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Military
StratCom aims for 'modernization,' ditches floppy disks in computers that run U.S. nuclear arsenal

U.S. Strategic Command no longer needs 40-year-old floppy disks to stop — or to start — Armageddon.

StratCom in June finished phasing out the last of its notorious 8-inch floppies from the legacy Strategic Automated Command and Control System (SACCS). They were used to communicate “emergency-response” messages from its Offutt Air Force Base headquarters to ballistic-missile launch sites, bombers, tankers and reconnaissance aircraft.

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An 8-inch disk holds 80 kilobytes of data. It would take 3.2 million of them to fill up a modern flash drive, which can be purchased for about $12 at Walmart.

A 2014 “60 Minutes” episode, followed by a Government Accountability Office report two years later, turned StratCom’s “atomic floppies” into a symbol of the nation’s neglect of its nuclear arsenal, the subject of Twitter snark and jokes by late-night comics.

Before leaving StratCom two weeks ago, then-commander Gen. John Hyten told The World-Herald that the floppies, introduced in the 1970s for data storage on SACCS, had been replaced with a form of SD (secure data) cards of late-1990s vintage. They are similar to the tiny inch-square cards used in digital cameras from the pre-cellphone era.

JASON ROSSI/U.S. AIR FORCE 

Don Leeper, left, a 595th Strategic Communications Squadron component maintenance technician, and Master Sgt. Timothy Todd, the flight’s noncommissioned officer in charge, inspect a SACCS power supply and power modules last week at Offutt Air Force Base. 

It’s a small part of a massive effort to modernize nuclear command-and-control infrastructure, and to centralize it at Offutt, under StratCom’s wing. Hyten acknowledged the upgrade is overdue.

“You might think, ‘Oh, wow, we’ve gone from floppy disks to SD cards!’ ” Hyten said. “We’re still very analog across the system. It is a significant storage device — a whole lot better than a floppy disk — but it’s just advanced 20th century architecture.”

The news, first reported in October on the defense technology website c4isrnet.com, has brought attention to the Offutt-based 595th Strategic Communications Squadron, which keeps the critical system running around the clock, even though in technological terms SACCS is ancient.

“We’re kind of the tip-of-the-spear operating system,” said Lt. Col. Jason Rossi, the squadron’s commander. “We’re here in Omaha, and we do this every day, 24 hours a day, seven days a week.”

While the 595th's floppies are now history, the system still operates using a half-century old IBM Series/1 mainframe computer. The 2016 GAO report quoted Defense Department officials as saying SACCS was “made up of technologies and equipment that are at the end of their useful lives.”

The report also said replacement parts “are difficult to find because they are now obsolete.”

Rossi said airmen reporting to his squadron — which is part of the Air Force’s Louisiana-based Global Strike Command — have been trained on some of the world’s most advanced cyberwarfare systems. They find themselves fixing circuit boards and trouble-shooting PC cards Air Force technicians of their grandparents’ age would find familiar.

In-flight emergency: An investigation into flight safety at Offutt's 55th Wing

“They solder things, they replace cards, really deep-level board repair,” he said. “It’s not sexy work.”

At the same time, Rossi said, older systems like SACCS can be safer because they are less vulnerable to hackers.

“It’s really secure, it works really well, and it’s cheap,” he said. “You can’t hack it because it’s not online.”

Hans Kristensen, director of the Nuclear Information Project for the Federation of American Scientists, said the tittering over StratCom’s atomic floppies has always been a bit overblown.

“There’s a tendency to overplay these things, because they stand out,” Kristensen said. “I haven’t been convinced about there being a safety advantage for the (newer) operational system.”

JASON ROSSI/U.S. AIR FORCE 

Senior Airman Ryan Catangay, a maintenance technician with the Offutt-based 595th Strategic Communications Squadron, trains Airman 1st Class Christopher Bradshaw to troubleshoot processor drawers and remove a bad circuit card from SACCS, which is one of the Defense Department’s oldest computer systems.

