Behind, and in, the Headlines

SANTA BARBARA â€”  The joke after reclusive billionaire Wendy McCaw purchased the Santa Barbara News-Press last year was that she bought the paper to make sure it never wrote about her.

If so, the plan has been a spectacular failure.

McCaw, a vegetarian and historic preservationist who is one of America’s richest women, has made one headline after another. The first splash was over her battle to stop the state from creating a public beach at her 24-acre estate.

Then details of a nasty lawsuit by a former lover oozed into the news columns. Depending on whom you believed, McCaw was a vengeful woman using her financial might to destroy a working stiff who fell out of love with her, or the suitor was a Svengali trying to woo his way to a fortune.

All this proves that $2 billion can buy you a lot of things, from beachfront acreage in Santa Barbara and Pebble Beach to a 180-foot yacht and a $30-million Gulfstream jet.

What it can’t buy is a hiding place, even in exclusive, laid-back Santa Barbara.

Unwelcome as the attention has been for McCaw, however, it has opened a window on one of the most powerful business and philanthropic empires on the Central Coast--and on the perplexing woman who runs it.

From her estate on a wind-swept bluff overlooking the Pacific, McCaw has orchestrated bold moves into prime downtown real estate, publishing, aircraft and satellite technologies.

But her stewardship of the 145-year-old News-Press has drawn the most attention around town. Her willingness to use her printing press for battles against government bureaucracy and to oppose eating turkey at Thanksgiving mark her as a first-rate iconoclast in an industry that hasn’t had many since William Randolph Hearst.

Some at the newspaper fear she could become a laughingstock. Others in the community, however, say more people are paying attention to the paper today than have in years. And more attention to its new owner.

As McCaw’s profile rises, a picture is forming of a personality who seems equal parts flower child and steely deal maker.

To admirers, McCaw, 49, is a warm, retiring woman who loves restoring old buildings and decorates her historic Spanish Revival estate with jars of beach glass she collects on walks. No elitist, she personally serves the salad to lunch guests, allows rescued burros to wander her property and donates money to child abuse victims.

Those not so admiring note that after she bought the newspaper, employees learned that their pension and 401(k) savings plans would be replaced by programs some considered much less rewarding.

She drives her cobalt-blue Porsche 911 so aggressively that her former lover refused to ride with her. Those who have incurred her wrath portray her as a tough-as-tungsten micro-manager whom money has made confident of her opinions and resentful of those who oppose them. Fearful that people are after her wealth, she fights to the end when cornered, they say.

“There are two sides of Wendy McCaw,� said Gregory Parker, the small-town attorney who helped handle her divorce and then became her lover. “One is highly principled, do the right thing for the environment. The other side is highly opinionated, ‘nobody crosses me or I’ll bury you.’ �

McCaw declined to be interviewed in person for this story. In response to written questions submitted by The Times, she characterized herself as someone who takes her bearings by the settings of a strong moral compass. Her goals are “to make money in a principled manner,� she wrote.

These days money is likely to be on her mind more than usual. Forbes listed her worth last year at $2.65 billion, but major investments in telecommunications stocks have been “hammered� by recent declines in the market, said a friend, Bob Ratliffe.

Asked if she is no longer a billionaire, McCaw declined to comment “except to say that my net worth has increased� since her $500-million divorce settlement with cellular telephone magnate Craig McCaw was reached in 1997.

A Determined Gene Pool

So how did an unassuming girl from the Bay Area town of Redwood City gain the toughness to outmaneuver moguls like Craig McCaw, from whom she won that historic divorce settlement, and Disney chief Michael Eisner, whom she outbid for her Santa Barbara estate?

The daughter of a Hewlett-Packard engineer, Wendy Rae Petrak was not accustomed to great wealth as a child. But she swam in a determined gene pool.

A colleague, Al Bagley, described Jack Petrak as a “hell of a solid guy,� who had a salty mistrust of soft-soapers. “If you tried to sell him with too much polish, he turned off,� Bagley said.

These are traits Petrak appears to have passed on to his daughter. At Stanford University, she tutored and fell in love with a fellow history student named Craig McCaw, a lanky, handsome young man who was dyslexic. The McCaw name didn’t mean much at Stanford, but it counted for a lot in the Northwest, where Craig’s father made a small fortune buying and selling radio stations.

