John Mutz served in various, significant leadership positions in business, State Government, and the non-profit sector. His successes as an entrepreneur included development of a franchise partnership that owned thirty-one Burger Chef Restaurants (1965-1980) and formation of Circle Leasing Corporation (1962-1980). He served as a state representative (1967-1970) and as a state senator (1971-1980). In 1980, Mr. Mutz was elected Lt. Governor of Indiana. Following two terms, he ran unsuccessfully for governor in 1988 against Democrat, Evan Bayh. The Lilly Endowment hired him as President in 1989. In 1993, he became Chairman of PSI Energy, Indiana’s largest electric utility, a post he held until 1999. In 2002, he served as Chairman of the City of Indianapolis, Department of Waterworks, and in 2006, he was Chairman of the Board, Lumina Foundation.
Interview – Mr. John M. Mutz
April 11, 2006
Interviewer: Dr. Philip V. Scarpino
Director of Oral History,
Randall L. Tobias Center for Leadership Excellence
Narrator: Mr. John M. Mutz
Chairman of the Board,
Lumina Foundation for Education
Follow-up questions: Dr. Gerald L. Bepko
Randall L. Tobias Center for Leadership Excellence
John Wesley Beeler
Randall L. Tobias Center for Leadership Excellence
Date of Interview: April 11, 2006
Today is April 11, 2006, and I am interviewing Mr. John M. Mutz in the Law School at Indiana University – Purdue University Indianapolis (IUPUI), located in the Lawrence W. Inlow Hall building. This interview, which is the first with Mr. Mutz, is part of a larger project undertaken by the Randall L. Tobias Center for Leadership Excellence, located at IUPUI. The long-term goal of this project is to create an archive of oral histories with distinguished leaders on the subject of leadership. The project supervisors are Dr. Gerald L. Bepko, Director of the Randall L. Tobias Center, and Dr. Philip L. Cochran, Associate Director of the Center and the Thomas W. Binford Chair in Corporate Citizenship. Dr. Philip V. Scarpino is the Director of Oral History for the Tobias Center and Chair of the Department of History. John Beeler, a graduate student in the history program at IUPUI, is the research assistant.
The project team asked Mr. Mutz to be a narrator because he has served in various multi-sector leadership positions in the State of Indiana. Mr. Mutz was born in Indianapolis on November 5, 1935. He earned bachelors and master’s degrees from Northwestern University. His successes as an entrepreneur include development of a franchise partnership that eventually owned 31 Burger Chef restaurants (1965-1980) and formation of Circle Leasing Corporation (1962-1980), ultimately sold to Xerox Credit Corporation. He served as a state representative from 1967-1970, and a state senator from 1971-1980. As a state representative, he helped write the Unigov legislation that combined many of the governmental functions of Indianapolis and Marion County. As a state senator, he served as chairman of the state budget committee from 1977-1978. In 1980, Mr. Mutz was elected Lt. Governor of Indiana, where he pursued an aggressive agenda of outside investment in Indiana’s declining economy. As a two-term Lieutenant Governor (1981-1989), he was President of the Indiana Senate; Executive Director, Department of Commerce, and Director, Department of Employment Training Services; and he served as Commissioner of Agriculture. Mr. Mutz ran unsuccessfully for governor in 1988 against Democrat Evan Bayh. The Lilly Endowment hired him as president in 1989, a post that he held until 1993. As President of the Lily Endowment, Mr. Mutz expanded the reach of the Endowment outside of Indianapolis and into smaller Indiana communities. In 1993 Mr. Mutz returned to the private sector and became chairman of PSI Energy, Indiana’s largest electric utility company, a post he held until 1999. In 2002, he served as Chairman of the City of Indianapolis, Department of Waterworks. Mr. Mutz is currently Chairman of the Board of the Lumina Foundation, an organization dedicated to providing greater access to higher education opportunities for underserved populations.
Scarpino: Well for the record then, I would like to thank you very much for agreeing to participate in this interview, and others in the future. And I’d like to remind you that what we’re doing here today is part of a larger Oral History Project on the subject of leadership undertaken by the Randall L. Tobias Center for Leadership Excellence. And the goal is to create a body of source material that will help a variety of scholars and students and other users of these oral histories better understand leadership. So as I said to you before, we turned the recorder on, I’d like to ask you for permission to record the interview, to transcribe the interview, and to place the recording and the transcription in the IUPUI Archives and Special Collections for the use of the patrons of that facility.
Mutz: You have my permission.
Scarpino: Well, thank you very much. I’m going to begin by asking you some very simple questions about your childhood and so on, and then we will work on through your career for as much time as we have today. And the first question that I have, because I want to get it in the record is, when and where were you born?
Mutz: I was born in Indianapolis, Indiana, in the Old Methodist Hospital right up (ph) the street, November 5th, 1935.
Scarpino: And what were your parent’s names?
Mutz: My mother’s name was Mary Helen Massie M-A-S-S-I- E, and my father’s name was John Lougagry, L-O-U-G- A-G-R-Y, Mutz.
Scarpino:Scarpino: Did you have brothers and sisters? Mutz: No.
Scarpino:Scarpino: So, you were an only child? Mutz: I am an only child.
Scarpino:Scarpino: Okay. Where did you go to elementary school? Mutz: Public school, 84.
Scarpino: And where was that located? Mutz: 57th N. Central.
Scarpino: Now, I also understand that you attended Broad Ripple High School?
Mutz: That’s right.
Scarpino: My son’s also graduated from there. And I read the records that you played on the tennis team?
Mutz: Yes, that’s true.
Scarpino: Where you any good?
Scarpino:Mutz: Well, I was the first man on the tennis team. Scarpino: The first man?
Mutz: Yeah, and I was not a great tennis player, and when I went to Northwestern, I had no intention of even playing tennis for Northwestern. And my freshman year -- this was during the era in which college athletes, as freshman, could not participate in a varsity sport - that’s changed now. And I won the Intramural Tennis Tournament at Northwestern, and I beat a scholarship recipient, who was a freshman.
Scarpino: Oh my!
Mutz: And so, the coach called me and asked if would come out for the tennis team, which I did. So, I played tennis for Northwestern too. I was number six man, that’s as low as you get in the -- but anyway I played.
Scarpino:Scarpino: You beat one of the scholarship recipients. Mutz: Yeah.
Scarpino: I also read in the record that you worked on the school paper at Broad Ripple, and that you ran successfully for Student Council President?
Mutz: Yes, I was the President of the Student Council for a couple of years; I was the Managing Editor of “The Riparian,” and that’s the Broad Ripple High School weekly newspaper. Yeah.
Scarpino: Did either working on the paper or running for school Student Council have an impact on your career as it developed later on? Did you get the bug for journalism and politics in high school?
Mutz: I don’t think there’s any question that my experience with the paper, and also the journalism courses, there’s just a couple of them you took in high school, which required more of you as a writer than the typical high school writing work did. There was a -- the advisor to the newspaper was a woman named, Marie Griggs, G-R-I-G-G-S, and she had an enormous impact on me. First of all, she was a rigorous person in terms of the discipline that she employed in editing your work. And she along with a grade school teacher, who always said on my papers, Johnny, you can do better. Miss Cuffing (ph) was her name and she was at ‘School 84’, and paper after paper she would write, Johnny, you can do better. And I got a big kick out of this, because I talked to her -- she is still alive and lives in the Teachers Retirement, whatever the right name of it is, in Franklin, Indiana. She is well in her nineties, and I called her on her birthday, and I reminded her of that ‘Johnny you can do better’ line, and she said to me, ‘Johnny, I think you’ve done okay.’ (Laughter) That was one of those great moments, but yes, that certainly had an impact.
Scarpino: Do you think that, the degree to which elementary school and high school nurtured your writing ability is something that still happens today in schools -- public schools?
Mutz: I’m not a good enough judge of exactly what takes place there. I do know that the test results we see would indicate to you that we’re not doing as good a job as we need to do in terms of teaching, writing. And of course the advent of the computer and all that sort of thing changes the whole process. When I was writing this book, my co-author, Kathy Murray, who is my wife’s nephew -- or niece, I should say -- I would write a chapter, she would send back comments on it, she would write some of the other chapters. And I kept saying to her, I said, Kathy these aren’t sentences, there is no subject and verb, I mean they’re not -- and she said, ‘Oh, you don’t worry about that anymore; that’s not how we write anymore.’ And if you do read ‘Dummies Books,’ you will see that there are a number of, what we used to call ‘sentence fragments’ in it. And common usage is changing, I understand that, but nevertheless, the discipline at that time period was a very important part of my life I think.
Scarpino: I should probably say for the record that we don’t accept sentence fragments now, because, like (Laughter) -- just for posterity.
Scarpino: Would you describe yourself as a leader in high school?
Mutz: Yes, I think, I would have to say that in the area -- in the areas in which I was involved, I was a leader. One of the things that -- my family’s background, and my father’s influence and so forth is that, like thousands of Hooiser kids, I wanted to be a basketball player, you see. And I made the freshman team at Broad Ripple, but was cut my sophomore year, and you would have thought somebody had cut my left arm off when this happened, I was so pained about it and hurt, all the rest of it. And one of the things I do remember however was that my -- one of my teachers at ‘School 84’, Dorthea Galle ???spelling??? was her name - she is long since deceased. She said, ‘Take up tennis’ - she said this when we were in grade school, the seventh grade - she said, ‘This is a sport you can play all your life, it will be a lasting kind of physical thing you can do.’ And I guess that’s kind of when I decided to concentrate on tennis after this happened.
Scarpino: Do you think you had qualities as a high school student that made you stand out as a leader?
Mutz: Well, the quality that I most exhibited early in high school was that of being a good student; and that cut both ways. On one side that does give you some profile for leadership, on the other hand, there is a certain kind of stigma about being, in today’s terms, the nerd, or the bookworm, or whatever those kinds of things are. And so I felt both of those influences, but I think that had something to do with it, I mean when you recite in class, and you know the answers and other people don’t, that makes a difference -- it’s that kind of thing.
Scarpino:Scarpino: And I note that you met your wife at Broad Ripple? Mutz: Yes.
Scarpino: Carolyn Hawthorne?
Mutz: We met in algebra class in our freshman year, and Carolyn was two and a half inches taller than I was at that point, and she had matured as a woman. And I remember asking one of the other girls well, how about this Carolyn Hawthorne? And the answer was, ‘Well, she only dates older guys’ - and she was dating a senior at Broad Ripple. And so, my chance didn’t come till the next year. And he graduated obviously, and we were both initiated into the Honors Society as sophomores, and we walked home from the Honors Society, that’s how we got on our first date - that’s the true story, yeah.
Scarpino: And what year did you get married?
Mutz: We were married in 1957 -- I am sorry, 1958 -- graduated from college, First Degree in 57, Masters Degree in 58, we got married -- and we would have gotten married earlier, except that my parents said, we won’t help you at all with your graduate education at Northwestern if you marry. That was a -- but the world’s changed obviously, but that was what happened.
And so my wife to be taught in elementary school in suburban Chicago, lived in -- near Chicago area, near Evanston, and I was getting my Master’s Degree there.
Scarpino: One more question about growing up in Indianapolis; as you look back on growing up in Indianapolis, particularly your high school years, were there any individuals who played important roles, and what later became your career trajectory - people who inspired you or influenced you?
Mutz: Well, I’ve mentioned the advisor to the high school newspaper, Marie Griggs, I have mentioned Miss Coughen ???spelling??? -- can’t think of her first name right this minute -- her influence on my work in a certain way. Those are good examples of people that they really did make a difference. Obviously, my father played a major role in my growing up. I didn’t know it at the time, but my mother was mentally ill a good deal of my childhood, and so my relationship with my mother is one that is a little difficult to characterize during this time period. She had severe cancer right after I was born; had a breast removed, and somehow or another, she felt that the birth of the child was related to her cancer, which is probably not a logical conclusion, but it had an impact on my relationship with my mother. So, that’s one of those things that makes a difference. Later on, it had a lot to do with my work in the mental health field as a legislator, a public official -- still involved in some things there. But my father had an enormous impact on me during that time period.
Scarpino: Were there people who particularly had an influence in shaping your understanding or your practice of leadership?
Mutz: That’s a good question. Well, I’ll give you one. During -- between the junior year and my senior year at Broad Ripple, I was selected to go to what’s called the ‘Cherub Program’ at Northwestern University. What this is, is a program in which the university invites to campus for - - I believe its six weeks now -- outstanding high school students, in part because they’d like to recruit them to the institution. And they do this in journalism, theatre, engineering -- can’t remember, there’s 4 or 5 of them. But I went in the journalism program. Now, the deal is that you spend the morning taking college level courses -- writing courses, and other things in journalism. And in the afternoon, you have a chance to explore the greater Chicago area - they have facilitated discussions on current events. The year I went, the Republican National Convention was going on in Chicago, and I went down to the Convention, to the floor, actually met Dwight Eisenhower, you know . . .
