Out of downtown

Pub date May 15, 2007

› steve@sfbg.com

It wasn’t going well for Ted Strawser, predictably. The alternative transportation activist faced an uphill battle March 14 trying to convince a San Francisco Chamber of Commerce committee to endorse Healthy Saturdays, a plan to ban cars from part of Golden Gate Park.

Representatives of the park’s museums and Richmond District homeowners had just argued their case against the measure. “Visitors want access to our front door, and we want to give it to them,” Pat Kilduff, communications director for the Fine Arts Museums of San Francisco, indignantly told the group of two dozen business leaders gathered around a large conference table.

Strawser gave it his best shot: he talked about following the lead of other great cities to create car-free spaces; he said, “Golden Gate Park is one of the best parks in the nation, if not the world”; and he made a detailed case for closure. But around the table there were scowls, eye rolls, and other obvious signs that Strawser was being tolerated, not welcomed. Some — including chamber vice president Jim Lazarus — even started to interrupt and argue with him.

Then the man sitting next to Strawser spoke up. “I don’t think this is fair,” he said. And suddenly, everyone in the room shaped up. Strawser’s ally — his only supporter in the room — was somebody no chamber member could or would dismiss. Warren Hellman doesn’t shout or bang the table — but when he speaks, downtown pays attention.

Hellman, a prominent investment banker, told the committee members that he expected them to show the same respect for Strawser that they had for the previous two speakers. The nonsense ended, immediately.

And by the time Strawser turned the floor over to Hellman, the mood had changed. The group listened raptly, smiled, and nodded as Hellman spoke in his usual folksy, familiar, disarming style.

“It’s not a lot of fun when friends fall out,” he began, “because the previous speakers and many of you all agreed on the necessity of the garage [that was built in Golden Gate Park], and we worked together.”

He pointed out that many in the group had promised during the fall 2000 election to support Healthy Saturdays once the garage was built, although Hellman was now the only member of the coalition honoring that commitment. But he didn’t chide or shame his colleagues. That isn’t Hellman’s style.

Instead, he spoke their language. The garage has never been full and needs the money it can charge for parking to repay the bonds. This isn’t a fight that’s going away, since “part of the conflict is because this park is everybody’s park.” But there are “about 100 compromises not acceptable to either side that would move this forward.” And if a solution can’t be found, there will probably be an expensive ballot fight that nobody wants.

“My conclusion is we should attempt this test,” Hellman told the group. Ultimately, when the vote was later taken in secret, the chamber didn’t agree, although it did vote to back a trial closure after the California Academy of Sciences reopens next year.

At the meeting, Hellman openly called for Mayor Gavin Newsom to get involved in seeking a compromise, something Hellman said he had also just requested of the mayor at a one-on-one breakfast meeting. A couple of weeks later Newsom — who had already indicated his intention of vetoing the measure — did broker a compromise that was then approved by the Board of Supervisors.

As usual, Hellman didn’t take credit, content to quietly play a role in making San Francisco a better place.

Healthy Saturdays isn’t the most important issue in local history — but the significance of Hellman’s involvement can’t be underestimated. His alliance with the environmentalists and park advocates might even signal a sea change in San Francisco politics.

Warren Hellman represents San Francisco’s political and economic past. And maybe — as his intriguing actions of recent years suggest — its future.

This guy is a rich (in all senses of the word) and compelling figure who stands alone in this town. And even though his leadership role in downtown political circles has often placed him at odds with the Guardian, Hellman consented to a series of in-depth interviews over the past six months.

“Our family has been here since early in the 19th century, so we had real roots here,” Hellman told us. His great-grandfather founded Wells Fargo and survived an assassination attempt on California Street by a man who yelled, “Mr. Hellman, you’ve ruined my life,” before shooting a pistol and barely missing.

The Hellman family has been solidly ruling class ever since, rich and Republican, producing a long line of investment bankers like Warren.

Yet the 72-year-old comes off as more iconoclast than patrician, at least partly because of the influence of his irreverent parents, particularly his mother, Ruth, who died in 1971 in a scuba-diving accident in Cozumel, Mexico, at the age of 59. “She was entirely nuts,” Hellman said, going on to describe her World War II stint as a military flier in the Women’s Auxiliary Service Pilots and other colorful pursuits. “She just loved people, a little like I do. She collected people.”

