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Home, Sweet...Home?

Tom Leppert moved a company to Dallas, he says. Too bad he left the employees behind.
Mark Graham

A relatively unknown candidate for mayor just six months ago, Tom Leppert has garnered attention, endorsements and cash by relentlessly casting himself as a successful former chief executive officer whose stewardship of Turner Construction, one of the world's largest construction companies, was an apt prelude to leading a city like Dallas. Leppert has said that he has the management experience his politically seasoned rivals lack, often stating that he relocated his company here from New York, giving him an edge in convincing other executives to do the same.

"I moved a $4 billion business to Dallas," he said at an East Dallas mayoral forum last month, highlighting his ability to create jobs. "I look forward to sitting across the desk from any business leader in the world and saying, 'Not only do I think you should move your business to Dallas, I've been in your shoes and here's what I did.'"

Actually, what he did was not as impressive as it sounds. Although Leppert was a well-regarded CEO of Turner, helping nearly double the size of the 100-year-old company, he didn't succeed in making it a Dallas company. For all practical purposes, Turner Construction is not run out of North Texas but the Northeast, specifically Manhattan. Turner's CEO, Peter Davoren, works in New York, as does its vice president, Nicholas Billotti. The company's public relations and sales and marketing offices are also located in New York.

Last year, after Davoren was named to replace Leppert as the company's CEO, he didn't sound like he was headed to a luncheon at the Greater Dallas Chamber of Commerce.

"I will make policy in [New York] and Dallas will support it," Davoren, a Brooklyn native, told the Engineering News-Record, a national trade journal. "I will be staying in New York."

So what exactly does that leave for Dallas? Not so much. Only one member of Turner's nine-person management team works in Dallas. Three work in New York while the rest are scattered throughout the country. Only 180 of Turner's 6,000 employees work in Dallas. To put that number in perspective: In 2005, a company called Continental Cabinets Inc. moved to Dallas, bringing with it 500 jobs. You don't see their CEO running for mayor.

Leppert says that even with a new Manhattan CEO, Turner remains a Dallas company. Located downtown, the company performs several vital internal functions in Dallas, including IT, human resources, finances, benefits and accounting. Because of the global nature of the business, Leppert says, Turner does not have a large local workforce.

"Corporate headquarters continue to be in Dallas," he says. "The type of business—it's a very decentralized business. In the construction business you have to have people all over."

Turner, a subsidiary of a German company, is an enormous, far-flung corporation, having built some of the world's most iconic towers and sports arenas. Last fall, the company won a $615 million deal to build the new Yankee stadium. Turner is also managing the construction of the Burj Dubai in the United Arab Emirates, which will be the world's tallest tower upon completion.

With a slate of diverse projects around the world, it makes sense that Turner's operations would not be anchored entirely in Dallas. But Leppert maintains that even with a scattered workforce, Turner's had a measurable impact on the local economy. In the Dallas area, Turner is the main construction firm for a range of current and recent projects including an engineering building at Southern Methodist University, a middle school at Cedar Hill and the Stoneleigh Residences in Uptown.

But though Turner locates most of its administrative functions in Dallas, in every other way it's run out of New York. While the company's New York-based public relations department maintains that Turner is based in Dallas, its own figures suggests that's only nominally true. For example, of Turner's 180 employees in Dallas, 100 of those are construction-related jobs (which presumably would exist regardless of where Turner was located) and only 80 are corporate-related. Interestingly, when the company moved to Dallas in 1999, it created just 15 corporate jobs, according to its own press release. In contrast, in New York, Turner has 700 positions, more than 150 of which are non-construction positions—including those in the company's sales and marketing office.

You could give Leppert the benefit of the doubt if he made just one throwaway remark about how he moved Turner to Dallas. But Leppert has brought it up at just about every mayoral forum. He's talked about it to reporters and bloggers and mentioned it twice in the candidate questionnaire he turned in to The Dallas Morning News.

"When I was named chairman and CEO of Turner Construction in 1999, my first action was to relocate the $4 billion company from New York City to Dallas, the place my family now calls home," he wrote, explaining his devotion to Dallas.

Later in the questionnaire, Leppert brings up his relocation of Turner to showcase his credentials in the corporate world.

"As a major company CEO, I can interact with business leaders from every part of the world and bring a special perspective, particularly because I spearheaded the move of a multibillion-dollar company from New York City to Dallas."

Mayoral candidate Don Hill, a lawyer with no executive experience, has questioned some of Leppert's claims about Turner Construction, particularly his position that his company did a billion dollars' worth of business with minority contractors. Hill has asked Leppert to provide corroborating documentation but says he has yet to receive any. Throughout his campaign, Leppert has steadfastly refused to respond to criticisms from his rivals, avoiding so far the attack-and-defend strategies of local politics in favor of a self-promotional, positive campaign. At times, Leppert's candidacy resembles more of a book-signing tour than a run for office.

Hill says Leppert has mentioned that he moved a $4 billion company to Dallas at just about every mayoral forum as a way to insulate himself from charges that he is a latecomer to the city. Leppert moved inside Dallas city limits three and a half years ago.

"The attack from others, not me, is that he doesn't have enough connections to Dallas. So when he says that he moved the company to Dallas, it's his way of showing off those connections," Hill says. "But it's not accurate, and it's not fair, and it has to be viewed as a direct misrepresentation of the facts."

Having entered the race with no political experience and almost zero name recognition, Leppert has run for office on how he's run Turner. So far, few candidates have questioned Leppert's management expertise in part because he had an impressive record as CEO. The company, which had become stagnant in the 1990s, experienced a renaissance of sorts under Leppert's leadership, last year doing $8 billion in construction. In addition, Turner won accolades for its investment in environmentally friendly projects. Last November, Leppert was the keynote speaker at the fifth annual Greenbuild Conference in Denver where he discussed how the company has built $13 billion in energy-saving projects. "I think he is a visionary," says Matt Papenfus, a vice president at Turner Construction. "He's been the best CEO for the company."

But like any large company, Turner can't insulate itself from criticism, particularly the type that occurs in the final stages of a mayoral race. Max Wells, a former city council member and candidate for mayor, has directly attacked Leppert's management of Turner Construction, citing how it ran afoul of federal law during his tenure. In a press release last month, Wells said that Leppert needed to explain "Turner Construction's own record of troubles with the law which resulted in $6.6 million in fines for fraud and abuse of taxpayers' money."

In June 2005 with Leppert as its CEO, Turner did agree to pay that figure in a settlement with the U.S. Justice Department after the company was found to have taken credits on bonds for dozens of federal contracts without sharing them with the federal government.

But the settlement agreement signed by Leppert and Justice Department officials says that Turner's misconduct dates back to a 1997 arrangement with its bond broker. That predates Leppert's arrival as CEO. Both Leppert and his former company maintain that he did not know about the company's questionable bond credit program, even though it continued for at least a year after Leppert took over. The Justice Department's own records don't lay the blame on Leppert. But in its 2005 press release announcing the settlement agreement, the department unintentionally takes issue with another one of Leppert's assertions when it describes Turner Construction as a—wait for it—"New York, N.Y. based company."


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