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Peter B. Lewis: This lone ranger has nothing to hide
from the Plain Dealer, September 29, 2002
Steven Litt
Plain Dealer Reporter

As a boy growing up in Cleveland Heights during World War II, Peter B. Lewis loved listening to "The Lone Ranger" on the small plastic radio in his bedroom.

Much later, when he faced adversity as the head of Mayfield-based Progressive Corp., the nation's fourth-largest auto insurer, he began to think of himself as the Masked Man.

"I developed an image over the years," he said. "I'd be in a canyon with rocks behind me and some big boulders in front of me, and I'd be down, crouched, squatted, with both guns out, thinking to myself, They don't want to f- with the Lone Ranger.' That was my own, and still is my own, internal battle cry."

Lewis' guns are out again, and they're blazing.

Last June, he opened fire, figuratively speaking, on Case Western Reserve University, calling it "a diseased university that is collapsing and sucking Cleveland into a hole with it."

It was a moment of stunning candor in a Midwestern industrial city where civic and business leaders adopt a code of silence about anything remotely controversial.

But it was typical of the 68-year-old chairman of Progressive.

He believes fiercely that good things come from honesty, and speaks openly about his emotions, his divorce, his use of marijuana and his belief that Cleveland is in decline because it has too many lawyers in civic leadership.

"Lawyers are functionaries hired by the people who do something," he said, "but we've got a situation where they're running the town. It's absurd. Those aren't the people who drive creativity. Their whole job is to keep people from doing things."

The immediate focus of Lewis' tirade is the university's new home for the Weatherhead School of Management, a shiny, curvy, steel-clad statement by the internationally renowned architect, Frank Gehry, whose work Lewis has supported for years.

Lewis, who donated $36.9 million for the business school building named for him, said the project has been mismanaged, and that he sees it as a sign of deeper troubles at CWRU. To drive this home, he announced in June that he would boycott all Cleveland charities until the university's board of trustees is restructured. Later, he said he wanted the size of the board cut in half and its membership infused with new blood.

The boycott is Lewis' way of showing how crucial the university is to the city's future - and how poorly he thinks it's doing after four years of high turnover in administrators, turmoil among trustees and declining academic rankings.

CWRU officials dispute Lewis' claims about the building, although they applaud his concern, and say they are working on changes in the university's governance that they hope he will appreciate.

Lewis, meanwhile, remains open to a reconciliation, and plans to participate in the Oct. 9 dedication of the building. But he hasn't budged from his position.

The boycott is typical of Lewis' style - a mix of controlled aggression, startling honesty, and a relentless desire to embrace risk and change. It's also the latest expression of his alienation from entrenched power in Cleveland, a club he has never been able to join, despite being one of the most successful businessmen in the city's history.

"I have felt marginalized, disdained, excluded, laughed at," he said.

Lewis believes Cleveland shuns entrepreneurs like himself, and he thinks that's one reason the city is in decline. Growing up as a proud Jew in a city he saw as suffused with a genteel anti-Semitism has added to his sense of otherness.

"I have this theory that Jews are put on this earth as a societal irritant," he said, "which is why everybody tries to squash us all over the place. Which connects with my wanting to do things differently."

In search of superlatives

For Lewis, doing things differently means constantly raising the ante in a quest for excellence and superlatives.

"I've always thought Peter was a visionary," said his former wife, Toby Lewis. "I'm not sure I'd call him an intellectual, but a business visionary, yes. Peter has this attitude that it can always be better, and it could be bigger."

When Lewis led Progressive as its president and CEO, he wanted it to be the best company in the world. That desire was so deeply rooted in his self-image that he even related it to his own virility. At one company gathering, he said that he planned to keep working until the "Rockefeller event," a reference to reports of Nelson Rockefeller dying in the arms of a 25-year-old lover.

But a severe health problem forced Lewis into semi-retirement. In 1998, after suffering for years from a congenital vascular problem, he had his left leg amputated below the knee. He has learned to walk with a prosthesis, which he calls less of an inconvenience than wearing glasses.

Now that Lewis has handed over the reins at Progressive to Glenn Renwick, his hand-picked successor, he is focusing his energy elsewhere. He is writing a memoir, giving away his money and overseeing the Solomon R. Guggenheim Museum in New York, which he serves as chairman.

