The Boston Globe from Boston, Massachusetts • 100

A4 THE BOSTON SUNDAY GLOBE DECEMBER 19, 1993 Kraft's bigg 'er crafts: Paper Mdpaeka By Richard Kindleberger GLOBE STAFF In the 28 years since Kraft went to work for his father's company, he has done very well indeed. A lthough the New England Patriots and Foxboro Stadium may put him in the news, they are really "the smallest thing I do," Robert K. Kraft says. million, or that International Forest Products is "much bigger." Between them, the companies employ more than 2,000 people worldwide, according to Kraft. More recently, he has expanded into new fields by setting up companies in the entertainment and money management industries.

The groundbreaking last month in Montville, near New London, means Kraft can add a new boast: As the region has lost hundreds of thousands of jobs, and as large companies have continued to announce layoffs, his medium-sized, family-run company is creating manufacturing jobs in New England. The $125 million plant is expected to employ 80 workers after its opening, which is projected for the spring of 1995. It is already being touted as environmentally friendly, and the company says it will be the first paper mill in the world to use exclusively recycled waste paper and recycled water as raw materials. "Everyone thought I was nuts when we started this 2Vz years ago," Kraft said. "In an industry that is mature and over capacity, no one ever believed we would complete the project That's part of the fun." Kraft takes particular relish in the fact linerboard, but Rand-Whitney is better known in the industry for its high-qua'ity printed folding cartons Its boxes carry Es-tee Lauder cosmetics and Hasbro toys, for example.

Kraft's success in paper and packaging, along with his other business ventures, has brought him to the attention not only of Gov. Weld but also of scholars who theorize about business. "Robert is a very direct, practical guy, not a theoretician but a man of action," said Michael Porter, the Harvard Business School professor who has written about competitiveness and who, like Kraft, is a Weld adviser. Kraft, Porter said, has taken a "high-skills, high-technology, high-value approach to competing, and that's allowing him really to be a worldwide player." Peter Lynch, the former stock picker for Fidelity Investments, described Kraft as determined, open and positive. "People in the forest products industry have been talking about the end of the world for the last three years, and here's a guy who's talking about doing a new plant," Lynch said.

"He's just an up person." Lynch also credited Kraft as being someone who hires outstanding people. In particular, he had praise for his choice of Edward Huebner, formerly of Hellman Jordan Management to run Chestnut Hill Management Kraft's investment firm. Chestnut Hill has been hot in its first three years'of operation, according to Lynch and figures given out by Kraft An investment placed with the firm in October 1990 would have tripled in, value by the end of December, according to those figures. Assets under management have grown from $20 million in 1990 to $480 million now. The firm invests money for Kraft and a few friends.

Another of the newer Kraft ventures is Gem Star a performance promotion company run by his wife. The company, started a year ago, "was Robert's way, I think, of fulfilling a need I have," Myra Kraft said. She has a particular interest in Israel, she said, and her work with Gem Star takes her there. Robert Kraft's biggest overseas operation, Carmel Container Systems is also in Israel. It employs 700 workers and is the only public company in the Kraft stable.

Kraft is chairman and the majority stockholder. "We're expanding our business in the Mideast and using this as a gateway," he said. It may seem a tad less glamorous, but what really moves Kraft is paper and aging, he said as he drove through rural Connecticut last month. He was on his way to a groundbreaking for his latest venture, a cardboard recycling plant. In the 28 years since Kraft went to work for his father's company, the high-powered businessman and would-be owner of the Patriots has done very well indeed in the paper and packaging business.

He expanded Rand-Whitney Group Inc. to the point that he can now boast that he heads the largest privately owned packaging company in the United States. He has had even bigger success in a sister company that he started in 1972, International Forest Products which trades raw terials and paper products. Kraft won't disclose numbers for the companies beyond saying that ney has annual revenue of more than $100 that Rand-Whitney was able to get its recycling mill approved and financed while the industry's behemoths, virgin paper companies like Weyerhaeuser, sat on the sidelines. But, he says, that's part of his basic approach: "We try to find niches where we can add value and do things other people can't do or don't want to do." In planning the mill, Kraft is betting on a growing market for recycled cardboard, spurred in part by an expected trend toward legislation mandating recycled contents.

