Glass House

by Brian Alexander

  Worse, during the two weeks of the festival, the art shows, piano concerts, and kids’ puppet theater didn’t make a profit, ran at a loss, or were free of charge. Nearly the entire operating budget depended on free labor from platoons of volunteers, on donations, and on drawing big crowds to the two Saturday nights. But it rains in Ohio in July—sometimes with violent electricity arcing through the sky and tree-bending winds. Storms had hit the previous two years, smack-dab on those Saturday nights, and walk-up ticket buyers, having seen the forecast, didn’t show. What the hell was Ross supposed to do about the goddamn weather?

  That was the past, though, and Lancaster was now looking forward with all the determination it could muster. Piccolo was to be the man who would take the Lancaster Festival into a new, splashier era. He didn’t know it yet, but Lancaster was counting on him to help save the town.

  Much of the grim optimism was invested in a vision of Lancaster as a tourist magnet. Lancaster could be hip. It could be an artist colony. Those hopes partly depended on the success of the festival.

  A group of Ohio State University urban-planning students had come to Lancaster and suggested as much. Spruce up downtown, it instructed. Showcase the old buildings and Sherman’s house—the assets saved by Nancy Frick’s generation. Put a modernist glass sculpture on the empty block where Lancaster Glass used to stand. Maybe open up a few cool coffeehouses. Use the festival to promote Lancaster as an arts destination, get some artists to live there, and—voilà—you’d have a midwestern Brooklyn.

  “It is okay for Lancaster to embrace its old industrial ways, but the economy is demanding a more leisure-oriented and cultural base.” The group did not say who would pay for the leisure, or who would serve the leisure class. And even if “the economy” were demanding such a thing, Lancaster never had. Lancaster worked for a living—or at least it used to. But those days were over. Industry had died of natural causes—everybody knew that. Lancaster should become a postindustrial amusement park. The future was an artisanal-scone-based economy.

  As tenuous as that future may have been, many cast their eyes toward it. They wanted to ignore Anchor Hocking the same way they wanted to ignore Carly and Mark. Like it or not, though, Lancaster still needed Anchor more than it wanted to admit.

  “Oh my gosh, we would really, really be in bad shape” if Anchor Hocking closed, city council president Cathy Bitler told me. “Do we need those thousand jobs? You bet we do!”

  * * *

  Sam Solomon, EveryWare Global’s—and so Anchor Hocking’s—new CEO, was loath to say it out loud. Every time he thought about doing so, he pictured himself sitting in a courtroom witness chair. But it was clear that he’d concluded that the only way to save EveryWare Global—and therefore Anchor Hocking—was to scrape Monomoy off its back. Anchor Hocking wasn’t dying a natural death; it was being killed.

  Pinpointing exactly when he began to despise his bosses at Monomoy Capital Partners was a little like trying to decide exactly when a marriage curdled: you could never blame the sour taste on one incident at one moment in time. But by January, his contempt was obvious. Nothing had gone the way he’d hoped when he first walked through the doors on Pierce Avenue the year before.

  Since leaving his first post-M.B.A. job, at Procter & Gamble, Solomon had fielded calls from headhunters. Depending on the match between his current job and his ultimate ambitions, he’d listen, or not. In November 2013, he received a call about the EveryWare Global CEO job.

  At the time, Solomon was working at Sears Holdings. He ran the Craftsman brands—tools and paint. The majority owner of Sears was a hedge funder named Eddie Lampert. Lampert made a name for himself in the early 2000s by avoiding Internet companies and investing instead in unglamorous businesses like AutoZone, a chain of auto parts stores. After the dot-com bubble popped and he became a multibillionaire, fawning media profiles followed. So when Lampert merged Sears with Kmart and made lots of claims about how profitable the new Sears Holdings would be, the stock ran up. But by the time Solomon joined it in 2011, Sears was faltering.

  Solomon thought he would be able to spin Craftsman out of Sears and run it as a stand-alone company. He believed Lampert would go along with the idea, but Lampert, Solomon said, decided he didn’t want to lose a revenue driver for the Sears stores. Also, and perhaps not coincidentally, at about the same time that Solomon got the call from the headhunter, Sears stock was falling like a sack of potatoes. On November 25, 2013, it was a hair above $50. Two months later, it hung at just over $29. So Solomon listened.

