Sam Wyly

Samuel E. "Sam" Wyly
Born	(1934-10-04) October 4, 1934 Lake Providence East Carroll Parish Louisiana, USA
Residence	Dallas, Texas, USA
Alma mater	Louisiana Tech University University of Michigan Ross School of Business
Occupation	Businessman; Philanthropist
Political party	Republican
Religion	Christian Scientist
Spouse(s)	(1) Rosemary Wyly (married 1960-1976, divorced) (2) Victoria Steele Wyly (married 1978, divorced) (3) Cheryl Wyly
Parent(s)	Charles, Sr., and Flora Wyly
Relatives	Charles Wyly (brother)

Samuel E. Wyly, known as Sam Wyly (born October 4, 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, Jr., was nearly equal in wealth; the two brothers were close with their business affairs, and were often referred to as the "Wyly brothers". Wyly's memoir, 1,000 Dollars and an Idea: Entrepreneur to Billionaire, was published in September 2008.^[1]

Early life and education

Wyly was born in Lake Providence, the parish seat of East Carroll Parish in northeastern Louisiana and one of the poorest communities in the United States.^[2] He began working at an early age, helping his father, Charles Wyly, Sr., and mother, Flora Wyly, to publish a weekly newspaper, The Delhi Dispatch in Delhi in Richland Parish. He sold advertising, wrote stories, folded and addressed the finished papers, and cleaned the printing presses.^[3][4]

Following high school, Wyly went to Louisiana Tech University.^[3] He worked his way through college by selling class rings.^[4] In 1952, known as the time as "Bubba" Wyly, he was the head page in the Louisiana House of Representatives, recalled one of the young men who worked under his supervision, Jasper "Jake" Smith, III, son of State Representative Jasper K. Smith of Caddo Parish.^[5] The Wyly brothers later honored one of their Tech professors, Robert C. Snyder, of the English department, with an endowed chair.^[6]

Following graduation, Wyly went to the University of Michigan's Ross School of Business in Ann Arbor, Michigan, where in 1957 he received a Master of Business Administration degree before such credentials became so recognized. He is one of five Michigan Business School graduates who are billionaires. He was able to attend only because of a new scholarship program, having enrolled as the school's first Paton scholar .^[7]

Business career

After receiving his MBA Wyly moved to Dallas to work as a salesman at IBM's Service Bureau Corporation.^[2] 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.^[4]

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;.^[4] The company went public in 1965.^[2] By 1968, sales were $60 million; in 1971, they were $125 million.^[8]

• 1967: With his brother Charles, bought the restaurant chain Bonanza Steakhouse.^[3] He had initially started investing in it with money from the sale of stock in UCC.^[4] The company grew to approximately 600 restaurants by 1989,^[3] 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.^[8]

• Co-founded Earth Resources Company, an oil refining and silver and gold mining company, served as its Executive Committee Chairman from 1968 to 1980.^[9]

• 1970: Purchased Computer Technology, which functioned as the in-house data processing unit for LTV, for $40 million in cash and notes.^[8]

• 1972: Sold a computer terminal business to Harris-Intertype, writing off $32 million in investments.^[8]

• 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.^[8]

• 1981: Co-founded Sterling Software.^[9] The company was sold to Computer Associates in 2000 for $4 billion.^[3]

• 1982: Bought controlling interest in an arts-and-crafts chain Michaels;^[3] 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.^[2]

• 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 hedge 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.^[10]

• As of 2006, Wyly was the largest stockholder of clean-energy producer Green Mountain Energy.^[3]

• In 2006 Wyly also was the largest investor in the online social networking company Zaadz.com at an estimated 1.5m.

