The Midas Touch

Cardinals owner Bill DeWitt Jr. has a knack for making money without risking his own. Meet the guy who wants you to cough up $250 million for a new stadium.

Former employees and friends say DeWitt was philosophical about the team's failure. Today, he says he was "relieved" when it all came to an end. "Everybody was kind of tired," he says. "It was a lot of fun, but it's no fun to lose money, and that's what we were doing."

When the Stingers folded in 1979, DeWitt took a break from sports to form the investment firm of Reynolds, DeWitt & Co. with Mercer Reynolds III, a former executive at the investment house where DeWitt worked before launching the hockey team. It has proved a lucrative partnership.

St. Louis Cardinals owners Bill DeWitt (left) and Fred Hanser gave Fernando Tatis a gold Rolex for being the first major-leaguer to hit two grand slams in one inning in 1999. This offseason, they gave Tatis his walking papers.
Tim Parker/Reuters
St. Louis Cardinals owners Bill DeWitt (left) and Fred Hanser gave Fernando Tatis a gold Rolex for being the first major-leaguer to hit two grand slams in one inning in 1999. This offseason, they gave Tatis his walking papers.

Among other things, DeWitt and Reynolds (who also has a minority stake in the Cardinals) have invested in restaurants, soft-drink-bottling companies and radio stations. Although the firm focuses on deals in the $1 million to $10 million range, DeWitt and his partners don't balk if something bigger comes along. In 1989, for example, DeWitt and company, then owners of 64 Arby's restaurants, made an unsuccessful bid to purchase the entire chain, a deal that would have been worth $200 million.

DeWitt typically invests with the same group of a half-dozen or so longtime friends and business associates, several of whom share his Ivy League pedigree and place in the upper echelon of Cincinnati society. They make it a point to keep their business as private as possible, rarely commenting to the press about details of their deals. "We've been in a lot of different businesses over a long period of time," DeWitt says. "We've had some success in a number of them, and we've had a number of them that haven't been successful. It's just kind of the nature of what we do." But even things that look like losers can end up smelling good when DeWitt is involved.

One example is the oil business. Following the example of his father, who invested baseball profits in oil and gas companies after selling the Reds, DeWitt and Reynolds formed an oil-and-gas-exploration company called Spectrum 7 in 1979, the same year the Stingers went out of business. With fuel prices skyrocketing in the late '70s, prospects looked good.

During the early 1980s, DeWitt and Reynolds searched for someone to run Spectrum 7 operations in Texas. In 1982, geologist Paul Rea, Spectrum's only Texas employee, introduced DeWitt and Reynolds to George W. Bush, whom Rea had befriended a few years earlier, when the future president was starting in the oil business and looking for advice. When he met DeWitt and Reynolds, Bush, son of the vice president of the United States, was head of his own oil-exploration company, which he kept afloat by tapping family friends for money. With typical caution, DeWitt and Reynolds lunched with Bush, then waited two years before buying out Bush Exploration in 1984, shortly before Ronald Reagan and the elder Bush were re-elected in a landslide. Under terms of the deal, Bush received Spectrum 7 stock and was named president of the company at an annual salary of $75,000.

The deal was a godsend for Bush, given that his struggling company had never made money for its investors. Though Spectrum 7 acquired oil-drilling rights held by Bush's firm, DeWitt and Reynolds weren't interested in Bush Exploration so much as they were in Bush himself. In several published interviews, both men have said they went into business with Bush because he had experience in drilling wells and they admired his leadership style. Others, including Rea, say that Bush's celebrity was a key factor. The name "was definitely a drawing card," Rea told the Washington Post in a 1999 interview. In the same story, DeWitt says the fact that Bush was the son of a sitting vice president with Oval Office ambitions didn't improve the company's ability to raise capital. His statements underscore his extraordinary network of business contacts and reputation as a man who makes money for his partners. "There was obviously some notoriety because of who (Bush) was, but it didn't open any doors for us," DeWitt told the paper. "I mean, our doors were already opened."

The Bush name did help DeWitt and Reynolds make a graceful exit from the oil business. Thanks to dropping oil prices, Spectrum 7 reported net losses of $1.6 million in 1985 and was on the brink of bankruptcy. Harken Oil and Gas came to the rescue in the fall of 1986, acquiring Spectrum for $2.2 million in Harken stock and assuming more than $3 million in debt. Harken officials have acknowledged they were investing in political capital as much as in Spectrum's oil reserves, which had an estimated value of $4 million at the time of the sale. "We didn't have a fair price for oil, we just had George," former Harken director E. Stuart Watson told the Dallas Morning News. "It seemed like George, he knew everybody in the U.S. who was worth knowing."

So far, DeWitt has done more for Bush than the other way around. During the 2000 presidential campaign, DeWitt was one of Bush's biggest fundraisers in one of the closest elections in U.S. history. On a single night last August, he and Reynolds hosted parties that netted $2 million for the Bush campaign. The night before Bush accepted the Republican nomination, he practiced his acceptance speech in DeWitt's living room in Cincinnati. And when he was finally declared the winner by the narrowest of margins, Bush called on DeWitt and Reynolds to co-chair his inauguration committee. The partners were instrumental in raising more than $20 million in private donations to pay for the parties.

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