The Reinvention of Edgar Kaiser Jr.

During the 1980s, you couldn’t avoid the bespectacled face of Edgar Kaiser in newspapers and magazines. CEO of Kaiser Resources and the Bank of B.C. Owner of the Vancouver Whitecaps and Denver Broncos. Standard-bearer of the famous Kaiser family. Then he disappeared.

Edgar Kaiser Jr. is in his kitchen making me a cup of coffee. Two days earlier, shortly after they moved in to their modest new West Vancouver home, his wife Sue fell and broke her ankle while walking their dogs. “Go in and say hello,” he urges me with an encouraging smile, indicating the direction of their bedroom. Her leg propped up and clearly in some pain, Sue Kaiser is warm and polite. But she can barely keep her eyes open, so I make myself scarce.


A once-controversial corporate icon, at age 68 Edgar Kaiser still cuts an imposing figure as he hands me a dainty china cup with one hand and reaches for a ubiquitous Marlboro with the other. Despite his obvious concern for his wife, and the post-move detritus of unopened boxes and the clatter of men at work fixing a leak in the basement, he is solicitous and welcoming, as are his two boisterous golden retrievers, who quickly stake out a spot at his feet. 


This relaxed, casually clad, still larger-than-life elder statesman is probably best remembered by those of us who toiled in downtown Vancouver in the 1970s and early ’80s as the swashbuckling, buttoned-up young mogul parachuted into B.C. by a giant U.S. corporate behemoth to light a fire under our sluggish raw-materials sector. Kaiser soon gained notoriety as much for his playboy lifestyle as his high-profile corporate exploits on both sides of the border, heading such organizations as Kaiser Resources, the Bank of B.C., the Vancouver Whitecaps and the Denver Broncos.


Although he still retains memberships in some of the world’s most exclusive private clubs so that he and Sue can stop and socialize with old friends or enjoy a round or two of golf while on the move, the trappings of Kaiser’s once jet-setting lifestyle – the oceanfront penthouse apartment in Vancouver’s West End, the fabulous 150-foot yacht Calliope, the sports franchises, the private plane and the luxury downtown offices on Hastings and Georgia streets – are now long gone. Kaiser has also shed the heavy mantle of one of the biggest industrial and health-care dynasties in American history, which included Kaiser Permanente, now the largest not-for-profit health-care provider in the U.S. 


As a young high flyer, Kaiser’s face, framed by his famous owlish glasses, was front and centre in North American business magazines from Fortune to Equity. While his business and personal adventures were once great media fodder, he makes it clear that his past peccadilloes are now old news. He is, he says, a different man. Indeed, for over 25 years, Kaiser has assiduously shunned the media spotlight unless it helps raise awareness for his new life’s cause: unravelling the tangled scourges of addiction and mental illness. 


In 1984, starting with a $3-million personal endowment, he established the precursor of today’s Vancouver-based non-profit Kaiser Foundation. It was one of the first organizations in Canada to lobby governments to address addiction and mental health – which together cost our economy more than $70 billion annually – as public health, not moral, issues. The foundation has promoted and funded some of Canada’s most focused research in the field of mental health and addiction. It has recognized and supported innovative community-based programs, participated in a long list of task forces and government initiatives to change policy, and produced public education materials that are currently accessed by a host of Canadian and international agencies. Kaiser has also personally lobbied governments across Canada and badgered the private sector to do its part because he believes government alone cannot resolve such health problems. In 2003 his efforts garnered him the Order of B.C.


When Edgar Kaiser calls, politicians listen. B.C. Health Minister Kevin Falcon says Kaiser was one of the first lobbyists at his door after he assumed his portfolio in June 2009: “Over the years, Edgar has contributed a great deal to policy development in the areas of addiction and mental health. These two issues affected his own family, so he speaks with genuine passion and conviction. There is no sense that he’s in it for personal recognition.”


Longtime supporters, such as B.C.’s provincial health officer Perry Kendall, say Kaiser’s efforts have been a real catalyst for change. “By facilitating a provincewide consultation process in 2001, Edgar was instrumental in convincing the provincial government to invest $10 million in the Centre for Addiction Research at the University of Victoria,” says Kendall. “It enabled us to attract high-profile researchers and do some very important epidemiological studies that are adding significantly to our understanding.” 


Kaiser says he stays the course because Canada needs strong, healthy communities, where people living with addiction and mental health problems can access services that work and become productive members of society: “When I started out on this path, I wasn’t thinking about mental illness. But we now know there’s a big connection between substance abuse and mental health disorders and that because these issues are rarely treated concurrently, people are falling between the cracks. That has to change.”

