- Harold Simmons
Harold Clark Simmons (born
1931 , Golden,Wood County, Texas ) [Richard Kimble, [http://yaf.org/media/libertas/Libertas28.2/Final%20Proof.Libertas_LowRes%206.pdf "Philantropist Harold Simmons Establishes Lectyre Series Featuring Senator Zell Miller"] ] is an American businessman whose banking expertise helped him develop the acquisition concept known as theleveraged buyout (LBO) to acquire variouscorporation s. He is the owner of "Contran Corporation" and of "Valhi, Inc.", (aNYSE traded company about 90% controlled by Contran). [ [http://knowledgebase.pub.findlaw.com/scripts/getfile.pl?FILE=articles/pmsllp/pmsllp000056&TITLE=Subject&TOPIC=Corporations%2520%2520Enterprise%2520Law_Director%2520%2520Officer%2520Liability&FILENAME=corporationsenterpriselaw_1_114 "Conflicts of Interest and Special Committees Revisited: Has Kahn V. Tremont Corp. Permanently Changed the Landscape, or Merely Slyghtly Altered It?"] , FindLaw.com] As of 2007 he has an estimated net worth of around $7.4 billion dollars. [ [http://www.forbes.com/lists/2007/54/richlist07_The-400-Richest-Americans_Rank_print.html "The 400 Richest Americans (2007)"] , Forbes.com]Education
Simmons has BA (1951) and MA (1952) degrees in agricultural economics from the
University of Texas at Austin . [Bill Bancroft, "Perils of the Simmons Watch," "New York Times", December 3, 1989.]Career
After completing graduate school in 1952, Simmons worked for the U.S. government as a bank examiner, then for a Dallas-based bank. In 1960, using $5,000 of his savings, he borrowed money to buy a small drugstore, which he parlayed into a chain of 100 stores, which in 1973 he sold for more than $50 million, to
Eckerd Corporation . This launched his career as an investor. [http://cache.zoominfo.com/cachedpage/?archive_id=0&page_id=959603324&page_url=%2f%2fwww.andrewscountynews.com%2fnews%2fget-news.asp%3fid%3d2752%26catid%3d1%26cpg%3dget-news.asp&page_last_updated=1%2f5%2f2005+10%3a56%3a57+PM&firstName=Harold&lastName=Simmons "Simmons donates $15 million for cancer research"] , "Andrew County News", January 5, 2005]Simmons developed his "all debt and no equity" philosophy of capital managment from having observed banks as a bank examiner, realizing that "Small banks in Texas were casual about getting the maximum use of their funds. . . banks were the most highly leveraged thing I saw. They borrowed most of their money and really didn't need much equity except for purposes of public confidence." Understanding that banks could be bought entirely with borrowed money, Simmons theorized that he should "buy a bunch, because one bank could be used dto finance another. All debt and no equity." [Bill Bancroft, "Perils of the Simmons Watch,"
New York Times , December 3, 1989.]Known as a formidable corporate raider, Simmons' acquired the nickname "The Ice Man" in the 1980's. [Dan Morain, "Billionaire Harold Simmons Funded Ad Linking Obama, Ex-Weatherman Ayers," "Los Angeles Times", August 23, 2008.]
Simmons conducted a widely publicized but ultimately unsuccesful takeover attempt on the
Lockheed Corporation , after having gradully acquired almost 20 per cent of its stock. Lockheed was attractive to Simmons because one of its primary investors wasCALPERS the pension fund of the state of California. Citing the "mismanagement" of its chairman,Daniel M. Tellep , Simmons stated a wish to replace its board with a slate of his own choosing, since he was the largest investor. His board nominations included former Texas SenatorJohn Tower , the onetime chairman of the Armed Services Committee, and Adm.Elmo Zumwalt Jr ., a former chief of Naval Operations. [Thomas Hayes, "Lockheed Fends Off Simmons," "The New York Times", March 19, 1991.]In 1997 Simmons made a $5 million investment in T. Boone Pickens, Jr.'s first fund "BP Capital Energy Commodity Fund"; by 2005 this had grown to $150 million. [ [http://www.projo.com/business/content/projo_20041007_boon07x.49718.html "Raider to trader - Rising oil prices bring gushing profits to T. Boone Pickens"] , www.projo.com ]
Capital Gains Tax Opposition & Activism
In 1964, Simmons set up a trust for his daughters, based on a single drugstore worth $33,000. [Allen R. Myerson, "Wealthy Texan Has Tough Talk for 2 Daughters," "New York Times", April 12, 1997.] By the 1990's Simmons had placed the bulk of his fortune, including homes, vehicles, a Falcon jet, and controlling stakes in two companies into two trusts to benefit his daughters and their descendants, to shield his assets from creditors, tax collectors, and their mother, his ex-wife. [Allen R. Myerson, "A Family Feuds Over 2 Trust Funds," "New York Times", April 8, 1997.] The trusts later were challenged by two of his daughters who brought suit against him in 1997 who accused him of using the trusts illegally for political purposes. [Ibid.]
