Date: December 14, 1994

Location: Newark

Title: Ray Chambers Makes Big Things Happen

Author: Terri Cullen

Subject: After making a fortune in LBOs, he took that same drive to trying to solve problems in his home town

Few people know his name, and you won”t find it in Who”s Who in America or other collections of important people. Yet he pulled off one of the most spectacular financial scores in Wall Street history. A computer database search on his name comes up almost dry. Yet he was once on the Forbes list of the richest people in the world and has spent the better part of a decade giving away a fortune once estimated at close to $400 million. He is so obsessed with guarding his privacy that he hired McQueeny Davis Kohm, a Morristown public relations firm, to keep his name out of the media. When New Jersey Monthly magazine wanted to put him on a list of the richest people in the state this year, he called and talked the editor out of it. When the Wall Street Journal tried to do a story about his charity work, he refused to talk with the reporter. Let others have the glory; he”s too busy doing the work.

People involved in philanthropy or Newark civic affairs, however, know that he is one of the most generous men in America. He also moves comfortably in the nation”s power circles, where he is well known and respected.

He is Ray Chambers, 52, the Northern New Jersey BUSINESS Person of the Year. Each year this paper honors a business person who has made a difference to society, not by making some spectacular deal but by helping others. Chambers is an outstanding example of a business person who has looked beyond the bottom line to the bigger issues facing American society.

The business career of Ray Chambers is the stuff of which legends are made. After graduating from Rutgers in the mid-1960s, he spent three years working in the Newark office of Price Waterhouse as a tax accountant. Then in 1968 at the age of 25, he started a home-nursing care company, Metrocare Enterprises. One year later he made his first million when the company went public. Then for the next seven years he ran Metrocare before selling it to a larger company.

In the late 1970s, Chambers virtually invented the modern practice of leveraged buyouts. Using a small amount of his own money and a large amount of debt, he bought small companies that had little or no debt. He then sold off some of the assets to pay down the debt and made a windfall on the remaining parts.

In 1981 Chambers teamed up with William E. Simon, who had been U.S. Treasury Secretary under Nixon, to form Wesray Capital. The goal was to do more and bigger leveraged buyouts. The company name came from Simon”s initials and Chambers” first name. In January 1982 Wesray bought Gibson Greetings, a card company that competed with Hallmark, from RCA for $80.5 million. Wesray put up only $1 million in cash. The rest was financed with OPM–other people”s money. Simon and Chambers reorganized Gibson, selling off some assets and making other divisions more efficient. In May 1983, Wesray took Gibson public at a valuation of $290 million. Chambers and Simon earned more than $75 million each from the stock offering. It was a deal that Wall Street still talks about.

Over the next year, a string of LBOs netted Wesray more than $130 million in profit (see chart). The partnership, though, soon began to show cracks as powerful egos clashed. Fortune magazine and the Wall Street Journal reported that WES and Ray were bickering over control and the type of investments the company should make. By 1987 Simon announced, “the bloom is off the rose” and quit Wesray. Chambers continued making deals, but the peak of leveraged buyouts had passed, and with it, so it seemed, Chambers” desire to grow richer and richer. According to a source close to Chambers, it was then that he began questioning what good making all that money was doing for himself and for others.

A year after the Gibson deal, Chambers began to get interested in the Boys and Girls Clubs of Newark. Born and raised in Newark, where his father was a warehouse manager, Chambers was once a member of the West Ward unit of the Clubs. By the 1980s, though, the clubs had fallen into disrepair. Vandals had burned out his old West Ward club. A friend of Chambers from Mutual Benefit Life introduced him to Barbara Wright Bell, the executive director of the Clubs. Out of that friendship developed Chambers” work in Newark.

Bell says that initially she was only seeking some financial help to rebuild and revitalize the organization. But once Chambers made a decision to help, his commitment was complete. “I went into a lunch meeting with a proposal for $50,000 and left with nearly double the amount,” she says. “But what struck me most about Ray was that he wasn”t only interested in writing a check. He wanted to get involved personally, to reach out and get to know the children.” The Saturday after the initial lunch, Chambers came to the Clubs and walked around talking to the kids, asking questions about their lives and getting answers. “I was struck with his capacity to remember all the children”s names,” Bell recalls. “To this day, Ray can rattle off the names of almost all of the children in the programs he supports, and tell you what”s going on in their personal lives.”

According to Bell, Chambers” drive to transform Newark was born out of a deep desire to get involved in helping the city where he grew up. “We met at the right time,” she says. “He was looking to get involved, and the Boys and Girls Clubs of Newark offered him the opportunity to change the lives of potentially thousands of children.”

Chambers soon found that providing the boys and girls with a safe haven where they could escape the city”s troubles was not enough. He wanted to do more–to help the children escape the cycle of urban poverty. One of his first steps was to set up the MCJ Corp. (Named after his three children, Michael, Christine and Jennifer. He has this thing about initials.) to be the funding arm for all his philanthropic endeavors. Chambers put more than $40 million in MCJ and asked Bell, “Barbara, if you had $10 million could you develop a program that would truly help some of the most disadvantaged kids?”

Bell”s response was READY (Rigorous Educational Assistance for Deserving Youth), a program designed to provide college opportunities and financial assistance to 1,000 of Newark”s most disadvantaged children. Chambers also hired Saul Cooperman, the former state commissioner of education, who tried new remedial education programs to help the children.