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The Kaiser family roots

To appreciate what drives Edgar Kaiser Jr., it’s important to understand his roots. He is the grandson of Henry Kaiser, founder of a vast U.S. construction, steel, dam and shipbuilding empire and arguably one of the world’s greatest entrepreneurs. Henry Kaiser was part of the consortium that built the Hoover Dam and Grand Coulee Dam in the U.S., and he created Kaiser Permanente, America’s first non-profit HMO in 1945, offering health care for his workers and their families. 


Born in 1942 in Portland, Oregon, Edgar, the eldest son of six children, literally studied the family business at Henry Kaiser’s knee. As a toddler, he accompanied his grandfather and father, Edgar F. Kaiser, on international business trips. And as a student, he spent summer breaks working alongside blue-collar workers in different corners of the family empire that included steel mills, mines, gypsum plants, construction operations, quarries and broadcasting companies, and an auto manufacturing plant in Cordoba, Argentina, where he became fluent in Spanish. While he claims he never felt “groomed” for leadership, Edgar Kaiser Jr. would became the only Kaiser of his generation to join the family business.


Kaiser was extremely close to his famous grand-father, but his parents were emotionally and physically distant. He recalls being so unhappy at age 14 that he asked his parents to send him to boarding school, which they did. A desolate childhood in the midst of privilege might explain his early wish to become a pediatrician. 


Over time Henry Kaiser persuaded his grandson to forgo medicine in favour of a degree in politics from Stanford, followed by an MBA in international finance and labour relations from Harvard. “He always knew I didn’t plan to join the family business, but at the end of his life he made me promise to come back and help if I was needed,” Kaiser recalls. 


On leaving Harvard in 1967, Kaiser volunteered, against his grandfather’s wishes, for an 18-month stint in Vietnam as an economist with the Agency for International Development. To this day, he remains tight-lipped about that experience, which affected him deeply: “I didn’t believe in what we were doing there, but, as I told my grandfather, I felt I should go in order to understand what I instinctively felt would be an important part of our country’s history.” 


Returning stateside, Kaiser was recruited as a fellow in the Lyndon Johnson White House, helping draft groundbreaking domestic legislation that would become the 36th president’s main legacy. He also assisted Walter Hickel, secretary of the interior under president Richard Nixon. “During that time, I learned how to distill extremely complex subjects into one or two pages of policy, something that has always been extremely useful,” Kaiser recalls. “I also discovered that for all we criticize bureaucrats, the best of the best in Canada and the U.S. are as good, or better, than anyone who sits in private sector boardrooms.” 


After two years in government, Kaiser reluctantly kept his promise to his grandfather and went to work at Kaiser Industries’ headquarters in Oakland, California, to raise cash for the company’s beleaguered Canadian mining operation. In 1973, at age 31, he was dispatched to Kaiser Resources in Sparwood, B.C., to personally salvage the troubled metallurgical-coal mine, on the verge of bankruptcy after years of mismanagement and scandal. 


A Kaiser friend and former colleague, retired Vancouver businessman Hans Krutzen, who was an administrative vice-president inside the Kaiser Resources organization, recalls that in the seven years Kaiser spent building the company, his former boss often slept at his desk and sometimes put in 24-hour days: “Back then Edgar was a very tough, powerful man. You felt his strength as soon as you met him. But he was also a man who enjoyed motivating thousands of employees and inspired unusual loyalty. While he expected his people to perform to a very high standard, he also cared deeply about their welfare, which is why he was loved by most of the people who worked for him.” 


In 1980 Kaiser sold the business to publicly owned B.C. Resources Investment Corp. (BRIC). It was a fortuitous call for Kaiser Resources shareholders and the floundering U.S.-based parent company Kaiser Steel, but it turned out to be the final nail in the coffin for BRIC and the Bill Bennett Social Credit government’s brief flirtation with “socialism lite.” 


Kaiser says it was the hardest move he ever had to make. “It broke my heart when I had to sell the company,” he says, flinching slightly as he recalls a painful decision mandated by his father and the bean counters at Kaiser Industries. “It didn’t matter that we were the most successful group in the organization; Kaiser Steel needed the money. I was in tears when I told my team we had to sell. I remember that a lot of people were crying that day. But they understood I had a responsibility to shareholders.” 


In 1981, casting around for a new challenge, Kaiser, who once made a tidy profit from briefly owning the Vancouver Whitecaps, returned to what he saw as the recession-proof world of sport, buying a majority stake in the Denver Broncos for US$30 million. One of his proudest achievements, he says, was brokering the trade that brought quarterback John Elway to the team. While characterized by some mean-spirited U.S. sportswriters as a sophisticated interloper, Kaiser claims he was deeply committed to the team. He was especially concerned with the welfare of injured players, he says, even establishing the team’s first charitable wing: the Denver Broncos Youth Foundation. He was also, he recalls, having a lot of fun.

