Sam Wyly

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Samuel E. Wyly, known as Sam Wyly (born October 4, 1934), is an American entrepreneur and businessman, author, 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., had about half his 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 & an Idea: Entrepreneur to Billionaire, was published in September 2008. He is of Scots, Irish, Welsh and English descent. His forebears came to America convergently in the 1600s, 1700s, and 1800s. His new book is titled The Immigrant Spirit: How Newcomers Enrich America.

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Early life and education

Wyly was born in Lake Providence, which Mark Twain described in Life on the Mississippi as, "the first truly southern" town as you go downriver. It is the parish seat of East Carroll Parish in northeastern Louisiana and one of the poorest communities in the United States. 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 Richland Parish. He sold advertising, wrote stories, folded and addressed the finished papers, and cleaned the printing presses. In the summer, he rough necked in the Delhi Oil Field.

In high School he played nose guard on a football team that became state champions. His Cherokee teammate, Monroe Fowler, said, "We were 'oil field trash' who moved to Delhi with the big oil discovery. But, when Bubba took me to his home, I could feel the gentility of the old South."

Following high school, Wyly went to Louisiana Tech University partly working his way through college by selling class rings. His brother, Charles, had a football scholarship that paid tuition, room, and board, and laundry, plus $15 a month. Sam was elected class president and student senate president and participated on the college debate team arguing whether America should "recognize Red China." In 1952, known at 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. The Wyly brothers later honored one of their Tech professor, Robert C. Snyder, of the English department, with an endowed chair. And in 1983, they endowed the University with the sixteen story Wyly Tower of Learning using profits from their University Computing stock.

Wyly went to graduate school at the University of Michigan's School of Business in Ann Arbor, where he dropped the "Bubba" and became "Sam." In 1957 he received a Master of Business Administration. He was Michigan's first Paton scholar and was able to attend only because of that new scholarship. He took their first course taught in computers. He is one of five Michigan Business School graduates who are billionaires. He coded programs in machine language on the IBM 650 computer and learned the von Neumann concept in which both the data and the program are stored in the same memory. He saw the computer as being a productivity tool as powerful as the tractors, trucks and electricity that were increasing the productivity of American farm workers as much as 100 to one for his home parish cotton farmers, and sending farm boys and girls to work in the cities.

Maps Sam Wyly

Business career

After Michigan, Wyly went to Air Force Boot Camp in San Antonio and later moved to Dallas to work as a salesman at IBM's Service Bureau Corporation. Three and a half years later, at the time when Fortune Magazine described the computer industry as "IBM and the seven dwarfs," Wyly left IBM to become the area sales manager for Honeywell, one of the dwarfs, establishing their computer business in Dallas, Ft. Worth, and Oklahoma. When Honeywell rejected his plan for a new technology computing center to replace the obsolete Univac at SMU, he quit to do it himself. In November 1963, the month that Wyly Started his company, President Kennedy was shot in Dallas. Sam had taken a lunch break to watch the parade from the downtown Neiman Marcus store. He first saw himself as a computer guy, then as an entrepreneur, and then as an author.

