On The Move With : Richard Riordan : Quiet Clout, Big Money and Questions of Obligation

RICHARD J. RIORDAN has the beginnings of a pained look on his face. It’s a little hard to tell, because Riordan affects such a pleasant poker face through even the most difficult situations. But irritation is pinching him like a tight collar: There’s a hint of exasperation in his eyes and a weary slump to his shoulders.

This is all perfectly forgivable. For more than an hour this afternoon, Riordan has been sitting in the conference room of his downtown law office, behind a wilting sandwich and a Pepsi turning flat in its can. He has been fencing with a battalion of pertinacious lawyers and executives from MCA Inc. and Spectacor Management, the companies that have been negotiating jointly since last fall for the right--the word is used advisedly--to run the Los Angeles Memorial Coliseum and Sports Arena, the troubled former home of the Rams, the Lakers and perhaps the Raiders.

Riordan is vice president of the Coliseum Commission and part of a small subcommittee appointed to reach an agreement with MCA and Spectacor. The hope is that professional managers can operate the complex more efficiently than the politicians have, keep the teams around longer, and (though this is mostly unspoken) someday maybe even mend relations with the Raiders.

Riordan called this meeting because the negotiations are stalled. The two sides have made some progress this afternoon, but it’s been inch by bloody inch. Periodically, the substantive negotiations have halted while one side or the other verbally strafed the room. It took them almost an hour to agree on which issues they disagreed about. Now, as Riordan looks blearily across the table, it ominously appears as though MCA’s chief negotiator, Irving Azoff--who may well have studied at the Ed Koch school of subtlety--is drifting into a speech.

Riordan doesn’t need this. His name is on the door of this law firm in downtown’s California Plaza; he has a busy venture-capital operation and a thriving investment-banking concern; he owns the Seventh Street Bistro and the Original Pantry Cafe, dollops of real estate and blocks of stock in a portfolio that’s bigger than those of some mutual funds.

As a deal-maker and money-mover, he’s world class. After a decade of venture-capital deals, leveraged buyouts, takeovers and mergers, Riordan’s cup is overflowing: He’s worth somewhere in the neighborhood of $100 million. But he’s never found enough nourishment there. He feels as much obligated as liberated by his wealth.

And so at 58, Riordan has become one of the most powerful unknown figures in Los Angeles. Quietly, businessman Riordan has emerged as a potent force in politics, charity and the Roman Catholic Church. A Republican who mingles easily with Democrats--and supports many of them--Riordan has solid ties across the political spectrum. Spend some time with Riordan and you start to think that this is what political power in the coming decade will look like: non-ideological, empathetic, unsettled by inequity, but measured in its expectations of change. Or, as Riordan describes himself, softhearted but hardheaded.

Riordan is a thoughtful man, unsure of what to make of a world that has rewarded him so lavishly while leaving so many others trapped in poverty. So, over the past 15 years, with little fanfare, Riordan has operated as a bank of last resort for a Dickensian parade of worthy causes, the Eastside Boys Club, for example, shuttered after allegations of financial mismanagement. In the past few years, he has stepped up to more ambitious social projects that affect the entire community. “Nothing is too small for him to get involved,” says Francis X. McNamara, former president of the Los Angeles United Way, “nor too big.”

There is an urgency to his public works--a need to do good and move on to the next project . . . and then the next. He has accumulated causes the way he did companies a decade ago. Riordan sits on the boards of about two dozen private companies and public institutions. He took a position on the powerful city Recreation and Parks Commission, hoping to open more parks in inner-city neighborhoods; he’s now president. And, at the request of his friend Mayor Tom Bradley, he joined the Coliseum Commission.

Which is how Dick Riordan has found himself in this conference room, arguing about scoreboard deals, renegotiation terms and who has reneged on what. Meanwhile, down the hall in his office, messages are stacking up. He’s late for a meeting of the Archdiocesan Education Foundation, which he chairs. Finally, he looks at his watch and stands up. The two sides appear to have moved within sight of an agreement--at least enough to let the attorneys handle the details. Azoff, chairman of MCA’s Music Entertainment Group, is on his way out, too. “Dick,” he says, smiling and wrapping his arm around Riordan, “you’re a great American. When your business goes bankrupt because you’re spending all your time on this crap, we’ll always have a job for you at MCA.”

