Ted Forstmann: On Philanthropy, Politics, and Religion

Deal W. Hudson
June 1, 1998

In multimillionaire investor Ted Forstmann we meet a man, a Catholic, who has become one of this nation’s leading philanthropists and who may be poised to head an educational revolution. As founding chairman of Empower American, a conservative grassroots organization whose Washington, D.C. offices are home to Bill Bennett and Jack Kemp, Forstmann has already made a substantial contribution to our cultural life. Behind the scenes, Forstmann has been doing for children, for education, and for his country what so many social conservatives only pay lip service to—the transformation of society through private, non-governmental initiatives.

Fortsmann created Empower America as a response to the election of Bill Clinton in 1992 as a place where serious thinking and the dissemination of good ideas, not simply politics, would be the first priority. “It’s a shame that people with more or less the right ideas, who marginally disagree, were taking shots at each other instead of joining together,” said Forstmann.

Forstmann’s public profile increased dramatically last year with the announcement of his three million dollar gift to the Washington Scholarship Fund, an organization that gives scholarship money to inner-city children to attend private and charter schools in Washington, D.C. “D.C. was a test case that worked, we got 7600 applications from poor parents who are tired of living with the state-funded monopoly. Public education is like everything else produced by the state—a bad product at a high price.”

Like other advocates of school choice, Forstmann has become the target of those who fear such programs will kill public education rather than provide its badly needed antidote. Among those are critics are those who claim Forstmann is using his philanthropy as a platform for a future presidential run. Fortsmann laughs at the idea. During a recent interview, Fortsmann recalled that before Steve

Forbes became a candidate for the presidency, he suggested Forstmann give it a try. When Forstmann declined, Forbes decided to run. In the meantime, Forstmann has redoubled his philanthropic energies.

Yet, since the issue of school choice unites a broader base of grass-roots support, it will not be surprising if Forstmann’s efforts make the liberal elites a bit nervous. At a time when the wealthiest, like Ted Turner, give their millions trying to solve children’s problems by pressing for abortion and contraception services, Forstmann stands apart. In spite of all, he must still learn about his Catholic faith, Forstmann is clearly prepared to defend innocent life with the same determination that he fights for equal opportunity in education.

Children First

The list of organizations Forstmann supports is long and impressive. As director of the International Rescue Committee, he has traveled several times to Bosnia, founding a medical program that has provided for thousands of war-injured children. “What has happened to these kids in Bosnia is wrong, to have your life blown up by a landmine. It’s not right.” This comment reveals the common denominator of Forstmann’s efforts on behalf of children—a passionate commitment to equal opportunity. Forstmann cannot shrug off the suffering of the poor—he recognizes that life is often “a vale of tears, not an easy place to live,” and the answer must lie with the fortunate helping the less fortunate.

This community-based vision of welfare stems from his belief that the state inevitably fails at the task of helping the disadvantaged: “The state is not a decent substitute for a father…. Nowhere in the Bible does it say that God created the state.” Forstmann believes that welfare programs have evolved into an entrenched, self-interested bureaucracy that creates generational dependency. “The poor, especially the inner city minorities, are being discriminated against by the people who insist that the state must be involved.”

Forstmann comes across as a realist, someone who has developed genuine street savvy through his years of hands-on philanthropy. He sympathizes with those whom the taste of entitlement leads to value security over freedom, but he quotes Hegel’s line, “a spirit of spiritless conditions,” to describe the dependency fostered by statism, the habit of looking to the state to solve every human problem. “It violates the basic nature of humanity to be bought off by a check that simply arrives from the state every month. You know that you’re not fulfilling your human potential.”

Forstmann’s attempt to harness the dynamics of entrepreneurial capitalism is not welcomed in today’s politically correct environment. “I gave a speech at Harvard a couple of years ago in which I called for the abolishment of capital gains, and I went on to say that the primary beneficiary of that tax cut would be inner-city blacks…. The next day the headline in the Boston paper read, ‘Forstmann issues racist statements at Harvard.’”

Accidental Catholic

The major themes of Catholic social teaching—natural law, subsidiarity, and personalism—infuse Ted Forstmann’s thinking. But Forstmann readily confesses that at least to his own recollection, none of these ideas came to him through his Catholic upbringing. At age fifty-eight, Forstmann is probably like many cradle Catholics who entered adulthood during Vatican II: His knowledge of Catholic teaching is hit and miss. When pressed about the influence of his Catholic upbringing he returns to a deep-rooted sense of the difference between right and wrong. “I had a great deal of trouble, even as a young man, with the idea that ethics were situational, that what was wrong was what you just didn’t feel good about.” Whereas this vagueness left many of his generation confused and lethargic, it led Forstmann on a circuitous journey to the positions in the social Magisterium of the Church.

