Jackson T. Stephens is a publicity-shy financier who heads a sprawling personal business conglomerate with interests ranging from banking and mining to insurance and farming.
Though little is known about the true extent of the privately held empire, it is clear that Stephens has accumulated a personal fortune estimated at hundreds of millions of dollars making him among the wealthiest individuals in the United States.
Jack, 51, and his 69-year-old brother, W.R. ("Witt") have long been powers in Arkansas political affairs. But now Jack has entered the national political scene. Since Jimmy Carter took office, he has become an active fund-raiser for the National Democratic Party. He has also played a behind-the-scenes role in the complicated and controversial financial affairs of Budget Director Bert Lance.
When Lance announced his Intention to sell his interest in the National Bank of Georgia, it was Jack Stephens who picked up the phone and started looking for buyers.
Later, when a representative of Atlanta businessman David N. Smith called Lance to make an offer for the NBG stock, Lance arranged for Stephens to "handle all the negotiatiions."
Stephens was introduced to Lance only two years ago by a mutal friend is a banker of Atlanta. The two men became fast friends, sharing interests in money and in Jimmy Carter, Lance had served in Carter's Georgia administration, while Stephens had been a classmate - though not a friend - of Carter at the Naval Academy.
A Stephens aide described why his boss has suddenly drawn close to Carter: "He believes in Carter. They have similar backgrounds, and he's the only president in a long time who has met a payroll. They are Baptist, southerners and they grew up on farms."
The hub of the financial empire is Stephens, Inc., a brokerage house which is wholly owned by the brothers and is based in a modest, three-story building here. With assets of $143 million, little known Stephens, Inc., ranks No. 10 among the country's brokerage houses.
The brokerage specializes in municipal and industrial bonds, many of which are sold to the more than 30 banks in which Stephens holds stock. Some 300 banks subscribe to the data processing services of Systematics, Ind., which is 80 per cent owned by Stephens, Inc.
Stephens, Inc., also owns Leisure Lodges, Inc., which operates 69 nursing homes in Arkansas and Texas, and has a substantial interest in an $86 million California nursing home chain.
Witt Stephens owns Arkansas Oklahoma Gas Co., with assets of $18 million, and has an option to buy for $21.5 million the Arkansas-Missouri Power Co. The brothers are also major stockholders in several other utilities.
According to a series published last spring in the Arkansas Gazette, the brothers' biggest profit potential comes from their rights to vast natural gas reserves. What is more, wholly owned Stephens Production Co. controls extensive coal fields in Arkansas, Oklahoma and Wyoming.
Among their other known holdings are two-thirds of a retail discount chain called Ayr-Way Stores, Inc., with annual revenues of $200 million, an $18 million industrial supplies company, and an iron foundry located here in Little Rock.
Not long ago, the president of Jack's wholly owned Union Life Insurance Co. ($711.2 million of insurance in force). A Vernon Weaver, was named by President Carter to head the Small Business Administration, Weaver, like Jack Stephens, was in Carter's class at Annapolis.
Witt Stephens started it all peddling $1 belt buckles, and later selling discounted municipal bonds during the depression. Then he invested his profits in bank shares.
Witt served in the legislature, and while his power in the state is sad to have reached a zenith during the Orville Faubus administration, the Gazette notes that even today in the state senate "all the men with clout . . have had obligations or ties to Witt."
Rep. Ray Thornton (D-Ark.), a nephew of the Stephens brothers, is generally referred to here as the apparent heir to the senate seat of 81- year-olf John L. McClellan, a long-time friend of Witt's.
But little is known about the brothers. As one attorney here put it. "Nobody knows much, and those who do aren't going to tell you."
As a result, a few anecdotes are constantly repeated, and they always involve the more colorful Witt. One of them is about a 1945 hearing in Washington when Witt wanted to buy Ft Smith Gas Co. Asked by a hearing judge where he would get the $150,000 downpayment, Witt is described digging into his pocket, "Judge," he is quoted drawing. "I brung it with me."
The paths of Lance and Jack Stephens have crossed regularly since they first met two years ago.
Most recently, as more information has surfaced about David Smith's plans to buy Lance's interest in National Bank of Georgia, it was announced that he was seeking financing through Union Planters Bank of Memphis. As it happens, Stephens, Inc., has sizable investment in Union Planters and a relationship with the bank that goes back more than three decades.
Jack Stephens also confirmed in answers to a list of written questions submitted by The Washington Post, that his frim tried to raise capital for Smith's company before Smith emerged as a potential buyer of Lance's shares.
"We showed a private (stock) placement memorandum several months age to several institutions and those discussions are still open," he said.
I January, just before beginning his government service, Lance found it necessary to switch a $2.7 million loan from Manufacturers Hanover Trust Co. in New York. Lance had used the loan to buy a one-sixth interest in NBG, but the New York bank allegedly requested that Lance remain at the bank for the duration of the laon.
Lance moved the loan to First National Bank of Chicago, which increased it to $3.4 million allowing him to increase his holdings NBG stock. ABout the same time NBG became a correspondent bank to First Chicago.
Did Jack Stephens help Lance find a new bank?
"I don't know that I played any role." Stephens said in reply to a written question. He noted that, in mid-September, 1976. Stephens, Ind., had been the leading underwriter in a stock offering for Lance's NBG.
"Daring the time of the offering of NBG stock," Stephens recalled."Mr. Abboud (A. Robert Abboud, chairman of First Chicago) held a luncheon for me and my key people. During the course of the luncheon he asked me what I was doing that would be of interest to him.
"I showed him the NBG prospectus and told him he should get acquainted with Bert Lance and the bank. I think that he immediately started soliciting business from NBG."
Stephens said he does not own any First Chicago stock, but an official at Stephens, Inc., added that there is a close relationship between the bank and the brokerage.
Stephens does own stock in First Railroad and Banking Co. in Augusta, however. Among Lance's $5.3 million in bank loans is one for $651.000 from Georgia Railroad Bank and Trust Co., a subsidiary of the Augusta holding company.
In another case, Lance and two investors bought NBG shares from Washington-based Financial General Bankshares, Inc., in June, 1975. Just this past April, Stephens, Inc., was the largest of several investors who bought control of Financial General. Jack Stephens, in his written answers, said he had no interest in Financial General prior to April.
When asked whether Stephens played a part in the above financial deals, a spokesman for Lance said no.
Stephens and Carter were brought together by Al Rusher, who is president of the Bank of Brinkley in Arkansas and a former Carter roommate at the Naval Academy.
Subsequently, Stephens had Carter as a house guest in April, 1975, at his home above the Arkansas River. Since the election, Stephen has taken an active role in raising money for the Democratic National Committee. He is on the Executive Committee and said Finance Chairman Jess Hay, he is "one of our most productive members." Hay is a Dallas banker.
Stephens has been on band for two briefings by White House staffers held especially for the big givers. And Stephens said he keeps in touch with his friend, Bert.
"When I go to Washington," he said. "I call Bert and when he's available we sometimes visit on the phone like any other good friends."