Stealth Billionaire:
                   Dennis Washington
                   Buys a Lot of Firms,
                   But Just Who Is He?
                   Adding Morrison Knudsen
                   To His Freight Interests
                   Makes Him a Major Force
                   Scouting Properties at Night
                   By Joan E. Rigdon

                   The Wall Street Journal
                   Page A1
                   (Copyright (c) 1996, Dow Jones & Company, Inc.)

                   VANCOUVER, British Columbia -- Kyle Washington drives out of the
                   parking lot of one of the companies his father is trying to buy, Seaspan
                   Inc., the largest tug and barge company in Canada. Across the street
                   looms an eight-story tower of freshly cut wood chips.

                   "The last time Dad was here, he was like, `What do you think? Should
                   we get into chips?'" the 26-year-old groans, mimicking his father as he
                   squints up at the pile. "I was like, `Geez, Dad, can we finish this one
                   first?'" the son recalls, waving his arm at Seaspan, a pending $135 million
                   acquisition now tied up in an antitrust investigation.

                   "Dad" is Dennis Washington, and he does seem in a hurry. He has
                   become a sort of stealth billionaire, little known even by some executives
                   whose companies he has been rapidly acquiring. A tall 61-year-old, he
                   started out as a teenage construction worker in 1948 in Montana and hit
                   the big time in the late 1980s by buying the troubled Anaconda Copper
                   Co. mine in Butte, Mont. He came in after copper prices had cratered,
                   paid only $15 million, busted the unions by getting workers to accept
                   lower wages in return for a share of the profits and then reopened the
                   mine just before copper prices went through the roof. Sheer luck, he

                   Now, in a world excited over the paper millionaires in new, high-tech
                   industries, Mr. Washington is quietly forging an old-fashioned empire
                   rivaling those of 19thcentury railroad barons.

                   He owns or controls some 40 construction, shipping, railroad, mining and
                   other companies and ventures, with combined annual revenue exceeding
                   $2.2 billion. His companies berth 80% of the commercial ships that come
                   into Vancouver, one of the busiest ports in North America. His shipping
                   lines haul wood, oil, chemicals and machinery up and down the Pacific
                   Coast, and some even haul newsprint through the Caribbean to
                   Venezuela. His railroad is a vital link between the Pacific Northwest and
                   the rest of the U.S. Last month, he snatched up Morrison Knudsen
                   Corp., the ailing construction-industry legend, for $250 million -- just
                   15% of Morrison's 1995 revenue. That capped a year of deal-making
                   that included the pending Seaspan acquisition and the June 1995
                   purchase of Norsk Pacific Shipping Co. for $30 million.

                   The buying binge has made Mr. Washington one of the country's
                   transportation and construction tycoons -- and helped him amass
                   personal net worth of more than $1.1 billion, aides say. Behind it all is an
                   audacious plan: As Pacific Rim population and trade explode, he foresees
                   his battalions of heavy machinery fanning out along the Pacific Coast,
                   building ports and highways and hauling freight. He envisions his
                   bulldozers grinding across the rest of America to rebuild aging sewers,
                   roads and dams. He wants his rail cars and barges to move precious ores
                   and timber from Alaska to the Southern Hemisphere.

                   Mr. Washington's vision strikes some transportation experts as grandiose,
                   but his timing -- or luck -- may be as good now as in the Anaconda days.
                   Better management and lower prices are helping railroads win back
                   shipping customers from trucks, and barges are in demand. "He's buying
                   the right modes of transportation," says Anthony Hatch, senior
                   transportation analyst at NatWest Securities Corp.

                   Nevertheless, Mr. Hatch and others wonder whether Mr. Washington is
                   attempting too much. In the 1980s, CSX Corp. tried to meld rail and
                   barge businesses and lost hundreds of millions of dollars. "The idea of
                   putting those businesses together raises questions," Mr. Hatch says.

                   So do some of Mr. Washington's other activities. Is he a corporate
                   raider, for example? He insists he isn't, but he has enlisted the help of
                   David Batchelder, a former lieutenant of onetime hostile-takeover king T.
                   Boone Pickens. Last year, Mr. Washington even made an unsuccessful
                   run at Mesa Inc., where Mr. Pickens is chief executive.

                   Another question concerns his odd form of due diligence. Under cover of
                   night, after dinner and wine, Mr. Washington often snoops through his
                   targets' equipment yards with a flashlight, sizing up engines and paint jobs.
                   Sometimes, one of his sons or even his lawyer tag along, they say. He has
                   occasionally been chased away by guard dogs, but no matter -- the tactic
                   is "a weird habit of mine," he says.

