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Harold Clark Simmons (born 1931, Golden, Wood County, Texas) is an American businessman whose banking expertise helped him develop the acquisition concept known as the leveraged buyout (LBO) to acquire various corporations. He is the owner of Contran Corporation and of Valhi, Inc., (a NYSE traded company about 90% controlled by Contran). As of 2007 he has an estimated net worth of around $7.4 billion dollars.

Education

Simmons has BA (1951) and MA (1952) degrees in agricultural economics from the University of Texas at Austin.

Career

After completing graduate school in 1952, Simmons worked for the U.S. government as a bank examiner, then for a Dallas-based bank. In 1960, using $5,000 of his savings, he borrowed money to buy a small drugstore, which he parlayed into a chain of 100 stores, which in 1973 he sold for more than $50 million, to Eckerd Corporation. This launched his career as an investor.

Simmons developed his "all debt and no equity" philosophy of capital managment from having observed banks as a bank examiner, realizing that "Small banks in Texas were casual about getting the maximum use of their funds. . . banks were the most highly leveraged thing I saw. They borrowed most of their money and really didn't need much equity except for purposes of public confidence." Understanding that banks could be bought entirely with borrowed money, Simmons theorized that he should "buy a bunch, because one bank could be used dto finance another. All debt and no equity."

Known as a formidable corporate raider, Simmons' acquired the nickname "The Ice Man" in the 1980's.

Simmons conducted a widely publicized but ultimately unsuccesful takeover attempt on the Lockheed Corporation, after having gradully acquired almost 20 per cent of its stock. Lockheed was attractive to Simmons because one of its primary investors was CALPERS the pension fund of the state of California. Citing the "mismanagement" of its chairman, Daniel M. Tellep, Simmons stated a wish to replace its board with a slate of his own choosing, since he was the largest investor. His board nominations included former Texas Senator John Tower, the onetime chairman of the Armed Services Committee, and Adm. Elmo Zumwalt Jr., a former chief of Naval Operations.

In 1997 Simmons made a $5 million investment in T. Boone Pickens, Jr.'s first fund BP Capital Energy Commodity Fund; by 2005 this had grown to $150 million.

Capital Gains Tax Opposition & Activism

In 1964, Simmons set up a trust for his daughters, based on a single drugstore worth $33,000. By the 1990's Simmons had placed the bulk of his fortune, including homes, vehicles, a Falcon jet, and controlling stakes in two companies into two trusts to benefit his daughters and their descendants, to shield his assets from creditors, tax collectors, and their mother, his ex-wife. The trusts later were challenged by two of his daughters who brought suit against him in 1997 who accused him of using the trusts illegally for political purposes.

In August 1997, President Bill Clinton used a line-item veto to draw attention to the type of "special benefits" that investors such as Simmons employ to avoid paying capital gains taxes since the early 1980's. Simmons had formed the "Snake River Sugar Cooperative" of 2,000 beet farmers and classified it as a joint-venture, shared ownership co-op, to purchase his Amalgamated Sugar Company, for $260 million. At the time, Charles Schumer, serving as a House Representative from New York, wrote a letter to Clinton stating that the measure before him for consideration would benefit Simmons with a $104 million tax deferral. Simmons stated at the time that his tax deferral was only $80 million.

Political activism

1980s During the Ronald Reagan presidency, Simmons was a contributor to GOPAC, the political action committee originally founded by Newt Gingrich when he was Speaker of the U.S. House of Representatives. Simmons also contributed to the defense funds of Oliver North and John Poindexter, Reagan aides implicated in the Iran-Contra scandal.

1990s In 1993, Simmons was fined $19,000 by the Federal Election Commission for exceeding the legal limit of campaign contributions in 1989 and 1990 elections.

Between 1993 and 1997, Simmons and family members and Contran gave more than $315,000 to Republican candidates, according to FEC records.