Hellman grew up wealthy and cultured, but he also attended public schools, including Grant Grammar School and Lowell High School. In between, the young troublemaker did a stint at San Rafael Military Academy — “reform school for the rich,” as he called it — for stunts such as riding his horse to Sacramento on a whim.

After doing his undergraduate work at UC Berkeley, Hellman got his MBA from Harvard and went on to become, at the age of 26, the youngest partner ever at the prestigious Manhattan investment firm Lehman Bros. He developed into an übercapitalist in his own right and eventually returned home from New York and founded Hellman and Friedman LLC in San Francisco in 1984, establishing himself as the go-to financier for troubled corporations.

“He is really one of the pioneers of private equity,” said Mark Mosher, a longtime downtown political consultant and the executive director of Gov. Arnold Schwarzenegger’s California Commission on Jobs and Economic Growth, on which Hellman sits.

Hellman became what Business Week called “the Warren Buffett of the West Coast,” a man of extraordinary wealth and power. Among other accomplishments, Hellman took Levi Strauss private, recently made billions of dollars in profits selling DoubleClick to Google, and manages the assets of the California public employee retirement funds (CalPERS and CalSTRS), which are among the largest in the world.

Like many financial titans, Hellman has always been a generous philanthropist, giving to the arts, supporting schools in myriad ways, and funding the San Francisco Foundation and the San Francisco Free Clinic (which his children run). He vigorously competes in marathons and endurance equestrian events, often winning in his age bracket. And he has his humanizing passions, such as playing the five-string banjo and creating the popular Hardly Strictly Bluegrass festival.

But he’s also been a prime facilitator of downtown’s political power, which regularly flexes its muscle against progressive causes and still holds sway in the Mayor’s Office and other city hall power centers.

Hellman founded, funds, and is a board member of the Committee on Jobs, which is perhaps the city’s most influential downtown advocacy organization. Hellman and his friends Don Fisher, the founder of the Gap, and Sen. Dianne Feinstein also started SFSOS, which now wages the most vicious attacks on left-of-center candidates and causes.

When the de Young Museum and other cultural institutions were threatening to leave Golden Gate Park, Hellman almost single-handedly had an underground parking garage built for them, in the process destroying 100-year-old pedestrian tunnels and drawing scorn from the left. The Guardian called it “Hellman’s Hole.”

“We at the Bike Coalition very much started out on the opposite side of Warren Hellman,” San Francisco Bicycle Coalition executive director Leah Shahum told us. “We couldn’t have been more like oil and water on the garage issue.”

But over the past two years or so, Hellman’s profile has started to change. He went on to become an essential ally of the SFBC and other environmentalists and alternative transportation advocates who want to kick cars off JFK Drive in Golden Gate Park on weekends, crossing the downtown crowd in the process. He has shared his wealth with progressive groups such as Livable City, which often fights downtown, and has stuck up for edgy fun seekers over more conservative NIMBY types. He has also publicly repudiated the attacks of SFSOS and its spokesperson, Wade Randlett, and withdrawn his support from the group.

Hellman is still a Republican, but a thoughtful and liberal-minded one who opposed the Iraq War and wrote an article for Salon.com in February titled “If the United States Were a Company, Would George Bush Be Our CEO?” (His answer: hell no.) And to top it all off, Hellman sports a few tattoos and even attended 2006’s Burning Man Festival and plans to return this year.

Unguarded and reflective, Hellman’s comments to the Guardian foreshadow the possible future of capitalism and influence in San Francisco and point to potential political pathways that are just now beginning to emerge.

Our first conversation took place at the Guardian office two weeks before the November 2006 election, when it was starting to look like Nancy Pelosi had a good shot at becoming speaker of the House of Representatives.

“I think this election in two weeks is going to be really interesting,” Hellman told us.

This Republican was cheering for the Democrats to win. “They aren’t my kind of Republicans,” he said of the people in power. Hellman didn’t support the war or approve of how the Bush administration sold it, and he wanted Pelosi and the Democrats to hold someone accountable.