IN THIS afternoon’s swirling and numbing session, Riordan has done what he does best: solve problems. Because he is not locked by ideology into rigid alliances, Riordan has a great facility for mediation. His flexibility may be his most valuable asset. “He bridges all the community, all the sectors in town,” says Tom Houston, former deputy mayor, now a private attorney representing MCA / Spectacor.

These extraordinarily complex negotiations have been a case in point. Because he has good relations with both Bradley and conservative county Supervisor Mike Antonovich, the Coliseum Commission president, Riordan played a key role last year in persuading the commission to consider private management for the complex. When the negotiations with MCA / Spectacor threatened to stall in March, Riordan was able to step in and nudge them forward because he had the trust of Bradley and Antonovich, the financial skills to confidently tackle the complex issues and, perhaps most important, the willingness to devote the time.

“Dick stepped in to keep the ship from sinking,” Azoff says.

The entire process has been “a great education,” Riordan tells me, as we leave the conference room and walk briskly toward the garage.

Riordan cautiously expects the full commission to accept the broad outlines of the contract taking shape, although some commissioners will resist diluting their control over the complex. “I think I can sell it,” he says, settling into my car for the short drive to the archdiocesan meeting. He sounds as if he’s trying to convince himself.

“Is this the sort of thing you went on the Coliseum Commission to do?”

“No,” Riordan says. “I thought the Coliseum Commission would be a lot easier job than it is: a reward, or whatever, for working my ass off at the rec and park commission. But I’m glad it’s happening because I’m loving every minute of it.”

“The Coliseum job,” I suggest, “was something you wanted, then?”

“But not badly,” he says looking out the car window as we drive off. “I didn’t want it that badly, because I don’t want anything that badly.”

MAYBE THAT’S because success appears to come easily to Riordan. There must have been a lot of hard work in there somewhere, but it looks frighteningly easy for him to make money. “God has given him an incredible Midas touch,” says William M. Wardlaw, a member of Riordan’s leveraged-buyout operation, Riordan Freeman & Spogli.

Riordan has always had the knack, the touch. In the late ‘50s, after earning a philosophy degree at Princeton and a law degree from the University of Michigan, Riordan came out to Los Angeles as a lawyer at O’Melveny & Myers. He took a small inheritance from his father and put it into the stock market. Skillfully, as it turned out. By the early 1960s, he had accumulated about $500,000, which then qualified as real money.

Through the 1960s, Riordan invested venture capital in small high-technology firms. In 1975 he opened his own law firm, Riordan & McKinzie, to work with the high-tech and venture-capital firms he met through his investments. Toward the end of the decade he hit it big twice: accumulating two full blocks in downtown Los Angeles just before the market exploded, and investing heavily in Convergent Technologies, a computer company that made him a very rich man when it went public a few years later.

In the early 1980s, he brought in a partner to systematize his venture-capital operation. Then he plunged into leveraged buyouts, just as they boomed. Every few years, the accountants tabulating his worth had to add a few more zeros.

But Riordan doesn’t like to talk about money. At this point, it seems he doesn’t even like to think too much about it. J. Christopher Lewis, his venture-capital partner, gets his time only in five-minute chunks. The size of most leveraged-buyout deals puts Riordan off; he prefers working with small companies, but now, as he’s pulled by the tug of public life, he has less time even for that.

“There are only 24 hours in the day,” Lewis says, “and he’s spread pretty thin.” Riordan’s attention may be elsewhere, but he doesn’t shy away from deals, and the money keeps coming anyway. “The risk-reward relationship is fantastic,” Riordan says unself-consciously. “I enjoy it--it’s such an easy game to win at, why stop playing?”

RIORDAN KEEPS giving money away, too, almost as if it burns his hands. He gives generously from a private foundation with assets of about $10 million. Last year, he established a pro gram at the UCLA business school to familiarize minority high school students with careers in management. Two years ago, he formed another foundation to put computers in inner-city schools in New York City, Trenton, N.J., and Los Angeles; he’s already put $2 million of his own money into that project. With a new fund-raiser, he plans to expand the program nationwide.

