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How Eli Broad gives his billions away

60 Minutes first broadcast this fawning profile of Eli Broad in 2011, repeated May 26, 2013. The transcript is below. You can watch here.

Michael Bloomberg sums it up: "It's his money. If you don't want to play the game, you don't have to."

In it, Broad admits he wasn't around as a father--too busy building an empire.

As for his two sons, Broad said, "They're well taken care of. They're different then their dad."

"Different, how?" Safer asked.

"They don't have, frankly, the ambition to build a great business that I had," Broad replied.

"You've been open about admitting that you were not a great father," Safer remarked.

"Look when I started, it was 24/7 as they say, and I didn't spend enough time with the kids when they were growing up. I admit that," Broad acknowledged.

Here's what the Los Angeles Times reported in 1985. Kind of refreshing to see how different they are from Dad.

Jeff, 28, worked for the Pacific Coast Stock Exchange until recently and now is traveling around the country in a VW van, and 26-year-old Gary lives in West Los Angeles where, his father said, he coaches young kids and does some investing.

Look at how Eli Broad talked about his sons in 1996--to the New York Times, in an article called Talking Money with Eli Broad.

But when it comes to their two sons -- Jeffrey, 36, and Gary, 39 -- the father's investment regimen is turned completely on its head. Neither man works full time and both expend much effort at the one financial activity of which Mr. Broad is skeptical: picking stocks.

Indeed, the market is Jeffrey Broad's main interest; he even worked for several years on the floor of the Pacific Stock Exchange.

"When I was growing up he introduced me to stamp collecting and the stock market," Mr. Broad said, referring to his father. "If he had introduced me to stamp collecting and accounting, I might have turned out more like him."

Mr. Broad concedes that his two sons have done respectably, even if their approach collides with his investing principles. "They do well," he said. "They know more about technology stocks than I do, and they did very well with some, though I forget which ones."

But compared with top money managers, "they are not that bright or sophisticated, let me put it to you that way," Mr. Broad added. He also noted that the rise in the value of SunAmerica stock -- he had given his sons "a certain amount" of shares years ago -- was the biggest reason for their portfolios' success.

And the sons lack their father's intensity, he believes. "They are not stupid," Mr. Broad said. "They are hardly unsophisticated investors. But they don't live it the way I do. They enjoy other things in life."

Like any father, Mr. Broad often ponders the tenor of his sons' lives. "They are both retired," he said. "They are leading my fantasy life." Then he added with some wistfulness, "If I could wave a wand . . .," and his voice trailed off. "We would like for them to be married, to have grandchildren, to be running a big enterprise," he said. "But that is not what they wanted to do. It doesn't make them happy. They saw me work too hard." (Several weeks later, Gary Broad surprised his parents by marrying.)

In 2007, Gary paid $7.7 million for a thoroughbred training facility. According to a Californina Thoroughbred Magazine Cover Story, he was introduced to horse racing by his father, who's a big fan of the Kentucky Derby.

Jeffrey Broad is listed as on the board of directors at the Broad Foundation.

In the closing of his 2012 memoir The Art of Being Unreasonable [foreword by Michael Bloomberg], Eli Broad was a bit more forthcoming about how he did as a father:

"I was serious, focused, demanding, and not much fun. I took the boys with me to tour subdivisions, and now I realize that's not exactly how kids want to spend their weekends. I missed too many moments, and I regret it. . . . Time with my sons was precious, but unfortunately rare."

60 Minutes ignores Broad's creepy influence on education. Morley Safer is just too fascinated with the money to get into that.

60 Minutes:Morley Safer and Eli Broad

In this era of belt tightening, it's kind of refreshing to take a look at people whose happiest pastime is to give money away. Such a man is 77-year-old Eli Broad, a self-made billionaire, art collector and for the past ten years one of the most consistently generous philanthropists in America - supporting education reform, medical research and the arts. Broad also wants to transform that sprawling monster of a city Los Angeles into a cultural capital.

Broad thinks big, but his critics say he can act very small: that he may give billions away, but that he tries to micromanage almost every dollar he gives. Broad doesn't really care what they say - all he wants to do is die poor. Well, relatively poor.

"I believe in two things: One, Andrew Carnegie said, 'He who dies with wealth dies in shame.' And someone once said, 'He who gives while he lives also knows where it goes,'" Broad told "60 Minutes" correspondent Morley Safer.

There's no one quite so civic minded in America. Broad and his wife Edye have become paparazzi pets because of the money they lavish on Los Angeles, so far more than half a billion dollars.

Behold his footprint on Los Angeles. He's a driving force behind 16 major public institutions. In the center of downtown, there is a cultural corridor, anchored by the magnificent Disney Hall, home of the Los Angeles Philharmonic. Next to it is the home of the Los Angeles Opera, The Museum of Contemporary Art, The High School for the Performing Arts, and The School of Music.