In the Cold War era, maintaining the nation’s nuclear forces was a job that commanded respect, and the Strategic Air Command was among the nation’s elite military units.

But after the fall of the Soviet Union, the nuclear deterrent seemed less important. SAC went away, its nuclear mission and its Omaha headquarters transferred to StratCom.

Upgrading nuclear systems fell down the priority list.

“There was the peace dividend,” said Rossi, referring to the post-Cold War downsizing of the military. “And (since 9/11) we’ve really been focused on the war on terror.”

In the 2010s, StratCom commanders have worked to restore the prestige of the nuclear force after a series of shocks, including the accidental transport of nuclear weapons across the country on B-52s and several cheating and drug scandals.

Hyten made promoting rebuilding and upgrading the nuclear arsenal a centerpiece of his just-completed three-year tenure at StratCom. His successor (and former deputy), Adm. Charles Richard, has promised to continue a push for new weapons and delivery systems, as well as new computer systems to operate them.

“It’s the entire nuclear capability that’s being modernized: the bomber, the ICBM, the submarine, the cruise missile, the nuclear command and control,” Hyten told The World-Herald. “They all need to be modernized at the same time.”

Hyten also spoke out often and loudly about the need for the Air Force to modernize faster.

Rossi said the needs are different, though, when it comes to upgrading the computers that run the arsenal and slower can be better.

“It has to be a zero-fail system,” he said. “Modernization is a go-right process, not a go-fast process.”

Rossi declined to discuss the pace of modernizing the SACCS system. The 2016 GAO report described a $60 million SACCS upgrade that was to continue through fiscal year 2020.

Kristensen said it makes sense to make smaller improvements to the current system while the Air Force is still planning replacements for today’s missiles and bombers. Nuclear command-and-control also has to merge with cyberwarfare capabilities, which are still in their infancy.

“It’s a big, sweeping upgrade of the entire nuclear weapons system,” he said. “We’re still sort of in the building-block phase.”

Hyten said that while the virtue of the old system is its simplicity, complexity may be StratCom’s ally as it faces 21st century threats.

“I think the answer is to create a near-infinite number of communication pathways for these messages to go through,” he said, “so near-infinite that the adversary will never figure out where these messages are going.”

One thing is all but certain. The future won’t include atomic floppies.

Photos: Offutt Air Force Base through the years

Plus
Schwab merger agreement includes language sought by Joe Ricketts intended to protect Omaha jobs

Charles Schwab and TD Ameritrade were set to publicly roll out a blockbuster brokerage merger that would shake up the investment industry, send both companies’ stocks soaring and fan deep fears of job loss in TD Ameritrade’s home city of Omaha.

Then just hours before the planned announcement, timed to hit just before markets opened Thursday, Nov. 21, Schwab officials noticed something concerning: The sale of TD Ameritrade had not been signed off on by the firm’s biggest individual shareholder, company founder Joe Ricketts.

The announcement was suddenly off. And when Schwab reached out to Ricketts later that morning, his representatives communicated a condition Ricketts wanted if he was going to sign off on voting his shares for the merger. The deal would have to include language offering some protection for TD Ameritrade jobs in Omaha.

In the end, Ricketts reportedly was satisfied with what he got — a signed agreement intended to provide a measure of security for TD Ameritrade’s Omaha workers.

On its face, the wording in the agreement Schwab filed with federal regulators last week provides no guarantee that all — or even any — of the 2,300 TD Ameritrade jobs will remain in Omaha for the long term. The language gives Schwab much leeway to reduce the acquired firm’s workforce in the city, and the agreement sunsets after two years.

But an expert on mergers law says the words could still pack both legal and practical punch. And a person close to the transaction says Ricketts was satisfied the agreement will accomplish his goal: requiring Schwab to be deliberate in the coming years as it considers how to integrate TD Ameritrade’s Omaha operations into its own.