Scarpino: . . . Oh my, the world has changed . . .
Mutz: Yeah, you couldn’t do that today; you wouldn’t get near a candidate, but in that case...
Scarpino: . . . You actually walked into the Republican National Convention as a high school student and met Dwight Eisenhower?
Mutz: . . . Yeah, well I didn’t meet him at the convention, I met him at the Old Hilton Hotel - “The Stevens” it was called, but I stood in line; there was this big long line, waiting to shake his hand, so I just stood in line, walked in. The Journalism School at Northwestern arranged for us to get on the floor of the Convention - that was part of the deal. But here is the story I want to tell you; there was a guy who was one of our counselors, who had just graduated from the Medill School of Journalism at Northwestern, named Dick Stollui, S-T-O-L-L-U-I, I believe. Dick was later to become the editor of Life, People -- whole bunch of publications in that firm’s collection. Anyway, Dick was leading a discussion; we were sitting on the beach of Lake Michigan middle of summer time, seven of us or five of us, I don’t know, something like that, in a circle and we were talking about politics. And Dick asked the question, what do you think of politicians, or as politics as a career to pursue? And we talked around the circle, and most of the students said what I imagined they’d heard at home; politicians weren’t very honest, they were kind of slippery and all that kind of stuff.
And so then, he said, ‘Well, what kind of people ought to be in politics?’ And the litany was Lincoln’s and Washington’s and Jefferson’s and things like this and he said ‘Well you know, one of the things you ought to do is read the history of these individuals’ lives and you will find that they are human beings like all of you and that they were subject to political ambition, to drive, to seeking power, to compromise,’ he said. ‘That’s one of the things that we tend to do is idealize these people and not realize that they were quite human,’ and so we listened and so forth and this was before the day of really insightful histories of these people. We got a lot of good stuff now on Adams and Washington so forth in which we learned a lot of things about them and Lincoln too for that matter but anyway, then finally he said, ‘Well, what kind of people ought to be in,’ and so forth and he said, ‘Well you guys are the cream of the crop, that’s why your here at Northwestern. How about you, well don’t you run for office?’ and he finally said what any of you consider and I raised my hand and that I was the only one in the circle who did, nobody else seemed to be very excited about that at the time and I guess I have always known since then that I’d eventually get involved somewhere or another and I didn’t have at that moment an ambition to be governor or legislature and all that but that is kind of one of those moments when you tilt the idea a little bit, you know.
Scarpino: Did attending the Republican National Convention influence you along those lines?
Mutz: Not so much accept in the sense that after it was over - Of course I told my mother about having met Dwight Eisenhower and she couldn’t believe it it was one of those things, well then you don’t remember that that election is the first election in which television commercials were used and Eisenhower’s commercials were picked, were manned, it was Eisenhower at the desk like this and off camera they’re asking questions and of course these were programmed questions and he’d say, ‘I’m glad you asked all this kind of stuff’ and then my mother said isn’t it wonderful the way he answers those questions and of course I said, ‘Mom, that’s all programmed, they script that up before hand and so forth.’ She goes ‘No, no they don’t, they don’t’
So, yes, the meeting him, being at the convention, singing the hoopla et, cetera, followed by that kind of conversation; my mother and father were insistent about dinner. I had to be at dinner every night at 6 o’ clock or have one whale of a good excuse why I wasn’t there. This was a command performance and this lasted until the end of high school basically and our dinner table conversations had to be some of the most illuminating and informative kind of discussions that took place in my life. My father was an avid reader. He had two or three books going all at the same time, all the time, that was his recreation among other things, he did other things but that was his recreation. My mother was an avid reader. They both devoured books and my mother was one of these members of the so called Womens’ Book Clubs, you’ve heard of these and this is a case where one woman reads a book and reviews it for the rest of them, they discuss it and so forth. The influence of the two of them in that environment and we talked about current events, we talked about Freud, we talked about the Kinsey report when it came out I was working for the -- on the copy desk of the Indianapolis News, when the Kinsey report was first was released. And to tell you that was hot copy in those days, is an understatement because the teletype that run this stuff out hereby run over to read it, clip it off and so forth. It was a whole new awakening in a variety of areas and I remember my father talking about politics and little that I knew that I would be caught in one of these movements that you talked about, but he said one of the great things about the American political system is we have two parties and the American public seems to have this desire periodically to clean house and put the other party there, the so called ‘time for a change argument.’ And he said I think that’s one of the great things about our system and I bought it at the time he told me that, but little did I know I’d become the victim of that particular (laughter) approach when I ran for office. Now, I am not suggesting, I lost that election just because of that argument. There are a variety of things hat were involved and I was running against a very attractive candidate, but that is -- it’s those kinds of discussions that took place. My dad was a businessman; CPA and how he went to Indiana University Business School, got a -- and then went to and he got an MBA at Harvard. So, I mean -- I am just giving you the feel for the environment there.
Scarpino: Did you have -- did you make friends during your high school years that stuck with you when you -- after you went to college and moved to Pittsburgh and came back to Indianapolis and began a career and life here.
Mutz: Clearly I did. That’s right and some of those friendships endure to this very moment.
Scarpino: Any of them that become entangled with your rise to the ranks as a leader?
Mutz: Sure, well Frank Walker I put on that list, yeah. Frank Walker who is the -- now a I guess board chairman of Walker Information here in town. Frank and I went to high school together. Frank even cheered my campaign for student council President or – no, senior Vice-President that’s it, and he later became the treasurer of my campaign committee when I ran for Attorney Governor and Governor. Yeah, we’ve known each other since we were very little kids. I remember watching his mother do some of the early research that she did on the dining room table of their apartment on Compton Avenue across from Broad Ripple High School, I used to go over there and eat lunch once in a while. Tommy Walker was there with her opinion studies at that point.
Scarpino: Can you tell us about these -- what were these opinion studies?
Mutz: Well, her -- I don’t know what she was studying right then, I can’t give you that, but her early work was in market research and she tested nipples for baby bottles, anything you can imagine in the consumer product field.
Scarpino: Okay. You’ve – were there any events or experiences other than the Republican National Convention and going to Northwestern, whether there any events or experiences that shaped your experience or your practice of leadership as you were growing up?
Mutz: Well, yeah I think so. Just let me give you an example. One of them was, my father came home one day when I was still in grade school and he was Vice-President of the Barbasol Shaving Cream Company which was headquartered here in Indianapolis at that time and Chief Financial Officer and he said, I had an unusual experience today, he said I spent a good part of the day reviewing United Way funding applications. I never even heard the United Way, didn’t know what it was or anything and so he spent that dinner table describing what he’d done. Now, back in those days, Gerry, volunteers did a whole lot of sifting through fund- raising applications through the groups, I don’t -- it’s been long time ago. But at any rate, he described to me this and I said well, why’ re you doing it? And he said, well we think it’s good business to care about the community where we are doing business. And he said there are people in this community who need lots of help and he said, this is one of the things that you have to have to do that. Later on I never dreamed I’d end up some day being the Chair of the campaign as Jerry has been and so forth, but my dad’s comment essentially was that there is a common good out here that has to be served at some point.
He never used that term that’s a Bob Patten ???spelling?? term, but he never used that term. So, you asked, does that have an impact on leadership, I think it does because I think it broadens your perspective, I mean I really think that’s important. Another thing that I’ve remembered about my dad during that time period was that he said son you want to go downtown with me today, I am going to go see -- and I can’t think of the man’s name; but he was an African-American maintenance man at the Barbasol Company. And his wife had died and I don’t know, he had family crises of some kind and so my dad went down to offer him money and some help. And his -- my dad’s comments was there is some people in the society that you just got to have to, -- if they come across your life, you have to stop and help them sometimes. That was kind of his line and that’s – I’ve never forgotten that I mean its one of those things you can’t forget. He never gave me a lecture on the subject or anything like that. It was by example and when we get down to talking about the specifics of my leadership philosophy if you want to talk about that…
Scarpino: . . . I guess I certainly do . . .
Mutz: … that’s one of the things that I think is involved and that’s modeling behavior, by what you do rather than by what you say and I – I know that’s a trite statement but I think it’s true.
Scarpino: How do you think that you’ve done that in your career modeling behavior by what you do?
Mutz: Well, well I’ll take a very simple example. When I went to work for the Lilly Endowment and I told you earlier this was an authoritarian kind of situation. Well, among with the authoritarian perks was that there was a side parking place for every single person at Lilly Endowment and the chairman’s little spot was the closest to the door, President the next closest and all those kind of stuff. And when we decided to re-do the parking lot, I said this doesn’t make any sense to me. I think it’s first come; first served whoever gets here first can park closer to the door as far as I am concerned and I gave up my parking space. Now, that’s a very small little thought, but this sends a message. A different kind of message. I mean I guess that’s the kind of thing I am talking about. Another one was (laughter) I was at the Lilly Endowment and we had installed our Intranet --I guess you’d call it and this is several levels of sophistication lower than where the world is today with PC’s and everything. But anyway, one of the things that happened was, one of my Ph.D.’s, and I’ve lot of Ph.D.’s that work there; came in one day and she was a person who never hesitated to tell what she thought about almost everything and she walked in and she says, ‘John, I’ve had enough.’ She said, ‘If you don’t answer your emails, nobody else in this place is going to’ And that was the point. I started religiously every morning that was the first thing I did when I got there, was to answer the emails from the rest of the staff. Even it was just I will talk to you about this later, whatever it was, we had to get back to them. Clearly the staff was never going to use those -- that system, unless I used it. That’s the common thing I am talking about; there are small little items often, you know.
Scarpino: I wrote down a phrase that you used a minute ago and I think this relates to philosophy of leadership, so I think I will just follow up and ask you about it now, you mentioned you were paraphrasing something your father said. You said common good has to be served. How do you figure out what the common good is?
Mutz: Well that is a -- that’s a tough question. Most of our society’s views of the common good I think came originally from the religious background that is part of our society. And there is not a single major religion that doesn’t include in it the idea of charity. Helping the poor and all that sort of thing. So, you can take your admonitions conceivably from that start.
Now, one of the problems you get into here is, in America like everything else we’ve done in our society we’ve elevated philanthropy to a almost a science or at least an art form. And what we have done of course is, we now engage in what some people call ‘scientific philanthropy’ where it’s all done on the basis of research and then we come back and it try out and test it and all that sort of thing. We also are in a situation now -- it seems to me in that field in which the question that ‘do no harm’ certainly has to be on your agenda because you can be so aggressively interested in changing the world that you do something that inadvertently has a number of side- effects that are maybe worse than what you wanted to solve at the first place. So, I have a lot of difficulty answering your question directly. How do you know? Your conscious tells you, your religious background tells you, and those are things that are involved in that.
Scarpino: No, I think that is one of the issues that public servants and philanthropists wrestle with this, what is the common good. You mentioned religious background, has your religious background had an influence on who you become as a leader?
Mutz: (Laughter) Well, see that’s going to be an interesting story because I was not brought up in a religious home. My parents didn’t go to church. They took me to Sunday school when I was very young and I didn’t like it and so they didn’t insist that I go back. I was not baptized until I was 35 years old. But the philosophy that we are talking about here was clearly apparent in the actions and in the things that my mother and father talked about. So, you asked did religion play a role in the early part of my life? No, at least organized religion. Did it after my mid 30s? Yes, there’s no question about that it did. Now I’m not a born again Christian in the sense of our religious right but when I was in politics I had all people ask me if I was and that’s a tough question to answer in that environment but I guess I’d have to say to you that my involvement in church experiment here in Indianapolis called the Church of the Savior which is patterned after the Church of the Savior in Washington D.C. did have an enormous impact on this sort of thing. And this was a church that required for membership to take a course, a ten-week course in practical Christianity. That was the way it was described. And this was a series of case studies for example; one case study was the church treasurer is caught stealing money, what is the obligation of the church in this respect? You turned him in to the authorities, prosecute him, you forgive him. I mean that was the discussion that we have. We read several books of the New Testament and one book of the Old Testament in this course as well, that probably started me off on a new course in terms of my religious background. Like a lot of college kids we talked a lot about philosophy and religion at Northwestern did not regularly attend Church in Northwestern. So, I have to be one of those people that came out of an un-church background.
Scarpino: The Church of the Savior was -- you attended while you were at Northwestern?
Mutz: No, that’s here in Indianapolis after I got married. It’s a Methodist Church -- thank you, that’s great.
Scarpino: I’m going to ask you one more question and then I’ll give Gerald Bepko and John Beeler a chance to ask and then maybe we’ll hit the pause button give you a chance take a drink and catch your breath.
