Mother Jones: Bernie Moreno Says He Built His Car Dealer Empire All on His Own. The Reality Is More Complicated.

Columbus, OH –  New reporting from Mother Jones on Aug 20th, details the “much-needed handout[s],” “special favors,” and “financial assistance” Bernie Moreno received – including “a sweetheart deal on his very first Ohio dealership” – to build his network of car dealerships that made him “enormously rich.” As more details surface and complicate the image Moreno is trying to sell Ohioans as a self-made businessman, Moreno continues to be “dogged” by lawsuits for refusing to pay his employees and going so far as to deliberately destroy evidence to get out of paying them.

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Mother Jones: Bernie Moreno Says He Built His Car Dealer Empire All on His Own. The Reality Is More Complicated.
Tim Murphy
August 20, 2024

• The up-by-the-bootstraps campaign trail story belies a more complicated reality. While Moreno describes his immigrant family as “lower middle class” and said they “came here with absolutely nothing,” a New York Times report in May detailed the Morenos’ powerful political and financial connections in Colombia, where one brother runs a major construction firm and another served as president of the Inter-American Development Bank.

• …Moreno has been dogged, too, by questions about how he made his money. Earlier this year, my colleague Abby Vesoulis reported that Moreno shelled out more than $400,000 to settle a wage-theft lawsuit in Massachusetts in which “he was forced to admit to shredding overtime-­payment records.” He eventually settled more than a dozen claims of wage theft at his dealerships in the commonwealth, along with a host of other complaints from former employees…

• The South Florida case offered a glimpse of the breaks that helped Moreno climb to the top of the profession. He drew the ire of rival dealers by collecting millions of dollars in financial assistance from manufacturers to open new storefronts, and he testified that Mercedes-Benz had pulled strings to get him a sweetheart deal on his very first Ohio dealership.

• He also got a bit of help… Mercedes arranged for the owner—billionaire automotive tycoon Roger Penske—“to sell that dealership for a dramatically reduced price in exchange for Mercedes giving Penske an open point in Chandler, Arizona,” Moreno said.

• Having grown up in the Miami area, he testified that his “heart started beating” when thought about opening a new dealership nearby… [Moreno] leveraged his family connections with a nephew, who worked for the “number three guy” at the private equity giant Fortress Investments, which had recently sold the property.

• “With a little bit of his assistance,” Moreno said, he secured “really favorable lease terms.”

• In a 124-page prospectus Moreno’s Collection Auto Group submitted as part of the company’s proposal for the dealership, the company included a “Capitalization Plan” with a detailed description of Moreno’s assets at the time. “Necessary Working Capital will be funded,” Collection Auto wrote, “from profits from existing operations in Northeast Ohio…Moreno Family cash reserves, and/or liquidation of select Northeast Ohio stores as necessary.”

• To cover the costs, Moreno got a much-needed handout. A centerpiece of the case was a confidential agreement Moreno signed with Infiniti. The manufacturer offered $4.4 million in financial assistance…

• According to court records, Nissan also gave Moreno $1.25 million in assistance to open a dealership in Akron, $650,000 to open a location in Cleveland, and $3.75 million to open another dealership by that city’s airport.

• “Your honor, they keep giving this guy money,” complained John Forehand, an attorney for one of the plaintiffs, South Motors. “They aren’t giving anybody else money.”

• A 2016 report in the trade journal Automotive News, which cited Nissan’s close financial relationship with Moreno, found that the assistance “has put Nissan at odds with some dealers, especially those who have smaller lots and lack the means or stomach to invest millions of dollars. Some have surrendered their franchises; others have faced termination notices from the manufacturer, numerous dealers report.”

• Later that year, in response to the Automotive News story, four Ohio dealers sued Nissan alleging that the manufacturer had given Moreno an illegal competitive advantage by lavishing incentives on him.