“It’s not a rock solid ‘no one can get fired,’ but it’s a commitment by Schwab to be reasonable and thoughtful in how they approach this, and the fact Schwab agreed means they are taking it seriously,” said the source, who had knowledge of the agreement and spoke on condition of anonymity. “It’s a merger. Changes are going to happen. But they’re going to happen in a thoughtful way.”

A spokesperson for Schwab declined Friday to comment or answer questions about the agreement or how it came about. Joe Ricketts through a spokesman also declined to comment.

However, Nebraska Gov. Pete Ricketts, his son, said the agreement “reflects a commitment to maintain a level of jobs in Nebraska” and “gives us the opportunity to make the case to Schwab to grow here in the future.”

Pete Ricketts, a former TD Ameritrade executive who as governor is the state’s de facto chief economic development officer, said he has since Monday spoken to Schwab chairman and founder Charles “Chuck” Schwab and company CEO Walter Bettinger.

“I will continue to make the case in the coming months,” Ricketts said.

The jobs agreement, signed by Bettinger, Joe Ricketts and his wife, Marlene, was part of a pile of merger-related legal documents Schwab filed with the U.S. Securities and Exchange Commission Wednesday. Here is how the relevant language reads (“Parent” being Schwab and “Company” being TD Ameritrade):

Post-Closing Integration. Parent commits in good faith to seek to maintain, from the Closing Date through the second anniversary of the Closing Date, a level of employment in Nebraska comparable to the Company’s level of employment in Nebraska at the Closing Date, taking into account voluntary attrition and transaction-related integration plans.

Irina Fox, a mergers and acquisitions expert with Creighton University’s law school, agreed that the latter part of that wording does give Schwab much freedom to reduce Omaha employment. But she said no one should overlook the significance of Schwab’s commitment to “in good faith” seek to maintain Omaha employment — words that also carry significant legal meaning.

“That does put a little restriction on their discretion,” she said. “If they were to fire a significant percentage of the Omaha employees, they would need to do quite a bit to justify that decision. There is a good faith clause there where they promise not to do it arbitrarily. I think this clause has some teeth.”

Legalities aside, it’s probably not a bad thing for Omaha’s future job prospects that Schwab’s leadership made a promise to TD Ameritrade’s founder. All things being equal, it’s certainly not unheard of for boardroom politics to play a role as companies make decisions on where jobs will be located.

And that may be particularly noteworthy in this case, in which the two company founders have a long shared history.

REBECCA S. GRATZ/THE WORLD-HERALD 

Joe Ricketts initially delayed the TD Ameritrade-Schwab merger until an agreement on some protection for TD Ameritrade jobs in Omaha. “Omaha has been, and we hope may continue to be, an important employment center for our company,” said spokesperson Kim Hillyer.

* * *

As it happens, within a single month this fall, both Chuck Schwab and Joe Ricketts came out with autobiographies telling their own life stories. And in back jacket quotes, each man actually offered praise for the other.

Schwab lauded the guts, tenacity and creativity of his Omaha-based competitor. Ricketts described Schwab as a man of high integrity and a fierce rival who he now considers a friend.

Indeed, the two men have much in common.

In 1975, Ricketts and Schwab founded two of the nation’s very first discount brokerages, their low trade commissions helping to democratize stock trading, bring investing to the masses and shake up the Wall Street establishment.

While Schwab’s San Francisco-based firm largely evolved into a traditional wealth management company offering financial advice to individual investors, Ricketts’ firm in Omaha was more of a technological innovator. One of his first breakthroughs was a niche technology he developed that allowed customers to make automatic trades on their touch-tone phones.

That platform left Ricketts’ firm well-positioned in the 1990s when the Internet and home computers rose to prominence. In 1995, Ricketts’ firm bought the company that had just pioneered the first online trade, and he dove headlong into the fast-growing, lucrative new business line.

The sales commissions starting rolling in, and TD Ameritrade shot off like a rocket. By 1997, Ricketts took his family business public. By 1999, Joe Ricketts was a billionaire.

The company continued to grow and thrive in Omaha, becoming the industry’s largest volume online brokerage with its widely recognized “eight bucks a trade” pitch. But technology and marketing aside, Ricketts spoke to a World-Herald reporter in 2006 about what he considered the secret of his firm’s success.

