Riordan Puts His Millions Behind Bid to ‘Rescue’ L.A. : Campaign: The businessman-lawyer is running as a political outsider but enjoys significant City Hall clout.

With a bottomless faith in himself and a bankbook to match, Richard J. Riordan sees himself as the savior of Los Angeles.

“I’m a rescuer,” he says. “I can’t stand to see vacuums where nothing’s being done.”

That is why the 62-year-old multimillionaire lawyer-businessman says he jumped out of his car recently to save a blind man from falling into a manhole.

And that is why he is spending $3 million of his own money to sell himself as the political outsider who is “tough enough to turn L.A. around.”

Riordan is using business symbolism--such as his rescue of an insolvent Mattel toy company with advice to get back to basic Barbie--as evidence that he is a non-politician more than capable of cleaning up politicians’ messes.

Rivals call that arrogance. They say saving a toy company is a far cry from saving a city, and scoff at Riordan’s portrayal of himself as an outsider.

For Riordan is no ordinary tycoon. He knows the power corridors of City Hall and the County Hall of Administration better than most who work there.

With a largely self-made fortune of $100 million, he is one of the biggest campaign contributors in California.

A registered Republican, he routinely gives to candidates of both parties--a prudent course for someone who seeks influence no matter who is in office.

In the last decade, his donations and loans to initiatives and candidates total $2 million--more than $5 million if gifts to his mayoral campaign and his local term limits initiative are counted.

His political friends have rewarded him with appointments to two city commissions and a series of lucrative lawyerly missions to broker delicate deals, ranging from how much taxpayers should pay for railroad rights of way, to how much developers should pay to lease land in county-owned Marina del Rey.

His law firm, Riordan & McKinzie, has billed the county about $3 million for such work.

Riordan has always given taxpayers a break--charging them 10% less than his usual fees of up to $450 an hour. Now, if he can ride into the mayor’s office on a wave of public fear and disgust about life in a tense, recession-wracked city, he has pledged to work for just $1 a year. That, he says, is in keeping with his decision to run for mayor “out of an obligation to public service.”

The heart of his plan to save the city is to rent the airport to private industry and use the money to hire more police. If people feel safer, he says, businesses and the frightened middle class will be more likely to stay and create jobs for the poor.

Riordan is one of the city’s most influential people. A member of elite clubs and a leading Catholic churchman, he hobnobs with civic, political and religious leaders, was a moving force behind the successful effort to dump California Chief Justice Rose Elizabeth Bird and has sponsored various ballot initiatives to update the 911 system and impose term limits on elected officials.

He is a major philanthropist, land developer and investment banker who has compiled an impressive record backing entrepreneurs who create jobs, though he has also helped finance corporate takeovers that cost them.

He makes it clear that he gets what he wants. He has never met with the Pope, for instance, but that is because “it was not important to me to see the Pope. It would be if I had something I really wanted to get out of the Pope. Then I’d do it. I’d find a way to do it.”

A Determined Do-Gooder

This kind of dogged determination does not always serve him well. Someone who has played poker with him said Riordan’s lousy because he never folds.

As of now, Los Angeles’ would-be rescuer is running behind in the polls. But, given the crowded field and his willingness to write himself million-dollar checks, he is widely viewed as having a decent chance to get enough name recognition to win a runoff spot. Riordan’s chief appeal is expected to be among conservative voters.

In his private and public life, Riordan loves to intervene. As a Los Angeles Memorial Coliseum commissioner, he helped keep the Raiders in Los Angeles by convincing an Oakland-bound Al Davis that you cannot go home again. As a civic-minded citizen, he tried to help Police Chief Daryl F. Gates find a door that would allow him to exit gracefully after the uproar over the beating of Rodney G. King. As a customer at McDonald’s, he and his wife say, he walks over when he hears a parent yelling at a child and comforts them both.

Riordan lights up around young people. He gives more than $2 million a year to charities, mostly to help schoolchildren learn to read and write with the help of computers.

“If you think a child is important and that child is not getting the right medical care, the right nutrition and the right education, it’s pure logic that you should do something about it,” said Riordan, who was raised as the youngest of eight children in a privileged Irish-American family in the New York City suburb of New Rochelle.

“Now the question is: ‘What holds other people back from doing it and what makes me do it? . . . Why am I my brother’s keeper and they’re not?’

