Bennett S. LeBow
|Bennett S. LeBow|
|Born||1938 (age 76–77)|
|Education||B.S. Drexel University|
|Known for||Chairman of the Board of Vector Group|
|Spouse(s)||Geraldine Cosher (until her death)
|Parent(s)||Suara and Martin LeBow|
Bennett S. LeBow is an American businessman and philanthropist. He is also the former Chairman of the Board and CEO of Borders Group, an international bookseller based in Ann Arbor, Michigan and current Chairman of the Board of Vector Group (NYSE: VGR) and Signal Genetics (NASDAQ: SGNL).
Education and career
LeBow was born to a Jewish family in West Philadelphia, the son of Suara and Martin LeBow. His father was an insurance salesman and his mother a teacher. He graduated from West Philadelphia High School and in 1960, earned a degree in electrical engineering from Drexel University. LeBow then went on to graduate school at Princeton University. Before completing his degree, LeBow left Princeton and joined the army where he installed early data systems at the Pentagon. LeBow's first foray into business occurred in the 1960s when he started a computer company to continue his Pentagon project. LeBow eventually sold the business in 1971 for a profit and became a full-time investor. LeBow went on to purchase many companies including: Western Union, Information Displays, MAI Basic Four, Liggett Group and Brigham's Ice Cream.
Cigarettes and litigation
In 1996, while under his leadership, Liggett Group broke ranks with the rest of the US tobacco industry, including Philip Morris, Brown and Williamson, RJR Nabisco, Loews and Lorillard, when he announced that Liggett would settle the Medicaid tobacco suits brought by forty state attorneys general. Liggett publicly announced that smoking is addictive and causes cancer and other health ailments, turned over long-secret tobacco industry documents, disclosed its ingredients, and testified against the industry. Liggett was the first cigarette company to voluntarily put the label "Nicotine is Addictive" on their product.
LeBow's actions were pivotal to the government in their signing of the Master Settlement Agreement. In addition to this, LeBow was honored with a proclamation by Florida Governor Lawton Chiles for his "invaluable assistance" in helping Florida achieve its historic $11.3 billion settlement with the tobacco industry. Following this presentation, Lebow and Mr. Chiles addressed a group of students, who "saved their toughest questions for Liggett Group chief Bennett Lebow of Miami". One student asked, "If you want to be a watchdog of the industry, why not get out altogether and stop making cigarettes?" to which he responded that if he did, others would continue. LeBow also developed, through Vector Tobacco Inc., the nicotine-free cigarette Quest (cigarette) which is a cigarette designed to help people quit smoking. Also that year LeBow teamed up with corporate raider Carl Icahn to make a bid for RJR Nabisco. In response to this proposed spin-off of Nabisco from RJR Reynolds, tobacco industry analyst Ellen Barabas stated that "I think there are people who would support a spin-off of Nabisco, but not by Lebow. One of the prime factors was Lebows dubious reputation as a manager. In 1994 his shareholders sued him, claiming he had taken millions of dollars in improper loans; Lebow settled out of court."  According to court documents, Liggett, while under LeBow's leadership, "engage(d) in marketing tactics that appeal to youths, such as couponing, sampling, and “buy one get one free” offers for its cigarettes, and advertise(d) in magazines with substantial youth readership."
Lebow has stated that since cigarettes are a legal product, he does not care whether they cause cancer.
In May 2010, following a major stock investment, he became a member of the Board of Directors at Borders Group Inc. and was immediately elected Chairman of the Board, replacing Mick McGuire, who resigned. In June 2010, LeBow became CEO of Borders Group Inc.
LeBow is also a large supporter of his alma mater, Drexel University. In 1998, Drexel's College of Business and Administration was named the Bennett S. LeBow College of Business in his honor after a contribution of $10 million to the university. Further, he endowed the Bennett S. LeBow Engineering Center, a state-of-the-art facility that houses Drexel's College of Engineering. In November 2010, the 72-year-old West Philadelphia native contributed $45 million for the construction of a new facility for the LeBow College of Business — the 12th largest gift to any US business school, and the biggest ever to Drexel University.
In 2009, LeBow made a $10,000 campaign contribution to Manhattan District Attorney candidate Leslie Crocker Snyder, whose law firm - Kasowitz, Benson, Torres & Friedman - had represented the Liggett Group in smoking and health litigation since 1996.
Anti-smoking critics have attacked LeBow for his involvement with and ownership of tobacco producer Liggett Group. Critics cite a 1993 deposition, where LeBow was reported to have denied knowing whether smoking caused cancer. By the mid-1990s, however, LeBow had broken ranks with other tobacco producers to settle cases against Liggett and had made statements that he believed smoking was harmful. Then, nearly a decade later, in 2005, LeBow would retract or disavow many of his earlier criticisms of the tobacco industry. In 2005, LeBow could identify only a handful of documents that had led to his earlier criticisms and was reluctant to identify a "direct link" between smoking and cancer. Critics cite evidence that Philip Morris paid at least some of Liggett's legal bills in order to buy its cooperation in anti-tobacco lawsuits.
LeBow has also been scrutinized a number of times for a variety of decisions and business dealings:
- In 2005, LeBow resigned from the Dana-Farber Cancer Institute Board of Trustees shortly after his appointment over discussions about the propriety of associating with the owner of a company which sells products that are known to cause cancer.
