Riordan Rises to the Tallest of Challenges

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On Jan. 17, 1994, Mayor Richard Riordan overslept. Violent shaking threw him to the floor at 4:31 a.m., one minute later than he usually woke up.


Across Los Angeles, chaos was spreading. The 6.7 magnitude Northridge earthquake would become the costliest natural disaster of its time, leaving 57 people dead, 1,500 injured and 22,000 homeless.


Riordan didn’t know that yet. Still, sensing he needed to act, the mayor, who had been elected less than a year earlier, headed to City Hall, avoiding a head-on collision and a freeway collapse along the way.


Arriving downtown slightly after 5 a.m., the mayor hunkered down in the emergency operating center, and with Robert Yates, general manager of the Department of Transportation, went over a map pinpointing felled bridges and possible detours.


What followed became one of the most retold yarns of the Riordan administration.


Yates told Riordan the only workable detour around a collapse at La Cienega Boulevard was through Culver City. Because that’s a different city, the alternate route would require several approvals to implement and could be operational in two weeks at the earliest. Furious, Riordan told Yates he had 10 minutes to take over the intersections.


“If anybody complains, have them call me, and I’ll ask for forgiveness,” exclaimed Riordan. But after the detour was set up, nobody called From that arose one of Riordan’s favorite sayings: It is much easier to get forgiveness than to get permission. And with that principal as his guiding force, Riordan’s response to the earthquake was the shining moment of his tenure as mayor.


“When somebody has to do something quickly, has to have a reaction to a crisis event, you see who they really are. He showed his stuff,” said Steve Soboroff, a key advisor to Riordan and now president of the Playa Vista development.


Shepherding the city at its most urgent moment would perhaps seem an unlikely position for Riordan, a New York transplant, lawyer and venture capitalist with an estimated worth of well over $100 million. He could have retreated to a comfortable, worry-free existence, nestled in his Brentwood home, surrounded by his prized book collection and manicured backyard.


But, in business and in politics, Riordan this year’s inductee to the Los Angeles Business Journal’s Hall of Fame was always drawn to act when help was in short supply.


“Where there is a vacuum, whether it is charity or law or what, I feel a compulsion to fill that vacuum,” he said. “I am at my best in an emergency, my clearest. I go to fill vacuums and make decisions.”


At 75, Riordan isn’t nearly done with this work. Last month, his list of tasks included working with Mayor Antonio Villaraigosa to shore up security at LAX and the port, seeking ways to improve charter schools and studying how to construct a massive health-care database. And he adds to that list everyday.


Eli Broad, the billionaire philanthropist, calls his long-time friend “a doer.”


“He has that very warm Irish politician personality. He loves meeting people,” said Broad. “He is very bright, very pragmatic. He is a very good counselor (and) a very good judge of character.”



Government over yachts


Riordan doesn’t try to outshine others with his smarts. In fact, he detests when policymakers or businesspeople pack their sentences with lingo or overly sophisticated vocabulary. In Sacramento, he picked up a 300-page book filled with state government acronyms that he believes were all intended to obfuscate the daily practice of governance.


“It would take a lifetime to memorize them, and these people throw it around to confuse you,” he said. That led him to another favorite saying: “If you can’t reduce a description of something to ABCs, then beware of it; there is something wrong.”


Riordan’s oft-uttered axioms do just that: They reduce heady matters of leadership and business to ABCs. At their best, they can give everyone around him a clear mandate, letting them know exactly what he expects and, likewise, how he will behave.


Riordan’s method of leadership required those cues. He gave his employees wide latitude because he believed that, if he hired the strongest people, they could execute better than he could in their given specialty. But to attract those people, he had to persuade them that their input would impact government.


“His management style was very hands-off. He set the tone, he was the CEO, and he trusted people,” said Stephanie Bradfield, a deputy mayor and now owner of Bradfield Consulting. But, she added, “If you didn’t do your job, you were out of there.”


Riordan set the tone by making sure his staff understood his priorities. Ann D’Amato, also a deputy mayor under Riordan and now chief of staff for City Attorney Rocky Delgadillo, said Riordan outlined parameters to highlight where the staff should concentrate. The five areas of utmost importance were economic development, public safety, government efficiency, education and healthy neighborhoods.