By the time he died in 1969, however, the elder McCaw was in debt, running a small cable television franchise. After Wendy and Craig graduated and married in 1974, they moved to gloomy Centralia, Wash., to run the family business.

Craig McCaw’s trademark was established early: prompt customer service, combined with a bold willingness to leverage assets for the next big deal.

He had an uncanny ability to “look around corners to see what’s next,� said O. Casey Corr, who wrote a biography of McCaw called “Money From Thin Air.�

McCaw also had a childlike habit of pulling out a Super Soaker squirt gun in business meetings.

“I think he zapped me once or twice with a Nerf ball,� Corr said.

Saving animals was a passion both McCaws shared. They spent $10 million in a widely publicized effort to return Keiko, the killer whale of “Free Willy� movie fame, to the wild.

Wendy’s desire to escape the Northwest’s soggy weather led the couple to spend time in Santa Barbara. A moderately serious runner, she loved to jog the beach and the dry hills around the affluent Hope Ranch neighborhood. The town was small enough that she could venture out to a Neil Young concert without worrying about crowds.

On Santa Barbara’s social circuit, some saw her as withdrawn and unapproachable.

“Nobody knows anything about her,� said Elizabeth Milam, the society writer for Santa Barbara Magazine.

To others, her reticence was charming.

“This is a woman with as much, if not more, money than anybody [else] in Santa Barbara,� said Tim Stack, an actor who sat next to McCaw over dinner at the home of the owner of a local television station. But “she’s not one of those people who has to let you know they own a jet.�

“Wendy is probably the most successful and humble human being I’ve ever met,� said actress Mary Ellen Trainor Zemeckis, a friend who recently organized a $250-a-ticket charity event that McCaw attended.

Part of that success came through McCaw’s ex-husband. One corner he looked around told him the cell phone craze was coming. He entered the business in a big way and, in 1994, sold McCaw Cellular to AT&T; for an eye-popping $11.5 billion. The deal catapulted Craig and Wendy onto Forbes’ list of the 400 richest Americans.

It also caused Craig to take a look at his life. After 21 years of marriage, the couple separated in 1995. In a legal filing, Wendy McCaw said she was “devastated.�

But if Craig thought he could pay her a few million to go away, he misjudged Jack Petrak’s daughter. She assembled a legal strike team and mounted an aggressive battle for the couple’s estate, withstanding 27 days of depositions.

Today, the couple have a good relationship and even invest together, said Craig McCaw through a spokesman.

After her separation, Wendy took up residence in Santa Barbara, reportedly outmaneuvering Eisner to purchase a 20,000-square-foot Hope Ranch estate overlooking the Pacific at the end of a eucalyptus-lined private road. The $9-million, all-cash deal has proved a wise investment. A smaller estate in the area recently sold for $30 million.

She leases 12 acres at the Santa Barbara Airport, where she keeps her Gulfstream jet and rents space to Tenet Healthcare’s corporate fleet. Tenet Chairman Jeffrey Barbakow praised McCaw as a “great businessperson� who does her homework.

She owns a second home on the beach in Monterey County, and her company has purchased historic buildings in Santa Barbara. Last year, she emerged from the shadows to purchase the New York Times Co.-owned Santa Barbara News-Press for a reported $100 million.

Afraid that a cut-rate chain would buy it and slash costs, the newsroom breathed a sigh of relief that the rich, environmentally aware McCaw was taking over.

“We were all euphoric,� said one staffer, who like most employees interviewed would only speak on the condition that they not be identified.

After the deal closed in October, McCaw hosted a party on the third floor staffed by waiters with silver trays serving cake and champagne from the Biltmore. She prefers the best French labels. Glass in hand, McCaw seemed the farthest thing from a secretive Howard Hughes-type magnate. If some were surprised by two men wearing earpieces standing sentry in the hall, others said a woman as rich as that could hardly be blamed for being cautious.

McCaw made all the right points, saying she cared about her community and promising not to interfere with the news-gathering process.

“She’s really smart,� said a staffer who chatted with her about urban sprawl at a subsequent event.

