Ken Bentsen Former President, ELFA

It has been two years since I began this series of interviews with Ken Bentsen regarding his role as president of the Equipment Leasing and Finance Association (ELFA). And press schedules being what they are, the association and I planned this year’s interview well in advance of the August 4 bulletin announcing Bentsen’s decision to resign his post at the association to accept an offer to lead the Washington D.C. office of the Securities Industry and Financial Markets Association (SIFMA).

In planning the contents of this issue, I had to grapple with the question of continuing as planned with a final interview with Bentsen or alternatively, do we look ahead, change course and interview Ralph Petta, the newly named interim president of the ELFA? Since these articles have been about both — a look at the association’s accomplishments for the past year and a look forward at the ELFA’s expectations for the coming year — both seemed to make sense, but neither would be complete on their own. Therefore, I was delighted when I was able to book separate times with both Bentsen and Petta to bring our readers “the whole story.” Yielding to what seemed to be the most logical approach, I spoke with Bentsen first.

As affable as ever, Bentsen shared his plans for the remaining days of summer and I began by asking him to briefly sum up the last three-and-a-half years leading the equipment leasing industry’s largest association. “Well, I’ve enjoyed it tremendously,” Bentsen begins. “It’s probably been one of the best professional experiences of my career, and it’s been a real pleasure to be part of a team that’s been able to accomplish so much in such a little period of time.” Looking back to the last 12 months, Bentsen says, “I guess the entire year has been overshadowed by what’s been happening in the general economy and in the financial markets — that’s had a very serious and direct impact on the equipment finance sector and that obviously affects the association.”

“Even so,” he quickly adds, “the industry has continued to persevere, albeit at a slower pace … well, definitely at a slower pace from prior years. But I feel good about the fact that as an association, we continue to improve the data we’re putting out and create a better understanding of the sector across the financial markets and in the financial media, which is a goal we set out to accomplish three-and-a-half years ago. In the public sector, we continue to burnish the equipment finance sector’s brand before policy makers at the state and federal levels with a good deal of success.”

In terms of accomplishments in the last year, Bentsen notes that the association was successful in getting the attention of the Federal Reserve Board and the Department of Treasury at a time it mattered most by having the sector be included in the Term Asset-Backed Securities Loan Facilities. He also notes the association’s efforts in influencing the outcome of a workable settlement with regard to SILO/LILO transactions.

As for what didn’t get accomplished or didn’t get accomplished fully, Bentsen has little regret. “There’s nothing I would really dwell on … but I guess I’d look back and ask: ‘Do I wish I had seen the rapid decline in the use of some of our products or conferences far more quickly than we did?’ Well, maybe … but frankly we did see a decline and we tried to adjust for it. Even though we were already making adjustments, the economy moved faster than we did.

“But overall, I feel good about everything we’ve set out to do. I think we set achievable goals — some may have been delayed because of the economic cycle, but in the long run, I think we are positioned well with our business.”

Ralph Petta Interim President, ELFA

With the size and scope of the association and the relatively short period of time Bentsen had to turn over the reigns to his successor, Ralph Petta, it seemed appropriate to ask Bentsen what he sees as Petta’s top three priorities in assuming the role of interim president. Bentsen says, “Ralph’s number-one priority will be the financial management of the association during this time of economic stress. It’s purely a fact that as our members feel the stress, we feel it too. Having said that, I think the next priority will be to make sure the association continues on the path that the board set out on three-and-a-half years ago. That’s a tall order during a time when you have to watch every dollar you spend and you aren’t necessarily getting the same demand for your product. But you can’t let your product slip away; and you must hold true to your commitment to your outreach by expanding your public policy apparatus communications with the media and the markets. The challenge will be finding a way to be more efficient in accomplishing all of that.

“And the third priority is going to be maintaining a close relationship with the membership … continuing to keep them engaged and also, to keep staff morale high. Ralph knows all of this … he’s been around the association a long time and he knows exactly how it works and how it should work. I’m very confident about the future with Ralph at the helm.”

Are all industry associations alike? In the end, Bentsen sees the ELFA providing vital and unique services to the equipment finance constituency it serves. “I don’t think that there’s any other organization that provides the level of service, whether it’s industry research and data, professional development, public policy support, communications or legal support, that this organization does. I think we provide the services that the vast majority of the industry can’t live without. And that’s not meant to be a criticism of the other industry associations … we have a great deal of respect for one another. We try to support one another and I hope we continue to do that.”

He continues, “But here’s the key thing, our effectiveness as an organization is conditioned on our continuing to provide those types of services in a financially efficient and timely manner while maintaining and enhancing the quality of service. The critical component here will be our ability to remain flexible and keep current with the needs of our member companies.”

I asked Bentsen to comment on his future post. He says, “This opportunity with SIMFA literally came out of the blue and there was a lot about it that made it appealing … obviously, extremely appealing.” Bentsen explains that the securities industry has always been a part of who he is.

