Bennett S. LeBow
Encyclopedia
Bennett S. LeBow is a financier
and corporate raid
er. He is also the former Chairman of the Board
and CEO of Borders Group
, an international bookseller based in Ann Arbor, Michigan and Chairman of the Board
of Vector Group
, a holding company primarily involved in the manufacturing of cigarette products which is listed on the New York Stock Exchange
.
graduated from Drexel University
in 1960 with a degree in electrical engineering. LeBow then went on to graduate school at Princeton University
. Before completing his degree, LeBow left Princeton and joined the army where he installed early data systems at the Pentagon. LeBow's first foray into business occurred in the 1960s when he started a computer company to continue his Pentagon project. LeBow eventually sold the business in 1971 for a profit and became a full time investor. LeBow went on to purchase many companies including: Western Union
, Information Displays, MAI Basic Four
, Liggett Group
and Brigham's Ice Cream
.
LeBow also started the SkyBox International
trading card company and eventually sold the business to Marvel
.
broke ranks with the rest of the US tobacco
industry, including Philip Morris
, Brown and Williamson, RJR Nabisco
, Loews
and Lorillard, when he announced that Liggett would settle the Medicaid
tobacco suits brought by forty state attorneys general. Liggett publicly announced that smoking is addictive
and causes cancer and other health ailments, turned over long-secret tobacco industry documents, disclosed its ingredients, and testified against the industry. Liggett was the first cigarette company to voluntarily put the label "Nicotine is Addictive" on their product.
LeBow's actions were pivotal to the government in their signing of the Master Settlement Agreement
. In addition to this, LeBow was honored with a proclamation by Florida Governor Lawton Chiles
for his "invaluable assistance" in helping Florida achieve its historic $11.3 billion settlement with the tobacco industry. Following this presentation, Lebow and Mr. Chiles addressed a group of students, who "saved their toughest questions for Liggett Group chief Bennett Lebow of Miami". One student asked, "If you want to be a watchdog of the industry, why not get out altogether and stop making cigarettes?" to which he responded that if he did, others would continue. LeBow also developed, through Vector Tobacco Inc., the nicotine-free cigarette Quest (cigarette)
which is a cigarette designed to help people quit smoking. Also that year LeBow teamed up with corporate raider Carl Icahn
to make a bid for RJR Nabisco
.
According to court documents, Liggett, while under LeBow's leadership, "engage(d) in marketing tactics that appeal to youths, such as couponing, sampling, and “buy one get one free” offers for its cigarettes, and advertise(d) in magazines with substantial youth readership."
Lebow has stated that since cigarettes are a legal product, he does not care whether they cause cancer.
and was immediately elected Chairman of the Board
, replacing Mick McGuire, who resigned. In June 2010, LeBow became CEO of Borders Group Inc.
.
LeBow is also Chairman of the Board
of Vector Group
, the holding company for Liggett Group
, Vector Tobacco, New Valley LLC
, and Douglas Elliman
.
LeBow is also a large supporter of his alma mater, Drexel University. In 1998, Drexel's College of Business and Administration was named the Bennett S. LeBow College of Business
in his honor after a contribution of $10 million to the university. Further, he endowed the Bennett S. LeBow Engineering Center, a state-of-the-art facility that houses Drexel's College of Engineering. In November 2010, the 72-year-old West Philadelphia native contributed $45 million for the construction of a new facility for the LeBow College of Business — the 12th largest gift to any US business school, and the biggest ever to Drexel University.
In 2011, LeBow was named the nation's 23rd largest charitable donor by The Chronicle of Philanthropy
for donating more than $49 million to charitable causes.
In 2009, LeBow made a $10,000 campaign contribution to Manhattan District Attorney candidate Leslie Crocker Snyder, whose law firm - Kasowitz, Benson, Torres & Friedman - had represented the Liggett Group in smoking and health litigation since 1996.