“I think it’s partly growing up in the Depression. I’m surprised I’m not an ultra-liberal Communist, you know, having grown up and seen people beg, seen all these movies, ‘I Am a Fugitive from a Chain Gang’ and all this stuff like that.”

Riordan’s father, William O. Riordan, was a remarkable man. A school dropout at 13, he rose to become president of a major New York department store, Stern Bros., where he built a reputation as a progressive retailer by pioneering free group insurance for employees. He also raised funds for Catholic charities and Legal Aid, served as chairman of the New York Convention and Visitors Bureau, and was a member of the New York State Board of Social Welfare.

Riordan’s mother graduated from college--unusual for women in that era--and had 12 or 13 children, counting three or four who were stillborn. One of the stillborn would have been Riordan’s twin.

Life of Brilliance, Tragedy

Riordan’s family life has been plagued by tragedy. He lost a 5-year-old sister to a brain tumor, a 35-year-old sister to a fire and a 41-year-old brother, Michael, to a mudslide that swamped the bedroom of Michael’s Mandeville Canyon home. Michael was chairman of Equity Funding Corp., which turned out to be one of the largest financial frauds of its day. But there is no reason to believe that Richard, an Equity stockholder, knew about the fraud or profited from it, said Robert Loeffler, the trustee appointed to straighten out the company’s affairs.

Both of Riordan’s marriages have failed. The first ended in divorce after five children and 23 years. The other is in the fourth year of a separation. “I’m very nervous about publicity,” said his second wife, Jill, from her home in Carmel. “I like a quiet, peaceful lifestyle.”

Some of his friends cannot understand why Riordan, who lives alone in a $6-million Brentwood mansion, with three Yorkshire terriers and 40,000 books, would want the headaches of the mayor’s job.

But Jill Riordan suggests that the urge might be linked to the deaths a decade ago of two of his children--a young adult son who drowned while scuba-diving when he became hopelessly entangled in kelp, and a teen-age daughter who died of complications of bulimia after her parents’ divorce.

After those losses, she said, Riordan “seemed to put himself a little more into work and then politics.”

Riordan’s holdings are vast. He is a major stockholder in Mattel, in Tetratech, an environmental cleanup firm, and in Total Pharmaceutical, which provides health care for patients at home. He is a director of the giant Southern California home-building firm, Kaufman & Broad, owns Coors beer distributorships and the Original Pantry, is principal partner in a corporate law firm, owns shopping centers, apartment buildings in Texas and Florida, a mobile home park in Arizona, and has multimillion-dollar investments in several venture capital and mutual fund partnerships. And that is just a partial list.

His overall reputation is that of an honest, savvy businessman.

Some of his partners consider him downright brilliant. They say he is a quick study, with a fine negotiator’s ability to concede minor points and hold fast on big ones, and a Midas touch.

“He’s got the metabolism of a hummingbird,” said former Los Angeles Rams quarterback Pat Haden, who is Riordan’s partner in an investment banking firm. “He just zips around the office. He’s on eight different phone calls at a time. I may only get him for five minutes a day to make a decision. Yet he’s got incredible concentration. He can focus on (my problem)--he’s generally right--and get on with the next task.”

Riordan’s fans include even his first wife’s divorce lawyer. “Basically, anything that this guy did that I saw, he had a Midas touch to it,” Brian Brandmeyer said. “And the thing that was impressive was that he had a really superior mind. . . . Plus, I think he cared a lot about people. He wasn’t a guy to leave a lot of trails of blood behind him on his way to the top.”

There are other distinctive aspects to his character. He is so fond of the grand gesture that he once organized a small group of businessmen to donate a $395,000 helicopter to keep now-Cardinal Roger M. Mahony out of SigAlerts.

He is not a detail person, associates say. Jill Riordan said he once pulled his Mercedes-Benz curbside at an airport, got into an airplane and took off, before realizing he had left his key in the ignition and the engine running.

No one could operate in the kind of rarefied atmosphere that Riordan does without collecting detractors, and, in his case, the general criticisms are that he is arrogant and not much of a consensus builder because he has to get his way.

Typical of the critics is Barbara Mejia, of the Amalgamated Clothing and Textile Workers Union, who said she will never forget meeting with Riordan and then-Archbishop Mahony.

