- Photos by Emanuel Wallace
- Bernie Moreno on Public Square.
One of the few things Bernie Moreno remembers from college is a story about the smartest guy in the world.
"It's not me, by the way," he tells Scene. "I'm certainly not the smartest guy in the world. Not even close."
It might have been a study, Bernie thinks, or maybe just a parable his psychology professor hatched on the spot to illustrate a point. The gist was the smartest guy in the world, alone in a booth, competes in a trivia contest against a stadium full of people plucked at random from the University of Michigan.
"Who wins?" Bernie asks. "The smartest guy in the world, or the stadium?"
"The stadium, of course," we reply.
"But that's the smartest guy in the world."
We chuckle, stand pat. "Yeah, but—"
"It's the stadium."
* * *
It was June 6, 2018 — two days before attorney Jon Pinney's "Dead Last" speech at the City Club, around which too much Cleveland news thereafter seemed to orbit — when a story published online brought Bernie Moreno's Blockland initiative to the city's notice. Bernie wanted to make Cleveland the "national epicenter for all things blockchain," he said. And he wanted it with a hot eagerness that would have been embarrassing if it weren't so typical of Cleveland's elite desires.
He had already poured a "humongous amount" of his own money into the effort, he said, and would continue to do so. More importantly, he was lobbying, making phone calls to legislators and rapping his knuckles on the lintels and oaken office doors of any executive or public official or "super smart person" who would listen to his pitch.
Bernie's expectation, as a luxury car dealer and very wealthy man, is that his dollars, if not necessarily his ideas, produce results he gets to dictate. Even when he has made significant donations, as in a $500,000 gift to Tri-C, or $1.3 million in two separate gifts to Cleveland State University, where he recently completed a two-year term as chairman of the board and where a Center for Sales Excellence now bears his name, he's in the habit of attaching strings. The Tri-C gift was to fund scholarships for Hispanic students, for example. (Bernie is Colombian.) But if any recipient failed to graduate, Tri-C would have to pay the scholarship money back into the pot.
"It had to be on my terms," Bernie says. "[Former Tri-C president] Jerry Sue Thornton didn't take that deal for three years."
Bernie self-identifies, often, as a capitalist and a conservative. Through those lenses, it's easy to interpret virtually all of his financial activity, including his charity, as investments of one kind or another. Some are explicit: He was one of five local investors who participated in Chain Reaction in Old Brooklyn this year, the local followup to CNBC's LeBron James-produced Cleveland Hustles in Detroit-Shoreway, which paired investors with aspiring neighborhood businesses. Others are more indirect. He says he has a policy to pay all his employees $15 per hour, or the equivalent. For those making less — receptionists making $12 per hour, for example — the remainder is invested in a "scholarship fund" for their own education.
So when he chartered a private jet to Toronto in June to expose a handful of the region's topmost academic and nonprofit executives to blockchain research, it was clear he was buying something: not just their time and attention, but their assent. Bernie is candid, in fact verbose, on the topic of Cleveland's old-school leadership culture and the enormous effort required to get the region's risk-averse executives on board with new ideas.
But now he has momentum on his side, and he knows it. After the private jet, a full battery of volunteers from the region's top corporations, foundations and law firms leaped at Blockland. They'd been hunting for a "moonshot," a grand idea to rejuvenate the city's economy, and Bernie had one ready-made. He was a unique specimen among Cleveland leaders because he wasn't just talking. He was doing stuff, paying for stuff. And now, every local leader worth his or her board seat[s] wants in on it — even if they don't understand it; even if they don't like it, which many don't — because they can't stand the thought of being on the outside looking in. For them, who builds the rocket ship matters less than having first-class seats when it blasts off.
But Bernie also has a problem. He knows, deep down, that he must continue to be Blockland's evangelist-in-chief if the effort is to succeed. He created it, and despite his insistence that his influence will dwindle from an initial 98 percent to one percent or less — "it'll be like a bad stock," he says — he understands that he needs to protect his vision as it grows and evolves.
On the one hand: "When people ask me what this will look like at the end, the answer is, I have no idea. We're building this as we go."
On the other: "We can't have people — you see this on the Facebook page — saying the wrong talking points: 'The public's gonna pay for a tech center;' 'It's going to be the Medical Mart.' This, that, blah blah blah. It's off the rails."
