Will Internet voters choose the next presidential candidates?

Posted Jan. 08, 2012, at 7:32 a.m.
Peter Ackerman (second from left), the former Michael Milken lieutenant, is spending millions of dollars to put an Internet-nominated third-party presidential candidate on the ballot.
Brian Finke | Bloomberg Markets
Peter Ackerman (second from left), the former Michael Milken lieutenant, is spending millions of dollars to put an Internet-nominated third-party presidential candidate on the ballot.

NEW YORK — It’s just after 8 a.m. on Nov. 11, and Peter Ackerman is staring at red numbers flashing on an electronic board. He sees 2,008,069.

“That’s 2 million Americans who have signed on to having another candidate on the presidential ballot,” he says, beaming, in the Manhattan offices of the marketing agency for Americans Elect, the group he’s backing with more than $5 million.

Ackerman, 65, who made more than $300 million working alongside Michael Milken at Drexel Burnham Lambert’s Beverly Hills, Calif., offices in the 1980s, is Americans Elect’s chairman and top donor. He wants to circumvent politics-as-usual by letting voters choose a presidential candidate via the Internet who, with a running mate from a different political party, will appear on every state ballot for the 2012 election.

Americans Elect is the latest manifestation of Ackerman’s passion for grass-roots democracy — an interest that has divided his attention during his career as a financier. At Drexel, he raised billions of dollars for junk-bond-fueled takeovers in the 1980s. He helped secure $5 billion for Kohlberg Kravis Roberts’ $31.3 billion buyout of RJR Nabisco Inc., the deal immortalized in “Barbarians at the Gate.”

Today, he’s the majority shareholder of FreshDirect Holdings, a Web-based grocer operating around New York. Former FreshDirect Chief Executive Officer Rick Braddock says he saw another side of Ackerman in 2011 when Ackerman promoted a nephew as CEO after summarily ousting Braddock and three directors.

Ackerman embraces the idea that nonviolent resistance works better than armed conflict to effect political change — a concept gaining ground around the world. “The whole idea of nonviolent conflict is to get elements inside the authoritarian regime to defect,” he says.

Ackerman, who has co-written two books on nonviolent resistance, formed the Washington-based International Center on Non-violent Conflict in 2002. In 2005, he co-wrote a study showing that non-violent action had been instrumental in 50 of 67 transitions to democracy since 1972, including in Chile, the Philippines and Poland. “When he’s passionate about something, he’s unstoppable,” says Mark Palmer, a former U.S. ambassador to Hungary.

With Americans Elect, Ackerman wants to reduce the partisanship that he says makes U.S. politics dysfunctional. The group gained its first candidate on Nov. 30: former Louisiana governor Buddy Roemer, a Republican.

“The American people are far more moderate than the two parties,” Ackerman says during a rare media interview at LBi International. “There is a strong sense of disenfranchisement.”

A third-party victory is highly unlikely, says John Sides, a political science professor at George Washington University. “The idea that there are wealthy centrists who for the common good are prepared to enter the race is very romantic, like angels sent from heaven,” Sides says.

Americans Elect’s rules call for a ticket where the presidential candidate picks a vice president from a different party. Any registered voter who signs up on the group’s website becomes a delegate who can draft candidates, submit questions and vote in Americans Elect’s online primaries.

Americans Elect must meet state requirements for signatures from registered voters to get a candidate on the ballot. As of early January, the group, aided by Peter’s son, Chief Operating Officer Elliot Ackerman, had ballot slots in 13 states, including California. It hasn’t yet secured a place on the presidential ballot in Iowa, where Republicans held caucuses on Jan. 3.

Americans Elect is not fully transparent with the American people, says Fred Wertheimer, president of Democracy 21, a Washington campaign finance advocacy group. Americans Elect changed its tax designation to be a 501(c)(4) group, named for a section of the federal tax code, meaning it’s a social welfare organization that doesn’t have to divulge donor identities.

“The idea that a political party, whose sole purpose is to nominate and elect candidates for office, can also be a social welfare organization for tax purposes is an oxymoron,” Wertheimer says.

The status change gives donors the anonymity they want, says Kahlil Byrd, Americans Elect’s chief executive officer.

As the nation heads toward November elections, doubters point to Americans Elect’s obstacles, among them the dismal record for third-party candidates. Another hurdle may be Ackerman’s own inability to show he’s as democratic and transparent in business as he expects the rest of the world to be in politics.

At FreshDirect, Ackerman has shown an autocratic side, former CEO Braddock says. Braddock sued the company in July, accusing Ackerman of breach of fiduciary duty. He says Ackerman has refused to pay him severance, unfreeze his $6.5 million investment or even talk of settlement.

Braddock says he was surprised by a Feb. 6, 2011, phone call in which Ackerman complained that Braddock had changed a board meeting date without consulting him. Three weeks later, Ackerman fired three independent directors. Two days after that, Braddock says the winnowed board told him to leave the company. Jason Ackerman became CEO two months later.

FreshDirect’s shareholder agreement allows Ackerman to appoint and fire directors, says his lawyer, Thomas Richardson at Arnold & Porter. Ackerman says the board had already agreed in January to seek a new CEO and he was exercising his right as majority shareholder to dismiss directors.

“They were independent in terms of view,” Ackerman says of the three he fired. “But they served because I had a right to pick them and a right to unpick them.”

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