Staffers Jolted by Changes in Benefits

Robert G. Magnuson, a former Los Angeles Times vice president who talked twice with McCaw about becoming publisher in Santa Barbara, said he found her “very personable and smart.�

Magnuson, now president and chief executive of InfoWorld Media Group in San Mateo, said he was most impressed that she seemed to “understand what she didn’t know� about newspapers. She genuinely seemed to want to improve the paper.

But at the October party, the staff was jolted when then-Publisher Allen Parsons’ sudden resignation was announced. He was replaced by Joseph Cole, McCaw’s lawyer.

A week later, employees said, they were told that the company-paid pension plan and the company match to the 401(k) retirement savings program were being eliminated. The money saved would be pooled and used to pay bonuses for the paper’s best and brightest, which they could spend or invest as they wished.

Two staff members said the first bonuses ranged from $400 to $800.

“It was kind of a joke,� said a reporter. The worst part was when some staffers learned they got no bonuses.

“The whole thing is sort of ghastly,� one writer said. “We feel like we’re in the hands of amateurs.�

McCaw, however, said she has paid “substantial cash bonuses� and that “the changes have been well-received.�

The paper’s editorial opinions have aroused talk around town.

Last Thanksgiving, the News-Press took a stand against the turkey dinner, saying the paper could not support “a tradition that involves the death of an unwilling participant.� A later editorial attacked the minimum wage, saying it and a “living wage� proposal “force a counterfeit value on labor.�

The paper has carried several editorials and opinion pieces critical of the state Coastal Commission, against which McCaw is waging a legal battle to block a stretch of shoreline in front of her estate from being made a public beach.

McCaw said she had nothing to do with the controversial editorials, but defends them. If a newspaper is doing its job, she said, people are going to disagree with its opinions.

“That is OK in my book--in fact it is more than OK,� she said.

Coastal Commission Chairwoman Sara Wan said she feels that the editorial attacks on her agency were “more than unfair. They represent a misuse of the newspaper.�

In an unusual departure from the way most newspapers operate, Executive Editor Tom Bolton does not know who writes the editorials.

“They’re not written in the newsroom,� he said. “They are provided to us by the owner and publisher.�

Some observers believe that McCaw’s influence is showing up in still other parts of the newspaper, including environmental coverage.

Dan Walters, a Sacramento Bee political columnist whose work appears in the News-Press, said he recently attended a cocktail party with Santa Barbara power brokers.

“She was quite the topic of conversation,� he said. “They talked about how personalized and erratic the paper had become.�

His view is different. “I kind of like the idea of a maverick running a newspaper,� he said. “It’s better than the McPapers out there.�

Editor Bolton doesn’t think the editorials have harmed the paper’s integrity.

The News-Press has long been considered an above-average community newspaper, with a respected voice in local affairs. The paper caught the national spotlight in 1962 when then-owner Thomas M. Storke won the Pulitzer Prize for writing “forceful editorials calling public attention to the activities of a semi-secret organization known as the John Birch Society.�

While some at the paper and outside it question the direction of the editorial pages, others say McCaw has done some good things, including expanding business coverage. Staffers said she has also announced plans to hire an investigative team.

“It looks like she’s going to improve the paper,� said George Thurlow, publisher of Santa Barbara’s alternative paper, the Independent.

“They’re already forcing us to work harder,� he said. “We would have preferred a cut-rate chain.�

Bolton, a 10-year News-Press veteran, said McCaw has respected the independence of the newsroom, even when the paper writes about its owner. “We’ve done several stories [about her], and I’m still here,� he said.

A Battle Over a Beach

McCaw’s first news splash landed a direct hit on her glossy environmental reputation. A Surfrider Foundation online newsletter accused her of wanting to “scrub the rest of us out of� her bit of paradise by trying to rescind an agreement to dedicate the beach below her bluff-top estate to the public.

McCaw and her representatives say the case is not about the environment, but about the government’s unconstitutional attempt to take her land without paying for it. Potential fines have hit a record $17.7 million, according to California Deputy Atty. Gen. Joe Barbieri, proving that McCaw’s reticence does not prevent her from waging public battles.

“I refuse to be bullied or intimidated,� she said.

If anything could cause her to reconsider, it might be her most recent brush with notoriety, her failed romance with Parker.

