Who’s Top New Yorker in Bush White House? Chelsea Piers’ Betts

WASHINGTON, D.C.-On inauguration night, the toughest ticket

in town was the Texas and Wyoming Ball, held in a cavernous, blue-bedecked

Washington Convention Center hall. Hundreds of Republican revelers-men in

tuxedos with big hats and women in ball gowns with big hair-crowded

shoulder-to-shoulder on the dance floor, awaiting a glimpse of their President. In a cordoned-off

redoubt stage left, big donors mixed with Commerce Secretary Don Evans and

National Security Advisor Condoleezza Rice, dressed in a shimmering blue gown.

Yet within Washington’s caste system, where status is

apportioned according to one’s access to power, the people closest to the top

weren’t there. As the new President shuffled uneasily on the dance floor,

54-year-old Roland Betts, the new President’s Yale fraternity brother, former

partner in the Texas Rangers, loyal fund-raiser and unofficial Manhattan

ambassador, was sitting in a room in the J.W. Marriott, surrounded by a small

group of the President’s closest friends. Mr. Betts and many in the Bush inner

circle had been wondering if their relationships with Mr. Bush would change now

that their friend is President. Before the inauguration, Mr. Betts said,

whenever Mr. Bush called “I start off calling him ‘Mr. President-elect.’ By the

end of the conversation, it’s back to ‘George.’”

Mr. Bush just calls him “Betts.”

Until recently, Mr. Betts was best known as the man who

built Chelsea Piers. Now he is the President’s best friend in New York, a title

loaded with significance for both men. There will be no shortage of New Yorkers

jostling for face time with the First Buddy. And the new President, still

something of a stranger to New York, no doubt will rely on his friend’s

connections to the city’s power elite. And vice versa: When The New York Times was having trouble

getting Candidate Bush in for a meeting last year, somebody at the paper placed

a call to Mr. Betts, asking him to intercede. (He did, and Mr. Bush made the

obligatory visit.) Though Mr. Betts describes himself as a liberal Democrat,

his long-standing loyalty to Mr. Bush has placed him within an inner ring of

the President’s many circles of friends.

Mr. Betts says he has no interest in a job with the new

administration, although his partner at Chelsea Piers, Tom Bernstein, is

rumored to be on the list to head the National Endowment for the Arts. But as

one of a select group who can pick up the phone and get a call back from Mr.

Bush, “usually [within] three hours,” he stands to play a prominent role in the

President’s kitchen cabinet. “We have far-reaching conversations that are

related to political matters, national matters, key people in government

matters, and family,” he said.

Mr. Betts didn’t get much time with the President over the

inaugural weekend, but he sure had a great view of the proceedings. At the

swearing-in, he and his wife, Lois Betts, sat just barely out of the frame of

the Times’ front-page photo, behind

Mr. Bush’s brother Marvin, next to Attorney General–designate John Ashcroft,

and in front of Christine Todd Whitman. “There was this sort of aura over the

friends,” said Lois Betts. “Do you believe this? It’s finally here, it’s done,

it’s over. He’s President.”

On Jan. 21, Mr. Bush’s first full day as President, Mr. and

Mrs. Betts enjoyed an intimate (and unannounced) brunch with the President in

the East Wing of the White House. Mr. Bush, beaming and upbeat, asked about Mr.

Betts’ dog: “How’s Maxx?” As a matter of fact, Maxx-a 12-year-old bulldog with

a passing resemblance to his owner-was doing better than Mr. Betts. Still

playing ice hockey well into middle age, Mr. Betts left Washington after the

inauguration festivities to have shoulder surgery in New York.

Mr. Betts won’t go into

detail about the kind of advice he gives the President-”I’m one of the few

people George can talk to about absolutely anything … and know it’s not going

anywhere,” he says-but he does try to nudge his friend toward the political center.

Clay Johnson, another Yale friend who had coordinated Mr.

Bush’s transition, said President Bush “would most dislike being sealed off

from big doses of reality, and Roland Betts is going to be there at every turn

with big doses of reality.”