  By January 2014, conversations with Monomoy had turned serious. Solomon flew to New York to interview at Monomoy’s offices, in the Metropolitan Tower on Fifty-seventh Street, next door to the Russian Tea Room and just down the block from Carnegie Hall. The reception lobby of the seventeenth-floor suite was decorated with totems of American industry. To the left, a silvery piece of cast metal, about eighteen inches high, sat on a display pedestal like a piece of brutalist art. On the wall to the right, a large photograph depicted an industrial landscape with a man walking across a bridge, a factory in the background. The red-tinged light in the picture made it hard to tell whether the man was walking to or away from work.

  Solomon understood the basics of private equity’s business model, as well as both sides of private equity’s reputation. PE’s general partners—the firm and its principals—formed one or more funds. The funds were pools of cash, obtained from investors, such as pensions, endowments, other investment houses, and very wealthy individuals. These investors were the limited partners. The PE firm made money by charging the limited partners 2 percent management fees on the money the investors deposited into the fund, and 20 percent of any profit after the fund vaulted a rate-of-return hurdle. Monomoy set an 8 percent hurdle, standard for the industry. Legally speaking, the 20 percent was not salary; it was “carried interest,” a term with roots dating to the era when cargo was shipped—carried—by sailing vessels on risky voyages, and the captain of a vessel took a percentage of the cargo as part of his compensation. As carried interest, PE’s income wasn’t taxed as regular wages subject to the tax brackets that bound most people. It was considered capital gains and taxed at 20 percent. The top bracket most PE principals would occupy if they weren’t in private equity but earned the same amount of money would require them to pay double that—39.6 percent. PE firms also charged a variety of fees. For example, they billed the companies they bought “advisory fees” for providing business wisdom.

  PE enthusiasts tended to view private equity investment outfits as saviors who could buy a company, boost efficiencies, create strengths that had faded under previous owners, and then sell the company at a profit, thus enriching both the general partners and the limited partners. The target company emerged better positioned to compete in capitalism’s grand marketplace. Everybody won.

  PE critics, on the other hand, viewed the buyout shops as chain-saw cowboys who slashed employment, cut investment, and shut down marketing and research—all in order to goose the bottom line just long enough to foist a shiny, but hollowed-out and highly indebted, company onto new buyers and then count their money on the helicopter flight from Manhattan to their summer houses in the Hamptons.

  Solomon regarded private equity as a matter of perspective. If you were a PE general partner, he told himself, “strip-and-sell is a great freaking return” on your money. If you were a target company employee, or a small town where that company was located, you might prefer to add value through investment in people, machines, and research and development, for a long-term benefit. Business finance isn’t religion: Nobody—at least nobody whose voice mattered much—was going to condemn you for making money either way.

  Solomon’s dispassion hadn’t come naturally. He had to learn it.

  * * *

  He liked to say that he was bred with a blue-collar work ethic. No matter how successful he became, Solomon always carried thoughts of his father and the rest of his people in the tobacco field
s of Warren County, North Carolina. They shopped in the usurious landowner stores, went into debt, made up the debt by sweating through backbreaking days, then fell back into debt the next year laboring for “Mr. Charlie.” In between harvesting and planting tobacco, they worked odd jobs like stacking wood and got shortchanged for their labor. But they didn’t do much about being cheated, because arguing with a white landowner was never going to get you anything but trouble. His father joined the air force to escape that life, and because of his dad’s decision, Solomon had been educated in good, integrated military-base schools in Panama and along the East Coast.

  He was a smart kid, and though his school counselors had their doubts—because Solomon was black—he applied to Duke University, a temple of the white South named for tobacco barons. He was accepted, with a scholarship.