Company officials say their recycled linerboard, the brown paper used to make corrugated boxes, will be cleaner and stronger than the virgin product, and could command a higher price. This plant will turn used cardboard into The family ties that bind pull at the man who would purchase the Patriots I I is lXS' J- a 1M GLOBE PHOTO STEVE MILLER Robert Kraft: "The guy has tremendous heart, tremendous passion," a friend says. over the stadium and with his Patriots bid pending, then worked with a Brpokline firefighter to "put this thing together." But even as admirers praise his warmth and generosity, more skeptical observers question his sincerity and chafe at his untiring pursuit of approval. Several acquaintances, speaking anonymously, expressed doubts as to how genuine Kraft is and questioned whether he is interested in people who can't be useful to him or enhance his status. A high school classmate said some who knew him then saw him as holding himself above other people.

He remembered Kraft trying to "take over" the Brookline High Class of 1959's 25th reunion a few years ago, and making a speech' that was largely ignored. Others portray things differently. Kraft was friendly with everyone and "a little bit political in that sense," said Marvin Shapiro, who lived in Brighton but knew him from youth activities at Brookline's Kehil-lath Israel temple. But Shapiro said he never felt" Kraft was insincere. Handsome, athletic and a leader, Kraft "was a little bit of a golden boy" who was widely looked up to, Shapiro said.

And some of the sniping may stem from envy or originate with business rivals who see Kraft's plans as a threat to their own. Boston is a small town, and "anytime anybody gets up too high, they want to kneecap him," a Kraft admirer said. "It's a sport in this town." Kraft's urgency to please can backfire. Last April, seeking to match or outdo the surprise birthday bash his wife threw for him in 1991, he bought out a performance of "Guys and Dolls" at the Colonial Theater to celebrate Myra Kraft's 50th. About 250 guests, including some of Boston's leading lights, were invited.

But the cast became miffed when Kraft did not follow through on his stated intention to give to poor people some of the seats left unoccupied by party guests, according to stage manager David Foster. The resentment increased when tributes offered to Myra in the lobby during intermission, followed by cake and champagne, ran longer than expected. That left the cast playing to a nearly empty hall as the second act got under way. The upshot was that the cast refused to sing happy birthday to the guest of honor at the end of the curtain call. Afterward, there was an exchange of angry words, Foster said.

He described the behavior of the partygoers, in the eyes of the offended cast, as "highfalutin." The Krafts were mortified, especially after news of the flap was leaked to the Globe. Kraft says now that it had proved difficult to find a suitable method of distributing excess tickets. Also, there was no graceful way to shut off the festivities in the lobby when the theater, needing to pay the crew overtime if it fell behind schedule, raised the curtain on the second act. Kraft can find solace in his close-knit family. His wife his "greatest asset" and two of his four sons work for Kraft companies, and his wife and all four sons sit on Rand-Whitney's board.

Kraft says he wants to own the Patriots in part to please his sons and keep them close to home. volvement with the team as a chance' to contribute something to the region and boost "the psyche of the community." "Money-making won't be the' main objective here," he said, "but if you do a good job, the value of the asset will be enhanced and grow." His record of starting successful businesses prompts friends and acquaintances to predict Kraft woukt be good for the Patriots. His one previous experience in owning a sports team is cited as a guidepost to what he would do. After buying the Lobsters in bankruptcy proceedings in the mid-1970s, Kraft and partners spent heavily to lure players like Martina NavratiJova, and turned the team into one of the best in World Team Tennis. But with popular support shaky, the league folded in 1978,.

and the Lobsters along with it. Kraft and his partners are credited, even by ad-' versaries, with doing the right thing and paying off their bills rather than declaring bankruptcy to escape the debts. Richard Morse, a Brookline investor who was a partner with Kraft on both the Lobsters and Channel 7, called his friend tough but honorable. Morse said Kraft has been unfairly criticized for refusing to renegotiate the Patriots' lease with Foxboro Stadium unless the team agreed to extend it. The team contends the lease is highly unfavorable to it and an obstacle to its progress.

