Domino's Pizza Founder Takes the Gospel to the Rich

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Domino's Pizza Founder Takes the Gospel to the Rich

 By ALEX PRUD'HOMME


  The Roman Catholic Church has always struggled to speak with one voice to
both the rich and the poor. 

  Last month, when Pope John Paul II toured Mexico and St. Louis, he sternly
warned against a runaway free-market system based on a "purely economic
conception of man." But he also exhorted church leaders not to forget the
wealthier members of their flock. 

  "Love for the poor must be preferential, but not exclusive," he said. "The
leading sectors of society have been neglected, and many people have thus been
estranged from the church." 

  Among the pope's avid listeners was Thomas S. Monaghan, the founder of
Domino's Pizza Inc., who has long struggled to balance his own conflicting
impulses towards God and Mammon. 

  Late last year, Monaghan sold most of his stake in Domino's, the world's
largest pizza-delivery chain, to Bain Capital Inc., a private investment firm,
for a reported $1 billion. And inspired by the pope, he vowed to devote the
rest of his life -- and his money -- to spreading the Gospel, especially among
the business elite. 

  "Financially, it would have been much better for me to hold onto the company
for another 20 years," said Monaghan, 61, who remains chairman emeritus of
Domino's, which is based in Ann Arbor, Mich. "But I don't want to take my
money with me when I go, and I don't want to leave it for others. I want to
die broke." 

  Monaghan plans to use his fortune to finance a network of Catholic schools,
starting with Ave Maria College in Ypsilanti, Mich., and to support
politicians who oppose abortion. He also wants to promote his conservative
agenda through Credo, a newspaper; WDEO, a radio station he owns, and the
Thomas Moore Law Center, a new Catholic law firm supported by his Mater
Christe Foundation. All are in Ann Arbor. 

  But most of all, he is focusing his attention on Legatus, a lay support
group for Catholic executives and their spouses that he believes can "change
the world." 

  The idea for Legatus (Latin for ambassador) came to Monaghan in 1987 as a
"divine inspiration," he said, after he met the pope for the first time, in
Rome. He patterned the group after the Young Presidents' Organization, an
international support group for business leaders. But while YPO is devoted to
making its members better executives, the goal of Legatus, according to the
mission statement, is to encourage Catholic executives to "study, live and
spread the Faith in our business, professional and personal lives." 

  Legatus now has more than 1,300 members in 25 American chapters and nascent
groups in Canada, Mexico and Honduras. Some 275 members and spouses gathered
last weekend in Phoenix for the group's annual conference. 

  But Monaghan, his company-building days behind him, thinks he can build
Legatus into a major force -- his goal is 10,000 members or more within five
years -- using the same zealous, uncompromising approach he employed in
forging his global network of Domino's stores. A recent gift from the Mater
Christe Foundation doubled Legatus' annual budget to $3 million. 

  "A disproportionate number of CEOs are Catholic, and there must be at least
100,000 who would qualify for membership," Monaghan said. "What I can do is
set a good example and get people fired up about the church. It's what
businessmen do: They see a need and fill it." 

  He would just as soon have Legatus, not Domino's, be his legacy. But he
expects to encounter obstacles. "If Legatus' work is going to be as important
as I think it is, we're going to have a lot of enemies -- namely the Devil,"
he said. "He's a fallen angel, very intelligent. And his spirit is loose in
the land." 

  Orphanage to Seminary to a Pizza Kitchen 

  Tom Monaghan always wanted to be a priest. After his father died on
Christmas Eve in 1941, Tom was placed in a Catholic orphanage. (His younger
brother, Jim, has been quoted as saying that their mother could not control
the boys.) 

  There, as Monaghan tells the story, Sister Berarda taught him that God and
the Golden Rule were the most important things in life. But as a 10th grader
at the St. Joseph's Seminary in Jackson, Mich., he was expelled for pillow-
fighting and whispering in chapel. 