Forstmann maintains a clear commitment to the sanctity of life. “I don’t see how you can think of abortion in any terms other than killing.” He won’t even argue with people about “choice.” “If choice were understood properly, I would be its biggest supporter.” Those who consider having an abortion, he says, have already made the choice: “The choice was to put yourself in a position where this can happen…. A woman, for example, does not have the right to choose a .38mm handgun to knock off the gardener who she finds to be inconvenient.”

Forstmann laughs at the idea that Planned Parenthood, a favorite philanthropy of the wealthy, is the solution to social problems. “I got over the Malthusian way of thinking a long time ago. Population control approaches these problems backward. The issue is not fewer people, it’s using human creativity to find the solution.” He doesn’t know why some of the country’s wealthiest people—George Soros, Warren Buffett, Ted Turner—give to population control organizations, although he guesses that it may have something to do with the loss of belief in eternal life: “If you begin with the assumption that everything ends when you die, then those who want to control the population are consistent. But if you believe in eternal life, then you see the purpose in every human life, even in suffering.”

Forstmann says he learned much about the hope of eternal life from sick children: “I really think that ninety-nine out of 100 people would have had the same experience, dealing with these kids…. They’ve been dealt such a lousy hand and been given so much to overcome, and by and large they just smile and take it.” A lifelong bachelor, Forstmann has worked long and hard as director of Nelson Mandela’s Children Fund; cofounder of Silver Lining Ranch in Aspen, Colorado; cofounder, with General Nor-man Schwarzkopf and Paul Newman, of Boggy Creek Gang Camp; and director of the Inner City Scholarship Fund, which educates more than 10% of the inner city children in the Catholic schools of New York City.

Moral Businessman

Ted Forstmann, cofounder and senior partner of the private investment firm Forstmann Little & Co., made his millions as a pioneer of the leveraged buyout. He gained an unusual reputation in this rather cutthroat field. As one observer puts it, “Ted was the most ethical of the leveraged buyout guys.” Forstmann remembers, “During the heyday of the buyout, I was critical of the excessive use of debt. Only a few people benefited in huge fees, and lots of people got thrown out of their jobs. The business could not support the debt, and then to make matters worse they would turn around and sell poor securities.” His acquisitions include Gulfstream, General Instrument, Ziff-Davis Publishing, Community Health Systems, Dr. Pepper, and Topps. Forstmann’s firm currently has almost $5 billion in commit-ted capital for future acquisitions.

Forstmann’s mother and sister, the staunch Catholics in the family, brought him up with a strict sense of right and wrong. His Lutheran father converted only when he was older, largely due to the friendship of Bishop Fulton J. Sheen, a regular visitor in Forstmann’s childhood home in Connecticut. “When he came to dinner my parents felt it necessary to put the nude statues in the closet.” Sheen’s “eyes were so piercing you couldn’t look at them.”

His relationship with the Catholic Church has been strengthened by his relationship with John Cardinal O’Connor. “There’s a guy who knows the difference between right and wrong. He stood there and had these activists throw condoms at him, and he said, ‘I don’t care if the whole city is opposed to me.’ And he forgives them.”

Forstmann’s first meeting with the Cardinal was as welcome as a summons. “I had been dragged in to see him. I had no interest in seeing the guy at all. He says to me, ‘I’m a priest. A priest is a shepherd and you, my friend, are in need of a shepherd. And so,’ he said, ‘I am going to offer myself to you.’ It was really quite something. And I replied, ‘You and I should talk every once in a while.’ So we did, and it was great. He’s a great guy.”

Leaders Who Count

Though he has considered a presidential run, Forstmann has given little thought to recent attempts to rally the Catholic vote through organizations like the Catholic Campaign for America and the Catholic Alliance. Forstmann had never thought about there being a Catholic vote, especially since the U.S. bishops on economic matters are “to the left of Bill Clinton.” But he agrees with the intention of the bishops’ teaching—a “plea to people to pay attention to their fellow man.”

The subject intrigues him. “You need a candidate, a candidate to rally the Catholics.” He talks about the track record of important Catholic political leaders. He asks, “Who is the most notable Catholic politician of the last ten or twenty years?” Congressman Henry Hyde and former Pennsylvania Governor Robert Casey are mentioned. “Henry Hyde is one of the greatest politicians we have, but he never has attracted the kind of national attention Cuomo has. Mario could have been the Democratic nominee for president.” Cuomo’s position on abortion, he adds, is a “total fraud.”

When asked whether he would run for president, Forstmann predicts that he will end up spending more money on The School Bank than he would ever spend running for public office. “When people have asked me to run I have always come to the conclusion that I could really do more of the thing I want to do outside the ‘sewer process’ than I can inside it. On the other hand, as a result of what we are doing in education, lots of people are coming together under this issue, from many different back-grounds—black ministers, cardinals, rabbis, traditional liberals—they are all tired of seeing children sacrificed for the benefit of political power.”

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