Six years her junior, Parker declined to discuss details of his life with McCaw but said they met when he was representing the previous owner of the Hope Ranch estate. In 1997, as the McCaws’ marriage unraveled, Parker and McCaw began dating.

Brian Cearnal, an architect hired to restore the estate, socialized with the couple, although he and McCaw have since clashed.

“Greg was very good for Wendy,� Cearnal said, and he helped ease her distrust of people. “She’s worried [that] everybody is going to take advantage of her,� he said.

Zemeckis, the former wife of film director Robert Zemeckis, can sympathize. “It’s challenging,� she said, to know whom to trust when you’re a rich, single woman.

At times, no detail was too small for McCaw’s attention. She might question a $1.27 copy charge on a bill of thousands of dollars, Cearnal said.

Parker cajoled her out of that. And McCaw was generous to the new man in her life. Gifts included a BMW sports car.

Cearnal and his wife spent a week with the couple on McCaw’s yacht in the Mediterranean. The setting couldn’t have been more romantic. The 180-foot yacht was one of McCaw’s favorite places. Moored part of the year in the Mediterranean and the rest in the Caribbean, it had a crew of 14 and a helicopter on deck.

Cearnal said he was the first to hear that Wendy and Greg planned to be married. “He proposed and she accepted,� Cearnal said.

McCaw refused to discuss details of the relationship but feels that Parker had just one thing in mind all along: her fortune.

In a March legal filing in response to Parker’s suit asking $11.4 million for fraud and breach of contract, she said he initiated an intimate relationship and “almost immediately� proposed, claiming his marriage to a Santa Barbara attorney was unhappy.

McCaw said Parker soon had “carte blanche� over her business affairs. Though she paid him $700,000 a year, twice what he made at his law firm, he wanted more, McCaw said.

Shortly after she gave him an interest in her assets, she said, he broke up with her. Parker borrowed her jet to take his two children and their nanny on a ski trip to Utah, and when he got back, he dropped McCaw and, according to one of her legal filings, “is now married to the nanny.�

Parker said his wife was not a nanny at the time but a teacher in her late 30s who baby-sat his children twice. Far from being an assignation, the ski trip was originally intended to help McCaw develop a relationship with his children, he said. The night before they were to leave, she suddenly decided to fly off to England to visit friends, he said.

“She couldn’t face being involved with my kids,� Parker said.

“You just don’t say no to Wendy,� Cearnal said. “Greg said no.�

Parker also said that giving him an interest in her assets was her idea. And he suggested she get outside counsel to advise her after they became lovers, he said.

A spokesman for McCaw, Michael Sitrick, denied that Parker’s children were a problem. McCaw said she fired Parker after he refused to give up his interest, “baldly telling her that, with the amount of money he stood to take from her, he would not ever have to work again,� her legal papers say.

Cearnal said he was also fired. He said he tried to be a friend to McCaw. “I was being a nice guy,� he said. “I’ve learned that with a billionaire, nice guys finish last.�

McCaw said that Cearnal was paid “substantial sums� for work he did properly but that other work was subpar. She added that he is a “good friend� of Parker, which the two men acknowledge.

Parker said his former lover is bent on nothing less than ruining him. She has filed a complaint with the State Bar of California accusing him of gaining undue influence by doing business with someone he was involved with romantically. He now works for a software company because, he said, his old law firm won’t hire him back since he went to battle with the powerful McCaw.

Despite the falling out, Parker dismisses those who say McCaw has accomplished nothing more than marrying and divorcing well.

As for taking advantage of her, he scoffed, “If I was half the cretin they say I am, I would have married her.�

McCaw’s friends say she’ll weather her problems.

“She’s gone from a beret to a helmet,� said Zemeckis about McCaw’s change from pampered married woman to bruised public figure.

She may need the helmet awhile longer. Her most recent firefight erupted when interim publisher Joe Cole was compelled to call a meeting to address rumors that McCaw was putting the paper up for sale.

To some, the rumors made sense. She was said to be fed up with the fractious news business and tired of having her life dissected in print.

But McCaw made it clear that anybody who thought she’d turn tail when trouble hit didn’t know her. In the staff meeting, Cole said she scoffed at the rumormongers, saying, “What have they been smoking?