Ira Rennert

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Ira Leon Rennert (born 1934 in Brooklyn, New York) is the billionaire founder of Renco Group. As described more fully below, Rennert is known for his palatial house in the Hamptons, the mixed environmental record of his firm (The Renco Group), the battles he has fought with bondholders, his philanthropy, and his support for Israel and Jewish charities.

Contents 1 House Details 2 Education 3 Career 4 Renco Group 5 Environmental concerns 5.1 United States 5.2 Peru 6 Philanthropy 7 Wealth 8 Family 9 References 10 External links

[edit] House Details

The publicity-shy billionaire riled New York's tony Hamptonites^[1] by building a beach front home in Sagaponack, New York considered one of the largest occupied residential compounds in America.^[2] Real estate magnates claim if this house was ever put on the market it would be valued the most expensive home globally. The house outraged locals, who claimed Rennert originally planned to use it other ways — as everything from a spa to a hotel to a religious retreat. Rennert denied such allegations, and the local paper recently wrote an apology acknowledging that the original allegations were wrong and that the house did not change the character of Sagaponack which was undergoing its own cultural change regardless of Rennert.^[3]

Rennert's home, dubbed Fair Field (named after the adjoining body of water, Fairfield Pond), faces the Atlantic Ocean and is perched on 63 acres. The buildings, which total over 110,000 square feet, including the 66,000 square foot main house, have an Italianate facade, 29 bedrooms, and 39 bathrooms. A dozen chimneys tower from the Mediterranean-style tile roof. The formal dining room stretches 91 feet in length. That's three feet shorter than a basketball court—another amenity Fair Field has, along with a bowling alley, a pair each of tennis and squash courts, and a $150,000 hot tub, according to building plans and other documents filed with Southampton town hall. Its property taxes in 2007 were $397,559.00. Based on these taxes, the home is currently valued at $170 million making it the most valuable home in the Hamptons.

[edit] Education

Ira Rennert is a graduate of Brooklyn College. He earned his master's degree from New York University's Stern School of Business, where he is currently on the Board of Overseers.^[4]

[edit] Career

Ira Rennert worked as a credit analyst at a Wall Street firm and later as a typewriter company salesman before venturing into the stock brokerage business. He launched his own securities firm, I.L. Rennert & Co. which came under NASD scrutiny in 1962 and 1964 when it was censured for operating without enough capital.^[5] Because of the 2nd censure, NASD revoked ILR & Co.s license to operate in 1964.^[5] Rennert has denied through a spokesperson that he was ever reprimanded by NASD.^[5]

Rennert spent the next decade consulting.^[6] In the 1980s, he turned to private equity and utilized high-yield debt or junk bonds to facilitate transactions. He purchased a bankrupt Warren, Ohio steel company, WCI Steel Inc., in 1988 for $140 million, issuing $250 million in junk-bonds and temporarily turning WCI Steel around.^[5]

Also in the 1980s, Jay Zises, a Wall Street executive connected with Integrated Resources Inc., asked Rennert to serve on the New York-based real estate investment firm's board of directors.^[6] The 1991 book "Den of Thieves" details how Integrated executives pocketed enormous salaries but later defaulted on $1 billion in bond-debt. Alleging fraud, shareholders sued Integrated's chief executive and directors, including Rennert who hadn't been paid a salary for his director's role.^[6] In 1995, the suit was settled for $10.6 million and covered by insurance.^[6] The executives weren't found liable and never admitted wrongdoing.^[6]

When Rennert's Magnesium Corp. of America filed for bankruptcy, Rennert managed to escape another jam as bondholders petitioned for a court-appointed trustee to decide if certain company transfers were legal, or if Renco Group had knowingly left the company insolvent.^[5] The court ruled that the company transfers were legal and allowed Rennert to buy the assets of Magcorp (now called US Magnesium) without retaining the prior liabilities.

Rennert has built a substantial amount of his wealth utilizing leverage. His holding company, Renco Group, Inc., gobbled up struggling companies, issued junk-bonds and charged its subsidiaries management fees and dividends.^[7] According to documents filed with the U.S. Securities and Exchange Commission, Renco subsidiaries have borrowed $1.1 billion since 1995 and transferred nearly a third, or $322 million, back to Renco.