. Critics cite a 1993 deposition, where LeBow was reported to have denied knowing whether smoking caused cancer. By the mid-1990s, however, LeBow had broken ranks with other tobacco producers to settle cases against Liggett and had made statements that he believed smoking was harmful. Then, nearly a decade later, in 2005, LeBow would retract or disavow many of his earlier criticisms of the tobacco industry. In 2005, LeBow could identify only a handful of documents that had led to his earlier criticisms and was reluctant to identify a "direct link" between smoking and cancer. Critics cite evidence that Philip Morris
paid at least some of Liggett's legal bills in order to buy its cooperation in anti-tobacco lawsuits.
LeBow has also been scrutinized a number of times for a variety of decisions and business dealings:
Financier
Financier is a term for a person who handles typically large sums of money, usually involving money lending, financing projects, large-scale investing, or large-scale money management. The term is French, and derives from finance or payment...
and corporate raid
Corporate raid
A corporate raid is an American English business term for buying a large interest in a corporation and then using voting rights to enact measures directed at increasing the share value...
er. He is also the former Chairman of the Board
Chair (official)
The chairman is the highest officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office is typically elected or appointed by the members of the group. The chairman presides over meetings of the assembled group and conducts its business in an...
and CEO of Borders Group
Borders Group
Borders Group, Inc. was an international book and music retailer based in Ann Arbor, Michigan. The company employed approximately 19,500 throughout the U.S., primarily in its Borders and Waldenbooks stores....
, an international bookseller based in Ann Arbor, Michigan and Chairman of the Board
Chair (official)
The chairman is the highest officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office is typically elected or appointed by the members of the group. The chairman presides over meetings of the assembled group and conducts its business in an...
of Vector Group
Vector Group
Vector Group Ltd. is a Miami, Florida-based, publicly traded holding company founded by its Chairman, Bennett S. LeBow. Howard Lorber serves as President and Chief Executive Officer of Vector Group Ltd.. The company is headquartered in the Miami Tower in Downtown Miami.The company's holdings...
, a holding company primarily involved in the manufacturing of cigarette products which is listed on the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
.
Education and career
LeBow, a native of Philadelphia, PennsylvaniaPhiladelphia, Pennsylvania
Philadelphia is the largest city in the Commonwealth of Pennsylvania and the county seat of Philadelphia County, with which it is coterminous. The city is located in the Northeastern United States along the Delaware and Schuylkill rivers. It is the fifth-most-populous city in the United States,...
graduated from Drexel University
Drexel University
Drexel University is a private research university with the main campus located in Philadelphia, Pennsylvania, USA. It was founded in 1891 by Anthony J. Drexel, a noted financier and philanthropist. Drexel offers 70 full-time undergraduate programs and accelerated degrees...
in 1960 with a degree in electrical engineering. LeBow then went on to graduate school at Princeton University
Princeton University
Princeton University is a private research university located in Princeton, New Jersey, United States. The school is one of the eight universities of the Ivy League, and is one of the nine Colonial Colleges founded before the American Revolution....
. Before completing his degree, LeBow left Princeton and joined the army where he installed early data systems at the Pentagon. LeBow's first foray into business occurred in the 1960s when he started a computer company to continue his Pentagon project. LeBow eventually sold the business in 1971 for a profit and became a full time investor. LeBow went on to purchase many companies including: Western Union
Western Union
The Western Union Company is a financial services and communications company based in the United States. Its North American headquarters is in Englewood, Colorado. Up until 2006, Western Union was the best-known U.S...
, Information Displays, MAI Basic Four
MAI Basic Four
MAI Basic Four refers to a variety of Business Basic, the computers that ran it, and the company that sold them .Basic/Four Corporation was created as a subsidiary of Management Assistance, Inc. in Irvine, California...
, Liggett Group
Liggett Group
Liggett Group , formerly known as Liggett & Myers Tobacco Company, is the fourth largest tobacco company in the United States. Its headquarters are located in Durham, North Carolina, though its manufacturing facility is 30 miles to the west in Mebane, North Carolina...
and Brigham's Ice Cream
Brigham's Ice Cream
Brigham's Ice Cream is an ice cream manufacturer and franchised restaurants. Brigham's is sold in quart cartons throughout New England, and served at franchised restaurants located in Massachusetts. It was founded in Newton Highlands, Massachusetts. Since the purchase by HP Hood, its offices are...
.