Just as ambitious is the next item on his afternoon agenda: the Archdiocesan Education Foundation. Archbishop Roger M. Mahony and Riordan, an active Catholic who serves as a financial adviser to Mahony, began the foundation to provide an unprecedented $100-million endowment for the city’s huge parochial-school system. To reach their goal, they have assembled a high-powered board, including Bank of America Executive Vice President James P. Miscoll, MCA Chairman Lew R. Wasserman and Korn / Ferry International President Richard M. Ferry.

About half of the board’s members have shown up for this afternoon’s meeting. When we arrive shortly before 4, they are sitting in a small, plain room inside the archdiocese’s chancery building near downtown. They make an incongruous sight: a group of extremely wealthy Type-A businessmen gathered in mid-afternoon in what looks quite like a classroom, nibbling on homemade cookies provided by the church staff.

The fund-raising has started slowly, partly because Riordan is no administrator. He leaves the day-to-day operations of his businesses in the hands of others. His strength is conceptualizing solutions; by his own admission he lacks the patience for diligent execution. Riordan has the fuzzy air of an absent-minded professor. This is a man who, the story goes, once pulled up in his Mercedes for a flight at LAX, rushed out the door, caught the plane, settled into his seat and then realized, once aloft, that he had left his car at the curb, keys dangling in the ignition.

As chairman, Riordan runs the meeting with an easy hand. He takes off his suit jacket--he’s the only one who does--and lets long stretches of discussion pass without saying anything. The conversation is a strange mix of philosophy, education and corporate-speak.

The group describes principals as “the chief executives” of schools; they talk about “incenting” teachers. Their tone is earnest, civil and concerned--softhearted, hardheaded. For a long time they discuss how to attract more quality lay principals to parochial schools, which pay considerably less than public schools. When they decide that they can afford to spend just $50,000 to provide incentives, Riordan is dissatisfied.

“I think the $50,000 is much too low, because this is the most important thing we’re doing,” he says.

“But Richard,” says another committee member, “We don’t have any more money.”

“We can take care of that,” Riordan says calmly.

WHEN THE 90-minute meeting breaks up, we head back to Riordan’s law office. On the way, Riordan talks about the American Catholic Archbishops’ 1986 pastoral letter on the economy. After months of debate, the archbishops declared “the disparities of income and wealth in the United States to be unacceptable.” The archbishops wrestled with the question that itches at Riordan--how can you justify a society with so much inequality?--and concluded: only with drastic reform of its social and economic structures to provide a more level distribution of income and power. As we drive through downtown, with its grim, glassy towers and its spectral homeless men wandering between them, these do not feel at all like abstract questions.

Riordan finds sweeping prescriptions like the archbishops’ “absolute pie-in-the-sky and dangerous, too.” He would like to reorder society’s priorities to de vote more to the poor, but in an incremental, voluntarist fashion.

Riordan puts his faith in concrete, tangible projects that he sorts through with a businessman’s eye for the practical. “Ninety-eight percent of the ideas that are given to me I veto because the dream doesn’t work in the trenches,” he says. Like most of the men who ran for President this year, he has rejected the expansive optimism of the 1960s and the chilly solipsism of the 1980s. He is, much like the nation, looking for a way to balance hope and experience.

“The bishops’ letter talks about (establishing) ‘preferential options for the poor,’ ” Riordan says with an unsettling intensity from across the front seat. “Well, I believe everybody in that room today has a preferential option for the poor. But the question is how do you . . . fulfill your obligation?”

Maybe first the question is: How do you define your obligation? “I define it as making the poor equal to the task,” Riordan says as we pull into the garage beneath the California Plaza and head toward the elevator. “Every human being should have the tools to compete; that to me is a total religion.” That belief nourishes his faith in education for the very young as the most effective way to break the cycle of poverty.

So then the question is: What works? Reagan hasn’t been sincerely interested in helping the poor, Riordan says, and the “liberal . . . welfare system has perpetuated the problem.” Can private initiative solve social problems? “I hope it does,” Riordan says. “I can’t say absolutely. So maybe this is the best way, or the most hopeful way, to go at it.” That’s the conviction that propels him.

WHEN WE ARRIVE at Riordan’s office, it is past 6. Almost everyone else is gone, but the lawyers are still in the conference room haggling over the proposed Coliseum contract. When he passes his office, his secretary presents him with a pile of phone messages. He looks at them in despair. The more projects he takes on, the more offers come to him. It has come to the point where he must turn people down. “Until four or five months ago I used to pride myself on returning every call within a day,” he says, scanning the pile as he walks. “Now . . . ,” he waves his hand, “it’s critical mass.”

