Ira Rennert
Encyclopedia
Ira Leon Rennert is a American investor and businessman. Using junk bonds to finance his acquisitions of companies, often in bankruptcy, Rennert has amassed significant holdings in basic, cyclical industries, such as mining and metals, including lead smelters, coal mines, magnesium producers and vehicle assembly lines. Today he controls one of the nation’s largest privately held industrial empires, and his personal fortune is estimated to be $5.9 billion.
. He earned his master's degree from New York University's Stern School of Business
, where he is currently on the Board of Overseers.
"Due to market conditions, the firm found itself in violation of the net capital rule
and Rennert raised capital and put it into the firm to bring it into compliance. However, the firm once more fell beneath the net-capital requirements and he shut the company down."
Rennert was a consultant for the next eleven years (Who’s Who entry) and entered the private equity market. His role was to put together small leveraged buyouts of unwanted companies. In 1975 he bought a sewing machine maker, and a few years later purchased Covert Marine Inc. of Kansas City (forced into bankruptcy in 1992), followed later by a group of hardware stores and lumber companies. In the early 1980s he joined the board of Integrated Resources Inc, a company financed by Michael Milken
where he learned the art of raising junk bonds to finance additional acquisitions.
—was successful selling high-risk, high-yield bonds issued by struggling or undercapitalized companies. Before Milken, these were considered ‘junk’ and most investors avoided them, but it was Milken’s innovation that formed a strategy of using these junk bonds to provide capital for corporate raiders to conduct hostile company takeovers. Integrated Resources raised $2 billion in junk bonds financed by Milken but ultimately collapsed amid scandal and defaulted on $1 billion of bond debt in May 1989 (c.f. the 1991 book Den of Thieves
about the junk bond scandal). As an outside board member, Rennert was not dragged down by the collapse and began to raise junk bonds on his own behalf to finance acquisitions for Renco.
Rennert's strategy for building Renco was to acquiring all the shares of struggling companies and to finance the acquisition by issuing junk bonds. Along the way, Rennert paid substantial dividends out of the business to himself. In a series of junk bond issues since 1995, Renco’s subsidiaries have borrowed an estimated $1.1 billion and transferred $322 million (29 percent) to Renco Group, according to documents filed with the SEC. Backed by blue-chip mutual funds and hedge funds such as John Hancock Funds LLC and Putnam Investment Management LLC, Rennert now didn’t have to invest much of his own money. His purchase of AM General in 1992 was bought with a down payment of just $10 million. In 1994, Fluor Corp. of Los Angeles sold Doe Run to Renco, with the latter paying $52 million in cash, and approximately $60 million in debt payable over an eight-year period. In 1997, Doe Run went on to pay $247 million for a similarly environmentally troubled lead smelting complex from the Peruvian government, as well as borrowing more money to service its Fluor debt. And in 1998, Doe Run sold $305 million in junk bonds for financing its Peruvian acquisition as well as more lead mines in Missouri (according to Doe Run filings with the SEC). Since 1998 most Renco financings have been bank debt.
, for a price tag of $140 million, of which half was paid for with debt. This company then became WCI Steel Inc., and Rennert was able to ultimately sell bonds totalling $300 millon, paying $108 million of the proceeds as a dividend to Renco. In 1998, Renco Steel Holdings Inc. was created to serve as a holding company for WCI. The holding company then sold $120 million in junk bonds, this time paying an additional $100 million dividend to Renco.
After a strike in 1995, Rennert, as WCI Steel’s chairman, agreed to create a new pension plan for the 2,000 employees and retirees whose old plan had collapsed in the previous bankruptcy. In 2003 when WCI’s $300 million of notes came due, the company was unable to pay and declared bankruptcy. With steel prices rising, an investment group led by Rennert, came forward with reorganisation proposals that pledged to keep the WCI pension plan going, reviving it by investing $66 million over four years, leaving a $100 million plus shortfall. The plan emerged as the front runner, but ultimately Rennert's proposal was blocked by Harbinger Capital
, the leading holder of the notes, and Harbinger acquired the business. At the time of the bankruptcy, if the pension plan had been terminated, the Pension Benefit Guaranty Corporation
calculated a $117 million shortfall. Despite losing the company, Renco agreed to assume responsibility for the existing pension plan, with ongoing support from WCI. Newspaper reports speculated that the Pension Benefit Guaranty Corporation had threatening to put a lien on Rennert’s personal estate in order to ensure the steelworkers’ benefits. Harbinger sold the business to Severstal
, a steelmaker based in Russia, which was forced to shut down steel-making operations in the fall of 2008 because of the recession.The plant was reopened in 2010, and as of March 2011 has been sold back to Rennert, renaming the company RG Steel.
, Magnesium Corp. uses chemicals to refine the magnesium
used in products ranging from bombs to bicycles. In 1996, Renco established Renco Metals Inc as a holding company for Magnesium Corp. and issued $150 million in bonds. Just like WCI, the company paid Renco $90 million in dividends by the year end. In 2001, the Department of Justice
filed suit against Magnesium Corp. for multiple violations of hazardous waste law (the EPA ranked Renco’s holdings as the nation’s 10th largest polluter), but also it cited Rennert’s removal of money from Magnesium Corp. through the bond issue, ‘leaving the companies insolvent and unable to pay their bills'. The suit went on until 2007 when a judge ruled in favor of Renco and against the DOJ. On August 17, 2010, A 10th Circuit Court of Appeals ruling overthrew a district court judge's Oct. 17, 2007, decision that the U.S. Magnesium facility in Rowley was not illegally disposing five wastes. The initial lawsuit DOJ filed on behalf of EPA in 2001 claimed U.S. Magnesium was not following regulations promulgated under the Resource Conservation and Recovery Act
of 1976, which dictates how waste byproducts must be disposed. Renco continues to operate the business under the name US Magnesium. At this point, US Magnesium is the only magnesium producer in the United States.