The key, he said, was the low-cost operations of TD Ameritrade’s back office trading center, at the time in the Southroads Mall in Bellevue. Staffed 24/7, it operated so efficiently and cost-effectively, no competitor could afford to offer online trades for less.

Ricketts also expressed an appreciation and affinity for his staff, talking of the pride he felt in helping create jobs that made a difference in the lives of his employees and their families.

“It had always been a point of pride with me that this business I had built was helping bring prosperity to some of my neighbors,” he wrote in his recent book. At times when he had to lay off workers due to stock market crashes, he’d do so, but said he’d “rather cut off my own arm.”

Once TD Ameritrade went public, the control the Ricketts family held over the firm loosened with time. Joe Ricketts retired as CEO in 2001, saying he was firing himself to put the company in more capable hands. He left the board of directors completely in 2011, though other members of the Ricketts family have continued to hold at least one board seat since that time.

Tapping its TD Ameritrade fortune, the Ricketts family in 2009 acquired the Chicago Cubs baseball team. Joe Ricketts became one of the largest funders of conservative politics and libertarian thought. He saw his son, the firm’s former chief operating officer, win the Nebraska Governor’s Office in 2014.

KILEY CRUSE/THE WORLD-HERALD  

By 1999, Joe Ricketts was a billionaire — something Ricketts credits in part to TD Ameritrade’s back office trading center, operated so efficiently and cost-effectively, no competitor could afford to offer online trades for less. “It had always been a point of pride with me that this business I had built was helping bring prosperity to some of my neighbors,” Ricketts wrote in his recent book.

But over the years, Ricketts also continued to own huge amounts of TD Ameritrade stock, despite the persistent advice of financial advisers that he should do more to diversify. TD Ameritrade remained his baby.

To this day, he and his wife hold 8.6% of TD Ameritrade’s shares, and his children own sizable stakes as well. Before word of the Schwab merger leaked, Joe and Marlene Ricketts’ shares were worth almost $2 billion. Based on the premium they and other shareholders will receive from the sale, those shares are currently worth $2.5 billion.

Joe Ricketts rode his company’s stock through highs and lows over the years. He also watched as the firm gobbled up competitors and in 2013 moved into its new headquarters, a green-tinted tower meant to resemble a ticker tape that rises over Interstate 680 and West Dodge Road.

But in recent years came an industry challenge that finally proved the company’s match.

An upstart called Robinhood in 2014 began offering no-commission trading on a phone app, causing all the traditional players to start ratcheting down their commission rates.

On Oct. 1, Schwab announced it was eliminating all sales commissions on U.S. stocks and exchange-traded funds. Within hours, TD Ameritrade and other competitors were forced to match the move.

Schwab was completing the “race to zero,” and it appears to have been a strategic play, as it disproportionately hurt Schwab’s chief competitors.

For Schwab, the lost commissions reportedly amounted to less than 5% of revenue. For Ameritrade, the loss was 15%, nearly $1 billion a year. TD Ameritrade’s stock price plummeted by almost one-third.

At some point, Schwab and TD Ameritrade began merger talks. And when they got serious, TD Ameritrade officials provided Joe Ricketts and his family a “voting support agreement.” Such documents are common in business mergers and acquisitions, signed statements that bind major shareholder to vote stock in favor of the merger.

Such an agreement wasn’t needed for the deal to go forward. The considerable Ricketts family holdings were still just a fraction of TD Ameritrade’s shares.

And Ricketts actually fully backed the merger. According to the source close to the transaction, Ricketts believed that in a zero-commission world, having a company of significant scale would be critical to future success. Marrying TD Ameritrade with Schwab would provide that scale.

But Ricketts simply wasn’t interested in signing the voting support agreement. He just wanted to vote his stock the same way any other common shareholder would, later when TD Ameritrade schedules the shareholder vote.

