“I’ve never seen a black guy that was so driven to be successful in my life,” Johnson says. “He was a hot-tempered guy and he wanted to get things done. He didn’t like mistakes. ‘How could you make this mistake? You’re an attorney, you’re supposed to be good, that’s why you’re here.’ Whenever there was anything that Reg disagreed with or thought there was problem with, he would get loud.”
As at 30 Broad Street, Lewis liked to interact with his employees away from the workplace. A favorite lunchtime hangout was Fraunces Tavern, a restaurant in the financial district. Lewis had a table at the restaurant and treated his lawyers to lunch there from time to time.
Shortly after Wright and Nelson joined the firm, he also took his entire office staff to Springy Banks, his summer house in East Hampton. Those not staying at the home were put up in a local hotel. Everyone enjoyed a weekend of partying and tennis, and catered meals were served in Lewis’s backyard, including a Sunday brunch.
Around this time, Lewis was involved in a clash with New York City concerning the handling of some real estate he and his wife owned on 10th Avenue. The Lewises wanted to sell the property, which consisted of three apartment buildings. The city maintained that extensive repairs had to be made to the buildings and ordered Lewis to take care of them. Before he could act, the city started proceedings to take over the buildings, blocking their sale. The whole affair made Lewis apoplectic. Sputtering, “These people are not according me due process,” Lewis fought the lawsuit and it was resolved in his favor.
In the mid-1980s, Lewis had taken to smoking cigars. He picked up the trait while attending a Paris birthday party for a good friend from the Ivory Coast, Dominique Kanga. Lewis saw cigar smoking as very Parisian and trés continentale. He and Kanga had a smoking ritual they adhered to without fail when they were in a restaurant. First, a waiter would bring them a humidor from which they would select an expensive Cuban cigar they were partial to, in particular Monte Cristo No. 3. They would then hold the cigar next to an ear and roll it through their fingertips, the sound being an indication of whether the tobacco was brittle, and therefore, not fresh. Then the waiter would clip off one end of the cigar and a long match would be used to set that end aflame. A nice smooth draw on the first try signaled mission accomplished.
In his law office, Lewis had ashtrays on his desk, by the sofas and strategically placed at different corners of his office. Each ashtray would have a partially smoked cigar in it. Lewis had a habit of moving about his office while working on some matter, lighting a cigar and taking a few puffs on it, then moving on to another stogie parked in a different section of his office. Smoking was a pleasure to be enjoyed by the managing partner only, though. Other smokers and their smoking implements, be they pipes or cigarettes, were not welcome or tolerated.
In later years, Lewis would become so fond of Cuban cigars that his staff would go to all kinds of permutations to purchase them and fly them into the United States. One TLC Beatrice executive in Switzerland would even go to the trouble of smuggling several boxes of cigars by car over the border from Switzerland to France and then send the package by courier to Paris where it would be tucked into the luggage of yet another executive on his or her way to New York and a waiting Lewis.
By 1984, more new faces showed up at Lewis & Clarkson and the firm began to have a family flavor to it. Jean Fugett, Jr. started work as an associate. When not absorbing the fine points of corporate law from Clarkson, Fugett would huddle with Lewis in Lewis’s office, deep in conversation. Young Joseph Fugett was also employed as a law librarian.
When it came to Jean, Lewis always felt a sense of ambivalence. On the one hand, he had always admired Jean’s athletic ability and trusted him implicitly in a way he trusted no one else. Lewis also gave a lot of weight to Fugett’s feedback on business and personal matters.
Fugett was an Amherst cum laude graduate who played pro football, first with the Dallas Cowboys and later with the Washington Redskins. While with the Redskins, he worked his way through law school at George Washington University and during the off-season worked as an intern with the Washington Post, earning several bylines in the process.
Even so, something about Jean always left Lewis feeling vaguely ambivalent. For one thing, he felt that being a tight end in the National Football League had been to his brother’s detriment. Lewis believed that professional football had brought Jean too much of the good life too fast with too little hard work and dedication. Plus, how could anyone have a properly Calvinistic outlook when they only worked six or so months out of the year?