In August 1997, President
Bill Clinton used a line-item veto to draw attention to the type of "special benefits" that investors such as Simmons employ to avoid paying capital gains taxes since the early 1980's. Simmons had formed the "Snake River Sugar Cooperative" of 2,000 beet farmers and classified it as a joint-venture, shared ownership co-op, to purchase his Amalgamated Sugar Company, for $260 million. At the time,Charles Schumer , serving as a House Representative from New York, wrote a letter to Clinton stating that the measure before him for consideration would benefit Simmons with a $104 million tax deferral. Simmons stated at the time that his tax deferral was only $80 million. [Allen R. Myerson, "Billionaire Feels Sting of Line Item Veto," "New York Times", August 12, 1997.]Political activism
1980sDuring the Ronald Reagan presidency, Simmons was a contributor to GOPAC, the political action committee originally founded by
Newt Gingrich when he was Speaker of the U.S. House of Representatives. Simmons also contributed to the defense funds ofOliver North andJohn Poindexter , Reagan aides implicated in theIran-Contra scandal.1990sIn 1993, Simmons was fined $19,000 by the Federal Election Commission for exceeding the legal limit of campaign contributions in 1989 and 1990 elections. [Allen R. Myerson, "A Family Feuds In Texas Over 2 Trust Funds," "New York Times", April 8, 1997.]
Between 1993 and 1997, Simmons and family members and Contran gave more than $315,000 to Republican candidates, according to FEC records. [Allen R. Myerson, "A Family Feuds in Texas Over 2 Trust Funds," "New York Times", April 8, 1997.]
When the Internal Revenue Service judged in 1996 that one of Simmons' two family trusts was used as his own property and therefore subject to tax law, [Barnaby J. Feder, "Mistrial Declared in Dispute Over Billionaire's Empire," "New York Times", December 18, 1997.] two of Simmons' four daughters sued him, alleging that he had mismanaged the two trusts he had created for them, valued at that time at one billion dollars, that he had forced them to sign blank letters for political contribution purposes to use for whatever cause he saw fit, that he had contributed money in their names to causes and campaigns that they themselves opposed, and that he had pressured them into making "illegitimate" and "illegal" campaign contributions from the trusts he had established for them. [Allen R. Myerson, "A Family Feuds In Texas Over 2 Trust Funds," New York Times, April 8, 1997; Allen R. Myerson, "Wealthy Texan Has Tough Talk for 2 Daughters," "New York Times", April 12, 1997.] After a publicly acrimonious Dallas probate court battle that lasted eight weeks, Judge Nikki DeShazo declared a mistrial. [Barnaby J. Feder, "Mistrial Declared in Dispute Over Billionaire's Empire," "New York Times", December 18, 1997.] The suit was settled when Simmons agreed to give each of the two daughters $50 million, if they would reliquish all claim to his remaining wealth, which at that time was estimated to be at $1.2 billion. Simmons other two daughters remained the beneficiaries of his wealth. The FEC launched an investigation into the contributions to political campaigns that he had made in his daughters' names. [Allen R. Myerson, "Agreement Ends Simmons Family's Feud," "New York Times", February, 11, 1998.]