“What I’d like her to do is admit that we can’t get out [of Iraq immediately], but start to talk about what the fallout has been. Discuss the enormous cost in human life as well as money, and how it’s possible the war united the Middle East against us,” Hellman said.

The one thing he can’t abide is disingenuousness. Hellman speaks plainly and honestly, and he asked us to keep particularly caustic comments off the record only a few times during almost six hours’ worth of interviews. He was self-effacing about his political knowledge and seemed most interested in working through the problems of the day with people of goodwill.

Asked what he values most in the people he deals with, Hellman said, “It’s authenticity. Do they believe things because they believe in them, or do they believe in things because they’re cynical or they’re just trying to gain something?”

Locally, Hellman has reached out to people with varying worldviews and come to count many friends among those who regularly battle against downtown.

“I love to know people,” he said. “That’s probably the single thing that motivates me. When someone says to me, ‘How can you be friends with [then–head of SEIU Local 790] Josie Mooney?’ I say, ‘Look, I want to know Josie Mooney. And if she’s awful, then we won’t be friends.’ I’m just fascinated by getting to know people. And virtually always, they’re a little like Wagner operas: they’re better than they sound.”

Hellman was the chair of the Committee on Jobs when he got to know Mooney, who chaired the San Francisco Labor Council and was a natural political adversary for the pro-business group, particularly when Hellman was leading the fight to do away with the city’s gross receipts tax, which has proved to be costly for the city and a boon for downtown.

But after that victory, Hellman turned around and cochaired a campaign with Mooney to retool and reinstate the gross receipts tax in a way that he believed was more fair and helped restore the lost revenue to the city.

“We lost, but he put $100,000 of his own money into that campaign,” Mooney told us, noting that the proposed tax would have cost Hellman and Friedman around $70,000 a year. “I think he just thought the city needed the money. It was a substantive point of view, not a political point of view.”

Mooney considers Hellman both a friend and “an extraordinary human being…. He has made a huge contribution to San Franciscans that doesn’t relate to ideological issues. A tremendous thing about Warren is he’s not ideological, even in his political point of view…. On politics, I’d say he is becoming more progressive as he understands the issues that confront ordinary people.”

Mooney is one of the people who have helped bring him that awareness. When they first met, Mooney said, Hellman told her, “You’re the first union boss I ever met.” That might have been an epithet coming from some CEOs, but Hellman had a genuine interest in understanding her perspective and working with her.

“In a sense, I think that was a very good era in terms of cooperation between the Committee on Jobs and other elements of the city,” Hellman said. “Josie and I had already met, and we’d established this kind of logic where 80 percent of what we both want for the city we agree on, and 20 percent [of the time, we agree to disagree].”

Committee on Jobs executive director Nathan Nayman — who called Hellman “one of my favorite people in the world” — told us that Hellman feels more free than many executives to be his own person.

“He’s not with a publicly held company, and he doesn’t have to answer to shareholders,” Nayman said. “He takes a position and lives by his word. You don’t see many people like him in his income bracket.”

Hellman has become a trusted hub for San Franciscans of all political persuasions, Nayman said, “because he’s very genuine. He’s fully transparent in a city that likes to praise itself for transparency. What you see is what you get.”

Hellman expects the same from others, which is why he walked away from SFSOS (and convinced Feinstein to bolt as well) in disgust over Randlett’s scorched-earth style. Among other efforts, SFSOS was responsible for below-the-belt attacks on Sups. Chris Daly, Jake McGoldrick, and Gerardo Sandoval (whom a mailer inaccurately accused of anti-Semitism).

“If all things were equal, I’d just as soon that SFSOS went away,” Hellman said. “SFSOS started doing the opposite of what I thought they would be doing, so it was fairly easy for me to part company with them. What I thought we were doing is trying to figure out ways to make the city better, not just being an antagonistic, nay-saying attack organization. I’m not a huge fan of Gerardo Sandoval, but I thought the attacks on him were beyond anything I could imagine ever being in favor of myself. And it was a series of things like that, and I said I don’t want anything more to do with this.”

Downtown, they’re not always quite sure what to make of Hellman.

“Every once in a while, he does things that irritate people who are ideologically conservative,” Mosher said. “He took an immense amount of heat for supporting the Reiner initiative [which would have taxed the rich to fund universal preschool].”

