Power Player Jack Faris is staunchly conservative, a zealot against government regulation, and the most influential voice for small biz in Washington. Like it or not, he's your...
(FORTUNE Small Business) – In a private dining room situated near the top of a downtown Nashville office building, nearly 50 Republican activists are having a good laugh. The nation's capital, their luncheon speaker jokes, is "America's only truly work-free drug place." The patients' bill of rights, he quips, is really "the lawyers' right to bill." And of NAFTA, the free-trade pact, he asks, "Is that an auto-parts house?" The audience answers with more laughter and approving applause. But the man they're so enamored with isn't Nashville's newest comic. He's Jack Faris, the president and CEO of the 58-year-old National Federation of Independent Business.
He may have a knack for comedy, but Faris isn't about to give up his day job--one that, for better or worse, he's very good at. The NFIB, under Faris' nine-year watch, has grown to 645,000 members, making it the nation's largest and most important small business organization. It has been near the top of Fortune magazine's Power 25 survey of influential lobbying groups since it began in 1997. And this year it ranked third, just behind the National Rifle Association and AARP.
Bronzed by his regular jogs and often clad in a tightly tailored blue blazer accessorized with a white pocket handkerchief, Faris, 59, dresses the part of the Beltway power player he is. But he prefers to fashion himself as a down-home spokesman for the little guy, the champion of the constantly put-upon small business owner. He claims that mantle as a birthright: He is the son of a North Florida gas-station owner, and is on a mission to defend hard-working folks like his dad. And he's quick to point out that his keen understanding of small business concerns was sharpened over the 12 years he ran his own management consulting firm.
But defending the little guy means he has also had to play nice with the big boys. The chief fundraiser for the Republican National Committee from 1978 to 1981, Faris has deep connections within the party hierarchy. And now, with a Bush in the White House, Faris is even more of an 800-pound GOP gorilla, and not shy about throwing his weight around. He has met with President Bush three times and visited the White House a dozen times this year alone, mostly on the fiscal and health-coverage issues that mean so much to small businesses. In contrast, he went to Bill Clinton's White House just four times in eight years. Undoubtedly, Faris is now the loudest and most potent voice for small business in the nation's capital and, indeed, in state capitals around the country. But he is also a quirky leader and a zealot against government regulation and taxation, even if they sometimes help small businesses. Whether you're a card-carrying NFIB member or not, Jack Faris is speaking for you. Like it or not.
Faris' strong views both help and hurt his cause. It's an advantage to be Republican and conservative when Republicans and conservatives are in charge. But on the other hand, when the capital and the electorate are as closely divided as they are, such GOP leanings can sometimes backfire. Democrats now control the Senate. So the rush to enact NFIB priorities at the beginning of the year, such as income tax cuts, is quickly being replaced with movement toward passing issues that the organization disdains, like an increase in the minimum wage.
Still, Faris and the NFIB are political principals on the national scene. In the 2000 election cycle, the NFIB gave 96% of its million-dollar political action committee war chest to Republican candidates for federal office. It's not much surprise, then, that Faris has some trouble getting in to see top Democrats. The only way he can catch face time with some of them, he concedes, is to attend an annual benefit in Washington for Ford's Theater. And even then, Faris can be impolitic. Of the Senate Majority Leader, Tom Daschle, he says, "He's probably the most partisan person I've met on the Hill." And during his stem-winding speech in Nashville, Faris called former Democratic Labor Secretary Robert Reich "Robert Wrong."
With an annual budget of $75 million and a political-action network that includes lobbyists in all 50 states, the NFIB is the envy of all other business organizations. This year it ran so many television commercials in Montana pressuring Democratic Senator Max Baucus to vote for the tax-cut bill that Baucus, who now chairs the powerful Finance Committee, asked the NFIB to relent. Which it did when Baucus promised to vote for the legislation. To repeal ergonomics regulations, the NFIB coaxed 70,000 of its members to deluge Congress with faxes in a 48-hour period. Says Faris: "That was our biggest victory since the defeat of Clinton's health-care plan."
Such victories don't make everyone happy. For less conservative business owners, there are other organizations. Both the American Small Business Alliance (see box) and National Small Business United pitch themselves as less GOP-tilted versions of Faris' group. "The NFIB is more partisan than we are," says Damon Dozier, the NSBU's top lobbyist. "We work with the Democrats, and they don't as much." The U.S. Chamber of Commerce, the country's largest and best-known general-business organization, is less diplomatic. "I love the NFIB, the way they get out there on the edge, like when they said, 'Get rid of the IRS.' They make us sound reasonable," says Chamber President Tom Donohue.