Mr. Betts’ personal reality is one of wealth and

accomplishment. He made millions financing movies and built an ambitious

development on the Hudson River, sometimes by using “ruthless” tactics, as one

associate put it. Mr. Bush is only the most notable on a long list of powerful

friends. Asked by a reporter for a few names of acquaintances, Mr. Betts

responded with two typewritten pages, among them Disney chief executive Michael

Eisner, Governor George Pataki, journalist David Gergen, former Senator Bill

Bradley and former Dodger great Sandy Koufax.

Gruff, funny, with a profane streak, Mr. Betts once told an

interviewer: “I can be a pain in the ass, and [Mr. Bernstein, his partner] can

come in and clean it up.”

Mr. Betts and Mr. Bush are even closer today than they were

when they graduated from Yale in 1968. “I think that honestly, their friendship

bloomed more after college,” said Livingston Miller, a friend of Mr. Betts’

since childhood and another Yale buddy. “I think they both recognized that they

were going places in life and could help each other.”

In 1988, as his father was running for  President, Mr. Bush called Mr. Betts to talk

business. “He knew that I was interested in sports and interested in trying to

buy a [sports] team,” Mr. Betts said. Mr. Bush told his friend, “I think I’ve

got a live one here. It’s the Texas Rangers.”

“I said that other than Pete Incaviglia, I couldn’t name a

guy on the Rangers-but teach me more about it,” Mr. Betts said. “And what I

learned … was that it was a franchise at the bottom of the pack in every

respect, with a lot of things that could be worked on by a businessman and

improved-most importantly the stadium, which was the crappiest stadium I’d ever

seen.”

Mr. Betts says Mr. Bush’s purchase of the Rangers-and not

his mythologized decision to quit drinking on his 40th birthday-was the real

turning point in the future President’s life. But for Mr. Betts, the Rangers

were simply a great time. He talked trades and free-agent signings with Mr.

Bush. One night, Mr. Betts got a call from Mr. Bush: “He said, ‘You won’t

believe it: [Nolan] Ryan’s pitching a no-hitter.’” Mr. Betts was doing laundry

in his basement; Mr. Bush was calling from the Lincoln bedroom. Mr. Betts asked

to be kept abreast. “So for the next three innings, he called me every pitch,

and Ryan pitched a no-hitter.”

Great fun-and a great investment: They and their partners

bought the team for about $75 million in 1988 and sold it for $250 million in

1998.

“I won’t deny being interested in … the sex appeal of

owning a sports team,” Mr. Betts said. “[But] I love the idea of taking things

that are in disrepair and making them better. Really, buying the Rangers and

fixing them up is not too different from buying [Chelsea] Piers and fixing them

up.”

On the Waterfront

Jay Spadaro still remembers the day Mr. Betts walked into

his Chelsea Piers office. It was winter of 1991. Mr. Betts told Mr. Spadaro,

then the state Department of Transportation’s managing agent for the property,

that he had an idea: He wanted to turn one of the long-derelict piers into an

ice rink. Mr. Spadaro had overseen the first tentative steps at redeveloping

the property, turning some of the buildings into TV studios. He had ideas of

his own. He gave Mr. Betts a four-hour tour of the property.

“From Day 1, I thought Roland was a sweetheart,” he said.

Soon, Mr. Betts was romancing West Side politicos and

community leaders, asking them to pressure state officials to auction the

property. To lefties like Ross Graham, then chairwoman of Community Board 4, he

seemed a kindred spirit. He just wanted a better place for his daughter to ice

skate. There was something comforting about the fact that his wife, Lois, was

black. “He taught in Harlem, he’s in a mixed marriage,” Ms. Graham said. “When

you first meet him, he’s really great fun. He’s kind of bear-like, the way

Lyndon Johnson was.”

Then Mr. Spadaro broke the news. The state had decided to

auction a lease on the piers … all four of them. Given a rare gift-a blank

slate within Manhattan-Mr. Betts began thinking bigger than an ice-skating

rink: a giant health club, an indoor soccer arena, a golf driving range. “There

was a tremendous feeling of freedom,” recalled architect Jim Rogers, Mr. Betts’

college roommate, who designed the project. “Everyone threw their ideas out on

the table to chew over.”