The EPA published its proposal to place the US Magnesium facility on the National Priorities List
(NPL, a "Superfund site" under CERCLA) in the Federal Register on September 3, 2008. The National Priorities List (“NPL”) is a list of places, commonly known as “superfund sites,” considered national priorities for environmental remediation because of known or threatened releases of hazardous substances. EPA received comments on the proposal through November 24, 2008, including over 300 comments supporting the listing from the public and 100 pages of comments from US Magnesium. EPA prepared a response to comments and published the final listing on the NPL in the Federal Register on Wednesday, November 4, 2009. USM filed its petition for review of the listing in the United States Court of Appeals for the District of Columbia Circuit on November 5, 2009. The hearing was on November 5, 2010. On January 14th, 2011, the United States Court of Appeals sided with the EPA and upheld placing the site on the National Priority List. The website address for the US Magnesium Superfund Site is www.epa.gov/region8/superfund/usmagnesium
's MacAndrews & Forbes Holdings
company would buy 70% of AM General from Renco. The deal reportedly cost close to US$1 billion.
Man of Year Award in 1999 by filmmaker Michael Moore
, based on a 1996 EPA Report which lists Magnesium Corporation of America as the top single polluting industrial facility in the United States and a second EPA report from the same year which lists Renco Group as the top most polluting parent company (based on total on-site and off-site releases). Doe Run Peru continues to elicit tremendous controversy and criticism. Despite over $100 million of investment in pollution reduction, the site remains heavily polluted and the impact on the local population is severe.
.
The Renco Group's environmental record has been mixed. In 1998 the EPA
placed Renco Group business holdings 10th on the nation's largest polluter list primarily because of emissions from US Magnesium in Utah (formerly MagCorp). (US Magnesium was purchased by Renco in 1989 in the year in which its emissions peaked at 119,000 tons per year.) By 1998, the year the Renco was placed on the EPA list, Renco had reduced emissions at US Magnesium by 50%. By 2005, the most recent year of data released by the EPA, emissions had been reduced by 97%.
In 2001, the Justice Department
and EPA took action against Renco, filing suit against the company. The agencies demanded nearly $1 billion in fines, alleging MagCorp (a Renco Metals Inc. subsidiary) dumped toxic waste in ditches and ponds on the Great Salt Lake, Utah. The suit claimed PCB-laced sludge and dust choked the plant's plumbing, wastewater ponds, landfill and ditches, where contaminants were 12 times the allowed limit for accidental release. MagCorp maintained it was exempt from the federal Resource Conservation and Recovery Act
, which requires companies to monitor certain kinds of hazardous waste. Magcorp declared Chapter 11 bankruptcy shortly after the lawsuit began and a federal judge allowed Rennert to restructure MagCorp — now U.S. Magnesium — which exempted it from previous legal liability. The EPA suit, however, remained outstanding until October 2007 when a federal judge ruled against the EPA and the Justice Department and in favor of Renco and MagCorp / US Magnesium.
Today, U.S. Magnesium is the third largest magnesium producer in the world. US Magnesium’s environmental improvements and recent track record have been substantial and include a reduction of emissions by 90% since 2000 (97% since 1989). The EPA data recognizes this as the single largest reduction in air emissions in the category of hazardous air pollutants since the TRI began in 1987 at any single facility. Also, the energy improvements in US Magnesium’s manufacturing process caused a net reduction of 100,000 tons per year of carbon dioxide emissions. US Magnesium was the recipient of a 2004 Climate Protection Award from the EPA. and won an MEP award in 2006 for Environmental Consciousness.
Another US unit of Renco also faced environmental issues in Herculaneum, Missouri
and has made substantial improvements. Locals in Herculaneum claimed their children were suffering from lead poisoning traceable to toxic emissions coming from Renco's Doe Run lead smelting plant which had been in operations locally since 1892. In 2000, the EPA and the Missouri Department of Natural Resources tested area lead levels and ordered Doe Run to clean up locations where lead levels exceeded EPA standards. A 2002 study showed more than half of the children living within a quarter mile of the smelter had high blood-lead levels. Doe Run agreed to buy 160 homes in the contaminated area around the smelter at a cost of more than $10 million. An EPA fact sheet noted the following: "Since 2001, EPA, MDNR and The Doe Run Company have addressed lead contamination in Herculaneum through a series of actions which have included residential soil replacements, home interior cleanups, and a voluntary residential buyout program. EPA and MDNR continue to work with Doe Run to address stabilization, erosion control, flood protection, stormwater collection and treatment, and wetland mitigation related to the slag pile area at the site. EPA and MDNR are also working with Doe Run to address soil recontamination of residences near the smelter and contamination along city haul routes." In the first quarter of 2007, Doe Run met all of the National Ambient Air Quality Standard (NAAQS).
.
