Booker’s Startup Wealth Recasts Image in U.S. Senate Race

Aug. 7 (Bloomberg) -- Today's "BWest Byte" is $5 million, for the potential value of a stake that Newark Mayor Cory Booker has in Waywire. Jon Erlichman reports on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

Newark Mayor Cory Booker, who lived on food stamps and resided in low-income housing to identify with his poor constituents, is acknowledging his status as a technology millionaire as he campaigns across New Jersey for a U.S. Senate seat.

The 44-year-old Democrat, in a report filed with the U.S. Senate last month, listed a $1 million to $5 million interest in Waywire LLC, a New York-based social-media company he co-founded in 2012. The two-term mayor filed a similar report with Newark Aug. 6, a week before the Democratic Senate primary election.

Booker, a Rhodes Scholar and Yale Law School graduate who has led in voter surveys, has cultivated a message similar to that of former President Bill Clinton: both are politicians who graduated from Ivy League schools and skipped lucrative careers to enter public service. His wealth contrasts with his image of living in a drug-infested neighborhood in New Jersey’s most populous city, where 26 percent of residents are impoverished.

“When he discloses his stake in this company is worth between $1 million and $5 million, all the claims about altruistic motivations may ring hollow,” said Brigid Harrison, who teaches law and government at New Jersey’s Montclair State University.

Special Election

The mayor is the frontrunner among four Democrats and two Republicans in the special election to fill the last term of Democrat Frank Lautenberg, who died on June 3 at age 89. Republican Governor Chris Christie set an Aug. 13 primary and an Oct. 16 general vote for the seat. Whoever wins this year would face another campaign in 2014, as Lautenberg’s term expires.

Booker’s campaign had previously reported earnings of $1.3 million from speeches, noting that he had given almost $620,000 to charity and paid $476,000 in taxes since 2008. He amended his Senate filing last month to reflect his Waywire stake, according to Kevin Griffis, a campaign spokesman.

“It was just an oversight,” Griffis said of the lack of initial disclosure. He said an “internal examination” led the campaign to make the change with the Senate and the city.

Booker was a suburbanite who moved to Newark in 1996. He took up residence in a violence-plagued high-rise, staging a hunger strike and living in a recreational vehicle to highlight runaway crime in a city left to decay after 1967 race riots that led to 26 deaths.

Social Media

After winning his first term as mayor in 2006, Booker expanded his appeal to 1.4 million followers on the Twitter Inc. website as he used the service to recount shoveling residents’ snow-covered sidewalks, rescuing a neighbor from a fire and tending to mundane matters like pothole and litter complaints.

Last year, Booker lived on food stamps for a week to show the difficulty of relying on the federal aid, formally known as the Supplemental Nutrition Assistance Program.

At home, Booker has quarreled with municipal unions over his job cuts and with the City Council over his efforts to plug a budget deficit by leasing the municipal water system. Some of his critics have said he is more concerned with his national image than the plight of Newark.

Booker has courted hedge-fund billionaires, including Nicolas Berggruen and Leon Cooperman, to invest in Newark development and enhance safety and recreation. The mayor drew a $100 million commitment from Facebook Inc. (FB) co-founder Mark Zuckerberg to help improve city schools.

Millions Raised

In his Senate campaign, Booker has benefited from such relationships. He raised $4.6 million between April and June, with donations of at least $10,000 from more than 150 people, including Zuckerberg and Christy R. Walton, a Wal-Mart Stores Inc. heiress and the world’s richest woman. Oprah Winfrey has also contributed to his efforts, and held a fundraiser for him last week at a restaurant on the Jersey City waterfront.

Waywire is a video-sharing site with 29,000 registered users akin to Google Inc.’s YouTube, though with content focused on news and inspiration to fix societal problems.

Booker’s partners in the venture are Nathan Richardson, former president of Gilt Groupe Inc.’s Gilt City, an online discount retailer, and Sarah Ross, a former marketing executive for AOL Inc.’s TechCrunch and Yahoo Inc. Booker personally gained investors, including Google Executive Chairman Eric Schmidt, according to the New York Times.

Andrew Zucker, the son of Cable News Network President Jeff Zucker, resigned his position on Waywire’s advisory board yesterday, Ross said in a statement. He wasn’t compensated in cash for his service, and his unexercised stock options will revert to the company, said Allison Gollust, a CNN spokeswoman.

Waywire Adviser

“Despite the fact that his affiliation with Waywire was extremely limited to only an advisory capacity, in order to avoid even the perception of a conflict, Jeff’s son is resigning as an advisor to the company, effective immediately,” Gollust said yesterday in a statement.

The mayor is a Waywire director and shareholder who has no day-to-day involvement with the company, Griffis said.

Federal lawmakers and congressional candidates are required to file annual disclosure reports detailing their finances. The filings include outside speaking engagements and any payments received; financial holdings in broad ranges; any positions in corporations, associations or other outside groups; and a spouse’s source of income.

Around 200 amended financial reports have been filed with the Senate since January 2012, according to the Center for Responsive Politics, a Washington-based research group.

Boehner, Pelosi

Ohio Republican John Boehner, the speaker of the U.S. House of Representatives, filed an amended report in 2003. Democrat Nancy Pelosi of California did so in 2010, when she was speaker.

“As a practical matter, there’s no real legal implication or legal penalty” for amending a disclosure form, said Kenneth Gross, who leads the political law practice at Skadden, Arps, Slate, Meagher & Flom LLP in Washington. “The political implications would be greater than the legal.”

In some cases, lawmakers may face ethics sanctions for inaccurate filings.

Representative Charles Rangel, a New York Democrat, was censured by his peers for ethics violations partly for failing to “fully and accurately report numerous items” in his disclosure statements, including rental income and stock trades. In August 2009, while under an Ethics Committee investigation, Rangel amended five years of filings to add more than $500,000 in previously unlisted personal investments.

Privacy Debate

In the wake of revelations by Edward Snowden, a former U.S. National Security Agency contract worker who spurred a debate about secret government-data surveillance of American citizens, technology and social-media companies have sought to publicize the extent of law-enforcement requests for user information.

Steve Lonegan, 57, a Republican from Bogota, New Jersey, who is running for the Senate seat, said the mayor’s relationship with Waywire makes him a part of that debate.

“Social media’s an important thing,” Lonegan said. “It’s also important to have a senator in Congress who’s not in the pocket of Silicon Valley millionaires. He’ll be indebted to them for his entire career.”

Harrison, the Montclair professor, said the disclosure won’t prevent a Booker win, though it may lead to some public cynicism.

“For Joe and Jane voter, there’s still a level of discomfort with politicians making enormous sums of money or potentially large sums of money off of products over which they may determine the public policies at some point,” Harrison said. “There could be a sense that here’s another politician getting rich off information or access they have.”

Closer Scrutiny

Booker is accustomed to controlling his image, using speaking engagements and Twitter to project his vision of a reborn Newark, according to Andra Gillespie, who teaches politics at Emory University in Atlanta and wrote the book, “The New Black Politician: Cory Booker, Newark, and Post-Racial America.”

“You start to lose control over your narrative when you run for higher office, and this is probably the first time he’s faced this level of scrutiny,” Gillespie said by telephone. “It’s going to be one of many growing pains.”

To contact the reporters on this story: Elise Young in Trenton at eyoung30@bloomberg.net; Terrence Dopp in Trenton at tdopp@bloomberg.net.

To contact the editor responsible for this story: William Glasgall at wglasgall@bloomberg.net.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.