“Those five goals were embedded into every staff members’ work assignments. We tried to stay focused to provide the best that we could for the city,” she said.


People were clearly convinced Riordan could change Los Angeles. From all walks of life, whether government, academia, business or law, they were drawn to the Riordan administration to aid in the process.


The people in Riordan’s circle were impressive. He tagged Soboroff to handle Staples Center and the Alameda Corridor, among other projects. He enticed Bruce Karatz, chief executive of KB Home, to raise money to computerize the police department. He worked with Broad on Disney Hall. And he wooed William Ouchi, UCLA professor and author of “Theory Z,” into City Hall to be chief of staff. And there were many more.


“Instead of people talking about where their yacht was going, people were talking about how they are helping Los Angeles,” said Ouchi. “He engaged people who were well off and made it fun for them to help a city, a government agency.”


At least part of the appeal was Riordan’s extensive business background, a departure from the preceding city leadership. According to Bill Wardlaw, campaign manager for Riordan’s mayoral bid and currently a partner at Freeman Spogli & Co., the business community in Los Angeles was considered largely irrelevant prior to Riordan.


“For the first time in many years, he engaged the business community actively in the process,” he said. “He wanted their involvement. He needed their involvement. He got that.”



The investor


Riordan’s tendency to draw from the business community came easily. He started out early with success in investing. In 1956, the year he came to Los Angeles for a job at the storied law firm O’Melveny & Myers LLP, he took an $80,000 inheritance from his father and put it in four companies: Control Data Corp., Litton Technologies Inc., Haloid and Syntex Corp. The initial $80,000 turned into several hundred thousand, while at the time he was making about $350 a month at O’Melveny.


At O’Melveny, Riordan’s business education was kicked into high gear. He was assigned to work on initial public offerings. He quickly learned that he had the ability to comprehend the heart of a company’s business to see the big picture. “I am the opposite of anal,” said Riordan. Instead, he said, he is adept at “taking one idea here and one there and connecting the dots somehow.”


After he multiplied his inheritance, more opportunities came Riordan’s way. He hooked up with Silicon Valley entrepreneurs and began pouring venture capital into their endeavors. He did so while moving from law firm to law firm before founding Riordan & McKinzie in 1975. The firm is now part of Bingham McCutchen LLP.


Mostly, Riordan’s investments weren’t overwhelming: $100,000 to $200,000 here and there. But in the small venture capital fish bowl, the gains could be large. “The risk/reward was so incredibly balanced toward the investor,” he said. “You could make five, 10, 100 times your money, but you could only lose it once.”


He put $650,000 in Convergent Technologies Inc., which made the some of the first intelligent computer terminals. All together, Riordan estimates he made $30 million off his investment in Convergent. Other companies Riordan scored big with include engineering services firm Tetra Tech Inc., home health agency Total Pharmaceutical Care Inc., and software company Pyramid Technology Inc.


Riordan didn’t invest based solely on the advice of others. He did the dirty work himself: inquiring about the management, learning about the product and figuring out the key to future advances. He wanted to know a company intimately before putting his money on the line.


“I used to say that I never would make an investment without getting drunk with the management before I made the investment,” Riordan said. Ouchi puts Riordan’s investment strategy this way: “Always be well informed. Talk to people on the ground. Don’t just talk to people five levels up who don’t know anything. Go out and talk to people who sell the stuff.”


The same strategy applied to Riordan’s leveraged buyouts. In the mid-1980s, El Segundo toymaker Mattel Inc. was struggling. After scouring the company’s balance sheets, Riordan determined that the problem with the company was that it reached too far beyond its core business of selling toys.


“They were making a lot of money in dolls, and within months, we had the company solvent,” said Riordan. In the end, when Riordan pulled out shortly before he became mayor, he had made about 30 times his initial investment.


Riordan wasn’t a perfect investor. He passed on Intel Corp. after investing in a similar company that fizzled. A close friend didn’t make the same mistake and put $200,000 into Intel that Riordan estimates is now worth $2 billion.


But Riordan did come out on top a lot of the time. Part of the reason was his mastery of negotiation. Rick Welch, former chairman of Riordan & McKinzie and currently the managing partner of Bingham McCutchen in Los Angeles said Riordan was no table-pounding dealmaker.


