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Sunday, June 9, 1996 - Page updated at 12:00 AM

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Gop Benefactor: A Very Private Man -- Vashon Island's Thomas Stewart Inhabits A World Of Power And Money

Seattle Times Staff Reporters

Copyright 1996, Seattle Times Co.

The man who tried to buy a Seattle election often sleeps with a gun under his pillow, sells pizza to the city's schools, earns $4 million a year, and maintains a mysterious presence in the region's politics.

Thomas J. Stewart controls a world of wealth and power, where influence is felt but not broadly displayed.

Through interviews and public documents, a portrait emerges of a man who pursues position but shuns the spotlight. A man who works behind the scenes, often through intermediaries who are handsomely rewarded or summarily dismissed.

One hidden piece of Stewart's world came into view last week when he admitted funneling $60,000 in contributions to an unsuccessful campaign to change the election of City Council members from an at-large to a district system. The campaign had been described as a grass-roots movement but, in fact, it was largely a creation of Stewart's money.

Violating state laws, a top Stewart executive arranged for friends to be secretly reimbursed for making donations to the campaign. Early last week, Stewart and the president of his company, Services Group of America, Inc., agreed to pay $60,000 to settle the civil infractions.

Frustrating the city Ethics and Elections Commission, the immaculately groomed Stewart offered vague answers about how he financed the local campaign.

Through a spokesman for Services Group of America (SGA), Stewart declined repeated requests for an interview. Requests for information about SGA and the company's political-action committee (PAC) also were declined.

"As a company, we tend to stay real quiet," says Steve Boyer, Services Group's director of corporate communication. "Tom is private and prefers to keep it that way."

As in many privately held companies, Stewart carefully guards business records, often declining to confirm even basic information such as how many people he employs. He has often obtained court orders sealing legal documents. Out of respect for his privacy or fear of repercussions, numerous employees and former employees declined to speak about Stewart or his business.

Some friends and family also declined to talk about him. "I'm not at liberty to say anything at this time," said his mother, Gladys Stewart of Seattle.

Thomas Stewart is a heavyweight Republican, one of the state's top political contributors. Individually and through his company's political-action committee, he has financed numerous local, state and federal campaigns. Nevertheless, he's managed to remain largely unnoticed in the public forum.

Stewart gives generously of his money but "he doesn't give for recognition," said Bill Baldwin, president of the Washington Institute for Policy Studies, a local conservative think tank. Stewart sits on the institute's board and gives it money.

Stewart gives, said Baldwin, because he "cares very much about the community and believes in job development."

Since 1990 Stewart and his Services Group of America PAC have contributed hundreds of thousands of dollars - mostly to Republican candidates, according to the Federal Election Commission and Washington Public Disclosure Commission.

And last week, Stewart's holding company contributed $200,000 to the state Republican Party. It was one of the largest gifts in party history.

Chief among Stewart's political beneficiaries is his close friend and former employee, Pete von Reichbauer, a member of the Metropolitan King County Council.

Von Reichbauer declined to comment for this story, saying Stewart is a private person and that he would prefer to let him define himself.

Based in West Seattle, Services Group of America is ranked as the 40th largest privately held company in the nation. Its business is mainly food processing, workers-compensation insurance and real-estate development.

One of its many subsidiaries is Food Services of America, believed by industry analysts to provide about 90 percent of the company's revenues.

When you eat at restaurants in Washington - or Wisconsin or Kansas or a number of other states - you're frequently dining on food delivered by a Stewart company.

When a child buys pizza or chicken nuggets in a Seattle public-school cafeteria, Stewart's company has likely provided them, as well as sponges, liquid soap and other supplies.

The result for Stewart is great wealth.

Tax records included in the recent King County Superior Court divorce file for Tom and Lynda Stewart show that, in the early 1990s, his income has approached or exceeded $4 million. Records also indicate he owns an estimated $9 million of residential property.

The trappings of wealth

One of the most anticipated Republican events of the year is the annual party picnic at Stewart's lavish Vashon Island estate where he raises purebred Arabian horses and Black Angus cattle.

The affair brings together party powerhouses and faithfuls dressed down in blue jeans with their children in tow for a day of carnival rides and music by country-fair musicians. Hundreds attend the picnic, jamming the Vashon Island ferry.

