William Simon was a successful banker, public servant, and noted philanthropist. He was a bond trader, a pioneer of leveraged buyouts, and merchant banker; he served as Secretary of the Treasury in the Nixon and Ford administrations and led the U.S. Olympic Committee during the 1984 summer games. He gave generously of his own wealth and became a trustee of some of America’s most influential philanthropic organizations.
Born in New Jersey in 1927, Simon volunteered for the Army and served as a private. After he was discharged, he attended Lafayette College. With graduation approaching, Simon was married and in debt, with one young son and another on the way. He camped out in the offices of Union Securities on Wall Street until he landed a $75 per week job in the mailroom. Within two years, he made partner and was heading the firm’s municipal bonds trading desk.
He moved to Salomon Brothers, where he became famous for his 16-hour days, standing beside his desk, guzzling gallons of ice water, and barking orders to his traders. When he left Salomon in 1973 to become chief deputy to George Shultz at the Treasury Department, he was a senior partner, member of the firm’s executive committee, and sat on the board that oversaw federal mortgage giants Fannie Mae and Freddie Mac.
At Treasury, both as Schultz’s deputy and later as Secretary of the Treasury in the Ford administration, many of Simon’s most important initiatives—tax reform, a balanced budget—would languish. In an ironic twist, the principled free-marketer was asked to head the government’s price-control program for gasoline. He would later joke that he was the guy who “caused all the lines at gas stations.”
After his government service, Simon returned to private life to find himself near-bankrupt. Inflation and losses in his blind trust had eviscerated his net worth. Within months he had rebuilt his fortune through a series of quick leveraged buyout deals. Most famously, with his partner Ray Chambers he purchased Gibson Greeting Cards for $80 million (all but $1 million of which they borrowed). They revitalized it, and took it public again for $290 million. In later years, Simon turned his attention to building a Pacific Rim merchant banking house with his sons, Bill and Peter.
From 1980 to 1984, Simon was president of the U.S. Olympic Committee. At the time, U.S. Olympic athletes were struggling under confusing regulations governing their amateur status and what kind of resources they could use to train. Soviet bloc countries skirted the rules by bringing their athletes onto state payrolls, an option unavailable to American athletes. Under the leadership of Simon and Pete Ueberroth, the 1984 summer games in Los Angeles turned a profit of $225 million, the first profitable games since 1932.
Simon then used a large part of the profits to create the U.S. Olympic Foundation, an elegant solution to the dilemma facing American Olympians. American athletes would no longer be handicapped because their government did not subsidize their training. Instead, private citizens would offer the funds that would ensure American Olympians could afford the training they needed. “It was really all Bill’s doing,” said hockey executive William Tutt.
Simon could be charming, but he was also—in the admiring words of Ed Feulner, head of the Heritage Foundation—a “mean, nasty, tough bond trader who took no B.S. from anyone.” He got into a highly publicized spat with another official about jurisdiction over federal energy policy that ended with Simon telling the man to “keep his cottonpickin’ hands off.” To an interviewer who suggested that Simon didn’t suffer fools gladly, he barked, “Do you?” If his teenage sons slept late, he woke them up by dumping buckets of ice water over their heads.
But Simon had a softer side, which made his philanthropy deeply personal. Simon and his family often visited the homeless teens at Covenant House, playing games with them and working in the kitchen. Later in life, Simon became a eucharistic minister of the Catholic Church, taking Communion to the sick, lonely, and dying. He required all members of the board of his personal foundation to perform 150 hours per year of hands-on service to the poor.
Simon was tapped to serve other philanthropists. After leaving the Ford administration, John Olin asked him to lead his foundation. Olin wanted his funds to be used to preserve the American free market system, and Simon was a natural ally. Under Simon’s direction, Olin funded what Simon called “the counter-intelligentsia,” the scholars and organizations who became the intellectual infrastructure of modern conservatism and libertarianism. Because Olin had a particular concern with the impact of law on public policy and culture, Simon also supported a host of academic programs that developed the law and economics movement at top-flight law schools around the country, including Harvard, Chicago, Columbia, and Virginia.
Simon’s commitment to Olin’s donor intent was forged by Henry Ford II’s infamous departure from the board of the Ford Foundation in 1977—and by his own experience serving on the board of the John D. and Catherine T. MacArthur Foundation from 1979 to 1994. Catherine MacArthur had read his book (A Time for Truth) and wanted her foundation “to have the same mandate as the John M. Olin Foundation.” It was not to be: Catherine’s stepson, Rod MacArthur, quickly steered the foundation in his own way. New board members from academia and government were elected, and without a clear mandate in the foundation’s incorporating documents, they picked causes they cared about—many of which Simon worried would have infuriated the MacArthurs. “As a result,” Simon later said, “the MacArthur Foundation lost its ability to do what its founder wanted it to do.”
Simon carried on Olin’s program of research and organization-building through his own William E. Simon Foundation, which funds programs that support free markets, faith, and strong families. The Simon Foundation’s portfolio is also directly concerned with building the capacity of the poor and needy to help themselves, reflecting its founder’s views about one-on-one service. It has given generously to scholarship programs for poor children in Catholic schools; supported Bible literacy programs and retirement funds for priests and religious workers; and funded mentoring programs, homes for runaway youth, and transitional programs for domestic violence victims.
Simon died in 2000, and his foundation, like Olin’s before it, is in the process of spending itself down, with plans to complete the process within the lifetime of the Simon’s children. It was, he thought, an easy choice. He believed that the capitalist system in which he thrived—which had produced, in his words, “the greatest prosperity, the highest standards of living, and most important, the greatest individual freedom ever known to man”—would soon enough bring forward new wealth, new philanthropists, and new ideas.
~ Justin Torres