  Then he messed up. He was still dating his high school girlfriend that first year. By the end of it, she was pregnant. He started his sophomore year as a married man, then became a father. With his scholarship, continuing at Duke might have been possible, but then the child was diagnosed with leukemia. His scholarship wasn’t going to pay medical bills, but the military would. So Solomon dropped out and joined the army. When the boy died less than a year later, the marriage seemed to lose its purpose, as did Solomon’s military career. Solomon and his wife divorced, but the military refused to let him divorce it. For the next three years, he worked in computers, telecommunications, and intelligence for the army while his former Duke frat brothers went on to medical school or good jobs.

  When his hitch was up, Solomon pulled out of Fort Sill, Oklahoma, and drove toward Houston, where his parents were living at the time. Normally, that’s a six-and-a-half-hour trip, but Solomon took six days. He saw some sights, he partied, and he called Duke. The university told him he was welcome to come back. The scholarship, though, was gone.

  At his reunion dinner in Houston, he announced the good news about resuming his college education at Duke, fully expecting his father to offer financial as well as moral support. There were toasts and huzzahs, and then his father took him into the backyard for cigars and brandy to express his pride in his son for accepting his responsibilities like a man. He had made a big-boy mistake but had done the right thing. But because he had blown his first shot at a paid-for education, he should keep right on being a man and pay his own way.

  Solomon moved to New Jersey, where he studied marketing at Rider University while supporting himself with his army-gained computer skills by working at tech companies. After graduating, he applied to Duke’s M.B.A. program. This time, his parents agreed to help.

  When he was accepted into Duke’s grad school, his mother, swelled with pride, couldn’t help bragging to Solomon’s aunt that her boy was getting an M.B.A. at Duke University. M.B.A.s could make real money, maybe $60,000, $80,000 per year right away, she said.

  “That boy is gonna drain you of every penny you have,” his aunt snapped. “No black person ever makes that kind of money.”

  Solomon did make that kind of money, and a lot more. But his tour around America’s corporate landscape taught him that the career he chose did not mirror the life he had left behind. His family’s history—and the military, too—instilled in Solomon “a huge sense of fair play, that there’s a right way to do things, a right way to treat people.” As a junior executive in modern business, though, “you pretty quickly learn that these people that you are supporting aren’t exactly playing the game the way you thought it was gonna be played.”

  Solomon became a pragmatist, not an idealist. The game existed, and he wanted to win, but to do so he’d have to play the game he found. If PE was part of the game, an instrument he could use to further his ambition, then so be it.

  Still, he was a build-value guy, not an extract-value one. So he was cautious going into his meetings with Monomoy. As he walked back out onto Fifty-seventh Street, though, he felt encouraged.

  “This was also articulated, and I believed to be true: [EveryWare] was the jewel of [Monomoy’s] crown. It was their largest investment at the time, the only public entity that they had at the time. And they were now professing a desire to move to the next level of private equity.”

  Monomoy was a small shop, compared with giants like Cerberus, the Carlyle Group, Kohlberg Kravis Roberts (KKR), the Blackstone Group, and Apollo Global Management. After his interviews, Solomon believed Monomoy saw EveryWare as a ticket to PE’s big time. EveryWare had potential to grow, to maybe become a billion-dollar enterprise. Monomoy had already extracted enough cash to make back its investment and more, but Solomon was fine with that as long as it was willing to pivot to growth and to hire him to lead the way.

  That’s what he’d always wanted but—as with the near miss at Sears—had not yet found. He had come to believe nobody was going to hand him the reins of a big, stand-alone company. Maybe his race had something to do with that, maybe not, but if he was ever going to be the man in control, he was going to have to build a billion-dollar company beneath himself. He was fifty-five years old. EveryWare looked like his shot.

  But Pierce Avenue in Lancaster, Ohio, proved to be a world away from Fifty-seventh Street in Manhattan, and not just geographically. Too much had gone on within EveryWare since he’d come to town in February, most of it hidden from view, buried by nondisclosure clauses in contracts: silence bought with money paid to departing executives.

  The month before, he’d sat down at a table in his office, scribbled a series of numbers on a piece of scratch paper, shoved it across the table, and stared at me as if the meaning of the numbers were so obvious, so incriminating, that there was no need to dissect them. He walked into a low-rent circus when he entered his new office that first day. The situation was worse now. EveryWare, and therefore Anchor Hocking, was near death, though nobody in Lancaster knew what Solomon knew.

