- Ira Rennert
Ira Leon Rennert (born 1934 in
Brooklyn, New York) is the billionaire founder of Renco Group. 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, and his philanthropy.
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. [cite web |url=http://w4.stern.nyu.edu/aboutstern/aboutstern.cfm?doc_id=1881 |publisher=New York University Leonard N. Stern School of Business |title=The Board of Overseers |accessdate=2007-08-01]
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
NASDscrutiny in 1962 and 1964 when it was censured for operating without enough capital.cite news |url=http://www.businessweek.com/magazine/content/03_07/b3820069_mz020.htm |title=Ira Rennert's House of Debt |publisher= Business Week|date= 2003-02-17|author=Emily Thornton] Because of the second censure, NASD revoked ILR & Co.s license to operate in 1964. Rennert has denied through a spokesperson that he was ever reprimanded by NASD.
Rennert spent the next decade consulting.cite news |url=http://quote.bloomberg.com/apps/news?pid=nifea&&sid=aX4418tSAFtM |title=Rennert builds $170 million Hamptons mansion as companies fail |publisher=Bloomberg |date=
2004-07-23|author=Peter Robison] In the 1980s, he turned to private equity and utilized high-yield debtor junk bondsto 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.
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. 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. In 1995, the suit was settled for $10.6 million and covered by insurance. The executives were not found liable and never admitted wrongdoing.
When Rennert's Magnesium Corp. of America filed for bankruptcy, 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. 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., purchased struggling companies, issued junk-bonds and charged its subsidiaries management fees and dividends. [cite news |url=http://www.nytimes.com/2006/02/03/business/03pension.html?ex=1296622800&en=4d760ff40ed5fac7&ei=5088&partner=rssnyt&emc=rss |title=Pension battle may entangle mogul's home |publisher=
New York Times|author=Mary Williams Walsh |date= 2006-02-03] 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.
Rennert caused controversy among his neighbors by building a beach front home in
Sagaponack, New Yorkconsidered one of the largest occupied residential compounds in America. [cite news |url=http://nymag.com/nymetro/realestate/features/1718/ |title=Rennert redux |publisher= New York Magazine|author=Peter Hellman] cite news
last = Gross
first = Jane
title = Millionaire's Mega-Mansion Shocks Even the Hamptons
New York Times
url = http://query.nytimes.com/gst/fullpage.html?res=9A02E0DF1F3DF930A1575BC0A96E958260
accessdate = 2008-07-02] The house outraged locals, who claimed Rennert originally planned to use it as a spa, a hotel, or a religious retreat. Rennert denied such allegations, and the local paper later issued an apology. [cite news |url=http://www.danspapers.com/issue48_2007/5.html |title=An apology to Ira Rennert of Sagaponack |publisher=
Dan's Papers|date= 2007-03-09|author=Dan Rattiner] Rennert's home is called Fair Field and is named after the adjoining body of water, Fairfield Pond. The house faces the Atlantic Oceanand its grounds measure 63 acres. The buildings, which total over convert|110000|sqft|m2, including the convert|66000|sqft|m2|sing=on main house, have an Italianatefacade, 29 bedrooms, and 39 bathrooms. The house has a dozen chimneys and a Mediterranean-style tile roof as well as a convert|91|ft|m|sing=on long formal dining room, a basketball court, a bowling alley, two tennis courts, two squash courts, and a $150,000 hot tub. 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.Fact|date=July 2008
Rennert's company, the
Renco Group, is essentially a holding group that owns other companies, such as Doe Run Company,. In February 2008, Renco Group acquired Delphi's interiors and closures business which has been renamed Inteva Products, LLC. [ [http://www.gadsdentimes.com/article/20080304/NEWS/617425379/1017/NEWS New era begins at plant | GadsdenTimes.com | Gadsden Times | Gadsden, AL ] ]
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%. [http://www.epa.gov/tri/ Toxics Release Inventory (TRI) Program ] ]
The Renco Group's environmental record has been mixed. In 1998
United States Environmental Protection Agencyplaced Renco Group business holdings 10th on the nation's largest polluter list primarily because of emissions from US Magnesium in Utah (formerly MagCorp). (US Magnesium was purchased by Renco in 1989 in the year in which its emissions peaked at 119,000 tons per year.) [www.secinfo.com/dRqWm.5RYu.htm] By 1998, the year the Renco was placed on the EPA list, Renco had reduced emissions at US Magnesium by 50%. By 2005, the most recent year of data released by the EPA, emissions had been reduced by 97%.