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The Kaiser Substance Abuse Foundation

When it comes to drugs, alcohol and mental illness, wake-up calls invariably follow personal tragedy. It’s no different for the wealthy and powerful, although in many cases, including Kaiser’s, the news hits like a bolt from the blue, perhaps because they are too preoccupied to see it coming. Kaiser’s awakening came in 1984 upon learning that one of his immediate family members was struggling with drug addiction. 


He refuses to elaborate on what he describes as a very personal issue. “It happened, we dealt with it and, painful as it was, it was quickly over,” he says emphatically. But for Kaiser, it was just the beginning. He knew that addiction had affected several generations of the Kaiser family and was prevalent at all levels within the family businesses. He decided to establish his own non-profit organization, the Kaiser Substance Abuse Foundation, in Vancouver, which by that time had become his adopted home. 


It would be a tumultuous year for Kaiser. While addressing his family crisis, Kaiser decided to sell his 60.8 per cent stake in the Broncos to current owner Pat Bowlen for about $70 million. He also assumed control in 1984 of the ailing Bank of B.C., quickly installing his own management team and tackling what he saw as toxic personnel issues. According to friends, his take-no-prisoners style, honed in the trenches and boardrooms of the more flexible resource sector, and his commitment to an unpopular regional banking model did not sit well with the conservative banking community. In 1986 the federal government, alarmed by the failure of two Alberta-based banks, pulled the rug out from under Kaiser and approved a takeover of Bank of B.C. by the Hong Kong Bank of Canada. It was his first corporate failure and, he admits, one of his biggest personal disappointments. 


After that bruising, Kaiser concentrated on reorganizing his family’s massive California-based Kaiser Family Foundation, a non-profit private foundation completely separate from his own that focuses on major health-care issues facing the U.S. as well as America’s role in global health policy. Through this work he connected with many prominent American health care activists, including Joe Califano, founder and chair of the National Center on Addiction and Substance Abuse at Columbia University. Such networking helped crystallize Kaiser’s thinking as he continued laying the groundwork for what would turn out to be his most important legacy. 


The first move of the fledgling Kaiser Foundation, officially founded in 1985, was to publish a comprehensive list of B.C.’s public and private substance-abuse treatment options, a three-year grind that demonstrated the slow pace of progress in the addiction arena and the patience that Kaiser, used to running his own show, would need to stay the course. Since those early days, the foundation has undergone several changes and expanded its scope to include mental health. Under his leadership, it has developed anti-drug school curricula, attracted a wide array of corporate partners from across Canada and launched the annual National Awards for Excellence Program to recognize the efforts of groups and individuals working on the front lines of the field, from public policy to programming. 


“We have silos of excellence in this country, but when it comes to addiction and mental illness the left hand often doesn’t talk to the right,” notes Kaiser. “People out in the trenches are the real heroes. They often work in terrible conditions with very little compensation and absolutely no recognition. Our goal is to communicate their successes and encourage others to follow their example.” 


Long passionate about the health conditions in Canada’s indigenous communities, Kaiser is one of the main drivers behind a countrywide Indigenous Canadian Health Initiative, which will be led by community leaders. He already has support from Health Canada, the RCMP, the Canadian Armed Forces, the Canadian Centre for Substance Abuse and researchers at UBC, McGill and Dalhousie universities. “It won’t be just another study,” he stresses. “We aim to address the inadequacy and inconsistencies in delivering health care to indigenous Canadians by supporting and nurturing community-led programs. As with everything we undertake, we know change won’t happen overnight. But for the first time, we have the support of all the players, and I think there is definitely the will.”


People who know Kaiser well, says Hans Krutzen, are not at all surprised by his metamorphosis from captain of industry to indefatigable social advocate. “Edgar was raised a capitalist, but it was never about making money at all costs. Because of his family’s long involvement in health care, he was raised with a very strong sense of social responsibility.”


Krutzen recalls a day, back in the 1980s, when Kaiser recruited him to help stage an intervention for a colleague with a drinking problem: “Edgar was compassionate and forthright with the guy, who at first denied he was an alcoholic but eventually agreed he needed help. Edgar had his personal jet on standby and flew him directly to a treatment centre. That’s just one example of his empathy and generosity.”