Doe Run, Peru, (a Renco Group holding) operates a smelting plant in La Oroya, Peru, that has similar types of environmental challenges to those faced in Herculaneum, but on a larger scale. The La Oroya smelter began operations in 1922 and was operated for many years by the Peruvian government until it was sold to Doe Run in 1997. The site was substantially contaminated at the time it was purchased by Doe Run, and as part of the purchase agreement Doe Run agreed to remediate certain environmental issues. Although the company has spent more than $107 million improving the pollution and has reduced air pollution by 25 percent and water pollution by 90 percent, La Oroya is still an evironmental blight and the Company had promised to spend $148 million by the end of 2006
The Blacksmith Institute
has placed La Oroya on its list of ten most polluted places in the world, along with Chernobyl
, Ukraine. In August 2007, it was reported that air levels of arsenic levels were 85 times more than the "safe" level, cadmium 41 times, and lead 13 times more. Water levels of lead exceeded the "safe" lead level (as established by the World Health Organisation) as well. A study by St. Louis University scientists found that 97 percent of children in La Oroya suffer from mental and physical deficiencies related to their exposure to polluted air.
Despite the pollution, the local mayor and union leaders have historically supported Doe Run even when the Peru government pressured the company to further reduce emissions. The local population elected a new mayor and new union leaders who have pushed for additional progress including a release of an early 2007 audit of Doe Run conducted by two auditing firms chosen and appointed by Peru's Ministry of Energy and Mines to verify Doe Run Peru's compliance with its environmental operating agreement with the government and an "alert program" implemented by Doe Run in agreement with the Peru government which consists of three levels (watch, danger and emergency); at each level, certain actions are taken which reduce the exposure to pollution and partially halt production lines for lead and copper. Approved July 18, 2007, the alert program consists of three levels (watch, danger and emergency); at each level, certain actions are taken which reduce the exposure to pollution and partially halt production lines for lead and copper. On the day the "alert program" was approved, the level of sulphur dioxide recorded over the course of three hours was 12,000 micrograms of sulphur dioxide per cubic metre of air, when the air quality standard only allows 364 micrograms. Carlos Rojas, regional coordinator of the government's national environmental council (CONAM) has stated that none of the three levels entails ceasing operations at the smelting plant.
The audit was released in November 2007 and reported that air quality samples taken during the audit earlier this year met the monthly Air Quality Standards (AQS), while main stack emissions were below the maximum limits allowed by the law. Additionally the auditor's report showed that there is no variation in the quality of receptor bodies in the Mantaro River. The audit took place January 4–14, 2007 and was monitored by outside observers. However, as noted above, the air quality standards were violated on July 18, 2007, the day the alert program was approved. Furthermore, a report from August 6, 2007 states that "If the contingency [alert] plan were already in place, a state of emergency would have been declared 183 days so far this year," suggesting that the air quality samples taken during the audit do not reflect air quality during most of the year.
Rennert and his wife Ingeborg have made many charitable donations to various organizations. They donated $5 million to establish the Wiesel Center at Boston University
and $250,000 to the Lincoln Center. They also gave over $1 million to the World Trade Center Memorial and established the Rennert Entrepreneurial Institute of Sy Syms School of Business
at Yeshiva University
. They have endowed chairs at several different universities, including a chair in Jewish studies at Barnard College
, a Chair in Aging Research at Albert Einstein College of Medicine
, a Chair in Stem Cell
Biology at Albert Einstein College of Medicine, and the Ira Rennert Professorship of Business at Columbia University
. They also established the Ira Leon Rennert Professor of Entrepreneurial Finance at New York University
and founded the Ingeborg Rennert Center for Jerusalem Studies at Bar Ilan University. The Rennerts also helped to fund the restoration of the Western Heritage Wall in Jerusalem (the visitor's center is called The Ingeborg and Ira Leon Rennert Hall of Light). The Rennerts are known to have donated to Rav Aharon Bina's new yeshiva in Israel, Yeshivat Netiv Aryeh
, and are additionally honored with a plaque as well as their family upon entrance into the building. They also donated about 160 Torah
scrolls to communities in Israel
.
The Rennert family also funded the construction for a new mikvah
at the Fifth Avenue Synagogue
, which was completed in May 2010.
considered one of the largest occupied residential compounds in America. The house outraged locals, who claimed Rennert originally planned to use it as a spa, a hotel, or a religious retreat. Rennert denied such allegations, and the local paper later issued an apology.
Rennert named his home after the adjoining body of water, Fairfield Pond. The house faces the Atlantic Ocean
and its grounds measure 63 acres (254,952.2 m²). The buildings, which total over 110000 square feet (10,219.3 m²), including the 66000 square feet (6,131.6 m²) main house, have an Italianate facade, 29 bedrooms, and 39 bathrooms. The house has a dozen chimneys and a Mediterranean-style tile roof as well as a 91 feet (27.7 m) long formal dining room, a basketball court, a bowling alley, two tennis courts, two squash courts, and a $150,000 hot tub. Its property taxes in 2007 were $397,559.00. Based on these taxes, the home is currently valued at $198 million making it the most valuable home in the United States. In 2009 the property was valued at $218 million.
Besides his house in Sagaponack, Rennert owns a duplex apartment on Manhattan’s Park Avenue, a home in Israel, and a Gulfstream V jet.
