Wednesday, July 17, 2024

Ring Master

By Jack Betts

Dean Debnam embodies the classic North Carolina success story: a tobacco farming family’s son who started working at age 12, despised authority so much that he left college after six weeks, and wound up controlling Workplace Options LLC, an employee-assistance company that posted $65 million in revenue last year. That’s where the resemblance mostly ends. While many CEO peers couple their success with a passion for conservative politics, Debnam wakes up every morning on the other side of the partisan divide. He’s one of the state’s most ardent donors to Democrat politicians and liberal causes, while financing and creating Public Policy Polling, which is in the national spotlight almost daily during the wild political season. He boasts of being a rarity: a successful Southern liberal businessman. A favorite pastime is sniping at North Carolina’s Republican leadership — and fellow Democrats who are not battling hard enough to win.

“There are far more Jim Hunt progressives among business leaders than there are [N.C. Senate President Pro Tem Phil] Berger conservatives, but they are afraid to speak out because those who write the laws are vindictive — the craziest bats in the barn,” he says. “We have successful businessmen in this state, and I ask them if they invest in their own businesses to make improvements. It’s the same way with running a state — you have to invest in schools and infrastructure.”

Republican leaders, emboldened after more than a century of Democratic rule, are moving too quickly to change a state long considered the envy of the South, Debnam says. “I need to recruit employees in this state. But how many good employees are going to come here if the schools are getting an F? I want a good working environment here in North Carolina, where there’s a good public infrastructure and where there are great schools. What we have now is complete insanity.”

Debnam’s analysis of the Republican surge in North Carolina is all wrong, Berger says. “One of the reasons we won in 2010 is that the business community finally abandoned support of Democrats in the legislature. [The business sector] wanted to support candidates who would support business, [who would be] pro-private sector.” Over the last five years the state has invested a record amount in schools, universities and transportation infrastructure, while stopping the transfer of road funds into the state’s general fund, he adds.

Debnam, 61, can get just as fired up on local issues. Last year, he financed an ad campaign in the Raleigh City Council race attacking Democratic councilwoman Mary-Ann Baldwin and others who favored allowing downtown bars to keep their sidewalk seating open until 2 a.m. The ad contended that Raleigh risked turning into “DrunkTown” as its center-city population skyrockets. Baldwin won her re-election campaign, while two other candidates criticized in the ad lost. Establishments now close their sidewalk trade by midnight on weeknights, 1 a.m. on weekends. “You would not need term limits if Dean were in public office,” says his friend Ken Eudy, co-founder of Capstrat, a Raleigh-based marketing company. “If nobody alienated him by accident, he would go out and find somebody to alienate.”

Debnam’s success makes him hard to ignore. His grandparents had a tobacco farm in then-rural north Raleigh: a hundred acres, no running water in the house and always in need of a hand when Dean visited. His relationship with his father, a real-estate investor, was difficult, his upbringing hardscrabble. He was bored in school, started mowing lawns at age 12 and created his first business, a horticultural nursery, at age 17. He sold it about 15 years later.

Debnam likes to be in charge, says Allen Proctor, a retired Presbyterian minister and a close friend since childhood. “That was true in third grade as well as in high school. Being in a classroom where the teacher is in charge was difficult for him.” It’s a product of his upbringing with six siblings and a demanding father, he adds. “Growing up that way made Dean very competitive and very tough. Dean is the guy you want beside you if you have to walk through a bad neighborhood. Dean will have your back.”

Debnam called his first business Time Nursery because he knew it would consume all of his time to grow plants for landscaping. Upset with the high cost of heating his greenhouses, he started Radiant Systems, which made heating equipment and blowers. It morphed into Ultimate Supplies LLC, which makes and sells heating equipment, high-speed door lifts, door parts and other  components for car washes. He also owns Raleigh office buildings that comprise 170,000 square feet.

