Winnick Perceived as Brash Benefactor

Contributing Reporter

When Gary Winnick was a little boy, he watched every episode of the television show "The Millionaire," which each week chronicled an everyday person who received an anonymous $1 million check from a well-heeled benefactor. Unlike his friends who imagined themselves as the recipients, he fantasized being the guy who wrote the check.

The story, which he told last year to the Chronicle of Philanthropy, encapsulates two sides of Winnick, now under fire for his role in the collapse of Global Crossing Ltd. He is a man who has amply demonstrated both his generosity in giving away millions of dollars and his ego in making sure he is recognized for doing so.

"He's always wanted to feel loved," said one local investment banker who has done deals with Winnick. "Some people do things quietly, some people don't."

For now, Winnick is keeping the lowest-possible profile. As of late last week, he had yet to grant any interviews on the Global Crossing troubles. Normally guarded with the media, Winnick is likely to be even more tight-lipped in light of ongoing investigations into Global Crossing by the Securities and Exchange Commission and the FBI.

Not that the guy is a wallflower. The 54-year-old Winnick is described by members of L.A.'s financial community as an outstanding salesman perhaps the product of his years of working under Michael Milken at Drexel Burnham Lambert. He left Drexel and formed what is now called Pacific Capital Group Inc., where he remains chairman and chief executive. Pacific Capital invests in companies in the telecommunications, financial services, health care and biotechnology industries and has an equity interest in Colony Capital Inc., a private investment firm with over $6 billion in managed assets.

But Pacific Capital had no more standing than many other investment firms until it purchased AT & T; Corp.'s nascent undersea fiber cable business in 1996 for $750 million, and which became the basis for Global Crossing.

When Global Crossing's stock rocketed upward in 1999 and Winnick became for a time the richest person in Los Angeles, he wasn't particularly well known outside of the financial world. A long-time contributor to various causes, his profile ratcheted up with a string of charitable giving, purchases and political contributions. Big, bluff and confident of his abilities as a financial operator from his days alongside Milken, he took pleasure in his newfound wealth and the celebrity that came with it.

"Money's no fun unless you spread it around," he told Business Week two years ago.

Spread it around he did. In a complex asset swap worthy of the deals he engineered while at Drexel or Pacific, Winnick two years ago bought millionaire buisinessman David Murdock's 12,000-square-foot house in Bel-Air a deal worth anywhere between $60 million and $94 million, according to published reports. Then he tore it down to build something else (those plans have been put on hold). Pacific Capital spent $41.5 million for the former MCA building in Beverly Hills. The building is modeled after an Italian villa, and Winnick's office a replica of the Oval Office.

The Winnick Family Foundation, set up by Gary and his wife Karen in 1987, became a major contributor to several causes. It has given away more than $100 million in the past three years to causes ranging from AIDS research to children's literacy, Bosnian relief efforts and the Special Olympics. The Skirball Cultural Center got $5 million. Last year the Los Angeles Zoo opened the $3.4-million Winnick Family Children's Zoo, so named because of the $2 million given by the foundation. Karen Winnick, a children's book author, was appointed to the city's Zoo Commission by then-Mayor Richard Riordan in 1999.

"We're now doing a lot with world-wide relief," said Rosalie Zalis, the foundation's executive director. "Children's education is also a priority. There's been some press about how we've given to presidential libraries (about $1 million each to the libraries of former presidents Clinton and George Bush) but that money is all to go to educational outreach for children."

A supporter of Jewish charities for more than two decades, Winnick gave $5 million to a program that sends Jewish youth to Israel for education programs, and $3 million to a Chabad girls' school in West L.A.

He made his biggest splash in 2000 when he announced a $40 million pledge to the Simon Wiesenthal Center to build an educational center in Israel to promote tolerance among people of differing religious faiths. Renowned architect Frank Gehry is designing the three-acre Winnick Institute Jerusalem and construction is expected to begin within the next nine to 12 months, says Wiesenthal founder, Rabbi Marvin Heir.

He quickly established himself as a political force as well. Global Crossing, Pacific Capital and Winnick himself each donated hundreds of thousands of dollars to both political parties.

He was the host at an August 2000 luncheon in Los Angeles for the National Democratic Institute attended by former President Bill Clinton and then-Secretary of State Madeline Albright. According to syndicated columnist Richard Reeves, Winnick spent 10 minutes extolling his own virtues. And then it got surreal.

Reeves wrote that when Winnick introduced Albright, "he mentioned that she was known to like hats and clamped a baseball cap on her head. It said 'Global Crossing.'" Albright gamely went on to praise Winnick for hosting the event, as did Clinton, although Winnick refrained from putting a hat on the president's head.

"He likes to name drop, that's who he is," one investment banker said. "I wouldn't look at him and say he's a male version of Mother Teresa."

With Global Crossing in turmoil, and Winnick's role under scrutiny, it is natural to wonder whether he will continue to be as active in donating money and abide by his pledges, which include $10 million to his alma mater, C.W. Post college in Long Island. Those around him say he will.

"Gary's a very honorable guy and I have no question he will honor his commitments," said long-time friend and publicist Mike Sitrick, who has been fielding many of the press inquiries connected with the bankruptcy filing.

All payments for the Winnick Institute Jerusalem have been on time, and there is no reason to suppose that won't continue, added Rabbi Heir of the Wiesenthal Center. "Gary's been a contributor for more than 20 years," Heir said. "I can only say that so far that he is up to date on his commitment to this project."

How Pacific Capital will fare is harder to tell. Its venture capital arm PCG Ventures, a $50 million fund once run by Winnick's son Adam, is inoperative. Last year Pacific Capital was part of a group that acquired Loews Cineplex Entertainment Corp. out of Chapter 11 reorganization and is putting in around $250 million to reorganize the theater chain. It continues to invest in telecom, media and real estate deals. No one doubts Winnick's ability to sell himself and his investments, but neither is there any doubt that his reputation has been shaken.

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