In the News - Full Article
Chicago Tribune
NO TERM LIMITS ON THOMPSON'S CLOUT;
Jim Thompson left the Illinois governor's mansion more than a decade ago, but he still wields influence throughout the state and nation as chairman of law firm Winston & Strawn, as a lobbyist and as a corporate director
By Ameet Sachdev, Tribune staff reporter.
At 67 years old, Jim Thompson should be retired from Chicago blue-chip law firm Winston & Strawn.
But in March, partners amended the firm's bylaws for the second time to extend his term as chairman for three more years.
"I have no plans to retire from anything," said Thompson, who is pushing Winston to become a global powerhouse. "My father worked until he was 82."
The former four-term Illinois governor also is a lobbyist, wielding clout on issues that matter to Chicagoans, from the renovation of Soldier Field to electricity bills.
Then there is Thompson the corporate director. He brings his government experience and connections to help companies navigate tricky governance and regulatory issues. Thompson serves on six boards, down from 10 a few years ago, including the parent company of the Chicago Sun-Times.
If that were not enough, he is also on a panel investigating the Sept. 11 terrorist attacks. He was appointed by U.S. House Speaker Dennis Hastert (R-Ill.), a friend. His network crosses party lines, too. Democratic Gov. Rod Blagojevich named him co-chairman of his transition team before taking office.
"Jim Thompson's at the top of the list of power brokers," said state Sen. Kirk Dillard (R-Hinsdale) who once served as the former governor's legislative affairs director. "If you have an issue that your company depended on, you go to Jim Thompson."
That does not mean he always prevails.
Consider what happened with Philip Morris. The U.S. arm of Altria Group Inc., the world's largest tobacco firm, threatened bankruptcy this spring after it lost a $10.1 billion class-action verdict in a Downstate court over "light" cigarette sales.
The judge wanted the company to pony up $12 billion before it could appeal--a demand that the company argued was outrageous. While Philip Morris pressed to lower the bond, the company turned to Thompson to help pass a bill in Springfield that would cap appeal bonds at no more than $100 million. Philip Morris also hired a Chicago public relations firm run by Thompson's wife, Jayne.
Thompson wrote a memo to legislators noting that the state already was in financial trouble and that a Philip Morris bankruptcy would threaten the hundreds of millions of dollars that flow into the state's coffers annually from the 4-year-old nationwide tobacco settlement.
The bill never made it out of Senate committee. Thompson's take: "The legislature was looking to the courts to spare them."
Sure enough, the judge lowered the bond to $6.8 billion. Yet on orders from an appellate court, the original bond was reinstated this summer. Philip Morris now is asking the Illinois Supreme Court to review the bond, and it may seek legislative relief this fall. Thompson is mapping strategies for a lobbying push with his client.
His chairmanship of Winston & Strawn, long a legal powerhouse, augments his stature as a lobbyist. But it also presents potential conflicts of interest.
In May, Thompson stepped down as a director of Prime Group Realty Trust, a Chicago-based real estate investment trust, after some new board members questioned his independence. Winston & Strawn has been Prime Group Realty Trust's primary outside counsel since the trust was founded in 1982. In 2002, the law firm earned about $1.7 million in fees from Prime Group.
As a former politician once considered presidential timber, Thompson was in great demand as a corporate board member after he left the governor's office in 1991. Companies value his broad experience, different perspective and connections.
"He has many professional relationships all over the globe," said William Goodyear, chairman and chief executive of Chicago-based Navigant Consulting Inc., where Thompson has been a director since 1998. "If you're trying to get access to somebody, he can be helpful in getting doors open."
At every step along Thompson's career, he has forged important relationships. When he was U.S. attorney in Chicago in the early 1970s, for instance, he hired or promoted a number of lawyers who have gone on to become prominent in their own right. Sam Skinner became U.S. transportation secretary; Tyrone Fahner, chairman of Chicago law firm Mayer Brown Rowe & Maw; Dan Webb, a partner at Winston & Strawn and one of the country's top litigators; and Ilana Rovner, a judge with the 7th U.S. Circuit Court of Appeals.
"I would walk off a ledge for him," Rovner said.
Winston & Strawn provides legal services to Navigant and two other companies on whose boards Thompson sits: FMC Corp. and FMC Technologies. Officials at all three companies said Winston provides limited legal work--in one case it is paid less than $1,000--and therefore his independence is not in question.
Thompson's oversight as a director is being questioned at one firm, Hollinger International Inc., owner of the Chicago Sun-Times and other papers.
Hollinger's biggest shareholder, New York investment firm Tweedy, Browne Co., said $73.7 million in payments to the chief executive and other executives after the sale of some newspapers should have gone to the company or shareholders. Hollinger has since named a special committee to look into the transactions that were approved by the audit committee, headed by Thompson.
While his role at Hollinger is being scrutinized, Thompson also has been a corporate investigator. The former U.S. attorney was hired last year as special counsel by Ullico Inc., an insurance and investment company, to investigate that company's stock sale and repurchase programs offered to union officials who were company directors and officers.
