The American Spectator

WASHINGTON — We lost a big-hearted prodigy on Sunday morning, Teddy Forstmann, financier, political player, philanthropist (especially for the young and in education), and a bit of an adventurer. I know. I accompanied him on some and feared for my life. He was a member of the Board of Directors of The American Spectator in the 1980s and early 1990. He died of brain cancer, and we shall miss him.

Teddy was from prosperous family, but his fortune he made on his own. He relished “the deal,” and sports, and gambling. He also had an interest in the ladies, Princes Diana, Elizabeth Hurley, and recently a television personality, Padma Lakshmi. He never married. He put himself through Columbia Law School in part through high-stakes gambling. He was a prosecutor as I recall and then flew around the country just managing to get together enough money to buy a company. He was down to his last nickel and last call, but he got the company, turned it around, and walked off with $300,000. He knew the game of the leveraged-buyout (LBO) was for him.

In 1978 he created Forstmann Little & Company, an early LBO firm. He was on his way, buying up Dr. Pepper, Topps Co., General Instrument Corp., and Gulfstream Aerospace, among others. He was on his way to a fortune estimated at $1.6 billion. He was among the first to buy companies with subordinated debt. Rebuild them, and sell them for hundreds of millions, occasionally billions. He bought Gulfstream in 1990 for $825 million and sold it in 1999 for $5.3 billion. Forstmann Little had average returns of 50 percent in its first two decades.

Teddy would not use junk bonds. That was, he would say, “Funny money. It’s wampum.” Over lunch he would try to explain it to me. He was famous for coining the phrase “barbarians at the gate,” which served as the title for Bryan Burrough’s and John Helyar’s bestseller about the $25 billion deal for RJR Nabisco, which Forstmann bid for but lost out to Kohlberg Kravis Roberts.

He had an eye for “the deal” but was also extremely well read, a great athlete, and civilized. He was also a conservative. He donated millions to the Republican Party, though his real interest was in education and the young. He teamed up with John T. Walton, son of the Wal-Mart founder Sam Walton, and donated millions to the Children’s Scholarship Fund. He was an advocated of voucher programs and charter schools.

There was a comic side to him. He created a rivalry with Henry Kravis from the battle for RJR Reynolds. He prided himself in using subordinated debt. KKR used junk debt. He lost, but in the Burrough and Helyar book the authors testify that Teddy “fervently believed junk bonds had perverted not only the LBO industry but Wall Street itself.” “Almost alone,” the authors write, “among major acquirers, Forstmann Little refused to use” junk. With Kravis it led to many amusing altercations. Teddy moved into a home on Long Island and damned if is was not just along the same beach where Kravis had a home. I remember how he competed to get to the heliport before Kravis. These are the things billionaires fight over.

There were more serious adventures. In the early fall of 1992 he called and asked if I could rouse some writers to go with him to the former Yugoslavia to cover the plight of the refugees. We hopped over to the London in his Gulfstream, picked up the distinguished young historian Andrew Roberts and flew on to Zagreb, the capital of Croatia. There we were greeted by the mayor as though we were visiting dignitaries. The next morning, you will forgive me if I expected armored cars to transport us through the war zone to Mostar, an embattled city in Bosnia-Herzegovina. Alas our armored caravan consisted of one beat up Volkswagen Golf sedan with one driver. Teddy was undeterred. The scenes along the Adriatic coast were spectacular, though the countryside was becoming increasingly ominous. Worse, we three were beginning to sweat profusely in the back of the un-airconditioned Golf, and soon we were hopelessly lost. Our guide, a Croatian tennis star friend of Teddy’s, seemed anxious, as well he should be, having not been back to Croatia in years.

Finally, midst the burned-out buildings of a remote town, we found the cops; or rather they found us. Now in my opinion we were prisoners. For hours we were kept incommunicado in that wretched town, and Teddy was growing irritable — not an auspicious sign. At long last something happened. I never figured out what it was, but Teddy exerted his fiery personality, and we were off to Mostar with proper directions. At Mostar we were shelled by the Serbs in the hills and feted by the locals — not good for the digestion. Teddy was unconcerned. He wanted to visit the refugee camps. We did for a day, driving by freshly dug graves, which Roberts and I found disconcerting. Shortly thereafter they would be filled.

When Teddy got to one camp where all the kids seemed to be down with colds and the flu he was distressed. How could such conditions exist in civilized Europe? He pledged a few million dollars to rebuild the camp with proper sanitation. And just before leaving, Teddy spotted a very fetching young lady and gave her his coat. He figured she would need it in the winter. If there was a pretty woman present Teddy would spot her. He was fun in a good cause or a great deal. There was no one else like him.