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. He capitalized the company with his own $1,000 commitments from customers including Sun Oil Company, Texas Instruments and SMU, and $650,000 borrowed from the First National Bank in Dallas. The company went public in 1965. In four years, UCC stock gained 100-1 over its IPO price. Lots of employees and early investors became millionaires. By 1969, it was one of only five companies headquartered in Texas with a market capitalization of $1 billion or more. By 1968, sales were $60 million; in 1971, they were $125 million.
• 1967: Bought the ten store restaurant chain Bonanza Steakhouse. and ran TV ads using the actors who played "Hoss," "Little Joe," "Adam", and "Pa Cartwright" from the TV series Bonanza. Bonanza grew to approximately 600 restaurants by 1989, when the two brothers sold it to John Kluge, a German-born entrepreneur, then the richest man in America.
• 1968: Acquired Gulf Insurance, which had free equity of $52 million and $63 million unrealized capital gains to help fund his biggest dream - a nationwide digital network to compete with AT&T, the national telephone monopoly. AT&T's plant was based on analogue technology--good for voice calls--but, not for computer to computer talk. Gene Bylinsky of Fortune wrote, "Sam Wyly builds a telephone company for computers." In his 1968 keynote speech to the Spring Joint Computer Conference in Atlantic City, Wyly said, "The computer user has dialed into a busy signal."
• 1968: Launched a takeover bid for Western Union, the only company that already had nationwide right of ways to compete with AT&T with a "highway for computers." Today, it's called the internet. His bid was foiled by a New York State law that said nobody could own more than ten percent of a telegraph company. That delayed digital competition in America, but not for long.
• 1968 Co-founded Earth Resources Company, an oil refining and silver and gold mining company, that built a refinery in North Pole, Alaska to make jet fuel for airplanes flying over the Arctic Sea. His capital investments in the Memphis refinery "got the lead out" of gasoline and fueled the fast growth of entrepreneur Fred Smith's Federal Express that brought overnight delivery competition to the U.S. post office. Served as its Executive Committee Chairman from 1968 to 1980.
• 1970: Purchased Computer Technology, which functioned as the in-house data processing unit for airplane manufacturer, LTV, for $40 million in cash and notes.
• 1972: Sold a computer terminal manufacturing business to Harris-Intertype, which had built a plant to create jobs for Arapaho and Shoshone workers on the Wind River Indian Reservation at a $32 million loss.
• 1973: He divided UCC into four companies, including Datran, which began construction of a US digital network to transmit data among 27 American cities in direct competition with AT&T. He was unable to capitalize Datran at $400 million it needed when there weren't any technology IPOs for 14 years and venture capital investing shrank 95 percent, and home mortgage rates rose to 20. Wyly liquidated Datran in bankruptcy in 1976 and filed a $300 million anti-trust suit against AT&T for abuse of its monopoly power and predatory pricing. Unable to afford lawyers' fees, he engaged Texas lawyer, Bob Strauss, -- later Chairman of the Democratic Party -- to fight the legal battle for a contingency fee of 28 percent of any winnings. Four years later that was the largest fee ever paid to a Dallas firm. AT&T agreed to be busted into eight companies competing with each other and they paid a $50 million settlement to Wyly's company. Strauss later became President Bush 41's Ambassador to Russia.
• 1981: Co-founded Sterling Software. The company focused on mainframe software and was sold to Computer Associates in 2000 for $4 billion.
• 1982: Bought controlling interest in an arts-and-crafts chain Michaels whose 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. The sale protected shareholders from massive losses in the Crash of 2008.
• 1986: Purchased Frost Bros., a San Antonio and Houston department store. Liquidated the company in bankruptcy in mid-1989.
• 1990: Had personal assets of $27 million and net worth $20,216,432.
• 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.
• In 1996, IPOed 19 percent of Sterling Commerce for $288 million in the "dot.com" boom of 1995-2000. Paid out the other 81 percent to Sterling Software shareholders as a tax-free dividend. Reference Sterling Software SEC filings.
• In 2000, sold Sterling Commerce to AT&T for $3.9 billion. Five years later in 2005, AT&T resold the company for $1.4 billion. Wyly protected his shareholders from a $2.4 billion loss. (Reference SEC filings by Sterling Commerce and IBM.)
• In 2002, co-founded Ranger Capital, a fund focused on small-cap stocks.
• As of 2006, Wyly was the largest stockholder of clean-energy producer Green Mountain Energy. replacing electricity made by older coal plants with cleaner natural gas, wind and solar power. Green Mountain became the clean energy supplier to the Empire State Building in New York. He had big start-up losses in the states of California, Pennsylvania and Ohio--whose state lawmakers favored electricity monopolies over competition. Green Mountain Energy became very profitable in Texas--a more free-market state. Wyly's management team under president Paul Thomas convinced hundreds of thousands to, "Choose wisely--It's a small planet!" Today's electricity prices are lower in Texas than in the other three big states, and Texas has dramatically reduced air pollution.
• 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. In September 2006, Forbes ranked him as the 354th wealthiest American.

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Books

Cheryl and Sam Wyly purchased Explore Booksellers and Bistro in January 2007, ending concern by Aspen, Colorado locals that the only book store would be sold to real estate investors.

Sam wrote his memoir, 1,000 Dollars & An Idea: Entrepreneur to Billionaire, in 2008. He made book talks to college and high school students.

His illustrated biography, Beyond Tallulah, How Sam Wyly Became America's Boldest Big-Time Entrepreneur, by Dennis Hamilton (Melcher Media) was published in 2011. Hamilton began writing about Sam in software journals in the 1970s.

Sam and his son, Andrew Wyly, (with a Foreword by Walter Isaacson), wrote Texas Got It Right! in October, 2012 (Melcher Media). The book explains why California, New York, and the Rust Belt states are losing jobs to Texas and the Southern and Rocky Mountain states. In 2014, Dallas added more jobs than any other city.

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Politics

In 1968, Sam Wyly was a delegate to the Republican Convention, at the request of Chuck Percy, an Illinois Senator and former CEO who he met at a "management course for presidents" attended by Wyly and fellow IBMer, Ross Perot. When Percy wasn't nominated, Wyly became Finance Chairman for the "Nixon For President" campaign in Texas. They lost Texas, but won the U.S.A. He raised $2 million. It was the first time that Republican presidential money had matched that of Democrats in Texas, which had been part of the "Democratic Solid South" since the Civil War. Nixon and later President Ford named Wyly chairman of a commission to foster businesses in mostly Black neighborhoods. Wyly had earlier worked with Joe Kirven, head of the Dallas Negro Chamber of Commerce, on a similar effort.

In 1998, he had an excruciating choice to make when his friend, Perot, and his friend, Bush '41, both ran for President. Perot got 20 percent, and with two Texans on the ballot, "another Bubba" from Arkansas--Bill Clinton--won the White House. Perot, Clinton, and Wyly all grew up less than 100 miles from each other.