2004 presidential electionDuring the 2004 presidential campaign Simmons made a $4 million donation to the controversial group Swift Vets and POWs for Truth, along with
Houston homebuilderBob Perry and Dallas oilmanT. Boone Pickens . [Wayne Slater, Gomer Jeffers, "Dallas Billionaire Harold Simmons Finances Anti-Obama Ad," "Dallas Morning News", August 23, 2008.] He also donated $100,000 toGeorge W. Bush 's January 2005 inaugural ball. [ [http://www.krem.com/sharedcontent/washington/politics_topstories/011805ccdrwashmoney.1e46d1b2.html "Bush inaugural ball in big donors' court - Top-tier contributions to revelry viewed by some as an investment"] , krem.com]2008 presidential electionSimmons, a longtime Republican donor, gave the maximum $2,300 contributions to Senator John McCain last year, as well as to former Governor Mitt Romney and to former Mayor Rudy Giuliani. He's listed as a bundler for the McCain campaign on McCain's website, which says he's raised between $50,000 and $100,000 for the Republican candidate. He's also contributed to Rep.
Chet Edwards , a Texas Democrat. [Mark Murray, “Obama, Meet Harold Simmons,” "First Read, MSNBC", August 23 , 2008] Simmons has given more than $500,000 to Texas governorRick Perry , and more than $300,000 to Texas Lt. GovernorDavid Dewhurst and Attorney GeneralGreg Abbott . [Wayne Slater, "Dallas Billionaire Harold Simmons Finances Anti-Obama Ad," "Dallas Morning News", August 23, 2008.]In 2008 Simmons was listed as the sole donor to the
American Issues Project , an independent political group with 501(c)4 tax status that created and bought airtime for ads about 2008 Democratic Presidential candidate SenatorBarack Obama 's ties toWilliam Ayers , who had been a member of the Weather Underground. [ [http://www.huffingtonpost.com/2008/08/22/anti-obama-ayers-ad-funde_n_120735.html "Anti-Obama Ayers Ad Funded By One Billionaire McCain Supporter"] ,Huffington Post , August 22, 2008] Obama's political platform had proposed changes in the capital gains tax codes that would affect investors such as Simmons. AIP's advertisements were rejected by only two news outlets on the grounds they appeared to be in violation of campaign finance laws; they were otherwise aired continually in Michigan, Ohio, Pennsylvania and Virginia at a cost of $2.8 million. [ [http://www.chicagotribune.com/news/nationworld/chi-obama-mediasep17,0,6325137.story "Obama mobilizes rapid response on Web - Campaign targets unsympathetic media"] ] A complaint against the American Issues Project was filed with the Federal Election Commission on October 10, 2008, by a campaign finance watchdog group, Democracy 21, which alleged that AIP conducted its operations illegally, since 501(c)4 groups must declare that their purpose is not to influence the outcome of elections. [Associated Press, "Watchdog Seeks Probe of a Political Group's TV Ads," October 10, 2008.]Environmental Management
Simmons is also the proponent of a controversial plan to store nuclear waste in West Texas, which his radioactive waste management company, Waste Control Specialists, would administer. [ Mark Murray, “Obama, Meet Harold Simmons,” "First Read, MSNBC", August 23 , 2008]
Philanthropy
Simmons donated money to help fund the Hobby-Eberly Telescope Dark Energy Experiment at the University of Texas. He has previously given to UT athletic programs and the McCombs School of Business. By 2005, total donations from his family and foundation to the UT Southwestern Medical Center at Dallas exceeded $70 million. In 2008 the Harold Simmons Foundation made a donation of $5 million to the Dallas Zoo, the largest single private contribution in the zoo's 120 year history. [ [http://www.pegasusnews.com/news/2008/sep/03/dallas-zoo-receives-largest-private-gift-its-120-y/ "Dallas Zoo receives largest private gift in its 120-year history"] , Pegasus News, September 3, 2008]
References
Further reading
*
John J. Nance – "Golden Boy: The Harold Simmons Story", ISBN 1571687475External links
* [http://www.forbes.com/lists/2006/54/biz_06rich400_Harold-Clark-Simmons_HT3L.html Forbes 400 list] , "Forbes" magazine
* [http://www.zoominfo.com/Search/ReferencesView.aspx?QueryID=a72d433e-9ceb-4809-9b81-bbde1f61b462&Page=3 Zoominfo]
* [http://www.secinfo.com/$/Search.asp?Find=Harold+C.+Simmons SEC info]
* [http://www.hoovers.com/contran/--ID__40105--/free-co-factsheet.xhtml Contran Corporation]
* [http://www.valhi.net Valhi, Inc]
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