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By Doug Stine

Steve Pearce was born in 1947 and moved to southern New Mexico with his family when he was two years old. He earned a business degree at New Mexico State University where he served as student body president and as a member of the baseball team He later earned an MBA from Eastern New Mexico University. Pearce Joined ROTC in 1967 and went on to fly missions in Vietnam and Cambodia. He earned the Distinguished Flying Cross and Air Medals for his service. He and his wife, Cynthia, bought Lea Fishing Tools, an oilfield services firm, and after struggling for a time, built it into a thriving business. He sold Lea Fishing Tools in 2003, which made him a multi-millionaire, although there was some controversy over the reporting of the proceeds. He served from 1997 to 2000 in the New Mexico State House of Representatives and ran for United States Senate in 2000 but lost by a wide margin in the Republican primary to former third district Congressman Bill Redmond. In 2002, he took long-time congress-man Joe Skeens’ seat in the U.S. House and has served ever since. Pearce has close ties to the oil and gas industry. He’s been criticized for being anti-environmental and for supporting oil drilling in the Arctic National Wildlife Refuge (ANWAR ) and Otero Mesa. Some think he’s too conservative to win a statewide election.

Wearing a standard issue, navy-blue suit and red-striped tie, U.S. Representative Steve Pearce rambles at times but rarely stumbles. He doesn’t mind talking about the family business or his four trips to Iraq. His speech is injected with slight drawl that makes him seem more approachable.

Pearce looks surprised when we say that many people think he’s the most conservative candidate in the race for U.S. Senator from New Mexico. “I’d say that, too,” he readily agrees.

After all, that’s who Steve Pearce is. According to the Washington Post Web site, he has voted with the majority of his Republican colleagues 93% of the time.

He believes voters are drawn to him because of his straightforward style—they know where he stands.

He knows something about building a business. He talks about buying a business with his wife, Cynthia, 20 years ago and stumbling into an industry he knew virtually nothing about.(Lea Fishing Tools, Inc., an oil services company, which has since been sold). They struggled for a time but eventually were successful. Now his net worth is estimated at more than $20 million, making him one of the top 20 wealthiest members of Congress, according to The Center for Responsive Politics, a nonpartisan, nonprofit research group based in Washington, D.C.

The top-three industries fueling his campaign war chest are oil and gas, retirees and dairy. He believes the North American Free Trade Agreement (NAFTA) is good, embryonic stem-cell research is bad. He supports drilling in the Arctic National Wildlife Refuge (ANWR) and New Mexico’s Otero Mesa and believes that nuclear power has been stalled for too long in the U.S to become viable, at least in the near future. He supports No Child Left Behind (NCLB) but thinks it’s only a first step in overhauling a failing education system.

He’s figured out a way to bring businesses together in the state and relishes the idea of helping create jobs, especially in rural areas. He thinks through the issues, separates them into their parts and analyzes the parts. His beliefs seem deeply rooted and explainable.

We caught up with him at the Hotel Albuquerque in late April.

We started out by asking what he’d learned the last time he ran for Senate in 2000 against U.S. Rep. Bill Redmond (Pearce lost in the primary).

the primary). “The polls are significantly better this time,” Pearce laughs. “New Mexico is a large state. We’re still flying ourselves (Pearce is a pilot and flys himself around the state in a small turboprop.), the same as we did then. Iraq was not on the radar screen then. Still, people wonder about the future, and they wonder about the national economy and New Mexico’s economy, and they try to hold their careers together. You have a kind of anxiety in America right now. Never has homeown-ership been as high, never has our income been as high, and yet we are all very anxious.”

Pearce seems to revel in helping businesses and creating jobs. He cites the $1.5 billion worth of investments in Lea County in support of nuclear enrichment. He talks about Spaceport America in Sierra County and NASCAR coming into Truth or Consequences.

Consequences. He believes that New Mexico’s economy is doing pretty well. “Right now, the housing problems across the nation aren’t occurring here because there is a demand for loans. Even if you have a loan that you can’t service, there’s somebody that will buy that house from you. So the great collapse that we’ve seen on the coasts caused by the speculation is not visible here as much. There’s some foreclosure but not much. Our banks were working well within the lending parameters that are standard and didn’t get out into the risky mortgage stuff. So, all in all, New Mexico’s pretty sound.”