[edit] Renco Group

Rennert's company, the Renco Group, is essentially a holding group that owns other companies, such as

Doe Run, and used to own AM General, manufacturer of the Hummer. Ira Rennert, bought AM General for $133 million in 1992. Ronald Perelman, a Wall Street corporate raider, bought a 70 percent interest in AM General of Mishawaka, Indiana. The deal reportedly cost close to US$1,000,000,000. The company makes the military Humvee, as well as the Hummer H1 and H2 sold by General Motors. In February 2008 the Company acquired Delphi's interiors and closures business which has been renamed Inteva Products, LLC. ^[8]

[edit] Environmental concerns

Rennert was awarded the The Awful Truth Man of Year Award in 1999 by filmmaker Michael Moore, based on a 1996 EPA Report which lists Magnesium Corp Of America as the top single polluting industrial facility in the United States and a second EPA report from the same year which lists Renco Group Inc. as the top most polluting parent company (based on total on-site and off-site releases). However, as described below, Rennert's companies have all made significant environmental improvements since being acquired by Rennert and Renco and the particular emissions highlighted by Moore have since been reduced by more than 95%.^[9]

[edit] United States

The Renco Groups environmental record has been mixed. In 1998 United States Environmental Protection Agency placed Renco Group business holdings 10th on the nation's largest polluter list primarily because of emissions from US Magnesium in Utah (formerly MagCorp).^[5] (US Magnesium was purchased by Renco in 1989 in the year in which its emissions peaked at 119,000 tons per year.)^[10] By 1998, the year the Renco was placed on the EPA list, Renco had reduced emissions at US Magnesium by 50%.^[11] By 2005, the most recent year of data released by the EPA, emissions had been reduced by 97%.^[12]

In 2001, the Justice Department and EPA took action against Renco, filing suit against the company. The agencies demanded nearly $1 billion in fines, alleging MagCorp (a Renco Metals Inc. subsidiary) dumped toxic waste in ditches and ponds on the Great Salt Lake, Utah.^[13] The suit claimed PCB-laced sludge and dust choked the plant's plumbing, wastewater ponds, landfill and ditches, where contaminants were 12 times the allowed limit for accidental release.^[13] MagCorp maintained it was exempt from the federal Resource Conservation and Recovery Act, which requires companies to monitor certain kinds of hazardous waste.^[13] Magcorp declared Chapter 11 bankruptcy shortly after the lawsuit began and a federal judge allowed Rennert to restructure MagCorp — now U.S. Magnesium — which exempting it from previous legal liability.^[14] The EPA suit, however, remained outstanding until October 2007 when a federal judge ruled against the EPA and the Justice Department and in favor of Renco and MagCorp / US Magnesium. .^[15]

Today, U.S. Magnesium is the third largest magnesium producer in the world. US Magnesium’s environmental improvements and recent track record have been substantial and include; a reduction of emissions by 90% since 2000 (97% since 1989.)^[16] The EPA data recognizes this as the single largest reduction in air emissions in the category of hazardous air pollutants since the TRI began in 1987 at any single facility.^[17] Also, the energy improvements in US Magnesium’s manufacturing process have led directly to a net reduction of 100,000 tons per year of carbon dioxide emissions with future implications possibly totaling another 800,000 tons per year. ^[18] US Magnesium was the recipient of a 2004 Climate Protection Award from the EPA^[19] and won an MEP award in 2006 for Environmental Consciousness.

Another US unit of Renco also faced environmental issues in Herculaneum, Missouri and has made substantial improvements. Locals in Herculaneum claimed their children were suffering from lead poisoning traceable to toxic emissions coming from Renco's Doe Run lead smelting plant which had been in operations locally since 1892.^[20] In 2000, the EPA and the Missouri Department of Natural Resources tested area lead levels and ordered Doe Run to clean up locations where lead levels exceeded EPA standards. ^[20] A 2002 study showed more than half of the children living within a quarter mile of the smelter had high blood-lead levels.^[20] Doe Run agreed to buy 160 homes located in the contaminated area around the smelter at a cost of more than $10 million.^[20] An EPA fact sheet noted the following: "Since 2001, EPA, MDNR and The Doe Run Company have addressed lead contamination in Herculaneum through a series of actions which have included residential soil replacements, home interior cleanups, and a voluntary residential buyout program. EPA and MDNR continue to work with Doe Run to address stabilization, erosion control, flood protection, stormwater collection and treatment, and wetland mitigation related to the slag pile area at the site. EPA and MDNR are also working with Doe Run to address soil recontamination of residences near the smelter and contamination along city haul routes."^[21] In the first quarter of 2007, Doe Run met all of the National Ambient Air Quality Standard (NAAQS).^[22]

[edit] Peru

Doe Run, Peru, (a Renco Group holding) operates a smelting plant in La Oroya, Peru, that has similar types of environmental challenges to those faced in Herculaneum, but on a larger scale.^[23] The La Oroya smelter began operations in 1922 and was operated for many years by the Peruvian government until it was sold to Doe Run in 1997. The site was substantially contaminated at the time it was purchased by Doe Run, and as part of the purchase agreement Doe Run agreed to remediate certain environmental issues. Although the company has spent more than $107 million improving the pollution and has reduced air pollution by 25 percent and water pollution by 90 percent, La Oroya is still an evironmental blight.^[24]