"I just wonder what knowledge he brought to that situation that was lacking here [at Hollinger]," said Laura Jereski, an analyst at Tweedy, Browne.
The irony of the situation is not lost on Thompson. But he defends the payments to the Hollinger officials as "appropriate."
"If you look at the issue of corporate governance these days, there are few corporations in America who have not been questioned," he said. "I think people will conclude we did our job here [at Hollinger]."
Art of the deal
As when he was governor, Thompson's forte is making deals.
In 1999, Blackhawks owner William Wirtz hired Thompson and several other lobbyists to promote a bill to protect Illinois liquor distributors from losing business to foreign companies. Wirtz also owns Judge & Dolph Ltd., one of the state's largest liquor distributorships.
Thompson made the rounds inside the Capitol for days on end. Without the bill, he argued, jobs were at risk. He also showed legislators how many Judge & Dolph workers lived in their districts.
"Jim knows which buttons to push," Dillard said.
But Thompson downplayed his role. "I was just one more guy."
A federal judge later ruled the legislation unconstitutional.
Thompson's stamina--and strategy of working all sides--also was on display in 1997 when a bill to deregulate the Illinois' power industry stalled in the Senate.
Some felt there were simply too many competing interests--consumers, utilities, regulators, competitors and labor--to reach a compromise. Negotiations moved to Chicago's southwest suburbs where the bill's key sponsor, Sen. William Mahar Jr. (R-Orland Park), was recovering from injuries suffered in a car accident.
Thompson jumped into the fray, going from conference room to conference room in a suburban hotel where the principals had gathered. At one point, Senate Republicans held a private meeting, or "caucus," and Thompson joined them. But when Gov. Jim Edgar's representative asked to join the meeting, he was denied.
"There was deference paid to Thompson, as if he were still governor," said Martin Cohen, executive director of the Citizens Utility Board, a consumer watchdog group.
"I was in the legislative caucuses for 14 years," Thompson said. "After a while, you develop acquaintances that last."
These days, Thompson says he is devoting less time to lobbying and more time to running the law firm.
His Winston offices display all the trappings of power. There's a picture of him throwing out the first pitch at the new Comiskey Park in 1991. A hand-carved Chinese screen that once stood in the entrance of his favorite Chinese restaurant on South Wabash Avenue. The nameplate outside his office reads "Governor Thompson."
The walls are covered with artwork, mostly 20th Century pieces by local artists depicting Chicago scenes, such as Navy Pier and Oak Street Beach. Look outside a window to the west, and there stands another landmark symbolizing his contributions: the James R. Thompson Center that houses state offices in the Loop.
He has been at the firm since January 1991 when he decided not to seek re-election to a fifth term as governor.
He joined Winston because he was promised he would succeed chairman Thomas Reynolds Jr. Two years later, Thompson took over.
Rough start as chairman
His first years were not easy. The firm shed 44 partners and associates as a result of the economic downturn. Then came another crisis.
In 1994, the firm's former managing partner, Gary L. Fairchild, pleaded guilty to cheating Winston and several clients of more than $750,000 over nearly a decade. The money was used to cover personal and family expenses. Fairchild served 21 months in prison.
For dealing with the havoc created inside the firm and with clients, Thompson and managing partner Jim Neis paid themselves bonuses, angering several partners. That Thompson had a personal car and driver, which were perks afforded no other partner, already had wrinkled noses.
Since then, Thompson and Neis have not paid themselves bonuses, said Thompson, who declined to disclose his annual compensation. His hourly rate is $620.
In the meantime, Thompson and Neis are pressing to make the firm into a global powerhouse. Thompson envisions only 20 to 30 super law firms serving multinational corporate clients within 10 years.
"Bigger is not only better, bigger is imperative," is Thompson's mantra.
Since he arrived, Winston has added three international offices, two in California and 600 lawyers. Now, Thompson seeks a merger partner in London, and he wants to add 300 lawyers in three years, boosting the firm to 1,200 lawyers worldwide.
While the expansion has not gone as quickly as Thompson would have liked, the growth has paid off. Revenues have soared 58 percent since 1998, to $442 million last year. Its 176 equity partners generated an average $810,000 in profits, up 10.2 percent from a year ago, according to American Lawyer magazine. Thompson didn't quibble with those figures.
For him, running the firm is similar to running the state.
"Whether at a law firm or with law school faculty or a business, there's politics everywhere," he said. "It's how the process works."
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James R. Thompson
Age: 67
Personal: Wife, Jayne; daughter, Samantha.
Education: University of Illinois; Washington University; Northwestern University Law School, 1959
Career: Chairman, Winston & Strawn, 1993-present; partner, 1991-93; Governor of Illinois, 1977-91; U.S. Attorney, Northern District of Illinois, 1971-75; First Assistant U.S. Attorney, 1970-71; Chief, Department of Law Enforcement and Public Protection, Illinois Attorney General's Office, 1969-70; Associate Professor, Northwestern University Law School, 1964-69; Assistant State's Attorney, Cook County State's Attorney's Office, 1959-64.