Bordered by wood-rail fences and tall firs, the sprawling estate includes a 6,000 square-foot home with six bedrooms and four bathrooms, as well as four smaller employee houses, a first-class stable and an indoor show arena. The horse barn features skylights above each of the 18 stalls and a richly appointed, wood-paneled office. The pond is stocked with trout.

Tom and Lynda Stewart were married in 1967, while he was still attending the University of Washington. He was 22, she 20. The newlyweds began their life on Vashon Island with little and, according to Lynda Stewart in divorce papers, used her income to buy their first house. They worked hard and lived simply, she said.

As their personal wealth grew, the Stewarts' lifestyle increased in luxury. In 1980, they bought Misty Isle Ranch, where the annual picnic is held. They and their five children began wintering in Scottsdale, Ariz., where they built a 12,000-square-foot home. They took yearly ski trips to Vail, Colo. Once, Tom and Lynda Stewart broke away for six months, saddled their horses and rode the Pacific Crest Trail from Mexico to Canada.

The family traveled on one of two private jets, a seaplane, a helicopter. They owned more than a dozen cars and trucks including a Rolls-Royce convertible, a Mercedes limousine and two Harley-Davidson "Heritage Classic" motorcycles.

The Stewarts were divorced this year after 27 years of marriage. Lynda Stewart could not be reached for an interview, but she has described herself in divorce papers as an "economic captive."

When she left him in 1994, Lynda Stewart claimed she had no money to pay for a hotel room, buy meals or hire a lawyer. Married to a multimillionaire, she was suddenly penniless.

Her husband controlled the household, she said in court papers. All the bank accounts. All the credit cards. All the property. She was in the dark about their personal and business finances.

"His pattern of behavior indicates an extraordinary need to control me and keep me from making decisions he might disapprove of," she said.

Into the mid-1980s, she said, she was given an allowance of $100 a week to pay for food, gas, ferry tickets and other expenses. The amount was later raised to $500 a week, she said, but she still had access to only one credit card. And while her husband traveled on one of the corporate jets between Seattle and Scottsdale, she flew coach.

After filing for divorce she sought a restraining order. In the divorce papers, Lynda Stewart said she was frightened by his "explosive temper" and his guns.

Later, in a divorce paper, Tom Stewart said that for a long time he'd kept a gun "either in a bed stand next to the bed, under my pillow or in a safe place within the home. . . . This is a customary practice of mine - in Arizona and on Vashon Island."

And for that matter, his wife had guns and sometimes carried one in her purse.

Tom Stewart vigorously denounced his wife's portrayal of him as a volatile, controlling man: "She refers to being scared of me and the physical harm that may come to her if she disagrees with me. These unfounded and preposterous declarations of her inner feelings are again without any reference to specific events or rational reaction to anything I have ever said or done."

But the divorce battle was mainly about money. She claimed she was entitled to half of an estimated $400 million in community property. He said their shared property amounted to no more than $10 million.

The divorce settlement was sealed.

Suddenly in the limelight

Thomas Stewart is known as "hard-driving." An astute, shrewd, results-oriented businessman, he rarely loses his footing.

Perhaps his most visible misstep to date was making illegal campaign contributions in an attempt to control the outcome of the city election.

Ethics officials are considering whether to send the case to King County Prosecutor Norm Maleng or possibly the state attorney general for a review of criminal charges. Maleng has in the past received campaign contributions from Stewart and currently has on his gubernatorial campaign staff a Stewart employee.

As in many large businesses, Stewart's employees are encouraged to give money to candidates and causes deemed friendly to the company. That is not illegal.

What is illegal is requiring employees to contribute, or reimbursing employees who make political donations. In a 1992 lawsuit two former employees alleged, among other things, that between 1990 and 1992 Stewart violated the campaign laws by requiring them to make contributions using money paid to them as part of bonuses. Before trial, the claim of illegal campaign contributions was resolved in an out-of-court settlement that prevents the employees from discussing the matter.

Other Stewart employees said nothing improper ever happened.

"He has a political-action committee that was represented. You could either agree or not agree," said Mike Cavalli, former president of the subsidiary company, Amerifresh. "I never felt intimidated one way or another.

