The Philadelphia Inquirer, Sunday, March 14, 1999
Memo: Road to City Hall
He's learned a lesson
Samuel P. Katz: Working hard to stay loose
By Larry Fish,
INQUIRER STAFF WRITER
Samuel P. Katz was a novice when he ran for mayor in 1991.
But the bookish-looking expert in the arcane world of municipal finance is
a neophyte no more. He has a good shot at becoming Philadelphia's first
Republican mayor since 1952. And he has taken to heart the lessons of '91.
He's working hard at staying loose.
In the '91 GOP primary, Katz was matched up against the towering
personality of Frank Rizzo and Vietnam vet and former District Attorney Ron
Castille. He came in last but only a respectable few percentage points behind
But he says his campaign demeanor was ``like I was interviewing for the
CEO's job.'' He was meticulously prepared, wore conservative suits, was always
earnest - and saw himself tagged with labels like stiff, curt and overserious.
He understands now the importance of making an emotional connection with
``People want to be able to touch the mayor,'' he says.
While Katz may not be cut from the extroverted cloth of an Ed Rendell, he
has loosened up noticeably since 1991. The self-assured, businesslike mien -
sometimes giving an impression of arrogance - has gotten softer.
Sizing up his chances of winning the Republican nomination in the May
primary - no one else is on the ballot - he tells audiences, with a modest
grin, that ``I'm counting on Unopposed not hiring a very good media
Not boffo, perhaps, but enough to season the meaty substance of his public
appearances. At a candidate forum for the Friends of Philadelphia Parks, Katz
was still the one who knew the number of street trees in the city (250,000),
but he also playfully tossed back a Frisbee that strayed up on stage.
Though he gets to coast through the primary while the five Democrats whale
away at each other, Katz knows that a Republican nomination can be a dubious
prize in a city where Democrats hold a 7-2 edge in voter registration.
But this year could be different. The Democrats may fatally wound each
other before the November election. Katz's positioning as a Rendell-esque
budget expert is especially timely. And he has more than $1 million in the
bank and skilled political advisers, many with ties to Rendell.
The 1991 campaign did something else for Katz - it taught him that he liked
the game. For all its personal attacks, impertinent journalists and long
hours, it fueled his 1994 run for governor.
``I was really bitten,'' he says. ``I was this nerdy, number-crunching
finance guy, reinforced by the image that I was dull and boring. . . . Then I
was out doing the Mummers' strut.''
If that sounds as though Katz, 49, is basically an accountant clone who
only recently discovered his politico alter ego, it overlooks a lifetime of
ambition and deep involvement in Philadelphia - mostly Democratic - politics.
Katz became a Republican shortly before the 1991 race because, he says, he
had grown to believe that solving Philadelphia's problems required lower taxes
and other steps that could alienate many of the Democratic Party's traditional
``I changed,'' he says.
Besides, he adds, ``I don't think I had any chance of being elected as a
He was born in West Philadelphia to Bernard and Aimee Katz, who grew up a
few blocks apart in the same Wynnefield neighborhood. His father, now retired,
ran an electrical-supply house; his mother worked in an apparel-design firm.
He was president of his elementary-school student council and, at age 7,
had a meeting with Mayor Richardson Dilworth that so impressed him that he has
wanted to be mayor ever since.
Katz was an honor student at Central High School and president of his
junior and senior class and of his synagogue's youth group.
In 1967, a ``very straitlaced'' Katz entered Johns Hopkins University in
Baltimore and got caught up in the antiwar protests sweeping American
Although he was playing guard (and was cocaptain) on the basketball team,
he had a medical deferment from the draft because of a high-school sports
injury to his leg. For this generation, few issues carry as much freight as
how one dealt with the draft. Katz says he did not seek the 4F status.
``I had a medical deferment,'' he says. ``Somebody else made the judgment,
and I'm glad they did.''
In 1994, while running for governor against Vietnam vet Tom Ridge, Katz
would come under attack for his deferment. Wallace H. Nunn, a powerhouse in
the Delaware County GOP organization, called him an opportunist ``politically
unfit'' for office. Asked today about the Republican mayoral candidate, Nunn
offers only ``No comment'' - except to note that he has never retracted his
Katz says he has no regrets.
He remembers a ``very tough'' freshman year at Johns Hopkins - he got the
first F of his life, on a political science midterm - but at least one thing
made it easier: At a mixer, he met Connie Hackel, a pathologist's daughter and
a student at Goucher College, outside Baltimore. She was smitten by ``his red
hair and freckles.'' They were married four years later.
After his graduation and return to Philadelphia, Katz worked briefly for
several State House committees and the Philadelphia Partnership, a civic
group. He also earned a master's degree in urban policy and politics from the
New School for Social Research in New York in 1974.
He began his political activity as campaign manager in Bill Gray's first,
unsuccessful bid for Congress in 1976 and future Mayor Bill Green's run for
Senate. With a streak of losses at the polls, Katz says, ``this didn't look to
be like a career [in campaign management] in the making.'' He was not so
directly involved in a campaign again until he became a candidate.
In 1976, he joined the company that was to make him rich, Public Financial
Management. It advises municipalities, turnpike commissions and the like on
cost-effective ways to do large projects, decisions always freighted with
politics (think of the debate about new sports stadiums for Philadelphia).
``All financing decisions you make will have a political context,'' says F.
John White, cochair of PFM, with Katz, until Katz left in 1994.
In 1985, PFM was under contract for the $523 million Pennsylvania
Convention Center project. The Goode administration, however, suspended the
contract upon learning that Katz and White had investments in properties that
were to be part of the project. White and Katz were deemed to have no conflict
of interest but chose not to pursue the contract.