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." Wyly and his brother Charles have personally given about $10 million to Republican causes and candidates between the early 1970s and 2006, they say; both are Bush Pioneers. They backed Bush 41 for president in 1980 and 1988. They backed Bush 43's run for Congress in West Texas in 1978 and for governor in 1994 and president in 2000 and 2004.

In 2000, Sam Wyly contributed $2.5 million to a group called "Republicans for Clean Air", 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.

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 Republican John McCain or Democrat Barack Obama in that year's presidential campaign, and would not get involved in the race.

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Philanthropy

Wyly and his late brother, Charles, spent more than $160 million on a wide range of charities in the last 25 years. Earlier, in 1968, he set up the Sam Wyly Foundation to help black business owners. It was run by Alan Steelman, who later became the first Republican elected from the 5th district of Texas, a seat now held by Jeb Hensarling, who worked with Wyly at Green Mountain Energy and Maverick.

At the request of Bob Wilson (husband of Laura Wilson and dad of Andrew, Luke and Owen Wilson), manager of Dallas's educational TV channel 13, Wyly provided local matching money required to get a larger Ford Foundation grant which enabled the creation of, "The Jim Lehrer News Hour." Lehrer has said, "Without Sam Wyly, there would be no News Hour." Lehrer has since been chosen as the sole impartial moderator for 16 presidential debates.

In 1969, moderate Republicans got Nixon to appoint Wyly to the PBS board to help defend its budget. Wyly believed that the then three national TV oligopolies--CBS, NBC and ABC--needed competition.

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. He also made a $10 million gift for Sam Wyly Hall, at the University of Michigan (2000). and is a significant supporter of Salvation Army, Deaf Action Center, Human Rights Organizations (gay marriage), animal shelters in Hillsboro, Texas, and Aspen, health care for people surviving with Lou Gehrig's disease, and the Aspen Writers' Foundation. They Supported the Dallas Theater Center for decades, and more recently, were key contributors to the Wyly Theatre in downtown Dallas. In 2015 - Founded WylyBooks Company, a nonprofit to fund his storytelling about America's history and future. He and his family are subject to a federal court "freeze order" which prohibits any spending for charitable projects, so Wyly and his family seek donations from others to fund this effort.

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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 for University Computing after the $100 million Datran loss. He settled without acknowledging any wrongdoing.

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, regarding their use of potentially illegal offshore tax shelters. No criminal charges were made by either Grand Jury. 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 lawyers and CPAs. They told the Senate Permanent Investigations subcommittee, chaired by Democratic Senator, Sander Levin of Michigan, investigating the offshore tax shelters that they would invoke their Fifth Amendment right against self-incrimination; they were not called to testify.

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 in stocks (Sterling Software, Sterling Commerce, Michaels Stores, and Scottish Annuity) while they were serving as board members. They allegedly, through hidden entities located in foreign jurisdictions, concealed their ownership and trading of those securities. On May 12, 2014, a jury found the Wyly brothers guilty of the charges.

On October 19, 2014 Sam Wyly filed for Chapter 11 bankruptcy, along with Dee Wyly, his brother's widow, having lost the fraud case brought by the SEC. In April 2015, the Internal Revenue Service filed claims amounting to $3.2 billion for unpaid income taxes, interest and penalties against Wyly and the estate of his late brother. His lawyer called the IRS claims "unfair and absurd." The largest tax claim ever imposed against an individual. Wyly jokes that this was an IRS "billing error." "They sent us Exxon's tax bill by mistake. Exxon's headquarters is a few miles from my house." The SEC issue Wyly intends to appeal. The tax issue is set for trial in Dallas in January 2016.

In June 2016, the United States Bankruptcy Court for the Northern District of Texas ordered Wyly to pay $1.1 billion in back taxes and penalties for tax evasion, although judge Barbara Houser stated that the money "may now be more difficult for the government to collect given the passage of time and the dissipation of Sam's wealth." Both Dee Wyly and Sam are 81 years old, having enrolled in the Louisiana Tech freshman class of 1952. (Reference 1952 Louisiana Tech Lagniappe yearbook.)

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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. In August 2011, just after they had their usual Sunday morning breakfast after church, Charles was killed in a car accident in Aspen's Roaring Fork Valley.

From 1960 to 1976, Wyly was married to Rosemary Acton. In 1978 in Dallas, he married Victoria L. Steele. Wyly and his third wife, Cheryl have been together for one-third of his life, and half of hers. They met in the summer of 1988, and they married in 1994. They live in an 8,450-square-foot (785 m²) $7.48 million house in Highland Park, Texas. Cheryl is a former Texas All-State volleyball player at Farmers Branch High School and Valedictorian of Texas A&M's School of Architecture. When Wyly introduced Cheryl to President Bush 41 in 1992, Bush said, "These Wyly brothers have backed me in every race I ever ran--and they never asked for anything." Wyly has six adult children. Evan, twins Laurie and Lisa, Kelly, Andrew and Christiana--from his first two marriages. They have a tradition of holding family meetings every other month and an annual summer retreat. Wyly has 23 descendants and 31 family members, and his brother has 12.

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References

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External links

• 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.

Source of the article : Wikipedia