We asked him what it was like to start his own business.

“It wasn’t the stupidest thing I’d ever done, but we bought a business that I didn’t know anything about. I just saw the opportunity, looked at it on the numbers, looked at it as a conceptual framework. We had the same problem as any business has: cash flow. We anticipated losses. We had a line of credit for six months worth of losses. As in any business, revenue generation is key, so we got out and started making sales and realized that we were up against some of the toughest competition in the oil industry.

“We gradually were able to turn the corner but then faced the problem of growth. More companies will go broke during growth than will go broke in hard times. In hard times, you can contract your expenses, but when you’re growing, you tend to get too much leverage and don’t have enough cash flow. And when the least little downturn occurs, you can’t hold it.

“When oil fell from $20 to $6 in 1998, our revenue fell by 80 percent. Our competitors laid off 68 percent of the work force and gave 30 percent pay cuts to everyone. My wife and I sat down at the dining room table and said, ‘We’ve asked each one of these people to come work for us and give up their careers somewhere else. We cannot cut ‘em lose and watch ‘em lose their houses.’ And so we committed to them.

“So though there wasn’t much work, they came and did their jobs everyday. We thought it would last maybe two or three months. We told them we’d give them 45 days notice before we had to do anything drastic. Eleven months later, the market for oil jumped back to $22, and we had the only team in town.

“We still look back upon those days as one of the most important times in our life because you really have to choose your values when the chips are hard against you, and I think we chose people, and it was the right choice.”

Pearce believes in growing business from within and admits that he occasionally raises the hackles of those involved in economic development who bring companies from outside New Mexico. “Growing companies from inside is easier than bringing companies from outside. The ability to connect the dots is the most important thing that we bring. I love to create jobs. I love doing it.

“When I saw that the publication (The New Mexico Business Journal) was closing, I told Brian (Phillips), my press secretary, ‘It’s not a good deal. Somebody local should be picking it up and investing in it.’ So I really appreciate what you’re doing.”

Pearce believes that a strong manufacturing base remains the key to a successful economy. “We need to aggressively be pulling manufacturing back into the country and giving incentives to manufacturers—that’s what we let get away. When you manufacture, you bring wealth back into the country.

“Was NAFTA a good idea or a bad idea?” we ask.

“Good idea,” he shoots back. “Overall, we’ve gotten more net benefit from NAFTA. I’ve got a lot of friends in the farming community that get a little anxious when I say that.

“We have to compete. The problem with our trade is not free trade but fair trade. There’s a guy who manufactures glass Christmas tree ornaments down in Roswell. He’s the last one in the world competing against the Chinese in that business. The government in China doesn’t even require companies to repay loans. And they manipulate their currency.

I’ve really been hammering on the valuation of their currency.” Pearce has strong feelings about the No Child Left Behind legislation, too. “We need drastic educational reform and unfortunately politically, NCLB is probably the only reform we’re going to see. In other words, if we let NCLB lapse, then we won’t have the political tools to pull both parties together.

“NCLB is working in some ways. I’ve been in the schools in New Mexico. I’ve seen a 27-point increase in math and 28-point increase in reading in one year. In that same school, the Adequate Yearly Progress (AYP) will show you that the kids with free and reduced school lunches—the poor kids—have 50-point increases. So we are beginning to see really strong effects. But the system is bro-ken pretty badly, and there are a lot of excuses.

“We can’t compete with China anymore. We can’t compete with India. Our educational system must be repaired. NCLB is a modest step, but we need so much more science, engineering, technology and math.”

According to interviews with local teachers, one of the most frustrating effects of NCLB is teachers having to teach to the tests. On this, Pearce says, “Math is math. You can do it on the back of a pad, or you can do it on a test. Either you can read or you can’t read. Without those two core skills, we have a very difficult economic future ahead of us as a nation.

“In this state, we have a great work force. People like to come here, but they don’t want to bring their kids and put them in our school system. That’s one of the many reasons we don’t get more growth.

“We have to contend with drugs, we have to contend with gangs. We have a lot of problems here in New Mexico that we can do better on.”