In greater Los Angeles, three scientific research centers, a theatre, an art center, and another contemporary art museum are supported by Broad. He puts his name on almost all of them.

Extra: Investing in science
Extra: Eli and Edye Broad's "joint venture"
Extra: A peek at the art collection

"You said that your sense of being a wealthy man actually increased the more you gave money away?" Safer asked.

"I think it's true," he replied. "I don't feel I'm here to just maintain the status quo. I'm here to make things better or different."

"And you want the world to know about it by putting your name on all the things you do support?" Safer asked.

"I don't keep it a secret, that's for sure," Broad replied.

Broad took us to Grand Avenue, which he plans to transform into a vibrant city center, rivaling New York's Museum Mile.

Disney Hall, designed by Frank Gehry, almost did not get built. Broad rescued the project by putting up his own money and putting the squeeze on fellow plutocrats.

"It's really become the symbol of our city," Broad told Safer.

And then there's his own museum, The Broad. It's still a parking lot right now, but it will eventually hold his $1.6 billion art collection.

"How much is this going to cost...something approaching a billion dollars?" Safer asked.

"More," Broad said.

Safer and Broad were interrupted by an Angeleno driving by: "Eli, buy the Dodgers. Buy the Dodgers," the man said to Broad from his car.

"'Eli buy the Dodgers.' You could be the George Steinbrenner of Los Angeles?" Safer asked.

"Oh, no, no, no. I've got enough on my plate," he replied.

Broad runs his philanthropic foundation like a for-profit business, not a charity. Charity he says, is just writing checks. He practices what he calls venture philanthropy.

"We don't give it away, we invest it. And we want a return. Remember, I started work as a CPA, so that gave me fiscal discipline in everything I did in business. I guess some of it carries over to philanthropy," he explained.

"Eli Broad says I want results, and if you're not gonna show me results I'm not gonna give you the money, and incidentally after one year if you don't show me the results, I'm gonna stop funding you," New York's Mayor Michael Bloomberg said.

Bloomberg, no mean philanthropist himself, admires Broad's "uncuddly" approach and the $32 million he has given to New York schools.

"Eli Broad sets the standard," Mayor Bloomberg said. "I think it's really being a role model for others. And they look at Eli and because of him, they get the ideas, 'I'm going to be innovative and be philanthropic and do some other things.' The leverage of Eli Broad is really quite amazing."

Amazing to the extent of almost half a billion dollars he has poured into improving public education. He spends even more on medical research: eight years ago he teamed up with Harvard and MIT to create The Broad Institute in Cambridge, Mass. The Broad is the world's leading genomic medicine institute. All discoveries are free, available to anyone.

"Let me be rude and ask: How much have you put into this institute?" Safer asked.

"600 million dollars total," Broad replied.

Broad grew up in Detroit, the only child of immigrant shopkeepers. At 21, he married Edye Lawson.

"We borrowed $25,000 from her parents," Broad remembered.

Asked what that sum ultimately led to, Broad told Safer, "A lot of money."

In 1957, Broad and a partner launched a no-frills home building business; he was a millionaire by 27. He bought Sun Life Insurance in 1971 and sold it in 1999 for $18 billion. And that's when he and Edye decided to give most of it away.

"You're giving 75 percent of your wealth away?" Safer asked.

"Maybe more by the time it's over," Broad replied.

As for his two children, Broad said, "They're well taken care of. They're different then their dad."

"Different, how?" Safer asked.

"They don't have, frankly, the ambition to build a great business that I had," Broad replied.

"You've been open about admitting that you were not a great father," Safer remarked.

"Look when I started, it was 24/7 as they say, and I didn't spend enough time with the kids when they were growing up. I admit that," Broad acknowledged.

Asked if that is something he regrets now, Broad said, "I do to some degree. We all go back and would do things over differently in our lives."

Today, Broad balances his life with his passion for contemporary art. "Civilizations are not remembered by their business people, their bankers or lawyers. They're remembered by the arts," he said.

He has collected over 2,000 works of art; unlike most collectors, almost all of Broad's art is available for loan to museums. He loaned a number of pieces to the L.A. County Museum of Art, and threw in a $50 million building to house them.

One of his favorite artists is the irrepressible Jeff Koons.

"You know Morley and Eli, I just have to say standing here, what a fantastic location. I mean look at the natural light that is coming in on these works, it's a tremendous gallery," Koons said, as they stood in an exhibition space.

"And the Balloon Dog? What does it do to you? Do you get some kind of emotional kick?" Safer asked Broad, referring to a well-known Koons creation.