"Well, the Patriots signed the lease," Morse noted. Morse was one of eight high-powered friends produced by Kraft to testify to his character and achievement for this article. The group is impressive, and so are the Kraft tributes volunteered by its members. "A classic entrepreneur," said Michael Porter, Harvard Business School professor, guru on competitiveness and adviser to Weld. "A very intelligent person and very insightful in business," put in Ed Es-kandarian, chairman of Arnold For-tuna Lawner Cabot and one of the best-known names in Boston's advertising world.

Harvard Business School dean John McArthur said Kraft "has a lot of outstanding human qualities," including intelli; gence, integrity and civic-minded-ness. Some current acquaintances rj fuse to take at face value Kraft's rn sistence that he values his privacy and has no interest in celebrity. "I don't think there's any question but that Bob likes the limelight" saril special events coordinator Dust Rhodes. "I used to work in th NFL," in the league's player operations office. With maybe one exception, "I don't know a shy owner Jn the group," she said.

But an admirer who asked not to be quoted said Kraft is genuinely torn about being in the public eye. Holding him back may be some insecurity and a desire not to be seen as "tooting his own horn," this acquaintance said. "The other part of' that is that if you want to be a player, you've got to be visible." Kraft insists the last thing he wants with the Patriots is to take center stage. He says he could stay in the background while aides dealt with the media. So why does he want the team? "IiTa funny kind of way he said, "this is serving the community." KRAFT Continued from page Al cesses, he appeal's to want as badly as ever to be at the center of things, even as he worries about the public exposure that stance brings with it.

Kraft's accomplishments both professional and personal are numerous, and his growing influence lias increasingly raised his profile. He took his father-in-law's Rand-Whitney Corp. and built it over the pwt 20 years into the largest privately owned packaging company in fjie country. He also started International Forest Products which trades raw materials and paper presets around the world and has outgrown the company he took over Shorn his father-in-law. 2 Among his newer ventures are a tjigh-performing money management company and Gem Star jm international concert promotion agency he started with his wife, Slyra.

Working through Gem Star, ijie couple made news last June by ringing Elton John to Israel and jien, after he left in a fit of pique, by Coaxing him back to give his concert. Kraft was also in the thick of Gigh-profile maneuvering at SfflDH-TV (Ch. 7) 2V years ago as minority owner. With relations trained between him and majority gwner David Mugar, Kraft exercised his option to be bought out for a ferge sum, squeezing Mugar's and station's finances. 2 He and his wife have given millions to charity and have taken an jjctive interest in the arts.

In a demonstration of the range of his inter-issts and initiatives, Kraft began negotiating this year to buy the shuttered Opera House in Boston and refurbish it so that Sarah Caldwell's jgpera troupe could return to the tage. The walls of his 1 Boston Place office are adorned with pictures of JKraft family members with the Kennedys and other national politicians. Jnd Kraft, although a Democrat, has ecome a confidant of the state's Republican governor, William Weld, in the past year or so. His success and influence come part from his engaging, if complicated, personality. A natural politician since childhood (he was class president at both firookline High School and Columbia College), Kraft likes people and has knack for making them feel liked.

$Vhile detractors see him as mainly Jjiterested in people who can do gomething for him, friends cite acts previously unpublicized kindness as evidence of the kind of person he George Regan, the public relations consultant for Foxboro Stadi-fm, recalled how Kraft reached out him four years ago, before they really knew each other. After Regan lad a distressing falling out with a Jriend, Kraft consoled him at length the telephone. "The guy has tremendous heart, tremendous passion," Regan says now. "The guy Jriidn't have to do that two hours out 5of his Sunday evening." More recently, Kraft played a skey role in arranging a ceremony at Brookline temple to honor David JWax, a high school classmate and 5Air Force pilot who was lost in Vietnam in 1965, and whose remains Jwere recovered earlier this year. According to a lifelong friend, Richard Sherman, Kraft "dropped everything" in the middle of negotiations On the other hand, Kraft saluted the 84-year-old Hiatt last month at the company's ground-breaking for its newest plant in Connecticut and then posed for photographers with his arm affectionately clasping the older man.