The meeting was called after Mejia’s union had signed up a majority of the Los Angeles archdiocese’s gravediggers. The union was seeking recognition from Mahony, who expressed concern that organizers had behaved improperly. Riordan was present as Mahony’s legal adviser.

“At the end of the meeting,” Mejia recalled, “Riordan very strangely said: ‘Now we’ve listened to what you’d like to see happen. Now we’d like you to just go away.’ He would like the union to just go away. I took him as a person who was not only anti-union but a person who didn’t believe in workers’ rights to organize. He was very arrogant.”

Riordan vehemently denied making such remarks. But local AFL-CIO chief Bill Robertson, who was also present at the meeting, had a recollection similar to Mejia’s. “Riordan said: ‘Why don’t you walk away from this one?’ ” Robertson recalled. Mahony did not respond to interview requests.

Mary Nichols, Riordan’s former colleague on the city’s Recreation and Parks Commission, got to know him over a sustained period and said that although she admired his mind, she was not sure that his temperament was suited to public life.

Riordan shared an attitude common among successful businessmen, she said, “that the bureaucrats are all idiots, have never had to meet a payroll, therefore what can they know about policy.”

Mixing Business and Politics

Mayor Tom Bradley, a onetime ally, added a twist to the chorus when he reportedly said that Riordan could not be trusted.

Bradley, who has received hundreds of thousands of dollars from Riordan in campaign loans and donations, made the remark in rejecting a Riordan offer to mediate a feud between the mayor and former Police Chief Gates, said the mayor’s top aide, Mark Fabiani.

“I presented (Riordan’s) offer to the mayor who responded by saying Riordan was ‘a snake’ and we should not involve him in the process,” Fabiani recalled.

Given an opportunity to repudiate the comment or amplify upon it for this article, Bradley declined.

“To me it meant that (the mayor felt) Riordan was attempting to play both sides of the street,” Fabiani said. “For months he had attempted to prop Daryl Gates up and yet he came calling and offered to help ease Gates out.”

Riordan denied trying to prop Gates up, and said Fabiani was out to get him because he had once taken the mayor to breakfast to give him his opinion that Fabiani was doing a bad job.

Criticism that Riordan straddles issues is recurrent. In this campaign, he has called his mayoral race opponents fundamentally wrong for accepting public matching campaign funds. But he was the largest individual contributor to state and local drives to establish such funds.

Riordan explained the apparent contradiction by saying that he gave $42,000 to the drives at the behest of friends, or friends of friends, “and plus I believe in them. What I’m saying now is that it is wrong under this budget crisis to take public money for campaigning.”

In another clash between his pocketbook and his politics, he said he is in favor of a woman’s right to choose abortion, but records of his foundation show gifts to anti-abortion groups, the largest of which was $10,000 in 1991 to Americans United for Life. The organization’s main focus, a spokeswoman said, is “to protect and defend the civil rights of the unborn.”

A Princeton graduate in philosophy and a veteran of Army service along the demilitarized zone in Korea, Riordan was No. 1 in his class at University of Michigan Law School. He moved to Southern California in 1956 to take a job with a downtown law firm.

Shortly after buying a house in South Pasadena, he hooked up with a neighbor, Merrill Lynch stockbroker Charles Reeves, for what turned out to be a wild ride.

Reeves looked over Riordan’s substantial list of securities and helped him reinvest, transforming a small fortune--based on an $80,000 inheritance from his father--into at least $300,000.

One of Reeves’ master strokes was to put Riordan into the now legendary stock of Syntex, a small pharmaceutical company that soon came up with the world’s first birth control pill.

But not everything Reeves advised led to success. Riordan’s misadventure at the time was his service on the board of directors of another innovative company, Glendale-based Traid Corp., which ran afoul of consumer protection agencies such as the Federal Trade Commission over the way it sold the world’s first electronic camera with a built-in flash.

“My recollection is that it was a very good camera,” Riordan said.

But according to Modern Photography magazine, the $500 “Fotron Space Age Color Camera”--marketed with techniques lifted from door-to-door encyclopedia sales--was a piece of junk. The Los Angeles Better Business Bureau found it took worse photographs than a $20 Instamatic. Class-action lawsuits charging fraud and naming Riordan as one of many defendants were settled with partial refunds or free merchandise.

