“Billionaire” Buying Up Newport — PART III: After NY Failure, Schorsch Makes Political Friends in RI
GoLocalProv News Team
“Billionaire” Buying Up Newport — PART III: After NY Failure, Schorsch Makes Political Friends in RI
Schorsch was forced to give up control of many of the interrelated web of commercial real estate companies.
Now living in Newport, Rhode Island, he is becoming a major political and business factor.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTIn 2016, a feature story titled “How Nick Schorsch Lost His Mojo” was published in Investment News. It was a devastating piece that raised questions about his management, business ethics, and transparency.
The article ended with, “What separates Nick from his predecessors is the rapidity of the composition of his empire and the haste of which it all went bad,” John Rooney of Commonwealth said. “That usually plays out over a decade. With Nick, it unwound as fast as it sprang up.”
Schorsch needed a new place to call home — he relocated to his summer home in Newport.
He has ingratiated himself with significant campaign donations, a well-compensated board slot for an influential state legislator, Lou DiPalma, and the offer of another board position to the former president and now chancellor of Salve Regina, Sister M. Therese Antone.
Antone was a board member appointed to serve on Schorsch’s failed attempt to create a $200 million SPAC — a so-called blank check company.
All the while, he went on a buying spree of local businesses, creating a new web of companies focused on hospitality in Newport.
Now, Schorsch and his family are all full-time Newport residents.
Schorsch bought one of Newport’s great mansions in 2012 when times were high-flying on Wall Street, but things began to unravel in 2014.
In 2015, while facing the ire of the United States Securities and Exchange Commission (SEC), he filed for non-profit status for the auto museum in Rhode Island, according to Rhode Island corporation documents.
The Audrain Automobile Museum was founded as a Delaware Corporation “to operate a museum devoted to the appreciation of historical, classical, collectible and modern cars. The organization aims that by telling the stories of automobiles, it tells the story of our culture, country, families and selves.”
The board is dominated by Schorsch, family members, and business associates, who are tied to his controversial real estate interests. Both Nicholas Schorsch’s wife, Shelley Schorsch, and his son, Nicholas Jr., serve on the board.
Schorsch told GoLocal that he has a long legacy of coming to Newport going back to when he was a child.
He says other wealthy Newporters enjoy the summer but are not committed to the community.
“There's a lot of Newporters born here that have chosen for tax reasons and other reasons to live elsewhere and come here a lot and that doesn't and that makes them you know ex-pats really,” said Schorsch in an interview with GoLocal.
As part of Schorsch’s strategy to build strong relationships in Newport, he has used his checkbook to pour tens of thousands of dollars into the campaign coffers of politicos in Rhode Island.
Previous to his relocation to Newport full-time, Schorsch was not a major political donor and generally split his donations between Republicans and Democrats.
Schorsch made donations to then-Pennsylvania Governor Ed Rendell, a close Schorsch ally when Schorsch ran his scrap metal company and in the early days of his real estate companies. In the early 2000s, Schorsch made three payments to Rendell’s political committees totaling $55,000.
Rendell refused to be interviewed for this series by GoLocal.
A 2018 report in the Philadelphia Inquirer outlined the relationship between Schorsch and Rendell.
“Schorsch, once described admiringly by his friend and fellow board member Ed Rendell, a former Pennsylvania Governor and Democratic National Committee chairman, as a "riverboat gambler," left the company after the fraud was disclosed,” wrote the Inquirer.
Schorsch also gave to Republicans, including then-U.S. Senator and now-Governor Mike DeWine of Ohio ($1,900) and then-U.S. Senator Rick Santorum of Pennsylvania ($1,000), both staunch conservatives.
He also wrote a check for the Bush-Cheney ticket in 2003 for $1,500
However, political donations have increased in Rhode Island in just the past few years.
Schorsch has now become a major political donor in the state.
In less than four years, he and his close family members have pumped more than $100,000 into the campaign accounts of top candidates — all Democrats.
According to campaign finance reports, Schorsch and his immediate family have poured tens of thousands into the coffers of the campaign accounts of now-U.S. Congressman Seth Magaziner.
Schorsch, his wife Shelley, their children and their spouses have donated via state campaign donations, federal donations, and independent expenditures for a total of $32,600 to Magaziner.