The Guggenheim has a collection and an endowment smaller than the Cleveland Museum of Art's. But under Director Tom Krens, it has turned itself into a global franchise, circulating blockbuster shows among five branches in four countries.

Lewis dreams of building yet another branch, a $1 billion museum on piers in the East River in Manhattan, next to the Brooklyn Bridge, to be encased in a swirling cloud of steel ribbons designed by Gehry. He has pledged up to $250 million for what he calls "the ultimate quixotic project."

Such dreams would be easy to dismiss as mere grandiosity if not for Lewis' track record.

Progressive, an insurance company co-founded by his father, Joseph Lewis, had 40 employees when Lewis started working there full time in 1955. Today, it has 13,500 employees in 375 offices nationwide, with another 8,000 workers in 14 buildings on either side of Interstate 271 east of Cleveland.

That growth occurred while other local corporations went bankrupt, merged out of existence, or moved headquarters out of state. And it meant that Lewis, who had trouble paying his bills at age 35, became wealthy beyond his wildest dreams.

His achievements confirm his conviction that he has been supremely rewarded for being an iconoclast and that he has something to contribute to the hometown he loves, even if it means closing his wallet.

Those feelings have coalesced around CWRU.

"It's become the only focus, the only thing in Cleveland I think about, basically," he said.

A complicated life

Given the small amount of time Lewis spends in Cleveland - fewer than 50 days last year - it can be hard to catch up with him.

But on a sunny morning in June, he made time for a conversation at his Beachwood penthouse, seating himself at the glass dining table, next to windows overlooking a sweep of sky and trees.

On the walls were paintings by blue-chip artists including Larry Rivers, Joan Mitchell and Alex Katz.

Dressed in a collarless black shirt and black slacks, he wore a bohemian uniform that would make him look at home anywhere in the art world.

Lewis, a weightlifter and swimmer who keeps his thinning white hair cut short, is 6 feet 1, lanky and muscular.

"Two hundred pounds of coiled steel," as he put it.

At 68, he said he's never been in better shape, despite the amputation. As he often does, he slipped his prosthesis off for comfort and propped his leg against the table.

He joked that the remaining inches below the knee "are the most important 7 inches in my life."

The amputation hasn't slowed him down. He zips from his penthouse in Beachwood to his apartment in New York and to a house in Aspen, Colo., in his private jet, a nine-seat Challenger.

Nearly half the year he cruises the Mediterranean or the Caribbean aboard the aptly named Lone Ranger, a 255-foot motor yacht built in Germany in 1973 as an oceangoing tug.

The boat, which he bought in 1997 for $16.5 million, sports a luxurious master suite, four guest cabins, a swimming pool and other accouterments. It symbolizes Lewis' love of freedom and his belief that it would be idiotic not to enjoy his wealth.

On board the Lone Ranger, Lewis works out, scuba-dives, reads, e-mails associates, watches movies and spends time with family members or friends including Gehry and former U.S. Sen. Robert Kerrey, now president of the New School University in New York.

A crew of 18 is on hand to set up parties, provide rubdowns, prepare meals, anything Lewis desires.

"You have no idea how easy and luxurious it is, because these 18 people on the boat have only one objective: To make me happy."

A life on the rise

Lewis lives a life he never could have imagined growing up in a middle-class family in the suburbs east of Cleveland.

As the oldest of four children, Lewis was the dutiful son who did his homework, got good grades and tried to please his parents.

He calls his childhood "idyllic." But he remembers the combative spirit his father developed in response to limits once set by Cleveland's WASP hierarchy, such as being barred from joining the prestigious Union Club.

"His attitude about being discriminated against was, f- 'em. Let's fight 'em. Beat 'em," Lewis said.

Lewis started working in Progressive's office at East 36th Street and Euclid Avenue at age 12, filing papers and stuffing envelopes. Even then, he dreamed of making his future at the company.

After graduating from Cleveland Heights High School, he got into Princeton University, where he awakened to standards of achievement that far exceeded any he had known in high school.

He loved college, and did well. But his happiness was shattered a year later when his younger brother, Jonathan, was killed at age 16 in a car accident.

Peter's relationship to Jonathan was complicated. Jealous of his younger brother's good looks and his close relationship with their mother, Peter bullied him mercilessly.

But he was tortured by guilt over not having hugged Jonathan the August morning he departed on a fatal fishing trip to Canada. In a draft of his memoir, Peter wrote that if he had delayed his brother's departure, even for a few seconds, his car might not have collided that night with a truck.