Using the financial base that Reeves had helped him create, Riordan launched in the 1970s what was to become his main career. He became a venture capitalist--someone who financed entrepreneurs.

He hit his “home run” with a company called Convergent Technologies, which pioneered “intelligent” computer work stations made possible by the advent of small computer chips. Riordan’s initial investment multiplied nearly 300 times.

Allen H. Michels, Convergent’s founder, said Riordan is “unquestionably a visionary. He has enormously high standards (and) a serenity that to this day I still envy. . . . He knows when to start and win a fight, when to avoid a fight.”

One of Riordan’s greatest triumphs came when he helped restructure an insolvent Mattel Inc. into one of the country’s two most profitable toy companies.

Riordan also decided to provide start-up money for two other financiers, Bradley Freeman and Ronald Spogli, who wanted to do leveraged buyouts.

Riordan, Freeman & Spogli financed the bulk of its buyouts with loans or high-risk, high-yield junk bonds, some of which were underwritten by junk bond king Michael Milken.

Mostly, the highly leveraged companies did well. But some failed under what critics said was the burden of too much debt.

In the case of an already weak A.J. Bayless supermarket chain in Arizona, bankruptcy resulted. Three thousand people lost jobs. More than 600 others were put out of work when a highly leveraged Sun Carriers Inc. shut down its Milne Truck Lines subsidiary.

Milne workers were stunned because the shutdown came with only three days notice, after management had assured them through a public relations campaign involving speeches, cakes, T-shirts and balloons that they had job security for at least three years, said Richard E. Schwartz, an attorney representing the workers.

Riordan, a “passive investor” in the leveraged buyout firm that bore his name, said he did not know anything about any deception and had no role in deciding to shut the subsidiary. His partner Freeman confirms the passive role.

But Schwartz is skeptical. “He takes deniability to the outer limits with these transactions where all the instability and chaos and hardship to the employees is supposedly the work of partners and subalterns who may or may not keep him informed,” Schwartz said. “In other words the guy’s a good enough lawyer that he tries not to leave fingerprints on the deals.”

Riordan withdrew his name from the firm in 1988, saying he wanted to pursue smaller deals on his own. But he maintained a multimillion-dollar investment in the company.

Riordan, who considers himself an Eisenhower Republican, got into politics in a big way in 1982 when he loaned Democrat Bradley $300,000 in the mayor’s unsuccessful bid for the governorship.

“I think it was a good symbol for the state to have a minority be the governor--particularly a competent minority,” he said.

He said he later got a call from a Bradley loyalist asking him what city commission he would like to serve on. “The airport was the sexiest because you could travel. But I had a real interest in inner-city problems,” Riordan said. He chose parks and recreation, where he pushed for soccer fields.

Bradley named Riordan to the Coliseum Commission, which offered “a post-graduate education in making things happen in government.”

Over the long course of negotiations to keep the Raiders in the Coliseum, Riordan developed a close relationship with fellow commission members and conservative county Supervisors Pete Schabarum and Deane Dana. This led, he said, to various assignments negotiating deals on the county’s behalf.

Riordan does not take kindly to criticism that he could have done a better job. Based largely on calculations of property values done by retired UCLA business Prof. Fred E. Case, Times articles last year suggested that county taxpayers should have gotten more money from developers leasing Marina del Rey. But Riordan fumed that the articles were “total complete dishonesty” and alleged that Case had since admitted that he was no expert. When asked about this, Case said of Riordan: “He’s wrong.” Case said the articles were correct.

Giving Is Receiving

By the mid to late 1980s, Riordan had become a political power in his own right. He had given liberally to candidates of both parties--sometimes simultaneously to as many as four people seeking the same seat--and led a successful effort to defeat liberal Justice Bird at the polls. Unlike many of those opposed to Bird, Riordan said he was more upset by her “anti-business” attitudes than her unwillingness to uphold a death sentence.

As his political activities increased, so did his level of charitable giving and the depth of involvement in a variety of community organizations to help the poor. Riordan, who had always given substantial sums to charity, nearly quadrupled his giving to more than $2 million a year beginning in 1988.

Asked whether this surge was related to a desire to seek elective office, a short fuse showed.

“I’m not going to even answer that question, I’m so insulted by it,” he railed. “I think that’s the kind of dirt that you guys get involved in too much.”

