The stock market crash wiped out some of their wealth, but according to Forbes magazine the 400 richest Americans still had a total worth of about $220 billion, enough to cover the federal budget deficit for a year.
And the Oct. 19, 1987, market debacle had little impact on Orange County’s wealthiest residents: four of the five built and maintain their fortunes on real estate.
Forbes, in fact, found that real estate fortunes topped all other sources of wealth for the 1988 list, the first time in several years that has happened.
In Orange County, for the fifth consecutive year, developer and Irvine Co. owner Donald L. Bren headed the local list, with an estimated fortune almost six times that of his nearest rival, media heir Harry Howard Hoiles, with an estimated net worth of $335 million. And this year, as in 1987, there were no women on the roll of Orange County’s richest residents.
Bren, whose fortune of $1.85 billion grew from a mere $1.25 billion last year and is triple the $600 million reported for 1986, placed 14th on the roll of the royally rich, up from 30th last year. He is one of 52 billionaires on the Forbes ranking.
The 48% increase in his estimated wealth over the past 12 months reflects the huge run-up in local land values. The Irvine Co., of which Bren owns 92%, owns nearly 17% of all the land in the county.
There was one newcomer to the list from Orange County this year, developer George Argyros, whose fortune was estimated at $250 million. Others who remained on the list are developers William Lyon with $300 million and Richard J. O’Neill with $275 million.
Three Orange County residents whose names graced the ranks of last year’s Forbes list were dropped in 1988, apparently because the size of their fortunes, while still enough to get them on almost anyone else’s A list, fell below the $225-million cutoff point.
The dropped-offs are developer Donald Michael Koll, who ranked 277th last year with an estimated personal worth of $300 million, and, at $225 million each last year, developer John David Lusk, ranked 375th, and media heir Hugh Bancroft III, ranked 393rd.
The average fortune on this year’s edition of the annual list was to $551 million, up $1 million from last year. In Orange County, thanks to Bren’s billionaire status, the average was $602 million, compared to $400 million in 1987.
The list appears in the Oct. 24 edition of Forbes and is based on holdings as of Aug. 30. The Oct. 19 stock market debacle last year reduced the fortunes of many of the ultra-affluent 400 and caused 22 former members to be dropped from the list because their fortunes slipped below Forbes’ $225-million cutoff.
The federal deficit for the fiscal year that just ended was about $150 billion. The total national debt is about $2.5 trillion.
‘A Pickup Truck and a Little Stock’
Sam Walton, 70, easily held the No. 1 spot for the fourth year in a row, even though his net worth shrank by a whopping $2 billion following the crash.
Walton, head of the Arkansas-based Wal-Mart discount store empire, scoffs at his $6.7 billion in riches. He calls it “just paper--all I own is a pickup truck and a little Wal-Mart stock.”
By Forbes’ estimates of worldwide wealth, Walton rates fifth behind Japan’s Yoshiaki Tsutsumi, $18.9 billion; Taikichiro Mori, $18 billion; and Haruhiko Yoshimoto, $7.8 billion; and Canada’s Kenneth Cole Irving, $8 billion.
Runner-up to Walton on the billionaire list is John Werner Kluge, the head of Metromedia Co. with a net worth of $3.2 billion.
Next in line are H. Ross Perot, the founder of Electronic Data Systems who wants to overhaul the nation’s postal system, with $3 billion; publishers Samuel I. Newhouse Jr. and Donald Newhouse, $2.6 billion each, and Pittsburgh industrialist Henry Lea Hillman, $2.5 billion.
Underscoring the adage that the more you have, the more you can lose, billionaires were among those hit hard by the crash. Among the big losers were David Packard, founder of Hewlett-Packard, media magnate Rupert Murdoch and retailer Leslie Wexner, each of whom suffered losses of up to 50% of their fortunes.
7 Join Billionaire Club
Murdoch was on a record money-making pace in 1987, trebling his net worth to $2.1 billion before the crash. But his fortune dwindled to $1.2 billion following Black Monday, relegating him to 35th place on the Forbes list instead of eighth. Fox Broadcasting, which he is trying to build into a fourth national broadcasting network, is expected to lose $80 million this year.
Seven new names joined the elite billionaire club, including flamboyant New York real estate developer Donald J. Trump, who claims a net worth of $3.47 billion though Forbes’ estimate is in the $1 billion range.
Joining Trump are:
- Sumner M. Redstone, who boosted his balance sheet with the takeover of Viacom, $1.4 billion.
- Press-shy Charles Feeney, who runs Duty-Free Shoppers at airports, $1.3 billion.
- Charles Sammons, head of the privately held Sammons Enterprises, the nation’s 15th-largest cable TV operator, $1.3 billion.
- Charles de Ganahl Koch and David Hamilton Koch, brothers involved in oil services, $1.1 billion each.
- Ronald O. Perelman, takeover strategist and head of Revlon, $1 billion.
Four businessmen returned to the “lowly” ranks of multimillionaire when their fortunes sank below $1 billion: Laurence and Robert Tisch of Loews Corp., each estimated at $850 million; Milton Petrie, the philanthropist and head of Petrie Stores, $750 million; and Carl Lindner II, $950 million.
William Henry Gates III, who dropped out of Harvard and founded the Microsoft software company, remained the youngest self-made billionaire at age 32. His net worth is estimated at $1.1 billion.
The oldest person new to the list is Mansfield Freeman, who holds a stake in American International Group. With a fortune of $240 million, he made the list for the first time at age 93.
Among the 52 who disappeared from the list, 22 vanished because of Black Monday-associated losses, 26 were surpassed by greater fortunes and four died.
On the list, as usual, was Forbes Publisher Malcolm Forbes, whose holdings include a 400-square-mile Colorado ranch and a French chateau. While not officially disclosing his net worth, the magazine put Forbes in the $500-million category but cited various published reports that pegged his wealth at $400 million to more than $1 billion.
Times staff writer John O’Dell in Orange County contributed to this story.