Kraft may have been impatient in the beginning, but he has long since become a wealthy man. After acquiring 50 percent of Rand-Whitney from his father-in-law in a 1968 leveraged buyout he gradually took a larger role in running the company, and eventually became majority owner. In buying half of the company in 1968, he put enough liquid wealth into Jack Hiatt's hands to permit him to give $30 million over the years to education and the arts in Worcester, according to a 1990 Globe story. Kraft declines to estimate his net worth, saying only that he is "comfortable." He said he is less interested now in making money than in making a difference. At one point, Kraft saw entering politics as a way to make a difference until he saw firsthand how the public spotlight of politics can harm a lifer Chairman of the Newton Democratic City Committee at age 27, he contemplated running for the congressional seat held by Philip J.

bin (D-Mass.) in 1970. Rev. Robert F. Drinan, the Jesuit priest, challenged Philbin instead and rode growing anti-Vietnam-War sentiment to an upset victory. Although Kraft simply cites the loss of privacy and strain on family life in explaining why he decided against entering politics, his wife says there was an even more compelling reason: the suicide of a friend, Democratic state representative H.

James Shea who came under intense public pressure after sponsoring a bill challenging the legality of the Vietnam War. Now, years later, making a difference would mean owning the Patriots and turning the team into a contender. Kraft said he sees his in- Indeed, family is central to Kraft and helps explain why he seems to have a lot to prove. His father, Harry Kraft, was a beloved figure in Kehillath Israel, when Bobby, as his friends called him, was growing up. The elder Kraft, who died in 1975, was a leader of the temple's youth groups and a man revered for his gentleness and breadth of religious learning.

But his dress manufacturing company in Chinatown, over what used to be the Cathay House restaurant "just eked out a living" because Kraft would not press his debtors for the money theji owed, Myra Kraft says of her father-in-law. "He just was not a businessman," she added. "He should have been a rabbi." After the dress business was liquidated, Harry worked for his son at International Forest Products as an accountant in the last three years of his life. But, during an emotional moment in the recent interview, Robert Kraft acknowledged that although he loved his father deeply, he also felt some resentment. The Kraft household was Orthodox.

That meant that Kraft, although an avid athlete, was denied the chance to play most sports in high school because it would have interfered with Hebrew studies after school and observance of the Sabbath. When asked if it had once been his father's wish that Robert become a rabbi, and if that was the reason Hebrew lessons won out over sports, tears welled up in Kraft's eyes and he briefly excused himself from the. room. "I was blessed to have a strongly spiritual and loving family, and a lot of kids aren't blessed with that" he said on his return. "That gave me an' edge starting out in the world way beyond what anyone can hope for.

Money can't buy it nothing can buy it that sense of family love, and also discipline." Kraft went to Columbia on a scholarship, where he was able to play sports. He won his letter as a running back and safety on the lightweight football team. In his junior year, home on winter break, he met and fell in love with Myra Hiatt daughter of Jacob (Jack) Hiatt, a leading Worcester industrialist. (The elder Hiatt is also the uncle of Arnold Hiatt the former longtime chief executive of Stride Rite Corp.) By the time he had completed Harvard Business School two years later, on a fellowship, Kraft and Myra were married, had the first of their four sons and the second on the way. Feeling "dirt poor," Kraft wanted to head for Wall Street to put his new skills to work making his fortune, according to his oldest son.

Jonathan. But Myra's father and his own intervened. Not having a son, Jacob Hiatt wanted his son-in-law to join the family business. Hiatt used his developing friendship with Harry Kraft to push the arrangement. And Robert, who family members said felt lingering guilt over having chosen a career in business instead of bowing to his father's wish that he become a rabbi, acquiesced.

That put him in close proximity with another older man against whom to measure himself. As he gained clout in Rand-Whitney, he proceeded to expand it aggressively and, later, to create another company that he built into something even bigger. No one could truthfully say his success was handed to him. Kraft and his wife acknowledge friction between him and his father-in-law during the early years, with Kraft wanting a larger part in running Rand-Whitney and Jacob Hiatt wanting to retain control. In a curious omission that may reflect lingering mixed feelings on Kraft's part, the company's promotional brochure outlines the history of Rand-Whitney, reaching back to its origins in 1857 and emphasizing its "family values" without mentioning Hiatt and the 30 plus years he ran the company..