Riordan, it seems, has a weightier agenda than mere politics.

He hinted at what it might be when he joked that his next fund-raising project might be an effort to persuade the Pope to delete a passage from the New Testament.

The passage poses a particular problem for rescuers such as him.

“It is easier for a camel to go through the eye of a needle,” it says, “than for a rich man to enter into the kingdom of God.”

Profiles of the 11 major candidates for mayor of Los Angeles are running in order of appearance on the ballot. Next: Julian Nava.

WOO’S AD CRITICIZED: Candidate Michael Woo ran a TV ad with Chief Willie Williams without Williams’ permission. B3

Profile: Richard Riordan

Born: May 1, 1930.

Residence: Brentwood.

Education: Attended Santa Clara University. Graduated from Princeton University. Law degree from University of Michigan.

Career highlights: As an investor, he helped restructure an insolvent Mattel Inc. He has served as president of the city Recreation and Parks Commission and the Coliseum Commission and is senior partner in a downtown law firm.

Interests: Bicycling, reading, chess, bridge, dogs.

Family: Separated from his second wife. Three grown daughters from first marriage.

Quote: “I’m an iconoclast in the sense that I don’t like people who think they know everything--the right or left wing. . . . I like to tweak people who are arrogant.”

Riordans Deep Pockets

Richard J. Riordan is fond of saying that he is not an ideologue, and his political giving certainly makes his point. As one of the biggest political givers in California, he has spread his wealth among conservatives and liberals, Republicans and Democrats.

In the last decade, he and his law firm have made donations and loans to initiative campaigns and candidates totaling $2 million. He has given another $3 million to his own mayoral campaign and local term limits initiative. He has given $110,000 to state and national Republican Party committees and $25,000 to state and national Democratic Party committees.

He or his law firm have given to all five members of the County Board of Supervisors, to 11 of 15 City Council members, and even to three people who are opposing him in the mayoral race.

Here are some who have received his largesse, according to campaign donation reports:

DEMOCRAT Bill Bradley U.S. senator, New Jersey: $1,000 Ernest Hollings, U.S. senator South Carolina: $500 Maxine Waters, U.S. representative, Los Angeles: $1,000 Dianne Feinstein, U.S. senator, California: $3,000 John Van K. de Kamp, Former California attorney general: $10,000 Kathleen Brown, California state treasurer: $21,854 Conway Collis, Candidate for Calif. ins. commissioner: $121,000* Leo McCarthy, Lt. Gov.: $15,000 John Garamendi, Calif. insurance commissioner: $10,000 Gloria Molina, L.A. County supervisor: $5,000 Yvonne B. Burke, L.A. County supervisor: $4,600 Diana Watson, Candidate for L.A. County supervsior: $3,500 Art Torres, Candidate for L.A. County supervisor: $70,000*** Kenneth Hahn, Ex-L.A. County supervisor: $1,000 Tom Bradley, L.A. mayor, candidate for Calif. gov.: $516,000**** James Hahn, L.A. city attorney: $10,500 Zev Yaroslavsky, L.A. City Council: $5,950 Richard Alatorre, L.A. City Council: $10,500 Rita Walters, L.A. City Council: $1,000 Mike Hernandez, L.A. City Council: $500 *

REPUBLICAN Jack Kemp for President: $2,000 George Bush for President: $5,000 Dana Rohrabacher U.S. representative, Huntington Beach: $2,000 Pete Wilson Calif. Gov.: $34,000 Mike Antonovich, L.A. County supervisor: $35,970 Pete Schabarum, Ex-L.A. County supervisor: $93,000** Deane Dana, L.A. County supervisor: $35,000 Sarah Flores, Candidate for L.A. County supervisor: $140,900*****

*

CURRENT OPPONENTS Michael Woo, L.A. City Council: $500****** Richard Katz, Assemblyman, Sylmar: $500 Nate Holden, L.A. City Council: $1,000 * Includes $100,000 loan

** $89,000, including a $25,000 loan, went to various Schabarum-controlled committees

*** Includes $125,000 from Riordan’s law firm for “general operations and overhead”

**** Includes $25,000 loan

***** Includes $400,000 in loans, including a $300,000 loan in 1982

****** Donation came from law firm