He's savvy enough to perceive that Blockland can't have the whiff of a pet project. People can't be allowed to think that a single man, by the force of his personality and his wallet, has the power to warp a city's destiny because he thinks Bitcoin is cool. And so he must achieve two equally crucial objectives: First, he must promote the narrative that blockchain is big. Indeed, it must be prophesied as a technology as groundbreaking as the internet. But just as critically, and much more deftly, he must sell the idea that the Blockland effort is bigger than blockchain. It goes without saying that it must be bigger than Bernie. He must convince both supporters and skeptics that its goal is not merely to attract blockchain-oriented startups to Cleveland, but to make the whole region a "petri dish for innovation," a bona fide tech hub, a destination of distinction for Silicon Valley expatriates and a breeding ground for, among other things, software developers who began as "16-year-olds from Glenville."
By mid-September, Bernie is even more in-demand than usual, and his personal financial contribution to the initiative has exceeded the limit beyond which he can't wave it away. He nevertheless remains a vigilant sentinel of the Blockland social media pages, and he avails himself to cynics and scribes whom he sees value in persuading.
At an August forum hosted by the Greater Cleveland Partnership, the region's chamber of commerce, Bernie said that "naysayers" would be the biggest impediment to Blockland's implementation, a comment he resents getting so much grief over. He says he's not facing naysayers now. Naysayers are what could be the biggest roadblock. And naysayers aren't people like Scene, he clarifies, who have questioned or challenged aspects of Blockland. Naysayers are people who say, "Cleveland will always suck; Cleveland will never be relevant in tech."
His modus operandi, in any case, is to call out potential naysayers on Twitter or Facebook and then try to convert them in private.
Why wouldn't he? Bernie Moreno is a master salesman, owner and sultan of the Bernie Moreno Companies, which has under its umbrella eight luxury car dealerships. He is very good at conversation — that is to say, at controlling conversation — and has built an empire on the foundation of that expertise. He has a broad awareness of popular and political culture and is somehow both hyperactive and relaxed in person. He is quick to laugh. He does this thing during moments of disagreement where he reframes a talking point or subtly changes course so that you think maybe you aren't in disagreement after all. He cackles good-naturedly, for example, at the mention of a recent testy social media exchange with this writer. He says, "That's why I could never be a politician," and suddenly he's talking about his respect for public officials and military personnel instead of the substance of the spat. At 51, he is trim and handsome and has retained a full head of hair, which has only recently begun to gray. He knows he can sell you a Mercedes or a Porsche or an Aston Martin in his sleep.
But selling Blockland? That's a more suitable challenge for a salesman of his stature and cred. Bernie loves a sales challenge, which means that if you're a naysayer, he is an easy man to meet.
* * *
At the Boss Pro-Karting indoor go-kart track, out among the aero-industrial flatlands of Brookpark Road, visitors must agree to the facility's terms and conditions at computer stations near the entrance before racing. One of the required fields on the digital registration form is "I'm here for ..." the multiple-choice responses to which are as follows: "Walk-in"; "I have an event code"; and "Bernie."
We're here for the latter, as are this month's top salesmen from the Bernie Moreno Companies, whom Bernie has invited in recognition of their accomplishments. Bernie does this semi-regularly, high-end go-karting being a fitting reward for high-end auto sales.
Bernie has always loved cars. After attending the University of Michigan, where his wife also attended and where his youngest son is now a sophomore, he worked at General Motors for a few years before making the jump to sales, which included a jump to New England. He lived in Boston for the 12-and-a-half years immediately preceding his Cleveland adventure, which began in 2005.
He'd always dreamed of working at GM. In fact, he'd wanted to run it. In 1982, as a precocious 14-year-old in Fort Lauderdale, he wrote to GM's CEO Roger Smith, alerting him that one day, Bernie would be taking his job. In the meantime, he offered nine suggestions for improving the company, some of which were generic — "Improve vehicle quality" — but others of which indicated an early technical proficiency and business aptitude: "Combine Chevrolet and Pontiac," the young Bernie suggested. "Make aluminum engines to reduce weight and boost fuel economy." The letter inspired a detailed type-written response from Smith himself.
At Boss Pro-Karting, Bernie looks airbrushed and race-ready in a marble gray pullover you needn't touch to know is extremely comfortable, plus actual leather racing shoes, which Bernie is confident will shave pivotal tenths of a second off his time.
