to get his money out. As a board officer, he had to hold his stock in the new company for two or three years, Mr. Iott said. By the time he was able to sell it, the value of the shares had dropped from $15 or $16 per share to $8 or $9, he said.

He made $2 million in the deal because Food Town shareholders were paid an additional $5 per share by Spartan to compensate for the higher value of Food Town stock, he said.

"There were no golden parachutes, no buyouts. I personally wrote a severance policy for all employees. It was based on wages and time of service for all employees, all nonunion employees," Mr. Iott said.

He said union employees were covered by the severance packages of their bargaining units. "I got the same severance package as anybody else who would have left," Mr. Iott said.

Mr. Iott's spokesman, Matthew Parker, said the news conference was held to respond to a stream of criticism, including from Miss Kaptur, that Mr. Iott sold out Food Town and put people out of work.

The Iott campaign produced a recording of a phone conversation in which a former Food Town employee was called by a man named Erich who identified himself as a researcher for the Democratic Party.

"We're just working on some information about Iott to run against him, just to find some information against him on his congressional run," the caller said to the unidentified man who received the call.

In the recording, Erich told the man he had called him in the belief that the man had complaints about Mr. Iott or about the merger, But the man who answered the call from Erich told him that was not the case, and tried to quiz him about who he was working for. Erich was evasive, apologized, and then hung up.

In the recording supplied by the Iott campaign, Erich gave his name and a Washington telephone number, which The Blade called. A man who answered declined to comment and hung up.

The Kaptur campaign refused to answer questions on whether it knew Erich, or whether he was working for the campaign, and instead issued a statement.

"That someone might be digging up Rich Iott's record of selling off jobs seems to be something Rich is quite nervous about. Whoever it is, they won't have to dig far," the statement from Ms. DeFreitas said.

In the last decade, Mr. Iott said he's been involved in numerous start-up companies. According to his resume, they include a salsa business in which he is partner and chairman, and a distillery, motion picture business, travel agency, a real estate developer, and an aircraft-leasing agency.

Mr. Iott has highlighted his private enterprise to show he is a "job creator," a claim his critics charge was overshadowed by the thousands of jobs lost when Food Town closed.

Contact Tom Troy at:

tomtroy@theblade.com

or 419-724-6058.



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