Scarpino: I can’t resist asking you – occurs to me if I can add correctly that you were a teenager during some of the hottest years of the cold war. Did that national, international context have any influence on who you became as a leader or politician or?
Mutz: Our discussions around the dinner table were largely about the question or not of whether or not -- having two major powers in the world, was a deterrent to war? This was the kind of debate that my father would arrange. And they added to it being that -- you remember the nuclear build up. It was built on the premise I think that the U.S.’s argument for that was, ‘As long as we’re strong and they’re strong, we are not going to be so stupid as to launch a nuclear warhead or an atomic warhead.’ And so we did have what I would describe as a dinner table conversation about that. Now when I was a very young child, one of my distant cousins was a World War II hero. He was a fighter pilot, shot down a whole bunch of enemy planes. He was shot down once himself and I remember that those Indianapolis papers had stories about him; he was a hero in every sense of the word at least as we defined it in those days and we talked about him. But you see I’m one of those people who even though we had a major conflict in the Second World War and those military engagements that followed, seldom -- I never had a direct contact with somebody who was physically killed or badly maimed in those situations. My father was 4F and didn’t go to the Armed Forces and I didn’t serve with the Armed Forces either, so there was a little distant from my early childhood and high-school years.
Scarpino:Scarpino: Gerry you want to ask anything? Bepko: No I think we’ve covered it.
Beeler: I have one question. It seems like the early inception of your leadership style is closely tied to morality or maybe a better word would be ‘ethics’. Like when thinking about experiences that shaped your leadership, they’re largely ethical with your father or at least they seem to be. So, maybe this is too forward looking but how has that early ethical aspect of leadership affected your leadership in business? How does that translate over to business which in many ways is when you just kind of think about it, which is cold hard money; it’s not inherently ethical as we understand it or perhaps you would think differently than it actually is. (laughter) And that will be...
Mutz: . . . Well, he had to start with two premises when we think about that. One is, at least to date, my view of the world is that capitalism is the best way to distribute resources within our society, subject to the interaction of government on behalf and the non-profit sector, on behalf of the very needy and those of the bottom of the pyramid, so to speak. So, you have to I think first of all premise your views of some of these things on whether or not you really believe capitalism is the best way to allocate resources. And then I think from that, then you have to say, if that’s true then how do you manage a capitalistic enterprise in a way that meets of these goals? One, the maximization of profit and second, your community responsibilities. I don’t think you can leave the second one out and so that’s where I come from on that.
Beeler: Does it work well, does it fit when you are operating ethically through business as opposed to, I suppose, I guess what I am trying to get at is, that it seems like you’ve spent much of your life in civic or non-profit work and so when you come into business did you find that there are obstacles or did you find that it’s easier or not at all no change at all to be ethical or to lead ethically?
Mutz: I think the temptations are present in all three of these in diverse, philanthropy for profit business and government, I mean the temptations to the wrong thing are always present.
Scarpino:Beeler: And this is just as easy in each sector to help people? Mutz: Yes, I think it is, I would agree with that.
Scarpino: Do you think that you have been successful as a businessman in both maximizing profit and exercising community responsibility as a leader?
Mutz: Well yes that’s a judgment other people probably ought to make, but yes, I think I think it’s been successful.
Scarpino: Can you give an example?
Bepko: Maybe there is another question and it would be interesting to hear you reactions looking at the different sectors that you have been in and then taking this spectrum of ideas with the most noble purposes on the one hand then a more self-serving or venal purposes in the other, which can exist in non-profit or government or . . .
Mutz: . . . All three of them . . .
Speaker: . . . In the case of a business person, someone could say my desire in life is to create the best kind of service to my community and incidentally I will be awarded for it over to on the other hand anyway I can make money out of this at all, I’ll do it. It is my goal to satisfy, it’s my goal to maximize my return, how would you place the people you have met in these three sectors along those spectrums from self interests, be it self interest over the public service. Is there a difference between business and government?
Mutz: Well, of course there’s a difference between all three of these, but the human personalities in the three all have the same frailties and also have some for the visionary ideas about what the ideal out of it, you find them in all three sectors, I, you know I often get asked the question, how about these three sectors because you have a leadership position all three of, and this is
maybe a little aside from the point, but I found politics to be the most challenging of the three, it required more of my heart and soul, its almost a sixteen an hour a day kind of endeavor, I found the Endowment to be the most intellectually stimulating place I had ever been and I can give you all kind of examples of that, the profit sector I found to be the one with the most difficult management challenges. And of course it depends on which business experience you talk about saying I had some business experience early in my life when I left Alcoa and came back to Indianapolis, and I had a home building business and I was involved with an equipment leasing company and so forth, those were very challenging kinds of situations for me in case of home building there is a survival, I lost a lot of money, and it’s a kind of an amazing story there I -- we lost a lot of money in a two-year period time and so we got out of that business and the financial backers who could help me stayed with me for a little period of time and I bought a fast food franchisee, Burger Chef, and I mean its a long story but the point I make is we earned all the money back in the fast food business in about a year-and-a-half that we lost in two-and-a-half years in the home building business, and we had a loss carry forward. In those days in the business world if you had a loss in a corporation it stayed with the corporate shell, in other words you can put in a new business venture in it and still get the benefit of the shelter so you had sheltered that new income without paying taxes on it. Today you can’t do that, it has to be the same or a similar business it’s a difficult law, but anyway back then, it worked very nicely for me and so you know, I’m mentioning these as the challenges here on the ethical questions and as I said I found the lack of ethics or the existence of people with a very strong commitment to doing the right thing in all three of these situations, I mean I didn’t find any, I mean the human beings just seems to be are always present there, does that answer this?
Bepko: That’s what I was thinking of is that if you look at the spectrum from nobility to venality you’ll find people in each of these sectors that are somewhere in that spectrum and you say they are spread about the same way?
Mutz: Yeah, I think they are spread about the same way.
Scarpino: Why did you find politics to be the most challenging of the three endeavors that you have been involved in?
Mutz: Well I don’t know exactly, its just the way I practiced it I suppose, but in part, well I’ll have to take you back to a little history here. When I was in grade school I had a substantial speech impediment, you may even notice it today, but I am a stutterer and I stuttered so much when I was like in the third and fourth grade, that it was an effort for me to recite in class, it was really tough, and it was even hard to go to a movie theater and ask for a ticket, talking on the phone was difficult, that sort of thing. They brought a speech therapist and back in those days to work with me and so forth and when I first ran for the legislature in 1964, anybody who heard me speak would tell you that I was a mess, my wife would tell you that, if you were to interview her, she said I don’t see why you were willing to do this in front of people and allow people to laugh at you so forth which happened sometimes. I guess I must have been pretty highly motivated to do this you know, but what happened over the years was that either through work or just experimentation, I managed to control and deal with it and there is a breathing technique that I still use that now I hear experts talk about is one of the ways that you deal with stuttering but I mean I remember my grade school situation, it was pretty painful from time to time because of this and my wife of course thinks I am nuts to be a politician generally, I mean that has never been her preference for a career even though her mother was one of the first women to serve in the legislature, Marion County recorder and bunch of stuff like that but the other thing about this is the schedule that you lead, you’re kind of always on, if you want to call it that and I also found it a real challenge to master the details of the issues that were involved but that’s the part I like the most, I am a wonk at heart you know rather than a -- you know I always ask and I look at politicians and I ask myself what kind of guy is this, what kind of women is this. What turns them on in this process? Now Bill Hudnut for example, Bill loved the crowd, he loved shaking hands, he loved kidding people, he loved hugging people I mean that was all part of his life, he loved it, Dick Lugar on the other hand detests that part of politics. Taking Dick to a cocktail party is something he just doesn’t like doing but he knows you got to do that if you’re going to get elected so he’s taught himself how to deal with it; endure it is the right word and people might think I always tell about Dick Lugar was that, you know what the Indiana Society of Chicago is, you guys know what that is?
Scarpino:Scarpino: I’ve heard of it. (00:49:56)
Mutz: Okay, well this is huge party held in Chicago, started years a ago by a bunch of Hoosiers who were well known and quite learned and important people in the past, and its just a huge party; goes on for three days essentially, Friday night to Sunday and Dick Lugar went once I was with him in fact we were roommates, Keith Bulen took us, and Dick never said this but he never went back again. Now for some politicians, they’d say you’ve got to go, this is a place where every politician in Indiana goes, Dick, conveniently arranged this ‘Run for the Cure’ or whatever it is he has out of Butler University on that same week end, and so he’s got a good excuse why he’s never there. So I’m just contrasting how people practice politics, people are brought to it for different reasons, and I guess in my case it was understanding the policy issue, figuring out solutions, convincing other people that there’s a way to do this, et cetera, that’s what it was fun for me and absorbing for me and so you know I re-wrote the school formula in Indiana twice when I was in the legislature and the school formula is one of those arcane things that Roger Brannigan used to say. I think there are five people in Indiana understand it now so its time to change it again. Because Roger was the Governor of Indiana when I was first was in the legislature so you know it’s a different kind of a thing and I find that an the most absorbing kind of thing, so I don’t have a really good answer to your question but…
Scarpino: What I would like to do is, I going to ask you a little about Northwestern and then I think that we mentioned it to you when we had lunch with you that we have some common questions on leadership and I am going solve several of those in, and I think at that point what I am going to do is having to appoint where you were moving back to Indianapolis and that will give John and I a chance to digest what you told us at the beginning, so…
Scarpino: We just recorded everything I told him, oh my! There are no secrets, okay. You earned a Bachelors and Masters degree from Northwestern University in 1957 and 1958 respectively and the first question that I was going to ask you is why Northwestern but I think you’ve kind of answered that.
Mutz: I did, I think the Cherub experience sold me on Northwestern, you know I came from a family in which both my mother and father went to Indiana and during my young years, there were many weekends we’d spend on the campus, we went to football games and you know there was no doubt that John Mutz was going to go to college, that there was an understanding; my parents never said you have to go, you have to have good grades all those kind of things but by their example, well, I remember my mother so often talking about how lucky she was to have gotten to college. She was from a farm family living south of Columbus, Indiana first in her family ever to attend college; in fact her mother never went to high school either nor did her father.
Scarpino: And she was an IU graduate?
Mutz: No she didn’t graduate she was there for I think for three years; at that time in history you could get a teacher’s license with out the full degree by taking a qualifying test that’s what she did, and then she taught school but anyway the point I am getting at is that college educations were a cherished commodity in our household.
Scarpino: What was you undergraduate major?
Mutz: Well in the school of Journalism at Northwestern, you have fields of concentration and mine were psychology and political science, so I have kind of like a major in those two fields but they’re within the schools and school term.
Scarpino: What was the focus of your Master’s degree?
Mutz: Well the Master’s degree is a program that no one could offer at Northwestern, I am an MS, not a MBA but it was taught in connection with the business school at Northwestern, so I have what approximates an MBA in those days and I was trained technically to be a publisher of a newspaper. I know that sounds wild and certainly highly specialized; obviously I never did that but it included case studies of newspapers in which you actually went and spent three or four weeks, you know newspaper and spent time with management and learned each of the pieces of the business, the advertising, the editorial clause and all that kind of thing. It was in the advertising sequence at Northwestern but the program I was involved in actually would train you to be a publisher of a newspaper.
Scarpino: Well it certainly appears that you drew on some of that learning later on.
Mutz: Yeah I did, I’d often said if I had to do it over again I would have done something differently I’d never ever credited my undergraduate years at Northwestern; they were absolutely the most eye-opening, mind- bending years of my life. I think, I mean I was a green kind from Indianapolis and I was exposed to things I didn’t know existed and ideals that I didn’t know existed, it was just remarkably exciting. My Master’s degree year however was kind of like more or the same and I, if I had to again I would have gone to law school, I think, but I didn’t think in those terms at that point you know.
Scarpino: Could you talk a little bit more about why you found your undergraduate experience in Northwestern eye- opening and mind-bending?