He’s given countless hours and untold riches to public schools, doing everything from endowing programs to knocking on doors in support of bond measures and often pushing his colleagues to do the same.

“My connection to him has been through the school district, and he’s really been a prince,” Sup. Tom Ammiano said. “He has even stopped calling me antibusiness. He put a lot of his energy into improving public education, and so he shows it can be done.”

Progressives don’t always agree with Hellman, but they feel like they can trust him and even sometimes win him over. “If you get a relationship with him and you’re always honest about the facts and your own interests, he will listen, and that’s pretty remarkable,” Mooney said. “He shows a remarkable openness to people who have good ideas.”

His appreciation for people of all stripes often causes him to reject the conventional wisdom of his downtown allies, who viciously attacked the Green Party members of the Board of Education a few years ago.

“Everybody said, ‘Oh my god, Sarah Lipson, you know, she’s a Green Party member, she’s the furthest left-wing person on the board,’ blah, blah, blah,” he said. “And I phoned her up one day and said, ‘I’d really like to meet you.’ And she’s — leave aside the fact that I think she’s a very good person as a human being, but she’s a very thoughtful, analytic person. Listening to her opinions about things that are happening in the school district, I really respect that. I mean, what do I know about what’s going on in the school district? I know more now than I did then. But just getting to know people, and maybe get them to understand my point of view, which isn’t that penetrating.”

Many of his efforts have received little publicity, as when he saved the Great American Music Hall from closure by investing with Slim’s owner Boz Scaggs and helping him buy the troubled musical venue. “There are things that you and I don’t even have a clue that he has done,” Nayman said.

“He’s an interesting guy,” Mosher said. “He’s one of a dying breed, a liberal Republican. He has a social conscience and wants to use his money to do good.”

Actually, calling Hellman liberal might be going too far. In the end, he’s still very much a fiscal conservative. He doesn’t support rent control, district elections for the Board of Supervisors, taxing businesses to address social problems such as the lack of affordable health care, or limits on condo conversions.

He also opposes the requirement that employers provide health care coverage, which downtown entities are now suing the city to overturn, telling us, “In general, I don’t think it’s a good idea, because I’m still, even in my aging years, a believer that the marketplace works better than other things…. Universal health care I do believe in, but what I worry is that it’s going to be another damned bureaucracy and that it’s not going to work.”

Yet he doesn’t believe wealth is an indicator of worth, saying of his fortune, “It is luck. Most of what you do you aren’t better at than everyone.”

He doesn’t believe in the law of the jungle, in which the poor and weak must be sacrificed in the name of progress. In fact, he feels a strong obligation to the masses.

As he told us, “My mantra for capitalism — and I didn’t invent this, but I think it’s pretty good — is that capitalism won, and now we need to save the world from capitalism.”

Hellman looms large over downtown San Francisco. His Financial District office offers a panoramic view of the Bay Bridge, Treasure Island, the Ferry Building, and the rest of the city’s waterfront. He likes to be personally involved with his city and the companies in which Hellman and Friedman invests.

“Usually I’m directly involved,” he told us in an interview earlier this year. “I’ve always said that I don’t like to go to the racetrack to just look at the horses. The fun of being a principal is that you’re standing at the track and not saying, ‘Gee, that’s a beautiful gray horse.’ You’re saying, ‘Come on, he’s got to win!’ So I’m almost always invariably invested in the companies that we work with, either individually or through the firm.”

Unlike many Wall Street barons who strive to control a company and bring in new executives, flip it for a quick profit, or liquidate it, Hellman said his firm tries to identify solid companies and help facilitate what they do. “We don’t usually take over companies. I always think that we provide a service to help the businesses,” he said. “Our job is kind of the opposite of owning a factory. Our job is to be sure the people who run the business feel like it’s their business.”

Similarly, he thinks capitalists need to feel a sense of ownership over society’s problems, something he thinks is taking root in San Francisco and other economic centers, particularly among the younger generations. “It’s about understanding how much suffering there is on the other side and trying to figure out how that suffering can be alleviated,” he said. “I think it’s partly good economics that as you bring people up, they’re able to do more for society. If nothing else, they’re able to buy more and shop at a Wal-Mart or something — probably someplace you would wildly disapprove of — and buy goods and services. But I don’t think it’s that narrow.”