"He's a fair guy and a good businessman. . . . Because he's done well, he's wealthy, they like to beat up on him."

But Cavalli said some people may have had trouble with Stewart's style: "Tom's not going to be one of those guys who's going to be warm and fuzzy."

Stewart sets very high standards. Those who measure up are richly rewarded. Those who fall out of favor are quickly dispatched.

A former president of Food Services of America received $1 million one year, records show. The manager of a subsidiary received $210,000, plus a $105,000 bonus.

Kenneth Wagner and Paul Junker were named co-presidents of Food Services of America in 1990. Stewart promised "wealth that we had never dreamed possible," the men claimed later.

Dismissed in less than two years, they sued, claiming wrongful termination and denial of equity interests in FSA. Stewart denied the allegations.

A jury found in favor of the two men, awarding each $900,000 and attorneys fees and costs.

Topic One on Vashon Island

Thomas Stewart is the most famous unknown person on Vashon Island. Next to the ferries, he's Topic One.

He has lived on the island for nearly 30 years, but has had few encounters with his neighbors.

Many only know him as the man who comes and goes in his noisy helicopter.

Jim Garrison, who grew up on the island, remembers seeing Stewart at a planning session in 1986. "He's very much opposed to governmental regulations over private property," Garrison said. "He came in and said people getting together to plan (use of) other people's property was a waste of time."

Known for his aggressive defense of private-property rights, Stewart and his political-action committee contributed heavily to last fall's Referendum 48 campaign to promote private-property rights.

Stewart operated a slaughterhouse on his property without a permit until state and federal agriculture regulators stepped in the early 1990s.

He commuted to Seattle by helicopter for eight years without a helipad permit until a neighbor turned him in. Earlier this year, the Metropolitan King County Council approved Stewart's application for a permit.

Building an empire

Stewart's low-key style took root on Seattle's waterfront, in an industry once dominated by family-owned businesses that quietly lobbied the Port of Seattle.

Melvin Stewart, Thomas' father, and partner Fred Smith flourished in this world, ruled by Port commissioners who ran low-profile campaigns largely financed by Port beneficiaries. The Port spent money to improve docks and other facilities, an arrangement designed to benefit the region's economy but one that also helped private businesses. Until recent years, the Port and its deliberations were closed to all but the cognoscenti.

Melvin Stewart and Fred Smith owned Seattle Stevedoring, which provided longshoremen to unload ships. The men expanded the business to 40 West Coast ports, from Alaska to Mexico, and changed its name to Stevedoring Services of America. The company extended its reach by buying Miller-Cascade, a large food-distribution firm.

In the early 1980s, Stevedoring's close ties to the management of the Port of Seattle helped it win an exclusive lease on Terminal 18, a large docking facility. It was - and still is - the only exclusive contract granted to an independent stevedoring company. Critics complained that the deal gave Stevedoring the power to dictate rates and squeeze out competitors. The Port said the move was necessary to compete with California ports. At any rate, the deal solidified Stevedoring's position on Seattle's waterfront.

In 1984, Fred Smith died and Melvin Stewart began easing out of operations, leaving their sons to run the company.

Then in 1989, something went sour between the families. In what was regarded by waterfront people as a nasty split, Ricky Smith won control of Stevedoring Services and Stewart took the remaining assets of what by now was known as Services Group of America.

The lawsuit dividing the company is sealed by court order. Hardly a word of the break, much less its cause, appeared in newspapers. Smith did not return calls placed to his office for this story.

Despite the break, Stewart's company appears to thrive.

According to a 1991 report by Kidder, Peabody & Co., Food Services showed revenue of $725 million in 1991. The company is believed to have exceeded $1 billion in revenue last year.

Inside the company, projects are given code names to protect secrets."Operation Big Chill" referred to a financing plan and "Operation Blue Chip" to an executive-incentive program.

Now the company project is keeping Stewart out of the newspapers.

"Thank you for the opportunity," Boyer, the company spokesman, said when asked to provide information about Stewart. "But we are going to decline to participate."

Seattle Times staff reporter Mark Matassa contributed to this report.

Copyright (c) 1996 Seattle Times Company, All Rights Reserved.

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