The fact that race times are being discussed without irony, let alone in increments other than laps, may be puzzling for first-time guests. But Boss Pro-karting is a serious operation, and instant race stats are what premium go-karters, who are dropping $22 per race, expect as part of the package.
Ditto neck braces and helmets, which turn out to be required. The helmets are oil black and visored and, when donned, lend to Bernie's sales crew the same anonymous thuggishness as any disposable biker gang from The Matrix or Mission Impossible franchises. Beneath the helmets, racers must wear what are called "head socks," which most closely resemble the stocking caps medieval peasants wore. A teenage employee, accompanied by instructional video, says that gloves and shoes and full-body racing suits are optional as well, if racers would like to "wear what the pros wear."
No one does, but Bernie sure drives like a seasoned vet. In a "qualifier," he scores the second fastest average lap and third fastest lap overall. It occurs to us to ask whether or not he ever raced professionally, or wanted to. He says he attended driving schools and notes with pride that Colombian drivers abound in the sport — "Montoya," he mutters absently, massaging his triceps — but it's not something he ever pursued.
Still, he loves driving. Every year, he and his son fly to Las Vegas or Los Angeles or Palm Springs and then drive north up the California coastline to the annual auto show in Monterey. It's prime father-son bonding time, and a couple of years ago, along this scenic stretch, his son tried to convince him to invest his total fortune in something called Bitcoin.
He'd never heard of it, and was doubtful on principle that investing in a currency was wise. He ragged his kid for the fun of the argument but was intrigued enough by his fervor to contact his financial people when he returned home. They told him not to invest all his money in Bitcoin but said that they and other financial institutions were beginning to seriously explore blockchain, the distributed ledger technology upon which Bitcoin was built. In Bernie's telling, this revelation kick-started a personal fascination. He's been boning up on the tech ever since, devouring white papers and industry news, attending the hottest conferences, and so on.
"I went to Consensus in New York in the spring," Bernie says, by way of example. "It was 95-percent anarchists."
In May of this year, Bernie held a meeting in Cleveland on the topic with 20 people, most of whom were about as far from anarchism as they were from Pan-Africanism. Joe Roman of GCP was there, to give you an idea. So was Ronn Richard of the Cleveland Foundation. So, too, was investor Stewart Kohl.
"Random people," Bernie says. "It's not because they had money or were important. Literally, there was no other reason other than, 'I think you're a smart person.' And the question was, could we change the conditions on the ground in Cleveland to make blockchain a reality here? The consensus was, 'Yeah, I think we can.'"
By then, Bernie had invested in a local civic-oriented blockchain company, Votem, and co-founded another, Ownum — tagline: "using Blockchain to power the digital frontier" — and says that when he told his advisors he intended to dive into the blockchain game, they asked where he wanted to set up shop: Nashville? Austin? Boston? The Bay?
"I was like, 'Guys, I thought you meant Westlake or Ohio City or downtown,'" Bernie says. "I'm not leaving Cleveland."
The next local blockchain meeting was 50 people. Bernie had instructed each attendee at the May gathering to bring someone along for the ride, and energy was accumulating as a by-product of body heat, if nothing else. The group of 50 decided that they should model their effort on a blockchain system, a system valued for its decentralization, immutability and transparency. In practical terms, that meant setting up a bunch of subcommittees (called "nodes") and making all meetings open to the public, with documents and updates shared on Blockland's social channels.
The transparency, Bernie says, has been a real sticking point for local leaders. Among other things, they don't like the idea of the press peeping in on their discussions.
"I got calls saying, 'What's [Scene] doing on that email? You can't have them there,'" Bernie says. "And I had to say, 'You don't understand. These are public meetings. They are open to everyone. If this is going to be a civic movement, it has to be out in the public square.'"
By September, Bernie says, more than 1,300 people were involved in the Blockland effort in some capacity. Meetings are happening virtually every day, and Bernie's goal is to host 20 community meetings — "at the community centers and the CDCs and the churches" — before the inaugural Solutions Conference in early December, which David Gilbert and Destination Cleveland have organized on an aggressive schedule.