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Current-day Kaiser

Today the Kaiser Foundation operates out of strictly functional digs in a suburban North Vancouver shopping mall. It’s a 10-minute drive from Kaiser’s unpretentious West Vancouver home with its stunning view across Burrard Inlet to Vancouver’s downtown core, the backdrop for much of his colourful career. Best known for building fortunes, Kaiser is now actively building bridges between government, academic researchers and the private sector. “Twenty-six years ago, we didn’t know very much about the impact of mental illness and substance abuse,” he says. “Today we’re seeing the impact in terms of human suffering and the economic costs due to lost productivity. We can’t reduce our health-care costs, but with the right policies and programs we can reduce the rate at which our health-care costs increase. To me that’s a very compelling reason to keep talking about prevention, treatment, support and rehabilitation.”


In his 30s and 40s, Kaiser travelled almost constantly, logging up to half a million miles of air travel a year and regularly putting in 15-hour days, six to seven days a week. In fact, he has spent much of his life in the air: in one year he took 45 international flights out of Vancouver. He even met Sue, his wife of 15 years, at Alaska’s Anchorage Airport. By the late ’90s, Kaiser had given up solo flying and sold his private plane. And though he now considers himself a homebody – one who enjoys watching televised football games and Jeopardy – Kaiser still travels on foundation business an average of two weeks a month. 


When he isn’t flying off to fundraisers and conferences or criss-crossing North America to participate in a long list of forums, round tables, advisory boards, government commissions or think-tanks, or dogging politicians and CEOs, he still begins his working day at 5 a.m., on the phone, watching the business channel, Marlboro in hand. (Despite suffering a mild stroke earlier this year, it appears that a lifelong addiction to nicotine is one thing that Kaiser is personally struggling with.) He makes his way into the office around 8 a.m., where he is either back on the phone, meeting with the foundation’s executive director, Deborah Tucker, or issuing instructions to his executive assistant Miriam Taylor. Front and centre in the Kaiser memorabilia decorating both home and office are simple family photos: daughter Suki, an actress, a mother of two and a Kaiser Foundation board member who lives in California; son Edgar, a Vancouver-based pilot with Cathay Pacific; and Sue, her two children and their families. Kaiser says they remind him what’s truly important in life.


Nowadays Kaiser says he and Sue devote about 90 per cent of their time to the foundation and 10 per cent to their personal investments. “After selling Kaiser Resources to BRIC, I bought back the company name and certain assets,” he notes. “We’re investors, not operators, and only get involved in companies we believe have good management, mainly in the raw-materials and energy sectors.” His biggest flub in recent years was investing in an unsuccessful french-fry operation called Spud Stop, which promised to produce McDonald’s-like fries through vending machines in less than five minutes. “I went to Korea and discovered there were no machines,” he says with a laugh. “But I was long gone when the company went out of business.”


As for the foundation, Kaiser admits to having thus far invested just shy of $10 million of his own personal wealth into confronting what he calls our “collective denial” around addiction and mental illness. However, it isn’t just cash he brings to the table; it’s also his cachet. In 2010 his name still opens doors at the highest levels, particularly in the U.S., where his family’s history is still part of the national fabric through Kaiser Permanente hospitals and health-care plans.


Anticipating passage of the Obama administration’s health-care reforms, which he says facilitate debate around the failed U.S. war on drugs, Kaiser recently set up the federally incorporated Kaiser Mental Health and Addiction Awareness Foundation. Encouraged by supporters such as former U.S. secretary of state George Schultz, Kaiser is planning to introduce his National Awards for Excellence Program south of the border. To date he has injected seed capital and is currently negotiating with some of the biggest U.S. political players for their personal endorsement and financial backing (though he declines to mention them by name).


Kaiser modestly downplays his personal role, but supporters such as former Canadian ambassador to the U.S., Michael Wilson, chair of Barclays Capital, says he has been an important driving force for change in Canada. “What Edgar is doing is terrific,” says Wilson, who lost his son Cameron to suicide in 1995 and has worked with Kaiser on a number of national and Canada-U.S. initiatives. “He is extremely passionate and has a presence and standing in the business community that allows him to take the message to influential people who can make a difference. We need more people like Edgar to step up.”


Despite the passage of time, Kaiser’s Rolodex of high-profile friends, colleagues and government insiders in both Canada and the U.S. clearly still offers enormous potential. He says he plans to continue milking his connections for all they’re worth, whether for funding purposes, for the use of their name to support his cause, to prompt change within their own organizations or just to open their hearts and minds. “It’s still a tough sell,” he admits, “but I keep talking about these issues because I believe the fight against the stigma of mental illness and addiction is one that a morally just society must win.”