The list of donors includes Schorsch’s son-in-law, Brendan O’Donnell — who is also a business partner with Schorsch in the failed SPAC as well as in many of the companies Schorsh has founded in Rhode Island.
Of the $32,600 to Magaziner, $12,500 was donated by Schorsch to the pro-Magaziner independent expenditure called Bright Future Rhode Island.
GoLocal asked the Treasurer of Bright Future Rhode Island, political veteran Paul Tencher, about the criteria for the fund. He said it was primarily a union PAC.
When asked if Bright Future Rhode Island was aware of Schorsch’s previous OSHA fines, environmental issues, and SEC enforcement actions against Schorsch and his companies, Tencher said repeatedly, “We disclosed all our donors; we were transparent.” He refused to comment on Schorsch’s record in business.
GoLocal asked Magaziner if he had concerns about Schorsch's business record, and the Congressman did not respond.
Another significant beneficiary of Schorsch family donations is former CVS President and gubernatorial candidate Helena Foulkes. She is the recipient of $6,000 from the Schorschs.
Foulkes has been a big player in retail in America, and Schorsch’s Wall Street company — American Realty Capital Properties, which he was forced to resign from due to accounting issues, lawsuits, and SEC enforcement action — was a major real estate player.
According to SEC filings by Schorsch companies at the time in which Foulkes was a senior officer of CVS, it had tens of millions of dollars in revenue generated by leasing properties to CVS.
Foulkes repeatedly refused to answer questions about her relationship with the Schorsch family.
After Foulkes’ tenure at CVS, she became CEO of Hudson’s Bay Company, a Canadian-based retailer that owned major American retailers like Saks 5th Avenue and Neiman Marcus. And, Foulkes, after receiving a massive payoff to step down at Hudson’s, joined the board of Home Depot and today serves on the board of COSTCO.
One recipient of Schorsch financial support, who is donating the monies to non-profits is Newport Mayor Xaykham "Xay" Rexford Khamsyvoravong. When GoLocal interviewed him for this series in May, the Mayor was very complimentary of Schorsch, and said he appreciated his financial support.
When Xay was asked about Schorsch’s game plan as being a major donor, the Mayor said, “The reality of running these campaigns is it takes the resources to effectively communicate with voters, and I think that and members of our community like Nick understand the necessity of the resources so candidates can afford to communicate.”
“It is clear he is engaged on the political front of our community, and I have never received an ask from him other than an offer to help support community initiatives,” said the Mayor.
In April, one of Schorsch's Newport corporations won an important contract with the City of Newport.
Schorsch's firm announced in a national press release, "1899, LLC (now doing business as The Heritage Restaurant Group) is pleased to announce that at tonight's Newport City Council meeting, 1899 was awarded the concessions contract for the 2024 summer season at Easton's Beach. 1899 is a robust, multifaceted restaurant and hospitality company currently overseeing and supporting three brick-and-mortar restaurants in the City of Newport, a fleet of mobile food trucks and mobile food carts, and a state-of-the-art mobile food kitchen."
(In PART IV of this series, GoLocal looks at the plethora of companies Schorsch has created in Newport.)
This week, the Mayor wrote in an email to GoLocal, “I noted that your piece regarding Audrain's donations is forthcoming and wanted to flag some facts that aren't yet on your radar because my latest campaign finance report has not yet been filed.”
“This past quarter, the Audrain organization became a significant vendor to the City of Newport after winning a competitive bid for beach concessions. Because of their increased involvement with the City as a significant vendor, I conducted a review of prior campaign contributions I'd received from individuals associated with Audrain, and donated those funds to community non-profits,” said the Mayor.
“I identified contributions from 2023 totaling $2,500 and donated those funds to the following community organizations, which will be reflected on my Q2 campaign finance report as "Donation of contributions received in November 2023 from individuals employed by Bellevue Capital, Newport Craft or Metropolitan Wealth Management."
According to the Mayor, he is making the following donations:
$1,000 to the Martin Luther King Center
$500 to Newport Pride
$500 to Friends of Newport Skate Park
$500 to the Rose Island Lighthouse Foundation
The Schorsch wealth is now a significant factor in Rhode Island Democratic political circles.
COMING NEXT: PART IV - Buying Newport