When the Internal Revenue Service judged in 1996 that one of Simmons' two family trusts was used as his own property and therefore subject to tax law, two of Simmons' four daughters sued him, alleging that he had mismanaged the two trusts he had created for them, valued at that time at one billion dollars, that he had forced them to sign blank letters for political contribution purposes to use for whatever cause he saw fit, that he had contributed money in their names to causes and campaigns that they themselves opposed, and that he had pressured them into making "illegitimate" and "illegal" campaign contributions from the trusts he had established for them. After a publicly acrimonious Dallas probate court battle that lasted eight weeks, Judge Nikki DeShazo declared a mistrial. The suit was settled when Simmons agreed to give each of the two daughters $50 million, if they would reliquish all claim to his remaining wealth, which at that time was estimated to be at $1.2 billion. Simmons other two daughters remained the beneficiaries of his wealth. The FEC launched an investigation into the contributions to political campaigns that he had made in his daughters' names.

2004 presidential election During the 2004 presidential campaign Simmons made a $4 million donation to the controversial group Swift Vets and POWs for Truth, along with Houston homebuilder Bob Perry and Dallas oilman T. Boone Pickens. He also donated $100,000 to George W. Bush's January 2005 inaugural ball.

2008 presidential election Simmons, a longtime Republican donor, gave the maximum $2,300 contributions to Senator John McCain last year, as well as to former Governor Mitt Romney and to former Mayor Rudy Giuliani. He's listed as a bundler for the McCain campaign on McCain's website, which says he's raised between $50,000 and $100,000 for the Republican candidate. He's also contributed to Rep. Chet Edwards, a Texas Democrat. Simmons has given more than $500,000 to Texas governor Rick Perry, and more than $300,000 to Texas Lt. Governor David Dewhurst and Attorney General Greg Abbott.

In 2008 Simmons was listed as the sole donor to the American Issues Project, an independent political group with 501(c)4 tax status that created and bought airtime for ads about 2008 Democratic Presidential candidate Senator Barack Obama's ties to William Ayers, who had been a member of the Weather Underground. Obama's political platform had proposed changes in the capital gains tax codes that would affect investors such as Simmons. AIP's advertisements were rejected by only two news outlets on the grounds they appeared to be in violation of campaign finance laws; they were otherwise aired continually in Michigan, Ohio, Pennsylvania and Virginia at a cost of $2.8 million. A complaint against the American Issues Project was filed with the Federal Election Commission on October 10, 2008, by a campaign finance watchdog group, Democracy 21, which alleged that AIP conducted its operations illegally, since 501(c)4 groups must declare that their purpose is not to influence the outcome of elections.

Environmental Management

Simmons is also the proponent of a controversial plan to store nuclear waste in West Texas, which his radioactive waste management company, Waste Control Specialists, would administer.

Philanthropy

The Harold Simmons Foundation is the philanthropic arm of the Simmons financial empire. Two of Simmons' daughters, Serena Simmons Connolly and Lisa Simmons Epstein, are its administrators. The foundation supports the causes of immigration rights, campaign reform, prison reform, handgun control, and reproductive rights. The contributions to the presidential bids of Hillary Clinton and Barack Obama made by Serena Connolly were privately made, not funded by the foundation.

Simmons donated money to help fund the Hobby-Eberly Telescope Dark Energy Experiment at the University of Texas. He has previously given to UT athletic programs and the McCombs School of Business. By 2005, total donations from his family and foundation to the UT Southwestern Medical Center at Dallas exceeded $70 million. In 2008 the Harold Simmons Foundation made a donation of $5 million to the Dallas Zoo, the largest single private contribution in the zoo's 120 year history.

Personal Life

On February 25, 1961, Harold Simmons married Sandra Katherleen Saliba in Fort Smith, Arkansas.

Further reading

• John J. Nance – Golden Boy: The Harold Simmons Story, ISBN 1571687475

External links

• Forbes 400 list, Forbes magazine
• Zoominfo
• SEC info
• Contran Corporation
• Valhi, Inc