Mutz: Sure, well to start with, this is a liberal campus, and the number one rule at Northwestern in those days and still might be true today, and that is; we don’t care whether you go class we don’t care whether you ever go to the library, this is all up to you, the resources are here. Now you can spend your time going to the local bar or the coffee shop or whatever it is and all those kind of things but the resources are remarkable that are there; great library, extremely good professors in most of the areas, and so I guess the mind-bending part of the thing was you know, finding did I have the discipline within myself first of all to do that and I found that I did. That is a -- you know, at Broad Ripple High School you are kind of led around you know it’s that kind of a situation, and suddenly you are on you own and that was an eye opening experience. Secondly my experience with individuals from other religions and races was dramatically changed in Northwestern. I mean it’s the first time I had ever really had a conversation with an African-American about any thing of substance. Remember one of my classmates named Troy Dester who is now a professor at University of California I think, he’s the first black American that I really talked to in any depth about relationships among the races and how he felt about his own role and that sort of thing. First time I ever really talked to a Jewish woman seriously, there was a young Jewish woman who I had several dates with and I found her to be extremely attractive and we had obviously some interest in each other, and she finally said one day you know this can’t be, she said my parents could never accept you. That was a -- I had never experienced those sorts of situations before, it’s the first time in my life that I had ever really understood symphonies, there was a professor on campus who on Saturdays took a bunch of us down to the Chicago symphonies, back in those days you could buy a symphony ticket for 50 cents and you had to sit in the very, very top balcony but made no difference, the music was as good there as it was anywhere else and then on the way home, he would describe to us what we had just heard. He was a student of most of these composers and he’d talked about soloists and why they were good and why they weren’t, I mean again you know that’s one of those -- its informal education and its not in any class but it was something very, very special. And then, I was involved in student government at Northwestern and I was for the first time, really forced to think through an issue, provide an argument for it and in many cases in opposition to someone else in the situation.
One of the examples of that was a big discussion on Northwestern campus, this was before the era of the student revolution, I was that quiet generation; just the tail-end of the quiet generation and for example I mean a big deal in Northwestern those days was a panty raid and we had panty raids; in fact our panty raids were so significant, they made Time Magazine and Life Magazine and so forth, that’s hardly a student revolt of any magnitude but particularly when the women came out and threw them out to the people participating, anyway that’s besides the point; the big discussion on campus at that point was the existence of discriminatory institutions on campus fraternities and sororities and the argument was that Northwestern should outlaw any organization on campus that discriminates on that basis.
Scarpino: You think it was on the basis of race or religion?
Mutz: Race or religion, yeah I mean its okay to discriminate on the basis on accomplishment that was another issue too but we talked about that and, so the student government at Northwestern of which I was an elective representative, during all my time in office and I mean all time in school, I lost the election for student body president at Northwestern but I was involved in student government all the time I was there. There was this debate going on about you know, SGB the Student Government Board adopt a resolution that asked the administration to outlaw discriminatory organizations, so we suddenly got into the debate about this question and I was a Beta at Northwestern, Beta Theta Pi, and Beta Theta Pi at that time had a discriminatory clause in its national constitution and one of the arguments that the Beta’s made on this subject was that while it wouldn’t be a big problem in Northwestern to have people with different backgrounds, the Southern chapter were absolutely unable to recruit new pledgers and all the rest of it you know. So and of course there was a kind of argument and that was well if you eliminate the campus organizations that discriminate then you eliminate that voice at the national level for change, so I made a pledge that I wouldn’t go to the Beta convention in Miami, at Miami University in Ohio, where it happened to be held and argue for the elimination of our discriminatory clause, well I wasn’t listened to any great extent that this was not a popular idea at that moment but you know these are eye opening time when you have been as cloistered as I was as a kid and the only black people I had know really were the maintenance man at Barbasol company I mentioned and the cleaning lady who came and cleaned our house once a week you know, so its one of those kind of eye opening things. The other eye openers had to do with the professors themselves, I mean these men and women were really stimulating people, and they forced you to debate things and question and so forth, but those were just samples I’d given you there I can think of some others I think.
Scarpino: I think that we probably are going to need to let you go to your lunch . . .
Mutz: . . . Ok . . .
Scarpino: . . . what I would like to do next time is to pick up with some of those questions that we gave ahead of time; general questions on leadership, what do you read, what do you think a leader reads, so on probably the first four five and then we are going to pretty quickly get to your business experience in Indianapolis and your electoral career here in Indianapolis, so thank you very, very much for sitting with us, and…
Mutz: Well this is fun, I’ve enjoyed it, let me ask you, I have two quick question…
Total Duration: 64 Minutes.
Scarpino: So we should be on testing, testing.
Mutz: Yes, this is John Mutz; we are trying out the fancy recording device.
Scarpino: And it’s working very well.
Scarpino: So, I thank you very much for sitting with this second interview, and if my memory serves, today is April 14th and we are sitting in the lovely conference room in the Law School. Last time when we talked, we talked for about an hour and we kind of did an overview of the early part of your career and we ended up at the point where I wanted to ask you some of the standard questions that we provided you ahead of time and then what I like to do is go on, talk a little about your work career and politics in Indianapolis and then come back at the end of this interview to some of those standard questions and so, the common questions; the ones we had at the beginning, the first one that I would like to ask you is, what do you read?
Mutz: Well, right now all, believe it or not, I’m reading my daughter’s second book, actually third book. She is a professor of the University of Pennsylvania, she holds the Samuel Arsht Chair in the Edinburgh School of Communication there and most recent book from Cambridge University press is called, Hearing the Other Side and it is a piece of work based on the research that she has done, that deals with a group of commonly held ideas about how a democracy functions best, and it flies in the face of common wisdom about this. And so, I’m sure it will cause a stir. Her first book was called Impersonal Influence and this is a take off on Lazarsfeld’s book that was written some 50-60 years ago, called Personal Influence, I don’t know if you are familiar with that or not, but if you are, it’s the classic in the communication theory area. And of course what she is doing in that book -- in her new book there is saying that, Lazarsfeld was our guy, how do we pronounce his name, may have been correct when he did his research but it’s not correct today. It is the fact that modern media and the impact of that media has in fact greatly influenced how people -- attitudes change about political matters and personal matters. So, obviously being a proud father, its fun to read her work and to see her excel in what she does and so that’s what I am reading and writing at this particular minute. What's funny about this is that, her first chapter and last chapter are relatively easy to read, the ones with all the research data in it are a little slow going and so I have had, I have had to spend some time reading and thinking and re-reading and so forth. Now, the other answer to your question about what do I read…
Scarpino: . . . I want to ask you a question for the records of, your daughter’s last name is?
Mutz: Mutz, Diana Mutz, yeah that’s right, she kept her name even though she is married, yeah. Her husband is a professor at the University of Pennsylvania too, in mathematics, so yeah. At any rate, the other things that I read, I mix fiction for fun, I call it beach reading, a kind of book you can read in an afternoon at the beach, so obviously I require a lot of that stuff, I also try to read those things that are directly related to the kind of process or task I m involved in. For example during the time when I became an officer of a Fortune 500 company, I read a lot of the management books and this is everything from Tom Peters’ to ‘Leadership’ I Warren Bennis, to Collins' books on Good to Great, Built To Last, all those things, I find good reflections if you are trying to manage an organization. The other things that I have read recently are some of the biographies of leaders like Washington, Adams and so forth; I find those to be great fun and helpful as I think about my own life.
Scarpino: Do those kinds of biographies help you in your various positions of leadership?
Mutz: I think so.
Scarpino: In what ways?
Mutz: Well, I think its interesting you take a look at Washington for example, although this is been said a lot by different people, but Washington I think could have been king of the United States. (00:05:02) He was in such a, dominant kind of leadership role, after the war, and participated in the adoption of the constitution and so forth, and yet he opted not to do that. Now, that’s not to say that Washington didn’t have ambition and drive he did, but it does say that he saw a place for him to step back. And I guess that’s the lesson, it seems to me, is knowing when to step back or I say step back sometimes that means retire, sometimes it means say no to an opportunity that’s presented to you, I guess that’s one of the, I guess an important lesson from the…
Scarpino: . . . Are there times in your career when you didn’t want to step back?
Mutz: Well, not always, I guess, I’m like a lot of people, everybody knows at the back of their mind, that there is a time when you should step back. But I think the classic situation; actually what I call an involuntary retirement from politics, meaning I lost the election in 1988. And yes my feeling about that is that, a lot of my colleagues in public life haven’t known when to step back, good example would be Larry Borst. Larry Borst is probably one of the most committed and effective public servants I know. He did not deserve to lose a primary election to a much younger opponent with little or no experience. He could have retired on top as we say, and I think that was a shame. We have some other men and women in public life who don’t always seem to know when its time to quit. The corporate world has changed that a little bit, in that the tension to create earnings in the for profit sector, has made it easier I think for people to step back, step back while you are ahead, you know take the accolades and move on. Public life though is an infectious kind of thing and I think it’s much harder for people to do that there.
Scarpino: What do you think makes a career in public life or politics infectious?
Mutz: Well, it’s a combination of adulation, in some cases self imposed importance, the public acclaim -- I mean its one of those kinds of situations that lots of people are attracted to you because they think you bear the mantle of power and that’s my phone, sorry. Can we stop this just a second I’ll get that turned off. I didn’t realize that was on. [Brief pause]
Mutz: All right, okay.
Scarpino: Do you think that, that sort of infectious enthusiasm for public life sometimes has potential to cloud the judgment of a leader?
Scarpino: In what ways?
Mutz: Well, the -- separating your own personal drive and ambition from the calling good or I’d probably want to describe the ideal in the situation, is hard to do sometimes. For example, doing what seems to be popular rather than what seems to be right is easier and I think that the judgment is clouded by the fact that, you know like being criticized, that also incidentally applies to the for-profit sector to some extent in the sense that most people in leadership positions will tell you, I want the truth, I want to know how you really feel about this, I want to know what is really going on, don’t tell me just the good news, tell me all the news, kind of thing. (00:10:22) And yet, some place in the craw down there, is this business, you know I’d just as soon, kind of move along on the upper run of this set of circumstances. And I guess my view is that, yes, your personal emotions and feelings about yourself, can clog your judgment. Now, one of the real tricks it seems to me, in keeping your feet on the ground is, making sure that the shadow side and your personality, occasionally becomes clear to you. In the reading that I do, one of the things is that I do read a lot of this Carl Jung and of course Carl Jung was a psychologist who actually followed the work of Freud on the unconscious et cetera. But his contributions to the shadow into the collective unconscious, I think are pretty significant. And of course what Jung says is, the way one becomes whole, one becomes real and authentic, is for the unconscious to be made conscious. And of course he suggest you do that, by a variety things, including dream analysis and meditation on the variety of other things, which I won’t get into right now. But the point I am getting at is, to have a shadow side is not evil, but to never know what’s in your shadow is a real problem, it seems to me. And that I think is what we’re dealing within the circumstances here. Being able to step back periodically and allow that shadow to be observed, I think is very important for people in a leadership spot, because what he does, it kind of tells you what’s really the truth is here. Is this -- am I being driven by my own ambition or are there other factors involved here? And I think those -- its an important way to look at it.
Scarpino: Is that something that reading Jung inspired you to do or encouraged you to do?
Mutz: Yes, yes it did and now I have to point out to you, my wife is a psychologist and I probably never would have read more than a superficial amount of Jung, if she had not been taking courses at Christian Theological Seminary, here in Indianapolis. And so, I became fascinated by Jung’s work. He is harder to read than my daughter, I might say. He is really tough reading.
Scarpino: I understand.
Mutz: Yeah. I would say, however that the book that I find most important is Memories, Dreams and Reflections. And that’s probably the best overall, look at Young’s contribution and I guess yes, for that in any question, my reading of Young has caused me to take that second look we’ve been talking about here.
Scarpino: Do you think that a leader should read?
Mutz: Should read? Well, I don’t know how you can avoid, but reading at, I think you mean in addition to the -- that kind of stuff that goes through…
Scarpino: Is you have to read that stuff.
Mutz: They have to read, yes oh yeah. I really do because, where is the balance, in your judgment come from? I mean, it has to come from some voice and I think it comes from your inner self, you are unconscious as well, and may be from your religious background. Well, I think reading is one of the ways that we balance.
Scarpino: Do you ever read about other readers?
Mutz: Oh yeah, I tried to and I have spent quite a bit of time, I mentioned the Warren Bennis work. I find his particular research, which is really much like what you’re doing here, interviews, intensive interviews in his case, several weeks with these people, trying to find out what were the common characteristics of leadership. And those are not only inspiring but they are instructive as well.
Scarpino: What have you learned about the common characteristics of leadership by reading Bennis? (00:14:44)
Mutz: Okay, well I’ll give you four or five things. First of all, leaders are agenda setters and by that I mean, they are able to crystallize the few things that are to be accomplished. And to keep that agenda up in front of the people, they’re attempting to lead, so that’s the first one. The second one is that, leaders are extremely good communicators. Some communicate in a verbal way, others do it in writing ways, but I think they communicate on different levels. It’s not just the rational level; it’s also on the emotional and subconscious level and I can think of all kinds of examples of that. I mentioned in the first interview, the idea of the parking place, going in the face of the authoritarian kind of management style. And that’s a kind of communication, I am talking about, but there’s some other things that would be similar to that. So that’s the second one, is the ability to communicate. The third one is, they know how to build trust with the people they work with. And I guess the thing that’s interesting to me on that was, when I was Lieutenant Governor, I had a fellow who was working with me, who everybody said, well he is a Democrat, why do you have him on your staff? And he happened to be one of the brightest people I’ve ever worked with; his name is Brian Bosworth. And Brain was my devil’s advocate, and in every meeting he was present on all the policy work and so forth. And he didn’t say something every meeting, but nearly every meeting and he was there to question the validity of what we were doing and he was secure enough in his position with me, that because he disagree with me, didn’t mean I am going to fire him, that was not that kind of arrangement at all. And building that kind of security with the people you work with, is the trust building thing I am talking about. The fourth thing we mentioned earlier but that’s modeling behavior. And Bennis has some great examples of that in his book, basketball coaches and symphony conductors and so forth. And then the one I would add to that, I think I may have mentioned earlier and that’s candor, disarming people with candor and I’ve just been amazed at the affect that has on people. What you’re basically are saying to them, but they kind of underneath suspect anyway and you say it directly to them, and I think its important, because its authentic, I mean its really, really you. So, I mean from Bennis, those were the five or six things I’ve learned.