Jon Pinney, who co-chairs the "Place" node alongside lawyer Teresa Beasley, is by all accounts (including his own) working tirelessly behind the scenes to nail down the location of City Block, Blockland's physical manifestation and the evolution of what he called the nation's "largest and most advanced technology and entrepreneurial ecosystem hub" in July. The hope, Bernie says, is that Pinney will be able to unveil the location of City Block at the conference. JumpStart, the local startup accelerator, has now hired a Blockland project manager to help handle logistics and finances.
"What I didn't want was for this to become 501(c)3 too quickly," Bernie says. "We've already got way too many organizations in Cleveland. I call it the Philanthropic Industrial complex. I don't want an executive director making 600,000 bucks, a development guy, a marketing guy, this guy, that guy, chief of staff, da da da, what the fuck do you guys do?"
This is roughly akin to Bernie's stated reasons for not wanting public financing: "The last thing we need is a $10 million government grant," he says. "You know what would happen? We'd have 40 people on staff, a beautiful conference room and zero results, other than 40 people with great jobs."
He says he doesn't want public ownership of City Block either — he wants to ensure that there's a profit motive for private investors — but is more than happy to take advantage of extensive subsidies and credits.
"I'm a conservative, so government should play no role," he says. "But TIFS, new market tax credits, Opportunity Zones. I don't consider that public funding. Those are just programs that currently exist."
But he actually does want government to play an important role: as a consumer of blockchain products and applications. (This is, of course, a subsidy of another kind.) Bernie has said that both Frank Jackson and Armond Budish have been "great," and "involved to the extent that they need to be." He meets with Jackson nearly every week to provide updates, and he's briefed the full mayoral cabinet on the Blockland effort.
After the championship race at Boss Pro-Karting, which Bernie narrowly loses to a salesman racing under the moniker BillyBenz, he is prompted in the parking lot to respond to a question about Cleveland leadership. Bernie had told Scene in a prior interview that one of his major goals with Blockland, in addition to making the city relevant in the tech world, was to encourage a culture of collaboration among city leaders.
The shortcomings of leadership had been swirling in news stories lately. Just that week, a report from the young professional nonprofit Engage! Cleveland had been disseminated, and one of its key takeaways was that young people desperately want to be more involved in civic affairs but are unable to break into leadership roles. Cleveland is seen as a "do your time city" where leaders are hostile to young, diverse voices. The report echoed comments made in recent conversations about the Fund For Our Economic Future's The Two Tomorrows report.
"It's the boards," Bernie says, quickly and without equivocation. "Every board meeting I've been to —Tri-C, Rock Hall, GCP, all of 'em, the whole alphabet soup — it's always the same question. How do we get more diversity? How do we get younger people? I'm sitting there asking the same thing when it hit me: We ask them for a shitload of money."
All 40 members of Tri-C's board, he says, are required to pay $10,000 for the privilege. This is standard practice at all the major institutions and nonprofits. Bernie says he and Ronn Richard of the Cleveland Foundation (and co-chair of the Blockland "Philanthropy" node) are working on an initiative that will encourage — or even mandate — that local organizations have a percentage of board members under the age of 35.
"Not 40," Bernie says. "Thirty-five. Otherwise you start creeping up. I've talked to a bunch of people who say, 'Well, we have Engage Cleveland.' But that's like the bullshit board. It's, like, patronizing, right? These young advisory boards are just like get-togethers at lunchtime. Everybody knows that."
Bernie says that that's exactly the problem he's trying to overcome with Blockland's "Next Gen" node, the mission of which is to get young people engaged and, per the official description, to "build and nurture next generation workforce pathways from within Cleveland's disadvantaged communities."
"The big thing," he says, "is that if we're going to attract all these people from Silicon Valley, they need to be able to come here and feel like they're making a difference. That means no separate boards and a lower give-and-get requirement. Dramatically lower, like 500 bucks."
* * *
From a glass office at his flagship Mercedes-Benz dealership in North Olmsted, five minutes from his home in Westlake, Bernie says that income inequality is "one of the things that is massively important to [him]."
He was born and spent the first five years of his childhood in Colombia, and growing up there, he witnessed inequality's ramifications firsthand. His brother still lives there and these days drives around in an armored vehicle because people are so fed up, Bernie says, with making a dollar per month. (His brother has a staff of 18.)