                   "He likes to touch and feel things," says Dorn Parkinson, his top operating
                   executive. If the iron passes inspection and advisers agree the target is
                   undervalued, Mr. Washington emerges in daylight with an offer -- often
                   strictly cash.

                   Right now, Mr. Washington is trying to muscle aside Union Pacific Corp.
                   so his Montana Rail Link Inc. can buy part of Southern Pacific Rail
                  Corp., which Union Pacific has agreed to acquire. Mr. Washington is
                   protesting that $3.9 billion merger on antitrust grounds but has said he will
                   drop his opposition if allowed to purchase Southern Pacific's Central
                   Corridor, which hooks up Kansas City, Mo., with Stockton, Calif. Three
                   federal agencies also oppose the deal unless Union Pacific sheds some
                   routes, including the corridor. If Mr. Washington succeeds, he would
                   expand Montana Rail's 1,000 miles of track into a major East-West
                   network. He has also talked about buying Alaska Railroad Corp. and
                   linking the state-owned line to the Lower 48 via barges.

                   Yet despite all this deal-making, Mr. Washington isn't widely known.
                   During his aborted run at Mesa, his aides had to supply the oil and gas
                   company with news clippings because Mr. Pickens didn't know who Mr.
                   Washington was. At APL Ltd., a big shipping company based in
                   Oakland, Calif., Thomas Meier, the general counsel, says, "I've been in
                   the business over 20 years, and I haven't heard that name." Even Union
                   Pacific has trouble placing him. "Mr. Washington?" asks spokesman
                   Harvey Turner. Other Union Pacific officials have heard of him: "A
                   bottom-fisher from Montana," one Union Pacific lawyer called him.

                   Many who have crossed paths with Mr. Washington seem puzzled by his
                   wealth. His holdings include some flashy assets, such as a 68,000-acre
                   Oregon ranch formerly owned by deceased cult leader Bhagwan Shree
                   Rajneesh; a seaplane; a 143-foot yacht, the "Impromptu," and a golf and
                   fishing lodge in Canada.

                   These baubles spur some speculation -- derided by Mr. Washington --
                   that he is a religious cultist or a mobster. His mystique grew last year,
                   when his real-estate czar, John Crowley, tried to sell the ranch to an
                   Oregonian who turned out to be a front for the Montana Freemen. Mr.
                   Crowley didn't find that out until a phony $9 million check, drawn on the
                   U.S. Treasury, arrived in the mail.

                   Mr. Washington can be tough on his own kin. Four years ago, he helped
                   fire his son Kevin from a temporary job. The younger Mr. Washington,
                   now 23, was supposed to be surveying railroad tracks, but instead was
                   spotted driving his pickup truck, friends and jet ski toward a lake. Mr.
                   Washington called his son's boss, Mr. Crowley, who said he thought the
                   son was working. "If Kevin worked for me and lied to me about where
                   he was, I'd fire the little bastard," Mr. Washington told the real-estate
                   manager, according to Mr. Washington's longtime friend and lawyer,
                   Milton Datsopholous, who was in the room. Mr. Crowley did. (The
                   younger Mr. Washington graduated from college last month and is
                   interning with Mr. Batchelder as preparation for re-entering the family

                   But Mr. Washington says his bluster often helps him in business. In 1993,
                   when he bought Vancouver's largest tugboat operation, C.H. Cates &
                   Sons Ltd., he blurted out his offer after only two hours of inspecting the
                   property with Cates officials in daylight (and after his secret nighttime
                   tour). "When are we going to wrap up this g-- d--- deal?" Mr.
                   Washington asked, recalls J. Claire Johnston, now Cates president.
                   When bidding began, Mr. Washington submitted his bid early -- with a
                   certified check. "It wasn't the highest bid," Mr. Johnston says, "but it was

                   Mr. Washington now spends a lot of time fixing up his yacht and relaxing,
                   but only because he nearly died of a complication of prostatitis in 1991.
                   Before then, he managed even minor details of his business operations,
                   personally approving small purchases such as typewriters, he says. Now,
                   he says, he lets his company presidents operate independently while he
                   focuses on deal-making and checks in with his managers by phone.

                   Raised mostly in Missoula, Mont., he survived polio as a child and by his
                   early 20s was managing freeway construction jobs. A few years later, he
                   struck out on his own, borrowing $30,000 and a bulldozer for cutting
                   logging roads. From the start, he loved heavy machinery. After getting
                   married, he worked six days a week building his business, and on
                   Sundays he would drive his wife, Phyllis, to job sites and gleefully
                   describe the machines in action. "That was his way of spending time with
                   his wife," Mr. Datsopholous says.