Background and education
Rennert is a graduate of Brooklyn CollegeBrooklyn College
Brooklyn College is a senior college of the City University of New York, located in Brooklyn, New York, United States.Established in 1930 by the New York City Board of Higher Education, the College had its beginnings as the Downtown Brooklyn branches of Hunter College and the City College of New...
. He earned his master's degree from New York University's Stern School of Business
New York University Stern School of Business
The Leonard N. Stern School of Business is New York University's business school. It was established in 1900 as the NYU School of Commerce, Accounts and Finance. In 1988 it was named after Leonard N. Stern, an alumnus and benefactor of the school...
, where he is currently on the Board of Overseers.
Early career
Rennert started his career as a credit analyst on Wall Street in 1956. He also served briefly as a salesman for a typewriting company and a stock brokerage, before launching his own business, I.L.Rennert & Co. in 1962 based at a Beaver Street office in Lower Manhattan. At this time he was censured by the NASD for operating with insufficient capital. This occurred again in 1963 and as a result, his license was revoked on November 29, 1964, effectively banning him from the securities industry. According to a company spokesman, Jon Goldberg:"Due to market conditions, the firm found itself in violation of the net capital rule
Net capital rule
The uniform net capital rule is a rule created by the U.S. Securities and Exchange Commission in 1975 to regulate directly the ability of broker-dealers to meet their financial obligations to customers and other creditors...
and Rennert raised capital and put it into the firm to bring it into compliance. However, the firm once more fell beneath the net-capital requirements and he shut the company down."
Rennert was a consultant for the next eleven years (Who’s Who entry) and entered the private equity market. His role was to put together small leveraged buyouts of unwanted companies. In 1975 he bought a sewing machine maker, and a few years later purchased Covert Marine Inc. of Kansas City (forced into bankruptcy in 1992), followed later by a group of hardware stores and lumber companies. In the early 1980s he joined the board of Integrated Resources Inc, a company financed by Michael Milken
Michael Milken
Michael Robert Milken is an American business magnate, financier, and philanthropist noted for his role in the development of the market for high-yield bonds during the 1970s and 1980s, for his 1990 guilty plea to felony charges for violating US securities laws, and for his funding of medical...
where he learned the art of raising junk bonds to finance additional acquisitions.
Junk Bond Financing
Milken—as a bond trader for Drexel Burnham LambertDrexel Burnham Lambert
Drexel Burnham Lambert was a major Wall Street investment banking firm, which first rose to prominence and then was forced into bankruptcy in February 1990 by its involvement in illegal activities in the junk bond market, driven by Drexel employee Michael Milken. At its height, it was the...
—was successful selling high-risk, high-yield bonds issued by struggling or undercapitalized companies. Before Milken, these were considered ‘junk’ and most investors avoided them, but it was Milken’s innovation that formed a strategy of using these junk bonds to provide capital for corporate raiders to conduct hostile company takeovers. Integrated Resources raised $2 billion in junk bonds financed by Milken but ultimately collapsed amid scandal and defaulted on $1 billion of bond debt in May 1989 (c.f. the 1991 book Den of Thieves
Den of Thieves (Book)
Den of Thieves is a 1992 non-fiction bestselling work by Pulitzer prize-winning writer James B. Stewart. The book recounts the insider trading scandals involving Ivan Boesky, Michael Milken and other Wall Street financiers in the United States during the 1980s such as Martin Siegel, Dennis Levine,...
about the junk bond scandal). As an outside board member, Rennert was not dragged down by the collapse and began to raise junk bonds on his own behalf to finance acquisitions for Renco.
Rennert's strategy for building Renco was to acquiring all the shares of struggling companies and to finance the acquisition by issuing junk bonds. Along the way, Rennert paid substantial dividends out of the business to himself. In a series of junk bond issues since 1995, Renco’s subsidiaries have borrowed an estimated $1.1 billion and transferred $322 million (29 percent) to Renco Group, according to documents filed with the SEC. Backed by blue-chip mutual funds and hedge funds such as John Hancock Funds LLC and Putnam Investment Management LLC, Rennert now didn’t have to invest much of his own money. His purchase of AM General in 1992 was bought with a down payment of just $10 million. In 1994, Fluor Corp. of Los Angeles sold Doe Run to Renco, with the latter paying $52 million in cash, and approximately $60 million in debt payable over an eight-year period. In 1997, Doe Run went on to pay $247 million for a similarly environmentally troubled lead smelting complex from the Peruvian government, as well as borrowing more money to service its Fluor debt. And in 1998, Doe Run sold $305 million in junk bonds for financing its Peruvian acquisition as well as more lead mines in Missouri (according to Doe Run filings with the SEC). Since 1998 most Renco financings have been bank debt.
WCI Steel
Rennert's first big deal came in 1988 when Renco bought a Warren (Ohio) steel company from its bankrupt parent, LTV Steel Co.Ling-Temco-Vought
Ling-Temco-Vought was a large U.S. conglomerate which existed from 1969 to 2000. At its peak, its component parts were involved in the aerospace industry, electronics, steel manufacturing, sporting goods, the airline industry, meat packing, car rentals and pharmaceuticals, among other...
, for a price tag of $140 million, of which half was paid for with debt. This company then became WCI Steel Inc., and Rennert was able to ultimately sell bonds totalling $300 millon, paying $108 million of the proceeds as a dividend to Renco. In 1998, Renco Steel Holdings Inc. was created to serve as a holding company for WCI. The holding company then sold $120 million in junk bonds, this time paying an additional $100 million dividend to Renco.