When visitors arrive at the North Olmsted dealership, they are invited to wait at a coffee bar in the back which serves Ospina Coffee. A receptionist may note that this coffee has been imported from Colombia at $150 per pound and is, by definitive accounts, "the best in the world." Bernie appends, later, that his paternal grandfather co-founded the Federation of Coffee Growers in Colombia alongside the Ospina family.
It is this coffee, a smooth and fragrant morning blend, that we are choking on as Bernie riffs on the topic of income inequality.
"In Cleveland, whatever we think is bad today is going to be exponentially worse as tech advances," he says. "The poor will become the hyper-poor. We'll look back on 2018 and say, 'Wow, the poor in Cleveland had it good, compared to 2038.'"
So why is there such an obsession with emulating San Francisco, a city with the worst income inequality in the country?
"It's a problem," Bernie agrees. "There are 8,000 homeless there, and the city just hired a full-time poop patrol ... Look, do I think this [Blockland] effort is perfect? Of course not. If I did, I'd be delusional. But that's why ... "
That's why the effort will be better and more inclusive than other strategies. Blockland, remember, is bigger than blockchain. And Bernie is insistent on explaining at length two components of the effort that are designed to countervail against the tech world's natural tendency, which he freely admits is to exacerbate existing inequalities. The first is education.
Education is something that is also massively important to Bernie. His wife Bridget is a former pre-school teacher, and they have contributed generously to local colleges and Breakthrough Schools, the charter network that Bernie laments has been having enrollment issues. They are involved in the Say Yes to Education initiative as well.
At City Block, Bernie says, in addition to startup desks and space for growing companies and an advanced-tech HQ for the best and brightest of local corporations' tech divisions, he wants to host a CMSD school, one he has dubbed Genesis.
As board chairman of CSU, he says the most common call he got was from parents asking if he could get their child into Campus International, the CMSD school on CSU's campus. (Bernie says he never did. Enrollment was determined by lottery.)
"It's got a waiting list," Bernie says. "Hundreds of kids get turned down every year." In 2017, 29 percent of Campus International's enrolled students were "out of district," meaning they didn't live in the city of Cleveland. It's the highest such percentage of any CMSD school, including those much closer to the suburbs, like the Cleveland School of the Arts (24 percent), the Warner Girls' Leadership Academy (17 percent) and Ginn Academy (10 percent).
Bernie says the goal would be to duplicate the Campus International model, with the hopes of keeping young, tech-oriented families in the city, which in turn would keep their companies there.
Bernie prides himself on his candor (a kind of civic incorrectness) and says unabashedly that wealthy people in Cleveland would never send their kids to Cleveland public schools. "I wouldn't even send mine to Westlake public schools," he says. And while he doesn't probe the motivations behind this assumption, presumed to be self-evident, he's nevertheless able to trace, with remarkable clarity, its effects.
"Say I've attracted you from California," he says. "You've started your tech company. You get married and you have a kid. But then, you're not gonna send your kid to Cleveland Public Schools, so now what do you do? You move to Solon! So what have I accomplished? Nothing. Because now, you don't want to drive from Solon to work, so you move your company out there, to some office park. Then what happens? The tech center is evacuated, and all these companies are like, 'Why are we in Cleveland again? Let's just go to Austin, where we can get a new tax break.'"
Bernie is at some times more keenly aware of his wealth and privilege than at others, but he maintains throughout multiple conversations his commitment to fairness.
"I'm a capitalist, but I'm all about fairness," he says. "At least from zero to 22. When you're an adult, your decisions may be different than mine, but for kids, fairness is an absolute right."
That's why he says he believes so strongly in quality education. He drifts, as if by magnetism, back to automobile analogies. And in this case he likens fairness in education to a car race.
"Look at my kids," he says. "They had pit crews. They had Ferraris. They knew what day the race was. They had incredible preparation. And then look at these kids from the neighborhoods. They don't even have a car! If at the end, you're like, 'Why did my kids succeed but the others didn't?' Are you shitting me? It wasn't a fair fight."
There are other details that Bernie furnishes about Genesis: Students will be immersed in technology all day; those who rent space at City Block will be required to devote five hours per week at the school as a condition of their rent, etc.
So how has CMSD responded, you might ask, as we did. Is Eric Gordon on board with the idea?
"Ha! It's all in my head right now," Bernie says, thrusting an index finger to his temple. "It's all right here."
