PhillyDeals: Former Pa. pol takes his prowess into bond business

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Mike Gerber (left) with Michael Forman, his new boss at Franklin Square Capital Partners.

With November's vote days away, those Americans suspected of still having capital to invest in the politicians of their choice are getting hammered with last-minute fund-raising appeals.

State Rep. Mike Gerber (D., Montgomery), a past leader of the Pennsylvania statehouse Democrats' finance committee, can relate as he prepares to leave politics for a job in the private sector.

"It's hard, grueling work raising money," Gerber told me last week in the board room of his new office at Michael Forman's $6 billion-asset Franklin Square Capital Partners at Cira Centre, after fielding a call from a suburban colleague in a tough race.

"It's not glamorous. You sit in a room for eight hours, banging out calls. You start with family and friends. You branch out to wider circles. You end up raising money from people you never met, who have an interest.

"A lot of people have a hard time forcing themselves to do it. It's like preseason football. It takes discipline. It hurts."

Politics was part of Gerber's family, though as a kid he was more interested in football, as quarterback at Germantown Academy and backup safety for Penn. His father, Richard, and grandfather, Morris, were Democratic National Committee members; the turnpike interchange at Plymouth Meeting is named for them. His mother, Penny, is vice chairwoman of the Pennsylvania party. The man later known as Gov. Ed Rendell was "Uncle Ed," who joined the Gerbers at Palestra basketball games, where the men "screamed like maniacs at the refs."

Those relationships, the fund-raising, and "seven-day, 12-hour" work weeks helped Gerber gain unusual influence for a junior member in his four two-year terms in Harrisburg. He expects to find his campaign-finance, negotiation and constituent-serving skills transferable - and lucrative - at Franklin Square, which sells junk-bond and energy-partnership funds to investors hoping for better yields than today's weak corporate bond rates. It's like public service, Gerber says: "We are democratizing investments that didn't used to be available to mainstream investors."

Gerber, a lawyer at the former Wolf Block and at Drinker Biddle & Reath before he went into politics, "will do our political and government relations," Forman said. "And he'll help the management team build our culture" for 130 workers, a staff Forman expects will double as Franklin Square adds clients. Gerber will also build the firm's charitable profile.

Forman, an ex-partner at Klehr Harrison Harvey Branzburg, first noticed Gerber when the younger lawyer served as legal counsel to Rendell's 2002 transition team. Later, after then-Rep. Gerber was named to represent his caucus on the board of the underfunded Pennsylvania State Employees' Retirement System, Forman recruited Gerber for the board of one of his Franklin Square funds. (There's no conflict, Forman says; he doesn't manage state money, unlike his Cira Centre neighbor, real estate and buyout mogul Ira Lubert.) That helped make Gerber a natural hire for Forman.

If Gerber "loved" public service, I asked, why leave? He pauses. He doesn't want to seem to be complaining about the $80,000 state rep's salary - as he notes, it's close to double the state's median income.

But with three preteen children, his wife back in nursing school, and knowing his Villanova Law School peers who made partner at big city law firms were pulling down "$600 or $700 grand a year," he felt that, "with my earning potential, with my aspirations for my family, staying in public service would have been selfish."

Plus, it wasn't as much fun, with Rendell gone and Republicans running everything. No more liaising with the chief executive in the big stone office, where the governor would munch Purim pastries, pore over bills in his round reading glasses, curse and threaten and compromise. "I don't have a texting relationship with Gov. Corbett like I did with Gov. Rendell," Gerber told me. "It's a frustration, watching others govern from the sidelines."

Well, somebody's got to do it. Gerber is left with the consolation of having worked across the aisle with Sen. Stewart Greenleaf (R., Bucks) to pass tobacco restrictions, and with House Republican leader Mike Turzai (R., Allegheny) on school menus and streamlining corporate taxes; with Rendell on open-space and biodiesel subsidies; and with Dwight Evans (D., Phila.) and a group of "real Profiles in Courage" suburban Democrats on career-threatening tax-hike struggles in a forlorn battle to shield social programs from budget cuts.

The investment business "is a big change for Mike," said Forman. "He had a promising political career. His colleagues, his constituents relied on him. He built a lot of trust, which is portable to what we do. If you can succeed in Harrisburg, you can probably succeed in business."


Contact Joseph N. DiStefano at 215-854-5194, JoeD@phillynews.com or @PhillyJoeD on Twitter.