The trauma of Jonathan's death was compounded two years later when Lewis' father was diagnosed with a malignant brain tumor and told he had weeks to live.

After returning from the Mayo Clinic in Minnesota, Joseph Lewis summoned Peter to his bedroom and told him he would soon become head of the family. Moreover, he could no longer guarantee Peter's future at Progressive.

"I had gone up those stairs a dependent young man," Lewis said. "I grew up in 10 minutes."

A year later, when Lewis graduated from college, his father's partner, Jack Green, gave him an accounting job. But it was unclear whether it would lead anywhere.

That changed a decade later, when Green scaled back his involvement in Progressive. Lewis and his mother, Helen, borrowed $2.5 million to buy the company, pledging their majority stake as collateral.

Lewis revved up Progressive by capitalizing on insuring high-risk drivers. He created an innovative pricing system, and came up with consumer-friendly ideas such as free quotes on competitors' rates and instant claims service. Lewis hired young, energetic workers, gave them enormous leeway in decision-making, and established a dress-down culture based on creativity, hard work and endless quantitative measurement.

"We're here to perform," he said. "And people who don't, go."

Lewis feels his success was based on core principles, honesty being the most important.

As a young executive, Lewis had tried what he calls "chiseling." When customers canceled their policies, he didn't repay their premiums until they asked.

He quickly decided it was immoral and unethical, and he stopped the practice. Later he became fanatical about creating objective standards for gauging Progressive's performance.

He contrasts the company's record of disclosure to those of corporations - Tyco, WorldCom, Enron - that recently imploded in accounting scandals. And he's proud that in 2001, Progressive laid claim to being the first corporation in America to report results not just quarterly, but monthly.

Honesty has been just as central in Lewis' personal life. But as in business, he first allowed himself a taste of deceit.

After cheating on his wife and living what he called the "big lie," he told her: "I can't sneak around. I've discovered I cannot do this. It's killing me."

End of a marriage

The two had met in 1953. Lewis, who had just finished his sophomore year at Princeton, immediately fell for Toby Devan, the smart, beautiful daughter of the owner of a a leather-goods business from Gloversville in upstate New York.

They married soon after he graduated from Princeton, and raised three children: Jonathan, Ivy and Adam Joseph.

In three interviews during the past year, he declined to discuss the children, out of concern for their privacy. But in a draft of his memoir, he wrote that his workaholic lifestyle turned Progressive into the family's fourth child, and that "if you ask Ivy, Jonathan and Adam, they might say they got short shrift."

Lewis expected married life to be blissful. But by age 48, he neither wanted to be monogamous nor to hide the fact.

"When he took over Progressive, he was so successful, and it was pretty heady stuff, and he thought, 'My God, I can have any woman I want,' " Toby said.

After their divorce in 1981, Peter worked to maintain a friendship, sending Toby lavish gifts, including a double portrait of her by Andy Warhol, which now hangs in her Shaker Heights home. (Peter retains half-ownership in the portrait.)

Then, in 1985, Peter asked Toby, who then worked at the Cleveland Center for Contemporary Art, to take over the Progressive art collection, saying she was the only person he could trust. She has since earned a national reputation for her sharp eye and advocacy of emerging artists.

"We both recognize today that we have each flourished as a result [of the divorce] and done things and achieved things and experienced things we never would have done together," Lewis said.

Toby feels that staying close to Peter has made perfect sense.

"How can you hate somebody you've lived with and had children with?" she said. "We were together for 25 years."

A sense of exclusion

Lewis repaired his relationship with his ex-wife through hard work. But he couldn't mesh with Cleveland's conservative civic culture.

In private, Lewis is warm, funny and down to earth - qualities summed up by the Yiddish word "heymish." He cares deeply about his friends and frets for years over whether he has hurt other people's feelings.

But in public, his ego and flamboyance tend to dominate, which may have worked against him in his hometown.

If there's a moment that sums up his sense of exclusion, it happened in the late 1980s, when Lewis convened a group of civic leaders at his penthouse apartment to show off his brainchild, a model of the skyscraper headquarters he wanted to build for Progressive in downtown Cleveland, overlooking Lake Erie.

The 50-story tower would have risen on platforms over the railroad tracks north of Cleveland's City Hall. It would have connected downtown to the lakefront and pumped 2,000 to 3,000 skilled workers into downtown.