After a strike in 1995, Rennert, as WCI Steel’s chairman, agreed to create a new pension plan for the 2,000 employees and retirees whose old plan had collapsed in the previous bankruptcy. In 2003 when WCI’s $300 million of notes came due, the company was unable to pay and declared bankruptcy. With steel prices rising, an investment group led by Rennert, came forward with reorganisation proposals that pledged to keep the WCI pension plan going, reviving it by investing $66 million over four years, leaving a $100 million plus shortfall. The plan emerged as the front runner, but ultimately Rennert's proposal was blocked by Harbinger Capital
Harbinger Capital
Harbinger Capital Partners is a private hedge fund based in New York City, New York.-Background:Harbinger was founded by its Senior Managing Director Philip Falcone and Harbert Management Corporation, a Birmingham, Alabama-based investment company that provided much of the original funding. Falcone...
, the leading holder of the notes, and Harbinger acquired the business. At the time of the bankruptcy, if the pension plan had been terminated, the Pension Benefit Guaranty Corporation
Pension Benefit Guaranty Corporation
The Pension Benefit Guaranty Corporation is an independent agency of the United States government that was created by the Employee Retirement Income Security Act of 1974 to encourage the continuation and maintenance of voluntary private defined benefit pension plans, provide timely and...
calculated a $117 million shortfall. Despite losing the company, Renco agreed to assume responsibility for the existing pension plan, with ongoing support from WCI. Newspaper reports speculated that the Pension Benefit Guaranty Corporation had threatening to put a lien on Rennert’s personal estate in order to ensure the steelworkers’ benefits. Harbinger sold the business to Severstal
Severstal
OAO Severstal Russian: Северсталь, "Northern Steel") is a Russian company mainly operating in the steel and mining industry, centred in the northern city of Cherepovets. Severstal is listed on the RTS and LSE. As of 2009, it is the largest steel company in Russia according to The Metal Bulletin....
, a steelmaker based in Russia, which was forced to shut down steel-making operations in the fall of 2008 because of the recession.The plant was reopened in 2010, and as of March 2011 has been sold back to Rennert, renaming the company RG Steel.
MagCorp/US Magnesium
In 1989, Renco acquired the US’s largest magnesium producer in Utah for an undisclosed price. Removing minerals from the water of the Great Salt LakeGreat Salt Lake
The Great Salt Lake, located in the northern part of the U.S. state of Utah, is the largest salt water lake in the western hemisphere, the fourth-largest terminal lake in the world. In an average year the lake covers an area of around , but the lake's size fluctuates substantially due to its...
, Magnesium Corp. uses chemicals to refine the magnesium
Magnesium
Magnesium is a chemical element with the symbol Mg, atomic number 12, and common oxidation number +2. It is an alkaline earth metal and the eighth most abundant element in the Earth's crust and ninth in the known universe as a whole...
used in products ranging from bombs to bicycles. In 1996, Renco established Renco Metals Inc as a holding company for Magnesium Corp. and issued $150 million in bonds. Just like WCI, the company paid Renco $90 million in dividends by the year end. In 2001, the Department of Justice
United States Department of Justice
The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries.The Department is led by the Attorney General, who is nominated...
filed suit against Magnesium Corp. for multiple violations of hazardous waste law (the EPA ranked Renco’s holdings as the nation’s 10th largest polluter), but also it cited Rennert’s removal of money from Magnesium Corp. through the bond issue, ‘leaving the companies insolvent and unable to pay their bills'. The suit went on until 2007 when a judge ruled in favor of Renco and against the DOJ. On August 17, 2010, A 10th Circuit Court of Appeals ruling overthrew a district court judge's Oct. 17, 2007, decision that the U.S. Magnesium facility in Rowley was not illegally disposing five wastes. The initial lawsuit DOJ filed on behalf of EPA in 2001 claimed U.S. Magnesium was not following regulations promulgated under the Resource Conservation and Recovery Act
Resource Conservation and Recovery Act
The Resource Conservation and Recovery Act , enacted in 1976, is the principal Federal law in the United States governing the disposal of solid waste and hazardous waste.-History and Goals:...
of 1976, which dictates how waste byproducts must be disposed. Renco continues to operate the business under the name US Magnesium. At this point, US Magnesium is the only magnesium producer in the United States.
The EPA published its proposal to place the US Magnesium facility on the National Priorities List
National Priorities List
The National Priorities List is the list of hazardous waste sites in the United States eligible for long-term remedial action financed under the federal Superfund program. Environmental Protection Agency regulations outline a formal process for assessing hazardous waste sites and placing them on...