Scarpino: The first point you mentioned was agenda setters. You mean as a quality of leadership -- is the ability to do that as a leader, have any relationship that kind of support staff and people who bring around you, is that a mark of leadership to be able to identify and gather together team?
Mutz: Oh, well of course it is. Collins’ in his book makes a big point of the right people in the right place first, then the ideas, then the products. Then he says, the people are more important than any of the ideas or any of the concepts, and I think he is absolutely right about that. One of the problems is that most leaders end up in a position where they are stuck with people who are already there. And the question is what you do about that? You clean house, you tempt to work with them, and so forth. But I guess the short answer to your question is that, assembling a team is very important, and I guess my goal has always been get a team that includes people that are brighter than I am, if I can find them. And I am not trying to be hard to deal with on that statement. The Brain Bosworth is a good example. My connection with Bob Orr, when he was Governor of Indiana and I was Lieutenant Governor, I don’t think there has ever been anywhere a governor and lieutenant governor who had a better relationship than Bob and I did. And I think the sign of Bob’s leadership question was, he never felt threatened by me. And I was an ambitious driving young man, during that time and he saw that as an asset for him. (00:20:03)
Mutz: And that takes a very big person to do that. And it seems to me that that particular -- that’s an example of somebody saying I want to -- that’s people around me, I can find. People that challenge me, people that feel comfortable in disagreeing.
Scarpino: Another of the one of our general questions: who do you think are important leaders? Who inspires you? We might start with those who are living and those who are not just a little break up.
Mutz: Yeah! Well, its very clear for me that, I’ve mentioned Washington. I know its easy for people though, to use Washington. But, and having read some of the recent biographies, which take you away from the classic, couldn’t tell a lie, cherry tree kind of image to a real human being. He has to be an inspired person, because of his ability first of all as I said, to step back and say, no. Lincoln, I think has to be on my list. I believe in today’s world were Abraham Lincoln in politics -- he probably would have been ridiculed because he was mentally ill. And I don’t mean that in a derogatory way at all. He was depressed a good part of his life and he’d lose in the election, he would go out in the woods for a month and not come back. Now, what would we say today, about a politician who did that? And so I think, Lincoln’s writing and his ability to persevere under very difficult circumstances, you have to admire his work. Others that I have the experienced in a direct phase is, Keith Bulen is got to be an example. He was a guy who could take a bunch of people in an ordinary set of circumstances and build enthusiasm in their hearts and souls, he really could. And I have to think that one of the things as leaders that we have to do, is to nurture, not just the intellect of the people we work with, but the emotions of those people as well. And Keith could do that as well as anybody I have ever seen. Dick Lugar has been an example for me, although I worked awfully closely with him for a long period of time. He is an individual who has exhibited the kind -- I think I have mentioned this earlier too. He doesn’t really enjoy, most aspects of the typical political life, and he is a policy wonk, and of course I have kind of am too. And as a result, I have a lot of empathy, with where he comes from in that situation. I remember one time, I was raising money when I was running for Lieutenant Governor and was very hard to raise money for the second thing on the ballet, and I said, one time Dick was helping me at a fundraiser and I said, ‘Well, what do I do?’ You know he said, ‘You just keep’ -- I’ve to ask and he said, ‘It is no fun, I don’t like doing it’ et cetera, et cetera and it was kind of a confession from him. So, I have those were some examples, there are other people who have exhibited leadership characteristics in my life too. And some of these border on mentors and so I know you want to talk about mentors later maybe, so we can talk about that.
Scarpino: Why don’t you just go over that right now? I mean if you got that thought then I’ll pick up on it later on.
Mutz: Okay, well I’d start in the mentor list, obviously I had mentioned my father earlier, and he is one of those, but the first one I want to mention is a man named Wayne Paulsen. P-A-U-L-S-E-N. Wayne Paulsen was the father of possibly my closest friend, best man in my wedding. When I came back from Northwestern University went to work for Alcoa in Pittsburgh for a couple of years then came back to Indianapolis. It was Wayne Paulsen that I went to work for. And he had started a business called ‘Circle Leasing Corporation.’ Circle Leasing Corporation was a financial services business, we leased personal property and Wayne Paulsen was a self educated, non-college educated, banker and investment banker from Fort Wayne. (00:25:04)
Mutz: And I learned so much from him, about the realities of business, about the negotiation of a business deal, about honesty in business and about forgiveness. I never will forget the time of that, a man came into the office to see Wayne and he was a person who had defaulted on a loan, some years ago. And he was back into talk to Wayne about a new business venture. Well, generally speaking that’s not a person to you would say yes to again, but Wayne did say yes. We financed some equipment for this small business, he was getting started and one thing led to another, that business today is an outstandingly success business here in Indianapolis. That man is long since deceased, but his son now runs the business and it’s a great success story. And I’ve always remembered that series of events, because I thought to myself, why would Wayne waste his time talking to this guy? I mean that, all of the stuff you’d look on your credit history, you would say, this is a bad deal. But, he saw something in this man’s -- the character there.
Scarpino: Because it turned out well, I am going to ask you the name of business.
Mutz: Okay! I am going to have to think about a minute here. They make plastic pots and located out in the Castleton area. Could I come back to you?
Scarpino: Sure, you can.
Mutz: I’ll have to get it for you, yeah. Like I just drove by the plant, couple of days ago. Yeah by the way this guy also paid back every dime that he have ever owed – owed to Wayne and those people. Other mentors besides Wayne Paulsen, I suppose, I came across a fraternity brother at North Western University, Bill Caruso, C-A-R-U-S-O, was the name. He was the President of the House, when I was Beta at the Northwestern and he is one of these unusual people at a young age, who seem to have a degree of maturity that you don’t see often in that situation. And what I learned from him was self-assurance. I was always, able to exhibit like he did, but he kind of always seemed to have it together, I don’t know how else to say that. And he spent some time with me talking about personal things, that’s an example; I think of a mentor along the way, in the political process obviously, Bob Orr fits in this category, to some extent. Those are some examples.
Scarpino: I am going to ask you a detailed question and then a bigger question and then we will sort of move on chronologically. You mentioned that you read some of the recent biographies of George Washington, in fifty years they won’t be recent, so could you give us the titles of what you read or something.
Mutz: Oh! I can’t get it to you verbatim here. I’ve go to land at home there.
Scarpino: Okay. All right, yeah.
Mutz: What is Washington’s -- something or rather, I can’t remember exactly?
Scarpino: I may follow up with all of them.
Mutz: Yeah, okay.
Scarpino: The second thing that occurred to me is, as you talk generally about leadership and the qualities of leadership and excellence in leadership and all that stuff is, it occurred to me that see you first ran for political office in 1964 and the last time that you ran was 1988, and I was in high school in 1964, however I was observing the world around me and it seems to me that one of the big things, it’s changed, in the career of a politician is, the relationship with the media. And I am wondering if the changes in the media, and media coverage, and media technology have any influence on leadership and what it takes to be successful leader?
Mutz: Well, I think it does and has. I don’t think the attitude of the media has changed so much, as has the emotional impact of the media on people, who watch it. Now, let me tell you what I mean by that, when the major media that records what you’re doing and saying is print media that’s still a step removed from the human being. (00:30:14) Now, when it’s television, you have an up close in your face, kind of relationship with the person. I can’t tell you, how many times I have had people come up to me and say, I know you, this is even today this happens, occasionally. And they say, you’ve been in my living room this woman said. I have never been in her living room but my image on television has been in her living room. Well, that is a much different sort of a relationship than you get, from the old print media kind of thing. This came home to me really, pretty dramatically, when I was down at the New Harmony in Indiana -- at New Harmony they have a program down there for writers who write screen plays, television shows is called the New Harmony Project and I was invited to sit on the last weekend of run-throughs and so forth. But what all things they do is; they show you on a big screen a televised version of the players actually the acting -- the dramatic piece. And then of course you can see it really in front of you on the stage. Well, the impact of seeing it on that big screen is just unbelievably different. It has emotion, it has fire, it has all that kind of thing to it. So I think that’s one of the big differences between the impact of media. Now, what does that mean? Well, it means again and Abraham Lincoln would have, I think had a very tough time in that sort of circumstances. By all accounts, he was not a very handsome man and not exactly the world’s most dramatic speaker although the words he spoke have turned out to be some of the great pieces of writing that we’ve come across. So, I’m not sure how he would have projected, in today’s world? Now, you can argue that this is a lack of substance, I don’t know that how I feel about that, that the pollsters that I’ve worked with. I’ve worked with a number of them; tell me that if you give the public long enough, they finally see through you. They finally find the real, the real you. And if that’s true, then this new media world we’re living in, does solve a purpose, that I don’t know, I can’t answer that.
Scarpino: I’m going to switch from the standard questions and we’ll have follow ups back you through chronological sequence, we’ll wait for a few minutes and I’m going to take you back to -- you’ve graduated from Northwestern and then right after college in, 1958 to 1960, you worked with Public Relations for the Aluminum Company of America in Pittsburgh. According to the information I found, you were a Director of Public Relations for residential building products. Why this company in Pittsburgh?
Mutz: Well, when I graduated from Northwestern in 1950, I had a Masters Degree and job were hard to find, there were not a lot of, readily available jobs, even for college graduates with Masters Degree. And so, I interviewed as many places like I could. One place I interviewed was in the Inland Container Company here in Indianapolis. And they did offer me a job as a Management Trainee but Alcoa offered me a job where I could use the journalism training I had had and at least at that moment of time that seemed to be appropriate thing to do. I also thought it would be fun you go to another city. I was recently married. By the way on that -- the year that I went to Alcoa, my wife and I had married – we were married on the 21st June and then we went to Europe for five weeks and everybody would say, well that’s an unusual kind of honeymoon for a couple of the young kids. I wrote a series of articles for the Indianapolis News while I was there on the trip. Now, I’ve to tell you, its not easy to write at night on, your honeymoon, you know you get the typewriter out and feed out the story . . .
Scarpino: (Laughter) . . . I can I was about to say that, that it sound like an extraordinary degree of dedication but I thought maybe I shouldn’t . . .
Mutz: . . . But at any rate, that was the year of the Brussels World Fair; it was a remarkable trip from our standpoint. (00:35:03) Now, we were traveling on a limited budget that was the idea and so forth. And so, when we came back to United States, I didn’t have a job, my wife did, she is a school teacher and she was teaching in the Indianapolis Public School System. And so, I interviewed and then we decided it will be great fun to go to another city. Break free of the constraints as we thought of them then, away in Indianapolis. So, I think that’s why I went. I had a good a friend who had graduated from the middle school journalism couple of years before hand and he already worked in Alcoa and he helped get the interview for me, and so that had helped.
Scarpino: So, knowing someone, is one reason why you directed your attention there?
Mutz: Sure, right!
Scarpino: I read in the research that we pulled together on you that, while you were in Pittsburgh your served as Chairman of the Allegheny county, you were with the Republicans?
Mutz: Yes that’s true.
Scarpino: What did that entail? What did you do as?
Mutz: Oh! That’s a volunteered job obviously but, I was interested in politics and my interest had already come along in that respect and I’ve volunteered to work for the Republican Congressmen in a suburban part of the Pittsburgh area…
Scarpino: What was his name?
Mutz: Corbett, Bob Corbett; Robert Corbett. He was in Congress for a long time and we got interested in the local political scene and one of the outlets for people like my wife and I was the Young Republicans, and so we got involved in that and that’s how it happened.
Scarpino: And I also like, you were a campaignist in the congressional race, was it for him?
Mutz: Not exactly campaigner, I worked on his campaigning, that’s all.
Scarpino: Then in 1960 you came back in Indianapolis, you accepted a position with Perine ???spelling???…
Mutz: Perine ???spelling??? Development Corporation…
Scarpino: Director of Advertising, Public Relations, Customer Relations and Research and assistant to the President (Laughter). Why did you like to come back to Indianapolis?