  "I was temperamental as a young man," Monaghan said. "The rector decided I
didn't have the vocation for the priesthood." What he did have a vocation for,
it turned out, was the pizza business -- and controversy. 

  In 1960, he and Jim borrowed $900 and bought a struggling pizzeria in
Ypsilanti, called DomiNick's. A year later, Jim traded his share for a used
Volkswagen Beetle. Meanwhile, Tom built the business into Domino's. 

  It wasn't always easy. In 1970, he dismissed everyone but his wife and the
bookkeeper to avoid bankruptcy. But by last year, Domino's had 6,250 outlets
worldwide with sales of about $3.3 billion and pretax profits of roughly $75
million. Monaghan owned 98 percent; the rest was owned by other family members
and longtime employees. 

  With success, Monaghan developed a reputation for both religious devotion
and publicity-hungry materialism. He arranged for a priest to say daily mass
at Domino's headquarters. And, happily mugging for the media along the way, he
collected everything from an island resort to an $8.1 million Bugatti Royale
sports car, a $500,000 Frank Lloyd Wright bedroom, and, in 1983, the Detroit
Tigers, who would win the World Series the next year. His infatuations were
all-consuming, though transitory. 

  He also became an outspoken advocate of a traditional, politically
conservative brand of Catholicism. In 1988, his faith-based politics and his
business collided when the National Organization for Women led a nationwide
boycott of Domino's to protest Monaghan's support of anti-abortion groups. The
controversy -- along with boycotts by homosexuals and other groups -- angered
some Domino's franchisees and colored the company's image. 

  Monaghan founded Legatus a year after the American bishops of the church
issued a letter critiquing Reagan-era capitalism and calling for fair wages,
stronger unions, a guarantee of full employment and other economic policies
that took the powerless into account. 

  The letter drew strong reaction from leading Catholic conservatives like the
theologian Michael Novak and William E. Simon, Treasury secretary in the Ford
administration (and later a Legatus member), who defended free-market
capitalism. But Monaghan was not part of the debate. 

  "Tom Monaghan is not concerned with politics or the lay culture," said
Novak, who was a speaker at the Legatus national conference last weekend. "His
point of reference is the personal. He founded Legatus when it was right for
him." 

  For Monaghan, the late 1980s were a time when his interest in managing
Domino's day to day was waning, while his Catholic activism was rising. He
underwrote construction of a mission in the Honduran mountain town of San
Pedro Sula and paid $3.5 million of the $4.5 million cost of building a
cathedral in Managua, Nicaragua, that was favored by the conservative Miguel
Cardinal Obando y Bravo and opposed by liberal Catholics. 

  In 1988, he was made a Knight of Malta, thus joining an international
charitable group with a conservative cast. He also hired several members of
the Word of God, a charismatic Catholic group active in right-wing causes,
though Monaghan says he was never a member himself. 

  Critics began to say that religion was merely a stalking horse for his
political agenda. 

  "His goal is to spread his conservative ideas, and he just waves a thin veil
of religion in front of them," said Barbara A. Pott, coordinator of a Michigan
branch of Call to Action, a liberal Catholic organization. 

  Monaghan is indifferent to such talk. "The things I do always bring out
praise and criticism," he said. "It doesn't bother me. You have to do God's
will." 

  He acknowledged, however, that he was neglecting Domino's at the time.
Competitors introduced new menu items and upgraded their computer systems.
Domino's floundered, burdened with a half-billion dollars in debt, and
Monaghan tried unsuccessfully to sell the company. 

  It was C.S. Lewis' book "Mere Christianity," which uses everyday situations
to explore the fundamentals of Christian faith, that helped him regain his
equilibrium, Monaghan said. After lying awake one night thinking about what a
"bad" person he was, Monaghan said that he decided to renounce his big sin:
pride. 

  Rededicating himself, as he put it, to, "God, family and pizza," Monaghan in
1991 began selling off his collections at fire-sale prices. Drummond Island, a
Lake Huron resort for which he had paid $28 million, sold for $3 million; the
Bugatti went for $5 million. He even sold the Tigers to Michael Ilitch, the
chief executive of rival Little Caesar Enterprises. 

