Sam Wyly

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Samuel "Sam" Wyly (b. 1934) is an American entrepreneur and businessman, philanthropist, and major contributor to conservative campaigns and candidates. In 2006, Forbes magazine estimated his net worth at $1.1 billion. His older brother, Charles Wyly, is nearly equal in wealth; the two brothers are close with their business affairs, and are often referred to as the "Wyly brothers".

Contents

[edit] Early life and education

Wyly was born in Lake Providence, Louisiana.[1] He began working at an early age, helping his father and mother publish a weekly newspaper, the Delphi Dispatch. He sold advertising, wrote stories, folded and addressed the finished papers, and cleaned the printing presses.[2][3]

Following high school, Wyly went to Louisiana Tech University.[2] He worked his way through college by selling class rings.[3]

Following graduation, he went to the University of Michigan's Ross School of Business, where he received a Masters of Business Administration degree in 1957 (he is one of five graduates who are billionaires). He was able to attend only because of a new scholarship program, and enrolling as the school's first Paton scholar.[4]

[edit] Business career

In March 2007, Forbes magazine estimated Wyly's net worth to be $1.1 billion. [5] In September 2006, Forbes ranked him as the 354th wealthiest American.[2]

After receiving his MBA, Wyly moved to Dallas to work as a salesman at IBM's Service Bureau Corporation.[1] Three and a half years later he left IBM to become the area sales manager for Honeywell, establishing their computer business in Dallas and Oklahoma.[3]

Wyly's wealth comes from businesses that he founded and developed, or purchased and expanded;

  • 1963: founded University Computing Company (UCC), which provided computer services to engineers, scientists, and researchers with Sun Oil Company, Texas Instruments, and others. He began the company with $1,000 and three customers;[3]. The company went public in 1965.[1] By 1968, sales were $60 million; in 1971, they were $125 million.[6]
  • 1967: With his brother Charles, bought the restaurant chain Bonanza Steakhouse.[2] He had initially started investing in it with money from the sale of stock in UCC.[3] The company grew to approximately 600 restaurants by 1989,[2], when the two brothers sold it.
  • 1968: Acquired Gulf Insurance; at the time, the company had free equity of $52 million and $63 million unrealized capital gains. [6]
  • Co-founded Earth Resources Company, an oil refining and silver and gold mining company, served as its Executive Committee Chairman from 1968 to 1980.[7]
  • 1970: Purchased Computer Technology, which functioned as the in-house data processing unit for LTV, for $40 million in cash and notes.[6]
  • 1973: Divided UCC into four companies, including Datran, which began construction of a nationwide system of microwave towers to transmit data among 27 American cities in direct competition with AT&T.[6]
  • 1982: Bought controlling interest in an arts-and-crafts chain Michaels;[2]; the company's revenues grew from $10 million at the time of purchase to $1.24 billion by 1996. In July 2006, Bain Capital and the Blackstone Group purchased the company for $6 billion.[1]
  • 1986: Purchased Frost Bros., a specialty retail chain, from Manhattan Industries. After failing to reorganize while operating under bankruptcy protection, the company was liquidated in mid-1989.
  • In 1990, co-founded private equity fund Maverick Capital, which by 2003 had about $8 billion in assets. Beginning in 1993, his son Evan, a Maverick co-founder, and money manager Lee S. Ainslie III managed the fund.[8]
  • In 2006 Wyly also was the largest investor in the online social networking company Zaadz.com at an estimated 1.5m.

[edit] Politics

In March 2007, commenting a purchase of a local bookstore by Wyly and his wife Cheryl, the Aspen Times noted that the Wyly family "has been known not only for its philanthropic efforts, but also its large contributions to conservative political campaigns and candidates."[9] Wyly and his brother Charles have personally given about $10 million to Republican causes and candidates between the early 1970s and 2006, they say;[10] both are Bush Pioneers.

In 2000, Sam Wyly contributed $2.5 million to a group called "Republicans for Clean Air",[11] which ran ads praising George W. Bush's environmental record and criticizing that of John McCain. The ads ran in New York, Ohio, and California in advance of early March primaries, at a time when Bush and McCain were locked in a tight struggle for the Republican presidential nomination. It initially was unclear who was behind the group or who paid for the ads until Wyly stepped forward to take the credit.[12]

[edit] Philanthropy

In 2006, the Dallas Morning News estimated that Wyly and his brother Charles had spent more than ninety million dollars on a wide range of charities.[10] His philanthropy has included:

  • In 1968, setting up the Sam Wyly Foundation to help minority businessmen.[3]
  • Helping to start an educational TV channel in Dallas.[3]
  • Funding, with his brother Charles, the Charles Wyly, Sr., Tower of Learning, on the campus of Louisiana Tech, in memory of their father. The building includes a computer center and the university library.[3]