"I do, I do. It makes me smile, it makes me feel good, It make me proud, and it especially makes me proud when I see young people and others looking at the work. And it introduces them to art in a way that no other work really does," he replied.

"And a piece that quite honestly mystifies me. Michael Jackson and his chimp is it?" Safer asked, referring to a gold-adorned porcelain-like sculpture of the late pop star and his chimp.

"Michael Jackson and Bubbles," Koons said. "When I made this series, the banality series."

"Series of banality?" Safer asked.

"Of images. I was trying to communicate to people that whatever you respond to, it's perfect," Koons explained.

If you find Koons' art speak incomprehensible, well just wait: "These are to make references to be in the womb a little bit, ah, before birth and prior to any kind of concept of death," the artist said, explaining one of his pieces of art - a fish tank with three basketballs suspended inside.

"Do you totally get what he's talking about?" Safer asked Broad.

"Not to the extent that Jeff does, but I do listen and understand and learn from the artists, especially Jeff," he replied.

But not all artists are as respectful as Koons. Take architect Frank Gehry: "Eli is a control freak. I worked on a house for him. I didn't wanna do it."

Asked why, Gehry said, "I just told him I didn't like him. He said you'll learn to like me."

Broad fired Gehry, then built the house anyway using Gehry's drawings.

"After two years and seven different models I was impatient. I think he wanted to spend another year or two designing it. And I said, 'Frank, a work of art is never finished - it's only abandoned,'" Broad explained.

They worked together again three years later to build Disney Hall. Once again, Broad fired Gehry. But he had to eat humble pie when the Disney family insisted that he hire Gehry back.

"We did it. We built it. We weren't friends," Gehry remembered.

"You've made your peace with him at the same time you've...?" Safer asked.

"I won't do a project for him, that's true," Gehry said.

"Eli's middle name is 'strings attached.' Eli 'Strings Attached' Broad," Los Angeles Times art critic Christopher Knight told Safer.

Knight has been "Broad watching" for years. "He's a first generation male self-made gazillionaire and people in that category typically believe, and with good evidence, that they know how to make something a success. And that can be a problem," he told Safer.

With science, Broad leaves the details to the experts, but when he dangles his money and his art in front of most major museums in L.A., he sees himself as the expert - if they don't play, he won't pay.

"Well, I am a perfectionist, and things I do know something about, I do get involved," Broad said.

"We've talked to a number of people who say that you can turn into a bully," Safer pointed out.

"I don't think I am a bully. But on the other hand, I'm not a potted plant either," Broad replied.

"No, I am sure you're not a potted plant. But these people who say some pretty unkind things about you will not talk publicly. They clearly are scared of you," Safer said.

Broad replied, "I don't know why they're scared of me."

"Well because you're a rich guy, and therefore a powerful guy, and you've got a temper?" Safer remarked.

"I've got strong views on things," Broad replied.

"But even your good friend Frank Gehry says, 'Eli can be a real pain in the ass,'" Safer pointed out.

"I can understand why Frank could say that, because I am inpatient, and patience has its limits," Broad acknowledged.

"Number one, it's his money and you don't have to take it - so I'm sympathetic with that. Eli is not a micromanager as much as he has ideas on how you can make society better, and he's devoting his own money to doing it. Kind of hard to argue that he doesn't have the right to do it, and you don't have to play the game of you don't want to," New York Mayor Michael Bloomberg said.

"When you've got one 800 pound gorilla in the room, you're scared to death of the guy. Everybody does want something from Eli. And since he is the biggest game in town, nobody wants to alienate him," art critic Christopher Knight said.

There was quite a crowd at a gala in November 2010 for the Los Angeles Museum of Contemporary Art, which Broad bailed out two years ago for $30 million.

It was a scrum of culture vultures, fashion victims and art victims, dealers and collectors - a night when skinniness was next only to godliness, when philanthropy and social climbing, self-aggrandizement and greed dissolved into one gigantic air kiss - all under the benevolent eye of that feared and admired dictator, Eli Broad.

"Beyond the altruistic part of it, ego plays a part in this?" Safer asked.

"Oh absolutely," Broad admitted.

"A desire to be loved?" Safer asked.

"A desire to be respected. I'm not doing these things to become the most popular person in the city. I wanna be the most respected person," Broad said.

We left him on the roof of his art foundation, this fully contented man, master of all he surveys.

'What's this at the very end here? I know what this is," Safer said, referring to a sculpture of two very big feet sitting on top of the building. "It's big foot."

"It IS big foot," Broad agreed.

"And who is the biggest foot in Los Angeles right now?" Safer asked.

"I don't know," Broad said. "I don't think so."

— Morley Safer & Eli Broad
60 Minutes





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