Newcomer Smith's Bid to Top Cook Must Fit into CEO Schedule

Smith is a first-time candidate running on a conservative platform to lower taxes, give teachers more control in the classroom, and rollback regulations on Internet businesses.

Smith has virtually no name recognition, and only 14 days left to pull off a coup. Yet he's not campaigning full-time. in fact, he's still working on his business nearly full-time. Why? The answer, says Smith, tells something about who he is, and what voters can expect from him.

Derek Smith likes to take big risks...and when he does, he'll jump into them with both feet.

SMITH: "One season I ski patrolled at Deer Valley and our motto was 'Go big or go home.'"

Smith has been going big ever since he quit college to launch his first business. It was 1989 when Smith left Brigham Young University one quarter short of graduation, on fire with an idea that became Cambric Corporation. Cambric created a way for manufacturers to make the transition from designing products in two dimensions on paper, to designing in three dimensions on computer. It sounds simple, but it wasn't says Smith, because often the information that defined that third dimension didn't exist except in someone's head.

SMITH: "It's something that we actually used to jokingly refer to as tribal knowledge, because it hadn't been documented but a guy down on the shop floor just knew to add an extra degree of draft so he wouldn't end up with a die lock and that information, if you can get it out of his head and into software, can save tens of millions of dollars."

As he talks, Smith reveals his hands-on knowledge, using accurate terms for manufacturing equipment and processes, hinting at the hours he spent on shop floors around the world. Cambric offered a dramatic revolution in manufacturing design-and Smith's new company, iEngineer.com promises to continue that revolution. But it wasn't a smooth ride to get there. Smith's Web site tells you, he once sold his truck to make payroll.

SMITH: "What you're seeing right now is the product of 15 years of gutting it out and being right on the edge of going under several times."

The financial highwire act has surfaced as an issue in Smith's campaign. In the early to mid-1990s, taxing entities filed numerous liens for delinquent employee withholding and other taxes. Smith says, in a stalled cash, flow he chose to pay employee salaries over taxes, and the liens were his guarantee to the taxing entities:

SMITH: "We were trained to be really going the extra mile to work things out with them and really explain you know the temporary difficult situation we had and we offered to them that they could put leins on our computer equipment so they could see yeah we have every intention of making these oayments to you and this is a way of making you feel more comfortable that we'll take care of these things."

The incident is part of what fueled Derek Smith's entry into the 2nd District race.

SMITH: "I mean I vowed way back then that if I ever had the chance to try and go provide some sort of voice for the small business person in Congress, I'd like to do it."

Smith apparently didn't mention his political ambitions much. Dow Jones has been a neighbor and friend of Smith's for about 6 years, in a cozy, affluent Sandy neighborhood. Jones says neighbors were surprised when Smith filed for office. He's not a schmoozer, says Jones, in fact he seems awkward with small talk. He'd rather converse on international politics and substantive topics. Smith is inquisitive, says Jones, and a good listener.

JONES: "He's not one to stand up and say in the center spotlight, hey listen to me, watch me. Derek's very content to be part of a group, to sit back and listen, share and throw his own ideas into the ring, not always need to be the ring leader himself."

But when Derek Smith sets out to do something, by all accounts he's untiring. iEngineer.com's Chief Financial Officer Jerry McClain says the man doesn't seem to stop.

MCCLAIN: "He's very very hardworking and will put in incredible number of hours and accomplishes an awful lot in that period of time. He's worn many of us down over long, long days. I would think that periodically he must have a down day sometimes, it's just I haven't seen it.."

JONES: "He's one of the few people I know that almost needs no sleep.."

Dow Jones.

JONES: "One of the things I like about Derek is he has the ability to work all night but if it's snowing like crazy up at Alta, you know, he jumps in the truck after breakfast and will run up and catch a couple of runs and still be at work by 10 or 11 in the morning. I think that he's a real person that way."

Ambience: doorbell rings, dogs bark.....

This Saturday Derek Smith knocks on doors in a Murray neighborhood. This woman informs him she won't vote for him because he's too conservative on issues she cares about, like the environment......what about the environment, asks Smith.

WOMAN: "My liberalism or my environmentalism is going to sound extreme to you. I would like to see population control." SMITH: "Hm. Well, O.K. Thanks a lot for your time." WOMAN: "O.K."

Environment isn't one of Smith's issues, and he candidly admits it's not one he's paid much attention to. Smith is in the race to help small businesses.

SMITH: "My take on these issues is grounded on my actual experience having, trying to go through the process of creating businesses, and creating jobs and making payroll and dealing with government over-regulation. It's certainly coupled with a theoretical study of the issues but the things that I passionately want to fight for for the people of the second district have everything to do wth my personal experience."

For example, he was bored by rote memorization in school and wants education to focus on teaching children to learn. Smith wants to rollback restrictive federal health and safety regulations he says don't apply to the home-based employees of the new economy. His grandmother could now have a better income had she been able to invest some of her Social Security in the stock market, and he favors allowing that. While Smith readily identifies how his life experience leads him to policy positions, he doesn't identify what life experiences of others he may need to learn about in order to represent them.

SMITH: "It's that it's just like what Reagan said, right, he didn't get into the details, he had top-level philosophy that governed every decision-- lower government, having the government spend less, lower taxes--those are overarching beliefs that'll shape the decisions on whatever policy issues come up."

It is an odd time for Smith to--as one friend put it--hit the pause button and run for Congress. His new company, iEngineer.com, has been two years in research and development. Now, just weeks from a worldwide advertising launch, and poised to go public as soon as the stock market looks inviting, Smith is about to see all his work come to fruition. And instead he's training a new CEO to take over. Smith says it's not that he wanted to run for Congress right now. It's that right now is a critical time when decisions are being made about taxing and regulation of the new economy.

SMITH: "My feeling is, if somebody doesn't go keep this seat for Republicans, a lot of what I've tried to build in business is going to be for naught because it's going to be so regulated that the promise of the Internet won't get fulfilled and I'd hate to see that happen. Look, if everybody sat back and did what was fun, we'd never make any progress on the problems."

Smith continues to be committed to his business, working full-time through the primary campaign. His staff says he spends every spare moment between campaign duties on the phone doing business. A county aging services manager says Smith hasn't come to any of the events they've held for seniors. And, unlike many newcomers, who wear out shoes walking neighborhoods, Smith knocked on doors for two hours that recent Saturday. It raises a question about whether Smith really wants to be a candiadte. But Smith says his priorities are clear:

SMITH: "Me going around and trying to artificially create events isn't going to make any difference, I think, with the public. I think the process we're going through here--we've recruited a new CEO, and I'm in the process of doing a handoff of some of those responsibilities--shows that I am capable of making those hard decisions and you know I'm sticking by the people that I made committments to here, I wouldn't leave them high and dry and I think the voters respect that."

Smith says he's running because he's the only Republican who can hold the seat for the GOP. And polls show Smith ahead of Cook 51 percent to 20 percent even without name familiarity. But if there's one thing Utah voters have learned over the years, it's that Merrill Cook is not a man to underestimate. Smith may be transitioning his business responsibilities, but if his low-key strategy doesn't pay off, in two weeks he'll be transitioning them back, and who knows which outcome would make him happier?