LeBow also started the SkyBox International
SkyBox International
SkyBox International Inc. was an American trading card manufacturing company based in Durham, North Carolina. A subsidiary of Vector Group, it was originally formed as Impel Marketing in 1989. In 1990, the company was renamed SkyBox International...
trading card company and eventually sold the business to Marvel
Marvel Entertainment
Marvel Entertainment, LLC , formerly Marvel Enterprises and Toy Biz, Inc., is an American entertainment company formed from the merger of Marvel Entertainment Group, Inc. and Toy Biz, Inc....
.
Cigarettes and litigation
In 1996, while under his leadership, Liggett GroupLiggett Group
Liggett Group , formerly known as Liggett & Myers Tobacco Company, is the fourth largest tobacco company in the United States. Its headquarters are located in Durham, North Carolina, though its manufacturing facility is 30 miles to the west in Mebane, North Carolina...
broke ranks with the rest of the US tobacco
Tobacco
Tobacco is an agricultural product processed from the leaves of plants in the genus Nicotiana. It can be consumed, used as a pesticide and, in the form of nicotine tartrate, used in some medicines...
industry, including Philip Morris
Philip Morris USA
Philip Morris USA is the United States tobacco division of Altria Group, Inc. Philip Morris USA brands include Marlboro, Virginia Slims, Benson and Hedges, Merit, Parliament, Alpine, Basic, Cambridge, Bucks, Dave's, Chesterfield, Collector's Choice, Commander, English Ovals, Lark, L&M, Players and...
, Brown and Williamson, RJR Nabisco
RJR Nabisco
RJR Nabisco, Inc., was an American conglomerate formed in 1985 by the merger of Nabisco Brands and R.J. Reynolds Tobacco Company. RJR Nabisco was purchased in 1988 by Kohlberg Kravis Roberts & Co...
, Loews
Loews Corporation
Loews Corporation is a holding company run by the Tisch Family whose subsidiaries are engaged in the following lines of business:*property and casualty insurance...
and Lorillard, when he announced that Liggett would settle the Medicaid
Medicaid
Medicaid is the United States health program for certain people and families with low incomes and resources. It is a means-tested program that is jointly funded by the state and federal governments, and is managed by the states. People served by Medicaid are U.S. citizens or legal permanent...
tobacco suits brought by forty state attorneys general. Liggett publicly announced that smoking is addictive
Substance use disorder
Substance use disorders include substance abuse and substance dependence. In DSM-IV, the conditions are formally diagnosed as one or the other, but it has been proposed that DSM-5 combine the two into a single condition called "Substance-use disorder"....
and causes cancer and other health ailments, turned over long-secret tobacco industry documents, disclosed its ingredients, and testified against the industry. Liggett was the first cigarette company to voluntarily put the label "Nicotine is Addictive" on their product.
LeBow's actions were pivotal to the government in their signing of the Master Settlement Agreement
Master Settlement Agreement
The Tobacco Master Settlement Agreement was entered in November 1998, originally between the four largest US tobacco companies and the attorneys general of 46 states...
. In addition to this, LeBow was honored with a proclamation by Florida Governor Lawton Chiles
Lawton Chiles
Lawton Mainor Chiles, Jr. was an American politician from the US state of Florida. In a career spanning four decades, Chiles, a Democrat who never lost an election, served in the Florida House of Representatives , the Florida State Senate , the United States Senate , and as the 41st Governor of...
for his "invaluable assistance" in helping Florida achieve its historic $11.3 billion settlement with the tobacco industry. Following this presentation, Lebow and Mr. Chiles addressed a group of students, who "saved their toughest questions for Liggett Group chief Bennett Lebow of Miami". One student asked, "If you want to be a watchdog of the industry, why not get out altogether and stop making cigarettes?" to which he responded that if he did, others would continue. LeBow also developed, through Vector Tobacco Inc., the nicotine-free cigarette Quest (cigarette)
Quest (cigarette)
Quest is a cigarette brand manufactured by Vector Tobacco, based in Mebane, North Carolina. It is manufactured using genetically altered tobacco plants.The product is available in three versions...
which is a cigarette designed to help people quit smoking. Also that year LeBow teamed up with corporate raider Carl Icahn
Carl Icahn
Carl Celian Icahn is an American business magnate and investor.-Biography:Icahn was raised in Far Rockaway, Queens, New York City, where he attended Far Rockaway High School. His father was a cantor, his mother was a schoolteacher...
to make a bid for RJR Nabisco
RJR Nabisco
RJR Nabisco, Inc., was an American conglomerate formed in 1985 by the merger of Nabisco Brands and R.J. Reynolds Tobacco Company. RJR Nabisco was purchased in 1988 by Kohlberg Kravis Roberts & Co...