* * *
At an event in September styled as a series of TED talks on local innovation, Bernie presents his vision for Blockland. By now, he has given versions of this spiel for months, and his remarks are crisp and persuasive at 10 minutes.
Charles Stack, the Flash Starts co-founder and CEO, introduces Bernie by saying that blockchain is the fourth major technological disruption of his lifetime, the previous three having been personal computing, the internet and cloud-computing.
Comparing the blockchain buzz to the dot.com boom of the '90s has been an essential ingredient of the narrative, even as it evolves. Bernie says that it's important for people, even if they don't understand "the plumbing" of the complicated tech, to recognize its potential. For weeks in August, he was sharing articles about new blockchain or blockchain-adjacent startups and applications on a daily basis, and he says that this was not to suggest that all these companies are good or sustainable ideas, but merely to build hype.
"If there are 50 companies wanting to do something in blockchain, it's possible that 45 of them are complete bullshit," Bernie says. "Total bullshit ideas. But in reading about one of those 45 bullshit ideas, maybe you get an idea to modify it. I'm not running a political campaign here. It's not like I want people to support me. It's more about getting the ideas out there."
But the message, embraced and propagated by other Blockland chairs, is that blockchain will be as revolutionary as the internet itself, as disruptive as smart phones. Through security and transparency, it can be for "value" what the internet has been for "information." Bernie has said more than once that it will be "the next iteration" or "the next generation" of the internet.
"It's going to impact you across broad swaths of your life," said Blockland's "Thought Leadership" co-chair Steven Santamaria in August. "In 10 years, everything's going to be blockchain."
That vision is still difficult for most to visualize, but Bernie is intent on getting the message out to Cleveland neighborhoods. He is working with a Community Engagement sub-node to assemble volunteers to deliver talks at community centers and churches to explain blockchain in basic terms and what Blockland "means to them." In this way, Bernie wants the effort to be more inclusive. (Inclusion is the other equity-oriented component, alongside education.)
"This is really about outreach," he says at a September meeting, held at Hot Cards on Superior Avenue, which he also owns. "It's not about getting the community to support it — it's not about toeing the company line — it's about touching the unexpected. It's about reaching out to that kid who's getting his haircut who never thought tech was for him. It's about the people that we've written off as a society who think that Blockland is just for the honors math kids at University School."
Bernie is often racially clumsy as he delivers this gospel: He tells barber Waverly Willis and boutique owner Lisa McGuthry, both of whom are black, that when they explain blockchain in their communities, a pick-up basketball analogy might resonate more than one about gambling. He says that he needs to delegate more appropriate messengers to black churches, where he fears he'll be seen as "just another white guy."
"I'm Hispanic," he says, "but they don't buy that."
But he also occasionally advocates what sure sound like progressive views, as in his thrashing of the bureaucratic red tape that he submits — in our view, correctly — is designed to keep poor people from easily accessing services and benefits.
He is passionate that blockchain can be liberating for poor and disempowered communities, though he's still learning the language for that message. His concern for these issues may be interpreted as a rebuttal to the notion that Blockland could become a "sandbox for white dudes," a description Scene applied to tech culture generally and which Bernie hotly rejected in August, notwithstanding the Blockland leadership and the Solutions Conference speaker lineup.
In moments when Bernie articulates something with which we wholeheartedly agree — e.g., "Most people in Cleveland are used to someone like me creating something like [Blockland] in secret, having it all baked out, and then saying, 'Hey Cleveland, this is what you're doing.' You sell it, sell it, sell it, say 'fuck you' to the opposition, and then it's in place — we recall, with a tinge of admiration, that Bernie Moreno is a master salesman. And with us, as with everyone, he's slinging a product.
Bernie boils Blockland down like this: He wants any smart person exploring blockchain tech to feel like they'll have a "soft landing" in Cleveland. He wants startups — "that 2-, 4-, 6-, 8-person company" — to come here and grow their business; he wants big corporations statewide to send their smartest people to a collaborative space at City Block; and he wants "magic" to strike for local kids — "poor kids, black kids, white kids, Asian kids" — who should feel like Blockland is for them too.
Like other Cleveland moonshots, Blockland is big and fanciful and designed to stir the civic soul. But unlike others, it's got a car salesman at the wheel. And though Bernie Moreno has never raced professionally, good golly does he love to drive.