                   Mr. Washington never attended college, but he likes to read and seems
                   to have a flair for design. He totes around pictures of new designs for his
                   boats and rail cars. William Brodsky, who runs Montana Rail Link, says
                   Mr. Washington ordered Montana Rail workers to replace the back door
                   of the railroad's luxury business car three or four times. He once told
                   workers to install a door with stained glass, but later, looking at it, he
                   declared, "I wouldn't put that on an outhouse," Mr. Brodsky recalls. The
                   car now has a glass door with minimal steel trim.

                   Mr. Washington's biggest business coup has been to cut costs by
                   persuading workers to forgo union pay and sometimes a union altogether.
                   He began profit-sharing when he founded his company, but the
                   arrangement got a big test in 1985 when he bought the huge Anaconda
                   mine, a bastion and battleground of the labor movement. The mine had
                   been shut down in 1983 because copper prices were too low to support
                   union wages of about $16 an hour, and Butte was withering away.

                   Mr. Washington had originally intended to use only the mine's equipment,
                   but he says he couldn't bear to see the mine closed permanently and
                   began thinking about reopening it. He called around for advice from
                   others in the industry, "but they told him he was out of his mind," Mr.
                   Datsopholous says.

                   With the backing of local politicians, he reopened the mine anyway. He
                   put out a call for 325 nonunion workers willing to work for $9 an hour,
                   about half union wages. About 1,500 responded.

                   Now, seven years later, the mine is still nonunion. "You don't stay
                   union-free in that kind of environment if you don't treat them right," Mr.
                   Parkinson contends. The Anaconda miners get $11.50 an hour,
                   compared with an industry average of $14.68. But with profit-sharing,
                   their pay for the past six years has averaged $14.81. And in highly
                   profitable years such as 1995, profit-sharing bonuses more than doubled
                   workers' base wages.

                   Some unions, including the Brotherhood of Locomotive Engineers, have
                   accepted lower wages from Mr. Washington's companies in return for
                   profit-sharing. The workers don't seem to object. At Montana Rail Link,
                   where they get 8% of the profits, "Mr. Washington wants to involve the
                   workers in the overall profitability of the company," says Dale
                   McPherson, the union's general chairman. He says workers are often
                   leery about companies bilking them by understating profits, but not at
                   Montana Rail. "We have been offered the opportunity anytime to review
                   the books, and we have never really felt the need," Mr. McPherson says.

                   However, the International Brotherhood of Teamsters, one of several
                   unions that testified in favor of Mr. Washington getting tax breaks to
                   reopen the mine, was stung when he opened without unions. "I guess he
                   wasn't too appreciative," says Ron Ygnatowiz, business manager of
                   Teamsters Local No. 2 in Butte. The unions posted informational pickets
                   at the mine for about a month after it opened but haven't tried hard to
                   organize the mine since then.

                   Mr. Washington still faces the challenge of staying focused on his core
                   businesses -- "we're like a horse with blinders on," he insists -- instead of
                   branching out into riskier ventures such as the run at Mesa. Mr.
                   Washington had acquired a large block of Mesa stock on the advice of
                   Mr. Batchelder, who had once been Mr. Pickens's right-hand man. Then,
                   Mr. Washington tried to field his own list of board nominees, accusing
                   Mr. Pickens of the kind of management excess for which the oilman used
                   to blast his own takeover targets. "I don't know how you can fly around
                   in a corporate jet when you're losing your a--," Mr. Washington says
                   now, referring to Mesa's weak earnings.

                   Although billionaire Marvin Davis joined the effort, Mr. Pickens
                   successfully defended himself with the help of another billionaire, Richard
                   Rainwater. Mr. Washington walked away with losses he won't disclose
                   -- and now is regarded by many in the investment community as a
                   potential corporate raider himself.

                   Messrs. Batchelder and Washington defend the Mesa move. "We like to
                   keep our investments working," Mr. Washington says. "Mesa was
                   undervalued," Mr. Batchelder says. And Mr. Washington bristles at the
                   raider charge: "I've never sold a company. We're operators."

                   But the image persists. On a recent day in Mr. Batchelder's offices, when
                   Mr. Washington's acquisition of Morrison Knudsen was still being
                   hammered out with the company's creditors, Mr. Batchelder took a
                   frantic call from Morrison Chairman Robert "Steve" Miller. Mr. Miller
                   complained that the press was describing Mr. Washington as a
                   "corporate raider" and commented, "We don't need that."

                   Mr. Washington's longtime financial counselor, Mort Lowenthal of
                   Schroder Wertheim & Co., disdainfully refers to the Pickens episode as
                   "that thing in Texas" and calls it "an anomaly." Mr. Washington agrees. "If
                   I had to do it again," he says, "I wouldn't do it."


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