Led by Gehry, the design team included the leading contemporary artists Donald Judd and Richard Serra. Nothing as bold had ever been proposed in Cleveland.

But as the other power brokers mingled at the party, Lewis said that Richard Pogue, managing partner at the influential law firm Jones Day Reavis and Pogue, turned to him and asked, "Where do you work?"

Lewis was infuriated. "I wanted to throw him down there," Lewis said, pointing from the balcony to the steel-tiled floor of the living room below. "I almost did."

Pogue doesn't remember the incident and can't imagine why he would have asked such a question. He said he tried to mediate an agreement between Lewis and City Hall over the project. Lewis remembers no meetings with Pogue.

The project died, Lewis said, for lack of support from former Mayors George Voinovich and Michael White and former Gov. Richard Celeste. Lewis has no regrets and harbors no ill feelings toward the politicians. He is happy that Progressive expanded its headquarters off Wilson Mills Road in Mayfield.

But the alleged snub from Pogue epitomizes how Lewis feels he has been "cut to my face" in his hometown.

At times, Lewis has contemplated lashing out publicly to vent his emotions. In the early 1990s, after the demise of the skyscraper, Lewis asked Gehry to continue working for him on plans for a sprawling, wildly innovative house on a wooded, nine-acre site in Lyndhurst.

Lewis pulled the plug on the project after 10 years of work and $6 million in design fees when the estimated construction budget had reached $82 million.

But before that point, he had planned to scatter the landscape around the house with works of art. One was to be a 75-foot-high sculpture of a golf bag by Claes Oldenburg and Coosje van Bruggen, creators of Cleveland's "Free Stamp."

Lewis viewed this not only as a work of art, but as a way to extend the middle finger to the Mayfield Country Club next door, where he had suffered a hurt as a child.

When he was 12, a friend had asked him to the club for a swim. The next day, the friend told Lewis that his parents had reprimanded him for being so kind to a Jew.

A Rockefeller-style rift

Critics of Lewis - none of whom would speak for attribution - say that he can be erratic, dictatorial and hard to work with, and that he comes with baggage. Some have likened his boycott of Cleveland charities to blackmail.

But friends and admirers say he has a point about the way he has been treated.

"Peter has had a life of being snubbed and stiff-armed by the Cleveland establishment, and it's not fair," said Michael Horvitz, a lawyer who serves on the boards of CWRU and the Cleveland Museum of Art. "Peter wants to be loved and feels he has a lot to offer this community, and he's right about that. But I think he feels the city wants him only for his money."

Lewis' rift with Cleveland looks like a reprise of the chasm that opened a century ago between the city and John D. Rockefeller, the founder of Standard Oil. After a bitter dispute over taxes, Rockefeller left Cleveland and established himself in New York.

The loss to Cleveland was incalculable. Rockefeller and his family lavished millions on universities and museums elsewhere. A fraction of that investment could have had a huge impact on Cleveland.

Lewis' life is on a similar track.

Over the past decade, he has donated more than $50 million to causes in Northeast Ohio, including the new building at CWRU.

But he has been more generous elsewhere, donating $115 million to Princeton and $50 million to the Guggenheim, not to mention his $250 million pledge for the proposed Guggenheim branch in Manhattan.

"The reputation he has in New York is starting to accrue," said Krens, director of the Guggenheim. "It's something he can grasp and use or not. And he's got the luxury at this point of doing whatever he wants."

Published estimates have put Lewis' net worth at $1.4 billion. But he said the number is closer to half that amount, because he has given away so much Progressive stock.

Lewis' wealth has served as a platform for larger ambitions in politics and art.

His chief political project today is a national effort to roll back the war on drugs. With billionaires George Soros and John Sperling, he is funding a series of state initiatives, including Ohio Issue 1, which would replace mandatory sentences with treatment for some nonviolent drug offenders.

Lewis believes drug laws are racist because they punish blacks more frequently and severely than whites. And as a libertarian, he feels people should be free to pursue happiness if they harm no one else. He wants drugs legalized and regulated, like alcohol.

"As long as you're not hurting somebody else, who the hell cares?" he said. "Kill yourself. God bless you."

Lewis, a longtime user of marijuana, was called a "functioning pothead" by Fortune magazine.

This doesn't faze him in the least. "Marijuana is, for almost everybody who uses it, a positive," he said. "It improves the quality of life, it improves performance. It improves."