“We made it up every step of the way,” Mr. Betts said. “We

didn’t know anything about real estate development, we didn’t know anything

about piers, we didn’t know anything about sports and recreation facilities.”

“Hair will grow on the palms of my hands before they get

that thing financed,” vowed a rival bidder, Abe Hirschfeld. They got the thing

financed-and, within just 38 months, opened. Along the way, though, some of the

people Mr. Betts so assiduously wooed say they saw a different side. “He came

across as the former school teacher … ‘one of you guys,’” said Tom Fox, then

president of the Hudson River Park Trust. “As soon as he got it, the shutters

came down around the facility.”

Steve Kass first met Mr. Betts at a Community Board 4

meeting about Chelsea Piers, around the time Mr. Betts was brainstorming

lucrative uses beyond his skating rink. Mr. Kass headed a group that wanted to

build a golf driving range there. His group met with Mr. Betts on April 6,

1992. According to Mr. Kass’ account-one denied by Mr. Betts-they decided to

join forces, but quietly, to avoid the appearance of “collusion.”

“We [had] a lot of backslapping, a lot of reassurances,” Mr.

Kass said in a deposition. But shortly after Mr. Betts’ group won the bid, he

hired a partner of Mr. Kass’ and stopped returning phone calls. Mr. Kass sued,

saying his idea had been stolen. The lawsuit was eventually settled for just

$5,000. “I mean, golf ranges do exist in other places,” Mr. Betts snorted.

Mr. Betts gave Mr. Spadaro a job at the Piers. “He came in

with all of his high-roller friends,” Mr. Spadaro said. “When he was rolling

through that place, I met George Bush, I met Marvin Bush ….” But Mr. Betts  and Mr. Spadaro soon had a falling out. “Jay

had a rather inflated view of what he could contribute” and wanted more money,

Mr. Betts said. But Mr. Spadaro said he was fired for reporting that workers

were stripping lead paint off the piers and allowing it to run into the river.

Mr. Betts said the U.S. Coast Guard investigated and found nothing amiss, and

the claim was just a ploy to get whistleblower status.

Mr. Spadaro now works as an actor and movie stunt man. “I

took the place from a vacant building in 1984 with just a few tenants and built

it up to the point where [the piers] were finally getting developed,” he said.

“This was my dream, and they just pulled the plug on me.”

There was a time when it appeared the Piers might go under.

But on the facility’s opening day in the fall of 1995, Messrs. Betts and

Bernstein took Governor Pataki for a walk around the facility and came up with

an agreement for a new lease, allowing them to refinance their junk bonds (to

the eternal consternation of Mr. Betts’ critics, who think the secret agreement

was a sweetheart deal). Though Mr. Betts won’t disclose detailed financial

information, he said the Piers have turned a profit the last two years.

These days, Mr. Betts leaves much of the management of the

Piers to his third-in-command, David Tewksbury. He’s trying to build a second

Chelsea Piers along the Embarcadero on San Francisco’s waterfront. But Mr.

Betts spends much of his time on philanthropic activities. He’s a Yale trustee

and a member of the New York City Parks Council. As a member of the U.S.

Olympic Committee’s board of directors, he recently spearheaded an unsuccessful

effort to install Bill Bradley as USOC president. He’s on the committee that

will determine the U.S. nominee to host the 2012 Olympics. His partner Mr.

Bernstein, as it happens, serves on the board of NYC 2012, the organization

trying to bring the games to New York.

Dose of Reality

Though Mr. Betts intended to pursue a career in law while an

undergraduate at Yale, two events in 1968 converged to change the way he saw

the world. A college friend was killed in Vietnam; Mr. Betts served as his

pallbearer. As a fortunate son, Mr. Betts probably could have gotten into an

Air National Guard unit, as Mr. Bush did. But around the same time, he was

writing his senior thesis about an innovative school in Harlem.

Born out of the segregation protests of the 1960′s, I.S. 201

was an experiment, a public school under the control of local residents. Mr.

Betts was taken with the concept, and its administrators were equally taken

with him. After graduation, he took a teacher-training job.

“I was definitely going to change the world,” he said wryly.

“I [was] going to reform the public schools in the course of a couple of

years.”