.
According to court documents, Liggett, while under LeBow's leadership, "engage(d) in marketing tactics that appeal to youths, such as couponing, sampling, and “buy one get one free” offers for its cigarettes, and advertise(d) in magazines with substantial youth readership."
Lebow has stated that since cigarettes are a legal product, he does not care whether they cause cancer.
Present
In May 2010, following a major stock investment, he became a member of the Board of Directors at Borders Group Inc.Borders Group
Borders Group, Inc. was an international book and music retailer based in Ann Arbor, Michigan. The company employed approximately 19,500 throughout the U.S., primarily in its Borders and Waldenbooks stores....
and was immediately elected Chairman of the Board
Chair (official)
The chairman is the highest officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office is typically elected or appointed by the members of the group. The chairman presides over meetings of the assembled group and conducts its business in an...
, replacing Mick McGuire, who resigned. In June 2010, LeBow became CEO of Borders Group Inc.
Borders Group
Borders Group, Inc. was an international book and music retailer based in Ann Arbor, Michigan. The company employed approximately 19,500 throughout the U.S., primarily in its Borders and Waldenbooks stores....
.
LeBow is also Chairman of the Board
Chair (official)
The chairman is the highest officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office is typically elected or appointed by the members of the group. The chairman presides over meetings of the assembled group and conducts its business in an...
of Vector Group
Vector Group
Vector Group Ltd. is a Miami, Florida-based, publicly traded holding company founded by its Chairman, Bennett S. LeBow. Howard Lorber serves as President and Chief Executive Officer of Vector Group Ltd.. The company is headquartered in the Miami Tower in Downtown Miami.The company's holdings...
, the holding company for Liggett Group
Liggett Group
Liggett Group , formerly known as Liggett & Myers Tobacco Company, is the fourth largest tobacco company in the United States. Its headquarters are located in Durham, North Carolina, though its manufacturing facility is 30 miles to the west in Mebane, North Carolina...
, Vector Tobacco, New Valley LLC
New Valley LLC
New Valley LLC is an investment company owned by Vector Group. Western Union was renamed New Valley in the early 1990s as the corporate parent of all Western Union related businesses. In 1994, New Valley sold its Western Union businesses to First Financial Management for $1.2 Billion...
, and Douglas Elliman
Douglas Elliman
Douglas Elliman is the largest residential real estate brokerage in the New York metropolitan area.-Overview:Douglas Elliman operates in New York City, Long Island, the Hamptons, and Westchester as Prudential Douglas Elliman and Miami as Douglas Elliman Florida. The company's Miami flagship office...
.
LeBow is also a large supporter of his alma mater, Drexel University. In 1998, Drexel's College of Business and Administration was named the Bennett S. LeBow College of Business
Bennett S. LeBow College of Business
The Bennett S. LeBow College of Business, also known as the LeBow College of Business or simply LeBow, is one of the primary and oldest colleges of Drexel University. The school is included in several lists of best U.S. graduate business schools and offers a wide range of programs.The LeBow...
in his honor after a contribution of $10 million to the university. Further, he endowed the Bennett S. LeBow Engineering Center, a state-of-the-art facility that houses Drexel's College of Engineering. In November 2010, the 72-year-old West Philadelphia native contributed $45 million for the construction of a new facility for the LeBow College of Business — the 12th largest gift to any US business school, and the biggest ever to Drexel University.