While the reason is unclear, the fact Ricketts declined to sign the agreement apparently was not communicated by Ameritrade officials to Schwab until just hours before the planned Nov. 21 announcement.

Schwab’s leadership balked. They weren’t comfortable going forward without the Ricketts agreement.

It’s not exactly clear why Schwab officials hesitated. But it’s conceivable they were concerned that Ricketts owned enough stock he could cause difficulties for the merger if he suddenly decided the deal was a bad one and worked against it before the official shareholder vote.

Nebraskans in recent years have seen firsthand the power that can be wielded by a significant minority shareholder like Ricketts. Sidney-based outdoor outfitter Cabela’s was forced to merge with a competitor in 2016 after an activist investor owning 9% of its stock vocally objected to the firm’s financial performance and led a campaign for major change.

With the announcement suddenly off, the source said Schwab officials reached out to Ameritrade’s founder. Ricketts’ representatives explained that he simply didn’t want to sign the agreement. But they said he’d be willing to do so if Schwab made a commitment to preserve jobs in Omaha.

“Joe is a businessman,” said the source. “If you’re going to ask something from him, he’s going to ask something from you. The only thing he asked for was the jobs language.”

Ricketts was certainly realistic that the elimination of redundancy between the two companies will require job losses in Omaha. He wasn’t going to ask for blanket protection. But he still wanted to pursue language that would make Omaha jobs “top of mind” for Schwab — potentially easing the impact, the source said.

Schwab officials were “thoughtful and respectful” and took the request by Ricketts seriously, the source said. It was considered at the most senior levels of Schwab. It’s unclear to what degree Chuck Schwab himself, as Schwab’s chairman, participated in the considerations.

With some tweaking, the language was officially agreed to on Sunday, Nov. 24. The merger was announced the next morning.

Though it’s clear the language offers no guarantees, the source called it an important commitment from Schwab — one that bodes well for how that firm will approach Omaha jobs in the merger.

What the combined Schwab-TD Ameritrade ultimately looks like will be a long game that will play out over years. The deal is not expected to close until next year, with Schwab officials saying the full integration of the companies could take up to three years after that.

The Omaha agreement isn’t the only geographic consideration. With the merger, Schwab announced that the combined headquarters will be in the Dallas-Fort Worth metro area, where both TD Ameritrade and Schwab already have significant operations.

While Schwab declined to comment on the Ricketts agreement, TD Ameritrade officials acknowledged it, but said it’s premature to talk about how it will impact the firm’s more than 9,000 employees nationwide.

“Omaha has been, and we hope may continue to be, an important employment center for our company,” said spokesperson Kim Hillyer. “But it would be a disservice to our people — in Omaha and in other cities across the country — to speculate on what staffing in Omaha may ultimately look like.”

Fox, the Creighton professor, said the Ricketts agreement won’t keep Schwab from creating the efficiencies that shareholders expect when two firms merge. But she said the agreement could help shape where the combined operations end up. And the firm in many cases will have multiple cities to choose from, as both companies have operations spread around the country.

For example, about half of TD Ameritrade’s 2,300 Omaha workers are part of its clearing operations, making sure trades get posted to the proper accounts, at the right price and according to federal regulations. TD Ameritrade also has clearing operations in Dallas.

For its part, Schwab has clearing operations in both Dallas and Colorado. It would seem quite likely the merged company will continue to have clearing jobs in more than one location.

While Omaha is officially the home of TD Ameritrade’s corporate headquarters, company employees say the reality is most of its top executives have been based in New Jersey for the past decade. In effect, Omaha lost most of those jobs years ago.

Besides clearance, the balance of TD Ameritrade’s Omaha workforce is largely a mix of certified stockbrokers who handle trades by phone and information technology workers who operate the trading platform. There are such workers in other locations around the country, too.

George Morgan, a former stockbroker who teaches finance at the University of Nebraska at Omaha, said Omaha has lots of business advantages that should be appealing to Schwab. The city offers low operating costs, is home to one of the industry’s most user-friendly trading platforms, and has some of the nation’s best technology infrastructure, part of its legacy as the strategic home of the nation’s nuclear arsenal.