- In 1993, Brooke Group Shareholder Frank Gyetvan sued LeBow on behalf of other company shareholders, claiming Brooke had improperly lent Lebow money for luxury personal items, such as a $21 million yacht. The suit was settled the following year, with LeBow repaying $16 million to Brooke's other shareholders and giving up his right to receive 6.25 million in preferred dividends .
- In 1989, LeBow was criticized for using $3 million to fly a planeload of friends to a London party for the launch of his 177-foot yacht. The trip came during the time LeBow controlled MAI Systems, an Irvine, Calif.-based computer network company, and Western Union. Both companies filed for Chapter 11 bankruptcy reorganization in 1993." (Although LeBow later reorganized Western Union and sold it to First Financial Management for $1.2 billion.)
- In 1984, LeBow completed the sale of Information Displays which subsequently went bankrupt. The buyer sued LeBow and his partners for fraud and misrepresentation.
- In the past, LeBow's business associations have come into question. In the book "Red Mafiya: How the Russian Mob Has Invaded America", the author states: "Ukrainian mob boss Vadim Rabinovich attended a Clinton-Gore fund raiser at the Sheraton Bel Harbor Hotel in Miami. Rabinovich came as a guest of Bennet S. LeBow, the Chairman of Brooke Group Ltd, Parent of Liggett, a cigarette manufacturing company (LeBow refused to comment)." According to a spokesman for LeBow, LeBow's Brooke Group and Rabinovich developed a business center and luxury hotel in Kiev.
LeBow was married to Geraldine Cosher whom he met while they were students together at Drexel University. They had two daughters. Geraldine died in 2011. LeBow is presently married to Jacqueline Finkelstein LeBow. They married in June 2014.
- BusinessWeek: "Lebow Turns Over a New Leaf" May 06, 2001
- Summit Towers Condo Association Bulletin March 1992
- Philadelphia Inquirer: "Bennett S. LeBow, a longtime businessman, with a great love for Drexel, his alma mater" By Melissa Dribben November 16, 2010
- "A Captive Young Audience; Students Screen Anti-Smoking Ads Aimed At Youths", Sun-Sentinel, October 22, 1997.
- Davis, Joshua. "Come to LeBow Country" Wired, February 2003
- "Populist Hero or Bottom Feeder?", Time Magazine, March 31, 1997.
- Deposition of Steven Shipe, United States v. Philip Morris, May 21, 2002, 86:22-87:13.
- "On Cigarettes, Health, and Lawyers", Business Day, New York Times, 1993, citing the following deposition: Q. If I asked you, does smoking cause lung cancer... A. I don't know. Q. O.K., and you really don't care because you're selling a legal product? A. Correct.
- Borders press release, May 21, 2010.
- "Drexel Receives $10 Million Gift from Alumnus Bennett S. LeBow". Drexel University. 1999. Retrieved 2007-10-29.
- "Drexel to receive $45 million gift for new center for business school". The Philadelphia Inquirer. 2010. Retrieved 2010-11-26.
- Drexel University Alumni Magazine: "A new gift from Bennett S. LeBow ’60, Hon. ’98 - Drexel’s leading alumni benefactor adds to his legacy" Fall 2004
- "No. 23: Bennett S. LeBow". The Chronicle of Philanthropy. 2011. Retrieved 2011-02-27.
- Leslie Crocker Snyder Accepts Tobacco Executive's Money, Daily News, August 25, 2009.
- "OK, OK, cigarettes do kill", US News and World Report, March 31, 1997.
- An Entrepreneur's High-Stakes Move, New York Times, March 21, 1997.
- Gene Borio. "Next up" Vector CEO Bennett Lebow". "Tobacco on Trial", Feb 7, 2005.
- "Tobacco Company Paid Competitors Legal Bills", New York Times, July 22, 1997.
- "Er, Never Mind", New York Times, March 13, 2005.
- Border's New Chairman: Bad For Business? Sarah Weinman, Daily Finance, September 23, 2010.
- Florida's LeBow Has Tobacco In A Huff", Palm Beach Post, April 14, 1996.
- "Turnaround Artist: Bennett S. LeBow; Collecting Wall Street's Wallflowers", New York Times, September 25, 1988
- "Red Mafiya: How the Russian Mob Has Invaded America", Robert Friedman, May 2000, pages 268 - 269.
- "A Cosmetics Heir's Joint Venture Is Tainted by Ukrainian's Past", Douglas Frantz and Raymond Bonner, New York Times, April 5, 1997, section 1, page 4
- New York Times: "TURNAROUND ARTIST: Bennett S. LeBow; Collecting Wall Street's Wallflowers" By BARNABY J. FEDER September 25, 1988
- Drexel University news: "College Mourns Death of Gerri LeBow" August 3, 2011
- "LeBow Appears Set to Start A Skirmish for RJR Nabisco" New York Times, August 30, 1995.
- Liggett's Bennett LeBow Honored by Florida Governor Lawton Chiles and Attorney General Robert Butterworth, Business Wire, October 21, 1997.
- Inside the Tobacco Deal: Bennet LeBow Profile PBS Frontline.