Whatever Lewis may have thought of his brother Jean, he turned to him again and again over the years. He picked Jean to run the Almet company with Cammer, had the deal gone through; he would later single Jean out to run a radio station in the Caribbean. Then on his deathbed, Lewis would turn to Jean to help run TLC Beatrice International Holdings, Inc.
LEWIS AND THE POLITICIANS
The enduring fascination Lewis had for politics continued at 99 Wall Street. One day he ushered Jesse Jackson into the law firm for a private conversation, causing some of his staffers to nearly fall out of their chairs in surprise.
In 1984, when Jackson made his first run for President, Lewis held a fund-raising dinner for him at Fraunces Tavern. He later invited Jackson to tour the McCall Pattern offices. Lewis would also host fundraisers for a number of African-American politicians including former New York City Mayor David N. Dinkins, as well as another one held for Jackson during his Presidential campaign in 1988.
Among the other African-American politicians Lewis assisted were Virginia Governor Douglas Wilder, Los Angeles Mayor Tom Bradley, North Carolina senatorial hopeful Harvey Gant in his losing bid against Senator Jesse Helms, New York Assemblyman Al Vann and two old friends of Lewis’s, New York politicians Basil Patterson, a candidate for Lieutenant Governor of New York and a former deputy mayor of New York, and Percy Sutton, a former Manhattan Borough President.
When Dinkins was mayor he appointed Lewis to his Economic Advisory Council in 1989 and had nominated him to New York’s powerful Municipal Assistance Corporation, which controlled a sizable chunk of the city’s funding, when Lewis died in 1993.
Dinkins would occasionally visit the Lewises at their home in Long Island, where he and Lewis engaged in some spirited tennis duels. Dinkins has a rapier-sharp sense of humor and when it came to the strong-willed Lewis, he would often joke, “You know, one thing about Reg is, success has not changed him—he’s always been an arrogant guy.”
Lewis for his part liked to tell stories of the times when he acted as a speechwriter for Patterson early in his career. At one point in the 1970s, Dinkins and his law partner, Basil Patterson, offered Lewis a partnership in their law firm, an offer Lewis turned down. Dinkins later called this “the smartest move Reg ever made.”
Laurie Nelson used to tell Lewis that politics seemed like a natural challenge for him to tackle next. Lewis would merely flash a gratified smile and say, “I don’t know, I’ve thought about it. We’ve given it some thought.”
Lewis did think about jumping into politics from time to time. He often mulled the pros and cons of taking on Democratic Senator Daniel Patrick Moynihan. He would later contemplate running against another New York Senator, Republican Al D’Amato.
Lewis’s ambitions weren’t confined to the Senate.
“If I got into the Senate, well, a few years of making speeches and who knows? Lightning could strike,” Lewis would say. Indeed, David Dreyfuss, Lewis’s video production guru, would later say with regret after Lewis’s death, “There are some of us who thought he could have been President.”
Lewis did make it to the White House, where he dined with Presidents Reagan and Bush during state dinners and business meetings.
CARIBBEAN BASIN BROADCASTING—THE SEARCH FOR ANOTHER DEAL
Meanwhile, the search for another deal went on unabated. Lewis couldn’t get his hands on enough public offering prospectuses. His desk was piled
high with them—they even littered the windowsills in his office.
Product, he would call the prospectuses. “I want to see more product,” he would frequently tell investment bankers.
One of his lawyers came into the office at 6 A.M. one morning to find Lewis already at his desk, plowing through prospectuses. Dutiful student that he was, and still smarting from his failures to acquire Parks Sausage and Almet, Lewis would leave absolutely nothing to chance this time. He’d been telling Clarkson for years that he would reach the pinnacle of capitalistic success by buying companies.
“We had a lot of bull sessions,” Clarkson says. “We’d sit there and talk for hours. Reg was a real dreamer. I always kept saying to myself, ‘God, this guy dreams good!’ They came true, though. He was very clear about the fact that there were businesses that he wanted to acquire and he wanted to basically take control over. He had a sense of what the future could be if he was able to get these things done.”