Mutz: Okay well, during the year I perceived that my mother died here in Indianapolis, unexpectedly. She was 56 years old and I was back and forth a lot to be with my dad and to deal with the circumstances, and when I was back here one time, I was having lunch and I ran into Tom Perine ???spelling???. Tom Perune ???spelling??? was in Northwestern, the same time I was there. He was a couple of years older, may be three year older, and he and a guy named Don Huber from Dayton had started a home building operation in Indianapolis. Don Huber’s family already had a major home building, home operation in Dayton and those of you who’d drive through, on I-70 will see Huber Heights and that’s one of the those communities in Dayton that he created. Actually his father was the major mover on that one. Well, in fact Time Magazine -- no I am sorry, Business Week Magazine even did a story about Don Huber running this business, all he was still a student at Northwestern and flying from Chicago back to Dayton and back and forth, it was kind of a dramatic story. Anyway, I went to work for them and Tom Perine ???spelling??? was the partner who was in charge of the Indianapolis operation. We built over three hundred houses a year in the Indianapolis area, in four different locations and of course I don’t know anything about the hold on the business but, the things that I was asked to do, was to supervise the advertising program and lots of other things, that’s what I did.
Scarpino: So, was this a company that was capitalizing on the post where were too demand for suburban housing, is that most of what their goal is, suburban housing?
Mutz: Oh yeah! It was all suburban housing, yes; I guess that’s the answer.
Scarpino: Did you -- while you were working for that company, did you gain experience or contacts that influenced your later career?
Mutz: I gained experience that influenced the later career. Tom Perine ???spelling??? was probably the best promoter I have ever met. He is a man who became a millionaire, multimillionaire twice, and lost it twice and then took his own life. In today’s jargon, I would suspect he was a manic-depressive, probably if he had, had the kinds of medications we have today; he might not have had some of the extremes. But Tom was extremely bright, that I say, one of the great promoters I have ever come across and he taught me a lot about promotion… (00:40:10) He was the builder of the first Playboy Club in the United States.
Scarpino: I’ll ask where was it?
Mutz: It was in Florida, in Fort Lauderdale and he had gone to Hugh Hefner, you see, Perine ???spelling??? was one of those guys, I don’t care who it was or how bold or how prompt he was, he would find a way to get into see him. I mean that’s one of the things that I learned from Tom and he went to see, Hugh Heffner and said, look I’ve this idea for this Playboy Club with the bunnies and the whole bit and he said, I’d like permission to build one, and if you’d like it, you can buy it from me, etc. That’s precisely what happened. He built one in Fort Lauderdale and Hffner liked it so much that you know the story -- he expanded the chain and so forth.
Scarpino: So, just I mean, I have to admit I didn’t -- I wasn’t prepared to talk about Playboy bunnies but, (laughter) I’ll ask the obvious question, Mr. Perine ???spelling??? was the person who came up with the idea for the Playboy Club and then . . .
Mutz: . . . Yes he did . . .
Scarpino: . . . And then sold it to Hugh Hefner?
Mutz: I don’t know, but the history of Hugh Hefner’s life will say about that, but I can tell you Tom was the one who first said, ‘Here is a business opportunity.’ Tom had ambitions that you cannot fathom, and so I have to say that, yeah, I learned an enormous amount from Tom. He also was the kind of person who had difficulty having balance in his life. It was not unusual for him to call me at home at two or three in the morning and say, Hey, John I want you to do such and such and of course, after this happened, twice, my wife stopped answering the phone or hung up on him, when he did this. He would call from a night club, some place in Chicago and he’d say, here I am here at that whatever it is and The Shapery or whatever be and that’s back in the days when they’d bring a phone to your table, that was supposed to be a big deal. Well, no cell phones, and he’d call me from there and tell me where he was and so forth. Actually he was one of those bigger than life kind of people. Lot sof women in his life, a number of things that we find waste and undesirable, but as I said, the greatest promoter I have come across.
Scarpino: So, you really learned about promotion.
Mutz: Yeah, I did indeed.
Scarpino: Lets see, 1962 through 1980, you served as Vice-President of Circle Leasing Corporation, Indianapolis, what kind of a business was Circle Leasing Corporation?
Mutz: Well, Circle Leasing was the business I mentioned a little earlier, where Wayne Paulsen and two other good businessmen here in Indianapolis, actually four -- I guess three other businessmen, George Stark the founder of Stark and Wetsel, ???spelling? Beeler, John Beeler, the founder of the Beeler Corporation and Ted Englehart ???spelling???, who was the Executive Vice-President of Beller Corporation and Wan Paulsen started this Equipment Leasing Company. They were later joined by Hap Henderson ???spelling???, who was a Senior Vice President at Merchants International Bank. Those five men started a Circle Leasing and what it was, was an equipment lessor, leasing was an alternative for financing equipment. It was a business-to-business kind of relationship and the company was patented after US Leasing, which was the first well-known national equipment lessor. Now, we did -- lease automobiles and things like that, that we leased construction equipment, production equipment, computers, a few airplanes that kind of stuff. And this was a business where you are essentially creating credit to the customer in the form of the lease; the collateral for the credit is the equipment that the company -- the leasing company still owned. It was a new business venture. And another one of those great opportunities to learn that I had in my lifetime, because I learned so much about financial leverage, about how you arrange financing for a business, how you present a request for financing, all those sorts of things. If you would have thought in my business school of training, I would have learned more of that. But, developing cash flow statements, business plans, all that sort of thing. I learned to write my first business plan when I attempted to buy a section of Prime Development. (00:45:15) So, I’ve bought one piece of it, at one time that may be mentioned in there. And that was another one of those interesting stories in it, I went in the home building business at the wrong time, and we lost a lot of money. And I was fortunate enough, that I was in there at the Circle and we had a loss carry forward in the corporation that owned the home building business. And so, we were starting to do financing in the form of leasing for Burger Chef. Burger Chef was a locally owned fast food -- hamburger operation here in Indianapolis and …
Scarpino: . . . Did the Burger Chef originate in Indianapolis?
Mutz: Yes, that’s right and we were doing business with the parent company, and so one time I had said to Frank Thomas who was the President, Founder of the Company that we have been looking at this business for quite a sometime impressed by, what they were doing, but they were making more money than we were and we were taking as big a risk as they were. And I said, why don’t we buy a couple of franchises from you? He said, ‘Oh, you guys are finance people, you shouldn’t be in the food business.’ But, he finally did let me go down to Liverpool Kentucky and I ended up making an offer to an existing franchisee in Louisville who sold to us, largely because he had a divorce in his family, he was in business with his brother in law, I guess. And so, we took over that franchise and subsequently built 16 more in the Louisville area. And at one time our chain was 31 stores. But, I guess, that was just kind of a side, deal going on while we did these other things, but the experience at Circle taught me a lot about the financing of business.
Scarpino: What kinds of leadership experience of, skills do you think you brought in the position of Vice-President of Circle Leasing? What did you bring with you, that it made you attracted to those people?
Mutz: Well, you know as I think back on it now, I am not sure I brought very much at that moment. I brought a lot of enthusiasm, a lot of drive, but I had to learn the business. I did not understand the finance business when I was first, first hired. I knew something about home building, because I have already being doing that, but I didn’t have a good sense of how to do that. I learned quickly and I guess I’d have to say that, I don’t think I’ve brought a heck of a lot to that situation other than the promotion, back around that I’d had.
Scarpino: These gentlemen knew you personally . . .
Mutz: . . . Oh, yeah. Well see -- Wayne was the father of my best friend -- Wayne Paulsen. Stan Paulsen and I grew up together, we went to Broad Ripple High School together, we went to Northwestern together, fraternity brothers in Northwestern. Yes, it would be a…
Scarpino: . . . A personal connection . . .
Mutz: . . . It was a very much of personal connection.
Scarpino: What kinds of leadership experiences, skills did you develop in that position?
Scarpino: But did you take away; I suppose what you brought there?
Mutz: Yeah, well in terms of, yeah, I think, I got more than I gave. I think, in the big sense, the most important skill I learned was, how you finance a business, the layers of financing, the role of equity, the role of debt, the structure also as I mentioned earlier, how to get a bank loan, how to prepare a presentation to perceive financing. Those sound like elementary skills, but those are really important at least at that point in my life. The other thing I learned there was -- that I had some sales ability, because I was for a long time the company’s only salesman. And so, I literally did everything, you know we sold, collected the accounts, cleaned up the office at the end of day, where it was Stan Paulsen, his father, me and one secretary, that was the business when we first started. (00:50:00)
Scarpino: When you went into politics, did your experience and expertise in sales and business translate into the ability to sell yourself and your ideas?
Mutz: You know, that was very hard because I found it much easier to sell an idea or a product or a service than myself. I had a lot of trouble with that. It is very easy to sing the praises of a product or a deal, but saying the same thing about yourself is not nearly as easy to do.
Scarpino: 1965 to 1980, you were Secretary Treasurer of Fast Food Management Inc, Indianapolis, where you and two other partners eventually developed the chain of fast food Burger Chef restaurants. I probably should say for the record that the first fast food restaurant I ever ate in in Eastern Connecticut was a Burger Chef in Connecticut . . .
Mutz: . . . (Laughter) Really?
Scarpino: . . . And was sure that in 50 years that will be relevant but -- and we’ve already talked a little about this, but I want to get it in one place. Who were your partners in this venture?
Mutz: Okay. Well, Stan Paulsen the same family, and then a fellow from Northwestern who was another paternal brother of ours named Peter DeBeer D-E-B-E-E-R. And we essentially brought Peter into the business and asked him to live in Louisville, Kentucky because that was the centre of our growth of stores and so he actually moved from Illinois to the suburban Chicago area down to Lousivlle, still lives there today as a matter of fact.
Scarpino: In 1965, was fast food an untried venture in the Midwest?
Mutz: No, it wasn’t untried; McDonald’s was the pioneer in this area, and of course there were some others that had preceded us in that situation in the hamburger area.
Scarpino: White Castle maybe?
Mutz: Well, White Castle preceded quite a bit. Steak-n-Shake also came before. So, it was not a totally untried concept, but of course what we are talking about here, White Castle didn’t franchise originally; they built all their units themselves. Steak-n-Shake didn’t either. Gus Belt, who started that business, built them all himself. So, the franchise way of expanding a business was the new concept too. McDonald’s worked on it and so did Burger Chef. Of course there a lot of other things came along thereafter in that list.
Scarpino: What attracted you to the fast food business?
Mutz: As I said earlier, we took a look at the amount of capital it takes to get at a business; that’s the thing that attracted us. This first unit that I told you I bought at Louisville, Kentucky, we bought for $5,000 plus the inventory. Now, of course, they weren’t doing so well at the time we brought it, but nevertheless, that’s how we got started.
Scarpino: So you are able to buy-in at a reasonable price for the expectation that you could make it profitable.
Mutz: A very reasonable part. That’s right.
Scarpino: I was trying to figure $5,000 in 1965 -- dollars in my head and I will say for the record, I couldn’t do it but . . .
Mutz: . . . Well, I can’t do it either. That’s right. I mean, its substantially different than it is today. That’s right.
Scarpino: What kinds of experience or skills did you -- do you think you developed in that position that might have had an influence on your later career?
Mutz: Well, the hamburger business was a different kind of business because it involves the motivation of so many employers, most of whom are part time, who are not career people with you. It’s a whole different kind of relationship; and I think the management of that kind of a work force is the thing that I learned there. I learned how hard it was, how difficult it was, and then the other thing was the fact that competition moves so quickly. I mean, one year you can have a store that made substantial profits, a year and a half later, Burger King or McDonald’s put a store a block away, and your volume is cut by a third. (Laughter)
Scarpino: It’s a very volatile business.
Mutz: It’s a very volatile business; that’s right. (00:54:55)
Scarpino: As you worked in Circle Leasing and fast food management and the other business ventures that you are involved in Indianapolis, did that experience help you develop a network that you later relied on when you went into politics or that you relied on when you went into politics? Was there a relationship thing here?
Mutz: Not the networking. No, I would not say that’s the case. I mean, I certainly have kept those friends and acquaintances and so forth, but they generally were not related to the political process.
Scarpino: In 1964, you made your first attempt to run for elected office, at least that I could find where you ran unsuccessfully for State Representative, and then of course in 1967 you ran successfully for State Representative, that began a very long career in politics.
Mutz: Yeah, that would be ’66 though.
Scarpino: Oh! My gosh! I am sorry.
Mutz: Yeah, because the elections are all in even number of years, yeah.
Scarpino: I did one election year and one take-office here.
Scarpino: Why did you decide to run for office?