“From the perspective of Schwab, maintaining a presence in Omaha makes a lot of business sense,” he said.

But he said the Ricketts-Schwab agreement certainly won’t hurt matters, either. “I really commend Joe 100 percent for taking care of what he has built,” Morgan said.

Indeed, beyond the legal significance of the jobs agreement, Fox said there’s a practical effect, too. She doubts Schwab and its leaders would take a pledge they made to the founder of TD Ameritrade lightly.

“It is in the interest of Chuck Schwab to have Ricketts on board with the merger,” she said. “It is in everyone’s best interest to assure a smooth transition.”


The Omaha area's largest employers

List: The Omaha area's largest employers

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Former official says Nebraska State Fair on 'verge of bankruptcy'; director says it's not that dire

GRAND ISLAND, Neb. — The sign marking the city limits here proudly proclaims Grand Island as “Home of the Nebraska State Fair.”

But nine years after the fair moved from Lincoln to this central Nebraska city, the festival that combines corn dogs and cotton candy with cattle and 4-H kids finds itself at a crossroads once again.

Despite a voter-approved subsidy of state lottery funds that now amounts to almost $5 million a year, the fair is on “the verge of bankruptcy,” according to its former finance director, who resigned during a tense State Fair Board meeting last month.

There’s been criticism of the fair director’s spending decisions; one board member even criticized her for wearing shirts too tight.

Some board members, as well as the fair’s executive director, Lori Cox, say the financial situation isn’t that dire, especially after cost-cutting measures ordered at that Nov. 22 meeting. Cox called the comment about her clothing part of some harassment that she’s endured.

But the financial woes forced Cox to lay off 10 of the fair’s 17 full-time employees last week to help offset a reported $1.4 million loss from a rain-plagued 2019 State Fair.

To pay its bills, the fair also took out a $1.1 million line of credit this fall and enacted a wage freeze.

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Before Cox arrived, the fair finished each year from 2007 to 2017 in the black, with positive balances between $108,000 and $933,000. It ended 2018 $24,000 in the red and was running a $1.7 million deficit as of October.

While some Fair Board members have said the losses were mainly due to rainy weather and overly ambitious budgeting, others pin the financial problems on Cox, who has overseen the past two fairs.

Spending on personnel and professional services rose 29% shortly after she arrived, and six full-time employees were added after Cox was hired in January 2018 for a job that now pays $130,000 a year.

Cox said three of those workers were hired when the fair took over management of the Aksarben Stock Show in May 2018, and one was an assistant to the financial director. Cox said it was the financial director’s idea; he said it was the recommendation of the fair’s auditor.

Cox said the fair’s finances took a hit from two straight years of rainy weather, which this year forced the closure of fairground parking lots and the hasty arrangement of remote parking and shuttle buses.

One morning, a kayaker paddled down the flooded main concessions area.

Cox, as well as some board members, also said that, in hindsight, revenue projections for the 2019 fair — the 150th anniversary — were overly ambitious.

“Of course, you’re going to expect perfect weather and sunshine. (But) we should have been more conservative,” she said. “We missed the mark as a team.”

She added that state lottery revenue is projected to be down by more than $400,000 this year and that so far, “rain insurance” has paid only about $40,000 of an expected $200,000 loss caused by the wet weather.

That all contributed to the fiscal woes, Cox said.

But former board members, as well as the former financial manager, Patrick Kopke, blame Cox. Doug Lukassen of Kimball, who was the Fair Board’s treasurer until he resigned in October, said that the executive director is responsible for the budget and that he and Kopke had warned Cox for months that her projections were “way over the budget” and should be reined in.

“No one would listen,” Lukassen said. “I believe in the State Fair, and I hope wholeheartedly that it survives. ... But it was headed in the wrong direction, and (I) felt I could no longer be a part of it.”

Kopke said he gave his dire financial prediction that the fair was a year away from bankruptcy at the November meeting because he wanted board members to be fully informed and take action. He also said he didn’t want to be blamed for the financial problems.