While he will claim at length to be bipartisan in his lobbying efforts, Faris is unapologetic about the NFIB's consistently right-leaning stance on almost every issue. The NFIB is so Republican, he says, because its members agree with GOP positions. Simple as that. The NFIB is one of the rare lobbying groups that sets its positions on issues based on surveys of its members. And not just stilted internal polls. It double-checks its findings using the Gallup organization. When the NFIB asks its members what they want to do about the inheritance tax, they say, loud and clear, "Repeal it!" Of the tax code, "Rewrite it!" Increase the minimum wage? Only 7% of its members say that's okay, Faris reports. And the group always goes with the majority.
A large part of the reason for these rightward-tipping views is that the business owners who join the NFIB are the more established, non-big-city sort--in other words, the kind of people who have conservative, and thus Republican, opinions. They tend to be older than the average business proprietor is (by about seven years, Faris says) and "predominantly Republican, white, and male," he adds. The typical NFIB-er is a white male over 45 who lives in a state that George W. Bush carried. Between 60% and 70% of the members say they vote Republican, according to Faris' observations of his members. He says he'd like to diversify the membership in order to grow it, but so far he hasn't devised a formula to make that happen.
In the meantime, the organization's relative homogeneity has made the NFIB nearly unstoppable when Republicans have control--to wit, tax cuts (including repeal of the estate tax) and the elimination of pending ergonomics regulations that the NFIB said would have cost its members billions of dollars to implement. Both became reality before the Democrats took control of the Senate with the party switch of Vermont's Jim Jeffords. But now the NFIB may have no choice but to swallow not just an increase in the minimum wage but also more lawsuits against HMOs than it would prefer and, probably, a whole new prescription-drug benefit under Medicare that could prove very expensive to its members.
Faris' strict anti-government posture sometimes forces him into some peculiar corners. For example, the NFIB doesn't support many of Uncle Sam's subsidies to small business owners. "The Small Business Administration isn't much of an agenda item" for the NFIB, Faris admits. Why? "It's a government solution," he explains, and that's not what NFIB members want. Furthermore, he says, NFIB members often resent government handouts to small businesses because those companies gain an advantage that could hurt already established businesses. That kind of thinking has prevented even the NFIB's 430-person sales force from coaxing $100 to $2,400 in membership dues (the average dues paid are $215) out of a great many inner-city business owners. After all, what liberal or even moderate person (of the kind who tends to dwell in cities) would belong to a group as right wing as the NFIB? That's one reason its membership, though large, has been flat since 1994 and remains at only about 5% of the nation's 13 million small business owners.
Still, the NFIB's members seem pretty happy with Faris' leadership. He has headed the NFIB since 1992 and has an annual salary of $600,000, which makes him one of the most entrenched and well-compensated association CEOs in the country. He splits his time between a small apartment in Washington (owned by the NFIB) and a large house that's always hopping with family (including his two grandsons), atop a hill in a tony Nashville neighborhood; country-western stars like Waylan Jennings and Eddie Arnold live nearby.
Despite these trappings of wealth, Faris insists his tastes are more homespun. One of his favorite Nashville restaurants is Uncle Bud's, known for its fried catfish and capped-hat collection. He sprinkles his conversations with folksy phrases like "Dagumit!" He also never ceases to point out that Nashville is the NFIB's home, not D.C., and that the NFIB's car in Washington is a homely gray Pontiac minivan. "I'm glad they pay me," says Faris. "But if they just paid my expenses, I might do this anyway. It's a cause for me."
Faris doesn't need to worry about his paycheck anytime soon. Under Faris' management, the NFIB is becoming more financially secure. Like other trade groups, the NFIB is evolving into a commercial enterprise in addition to servicing its members and lobbying Congress. Joining the NFIB now entitles members to discounts on Federal Express overnight delivery services and on Gateway computers. The NFIB also has its own credit card and offers workers' compensation and health insurance in selected states. Faris hopes revenue generated from these activities will fund a $10 million scholarship program for would-be entrepreneurs and also add some bucks to the NFIB's public policy operation.
Faris now leaves much of the NFIB's day-to-day lobbying to his right-hand man in D.C., Dan Danner. Faris, meanwhile spends most of his time selling the idea of the NFIB around the country. And if nothing else, Faris is an effective, high-energy salesman. He speaks in the argot of entrepreneurship, a combination of cornpone comedy and corny euphemisms. His father's business in Pensacola, for instance, was "a service station," not a "gas station." And his job there as a youth "wasn't selling. It was serving." He refers to the estate tax as the "death tax." Indeed, Faris' personal battle cry sounds like a GOP marketing slogan: "Let me win, let me lose, but most of all, let me alone."
Back at the Nashville luncheon where he doubled as a stand-up comic, Faris makes absolutely clear how determined he and his organization are to be heard and taken seriously. "We're the folks who sign the front of the paycheck," he says, "not just the back of one." And like him or loathe him, Faris, at least, is consistent. "Year in, year out, you know where the NFIB stands," Faris says. For lawmakers, he adds, defiantly, "there's no place to run, no place to hide." He ain't kiddin'.