“It will be interesting to see what the mood in the room is like,” I say to Riordan when we near the conference room. “Yeah, right,” he says. “Swords drawn.”

Actually the mood is undiluted exhaustion; the attorneys look as though they can barely lift a pencil, much less a sword. Soda cans and paper plates are strewn across the table. The late afternoon sun glints off the Wells Fargo building across the street, but somehow, in this room, it feels long past midnight.

After Riordan and Azoff left, the attorneys quickly found themselves entangled in several major issues, which remain defiantly unresolved. Riordan takes off his coat, settles into a chair and plunges back in.

Progress comes agonizingly. Half an hour into the discussion, Riordan picks up the phone to talk with Azoff and two other MCA officials. With bedraggled energy, he paces back and forth across the edge of the room, listening as Azoff animatedly presses MCA’s case.

“There’s logic in what you’re saying, Irving, but it’s not the real world,” Riordan interjects. Azoff resumes. Riordan interjects again: “Yeah, but it’s not the real world.” Azoff resumes again, even louder and more energetically now. Finally, in the midst of one particularly extended speech from the MCA team, Riordan smiles, takes the phone from his ear and places it against his leg. When the gale has passed, he brings the receiver back to his lips and says calmly, “Come on, guys, come on.”

Calm is Riordan’s style. He doesn’t fill a room with his presence. He almost never raises his voice. He’s so earnest that he sometimes seems oblivious--Mr. Deeds comes to the 29th floor. Riordan’s manner is not tough or confrontational, but it is persistent: It’s the difference between the way a jackhammer and a river cut through a rock. “Dick believes you get people with honey, not clubs,” says Azoff, who is, in that sense, ambidextrous. “That’s why he sneaks up on you. He wears you down.”

It’s not exactly clear who has worn down whom, but when Riordan finally hangs up the phone, the sharp crags have been smoothed. It is 7:30. Although the attorneys are facing another long night drafting the remaining legal language, the major issues finally, blessedly, seem resolved--at least as far as Riordan and Azoff are concerned. (The contract announcement went forward the next day. But, it turned out to be a premature celebration. It took an additional 10 weeks of dogged negotiation and substantial revisions before the Coliseum Commission, on the first day of June, approved a management contract for MCA / Spectacor.)

RIORDAN STUCK with those negotiations until the end. Persistence is one of the rea sons that in the political world, Riordan has a reputation as a man who can get things done. He’s brisk, efficient, flexible. “He knows how to get to the bottom line,” says City Councilman Richard Alatorre.

Sometimes, though, he strikes colleagues as unduly eager to get there.

“He is kind of a bull in a china shop,” says one of his fellow Recreation and Parks commissioners. “He comes in and decides what’s right on an issue, and he wants it to happen immediately. And he tends to assume that if he, or he and the mayor, thinks it can happen, it should happen.” These qualities are fairly typical for businessmen trying to moderate their high-speed metabolism to the more sluggish pace of the public sector.

But in most other ways, Riordan’s foray into public life has been decidedly atypical. Though he identifies more with Republicans, he casually crosses partisan lines. He’s helped Tom Bradley (in 1982, Riordan loaned Bradley’s gubernatorial campaign $300,000), Alatorre and the presidential campaign of Kansas Republican Sen. Bob Dole--although he would have preferred Democratic Sen. Bill Bradley of New Jersey had Bradley made the race. In 1986, Riordan saw no contradiction in working for both Tom Bradley’s gubernatorial bid and the effort to defeat California Supreme Court Chief Justice Rose Elizabeth Bird--a campaign that mobilized voters hostile to the mayor.

The Bird campaign was a crusade for Riordan--he thought her rulings expanded the influence of the courts, and thus lawyers, to a dangerous degree--and he raised significant sums of money for it. But he generally loathes political fund-raising. When the late Republican political consultant Bill Roberts, who organized the Bird effort, approached Riordan to raise funds for a group supporting the U.S. Supreme Court nomination of Judge Robert H. Bork, Riordan signed on again because he thought Bork stood for the principles of judicial restraint he values. But he never felt comfortable in the hardball campaign, and he hated asking for money. One day last fall, halfway through a list of fund-raising calls, Riordan turned to me and said, “I haven’t had so much fun since my dog died.”