A young woman, recruited to I.S. 201 by Mr. Betts from a

teaching job on the West Side, had a little more experience. “Lois looked at

all of us little Ivy Leaguers and thought, ‘What a bunch of jerks.’”

Within a couple of years, he and Lois,  would be married by an East Harlem minister

in a ceremony in their West 102nd Street apartment. (They still live there.) At

first, both of their families were apprehensive about the match, but eventually

they came around. “I think Roland sets his own course, whether it’s

unconventional or conventional,” said Robert Herzog, a fellow teacher who

attended the wedding. “What distinguishes him is his ability to be successful

in whatever he chooses.”

Needless to say, Mr. Betts didn’t succeed in revolutionizing

public education.

In the fall of 1968, Albert Shanker led the teachers’ union

out on strike. There were picket lines, charges of racism and anti-Semitism.

Most of the teachers who came in with Mr. Betts burned out. “There were some

who, after seven or eight months of teaching, dropped out knowing that they

faced the draft,” Mr. Herzog said. But Mr. Betts stuck it out.

Ten years later, on the advice of a friend, the writer Roy

Blount Jr., he put his experiences with unruly students, domineering

secretaries and a corrupt, all-powerful janitor into a book, Acting Out: Coping with Big City Schools .

“I left public education worn out, exasperated from trying to cope with an

institution at odds with its own clients,” Mr. Betts wrote. “The plight of the

schools seemed drearier, less amusing, less hopeful, more desperate.”

By that time, he had begun to pursue his original chosen

career: law.

Mr. Betts had negotiated his own book contract while a law

student at Columbia University. That got him interested in entertainment law.

He took a job at the law firm of Paul, Weiss, Rifkind, Wharton & Garrison,

where his office mate was a young Tom Bernstein.

The two associates hit it off. Mr. Bernstein’s father was

the chairman of Random House; Mr. Betts read each week’s New Yorker cover to cover. “He was interested in everything, a lot

of fun,” Mr. Bernstein said.

Mr. Betts would leave the firm to work for a small

production financing company, International Film Investors. When I.F.I.’s

investors ousted its founder, Josiah Child, for alleged mismanagement, Mr.

Betts was installed as president.

I.F.I. had run into

trouble even as it was financing an ambitious, expensive labor of love: Lord

Richard Attenborough’s Gandhi . “There

were roomfuls of unanswered telexes,” remembers J. Paul Bagley, then an

executive at the brokerage E.F. Hutton, which was involved in financing the

company. “Roland just dug right in” and got the movie made.

Mr. Child remembers thing differently. “I think Roland is

very bright, energetic, ambitious-and as a businessman, ruthless,” he said. Gandhi was his project, he claims, and

Mr. Betts deposed him in a corporate intrigue. “He’s got a lot of charm, and he

saw an opportunity.”

I.F.I. went on to finance more films, including The Killing Fields . But Mr. Betts wasn’t

interested in being a traditional mogul. He had thought of a new way to make

money in the movie business. The country was full of people who might sink

$10,000 into a movie, he reasoned, so long as they could be assured of breaking

even after a few years-”people who would enjoy the psychological gratification

of ownership of a movie, to have it as cocktail-party talk,” said Neil Braun,

Mr. Betts’ colleague at I.F.I. Put enough of those people together and you

could finance a lot of movies, spreading risk across a large portfolio.

Mr. Betts put together a

deal to raise millions for HBO, where Mr. Braun was now working. He recruited

Mr. Bernstein. They came up with a name for the company: Silver Screen.

Investors were sold limited partnership stakes over the

phone, essentially giving the studio money interest-free for five years. The

HBO movies were bombs-yet, as promised, investors broke even off the sale of

cable rights.

Mr. Betts’ methods caught the eyes of Frank Wells and

Michael Eisner, who had just been hired to revive the moribund Disney

franchise. “They were weak and new, and that’s why we got such favorable

financial terms,” Mr. Bernstein said. From 1985 to 1988, he and Mr. Betts

organized three more Silver Screen offerings, raising more than a billion

dollars to finance dozens of Disney movies.