He has learned some hard lessons from business ups and downs: If you think you’re smart, wait until the next recession. You learn more on your way down than on your way up. You don’t have to know everything, but you do have to know how to fix problems. Make good decisions, but don’t take forever. It’s better to run things than to work for someone else. And this: “Business and life in general are about observations, and if you are not paying attention, you are not going to be effective.”

His big hit is Workplace Options, an employee-assistance company with 13 offices, including nine outside the U.S., stretching from Singapore to Portugal, with new centers planned this year in Brazil and Chile. Debnam’s ex-wife, Stephanie Fanjul, founded the business in 1982, focusing on referring employees to child care centers. She left in 1993 to work in Gov. Jim Hunt’s administration as director of the child-development division, and Debnam became CEO.

The company grew modestly until acquisitions in 2005-06 expanded its offerings and added international clients. “We went from having a handful of employees and a few thousand clients to now, when we have 650 employees and more than 10,000 clients,” spokesman Jon Weiner says. Revenue has doubled since 2007, while the company’s workforce has almost tripled.

Workplace Options helps employees of its client companies arrange mental-health counseling, find housing for elderly parents, line up lawyers and many other tasks. Business is spread over more than 200 countries, though the U.S. still accounts for two-thirds of revenue. More than 45 million people work for client companies, who pay Workplace Options about a dollar a month per employee, depending on how many services they want. “If you watch the news and something bad is happening, a plane crash or other disaster, chances are we have a client there,” Debnam says. “It could be a tsunami, could be wildfires; we deal with it all, including suicide attempts, every day.” Under Workplace Options’ model, the depressed employee seeking help would be referred to a contract psychologist.

Workplace Options’ 30% growth in the last year comes as insurance companies offer their own employee-assistance programs, rather than farming the business out to specialists. “A lot of the large insurers have bought up independent EAPs, but we partner with many of the major insurers, such as Aetna, Cigna and Anthem,” Weiner says.

Debnam owns 85% of Workplace Options with the balance spread among three senior managers, including President Alan King, a former executive with rival employment-assistance group Ceridian HMC Inc. who joined in 2002. He oversees operations, while Debnam concentrates on sales and strategy. Early in the company’s life, Debnam formed a partnership with a foreign company that wanted to buy his business. The relationship sparked significant growth but convinced Debnam he never wanted to work for anyone else. “It was a good decision to get into that partnership and a better one to have gotten out of.”

Frequent queries from private-equity groups and industry peers about Debnam’s interest in selling are routinely rejected. “I haven’t been employed [by someone else] since I was 17, and I don’t want to end my career working for someone else.” Two of his five daughters work for the company. The business remains fun, “pretty much every day,” he says. 

Debnam rises at 6 a.m. each morning breakfasts with a smoothie, answers hundreds of emails from his far-flung enterprises, and reads The Wall Street Journal, The New York Times, Financial Times and The Economist. He has no interest in sports. He grows orchids that decorate his office in rented greenhouse space in Raleigh, a holdover interest from his Time Nursery days. His brief résumé in higher education surprises people. “I was enrolled at N.C. State for six weeks,” he recalls with a grin. “Attended classes for two weeks.” He calls himself “the least educated person in the company. I couldn’t get a job at this company.”

He certainly couldn’t get a job with the Republican Party, which he mocks with relish. “Republicans would vote for the Antichrist before they’d vote for a Democrat,” he says. Perhaps that is the pot calling the kettle black: Debnam himself has never given money to a Republican, while donating more than $1 million to Democrats, some with checkered records such as former House Speaker Jim Black, former Gov. Mike Easley and former U.S. Sen. John Edwards, along with less tarnished pols such as Attorney General Roy Cooper and former Lt. Gov. Walter Dalton. As North Carolina politics got more competitive, he foresaw a blood bath coming for Democrats in a political atmosphere “so conservative that neither [Republican governors] Jim Holshouser nor Jim Martin could have won their seats today.”