In 2011, LeBow was named the nation's 23rd largest charitable donor by The Chronicle of Philanthropy
The Chronicle of Philanthropy
The Chronicle of Philanthropy is a biweekly newspaper that covers the nonprofit world. Based in Washington, DC, it is the top news source for charity leaders, foundation executives, fund raisers, and other people involved in philanthropy...
for donating more than $49 million to charitable causes.
In 2009, LeBow made a $10,000 campaign contribution to Manhattan District Attorney candidate Leslie Crocker Snyder, whose law firm - Kasowitz, Benson, Torres & Friedman - had represented the Liggett Group in smoking and health litigation since 1996.
Criticism
Anti-smoking critics have attacked LeBow for his involvement with and ownership of tobacco producer Liggett GroupLiggett Group
Liggett Group , formerly known as Liggett & Myers Tobacco Company, is the fourth largest tobacco company in the United States. Its headquarters are located in Durham, North Carolina, though its manufacturing facility is 30 miles to the west in Mebane, North Carolina...
. Critics cite a 1993 deposition, where LeBow was reported to have denied knowing whether smoking caused cancer. By the mid-1990s, however, LeBow had broken ranks with other tobacco producers to settle cases against Liggett and had made statements that he believed smoking was harmful. Then, nearly a decade later, in 2005, LeBow would retract or disavow many of his earlier criticisms of the tobacco industry. In 2005, LeBow could identify only a handful of documents that had led to his earlier criticisms and was reluctant to identify a "direct link" between smoking and cancer. Critics cite evidence that Philip Morris
Altria Group
Altria Group, Inc. is based in Henrico County, Virginia, and is the parent company of Philip Morris USA, John Middleton, Inc., U.S. Smokeless Tobacco Company, Inc., Philip Morris Capital Corporation, and Chateau Ste. Michelle Wine Estates. It is one of the world's largest tobacco corporations...
paid at least some of Liggett's legal bills in order to buy its cooperation in anti-tobacco lawsuits.
LeBow has also been scrutinized a number of times for a variety of decisions and business dealings:
- In 2005, LeBow resigned from the Dana-Farber Cancer InstituteDana-Farber Cancer InstituteDana–Farber Cancer Institute is part of a Comprehensive Cancer Center designated by the National Cancer Institute. It is a major affiliate of Harvard Medical School and is located in the Longwood Medical Area in Boston, Massachusetts.-Overview:...
Board of Trustees shortly after his appointment over discussions about the propriety of associating with the owner of a company which sells products that are known to cause cancer.
- In 1993, Brooke Group Shareholder Frank Gyetvan sued LeBow on behalf of other company shareholders, claiming Brooke had improperly lent Lebow money for luxury personal items, such as a $21 million dollar yacht. The suit was settled the following year, with LeBow repaying $16 million to Brooke's other shareholders and giving up his right to receive 6.25 million in preferred dividends .
- In 1989, LeBow was criticized for using $3 million to fly a planeload of friends to a London party for the launch of his 177-foot yacht. The trip came during the time LeBow controlled MAI Systems, an Irvine, Calif.-based computer network company, and Western Union. Both companies filed for Chapter 11 bankruptcy reorganization in 1993." (Although LeBow later reorganized Western UnionWestern UnionThe Western Union Company is a financial services and communications company based in the United States. Its North American headquarters is in Englewood, Colorado. Up until 2006, Western Union was the best-known U.S...
and sold it to First Financial Management for $1.2 billion.)
- In 1984, LeBow completed the sale of Information Displays which subsequently went bankrupt. The buyer sued LeBow and his partners for fraud and misrepresentation. In 1986, the S.E.C. charged an associate of LeBow's (William Weksel) with violations of securities regulations
- In the past, LeBow's business associations have come into question. In the book "Red Mafiya: How the Russian Mob Has Invaded America", the author states: "Ukrainian mob boss Vadim Rabinovich attended a Clinton-Gore fund raiser at the Sheraton Bel Harbor Hotel in Miami. Rabinovich came as a guest of Bennet S. LeBow, the Chairman of Brooke Group Ltd, Parent of Liggett, a cigarette manufacturing company (LeBow refused to comment)." According to a spokesman for LeBow, LeBow's Brooke Group and Rabinovich developed a business center and luxury hotel in Kiev.