He said he warned Cox and Fair Board members a year ago that her projections of concert revenue were overly ambitious and were based on false assumptions of large “walk-up” sales of tickets on the day of the concert. The concerts ended up losing $700,000, Kopke said.

A major sponsor of the fair, Grand Island auto dealer Tom Dinsdale, was so alarmed about management of the fair that he and two members of the Fair Board recently took their concerns to Gov. Pete Ricketts, who appoints four members to the 11-member board.

“I don’t think you can blame the rain for all the problems they have,” Dinsdale said. “I don’t think the leadership is there. I don’t think the money was spent very wisely, or we wouldn’t be in the trouble we’re in.”

But Cox said the State Fair is an outdoor event and at the mercy of Mother Nature.

Rain was the reason concerts didn’t generate walk-up revenue, she said.

“We’re totally dependent on the weather,” Cox said.

The president of the Fair Board, Omaha businessman Chris Kircher, did not respond to messages left last week, and the head of the board’s finance committee, former Grand Island Mayor Jeremy Jensen, referred all questions to Cox.

But Kircher and Jensen, after the Nov. 22 meeting, told the Grand Island Independent that the fair’s budget problems weren’t as dire as suggested by Kopke and that a new budget, which included the layoffs, a salary freeze and a $700,000 reduction in entertainment costs, would put the fair in the black by $300,000.

“We have put together a careful plan — with the input of our executive director — and have passed a budget that will put this fair in a positive fiscal position,” Kircher said.

But Lukassen, Kopke and some others close to the fair question whether the fair can crawl out of its financial hole, particularly when it has a $1.1 million line of credit to pay off. Former Fair Board member Tam Allan of Lincoln and Grand Island Chamber of Commerce President Cindy Johnson — two officials instrumental in facilitating the fair’s move west — noted that the fair was on firm financial footing before Cox arrived.

Allan said that several fair vendors, sponsors and volunteers voiced concerns to him about the fair’s financial problems and that he’s concerned that relations with those groups have been harmed.

To be sure, without the subsidy from the state lottery — approved by voters in 2004 — the State Fair would run in the red every year. The lottery subsidy has varied from $4.7 million to $5.1 million in recent years, and, until the past two years, has helped sustain the fair, which had accumulated debts of almost $1 million by 2004, when it was still held in Lincoln.

Ricketts, in comments to The World-Herald, said that the fair is an independent entity that needs to live within its budget but that he’s confident that the Fair Board will “demonstrate the leadership” to do that.

Cox came to Nebraska after running the Big Sky Country Fair in Bozeman, Montana, and working in marketing at the Western Idaho Fair and the Montana State Fair.

While she was able to increase attendance and sponsorships at each of those stops, she said, Nebraska has presented “unforeseen challenges” she’s never faced before.

One challenge has been criticism of her wardrobe. One member of the Fair Board, Kirk Shane of Atkinson, advised her to stop wearing “ball caps, shorts, and sleeveless shirts and ... tight shirts,” according to the minutes of the board’s August meeting.

At the same meeting, there was a motion to put Cox on administrative leave for alleged misuse of funds after it was discovered that she had used a State Fair credit card to purchase clothing — clothing that Cox said she bought in response to the criticism.

Cox, in an interview, called the clothing cited by Shane “standard fair dress.” After a long discussion, nine of the 11 board members voted against the motion.

She said the August incident was part of a “strong amount of discrimination” she’s faced at the Nebraska job, which led her to question whether she wanted to stay.

Her contract is up for renewal in January. In September, a straw poll taken by the board indicated a 50-50 split on support for Cox.

She said she’s decided to ignore the naysayers and focus on doing the best job going forward.

“I have high expectations for the Nebraska State Fair,” she said. “With the restructuring, we’ll not only balance the books but approach our entertainment and competitions with a much more sustainable way of doing business.”

Food at the 2019 Nebraska State Fair

Food at the 2019 Nebraska State Fair