“He is a little more focused on broadly what is important and maybe less on the details than a lot of negotiators and, certainly, than a lot of lawyers,” said Welch “In any situation, he figures out what is most important instantly.”


Riordan said his tactic is to let the other people talk and don’t combat those who disagree. “Somewhere down the road they may forget what they were saying. In fact, they normally do and when you finally get them thinking your way, you give them credit for thinking your way,” he said.



Family life


Riordan acknowledges that money was one of his driving forces. However, it wasn’t the most crucial. He has a theory that people have around 10 main priorities, including greed, and the way they live depends on where they rank their priorities. “In my case, I would say the greed is about number three (from the bottom,” he said, while “doing something right” ranks at or near the top.


Indeed, the trappings of money certainly haven’t consumed Riordan. Although his Brentwood home is carefully appointed, he said he pays little heed to some of the costlier details. The house is full of orchids and roses that are replaced frequently. But Riordan said he barely notices the flowers, which he said are a lavish expense that his wife enjoys.


Around his house, there are few pictures of him with dignitaries, kings or celebrities. Instead, there are scores of pictures of family at various occasions. And there’s a painting on the wall done by his son-in-law of Riordan shows him at one of his favorite activities: studying a chessboard. Now he often competes online with chess players from all over the globe. He’s also a big book reader. He has over 40,000 books in his house, most of which were acquired when he bought a college collection.


The balance is not surprising given his upper middle class background, which never left him wanting materially even as he was taught achievement was important.


Riordan grew up in New Rochelle, N.Y., a part of a large, Catholic family. His father was a highly successful department store executive, who at 28 became president of Abraham & Strauss, a leading department store in New York City at the time.


Like many, his political beliefs originate with his family. At home, his father wasn’t overtly political, but made his opinions clear. He voted for Franklin Roosevelt in 1932 but never again voted Democratic. “I was programmed not to like Roosevelt,” said Riordan.


Riordan, who has mixed feelings about Roosevelt, said the Democrat’s leadership skills gave the country confidence in difficult times and prepared citizens for World War II. In contrast, Riordan criticized his economic policies, which he said led to a liberal welfare system. “It turned blacks into victims, where they didn’t feel responsible for their own lives,” he said. (Decades later, Riordan caused a fracas when he labeled some social service agency executives “poverty pimps” a quote he refused to back down from despite severe criticism.)


For his first two years in college, Riordan attended Santa Clara University and was on the football team. After that, he transferred to Princeton University, where he graduated with a degree in philosophy. Then he entered the armed forces and served in Korean War. He later attended law school at the University of Michigan, and joined O’Melveny directly out of law school in 1956.


Riordan’s life has been one of great achievement, but it also has been touched by heartbreak.


He had five children with his first wife, but the marriage was later annulled and two of those children died: William in his early 20s in 1978 in a scuba diving accident; Carol in her late teens of a heart attack, a complication of anorexia.


It was like “somebody taking a sledge hammer to you,” he said. “But you learn to live with it. You cry now and then.”


His second wife, Jill Riordan Harris, offers more insight. She told one interviewer that her former husband “seemed to put himself a little more into work and then politics” afterward. He married his third wife, Nancy Daly, while serving as mayor.


Riordan plunged into civic life in 1981 with the start of his own foundation dedicated to literacy programs. Shortly thereafter, then-Mayor Tom Bradley ran for governor and Riordan got active in politics, supporting Bradley’s failed statehouse bid.



Civic duties


Bradley’s bid gave Riordan his first chance to sample politics. In return for the support for his candidacy for governor, Bradley asked Riordan if he wanted to serve on a city commission. Riordan picked Recreation and Parks. In 1984, he became a commissioner.


“I felt that people weren’t concerned about the poor, and I thought I could help and I found that I could to some extent make a difference,” said Riordan, who joined the Coliseum Commission starting in 1985. One of his first priorities was finding money for underserved parks in the inner city.


Then in 1993 the opportunity came to run for mayor.


The city was suffering from a crisis of confidence when Bradley decided to step down following 20 years atop City Hall. In June of that year, the Los Angeles Times released a poll showing only 38 percent of Angelenos approved of Bradley’s job performance. Some blamed Bradley for the riots in 1992 that left more than 50 people dead and racked up $750 million in damage.