(NPL, a "Superfund site" under CERCLA) in the Federal Register on September 3, 2008. The National Priorities List (“NPL”) is a list of places, commonly known as “superfund sites,” considered national priorities for environmental remediation because of known or threatened releases of hazardous substances. EPA received comments on the proposal through November 24, 2008, including over 300 comments supporting the listing from the public and 100 pages of comments from US Magnesium. EPA prepared a response to comments and published the final listing on the NPL in the Federal Register on Wednesday, November 4, 2009. USM filed its petition for review of the listing in the United States Court of Appeals for the District of Columbia Circuit on November 5, 2009. The hearing was on November 5, 2010. On January 14th, 2011, the United States Court of Appeals sided with the EPA and upheld placing the site on the National Priority List. The website address for the US Magnesium Superfund Site is www.epa.gov/region8/superfund/usmagnesium
AM General
In 1993, Renco acquired AM General from LTV to help LTV emerge from bankruptcy. Terms included a $67.5 million cash payment with the remainder to be paid in various forms over a 10-year period. AM General produced vehicles for industrial, military, and government use, including the Humvee, which was the heavy-duty military replacement for the jeep. The vehicle later became available in a civilian version sold under the Hummer brand name. AM General sold the rights to the Hummer name for civilian use to General Motors in 1999 but built the H2 vehicles for GM until it was discontinued in 2008. Renco was fortunate that the Gulf War dramatically increased demand for the military Humvees at a time when many of Renco's other subsidiaries were struggling. On August 20, 2004, it was announced that Ronald PerelmanRonald Perelman
Ronald Owen Perelman is an American business magnate. Through his company MacAndrews & Forbes Holdings Inc., he has invested in various companies in grocery, cigar, licorice, makeup, car, photography, television, camping, security, lottery, jewelry, banks, and comic book industries.-Early...
's MacAndrews & Forbes Holdings
MacAndrews & Forbes Holdings
MacAndrews & Forbes Holdings, Inc. is the principal holding company used by and wholly owned by businessman and private equity investor, Ronald Perelman...
company would buy 70% of AM General from Renco. The deal reportedly cost close to US$1 billion.
Environmental concerns
Rennert was awarded the The Awful TruthThe Awful Truth (TV series)
The Awful Truth was a satirical television show that was directed, written, and hosted by filmmaker Michael Moore, and funded by the British broadcaster Channel 4.-Format:...
Man of Year Award in 1999 by filmmaker Michael Moore
Michael Moore
Michael Francis Moore is an American filmmaker, author, social critic and activist. He is the director and producer of Fahrenheit 9/11, which is the highest-grossing documentary of all time. His films Bowling for Columbine and Sicko also place in the top ten highest-grossing documentaries...
, based on a 1996 EPA Report which lists Magnesium Corporation of America as the top single polluting industrial facility in the United States and a second EPA report from the same year which lists Renco Group as the top most polluting parent company (based on total on-site and off-site releases). Doe Run Peru continues to elicit tremendous controversy and criticism. Despite over $100 million of investment in pollution reduction, the site remains heavily polluted and the impact on the local population is severe.
United States
For more detailed information, go to Doe Run CompanyDoe Run Company
Doe Run Resources Corporation is the largest integrated lead producer in North America and the largest primary lead producer in the western world...
.
The Renco Group's environmental record has been mixed. In 1998 the EPA
United States Environmental Protection Agency
The U.S. Environmental Protection Agency is an agency of the federal government of the United States charged with protecting human health and the environment, by writing and enforcing regulations based on laws passed by Congress...
placed Renco Group business holdings 10th on the nation's largest polluter list primarily because of emissions from US Magnesium in Utah (formerly MagCorp). (US Magnesium was purchased by Renco in 1989 in the year in which its emissions peaked at 119,000 tons per year.) By 1998, the year the Renco was placed on the EPA list, Renco had reduced emissions at US Magnesium by 50%. By 2005, the most recent year of data released by the EPA, emissions had been reduced by 97%.
In 2001, the Justice Department
United States Department of Justice
The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries.The Department is led by the Attorney General, who is nominated...
and EPA took action against Renco, filing suit against the company. The agencies demanded nearly $1 billion in fines, alleging MagCorp (a Renco Metals Inc. subsidiary) dumped toxic waste in ditches and ponds on the Great Salt Lake, Utah. The suit claimed PCB-laced sludge and dust choked the plant's plumbing, wastewater ponds, landfill and ditches, where contaminants were 12 times the allowed limit for accidental release. MagCorp maintained it was exempt from the federal Resource Conservation and Recovery Act
Resource Conservation and Recovery Act
The Resource Conservation and Recovery Act , enacted in 1976, is the principal Federal law in the United States governing the disposal of solid waste and hazardous waste.-History and Goals:...
, which requires companies to monitor certain kinds of hazardous waste. Magcorp declared Chapter 11 bankruptcy shortly after the lawsuit began and a federal judge allowed Rennert to restructure MagCorp — now U.S. Magnesium — which exempted it from previous legal liability. The EPA suit, however, remained outstanding until October 2007 when a federal judge ruled against the EPA and the Justice Department and in favor of Renco and MagCorp / US Magnesium.
Today, U.S. Magnesium is the third largest magnesium producer in the world. US Magnesium’s environmental improvements and recent track record have been substantial and include a reduction of emissions by 90% since 2000 (97% since 1989). The EPA data recognizes this as the single largest reduction in air emissions in the category of hazardous air pollutants since the TRI began in 1987 at any single facility. Also, the energy improvements in US Magnesium’s manufacturing process caused a net reduction of 100,000 tons per year of carbon dioxide emissions. US Magnesium was the recipient of a 2004 Climate Protection Award from the EPA. and won an MEP award in 2006 for Environmental Consciousness.