Most people would have found the prospectuses incredibly tedious reading, but not Lewis. He read them closely, dreaming a little and learning a lot. Each prospectus was like a little history book that told Lewis about the officers of a company, their salaries, their strategic thinking—even about lawsuits filed against a company. Lewis ate all of this up and he liked nothing better than to take a set of prospectuses home to read.
In 1982, he found out that two radio stations in the U.S. Virgin Islands, WCRN-FM in St. Thomas and WSTX-AM in St. Croix, were up for sale. Because of his vacations in the Caribbean with his family, he was relatively familiar with the area and he immediately began to visualize a whole network of Caribbean radio stations that would eventually stretch to Latin America.
Lewis started by trying to get his financing into place. A friend of Lewis’s, Frank Savage, tipped Lewis off to a Washington MESBIC, Broadcast Capital, Inc., that specialized in broadcasting loans for minorities. Savage was on its board, so Lewis figured getting a loan should be a “slam dunk,” as he was fond of saying. He put together a detailed business plan and traveled to Washington to meet with the head of Broadcast Capital, John Oxendine.
Lewis took his brother, Jean Fugett, Jr., with him. Oxendine immediately had reservations about Lewis’s proposed Virgin Islands venture.
“It was a bit difficult for us to do,” Oxendine says. “It was kind of overseas and not easy to monitor. I think that at that time he was going to buy the stations and have Jean commute back and forth.”
Oxendine was further troubled by the fact that Lewis wouldn’t be a hands-on operator for two financially troubled broadcast properties. He was also concerned that Fugett, who had done some football color commentary for CBS Sports and was putting some money into the deal, had no background in radio management.
Oxendine promised Lewis he would submit Lewis’s request to his board along with proposals for other applicants. However, that arrangement wasn’t quite what Lewis had in mind. He insisted on being able to present his proposal himself, a request Oxendine turned down because it was against procedure.
Lewis acquiesced but, wanting to leave nothing to chance, he personally lobbied each of Broadcast Capital’s board members. He showed up at the front door of one member who lived in Manhattan, Paul van Hook, and proceeded to make the case for his proposal.
“He was very, very aggressive, he really wanted the deal very badly and he did everything that he could to try to make it work,” Oxendine recalls. “I mean, I had to go to a convention in New Orleans—he followed me to the convention to push his deal. I don’t know if he had any business in New Orleans, but he certainly was there.”
Oxendine was eating breakfast inside the restaurant of his hotel with a business associate, when who should walk in and start striding toward their table but Reginald Lewis.
“How’s my proposal going?” Lewis asked. “Is there anything I can do?”
“Lewis was very articulate, very persistent, and very tenacious,” Oxendine remembers.
On the day Oxendine was to go before his board, Lewis traveled down to Washington from Manhattan. He insisted that he be physically present in the conference room while the board met, against the wishes of Oxendine who requested that Lewis wait outside the room.
As he reviewed each proposal for the board, Oxendine generally had a few supportive words to say. But when he went over Lewis’s loan application, Oxendine was silent. The board picked up on Oxendine’s silence and voted to reject Lewis’s business plan, with only Savage voting in favor. Lewis couldn’t believe what had happened. Savage’s help and Lewis’s lobbying had been for naught. In protest, Savage resigned from Broadcast Capital’s board the same day and he and a smoldering Lewis turned on their heels and headed north for New York.
Lewis continued to plumb his contacts to arrange for financing. His next stop was CVC Capital, a Manhattan MESBIC that specialized in lending money to minorities buying broadcast properties. It was run by Joerg Klebe.
“He was a very tough negotiator,” Klebe says of Lewis. “He wanted things that we weren’t prepared to give to him. We wanted personal guarantees and he was very reluctant to give that to us. But it didn’t seem that he had any other source of financing, so we pretty much got what we wanted.”