Switching the subject, we asked about his four trips to Iraq and how his impression changed over time.

“I went to Iraq the first time on Oct. 31 of 2003. We were in Abu Graib on Halloween.” Pearce laughs. “At that time, we were able to travel pretty freely through Baghdad and through the country. We went to Kirkuk and to Tikrit and mostly the northern regions. After that point, it became more unstable. I think that Sanchez and Bremmer weren’t right on target with what they were trying to do.

“The last time I went to Iraq was September 2007. We actually drove through the business district of Baghdad. You see people voting with their feet that it’s safer. That’s a pretty big change.

“You see the parliament that is passing two or three of the laws that have been considered benchmarks by a lot of people in the world. They’re actually picking up a larger share of their financial burden, both for the war and for their own government using the oil revenues. And that’s good.

“Infrastructure had been allowed to run down, so you see a little bit more dependable water, electricity and telephones, which creates a better climate for business.

“There’s a drop in ethnic violence. You see the ability of the Iraqi congress to work together. So you see very positive things. But it’s a generational conflict. It’s going to be like Ireland and England. The generation that wants to blow up things and cause instability in the world is going to have to die off. We may be finished in Iraq, but we’ll be fighting that fight the rest of my kids’ generation.

“The stakes are very high. We were in Egypt on New Year’s Day, and they said that if the U.S. leaves Iraq precipitously, not only will Iraq fall, but so will Israel and so will Egypt, Saudi Arabia, Kuwait, Jordan, the UAE—the 50 most moderate states will all fall to the radical Islamists. And so, they’re scared to death right now.

They’ve got these very brutal, internal jihadists that want to overthrow their country as well as annihilate us. The world is in very difficult circumstances right now.” We asked the congressman if he was optimistic about U.S. prospects in Iraq.

“I’m optimistic, as long as the U.S. public understands the stakes. The only thing that could happen is we could lose heart for the fight. When we pull out, we allow that entire region to become unstable.

We’ve been in worldwide negotiation since 1972 when the Israeli athletes were killed at the Olympics (by terrorists). And so, we’ve had this period of negotiation, and look where it’s gotten us. They’re not satisfied with negotiation; they want world domination—a worldwide caliphate. Go on their Web sites, and they’ll tell you that.

We moved from Iraq to the topic of oil and the energy. I asked him what his philosophy was in regards to the energy crisis.

“We may want renewable energy, but we cannot shut off oil and gas right now. That’s the reason the price of gas is escalating. If you look at a demand curve for worldwide petroleum, China is driving the worldwide price. China’s demand underlines almost exactly the changes in the price of oil over the last 10 years.

“So we either need to produce more oil or understand that we’re going to be paying more for it. It’s a supply and demand problem. But we’re acting in exactly the wrong way. In December of last year, Nancy Pelosi was about to put shale oil off-limits. That’s two trillion barrels of shale oil.

“There have been repeated rebuffs against attempting to drill in the ANWR and the outer-continental shelf. We’re allowing the Chinese to drill 47 miles off Florida but won’t even allow ourselves to drill 47 miles from Florida. In fact, we can’t even drill 150 miles off the coast of Florida.

We are doing exactly the wrong things on energy policy.

“If we had the absolute commitment to start a nuclear reactor today, it would be 35 years before it gets online. Fifteen years of regulation, 20 to build. And that’s 20 to build it if we have the human capital, if we’ve the human capability. But right now, everyone who was in the nuclear industry is my age, because we haven’t permitted a new nuclear power plant in 30 years.

“The San Francisco wing of the Democratic Party says no to oil, no to coal, no to nuclear, no to almost anything. Even the American Wind Energy Association (AEWA) last year came out opposed to the Nancy Pelosi energy plan because it was killing the wind energy opportunities. If we’re not going to use any source to make energy, how are we going to run the economy? And nobody in leadership right now seems to be asking that question. Nobody in the House or Senate. And so, we’re making very foolish choices. The choice to convert coal to ethanol is a very bad choice, a very bad policy.”

Steve Pearce is known as the most conservative of New Mexico’s candidates. We asked him how his conservative values played in the rest of New Mexico.