Debnam, who is now single, credits Fanjul’s commitment to public service with sparking his interest in politics. He provides inexpensive office rent to nonprofits, including the National Organization for Women, Lillian’s List and Women AdvaNCe. “I found that problems were not to be solved just by personal involvement, but by government.” He considered running for office, but concluded, “You get more done by helping good people into office.” That’s not exactly right, Allen Proctor says. “He really enjoys helping the good guys win, but what he really enjoys is seeing the bad guys lose.”

Night Caller

Plying his passion for politics into profit is the story of Public Policy Polling, Dean Debnam’s best-known pursuit. Infuriated by frequent polls by the conservative-leaning John Locke Foundation in Raleigh, he started his own polling business in 2001, using Workplace Options’ phone lines. “They were putting out polls to push their agenda,” Debnam told Talking Points Memo in 2011. “I was fed up with reading basically BS in the local paper as if it was fact.” While his initial goal was to inform the debate rather than make money, PPP is now profitable, with a clientele including businesses and Democratic politicians, who pay $1,500 to $4,000 per survey. The company uses advanced telephone technology that makes hundreds of thousands of automated calls to target people who voted in the last two elections, rather than just a raw list. “Everyone on our list, we make at least four efforts to contact,” says Tom Jensen, the company’s president. “We are committed to making more effort to get in touch.”

To break through the gaggle of polling companies, Public Policy regularly includes questions that elicit comic results and produce free media exposure. A 2013 survey found root canals and colonoscopies are more popular than the rock band Nickelback. A poll last year found that 5% of Republicans thought the country is run by shape-shifting lizards. A December poll found 30% of Republican primary voters — and 19% of Democrats — favor bombing Agrabah, a fictional country from the Disney movie Aladdin. “It’s a great business model,” says Raleigh political consultant Gary Pearce. “Polls make news, and boy, do they turn them out.”

On any given night, PPP has a half-dozen polls running through its 121 dialing machines, each with 168 lines to be used, enabling more than 2,000 simultaneous calls. “People have become aware of us for this, and because we are a lot less expensive than other polls,” Jensen says.

Few other pollsters spark more controversy, with Sen. Richard Burr, former N.C. Treasurer Richard Moore and former Sen. Elizabeth Dole among those who complained of bias during political campaigns. “A good poll does not use a computer,” Moore told the Greensboro News & Record in 2008. Conservative icon Rush Limbaugh and others pan PPP as a Democratic mouthpiece. While denying any fudging, Jensen told Politico in 2011 that “We don’t want Richard Burr to get re-elected.” In 2013, data-modeling expert Nate Silver of slammed PPP for not releasing results of a Colorado poll that suggested a Democratic state senator would win by 12% in a district that Obama had won by 20% a year earlier. The results “didn’t smell right,” Jensen says, though the margin ended up at 12%. “Dean’s response was, ‘Who cares what [Nate Silver] thinks? … Dean is a believer in the power of not giving a damn.”

Despite the criticism, PPP gets it right much of the time. Its polls correctly foretold whether President Obama or Mitt Romney would win in the 19 states where it conducted polls, along with all U.S. Senate and gubernatorial races that it surveyed. No other pollster had a lower average margin of error among companies that studied at least five gubernatorial contests, according to British market-research company Like many other pollsters, PPP had a rough start this year. Its last poll on the Iowa Republican presidential caucuses put Donald Trump seven percentage points ahead of Ted Cruz. Trump lost by 3.4 points.

PPP’s aggressive robocall-driven polling makes it harder for traditional pollsters who want to talk to live voters, says Francis DeLuca, president of the Raleigh-based Civitas Institute, which bills itself as North Carolina’s conservative voice. “The way they use it is driving down the response rate everywhere because they call so many people,” he says. Civitas prefers pollsters who speak with voters, and DeLuca is skeptical of PPP’s track record.

That attitude shows how PPP’s interactive-voice response polls are rattling traditionalists, says Raleigh PR executive Ken Eudy, a friend of Debnam. “But I think the results speak for themselves.”

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