Stockholders and Wall Street analysts have overlooked Lewis' extracurricular activities because they had no effect on Progressive's stellar performance.

But in the winter of 2000, his affection for cannabis was a source of personal embarrassment. Exhausted from surgery for a double hernia and from dealing with Progressive's Y2K preparations, Lewis took a commercial flight to New Zealand to watch the America's Cup races from his yacht.

Drug-sniffing dogs singled him out when he tried to pass through customs at the Auckland airport with pot in his briefcase. He spent a night in jail, but was released after admitting guilt and donating money to a local charity.

In an interview last year, he said the arrest was "a crisis in my life. I was ashamed of myself, disappointed in myself, and I learned something about myself, learned that I have the capacity to be stupid and arrogant."

But as with so many experiences, Lewis has also learned to look back with humor.

He recently regaled a visitor with an account of the arrest, complete with a strip search, a body-cavity search and the fact that he burst into tears when a policeman told him he'd have to spend the night in jail.

"I'm 66, I've just had my leg amputated, and I have to go to jail? I even waved my stump at him," Lewis said.

A patron of creativity

So far, Lewis' push against drug laws has been inconclusive. But his support of contemporary art and architecture has had considerable impact.

Progressive's annual reports, featuring commissioned artworks by contemporary artists, have won numerous awards. And the Progressive art collection, with 5,000 objects, is widely recognized as one of the finest of its kind.

Lewis views the collection as an investment in building a culture of creativity at Progressive. But when it comes to explaining his personal reactions to art, Lewis is at a loss for words. He got D's in the two art history courses he took at Princeton.

Today, Lewis enjoys being surrounded by contemporary art. But most of all, he likes being close to artists and architects, because he is fascinated by their creative processes.

"One of the reasons Peter Lewis follows me around so much is that there's a freedom he envies, and he tells me how famous I am," Gehry said. "But he wonders, 'How does this guy get to be so famous designing these pishy little buildings?' "

Lewis met Gehry at the Cleveland Center for Contemporary Art in 1985, and soon commissioned him to design the house in Lyndhurst.

Over the next decade, as Lewis asked the architect to add ever more lavish features and experimental forms, the budget grew and grew.

Lewis never seemed to care. He loved visiting Gehry, and brought along a film crew, thinking it would be important to record every encounter.

Although the house was never built, Lewis' support for Gehry's experimentations led to breakthroughs on other signature projects, including the widely acclaimed Guggenheim branch in Bilbao, Spain. Evidence is already piling up in books and exhibitions that Lewis will be remembered as one of the great architectural patrons of his time.

After having failed to build either the downtown skyscraper or the house in Lyndhurst, Lewis was determined to follow through with the building at CWRU, even though this meant he had to increase his pledge from $15 million to $36.9 million as the project's budget rose from $25 million to $61.7 million.

Although Lewis was angry about cost increases on the building in Cleveland, his friendship with Gehry is stronger than ever.

The Oct. 9 dedication of the Peter B. Lewis Building could either be a reconciliation between Lewis and the university or an event of unparalleled awkwardness, like sitting down to dinner with an estranged couple.

Lewis craves a confrontation with CWRU trustees. He said he "begged" to meet with the full board, but was turned down, despite having made the biggest single donation in the university's history. He even suggested privately last summer that he could turn the university around in six months if he were named chairman and was given sweeping powers.

Now he calls that idea "an egomaniacal, fat-headed, arrogant thing to say when people can't stand me."

University trustees say they will soon vote on changes in governance. But they also make it clear that those proposals were in the works long before Lewis raised a ruckus.

Lewis has seen a draft of the proposed changes but summed up his response by making a rude noise with his lips.

"They're trying," he said. "But they don't understand."

So is he open to changing his mind about CWRU and Cleveland?

"I can't predict what I'm going to do in the future. But I know where my head is at, and I know where I want to make my point."

For now, Lewis thinks it's symbolic that his Beachwood penthouse and the Progressive headquarters are both about a dozen miles east of downtown, next to an interstate highway. He's on the edge, not in the center.

But those who know him say he will never be able to sever ties with his hometown.

"I think he'll die a Clevelander," says former Sen. Kerrey. "You may not get as much of his money as you'd like. But you won't lose him."

To reach this Plain Dealer reporter:

slitt@plaind.com, 216-999-4136

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