“My strength is my transparency—the fact that I go straight out to the people. I do these telephone town hall meetings for two hours, go on the Jim Villanucci show and take questions for an hour. People really like that accessibility.

“I speak pretty directly. I tell them where I stand. Liberals often say, ‘We don’t agree with you, but we’ll vote for you because you are who you say you are. You actually vote the way you say you’re going to vote. And we like that. We don’t agree with you on the issues.’

“Up north, they like the fact that we’ve helped create jobs down south. They ask, ‘Will you come up here and do the same things you’ve done down there?’ I say, ‘I can’t take full responsibility for the things that have happened in the south, but yes, I will have the same passion for creating jobs in small areas.

“So yes, we must have this distributed economy, so people can make a living out in the rural parts of the state.”

We wondered about his stance on embryonic stem-cell research, since it has been widely publicized in the media that unused embryonic stem cells are destroyed.

“You’ve got three kinds of stem cells. The cord blood is fine, and the adult stem cells are fine, but if it’s going to take a life, then I’m opposed to it because we really must consider the ethical considerations of the life issue. And that’s a very significant piece. Cloning follows right along the same line. There are bills that say that you can clone and kill and then experiment. I find those things harmful to us as a culture.

When asked about health care, Pearce likes to break health insurance and health care into separate issues. He supports lowering the costs for younger people through Health Savings Acoounts (HSAs) as well as association health plans where small businesses can group together and buy health care.

“What’s happening in health insurance is younger families are bailing out because the cost is too high. And the cost is too high because of the cost of medicine,” he insists.

“Insurance companies’ revenue is affected when young people get out. So we need to find a way to get them back in. And that way is to lower the costs for them.

“We passed the health savings account, which is really a medical IRA that you can put money into, but you can use it at any age. So if you have a savings account that you can take the money out and use pre-tax money to pay for your premium (about 30 percent lowering of costs), then you can use it to pay for your deductible, and again, that’s pre-tax money. So that’s pretty big. It still does not get the traction out of the market that we need. But it’s really catching hold, and we’re seeing dramatic growth. But the Democrats are trying to kill it because they know that it’s a solution that’s happening.

“We’re putting the patient back in charge of their insurance money and stopping the idea of the insurance payment going straight to the doctor.

“On the cost of health care itself, litigation is a high driver of cost. “Each one of us pays a cost for doctors to protect themselves against litigation, So stopping frivolous lawsuits is key. Then there’s the problem of overprescription by doctors fearful of things happening down the road. And finally, more investment in science and research.” Pearce cites the fact that Republicans increased spending at the National Institutes of Health (NIH) by more than double, from $13 to $29 billion in a five-year period. “Research would let us start managing diseases, not just treating them after they happen.

“We need to have healthier lifestyles. My wife and I offered free physicals at our company. When people started measuring every week, they started losing weight, some quit smoking, some lowered the amount of alcohol because they could see their blood pressure going up.

“Preventive medicine is very important long term. We were able to turn that around a little bit in the Medicare prescription drug bill. Medicare for the first time could get physicals and for the first time ever could get medication. As Medicare does, private insurance tends to lean that the same way. We should give private insurance incentive toward catching the diseases before they become catastrophic. So those two elements. Once again, you probably have 17 or 18 different elements that you could unravel on each but that gives you a good idea of the complexity.

We feel comfortable that our message is one that New Mexican’s like. A good business philosophy, socially conservative, fiscally conservative, strong on national defense, fix illegal immigration, no amnesty. It’s pretty simple.

“I’m who I say I am. I believe it’s a disservice when we as elected officials beat around the bush and tiptoe around the issues. Let me just tell you where I stand, and I’ll also recognize the validity of your viewpoints.

“On some things, there is obviously no middle ground. But on almost everything, there’s great middle ground between conservative views and liberal views. So I’m going to tell you who I am and then try to work it as far in your direction as I can in order to make it work. We need to start bringing the country back together instead of this deep divisive partisan tuff that we have.

“And that’s the value of having a Republican in a Democratic seat. I can’t survive by speaking strict political stuff. I almost never use the words Democrat and Republican. I talk about the future of the country. I talk about our hopes, our dreams. I talk about liberal and talk about conservative. I talk about my values.”

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