Bennett S. LeBow is an American businessman and philanthropist. He is the current chairman of the board of Vector Group.
Education and career
LeBow was born to a Jewish family, the son of Suara and Martin LeBow. His father was a life insurance salesman and his mother a teacher. He graduated from West Philadelphia High School and in 1960, earned a degree in electrical engineering from Drexel University. LeBow then went on to graduate school at Princeton University. Before completing his degree, LeBow left Princeton and joined the army where he installed early data systems at the Pentagon.
LeBow's first foray into business occurred in the 1960s when he started a computer company to continue his Pentagon project. LeBow eventually sold the business in 1971 for a profit and became a full-time investor. In 1980 he founded the investment holding company Brooke Group Ltd. LeBow went on to purchase many companies including: Western Union, Information Displays, MAI Basic Four, Liggett Group, Brigham's Ice Cream, and the trading card company, SkyBox International (which he sold to Marvel). In 2000, Brooke Group Ltd. was renamed Vector Group Ltd.
Cigarettes and litigation
In 1986, he purchased the fifth-largest cigarette manufacturer in the United States, the Liggett Group for $140 million. In 1993, Lebow stated under sworn testimony that since cigarettes are a legal product and people choose to use them, whether or not that they cause cancer is irrelevant. In 1996, while under his leadership, Liggett Group broke ranks with the rest of the US tobacco industry, including Philip Morris, Brown and Williamson, RJR Nabisco, Loews and Lorillard, when he announced that Liggett would settle the Medicaid tobacco suits brought by forty state attorneys general. Liggett had previously been accused of being illegally influenced by Philip Morris which allegedly paid some of Liggett's legal bills in order to buy its cooperation in anti-tobacco lawsuits. LeBow stated that the reason for the settlement was to obtain immunity for Liggett from future liabilities and to prevent a future bankruptcy. The settlement entailed that Liggett agree to pay $1 million in damages; publicly announce that smoking is addictive and causes cancer; turn over long-secret tobacco industry documents; disclose ingredients in its cigarettes; and testify against the industry. Liggett was the first cigarette company to voluntarily put the label "Nicotine is Addictive" on their product.
LeBow's actions were pivotal to the government in their signing of the Master Settlement Agreement. In addition to this, LeBow was honored with a proclamation by Florida Governor Lawton Chiles for his "invaluable assistance" in helping Florida achieve its historic $11.3 billion settlement with the tobacco industry. Following this presentation, Lebow and Mr. Chiles addressed a group of students, who "saved their toughest questions for Liggett Group chief Bennett Lebow of Miami". One student asked, "If you want to be a watchdog of the industry, why not get out altogether and stop making cigarettes?" to which he responded that if he did, others would continue. LeBow also developed, through Vector Tobacco Inc., the nicotine-free cigarette Quest (cigarette) which is a cigarette designed to help people quit smoking. Also that year LeBow teamed up with corporate raider Carl Icahn to make a bid for RJR Nabisco. In response to this proposed spin-off of Nabisco from RJR Reynolds, tobacco industry analyst Ellen Barabas stated that "I think there are people who would support a spin-off of Nabisco, but not by Lebow. One of the prime factors was Lebows dubious reputation as a manager. In 1994 his shareholders sued him, claiming he had taken millions of dollars in improper loans; Lebow settled out of court." According to court documents, Liggett, while under LeBow's leadership, "engage[d] in marketing tactics that appeal to youths, such as couponing, sampling, and 'buy one get one free' offers for its cigarettes, and advertise(d) in magazines with substantial youth readership."
Notable acquisitions
In 1987, Liggett bought a majority stake in Western Union which had a negative net worth of $200 million. The company, then renamed New Valley LLC, eventually filed for bankruptcy but was able to pay its bondholders in full via asset sales. Liggett later sold its remaining interest in Western Union Financial Services Inc for $1.2 billion earning it a $300 million profit.