Mutz: Well, of course I have mentioned to you before that in a moral moment, not the last year, when I said I might run for office. I decided to get involved beyond being the volunteer and my wife and I talked about it, we went ahead and did it. Our children were very, very tiny at that moment; it was not a good time to do that, if there ever is a good time. And I thought it was a challenge I wanted to take, you know.
Scarpino: What do you think you learnt from that experience?
Mutz: Well, of course, I mentioned to you my speech impediment, I mentioned to you the relationship of the political organization to candidates and so forth. We had a boss system at that point and one of the reasons I lost the first time I did, was that I wasn’t blessed by the right boss. You know that’s one of the things you learn. Having said that, I also learnt from Keith Bulen who was coming along at that same time, that the organization of the political process, at least in those days could make an enormous difference. Now, that’s not true today. The rise of the electronic media, the fall of the patronage system, which we talked about earlier, the changing influence of the political process automatically changed that. Money has become more important today than it was then; it’s always been important, but it wasn’t anyone new that influenced that now.
Scarpino: And you obviously had to raise money for this campaign?
Mutz: Not much.
Scarpino: Not much?
Mutz: No. Didn’t amount to much.
Scarpino: Who was your opponent?
Mutz: Well, you see, back in those days, State Representatives ran at large from districts with more than one seat in them. Now believe or not, the first time I ran for the legislature, Marion County had 15 State Representatives elected at large from the County. So, the only way you get elected in that situation is to be selected by the party or the organization; otherwise there is no way to move on; no way you could raise enough money as an individual candidate to be heard.
Scarpino: So, as a voter, voting in that 1964 election, I would have been presented with a ballot that had…
Mutz: . . . Sixty-four candidates on it for fifteen seats.
Scarpino: That clarifies things.
Mutz: That’s right.
Scarpino: After the 1964 election, you joined the Republican Action Committee, which included Keith Bulen. What was the Republican Action Committee?
Mutz: Well, Republican Action Committee was an effort -- I think I described this earlier, in which a group of existing Republican office holders and a group of activists led by people like John Burkhart decided it was time to change the Republican Party leadership, and so we organized, elected precinct committeemen, who in turn elected a new County Chairman; the new County Chairman was Keith Bulen (ph). That was the goal of Republican Action Committee.
Scarpino: We talked a little bit about networks that existed in Indianapolis in the 60s and 70s with the recorder off as part of the pre-interview and I am going to ask you some of those questions for the record now, could you talk a little bit about Keith Bulen? Who was he, what impact did he have on your career as a politician? (00:59:53)
Mutz: Well, Keith Bulen (ph) was an attorney by training, an Indiana University Graduate, a member of the legislature for one term in the 1960s. He served with my mother in law in the General Assembly. He turned out to be one of the most effective political leaders that has ever come out in Indiana, later to be one of Ronald Reagan’s major advisors. Keith had a knack for organizing at the precinct and ward level; he also had a knack for selecting candidates. For example, he is the one who picked Lugar to run for Mayor against Alex Clark who had been mayor previously who was a seasoned and well known person in Indianapolis. Dick Lugar had been a member of the school board, and other than that, no political experience at all; matter of fact, he had lost the election for President of the School Board, and Keith picked him to run for Mayor. And of course in an unbelievable kind of race, won the primary against Alex Clark. So, Keith had a lot of gall and a lot of organizing ability and later led the Republican Party in Indiana as the State Chairman, National Committeemen from Indiana, all that kind of stuff.
Scarpino: In additional to gall and organizing ability, what do you think made Keith Bulen an effective leader, or the most effective; I think he is a political leader in Indianapolis.
Mutz: His personality, his ability to get people excited about a cause; he understood power, how to wield power -- I tell you a few stories about Keith. One thing that I always -- I finally learned about Keith was that if he heard that something really good was going to happen for you, maybe an appointment or something of that kind, he would call you up before it was announced and say, ‘John, I hear such and such is going to happen and I’m really so happy for you.’ Now, he would not say to you directly, ‘I made it happen,’ but you would automatically assume he had something to do with it, whether he did or not. Well, you may call that a kind of a manipulation of sorts; he never lied to you, but it is the kind of thing that Keith was a master at doing. I’ve seen him in a State Convention in Indiana when we were -- I ran for State Treasurer in 1970 and Keith was the manager of my campaign to win the state convention against three other candidates, and he was the negotiator behind the scenes; he was one of the last of the smoke-filled room experts.
Scarpino: He was a good negotiator.
Scarpino: Would you say that the source of his success as a leader was loyalty, or that he had the ability to make people a little bit afraid of him or some combination thereof or…?
Mutz: A combination thereof, yeah, he was one of those individuals who --you wanted to work for, I mean, you felt -- well, there were some people who didn’t like it; I was quoted in Indianapolis Star not too long ago, I said, ‘He was not a neutral person now, you either loved him or hated him’ - I happen to love him. But I guess, I’d say that you wanted to work for Keith, you wanted to reach the same kind of goal that he did, and he imbued you with the vision. There was a little bit of fear there too that he had some power you weren’t sure about, ‘you never knew’ kind of thing.
Scarpino: Do you think that he consciously, deliberately created that situation?
Mutz: I never have known exactly; when he was ill before he died, I talked to him a little about some of those things. And he denied steadfastly that he ever meant to scare anybody. (01:05:01) As you know, he was the subject of an indictment at one time and so forth -- eventually cleared of wrongdoing. You always had the feeling someplace in the back, he could be pretty ruthless; you had that feeling but I never saw any evidence of it.
Scarpino: I mean what I am trying to figure out here is, I mean, you can’t live in Indianapolis for as long as I happened to be a historian and I’ve heard multiple Keith Bulen stories but I have also had the privilege to interview him; and I am just trying to figure out, what is it that made him so successful?
Mutz: It’s not easy to put your finger on all of it but as I said earlier, I think the personality, the charisma, you know.
Scarpino: You mentioned that one of his strengths was selecting and I assume, mentoring and nurturing candidates, and one of the people that he picked, was Richard Lugar. What do you suppose stood out for him about Richard Lugar because as you know that Mr. Lugar had very little political experience when he was tapped by Keith Bulen.
Mutz: Exactly. And he was not a great speaker either. Intelligence, depth -- I mean Bill Rucklesas ???spelling??? is another example of a person that Keith pulled up and said, “We’d like you to run for State Representative.” And on the service (ph) that didn’t like a big deal for a family like the Rucklesas ???spelling??? family, and yet Bill was eager to do it.
Scarpino: Would you say that the network that Keith Bulen created, helped to foster almost a generation of people who went on to leadership experiences and…
Mutz: . . . No question . . .
Scarpino: …and who continued to network with each other after their careers took them outside of Indianapolis.
Mutz: Right, there is no question about it. That network exists even today although it’s deteriorating, because we are all getting old at this point, but yeah, there is no question about the fact.
Scarpino: I mean, I think you got it; I mean, and I can’t name everyone, but I think of yourself, Richard Lugar, Willy Markelzous ???spelling???, James Morris, there must be other people...
Mutz: That’s right. Well, Ned Lamkin, he was majority leader of the house. Let’s see who else I get the name at this point. Well, Keith got Ed Witken nominated and elected as governor in Indiana, and that’s one of the times when I disagreed with Keith’s choice. And Ed Witkenis a very nice guy and a nice man, however I never found the intellectual capacity there that I wanted in a governor. In fact, I was a -- this isn’t my brother’s own tale and I’ll tell you, I was a State Representative and I’ve been just in one term and Keith asked me to go talk to Ed Witken about his campaign; and I had a long list of campaign ideas and policy positions and they are ranged from year-round school to a way to balance the budget at the state level, sales tax on services, all kinds of stuff. And I got nothing out of that interview with him at all; I mean, it seems like I was talking to this wall over here. And the only thing he had an interest in was year-round school; so, that’s how they got the idea; of course, it was an idea whose time had not come yet, but I mean, my point was that nine times out of ten, Keith was a very good judge or candidate.
Scarpino: I am going to talk to you, its either today or next time because State Representative and State Senator and so on, but I wanted to ask you a few more questions about the networks that existed in Indianapolis; and again, you and I talked about this in a prior interview, but I wanted to keep stuff in the record and... You mentioned that there are actually two networks, one created by Mr. Bulen and the other associated with the city committee and we have been talking about the one create -- what you called the Bulen network in the pre-interview and noted that one of its goals was to remake the Republican Party, and you mentioned that one of the things they wanted to remake was the patronage system overseen by H. Dale Brown, who was then I guess, political party boss of Indianapolis.
Mutz: That’s right.
Scarpino: Could you talk a little bit about that patronage system and how it worked?
Mutz: Yeah. Well, the patronage system -- I want to correct one thing you just said; we did necessarily in the early going, want to change the patronage system; we just wanted to control it ourselves rather than the other guy control it. I want to be very candid about that. But the patronage system, as it exists in those days consisted of really two major sources of money and then other kinds of influence. First of all, a license grant system was privatized and run by usually the County Chairman in each County of the State of Indiana, and it was like a franchise in which the county Chairman actually…
Total Duration: 70 minutes.
Mutz: . . . operated the license grants, leased the space and owned the equipment and got a fee for each transaction and then a percentage of the fee went to the county organization and then a percentage of those fees went to the state organizations and that was the patronage system for the party that was in power. Then, the second thing was what's called the two percent club, now 2 percent club means that each person who got a job in state or local government, was expected -- excepting a few merit type jobs to give two percent of their regular paycheck, and it was actually taken out of the paycheck and given to the local party. And then a percent of that went to the state party; in the same system is the license grant system. Now, that was how we financed politics in those days. There were other contributions but that was overwhelmingly the way the party was financed and organized. The situation that we found with H. Dale Brown was that he was more interested in perpetuating his hold on the patronage system than he was in being successful and we saw a bright new day for Indianapolis, so we wanted to make this community different and so the motivation we had was to get control of the patronage system and the party organization, not for the sake of the power or the money but rather so we could elect people to office as it would really make a difference, that’s what we worked on.
Scarpino: You talked about a bright new day and making a difference, what was the vision, what were the clients on the horizon that you saw that?
Mutz: Okay, well, its kind of an interesting series of events that evolved during that time period. One of the early events that we were entered in was the creation of a major urban university; our thesis was that you cannot have a great city without a great urban university in that city. We had couple of private schools in Indianapolis but fairly small in size and Indiana and Purdue Universities had extensions here, but no major presence. And so, our vision was to create the University of Indianapolis, a separate new higher education institution, and how we introduced bills in the legislature once we got elected so forth, to do this. Now, those were always defeated by the heavy influence of the alumni of Purdue and Indiana University who were urged to oppose this sort of thing. The University is a pretty good at lobbying the legislature too. And so, we never got that bill passed, but we did convince the university system, they better do something about the educational needs of Indianapolis, and out of that came, this campus that we are sitting on right now. It came in the creation of IUPUI, the actual designation of this quarter of down town as the university corner, it was the agreed upon arrangement that the ground in this area would be set aside for university purposes and year by year we set aside a little money in the legislature and since I was a budgeter, I was made sure it was in there, to buy ground whenever it became available. We didn’t use imminent domain particularly to do this; we didn’t need to. Properties became available we bought them and of course today, you look at here at our campus that serves, I don’t know what the certain -- at the moment 25000 students.
Scarpino: Actually about 28.
Mutz: 28, whatever it is, evolving into some residential campus although small by comparison, to the community students, so that was one the visions. The second vision that we had was unified government for Marion County, and this is an idea that was hatched at a dinner held in John Burkhart’s, home, presented that dinner -- I’ll do my best to list them, were Dick Lugar, Keith Bulen, Ted Lampkin,, Larry Borst, John Walls who was then Deputy Mayor of the City of Indianapolis, Brooks Servoss who was President of the County Council and Tom Hasberg who was the President of the City Council and me. And we were there to talk about the urban university, but this issue wasn’t even on the agenda and John and Artiff ???spelling??, that was his wife of that time, served a nice dinner at their elegant home and we had a glass of wine or two, and after dinner we started talking about what we wanted to see happen in Indianapolis and I can’t tell you whose idea it was, but we all came down on the idea of unified government. (00:05:31) Now, in those days we called it Metropolitan Government, Metropolitan Government ends up with bad names, so we stopped using that. Bart claims to have coined the term Unigov, I don’t know whether that’s true or not, but I’m willing to give him that credit and that’s where we started the whole process of the Unigov thing. So we decided well, lets see if we can get a bunch of lawyers to donate their time to help draft a bill and it became a monumental drafting job because -- now, I want to say to you that the idea of unified government was presented before that in other forms, you know a unified effort at park planning for the whole county that is a Marion County Park District and all that sort of thing. But this idea was one which was a grand scheme, it included schools in its original vision, which later we took out because we didn’t think we think we could get it passed and all that sort of thing, it was compromise as we went along. But one of the great experiences of my lifetime was to participate in the drafting and passage of that particular piece of legislation. At the same time that we said Indianapolis needs a place to meet, a place to convene, and so we built the convention center, the first phase of the convention center. And I remember that everybody said well, you know who is going to get the benefit of this? We need to have some private sector participation. And so, the bill required that two million dollars be raised from the private sector. Well back then, two million dollars is a lot of money, today we raise that kind of money every week here in Indianapolis for one thing or another. But I remember very well, everyone said can you get that done, well of course we did get it done, we built the Convention Center and you know the story of expansion and so forth.