Fifty-two candidates entered the race, including Riordan, who appeared to be an odd fit to helm Los Angeles: He was a Republican in a city that ran about 3-1 Democratic; he was a Catholic who wasn’t heir to the liberal black-Jewish voting base that had propelled Bradley’s reign.


But Riordan knew that, if he were ever to win, it would be when the city begged for a drastic makeover. Wardlaw, who had managed political campaigns in the past, convinced him that he must jump into the fray.


“Dick is an extraordinarily talented and successful man and had been a very innovative and instinctually great investor,” said Wardlaw. “I thought, at the time, it was someone like him that the city of Los Angeles needed to return vigor and excitement to government.”


Transforming from private investor and businessman to mayoral candidate in Los Angeles wasn’t easy. Riordan worried what the publicity would do to his family. And he struggled with campaigning, something he had never had to do before.


“As successful as he was, he was a gentleman that didn’t seek the limelight back in the early part of his professional career,” said Wardlaw. “It was a tough transition.”


The media could be harsh. Although Riordan was personable one-on-one, he wasn’t totally comfortable in front of large audiences. He was pegged a stumblebum. Still, Riordan approached his candidacy with extreme discipline. Realizing he knew little about running for public office, he soaked up the advice of the political experts around him.


Wardlaw said Riordan’s outsider status played to his advantage with city residents tired of the entrenched regime. In Riordan, they saw someone who could cut through the layers of red tape, someone who could use his business sense to set government straight.


“The city was ready for a change,” said Wardlaw. After Riordan willed himself through the debates with Councilman Mike Woo, his Democratic adversary, the campaign manager could feel the win coming.


On election day, Riordan bested Woo 54 percent to 46 percent. He was the first Republican mayor of Los Angeles in over 30 years. What followed was a tenure marked by major successes and failures.


Even as major projects such as Disney Hall and the Staples Center moved along under his administration, Riordan, whose tenets were based on his personal code of accountability and a distrust of big government, regularly locked horns with a far more liberal City Council. Indeed, the rift between Riordan and the council became a running theme in the media. There were powerful personalities in the council, including Jackie Goldberg and Joel Wachs, who weren’t afraid to clash with Riordan.


“It was a very tough relationship. There were a lot of long-timers there,” said Bradfield, the former deputy mayor. “Bradley was an inside government guy, and Riordan was an outside government guy.”


And though Riordan contends that his relationship with the council wasn’t as bad as it was made out to be, he had far from a free ride in the media. Sometimes, Ouchi said he would open the morning paper and shudder at the headlines, realizing he would have to spend time dealing with the fallout. Even at his inaugural address, a reporter pointed out that a quote Riordan attributed to the Bible couldn’t be found in its pages.


Only a mediocre person doesn’t make mistakes, argues Riordan in another one of his axioms. “Now, I have been in politics long enough that if someone picks up something I did wrong, I say, ‘Look I made a mistake, but I am going to look to what I can do today, tomorrow and the future. I am not going to look back,'” he said. “People seem to accept that.”


Among his major accomplishments: a charter reform package in 1999 that gave the mayor’s office more power over commissions and contracting, among other areas. It also created the neighborhood council system to give residents a greater voice in how their neighborhoods were governed.


“It is probably working a lot better than a lot of people thought it would. Certainly, I think it has been a significant change for the city,” said Raphael Sonenshein, a professor at Cal State Fullerton. “The lines of authority are a lot clearer. There is greater accountability for the mayor.”


Riordan was less effective molding the school board. He teamed up with Broad in the late 1990s to elect candidates to challenge the union, United Teachers Los Angeles. The slate won in 1999, but the union fought back with its own candidates and regained its power two years later.


Still, Riordan’s involvement in the school board race gave the mayor a role over education previously unheard of. Today, Villaraigosa is taking further steps to takeover the school district. Without Riordan’s example, it’s not obvious that he would be able to advance that agenda.


To sum up his career, he paraphrases Teddy Roosevelt.


“The world belongs to those who trip and fall and get up and keep going,” said Riordan. “That is sort of me.”

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