Last June the members of READY”s first graduating class received their diplomas. Out of the initial class of 90 READY scholars, 66 graduated and about 45 went on to college this fall. “That”s terrific,” says Sandra Persichetti Rothe, who has run a similar program in Trenton. Bell believes that few, if any, of the children would have finished high school without Ray Chambers. “It was his personal touch that guided these children. He knew the kids and their families; he knew their problems and their pains,” she says. Chambers takes a close personal interest in the children. During the winter Olympics in 1992 in Albertville and then again in 1994 in Lillehammer, Chambers filled his private jet with an unusual melange of high-powered business friends and inner-city children and flew them all off to watch the games.

Chambers may have saved one READY student”s life, when he heard that the boy had been using drugs and was later expelled from school for bringing a gun to class. The boy was living on the street, but Chambers sent READY workers out to find the 15-year-old. When the youth was located, Chambers talked him into going to Boys Town, the famed home for homeless boys in Nebraska, and then took him there on his jet. “After one or two false starts,” Bell says, “that young man is now on the honor roll. He probably would be dead had it not been for Ray.”

With the Boys and Girls Clubs and the READY program going strong, Chambers looked around Newark for other projects and found more than enough to keep him busy. In 1988 Chambers started the Amelior Foundation to organize and oversee philanthropic projects in Newark. With Bell as its president and Chambers as chairman, the foundation began making grants. One of Amelior”s programs was the One-to-One Partnership, which provides youngsters in urban areas with mentors to show them that hard work pays off. An offshoot of this program, the One-to-One Charitable Fund, financed by profits from a commodities futures fund set up in Chambers” name, provides $10,000 to help young adults in the One-to-One Partnership start their own businesses. Through the One-to-One project, more than 1,000 students and mentors are involved with the program nationally, and some 200 children have been matched up with mentors in Newark.

Many people give generously to causes in which they believe, but Chambers makes a bigger commitment. Marty Friedman, director of national service for the Woodrow Wilson Foundation in Princeton, has seen Chambers at work on education programs. “He”s different from others in that he sees the various dimensions of an issue. When you start talking about education, he wants to know where the kids will get jobs once they graduate. He also has a commitment to succeed and not just be a name at the bottom of a program.”

In 1989 Chambers decided to leave Wesray and devote all his time to his charitable works. Wesray still exists and continues to invest in companies, but Bob Meyer, the general counsel, says, “We”re much less active now than in the heyday of the leveraged buyouts. Our activity has been vastly scaled down.”

Chambers, though, has not forgotten the leveraging techniques he used so effectively on Wall Street. “The most amazing thing about Ray Chambers is the way he uses his leverage to make things happen,” says James C. Kellogg, president of the Community Foundation of New Jersey, a philanthropic organization that administers and distributes funds for a wide range of charities in the state. Kellogg points to Newark”s attempt to obtain designation as a federal Empowerment Zone, which will provide cities with $100 million for capital investments and improvements. “Chambers paid a consultant $150,000 to help the city fathers fill out the complicated forms and provide the proper documentation to obtain the federal funds,” says Kellogg. “There”s been no decision as of yet, but right now the word is that it looks very good. For his $150,000 investment, Chambers may bring $100 million to Newark.”

Chambers was also instrumental in the $150 million project for the New Jersey Performing Arts Center in Newark. According to Lawrence P. Goldman, CEO of the center, former governor Tom Kean personally asked Chambers to help create a public-private partnership to raise the funds to do it. Says Kellogg: “Ray responded, as he tends to, magnificently.” According to Goldman, the Amelior Foundation in 1989 kicked in $5 million to get the center drive going. The center has now raised $106 million of the needed $150 million. Sharpe James, the mayor of Newark, says Chambers was key in attracting the center to Newark. “His is the singular force that has brought so many corporate giants to the table as partners in the project.” James wishes “there were 100 more Ray Chambers.”

While most of Chambers” work has been done in Newark, he has also been active on a national level as the founding chairman of the Points of Light Foundation, which is trying to raise the quality and quantity of volunteerism in America. The group took its name from the acceptance speech of George Bush at the 1988 Republican convention, when he spoke of a “thousand points of light.” The group”s directors originally met at the White House, although Chambers tried to make the organization non-political. He recruited J. Richard Munro, the co-chairman of Time Warner, to run it when he retired. That permitted Chambers to keep his normal low profile. Says Munro: “We have a good deal. He writes the checks; and I make the speeches.”

Recently Chambers has spent time consulting with leaders of the Corporation of National Service, which is establishing the AmeriCorps –a kind of Peace Corps for American cities in the 1990s.

People who have worked closely with Chambers use strikingly similar words to describe the man. Says Bell: “Ray is really an intriguing and unique individual because he”s a man of many, many layers.” Concurs Munro: “His style has awed me. He”s laid back, but there is something inside him that”s burning.” Says Mayor James: “Ray doesn”t have to boast about his accomplishments because the work he has done speaks for him.”

Chambers, though, is no austere monk. He worked his way through Rutgers playing the piano, a talent he has not lost. He is a fan of Beatles music and recently combined his interests in the Beatles and in eastern religions on a trip to India with Beatle George Harrison. Says Munro: “He”s lots of fun to be with.”

Friends also say Chambers can be maddeningly demanding. “He”s gentle and quiet, and I”ve never heard him raise his voice,” says Munro. “But he is tenacious. He wants everything done yesterday.”

Newark will not be rebuilt by one person or in one generation. But Ray Chambers has helped the city make a beginning. Bell recalls her reaction after one of their first meetings: “I remember feeling that Ray was the kind of man who made dreams come true. I had confidence that he could make things happen.” In the long, and often discouraging, struggle to bring Newark back, Ray Chambers has quietly made dreams come true and made things happen. u