Although Klebe harbored some of the same reservations Oxendine had, he pushed the deal through. “Reg wasn’t really an owner-operator, and that kind of deal isn’t going to fly unless you’re an owner-operator,” Klebe says. “I think it was the first deal that Reg really did. I think the deal was more important than the operational side of the thing. Reggie was at no point prepared to manage and operate this station.”
CVC agreed to make Lewis a loan for $150,000, provided that it was secured by the three apartment buildings Lewis and his wife owned on 10th Avenue and some Warner Communications stock Lewis owned.
Lewis also succeeded in tapping a Puerto Rican bank, Banco Popular, for a loan of $275,000. The loan was secured by a personal guarantee from Lewis and by his vacation home at Springy Banks. “I promise that you’ll get every penny back,” Lewis told the bank.
With his financing in place, Lewis went ahead with the purchase of the St. Thomas FM station in July 1982. A portion of the financing was used for the station’s initial working capital.
The purchase of the St. Croix station did not push through, so the St. Thomas station became the first piece of what Lewis optimistically christened the Caribbean Basin Broadcasting network. The station was renamed WSTT-FM. Lewis appointed a board of directors for the company that included a number of friends, including Ricardo Olivarez, James Obi, a senior executive at Equitable Life Insurance, and an architect from St. Thomas, Robert De Jongh. Meetings were held at the elegant Harvard Club in Manhattan. Unfortunately for Lewis, things began to go awry with his broadcast property almost immediately.
The station operated out of a rat-infested trailer located in the mountainous area of the island, making its signal difficult for most listeners to receive. Its equipment was ramshackle at best and often on the blink. The station spent more time off the air than on, and building a profitable advertising base proved more difficult than the optimistic Lewis had predicted.
WSTT had a husband and wife team that acted as disc jockeys and sales staff. It soon became clear they weren’t up to the task.
Lewis put his brother, Jean, in charge. Fugett actually moved to St. Thomas and at one point became an on-air personality. However, he was put in the middle of an impossible situation where revenue did not cover expenses. The station became a financial black hole for Lewis.
In July 1986, Lewis cut his losses and sold WSTT, putting an end to his dream for a Caribbean radio network. However, he would continue to explore the possibility of purchasing other radio stations.
Phyllis Schless, an investment banker with Bear, Stearns & Co., represented a client trying to unload six small stations experiencing financial difficulties. In early 1983, Schless was looking for a potential purchaser of the properties. Klebe put her in touch
with Lewis, who was very interested in buying the stations, located in Florida, Ohio, and New York. Lewis moved expeditiously to solidify a deal.
“I was impressed with the fact that he seemed to be very knowledgeable, seemed to know what he was doing, and what he could do,” Schless says. “I thought he would be a very good candidate to acquire these stations.”
The transaction was worth about $3 million and Lewis had to come up with $1.5 million. However, the management company owning the stations was not particularly impressed with Lewis. It decided that Lewis wasn’t good for the remaining $1.5 million needed to purchase the stations, nor was he capable of successfully managing the stations if he ever obtained them. The deal collapsed in July 1983.
The ignominy of Caribbean Basin Broadcasting and Lewis’s failed attempt to buy more radio stations would have discouraged most individuals, but just served to further whet Lewis’s desire to buy and run a successful business.
In August 1983, Schless got a phone call from Lewis in her office. “I have an interesting little situation,” he told Schless. “I’d like you to come over. Why don’t we kick it around?”
Schless came by to see Lewis at 99 Wall Street. His “interesting little situation” was a company by the name of McCall Pattern Company, a 113-year-old maker of home sewing patterns with revenues of $51.9 million. Lewis had just tried and failed to pull off an acquisition valued at $3 million. His reaction was to go after another acquisition more than seven times bigger.
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Drexel, the Bear, and the $18 Million Race: Closing the McCall Pattern Deal
The year that Reginald Lewis went after McCall, 1983, it seemed that every day brought news of yet another corporate takeover or leveraged buyout being consummated. The huge conglomerates built up in the 1950s and 1960s were now being dismantled and operations that did not fit in with a company’s business emphasis were being unceremoniously sold off to the highest bidder.
Why Should White Guys Have All the Fun? Page 16