Rather, he believes that everyone has a little progressive in them, a little desire to cooperatively solve our collective problems rather than pass them off to future generations. He sees a marked change from his days at Lehman Bros.

“Everybody was into making it,” he said, noting that many capitalists then did charity work as a means of attaining social status but focused mostly on the accumulation of wealth. But, he said, the new generation of capitalists seems genuinely interested in improving the world.

“The feeling for giving back in the next generation, in the now 25- to 35-year-olds, it’s just an order-of-magnitude difference than it was for people who are now in their 40s and early 50s,” Hellman said. “I’m very encouraged.”

Yet the flip side is that, in Hellman’s view, downtown doesn’t wield as much power as it once did. Low political contribution limits have made politicians less dependent on downtown money, creating fewer shot callers, while democratizing tools such as the Internet have broadened the political dialogue.

“For the last 30 years we have become an increasingly tolerant city, and that’s great,” he said. “In the old days, [the Guardian] complained about downtown, and yeah, no shit, downtown really did control the city. The benefit was as that slipped away, the city became fairer and more open to argument. So now downtown hardly has any power at all anymore. In a sense, that’s a good thing. Tolerance grew tremendously when the city wasn’t dictated to.”

That tolerance caused street fairs to pop up all over town and festivals such as Hellman’s Hardly Strictly Bluegrass to blossom in Golden Gate Park. Bike lanes have taken space from cars, events such as Halloween in the Castro have gotten crazier, street protests have gotten bigger and more frequent, and people have felt more free to fly their freak flags. And all that freedom eventually triggered a backlash from groups of isolated NIMBYs who complain and often find sympathetic ears at city hall.

“Sometimes you get the feeling in this city that in the land of the tolerant, the intolerant are king,” said Hellman, whose festival has endured noise complaints even though the music is shut off by 7 p.m. “There is a continuing pressure to do away with fun, because fun is objectionable to someone, [but] we need to think about not creating a new dictatorship of a tiny group of people whose views are not in line with the opinion of most of the people of San Francisco…. You should try to balance the good of a lot of people versus the temporary annoyance of a few people.”

Preserving fun and a lively urban culture is a personal issue for Hellman, who plays the five-string banjo and calls his festival “the most enjoyable two days of the year for me.” He helps draw the biggest names in bluegrass music and acts like a kid in a candy shop during the event.

“I feel very strongly that an important part of our culture is built on the type of music and type of performance that goes on at Hardly Strictly Bluegrass,” Hellman said. From parables set to music to songs of struggle and the old union standards, “that kind of music is the conscience of our country.”

He considers bluegrass a vital and historically important form of political communication, more so than many of the upscale art forms that the rich tend to sponsor. “I’m glad that we have first-rate opera, but it’s equally important that we foster the kind of music, lyrics, etc., that support all this,” he said. “Somebody once said that most of the great Western philosophy is buried in the words of country songs. And that’s closer to the truth than most people think. A big passion of mine is to try to help — and people have defined it too narrowly — the kinds of music that I think have a hell of a lot to do with the good parts of our society.”

Perhaps surprisingly for a Republican venture capitalist from the older generation, Hellman also considers the countercultural freaks of San Francisco to be some of the “good parts of our society.” That’s why he attended Burning Man for the first time last year and why, he said, he loved it, as much for the culture and community as for the art.

“I went to Burning Man because as much as possible I want to experience everything,” he said. “I want to just see directly what it’s like. I knew I’d enjoy it. I never doubted that. But what really overwhelmed me is it was 40,000 people getting along with each other. I mean, it’s pretty intense. There were dust storms and the world’s most repulsive sight: nude men over 70 just dangling along. But I never saw an argument. It was 40,000 people just enjoying each other.”

It was most striking to Hellman because of the contrast with the rest of society. As he said, “I’ve never seen this country so divided.”

While Hellman supports Schwarzenegger — calling him “a good advertisement to California” — he has nothing good to say about his fellow Republican in the Oval Office. He calls Bush’s tenure “an absolute four-star disaster.” The invasion of Iraq is the most obvious problem, he said. “Our war policy has slowly veered from being ‘Don’t tread on me’ to we’re going to jump on your neck.”