Then, Mr. Bernstein said, “we got kind of lucky.” Disney

went on a stupendous run, producing hits like Stakeout , Who Framed Roger

Rabbit , Pretty Woman and The Little Mermaid . Money began rolling

in. Between 1987 and 1989 alone, Mr. Betts’ net worth doubled, from $3.5

million to $7 million.

There were problems

along the way. Hard-sell tactics by salesmen attracted regulatory scrutiny. An

article in Forbes questioned the high

fees Mr. Betts’ management company took and said investors would do better to

buy Disney’s stock. Mr. Betts filed a libel suit, but a judge dismissed it,

writing that the article was “not substantially different” than what Silver

Screen said in its own fine print.

Mr. Betts would have the last laugh. He had quietly secured

the rights to all the movies Silver Screen financed and, in 1995, Disney paid

approximately $650 million to buy back the titles. Under the partnership

agreement, Messrs. Betts and Bernstein kept about 18 percent-well over $100

million-of the buyout.

The three partnerships eventually yielded returns of 14

percent for investors on average, heftier than Forbes and other analysts predicted. (Disney’s stock, though more

risky, appreciated more than 1,250 percent over the life of the partnerships;

while $500 invested in Silver Screen II returned $739, according to S.E.C.

filings, $500 invested in Disney stock would have yielded about $6,200.)

Bush Checks In

One day a couple of years ago, Mr. Betts got another call

from his old friend, George W. Bush. He had a new opportunity: He was thinking

of running for President. Mr. Betts was ready to invest.

Mr. Betts was hardly the prototypical Bush fund-raiser. If

Mr. Bush hadn’t run, he said he’d have supported Mr. Bradley, also a longtime

acquaintance. Over the years he had given to numerous Democrats, including

Senator Edward Kennedy of Massachusetts, former State Attorney General Robert

Abrams and Connecticut Senator Joseph Lieberman.

Mr. Betts dove in with characteristic enthusiasm. He was one

of the original “Pioneers,” donors who raised $100,000 or more to give Mr. Bush

early front-runner status. When Mr. Bush was in trouble for speaking at Bob

Jones University, Mr. Betts offered to have his friend stay over at his

apartment; the photographers could shoot Mr. Bush and Lois going outside to get

the paper in the morning, inoculating him against charges of racial

insensitivity. Mrs. Betts is a devoted supporter, too. “Election night, when

Florida was called [for Gore], she was weeping. I had to take her upstairs,”

Mr. Betts said.

At crucial moments, Mr. Betts always seemed to be at his friend’s

side. “George is such that he can appear to be your lifelong friend even if

you’ve only known him a month,” said John McMichael, an executive with the

Texas Rangers. “I only kind of realized [how close they were] when I watched

the Republican convention, when Roland was sitting next to him when the vote

was tallied for nomination and I thought, ‘That’s not a bad ol’ seat to have.’”

Most of the

conversations he has with the President, Mr. Betts said, are typical friend

stuff. His two daughters, Margaret and Jessica, are just a little older than

Mr. Bush’s. As for their policy disagreements, he said they’re no big deal.

“It’s agree-to-disagree to some extent, but he’s definitely open-minded to

differing opinions and points of views, and sometimes I give him differing

opinions and points of views on things,” he said.

“I think he really enjoys [the conversations]. I think he

enjoys having somebody who is not saying the same thing.”

Mr. Betts has said he

urged Mr. Bush to move back toward the center after the primaries, and he seems

deeply confident that, on issues he cares about-abortion, education, civil

rights-Mr. Bush’s true sentiments are closer to his own than is publicly

understood.

“I think the qualities

that would make a good President, George has in abundance,” he said. “I would

say give him a little time, give him a little space, and he is going to be a

very, very, very good President. Get to know him.”

He said he remembered,

at Mr. Bush’s first inaugural as governor of Texas, seeing him ride through

Austin on the back of a Mustang, waving to the crowd. He turned to Mr. Johnson

and said, “It’s never going to be the same.”

But that night, Mr. Betts and his wife accompanied the

Bushes to various balls around town. Beforehand, they got ready in a special

hotel suite reserved for Mr. Bush’s friends and family. Mrs. Bush walked around

in her bathrobe. They were the same friends who visited his apartment on West

102nd Street.

“So,” Mr. Betts said, “maybe it’s not going to change.”