  He restructured Domino's debt, invested in computers, laid off 600
administrative employees, devised new products like a pizza with garlic in the
crust and, in 1993, abandoned the company's signature 30-minute delivery
guarantee, which was a lightning rod for lawsuits. 

  By 1996, the company was in its best financial shape ever, with money to
pour into a $150 million image-freshening campaign and to add outlets in India
and China. Then, last May, in Rome, Monaghan decided it was time to sell the
company once and for all.

  Taking Pentecost to the Board Room 

  It is easier for a camel to go through the eye of a needle than for a rich
man to enter the kingdom of God, the New Testament says. But for members of
Legatus, the pursuit of faith and trade are -- or are supposed to be --
complementary. 

  "CEOs have the biggest need of spiritual guidance of any group of
individuals anywhere; they can get so carried away with their own perceived
value to the human race," said J. Michael Hagan, a Legatus member who is chief
executive of the Furon Co., a publicly traded plastics maker in Laguna Niguel,
Calif., with 3,300 employees. "Ego can destroy you," he said. "The best way to
keep your ego in check is through spiritual contemplation." 

  The last few years, the workplace has increasingly served as an organizing
platform for spiritual quests by business people of many faiths -- lunch-hour
and after-work Bible, Torah and Koran study groups, for instance. But a
religious organization of corporate leaders can still raise eyebrows. 

  "Cynics might say, 'Here are a bunch of good old boys who made a pile of
money on earth, and now they want to buy some heavenly insurance,' "
acknowledged the Rev. George Rutler, a priest of the Archdiocese of New York
who serves as national chaplain of Legatus. "There is a tendency to strike a
rather condescending stance towards businessmen; it's assumed that a
successful entrepreneur has stolen money from the poor. But many of our
members marvel at their own success, or are even a bit threatened by it." 

  Once a month, Legatus chapters -- which range in size from 10 couples in
Canton, Ohio, to 70 couples in Detroit -- convene at a chapel for mass, then
move to a hotel or restaurant for dinner and a lecture by a church or lay
person. The idea is to give executives and their spouses a chance to pray and
reflect, to talk about integrating faith into their secular lives and to be
educated. 

  Lecturers at various chapters have included Sister Helen Prejean, the author
of "Dead Man Walking" (Random House, 1993), who spoke about inequities of
capital punishment; a rabbi speaking on Jewish-Catholic relations; Catholic
psychiatrists on homosexuality, and a writer on why "Angels Aren't Just Pretty
Things." 

  Luminaries who have spoken before national or local meetings of the group
include former President Ronald Reagan, former United States Court of Appeals
Judge Robert H. Bork and John Cardinal O'Connor of New York. 

  Last weekend, at the national conference in Phoenix, William J. Bennett, the
author and former Education secretary, filled in as a speaker for Rep. Henry
J. Hyde, Republican of Illinois -- who was busy in Washington with the
impeachment proceedings. 

  The members of Legatus come from 675 companies in a wide range of
businesses. They can be the chairman, chief executive or president of a
company with at least 30 full-time employees and annual sales of $5 million
(or with 10 employees and $100 million in annual business for financial
services companies). 

  About 5 percent of members are lower-ranking corporate officers or board
members at much larger corporations. Retired executives can belong, too. Of
the more than 1,300 members, 31 are women who own businesses. 

  Dues range from $1,200 to $2,000 a year, depending on the chapter, and each
member is expected to contribute $550 to the national office every year, with
10 percent of that money given to the Vatican as a tithe. Last year, after 50
members traveled to Rome with Monaghan -- a trip that included an audience
with the pope -- the group sent a check for $250,000 to the Vatican and asked
that the money be used for the Holy See's charities in Croatia. 

  While some members have enlisted for spiritual education, others are
motivated by social issues. 

