Bernard L. Schwartz has died at the age of 98. He was one of the most generous funders of the Democratic party in the US, especially during the presidency of Bill Clinton, and one of the highest paid CEOs, who created one of the largest industries of electronic systems for military use.
He founded New York-based Loral which he led to 96 consecutive quarters of profit growth starting in 1972. In 1996, he sold most of the business to Lockheed Martin for about $9 billion.
Who was Bernard Schwartz?
Born in 1925 in Brooklyn, Schwartz started out as an accountant. He was the architect of more than 16 major acquisitions that helped transform Loral into a global business. From 1986 to 1996 alone, Loral spent more than $4 billion to acquire assets from companies such as Unisys, International Business Machines, LTV, Ford Motor, Fairchild Weston, Honeywell and Goodyear, according to with the New York Times.
Schwartz for a time was among the highest paid US CEOs. Businessweek wrote that his pay was $5.8 million in 1991. He has financed the Democratic party with some of the highest amounts during Bill’s eight-year presidency, prompting comments about financing to curry favor with the American president.
According to a Times report, White House deputy chief of staff Harold Ickes wrote to Clinton in a 1994 memo: “I have reason to believe that Mr. Schwartz is prepared to do anything for the administration.”
The Times also reported that Loral needed and received summary approval from the White House to launch a satellite using a Chinese rocket in 1998. Schwartz himself told the Times that there was “no connection” between his donations and the decision that his company had requested. “I consider him a friend, but not the kind of friend you can ask for a favor,” she claimed of Clinton.
In 2002, Loral agreed to pay a $14 million fine to settle government charges that the company broke the law by selling satellite and missile technology to China in 1996.
Reservations for political funding
However, Schwartz himself has expressed reservations about funding politicians.
“I agree with most of the critics who say there’s too much money going into the system,” he said in an interview in 2007. “It’s not so much the amounts that are given. I would like to see some cap on how they are spent. Because it’s become almost defiant.”
However, the tactic was repeated in 2016. Schwartz donated $1 million to a party committee that supported Hillary Clinton’s second bid for the Democratic presidency, making him one of her top supporters. Soon after, he said that political action committees (PACs) should face tighter limits on what they can collect from big donors. Giving to PACs “distorts the political process,” he said. “The rich have the opportunity to gain access.”
Schwartz, however, has continued to fund Democrats, including one such committee on behalf of Joe Biden in the 2020 election.
Grandpa Schwartz
Schwartz’s paternal grandfather was an employee of the New York Democratic Party organization known as Tammany Hall. After his death, the group sent his widow “a turkey and a bag of coal” every Thanksgiving and Christmas, he said. “These were small contributions relative to their needs, but the family knew someone there was taking care of them and making good Democrats for the next five generations.”
He served in the Army Air Corps before graduating from the City College of New York with a Bachelor of Science degree in economics.
Against the Vietnam War
Schwartz was a partner at the accounting firm Schnee Hover & Schwartz from 1948 to 1962 before becoming CEO of Leasco Corp., a New York-based computer leasing company, in 1969.
When, having voiced his opposition to the war in Vietnam, he bought a controlling stake in Loral in 1972, the Bronx company was small. In fact, almost bankrupt. It manufactured copper wires, industrial meters and toys apart from defense electronics. At first he took care to phase out non-defense activities in order to concentrate on radar systems.
After being sold to Lockheed Martin in 1996, he formed Loral Space & Communications, hoping to build a satellite system that would allow people to use a cell phone anywhere in the world.
That company filed for bankruptcy protection using the relevant provision of bankruptcy law, two years after the bankruptcy of another satellite company, Globalstar LP.
Schwartz resigned in March 2006, just months after emerging from bankruptcy, and started a New York-based investment firm, BLS Investments LLC.
Charity
As a philanthropist, Schwartz established biomedical-imaging and radiology centers at New York University, as well as a urology research foundation at the same university.
Other structures he funded were the New York Historical Society, the Asiatic Society, Baruch College, and Fordham University.
Through a foundation named after himself and his first wife, Irene, he supported the New School for Social Research, the Carnegie Endowment for International Peace, the Roosevelt Institute, and the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University .
He also served on the Council on Foreign Relations, where he established an advanced scholarship in business and foreign policy.