Another US unit of Renco also faced environmental issues in Herculaneum, Missouri
Herculaneum, Missouri
Herculaneum is a city in Jefferson County, Missouri, United States. The population estimate in 2008 was 3,582. It was 2,805 at the 2000 census. The City of Herculaneum was the first county seat of Jefferson County from January 1, 1819 to 1839. The city celebrated its Bicentennial throughout the...
and has made substantial improvements. Locals in Herculaneum claimed their children were suffering from lead poisoning traceable to toxic emissions coming from Renco's Doe Run lead smelting plant which had been in operations locally since 1892. In 2000, the EPA and the Missouri Department of Natural Resources tested area lead levels and ordered Doe Run to clean up locations where lead levels exceeded EPA standards. A 2002 study showed more than half of the children living within a quarter mile of the smelter had high blood-lead levels. Doe Run agreed to buy 160 homes in the contaminated area around the smelter at a cost of more than $10 million. An EPA fact sheet noted the following: "Since 2001, EPA, MDNR and The Doe Run Company have addressed lead contamination in Herculaneum through a series of actions which have included residential soil replacements, home interior cleanups, and a voluntary residential buyout program. EPA and MDNR continue to work with Doe Run to address stabilization, erosion control, flood protection, stormwater collection and treatment, and wetland mitigation related to the slag pile area at the site. EPA and MDNR are also working with Doe Run to address soil recontamination of residences near the smelter and contamination along city haul routes." In the first quarter of 2007, Doe Run met all of the National Ambient Air Quality Standard (NAAQS).
Peru
For more detailed information, go to Doe Run CompanyDoe Run Company
Doe Run Resources Corporation is the largest integrated lead producer in North America and the largest primary lead producer in the western world...
.
Doe Run, Peru, (a Renco Group holding) operates a smelting plant in La Oroya, Peru, that has similar types of environmental challenges to those faced in Herculaneum, but on a larger scale. The La Oroya smelter began operations in 1922 and was operated for many years by the Peruvian government until it was sold to Doe Run in 1997. The site was substantially contaminated at the time it was purchased by Doe Run, and as part of the purchase agreement Doe Run agreed to remediate certain environmental issues. Although the company has spent more than $107 million improving the pollution and has reduced air pollution by 25 percent and water pollution by 90 percent, La Oroya is still an evironmental blight and the Company had promised to spend $148 million by the end of 2006
The Blacksmith Institute
Blacksmith Institute
Founded in 1999, Blacksmith Institute is an international non-for-profit organization dedicated to eliminating life-threatening pollution in the developing world. Blacksmith identifies and cleans up the world's worst polluted places, focusing on communities where children are most at risk. Based in...
has placed La Oroya on its list of ten most polluted places in the world, along with Chernobyl
Chernobyl
Chernobyl or Chornobyl is an abandoned city in northern Ukraine, in Kiev Oblast, near the border with Belarus. The city had been the administrative centre of the Chernobyl Raion since 1932....
, Ukraine. In August 2007, it was reported that air levels of arsenic levels were 85 times more than the "safe" level, cadmium 41 times, and lead 13 times more. Water levels of lead exceeded the "safe" lead level (as established by the World Health Organisation) as well. A study by St. Louis University scientists found that 97 percent of children in La Oroya suffer from mental and physical deficiencies related to their exposure to polluted air.
Despite the pollution, the local mayor and union leaders have historically supported Doe Run even when the Peru government pressured the company to further reduce emissions. The local population elected a new mayor and new union leaders who have pushed for additional progress including a release of an early 2007 audit of Doe Run conducted by two auditing firms chosen and appointed by Peru's Ministry of Energy and Mines to verify Doe Run Peru's compliance with its environmental operating agreement with the government and an "alert program" implemented by Doe Run in agreement with the Peru government which consists of three levels (watch, danger and emergency); at each level, certain actions are taken which reduce the exposure to pollution and partially halt production lines for lead and copper. Approved July 18, 2007, the alert program consists of three levels (watch, danger and emergency); at each level, certain actions are taken which reduce the exposure to pollution and partially halt production lines for lead and copper. On the day the "alert program" was approved, the level of sulphur dioxide recorded over the course of three hours was 12,000 micrograms of sulphur dioxide per cubic metre of air, when the air quality standard only allows 364 micrograms. Carlos Rojas, regional coordinator of the government's national environmental council (CONAM) has stated that none of the three levels entails ceasing operations at the smelting plant.
The audit was released in November 2007 and reported that air quality samples taken during the audit earlier this year met the monthly Air Quality Standards (AQS), while main stack emissions were below the maximum limits allowed by the law. Additionally the auditor's report showed that there is no variation in the quality of receptor bodies in the Mantaro River. The audit took place January 4–14, 2007 and was monitored by outside observers. However, as noted above, the air quality standards were violated on July 18, 2007, the day the alert program was approved. Furthermore, a report from August 6, 2007 states that "If the contingency [alert] plan were already in place, a state of emergency would have been declared 183 days so far this year," suggesting that the air quality samples taken during the audit do not reflect air quality during most of the year.
Philanthropy
Ira Rennert ranks #132 on Forbes Magazine's list of World Billionaires.Rennert and his wife Ingeborg have made many charitable donations to various organizations. They donated $5 million to establish the Wiesel Center at Boston University
Boston University
Boston University is a private research university located in Boston, Massachusetts. With more than 4,000 faculty members and more than 31,000 students, Boston University is one of the largest private universities in the United States and one of Boston's largest employers...
and $250,000 to the Lincoln Center. They also gave over $1 million to the World Trade Center Memorial and established the Rennert Entrepreneurial Institute of Sy Syms School of Business
Sy Syms School of Business
The Syms School of Business is Yeshiva University's business school for men and women...
at Yeshiva University
Yeshiva University
Yeshiva University is a private university in New York City, with six campuses in New York and one in Israel. Founded in 1886, it is a research university ranked as 45th in the US among national universities by U.S. News & World Report in 2012...