He continues, “I was an investment banker before I went into government and, as a congressman, I spent a good deal of my time working on legislative policies pertaining to the financial markets. When this opportunity to run the Washington office and the public policy and legal apparatus for SIMFA came around, it was too good to let pass by. But I had to weigh that against leaving the team I have worked so closely with. We’ve accomplished a great deal together over the last three-and-a-half years. But if I had felt that the team hadn’t accomplished what the board had tasked us with, I wouldn’t have taken the offer seriously. As I thought about it, I realized that the team has stepped up and excelled at meeting those challenges. And none of these accomplishments would have been possible had it not been for the fact that we had a board of directors and an executive committee that had such a clear sense of what it wanted to do, to have the courage to stick to it and to be a vital part of the effort as well.”

As for the industry Bentsen leaves, he concludes by saying, “This is a great sector made up of tremendous people. It’s really an industry ‘for the ages’ because there’s a strong economic rationale for it … it’s a core ingredient to economic growth. It has been a real pleasure to work around it and be a part of it.”

In contrast to Bentsen’s three-and-a-half years with the ELFA, Ralph Petta’s involvement spans 22 years when the association was known as the American Association of Equipment Lessors (AAEL). Petta, a native of Syracuse, NY moved to the nation’s capital armed with a degree in political science. Petta recalls, “What does a kid with a poli sci degree do when he first moves to Washington? I did what everyone was doing … putting my resume around to anyone who would look at it.” In relatively short order, Petta was hired to work in the senate office of Sam Nunn of Georgia. “It was an incredible experience… I was lucky enough to get hired by an influential senator at the time. I started by doing entry level work and worked my way up to being a senior legislative assistant, handling certain legislative issues for him.”

After nine years, just as Petta began to figure out his next move, he was introduced to Michael Fleming, president of the AAEL. Fleming was in need of a new research director just at the same time Petta was contemplating a change. “It really was a change … this job wasn’t in government relations and it wasn’t transferring anything I’d learned from the Hill, but I thought it might be interesting to learn more about business and economic issues. I took the chance and here it is 22 years later.”

During that time, Petta has managed the development of the ELFA’s industry informational resources including its annual Survey of Economic Finance Activity, the Monthly Leasing & Finance Index, known as the MLFI 25, and the Industry Compensation Index. He also serves as staff liaison to several of the association’s constituent committees.

As he assumes his new role, I asked Petta to elaborate on what he looks forward to the most. “That’s a good question, and I think it is the opportunity to continue the level of commitment that the association’s board and volunteers have shown in our government relations and advocacy program over the years. When the board brought on Ken, we were really solid and we were already doing a lot for our members. But in Ken, we found someone who could take the organization to the next level … someone who could elevate the gospel of equipment leasing and finance to a level it really hadn’t been before by reaching out to the media and other trade apparatuses as well as to Congress and [both the Bush and Obama] administrations.

“But it’s clear to me that our Executive Committee wants us to continue the inroads we’ve made in the areas of public policy and advocacy. And that goes beyond the state and federal levels to include work with the accounting standards boards both nationally and internationally. And of course, there’s making sure that we are developing information and competitive-based research that provides value for our members. And, that’s near and dear to my heart since it was what I was hired to do when I joined the association in 1987. There’s no appetite at all to do anything other than to be proactive on the policy level or the research and information level.”

Petta also looks forward to the challenges presented by reconciling the association’s long tradition of providing a robust conference schedule to the realities of a changing world. He notes, “We find that we need to retool and rethink how we can change our program offerings to be more in line with the needs of our members. As a result there may not be some of the tried and true live events we’ve offered in the past.” But Petta is quick to assure that the association’s staff is hard at work to develop alternative opportunities. “The folks around here are terrific in trying to figure out what our members want and how they want it delivered.”

Such alternatives include the expansion of the association’s best practices roundtables, webinar and Web-based training offerings. “As an association, we are more committed than ever in following the direction we set out for ourselves and as the staff, we are out to implement that vision and mission into tangible programs that bring value to our members and give them a good return on their association dues.”

In the meantime, Petta says, he and the ELFA staff are tasked with keeping a vigilant eye on developments at both the state and federal levels. “That’s critical — we want to be sure, for example, that we impact a second stimulus package should it come down the pike by making sure that the industry is taken into account in any provision that might spur capital investment in equipment or in some way provide incentives for the use and acquisition of capital equipment. At the same time, we have to make sure that we stay on top of any initiatives that could come out of Washington or the state capitals that have the potential of impacting leasing and financing in a negative way.

“And that’s just a part of it — the accounting standards boards are issuing an exposure draft in the first quarter of next year on capitalizing all leases and doing away with operating leasing. That first quarter is going to be important because we’ll need to take a long, hard look at that exposure draft and figure out what it means to our members involved in FMV leasing. They are pushing to have a new standard in place and we’ve been living with the current standard since 1976 — that’s going to be a shock to our system. But however it goes, our job is to make sure this shock is minimal, that we understand the new standard, that we analyze it and communicate it to our members so they, in turn, can understand it and retool their operations as necessary.”

But Petta, like Bentsen before him, still has faith in his constituents’ ability to come out on top. “When all is said and done, this is a bunch of smart people, and they are going to figure out how to adapt and cope with anything that comes their way.”