Taking Liberties In Los AngelesEric Schine
Richard J. Riordan, the wealthy Los Angeles businessman who wants to be the city's mayor, is doing his best Ross Perot imitation. Dressed in a tailored blue suit, he's trying to convince his audience of mostly poor, elderly blacks in a South Central retirement home that his business smarts will mean a difference in their lives. "I turned Mattel and other businesses around," Riordan proclaims. "Now, it's time to turn L. A. around." The response is underwhelming. A smattering of applause flutters through the meeting room, but before long the skeptical audience drifts toward the coffee and doughnuts on a table in the back.
In a 37-year business career in which he became wealthy by investing in high-risk ventures, Riordan has faced few challenges that match his latest. By June 8, when Los Angeles holds its mayoral runoff, the 62-year-old lawyer must persuade voters that a city wracked by crime, unemployment, and racial strife should elect a white conservative Republican who made a fortune together with the likes of junk-bond king Michael R. Milken. Riordan led 24 candidates in the Apr. 20 primary with 33% of the vote, but now he faces an uphill race.
Riordan's opponent, 41-year-old Michael Woo, a Chinese-American city council member, is preaching racial harmony and has spent years building a fragile coalition of blacks, Asians, and liberals. And while he promotes business development, Woo often notes that he was among the first to call for the resignation of Police Chief Daryl F. Gates after the police beating of Rodney G. King in 1991.
BUYS AND DOLLS. Riordan is relying partly on $3 million of his own money that he funneled into his campaign to overcome the two-to-one Democratic majority in Los Angeles. And he hopes his pro-business views will play well in a city where unemployment hovers at nearly 11%. To lure employers, he would ease environmental rules. To fight crime without raising taxes, he proposes leasing Los Angeles International Airport to a private operator and using the rent to add 3,000 police officers--a 40% boost.
Riordan made his fortune in the 1970s and 1980s by investing in such high-tech companies as pioneering workstation maker Convergent Technologies Inc. In the early 1980s, he formed a leveraged-buyout firm that invested in health care, real estate, and grocery-store chains--and made Riordan an estimated $100 million fortune.
The centerpiece of his campaign, however, is his claim to have turned around Mattel Inc. But Riordan never actually laid a hand on the toymaker. He was just part of an investment group including Milken's firm, Drexel Burnham Lambert Inc., that plunked down $231 million in 1984 for a 45% stake in the ailing company. As a director, Riordan did vote to install Vice-President John W. Amerman as chairman and chief executive. But it was Amerman who turned Mattel around with aggressive cost-cutting and rejuvenated marketing of its franchise Barbie doll.
Bragging about his record at Mattel may hurt Riordan. Woo points out in his TV ads that after Riordan's investment, Mattel closed two L. A.-area plants and shipped jobs to Mexico. "He got rich by putting people out of work," says a Woo spokesman. Jadine Nielsen, Riordan's campaign manager, calls the charges "irresponsible," adding that Riordan's investments have created 10,000 jobs.
PLUM JOBS. There's one part of Riordan's business record that's uncontested--his skill as a back-room dealmeister. After he lent Democratic mayor Tom Bradley $300,000 for his unsuccessful 1982 gubernatorial bid, Riordan won plum assignments to negotiate for the city. He bought up railroad rights-of-way for a commuter-rail system. And he kept the Los Angeles Raiders football team from leaving town by renovating the Los Angeles Coliseum. "For years he functioned as the co-mayor of L. A.," says Assemblyman Richard Katz.
To become the real thing, Riordan has to make rank-and-file voters believe he cares as much about them as he does about flashy deals. "He's just like any other rich man," says one woman leaving the meeting at the South Central retirement center. "He's got all the money, but what can he do for us?" Riordan knows he can't win unless he does a better job answering that question than Ross Perot did in November.
RICHARD J. RIORDAN BORN May 1, 1930, Flushing, N. Y., youngest of eight. EDUCATION Princeton, 1952, AB in philosophy; University of Michigan 1956, JD. CAREER PATH Corporate lawyer, venture capitalist, real estate investor, junk-bond player with Drexel's Michael Milken. PUBLIC-POLICY EXPERIENCE Helped negotiate agreement to renovate Los Angeles Coliseum, keeping the Raiders football team in town. Negotiated $550 million deal for local governments to buy 400 miles of railroad tracks for use in light commuter rail. POLITICS Eisenhower Republican, pro-choice. Pro-term limits. CAMPAIGN PLEDGE To add 3,000 policemen to L. A. force, funded by leasing Los Angeles International Airport. DATA: BUSINESS WEEK