. They have endowed chairs at several different universities, including a chair in Jewish studies at Barnard College
Barnard College
Barnard College is a private women's liberal arts college and a member of the Seven Sisters. Founded in 1889, Barnard has been affiliated with Columbia University since 1900. The campus stretches along Broadway between 116th and 120th Streets in the Morningside Heights neighborhood in the borough...
, a Chair in Aging Research at Albert Einstein College of Medicine
Albert Einstein College of Medicine
Albert Einstein College of Medicine is a graduate school of Yeshiva University. It is a not-for-profit, private, nonsectarian medical school located on the Jack and Pearl Resnick Campus in the Morris Park neighborhood of the borough of the Bronx of New York City...
, a Chair in Stem Cell
Stem cell
This article is about the cell type. For the medical therapy, see Stem Cell TreatmentsStem cells are biological cells found in all multicellular organisms, that can divide and differentiate into diverse specialized cell types and can self-renew to produce more stem cells...
Biology at Albert Einstein College of Medicine, and the Ira Rennert Professorship of Business at Columbia University
Columbia University
Columbia University in the City of New York is a private, Ivy League university in Manhattan, New York City. Columbia is the oldest institution of higher learning in the state of New York, the fifth oldest in the United States, and one of the country's nine Colonial Colleges founded before the...
. They also established the Ira Leon Rennert Professor of Entrepreneurial Finance at New York University
New York University
New York University is a private, nonsectarian research university based in New York City. NYU's main campus is situated in the Greenwich Village section of Manhattan...
and founded the Ingeborg Rennert Center for Jerusalem Studies at Bar Ilan University. The Rennerts also helped to fund the restoration of the Western Heritage Wall in Jerusalem (the visitor's center is called The Ingeborg and Ira Leon Rennert Hall of Light). The Rennerts are known to have donated to Rav Aharon Bina's new yeshiva in Israel, Yeshivat Netiv Aryeh
Yeshivat Netiv Aryeh
Yeshivat Netiv Aryeh is an Orthodox yeshiva located at the Western Wall Plaza in the Old City of Jerusalem. The yeshiva, which has a Religious Zionist ideology, was founded in 2003 by the current rosh yeshiva, Rabbi Aharon Bina...
, and are additionally honored with a plaque as well as their family upon entrance into the building. They also donated about 160 Torah
Torah
Torah- A scroll containing the first five books of the BibleThe Torah , is name given by Jews to the first five books of the bible—Genesis , Exodus , Leviticus , Numbers and Deuteronomy Torah- A scroll containing the first five books of the BibleThe Torah , is name given by Jews to the first five...
scrolls to communities in Israel
Israel
The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...
.
The Rennert family also funded the construction for a new mikvah
Mikvah
Mikveh is a bath used for the purpose of ritual immersion in Judaism...
at the Fifth Avenue Synagogue
Fifth Avenue Synagogue
The Fifth Avenue Synagogue is an Orthodox Jewish synagogue located at 5 East 62nd Street between Fifth and Madison Avenues in the Upper East Side neighborhood of Manhattan, New York City.-Founding:...
, which was completed in May 2010.
Houses
Rennert caused controversy among his neighbors by building a beach front home in Sagaponack, New YorkSagaponack, New York
Sagaponack is a village in the town of Southampton in Suffolk County, New York, United States. The village incorporated on September 2, 2005, in the wake of the failed attempt by Dunehampton, New York to incorporate. Dunehampton's incorporation would have blocked Sagaponack from Atlantic Ocean...
considered one of the largest occupied residential compounds in America. The house outraged locals, who claimed Rennert originally planned to use it as a spa, a hotel, or a religious retreat. Rennert denied such allegations, and the local paper later issued an apology.
Rennert named his home after the adjoining body of water, Fairfield Pond. The house faces the Atlantic Ocean
Atlantic Ocean
The Atlantic Ocean is the second-largest of the world's oceanic divisions. With a total area of about , it covers approximately 20% of the Earth's surface and about 26% of its water surface area...
and its grounds measure 63 acres (254,952.2 m²). The buildings, which total over 110000 square feet (10,219.3 m²), including the 66000 square feet (6,131.6 m²) main house, have an Italianate facade, 29 bedrooms, and 39 bathrooms. The house has a dozen chimneys and a Mediterranean-style tile roof as well as a 91 feet (27.7 m) long formal dining room, a basketball court, a bowling alley, two tennis courts, two squash courts, and a $150,000 hot tub. Its property taxes in 2007 were $397,559.00. Based on these taxes, the home is currently valued at $198 million making it the most valuable home in the United States. In 2009 the property was valued at $218 million.
Besides his house in Sagaponack, Rennert owns a duplex apartment on Manhattan’s Park Avenue, a home in Israel, and a Gulfstream V jet.
External links
- Rennert home in Sagaponack, New York on Google MapsGoogle MapsGoogle Maps is a web mapping service application and technology provided by Google, free , that powers many map-based services, including the Google Maps website, Google Ride Finder, Google Transit, and maps embedded on third-party websites via the Google Maps API...