But his antipathy to certain aspects of the Republican Party began even earlier, when the religious right began to take over.

“I thought we were not that polarized during the Clinton administration. I was somewhat encouraged,” Hellman said. “Maybe there was an undercurrent of strident religious behavior or strident conservatism, but not the conservatism that I think the Republican Party used to stand for, which was fiscal conservatism instead of social conservatism. Somehow, there was this angst in this country on the part of religious people who I guess felt this country was being taken away from them, and they were the kind of stalwart or underpinnings of society. And they took it back.”

But in the wake of that disaster, Hellman thinks, there is an opportunity for reasonable people of goodwill to set the future political course. As Nayman said of Hellman, “He does believe there is a middle way pretty much all the time.”

Politically, that’s why Hellman gravitates toward the moderates of both major parties, such as Schwarzenegger and Newsom. He looks for people who will marry his economic conservatism with a regard for things such as environmentalism and social justice.

“It’s very tough to be a big-city mayor,” Hellman said. “[Newsom is] probably the best mayor we’re entitled to. He’s got this fantastic balancing act.”

Hellman said downtown hasn’t been terribly happy with Newsom for supporting striking hotel workers, getting behind Ammiano’s health insurance mandate, supporting tax measures, and generally letting the Board of Supervisors set the city’s agenda for the past two years.

“Their measure is he has 80-percent-plus popularity, and he ought to spend some of it. Well, they might not agree with what he would spend it on. And he’s been unwilling to spend very much of it. In some parts of the business community there is disappointment with him, but I don’t think that’s right. He didn’t hide what he would be like.”

What Newsom said he would be — a big reason for his popularity — is a mayor for the new San Francisco, a place where the city’s traditional economic conservatism has been tempered by a greater democratization of power and an ascendant progressive movement that expects its issues to be addressed.

“I don’t like people who are intolerant,” Hellman said. “I don’t like people that are telling you something to get some outcome that, if you understood it, you probably wouldn’t want. I like people that are passionate.”

Asked, then, about Sup. Chris Daly, the nemesis of downtown and most definitely a man of strong political passions, he said, “I admire Chris Daly. I disagree with Chris on a lot of things he believes, but there are also probably a lot of things I would agree with Chris on. And I respect him.”

Hellman is the rare downtown power broker who wants to bridge the gap between Newsom — whom he calls a “moderate to conservative establishment person” — and progressives such as Daly, Mooney, and the Bicycle Coalition. The middle ground, he said, is often a very attractive place, as it was with Healthy Saturdays.

“I’m sure you spend time in the park on Sunday, and it’s a hell of a lot nicer in there on Sundays than Saturdays,” Hellman said. But even more important to him, this is about integrity and being true to what Golden Gate Park garage supporters promised back in 2000.

“They were proposing Saturday closing at that time, which I’ve always thought was a good idea,” he said. “And we made a commitment to them, or I thought we made a commitment to them, that let’s not have Saturday closure now, but as soon as the garage was done, we’d experiment with Saturday closure.”

We brought up what Fine Arts Museums board president Dede Wilsey has said of that pledge, that it was under different circumstances and that she never actually promised to support Saturday closure after the garage was completed.

“There’s a letter. She put it in writing,” he said of Wilsey. “She signed a letter on behalf of the museums saying that when the de Young is done, we should experiment with Saturday closings.”

The Bike Coalition’s Shahum said that even when Hellman was an enemy, he was a reasonable guy. But it’s in the past couple of years that she’s really come to appreciate the unique role he plays in San Francisco.

“He showed decency and respect toward us,” she said. “We never saw him as a villain, even though we disagreed completely. Later he really stepped up and has been a leader on Healthy Saturdays. And what I was most impressed with is that he was true to his word.”

Supervisor McGoldrick, who sponsored the measure, echoed the sentiment: “Hellman was certainly a man of his word who acted in a highly principled way.”

So why does Hellman now stand apart from the downtown crowd? Has he parted ways with the economic and cultural power brokers who were once his allies?

No, he said, “I think they parted ways with me.” *