The Blacksmith Institute has placed La Oroya on its list of ten most polluted places in the world, along with Chernobyl, Ukraine.^[24]In August 2007, it was reported that air levels of arsenic levels were 85 times more than the "safe" level, cadmium 41 times, and lead 13 times more. Water levels of lead exceeded the "safe" lead level (as established by the World Health Organisation) as well.^[25] A recent study by St. Louis University scientists found that 97 percent of children in La Oroya suffer from mental and physical deficiencies related to their exposure to polluted air.^[24]

Despite the pollution, the local mayor and union leaders have historically supported Doe Run even when the Peru government pressured the company to further reduce emissions. ^[26] The local population elected a new mayor and new union leaders who have pushed for additional progress including a release of an early 2007 audit of Doe Run conducted by two auditing firms chosen and appointed by Peru's Ministry of Energy and Mines to verify Doe Run Peru's compliance with its environmental operating agreement with the government and an "alert program" implemented by Doe Run in agreement with the Peru government which consists of three levels (watch, danger and emergency); at each level, certain actions are taken which reduce the exposure to pollution and partially halt production lines for lead and copper. ^[27] Approved July 18, 2007, the alert program consists of three levels (watch, danger and emergency); at each level, certain actions are taken which reduce the exposure to pollution and partially halt production lines for lead and copper. On the day the "alert program" was approved, the level of sulphur dioxide recorded over the course of three hours was 12,000 micrograms of sulphur dioxide per cubic metre of air, when the air quality standard only allows 364 micrograms. Carlos Rojas, regional coordinator of the government's national environmental council (CONAM) has stated that none of the three levels entails ceasing operations at the smelting plant. ^[28]

The audit was released in November 2007 and reported that air quality samples taken during the audit earlier this year met the monthly Air Quality Standards (AQS), while main stack emissions were below the maximum limits allowed by the law. Additionally the auditor's report showed that there is no variation in the quality of receptor bodies in the Mantaro River. The audit took place January 4-14, 2007 and was monitored by outside observers. ^[29] However, as noted above, the air quality standards were violated on July 18, 2007, the day the alert program was approved. Furthermore, a report from August 6, 2007 ^[30] states that "If the contingency [alert] plan were already in place, a state of emergency would have been declared 183 days so far this year," suggesting that the air quality samples taken during the audit do not reflect air quality during most of the year.

[edit] Philanthropy

Amongst other charitable giving, Ira and Ingeborg Rennert have:

• Endowed the Rennert Entrepreneurial Institute of Sy Syms School of Business at Yeshiva University
• Endowed a $2.5 million chair in Jewish studies at Barnard College
• Donated $5 million to establish the Wiesel Center at Boston University
• Given more than $1 million to the World Trade Center Memorial
• Established the Ira Leon Rennert Professor of Entrepreneurial Finance at New York University
• Endowed the Ira Rennert Professor of Business at Columbia University
• Founded the Rennert Center for Jerusalem Studies at Bar Ilan University
• Helped restore the Western Heritage Wall in Jerusalem (the visitor's center is called The Ingeborg and Ira Leon Rennert Hall of Light)
• Supported Lincoln Center with a $250,000 donation
• Endowed a Chair in Aging Research at Albert Einstein College School of Medicine ^[31]
• Endowed a Chair in Stem Cell Biology at Albert Einstein College School of Medicine ^[32]
• Donated dozens of Torah scrolls to communities in Israel. (As of 2007, 160 scrolls).^[33]

[edit] Wealth

Ira Rennert ranks #891 on Forbes Magazine's list of World Billionaires.^[34]

[edit] Family

Ira Rennert and his wife, Ingeborg, have three children and are grandparents.

[edit] References

• Michael Shnayerson. "Devastating Luxury." Vanity Fair. July 2003.
• James Ridgeway and Jeffrey St. Clair. A Pocket Guide to Environmental Bad Guys, (New York: Thunder's Mouth Press.

[edit] External links

• Toxic Lead Smelting Operation in La Oroya, Peru at YouTube
• The Children of Lead trailer at YouTube
• La Oroya at YouTube

• Ira Rennert is at coordinates 40°55′11″N 72°15′56″W / 40.919674, -72.265577 (Ira Rennert)Coordinates: 40°55′11″N 72°15′56″W / 40.919674, -72.265577 (Ira Rennert)