• In March 2007, Forbes magazine estimated Wyly's net worth to be $1.1 billion.^[11] In September 2006, Forbes ranked him as the 354th wealthiest American.^[3]

Books

Cheryl and Sam Wyly purchased Explore Booksellers and Bistro in January 2007, ending concern by Aspen, Colorado locals that one of the largest independent bookstores in the area would be sold to real estate investors.^[12]

Sam wrote his memoir, 1,000 Dollars & an Idea: Entrepreneur to Billionaire, in 2008 (Newmarket Press).^[13]

His illustrated biography, Beyond Tallulah, How Sam Wyly Became America’s Boldest Big-Time Entrepreneur, by Dennis Hamilton (Melcher Media) was published in 2011.^[14]

Sam and his son, Andrew Wyly, (with a Foreword by Walter Isaacson), wrote Texas Got It Right! in October, 2012 (Melcher Media).^[15]

Politics

In March 2007, commenting on the 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."^[16] Wyly and his brother Charles have personally given about $10 million to Republican causes and candidates between the early 1970s and 2006, they say;^[17] both are Bush Pioneers.

In 2000, Sam Wyly contributed $2.5 million to a group called "Republicans for Clean Air",^[18] 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.^[19]

In 2004, Wyly also donated $20,000 to the Swift Boat campaign that raised questions about Sen. John Kerry's military record in Vietnam, helping scuttle Kerry's challenge to Bush. Wyly said in 2008 that he was not leaning toward either Republican John McCain or Democrat Barack Obama in that year's presidential campaign, and would not get involved in the race.^[20]

Philanthropy

Wyly and his late brother Charles spent more than ninety million dollars on a wide range of charities.^[21] In 1968, he set up the Sam Wyly Foundation to help minority businessmen.^[4] He also helped to start an educational TV channel in Dallas.^[4]

With Charles, he funded the Charles Wyly Sr. Tower of Learning, designed by the Bastrop architect Hugh G. Parker, Jr., on the Louisiana Tech campus, in memory of their father. The building includes a computer center and the university library.^[4] He also made a $10 million gift for Sam Wyly Hall, at the University of Michigan (2000),^[7] and is a significant supporter of the Aspen Writers' Foundation.^[16]

Controversy and bankruptcy

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.^[22]

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,^[23] regarding their use of potentially illegal offshore tax shelters. Senate investigators allege that the Wyly brothers used the offshore trusts to buy $30 million worth of artwork, jewelry, furniture and other items for their personal use. The Wyly brothers denied any wrongdoing, and stated that they just followed the advice of their financial advisers.^[23] 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.^[24]

On July 29, 2010, the Securities and Exchange Commission charged Charles and Sam Wyly with fraud for violating federal securities laws governing ownership and trading of securities by corporate insiders. The Wyly brothers are alleged to have profited by more than $550 million in undisclosed gains. The charges state that this occurred through the trading of stock in public companies that the brothers were serving as board members. They allegedly, through hidden entities located in foreign jurisdictions, concealed their ownership and trading of those securities.^[25][26][27] On May 12, 2014, a jury found the Wyly brothers guilty of the charges.^[28]

On October 19, 2014 Sam Wyly filed for bankruptcy after having lost a fraud case^[29] brought by the SEC.^[30][31] In April 2015, the Internal Revenue Service filed claims amounting to 3.2 billion dollars for unpaid income taxes, interest and penalties against Wily and the estate of his late brother. His lawyer called the IRS claims "unfair and absurd."^[32]

Personal

Wyly and his brother Charles, older by a year, were close all their life. They played high school football, attended Louisiana Tech University, and joined Pi Kappa Alpha Fraternity together. The brothers have worked together in a large number of businesses they've owned or run.^[17][33]

From 1960 to 1976, Wyly's wife was named Rosemary. In 1978 in Dallas, he married Victoria L. Steele.^[34]In August 2006, Wyly and his third wife,^[3] Cheryl, lived in a 8,450-square-foot (785 m²), $7.48 million house in Highland Park, Texas.^[17] Wyly has six adult children^[4] from his first two marriages.^{[3] [8]}

References

External links

• Official website of Sam and Charles Wyly
• Oral history interview with Sam Wyly, Charles Babbage Institute, University of Minnesota, by David Allison, December 6, 2002. Wyly recounts 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), 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.

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