  "I see myself as Christ's ambassador to the marketplace of health care,"
said Adeline A. Laforet, chief executive of Health Care Professionals Ltd., a
medical staffing service in Southfield, Mich. "I believe there is a terrible
hunger for faith right now, and I want to tap into that energy and evangelize
the marketplace.' 

  James D. Davidson, a professor of sociology at Purdue University who spoke
to the Indianapolis chapter, said: "I was surprised by the range of views
expressed when I asked their opinions on faith and morals. Some were very
traditional, but others were clearly exploring other points of view. They
weren't authoritarian or closed-minded. They're the same kind of people I run
into at the country club." 

  What many members share -- and discuss at Legatus meetings -- is the
experience of having their faith and ethics tested by challenges at work. 

  When Albert H. Langsenkamp, chief executive of the Sigma/Micro Corp., faced
a financial squeeze a year ago, he had to lay off several of his 75 or so
workers. 

  "This was personally very humbling," said Langsenkamp, whose closely held
Indianapolis company develops computer systems. "As chief executive, I felt I
had done something wrong to get us into that situation. The Golden Rule says
treat people as you wish to be treated. I apologized to the workers," he said,
and "asked for their cooperation and forgiveness." 

  Because Langsenkamp is largely compensated by dividends, he took a financial
hit when the company did; his laid-off employees were given 30-days'
severance. 

  Mrs. Laforet of Health Care Professionals said, "Legatus is absolutely the
reason I learned to take a stand on ethics in the workplace." When it looked
last fall as if the Michigan Legislature might pass a measure legalizing
assisted suicide, she helped rally opposition with a mass mailing to everyone
in the company's data base. 

  "It was the first time we as a company took a stand on anything, and we won
a magnificent victory," she said, noting the bill's defeat. "Part of our
business is to deal with end-of-life issues, and we do not believe it's OK to
die in a van with Dr. Kevorkian."

  A Possible Conflict of Church and Business 

  It remains to be seen how long Legatus will hold Monaghan's notoriously
fickle attention and how his personal style, which he describes as "intense,"
will affect the organization. 

  The majority of members run privately held companies. But about 20 percent
are executives of publicly held businesses and are therefore more vulnerable
to criticism from shareholders, directors, analysts or customers who take
issue with the church's views on hot-button topics like abortion, divorce,
assisted suicide and homosexuality. 

  Indeed, though J. Peter Grace, the late chairman of W.R. Grace & Co., was a
charter member, there are few heads of major, publicly held corporations on
the group's roster. Monaghan said that when he asked Roberto C. Goizueta, who
was the chief executive of Coca-Cola, to join the group, Goizueta declined
because he was concerned about the reaction of shareholders. Goizueta died in
1997. 

  Still, members who head publicly held companies say their faith does not get
in the way of doing their jobs. "I accept fully the church's position on those
issues, and I've made no secret of my feelings," said William R. Burleigh,
chief executive of the E.W. Scripps Co., the Cincinnati-based owner of
newspapers and television stations. But, he said, "these are matters of
intense importance, and they need to be discussed," adding, "I accept others'
points of view no matter how vigorously I disagree with them." 

  Other ranking executives who belong to Legatus include Frank A. Olson, the
chief executive of the Hertz Corp., and Harry J. Longwell, an Exxon Corp.
senior vice president. Wellington Mara, owner of the New York Giants, is also
a member, along with Roger Staubach, the former Dallas Cowboys quarterback who
is now a Texas businessman. 

  Monaghan's plan to expand Legatus rapidly has some members fretting that the
organization will create an unwieldy bureaucracy. 

  But Legatus is Monaghan's mission now, and when you are wrestling with the
Devil, you don't play games. 

  "I listen to every idea, and if I don't agree I give a decisive but
sensitive response," he said. "That's what I did with the franchisees my whole
career. Legatus is a volunteer group. If people don't like what I'm doing,
they can go form their own organization." 

  


Sunday, February 14, 1999
<A HREF="aol://4344:104.nytcopy.6445375.574106743">Copyright 1999 The New York
Times</A>