|Samuel E. "Sam" Wyly|
October 4, 1934 |
East Carroll Parish
|Residence||Dallas, Texas, USA|
|Alma mater||Ross School of Business|
(1) Rosemary Wyly (married 1960-1976, divorced)
|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, 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., 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.
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. 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. In the summer, je 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. He worked his way through college by selling class rings. 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 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. The Wyly brothers later honored one of their Tech professors, 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.
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 was Michigan's first Patron scholor and was able to attend only because of that new scholorship. He took their first course thought in computers. 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 Patron scholar . He coded programs in machine language on the IBM 650 computer and learned the then revolutionary 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.
After receiving his MBA 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 tome 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 and Oklahoma. When Honeywell rejected his plan for a new technology computing center to repance the Univac at SMU, he quit to do it himself. In November 1965, 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.
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;. 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 hardhearted in Texas with a market capitalization of $1 billion or more. By 1968, sales were $60 million; in 1971, they were $125 million.
- 1967: With his brother Charles, bought the 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. He had initially started investing in it with money from the sale of stock in UCC. The company 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; at the time, the company 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.”
- Co-founded Earth Resources Company, an oil refining and silver and gold mining company, served as its Executive Committee Chairman from 1968 to 1980. after oil prices had boomed from $3 to $40—avoiding the bust to $9 in 1986.
- 1970: Purchased Computer Technology, which functioned as the in-house data processing unit for LTV, for $40 million in cash and notes.
- 1972: Sold a computer terminal manufacturing business to Harris-Intertype,in which he had built a plant to create jobs for Arapaho and Shoshone workers on the Wind River Indian Reservation in Wyoming at a $32 million loss.
- 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. He was unable to capitalize Datran at the $400 million. In the 1970s, there were no technology IPOs for 14 years. Venture capital investing shrank 95 percent. 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.
- 1981: Co-founded Sterling Software. The company was sold to Computer Associates in 2000 for $4 billion.
- 1982: Bought controlling interest in an arts-and-crafts chain Michaels; 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.
- 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.
- 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.
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.
Sam wrote his memoir, 1,000 Dollars & an Idea: Entrepreneur to Billionaire, in 2008 (Newmarket Press). 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.
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.
In 1968, Sam Wyly was a delegate to the Republican Convention, at the request of Chuck Percy, an Illinois Senator andformer 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. He raised $2 million dollars. It was the first time that Republican presidential money had matched that of Democrats in Texas, which had 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.
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 either Republican John McCain or Democrat Barack Obama in that year's presidential campaign, and would not get involved in the race.
Wyly and his late brother Charles spent more than one hundred and sixty million dollars on a wide range of charities. Earlier, in 1968, he set up the Sam Wyly Foundation to help black business owners. He also helped to start an educational TV channel in Dallas. - 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 the Aspen Writers' Foundation.
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.
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. 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 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. 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. On May 12, 2014, a jury found the Wyly brothers guilty of the charges.
On October 19, 2014 Sam Wyly filed for bankruptcy after having lost a fraud case brought by the SEC. 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." 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.” His lawyer called the IRS claims "unfair and absurd.” The SEC issue Wyly intends to appeal. The tax issue is set for trial in Dallas in January 2016.
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's wife was named Rosemary Acton. In 1978 in Dallas, he married Victoria L. Steele. In August 2006, Wyly and his third wife, Cheryl, lived in a 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 from his first two marriages. - 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. He writes in his forthcoming book, "The Immigrant Spirit: How Newcomers Enrich America," that his first immigrant grandma, Katy Cleland, a Scottish Presbyterian, landed in Chesapeake Bay in 1657, the same year as George Washington’s granddad. The colony of Maryland granted her and each of her family a 50-acre “headright” as an incentive to come to America.
- Wyly, Sam (September 2008). 1,000 Dollars and an Idea: Entrepreneur to Billionaire. Newmarket. p. 256. ISBN 978-1-55704-803-5.
- 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
- "The 400 Richest Americans: #354, Samuel Wyly", Forbes magazine, September 21, 2006
- "Sam Wyly, Chairman, Sterling Software Inc. and Michaels Stores, Inc.", Horatio Alger Association of Distinguished Americans, retrieved September 21, 2007
- Jake Smith, Dinner with Mobutu: A Chronicle of My Life and Times. Xlibris Corporation. 2005. p. 45. ISBN 978-1413499438. Retrieved June 9, 2014.
- "Robert C. Snyder Obituary". Shreveport Times, June 12, 2011. Retrieved June 21, 2011.
- Doyle, Rebecca A. "Sam Wyly Hall officially opens", University Record, University of Michigan, April 17, 2000
A_money_Tree_Grown_in_Texas_by_James_Walker_Davis.2C_Echo_House_Publishing.2C_1969was invoked but never defined (see the help page).
Cite error: The named reference
- "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
- Sterling Software filing with the SEC, Form:10-K/A, filing date: January 26, 1994
- Stephanie Anderson Forest, "Sam Wyly's Hedge-Fund Fiasco: Hiring a "family friend" brought lawsuits instead of fat returns", Business Week, September 1, 2003
- "The World's Billionaires", Forbes magazine, March 8, 2007
- Curtis Wackerle, "Explore building under contract to Wyly family", Aspen Daily News, January 29, 2007
1.2C000_Dollars_.26_An_Idea:_Entrepreneur_to_Millionaire._Newmarket_Press.2C_2008was invoked but never defined (see the help page).
Cite error: The named reference
- Rick Carroll, "End of an era: Explore sells for $4.6 million", Aspen Times, March 6, 2007
- 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
- Joe Conason, "Tit for tat?", Salon magazine, March 6, 2000
- Laura Meckler, "FCC Probing Group That Paid For Bush Ads", The Associated Press, March 9, 2000
- David Koenig, "Billionaire Wyly says anyone can match his success" at the Wayback Machine (archived September 17, 2008), Associated Press, September 15, 2008
- Barry Meier, "The View From GreenMountain; Financier Mixes Business, the Environment and Politics", New York Times, March 16, 2000
- 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
- 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
- SEC Charges Corporate Insider Brothers With Fraud, SEC, July 29, 2010
- "Wyly Brothers Charged with Fraud", New York Times, July 29, 2010
- SEC charges billionaire Texas brothers who donate to GOP with fraud, Zachary A. Goldfarb and Philip Rucker, Washington Post, July 30, 2010
- Matthews, Christopher M. (May 13, 2014). "SEC Wins Tax-Fraud Case Against Wyly Brothers". The Wall Street Journal. p. C1.
- Joseph Ax and Nate Raymond, Reuters (November 7, 2014). "SEC Wants Texas Businessman Sam Wyly To Pay $255 Million More For Involvement In Fraud Scheme". Business Insider. Retrieved December 26, 2014.
- Nate Raymond and Joseph Ax (October 20, 2014). "Texas investor Sam Wyly files for bankruptcy after losing SEC fraud case". Reuters. Retrieved December 26, 2014.
- Erik Larson (Oct 20, 2014). "Samuel Wyly in Bankruptcy Facing $400 Million Forfeiture". Bloomberg. Retrieved December 26, 2014.
- The Associated Press (April 17, 2015). "IRS seeks $3 billion from Texas businessman, late brother". The Seattle Times. Retrieved April 21, 2015.
- Hamilton, Dennis; (preface by Sam Wyly) (2011). Beyond Tallulah : how Sam Wyly became America's boldest big-time entrepreneur. New York: Melcher Media. ISBN 978-1-59591-069-1. OCLC 744978245.
- "Samuel Wyly". search.ancestry.com. Retrieved January 15, 2015.
- 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.