[edit] Investigations

In 1979, Wyly settled Securities and Exchange Commission charges that he made undisclosed payments to associates to buy up company bonds as part of a plan to stave off bankruptcy. He settled without acknowledging any wrongdoing.[13]

In August 2006, the Dallas Morning News reported that Sam and Charles Wyly were under investigation by the SEC , a grand jury in Dallas and a grand jury in New York,[14], regarding their use of potentially illegal offshore tax shelters. Senate investigators allege that the Wylys used the offshore trusts to buy $30 million worth of artwork, jewelry, furniture and other items for their personal use. The Wylys deny wrongdoing, saying they just followed the advice of high-priced financial advisers.[14] They told the Senate Permanent Investigations subcommittee investigating the offshore tax shelters that they would invoke their Fifth Amendment right against self-incrimination; they were not called to testify.[15]

[edit] Personal

Sam and his brother Charles, older by a year, have been close all their life. They became Eagle Scouts together. They played high school football together. Both went to Louisiana Tech University and joined the same fraternity. They have worked together in a large number of businesses they've owned or run, over the years.[10]

In August 2006, the Daily Morning News reported that Wyly and his third wife,[2] Cheryl, lived in a 8,450-square-foot, $7.48 million house in Highland Park, Texas.[10] Wyly has six grown children[3] from his first two marriages.[2]

In a 1973 article, Forbes magazine said he was a "devout Christian Scientist".[6]

[edit] Notes

  1. ^ a b c d Rigoni, Gene. "Sam Wyly 'Innovates To Opportunity' Time And Time Again", Monroe Street Journal, Stephen M. Ross School of Business, University of Michigan, January 13, 1997
  2. ^ a b c d e f g h i j "The 400 Richest Americans: #354, Samuel Wyly", Forbes magazine, September 21, 2006
  3. ^ a b c d e f g h i "Sam Wyly, Chairman, Sterling Software Inc. and Michaels Stores, Inc.", Horatio Alger Association of Distinguished Americans], retrieved September 21, 2007
  4. ^ a b Doyle, Rebecca A. "Sam Wyly Hall officially opens", University Record, University of Michigan, April 17, 2000
  5. ^ "The World's Billionaires", Forbes magazine, March 8, 2007
  6. ^ a b c d e f "Man With his Back to the Wall: With his Once-proud Empire Crumbling Around him, UCC’s Sam Wyly is Still Hanging on"f, Forbes magazine, June 1, 1973, accessed September 22, 2007
  7. ^ a b Sterling Software filing with the SEC, Form:10-K/A, filing date: January 26, 1994
  8. ^ Stephanie Anderson Forest, "Sam Wyly's Hedge-Fund Fiasco: Hiring a "family friend" brought lawsuits instead of fat returns", Business Week, September 1, 2003
  9. ^ a b Rick Carroll, "End of an era: Explore sells for $4.6 million", Aspen Times, March 6, 2007
  10. ^ a b c d Katie Fairbank and Sudeep Reddy, "Billionaire brothers under a microscope: They're known for gifts to charities, politics, but tax shelters scrutinized", Dallas Morning Times, August 27, 2006
  11. ^ Joe Conason, "Tit for tat?", Salon magazine, March 6, 2000
  12. ^ Laura Meckler,, "FCC Probing Group That Paid For Bush Ads", The Associated Press, March 9, 2000
  13. ^ Barry Meier, "The View From GreenMountain; Financier Mixes Business, the Environment and Politics", New York Times, March 16, 2000
  14. ^ a b Brendan M. Case, Selling secret accounts draws scrutiny: Senate report blasts Dallas firm for offshore services for the masses", Dallas Morning News, August 13, 2006
  15. ^ David Cay Johnston, "U.S. blows the whistle on tax cheats: Evasion is rampant among the super-wealthy, report finds", International Herald Tribune, August 1, 2006

[edit] External links

  • Oral history interview with Sam Wyly. Charles Babbage Institute, University of Minnesota, Minneapolis. Oral history interview by David Allison, 6 December 2002. Wyly begins by recounting his childhood, and education prior to going to work for IBM’s Service Bureau Corporation, and then joining Honeywell as an area sales manager. He discusses how he left Honeywell to form University Computer Corporation (UCC), which transitioned into a software services business. Wyly explains his growing focus on computing and telecommunications, his formation of Datran, and his unsuccessful attempt to acquire Western Union. Much of the interview focuses on ongoing developments at UCC, the eventual sale of this firm to Computer Associates, his formation of Sterling Software, its acquisition of Informatics, the sale of Sterling, and his ideas on the future of information technology. Throughout Wyly’s discussion of UCC and Sterling, he elucidates upon his leadership philosophy, and the strategic, technical, operational, and financial management of these firms.
  • Official website of Sam and Charles Wyly