Katz and Goode later had a political dustup. Katz supported Frank Rizzo's
comeback attempt to unseat Goode in 1987 and wrote (and eventually apologized
for) a fund-raising letter subtly linking Goode with Nation of Islam leader
Louis Farrakhan. In another context, Goode called Katz a ``worm.'' Both say
they long ago buried the hatchet.
Besides making Katz wealthy, PFM gave him a certain fame for the deals he
helped produce - Camden Yards in Baltimore, Joe Robbie Stadium in Miami, First
Union Center here - and indisputable credentials as a candidate who knows the
political and fiscal realities of city government.
``I've been a student of cities my entire professional life,'' he boasts.
``I've forgotten more than most people will ever know.''
Since leaving PFM, Katz has continued his consulting and entrepreneurial
ventures. He has also taken on one of the world's richest men.
Warren Buffett, the stupendously successful investor from Omaha, Neb., has
an investment vehicle called Berkshire Hathaway Corp., which buys huge chunks
of stock in blue-chip companies. A member of the public can buy shares of
Berkshire stock - assuming he has roughly $70,000, the recent price of a
single share of class-A stock.
In 1996, Katz and an associate tried to set up what amounted to a Warren
Buffett mutual fund that would in effect allow individual investors to own a
fraction of a single Berkshire share. Katz thought an elephant like Buffett
would never notice a fly like Sam Katz and his little fund.
He was very wrong.
The struggle was mostly behind the scenes, but it is clear that Buffett
brought every pressure that a $30 billion fortune and many of the titans of
Corporate America can exert to stop Katz.
Now, Katz says only: ``I was rattled. He was prepared to stop us at all
One insider who asks anonymity says Katz got ominous communications from
Fortune 500 companies. Buffett also attempted to get the Securities and
Exchange Commission involved.
But Katz persisted.
Finally, Buffett did what he had vowed never to do. He offered a second
class of Berkshire stock for about $1,000, then told the public it was a lousy
investment. Katz's pool of potential investors instantly dried up.
``He took out an atomic weapon; the fly is dead,'' says Katz, clearly proud
of having stood his ground.
And, he says, after tangling with Buffett, ``do you think John Street and
Marty Weinberg scare me?''
Sam and Connie Katz have led ``a limited social life'' of homey
domesticity since the birth of their daughter Lauren, now 18. The family also
includes Philip, 16, Elizabeth, 13, and Benjamin, 10.
Katz was appointed to the school board by Mayor Green in 1981 but resigned
in 1985, because he and his wife wanted a Hebrew-school education for their
children. They are active members of the Germantown Jewish Center.
Katz volunteers that he does not have deep religious feelings but finds the
cultural connection important. He says the household is ``moderately''
observant of Jewish ritual.
The Katzes socialize with a small group of ``nonpolitical'' friends and
vacation at Connie's mother's place in a North Carolina golf development. They
live in a French country-style house, on the wooded high ground of Cresheim
Valley in West Mount Airy, purchased for $280,000 in 1985.
Katz's musical taste runs toward Rachmaninoff and Verdi, and he plays golf,
but his passion is computers. His home office - his ``fabulous office'' - is
loaded with computer power. Ever the number cruncher, he says he has been
online since 1982.
He describes himself as deeply conservative in matters of his own family
and social life but seeks to distance himself from the national social agenda
of the Republican Party.
``I'm not a cultural conservative, not a right-winger,'' he told a
Democratically inclined audience recently, suggesting Arlen Specter as his
idea of ``a good Republican.''
J. Whyatt Mondesire, head of the NAACP, who has known Katz for more than 20
years, says Katz was warmly received when he appeared before the group in
January. Mondesire is working to elect a black Democrat but says he would have
few problems with Mayor Katz - the chief one being his support for school
vouchers, which the NAACP opposes.
While the national GOP opposes affirmative action, Mondesire praises Katz's
promise of an administration that reflects Philadelphia and his ``affability
and ability to be around all kinds of people.''
Like most of the Democratic candidates, Katz has also courted the
increasingly well-organized gay and lesbian community. He supports
domestic-partner benefits for same-sex couples as a matter of fairness, since
they cannot marry legally.
David Greer, head of the gay Log Cabin Republican club, says the community
has been lukewarm toward Katz so far.
Katz's support for partner benefits seems less than robust, Greer says, and
some gays and lesbians are troubled that Katz has appeared to have difficulty
dealing with the life and death of his only brother. James L. Katz, gay and
HIV positive, was a volunteer in Sam's gubernatorial campaign when he died in
1994 at age 42.
Sam Katz refrained from publicly discussing his brother, saying he wanted
to protect his family's privacy, until he broke his silence in mid-February,
before an AIDS group.
He now refers to his brother's death as evidence that AIDS issues are
``deeply personal and very real'' for him. And he pledges to fight for funds
for AIDS prevention and for care for those with the disease.
In 1991, Katz tried to win the Republican Party's primary endorsement from
the late William A. Meehan, who instead persuaded Castille, at virtually the
last minute, to enter the race.
The three-way Republican contest abruptly degenerated, with Rizzo charging
that Castille was a drunk who waved guns. Katz's unflappable demeanor and
financial expertise breathed new life into the nearly aborted campaign.
After Rizzo won the primary, then died that July, Katz had one more chance,
but Meehan chose Joe Egan as Rizzo's replacement. Egan lost, handily, to
Had Philadelphia elected him then, Katz says, he would have done much of
what Rendell has done, except for ``much deeper tax cuts and much greater
focus on reform of the systems and size of government.''
If voters give him a chance this time around, he says, he would further
reduce wage and business taxes, try to coax at least one major suburban
employer into the city, take personal responsibility for the schools, and
build more jail cells, if needed.
``I think Philadelphians are going to vote like they never have before,''
Sam Katz says, ``with a real concern about the future of this city.''