  * * *

  The day after the national championship game, around noon, at almost exactly the moment the Lancaster Festival Board announced the hiring of Joe Piccolo, Carly heard another knock on Mark’s door—this time so thunderous and angry it rattled the house. Men in bulletproof vests smashed through the door and charged into the living room.

  Eric Brown was one of them. His Major Crimes Unit had been buying heroin from Carly for over a month, a little more each time. The January 9 buy of a gram, and the fact that Mark’s house was within one thousand feet of East School, jacked up the possible charges against Carly to a felony, mandating a “presumption for a prison term,” according to the Ohio Revised Code. The MCU had been biding its time so it could make that charge. Now it could hold prison over Carly’s head and hope she would drop a dime on everybody she knew in Lancaster’s parallel society of dope.

  Brown took a few minutes to look around the house: the dog shit, the staircase, the trashed bedrooms upstairs, the falling-down plaster, the beat-up walls, a vintage Lancaster High School class photo, Peggy Cummins. None of it really surprised him. Unlike most people in Lancaster, he spent a fair amount of time in the homes of addicts.

  Brown was tired. The MCU had been formed in 2001, when meth was the drug everybody worried about. It was fourteen years later, and what had been accomplished? Different drug, same story. He told himself that the situation would be far worse without his work and that of his fellow officers—which was probably true—but they were treading water, and he knew it.

  He’d once attended a National Narcotic Officers’ Associations’ Coalition conference in San Diego, during which he trooped down to the Mexican border as part of a field trip. “Here I am, hometown America, and I just couldn’t believe it. It was like a whole other world. I walked around down there with my jaw dragging on the ground.” Thousands of cars, and many thousands of people, crossed the border hour after hour. In his mind, he saw dope in the cars, and imagined that dope finding its way into Lancaster, to a dilapidated house on King Street.

  While some of it would come from poppies grown in Mexico, the war in Afghanistan unleashed t
ons—8,600 tons in 2014—of opium onto the world market, depressing prices no matter where it originated. Brown believed the war in Afghanistan was a lot more complex than most Americans realized. The way he figured it, behind-the-scenes deals between the Americans, the poppy farmers, and the Afghan government had been made to keep the place from blowing apart.

  A detective pulled Carly out of the house and sat her down in the backseat of his car while his colleagues searched Mark’s place. They’d find over ten grams of heroin and $103; Carly had just brought down a fresh supply.

  Using the gentle tones of a priest preparing to hear a confession, the detective recited her Miranda rights. Carly sniffled a little, but recovered quickly. And then she talked. She named every customer she could remember and her Columbus connect, too. Once they were sitting in a cop’s car, Lancaster junkies always talked. The junkies all knew they always talked.

  Carly also knew what else to say. “I do want help,” she told the detective. “I would prefer to have rehab and get help, because obviously I’m not a bad person. I have a problem, and I would love to be clean.” Every arrested junkie said this, too, or some version of it. Who wouldn’t prefer rehab to jail? Most of the time, they meant it—at least when they said it.

  Mark wasn’t home. He’d just left work on his lunch hour to make a run to the ATM. He had cell phone and car insurance bills to pay. On the way back to work from the bank, his phone buzzed. An MCU officer told Mark that Carly was in trouble, but he wasn’t. Mark should come home, though, to retrieve his dog.

  Mark wasn’t too worried. He’d skated by so many close calls with cops, it was downright weird. Besides, he stashed his dope elsewhere. Anything the MCU found would be Carly’s.

  He almost laughed when he pulled up to the house. King Street was blocked off with those big $50,000 SUVs, like they were busting a terrorist cell or something. The front door was damaged, like they just had to crash it. He stepped inside, and right away thought the house felt like a big show—cops all suited up to take down a girl drug addict—but before his thought about how bogus it was had completely formed, somebody threw him on the floor, searched him, took the $360 he’d just taken out of the bank, and said the cash sure looked like proceeds from his criminal behavior. They took his phone and said he was now under arrest for permitting the use and sale of drugs from his home.