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.cite news |url=http://tv.ksl.com/index.php?nid=5&sid=205094 |title=EPA sues magnesium company |publisher=
KSL TV|date= 2005-05-14] 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. MagCorp maintained it was exempt from the federal Resource Conservation and Recovery Act, which requires companies to monitor certain kinds of hazardous waste. 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. [cite news |url=http://www.forbes.com/forbes/2002/0722/044_print.html |title=Man with many enemies |publisher= Forbes.com|date= 2002-07-02|author=Nathan Vardi] 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. [cite news |url=http://www.sltrib.com/news/ci_7288544 |title=USMag wins favorable fed judge ruling |publisher= The Salt Lake Tribune|date= 2007-10-26]
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). 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.>Citation
last = The Manufacturing Extension Partnership
title = 2006 MEP Award Winners
year = 2006
url = http://www.mep.org/textfiles/2006%20MEP%20Award%20Winners.pdf
accessdate = 2008-07-02] Also, the energy improvements in US Magnesium’s manufacturing process caused a net reduction of 100,000 tons per year of carbon dioxide emissions. US Magnesium was the recipient of a 2004 Climate Protection Award from the EPA [http://www.epa.gov/cppd/awards/winners_summaries4-20-04.doc] and won an MEP award in 2006 for Environmental Consciousness.
Another US unit of Renco also faced environmental issues in
Herculaneum, Missouriand 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.cite news |url=http://www.motherjones.com/news/feature/2006/11/lead_astray.html |title=Lead Astray |publisher=Mother Jones |date=November/December 2006 |author=Sara Shipley Hiles & Marina Walker Guevara] 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. A 2002 study showed more than half of the children living within a quarter mile of the smelter had high blood-lead levels. Doe Run agreed to buy 160 homes located in the contaminated area around the smelter at a cost of more than $10 million. 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."Fact|date=July 2008 In the first quarter of 2007, Doe Run met all of the National Ambient Air Quality Standard (NAAQS).Fact|date=July 2008
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. [cite news |url=http://www.dallasnews.com/sharedcontent/dws/news/world/stories/120505dnintperumission.7cfb9ab.html |title=In Peru, a poisoned town, a driven man |publisher= Dallas Morning News|date= 2005-12-04|author=Craig Cheatham] 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.
Blacksmith Institutehas placed La Oroya on its list of ten most polluted places in the world, along with Chernobyl, Ukraine.cite news |url=http://www.thenation.com/doc/20070709/hiles |title=Religious Leaders Challenge Polluter |publisher= The Nation|date= 2007-07-23|author=Sara Shipley Hiles] 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. [http://observer.guardian.co.uk/world/story/0,,2147039,00.html Poisoned city fights to save its children | World |The Observer ] ] 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.
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. 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. [http://www.ipsnews.net/news.asp?idnews=38854 PERU: Pollution Emergency Plan Instead of Real Action for La Oroya ] ] 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.
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. [ [http://www.prweb.com/releases/2007/11/prweb573032.htm Independent Audits Confirm that Doe Run Peru Meets Emissions Standards ] ] 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 [ [http://www.tierramerica.info/nota.php?lang=eng&idnews=954 Tierramérica ] ] 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.
Ira and his wife Ingeborg have made many charitable donations to various organizations. They donated $5 million to establish the Wiesel Center at
Boston Universityand $250,000 to the Lincoln Center. They also gave over $1 million to the World Trade Center Memorial and established the Rennert Entrepreneurial Institute of Sy Syms School of Businessat Yeshiva University. They have endowed chairs at several different universities, including a chair in Jewish studies at Barnard College, a Chair in Aging Research at Albert Einstein College School of Medicine, a Chair in Stem Cell Biology at Albert Einstein College School of Medicine, and the Ira Rennert Professorship of Business at Columbia University. [http://spider.mc.yu.edu/news/articles/article.cfm?id=101439 Yeshiva University News - Gifts Boost Medical Research: Ten Professors Invested in Endowed Chairs at Albert Einstein College of Medicine ] ] They also established the Ira Leon Rennert Professor of Entrepreneurial Finance at New York University and founded the Rennert Center for Jerusalem Studies at Bar Ilan University. The Rennerts also helped to fund the restoration of the Western Heritage Wall in Jerusalem (the visitor's center is called The Ingeborg and Ira Leon Rennert Hall of Light). They also donated about 160 Torahscrolls to communities in Israel. [cite news
last = Silverstein
first = Shelly
title = Rennert's Torahs
date = November 15, 2007
url = http://www.israelnationalnews.com/News/News.aspx/124270
accessdate = 2007-11-18 ]
Ira Rennert ranks #891 on Forbes Magazine's list of World Billionaires. [cite web |url=http://www.forbes.com/lists/2007/10/07billionaires_Ira-Rennert_M9N4.html |title=#891 Ira Rennert |work=
The World's Billionaries|publisher= Forbes.com|accessdate=2007-08-01]
Ira Rennert and his wife, Ingeborg, have three children and are grandparents.Fact|date=July 2008
*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.
*Youtube|gY6WXa9aKrM|Toxic Lead Smelting Operation in La Oroya, Peru
*Youtube|VguzDVY7NAM|The Children of Lead trailer
* [http://maps.google.com/maps?q=Sagaponack,+New+York&ie=UTF8&oe=utf-8&client=firefox-a&ll=40.918928,-72.263668&spn=0.008058,0.018797&t=h&z=16 Rennert home in Sagaponack, New York] on Google Maps
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