What makes Riordan most unusual is what he wants out of politicians. Unlike many wealthy people, he displays no desire to pal around with elected officials. And he’s refused requests to set up a lobbying practice, a traditional way for politically connected attorneys to cash in. Rather, he drifted into politics because he realized that befriending politicians would make it easier for him to accomplish his own goals, such as giving computers to inner-city schools. He had trouble persuading the school system to accept the gift until the mayor intervened.

A man who gives politicians money so that he can more easily give money to the public schools leaves traditional power players reaching for explanations. “Somewhere in his past, he is guilty about something,” Azoff says, laughing. “Nobody is that good.”

Riordan admits that there’s a healthy ego lurking beneath all that self-effacing reticence. “You know that Lucy and Charlie Brown cartoon where she says, ‘When I grow up I want to be rich and famous and humble, but I want people to know I’m humble’? It’s a little bit like that (with me),” Riordan says. There also may be some guilt buried inside--an uneasiness with the self-satisfaction that money breeds. “Everyone’s got to hit himself over the head and remind himself that in God’s eyes he may not be as high up as the homeless man on the street,” Riordan told an interviewer a few years ago.

RIORDAN IS considering this, the question of his motivation, later on that spring eve ning. We are in a loud downtown bar filled with well-dressed young men and women, lawyers and bankers, who are prosperous and healthy and radiate boisterously confident ambition. Riordan is sipping a Beefeater martini.

“One thing about being a Catholic--the same as being a Jew--is that there is something in the culture that makes you reach out to others, makes you a rescuer,” says Riordan over the din. “I love to rescue. But I’m also a pragmatist. I learn. I had one situation where I helped a teen-ager and followed it through--it was a kid who lived up in the ghetto and was brilliant--but eventually I realized it was a misuse of my time because he disappointed me. I still do things for him. But now I deal mostly with institutions because . . . I want whatever I do to have the biggest impact on the most people.” We’ve wound our way back now to the difficult question constantly raised by Riordan’s can-do ethic of individual responsibility: Can private charity level social inequities? Is it enough? In a community of such great wealth and abject need, how far does the responsibility to rescue extend?

Riordan rephrases the question. “How do I reconcile living in a $5-million house with people starving in Ethiopia or East Los Angeles?” Riordan is referring to the sprawling Brentwood home that he shares with his second wife, Jill. There’s a long pause, then he continues: “It’s a little bit like this: If I sold my house and split it all up and gave (the money) to everybody, it wouldn’t make a hell of a big dent.” He pauses again, then comes at the question another way. “What if I sold all my wealth, gave away everything, put a loincloth on? What am I doing? I don’t think I’m helping. I think what I’m doing (now) is helping the situation more.”

But Riordan is not entirely satisfied with that answer either. He is grasping for a way to demarcate the boundaries of his obligation. “We own the lot next to our house,” he says after a moment. “I’ve just been offered $1.8 million for this. The question is whether we integrate the lot into our house or get this $1.8 million. And the thought has occurred to me: OK, $1.8 million, that’s $180,000 in interest a year, that’s saving 300 people in Ethiopia every year, just on the interest of this. It’s educating 500 children in East Los Angeles, or something like that.” Riordan seems to be grappling with the numbers, unable to make the columns add up. “It causes me problems,” he says finally. “And I still haven’t decided what to do with the lot.”

A FEW MONTHS later, I checked in with Riordan to see what he had decided to do with the property. “I was hoping you wouldn’t ask,” he said through the crackle of a car phone. “I think we pretty much have decided we’re going to keep it.” Then he explained: “My wife and I have given the house to charity after we’re both dead, and that probably eases our conscience a bit,” he said. “And I guess everything is relative. This year, we’ve put far more into our (charitable) foundation than we ever have in the past.”

“I don’t know what it is,” Riordan said after a moment, his tone not defensive, but tentative, as if he, too, was still searching for a bright line to define the responsibilities of those who have for those who have not. “Do you sell everything? Do you sell off half of what you have? It depends on what your resources are. My resources have become dramatically high. That (piece of property) relative to what we can do elsewhere is not that important,” he said, each word acquiring increasing assurance. Then he stopped, and a characteristic whisper of uncertainty returned to his voice. “I don’t think that’s a rationalization,” he said.