Scarpino: So, approximately, when was that done?
Mutz: Well, that would be the -- let me look at my -- lets see, I sponsored that piece of legislation in ‘69.
Scarpino: And Unigov was a year or two before that?
Mutz: Well, Unigov we actually passed in ‘69 and then put in effect in the election held in ’71. We had elections around an odd number of years, yeah. So these are examples of visions we want to accomplish. Now, the other thing that happened about this time was that Dick Lugar had spent some time with Mr. Lilly and Mr. Lilly was near the end of his life and he came to Dick one day and he said, I think we need to start investing some of our endowment funds in Indianapolis. We’ve put money all over the world -- Africa, all kinds of places, but this is the community where we started or we made it. And so he said, what do you have as an example of something that we could do. Well, Dick suggested the renovation of the city market that was the first Lilly Endowment grant to downtown redevelopment. This was followed by the bricking of the Circle and all of these things then turned out to be, what we got to be calling the public- private partnership. Here we talk about it so much that it becomes happening but in the case of the Circle it was one- third, one-third, one-third. One- third from state government which was my job to get and put it in the budget at the state level, and one-third came from private sector contributions, and the third came from the city of Indianapolis, on that particular case. So, that kind of partnership arrangement evolved under a lot of projects and of course that we can name all kinds of things that came a long way, later including the Circle Center Mall and the sports agenda, the amateur sport’s agenda.
Scarpino: White River State Park?
Scarpino: What was the -- was there an over all vision that held that together, what people wanted the city to be like, 20 or 30 years in future?
Mutz: Well, that vision came from the city committee later, that the politicians at that point, we were thinking in terms of unified government, urban university, the Convention Center and of course not too long after that a major basketball arena, which was Market Square Arena… (00:10:08)
Scarpino: Which has since come and gone.
Mutz: Yeah, gone and been replaced. So, those were part of the vision but the vision that was kind of spelled out with an organized structure was from the City Committee.
Scarpino: And we also talk about that in pre-interview, and you mentioned that, that was James Morris who really brought that committee together.
Scarpino: Could you say for the record what the purpose of the City Committee was?
Mutz: Well, for the record I guess I’ll tell you, the City Committee was a group of young men, there were no women, regrettably, who came together with a desire to build a better city. So, that’s why I know the staff.
Scarpino: So, this would have included, Republicans and Democrats – A more diverse group than the…
Mutz: Exactly. It was not a political issue. It was a bipartisan -- as I said it included people like Ted Baume ???spelling?? who is now a Supreme Court Justice, who was a legislator a long time ago on the democratic ticket, included Bill Crawford, Herb Simon and then a lot of us on the Republican side. It was not an effort that was based on the political process.
Scarpino: What was Morris’s role?
Mutz: Well, Jim was able to bring the influence of Lilly Endowment to the table, and that was substantial and important. And I would have to say without any doubt, he did this only with a tremendous complete approval of Tom Lake who was the Board Chairman. Having been President of Lilly Endowment, I can tell you that nothing happened there that Tom Lake didn’t agree to and approve. He ran a very tight ship. That’s not to criticize Jim because a lot of this visioning was Jim. But Tom Lake affirmatively said we should get involved and try to make this happen.
Scarpino: One of the things you mentioned earlier when we talked in the pre-interview was that Morris was able to use the power of the Endowment to convene around an issue. Could you talk a little bit about that, what that entails?
Mutz: Well, what I mean by that of course is that, one of the great influential powers of foundations in my opinion is to the power to convene. Now, it’s to call the meeting, get the right people around the table, those people who can make things happen. And in my experience, well I use to laugh, like I told you this at Lilly Endowment, whenever I called the meeting, everybody always came. I mean they were afraid they might miss something, but the point I'm making is that Jim affectively used the endowment’s influence to bring together diverse elements of the community, to bring in expertise from outside of Indianapolis. That’s one of the things I found when I was President at the Endowment. We were deeply into affordable housing at that time and I found in reading national publications and so forth there were several organizations that were quite influential in changing the housing stock in a number of urban areas. They were not active in Indianapolis. So, I said, well lets get these folks in Indianapolis, and one of them is called LISC, L-I-S-C and they are probably the major lender in the affordable housing at field. So of course, when Lilly Endowment calls on the phone; LISC comes running. They came to Indianapolis, see what we wanted them to do and obviously they wanted us to support them financially, but much more important than the money, were their ideas, their experience, their knowledge about how to do these things. And so that’s what I mean by being able -- bring the right people around the table.
Scarpino: Do you think that, that’s a significant power in the world of philanthropy, the power to convene?
Mutz: I think it is ‘The’ most significant. It’s a form of leadership, more important than the money.
Scarpino: So, that would be then quality of James Morris as a leader, did he recognize that, the importance of the power to convene acted upon him?
Scarpino: Any other comments on Morris as a leader?
Mutz: Well, Jim is one of these guys who -- when you meet him and talk to him, you do not get a lot of energy from him sometimes but he is one of the people that doggedly keeps after the goal. One of the things I remember working with him on was the, construction of the Tennis Stadium where the National Tennis Tournament is held, now we call it the RCA . . . (00:15:16)
Scarpino: . . .here on the IUPUI campus?
Mutz: . . . Yeah it’s on the IUPUI campus here. And this again was one of these deals that was built with joint participation. There was a bond issue from the city and private contributions and so forth. And our member, it seemed like we could never get all of those private money raised, we were trying to raise about four million dollars and I was involved in that effort. Okay and his dogged determination finally got that done. Now that’s an unusual sort of circumstances because Lilly Endowment normally doesn’t raise money for anything.
Scarpino: At some point in the future, I'm going to talk with Mr. Morris about leadership like I'm talking to you now. If you had chance to do that, what would you ask him? What qualities of James Morris as a leader would you want to probe, explore?
Mutz: Well, I think methodology; Jim operates a kind of ‘close to the vest.’ There’s a few ‘Bulen-esque’ characteristics there. And I think methodology is something I’d ask him. You might say to me, how did you convince Tom Lake to do this, or did Tom Lake convince you to do this? You might ask him questions like, how did you get so many diverse political personalities to work together? I think I know some of the things he’ll tell you, but those are things I’d probably ask. I’d also ask him the question of where did you get your ideas? Where did they spring from? Because I have to believe that none of us has a monopoly on ideas, and I know mine don’t all come from me, I’ve -- get ideas from other people, I enlarge them, enhance them, change them and so forth.
Scarpino: Would you say that Morris had a -- was it Lake had a mentor relationship with James Morris?
Mutz: At one time.
Scarpino: One time. What was the nature of that relationship as you saw it?
Mutz: Well, I don’t know because at the time that was going on, I wasn’t there and it was a very -- Lilly Endowment is a very private place. They still have to sign on their building to this day.
Scarpino: And I actually understand there was a relationship with -- at a later point soured and then they went their separate ways.
Mutz: That’s exactly right.
Scarpino: How you are people selected for City Committee? Who did the picking?
Mutz: We all did. We’d suggest people and talk about it and so forth more.
Scarpino: And were you involved?
Mutz: Oh yeah.
Scarpino: Anybody in particularly you recommended that they came on the committee and you felt they really lived up to the expectations?
Mutz: You know it’s so hard for me to remember who suggested which person and so forth. I did suggest women from time to time and they were not well received and I think that’s unfortunate but we’ll let that pass.
Scarpino: And the overall goal of the City Committee was really to shape the future of Indianapolis.
Scarpino: So, there were certain projects they had in mind some of which overlapped with the Bulen network but can you kindly list those projects so we have them all on one place.
Mutz: Well, I think that really there were four major areas of interest. One is the amateur sports nexus as an economic development tool. Two, would be an interest in the arts and its importance to a metropolitan area. Third would be an emphasis on agriculture, food, and nutrition, which we saw as a natural adjunct to Indiana’s background and history, and fourth, education. Now some of these got more attention than others. For example, on the education thing; we were then aware of what was going to be a terrible problem in Indianapolis and that was the deterioration of the intercity school system. It wasn’t as apparent then as it obviously, later became. And we were trying to -- well, how you cure this? What do we do about this? (00:20:05) Well, several of the ideas we had were to run specialized magnet schools on this campus. We wanted to convince IUPUI, you ought to run a great school and a high school here for exceptional students or for students in unusual specialties. We talked, obviously the university complex was part of this and it was developing all this time. You know this campus here, it didn’t happen all in a year, it was gradually added year by year and from time to time, we would dream up an idea, for example the IUPUI Conference Center. Okay, now that’s again one of these unusual joint ventures in which Lilly Endowment played a role, private sector played a role by building the hotel. So, those are examples of things -- where outside forces were influencing investment in various things. Now from time to time, there was criticism of some of this saying well, these people weren’t elected to anything, who gave them permission to make all these big decisions? And of course the answer to that is, when there is a vacuum and there are active leaders it will fill that vacuum I think that’s what . . .
Scarpino: . . . I mean there was an article or two in the Star that sort of talked about the community and federal Government.
Mutz: Sure, yeah, that’s right. Yeah, they implied the evil someplace in there. I never detected any evil of member City Committee. The one thing you haven’t mentioned and I haven’t said much about was the City Committee also ended up later providing the leadership for these various projects. And an example would be Ted Bowman who had been the chairman of the -- I want to say, The Pan-American Games, I want to make sure I get that right, but there are a number of people who obviously…
Scarpino: . . . That would’ve included the games in Pan Am Plaza?
Mutz: Yes, yeah. Because that was a case where Michael Browning took the lead on the Pan Am Plaza, but the organization, the volunteers, the games and so forth, somebody had to do that and it was all done by the volunteers -- it’s amazing.
Scarpino: As you were driving around the city today, and look around the city and think about it. Do you think that the vision that the committee had -- it’s, come to pass in a way that you call successful?
Mutz: Yes, I really would -- sometimes it takes an outsider to recognize that during the NCAA finals that were just held here in Indianapolis, we had guests who stayed at our home from Boston. And the woman in the couple was a classmate of mine at Broad Ripple High School who had not lived in Indianapolis since college days. And her husband was the political reporter for the Boston Globe, and I took them on the tour of downtown Indianapolis, not just downtown, I took them to the Speedway and to the Children’s Museum and all that stuff you know. And I told them the same story, I’ve been telling you, may be in a little different form, but the same general story. And of course, the woman in this couple, she says, it’s just amazing. She said, I can’t believe, this is not the same city that I lived in; you know it’s the city that Bill Hudnet used to refer to as a cornfield with lights, Indiana-no-where, and all that kind of stuff. Yeah, I think we succeeded. Did we succeed on every score? No, we did solve the education problem. The artistic thing we made a lot of progress on, what I look at the four parts of downtime Indianapolis -- we do have some remarkable things going on there from the Waker Theatre to the Atheneum, to the so-called Theatre District on Massachusetts Avenue, the Circle Center Mall, all that stuff, re-vitalize down town. So, yeah I think we succeed, but to say that we -- it was an imperfect kind of thing.
Scarpino: I’m going to -- in the time we have left, I want to ask you some of the questions, standard questions off the list that we gave you ahead of time, and you’ve had a chance to look at these, but I wanted to -- I pulled the wrong list out of here, pause this tape recorder, I always have to embarrass myself, go ahead and do this. As you look at -- think about yourself as a leader in your long career as a leader who, who helped you along the way?
Mutz: Well, I think I’ve mentioned the mentors along the way -- Wayne Paulsen certainly did, his son Stan Paulsen did. And I want to tell you a little bit more about that one thing. Wayne and Stan were the people who made it possible for me to run for the legislature and still have a decent job. You know we have this part time legislature in Indiana and had they not been very understanding people -- most employers are not going to let you run off for 90 days and sit in the General Assembly. They tolerated that. That was -- that has a tremendous help in my career. In fact, I think today one of the problems we have is, unless you have independent wealth or some very unusual familial relationship, it’s pretty hard to do this.
Scarpino: I was thinking, we are going to ask you later, how do you managed keep those balls in the air.
Mutz: Yeah. So, those are people who helped the long way. Very clearly in my political career, Keith Bulen, Mike McDaniels, then my campaign manager, there are probably scores of others I can name but those are samples.
Scarpino: But would you say that having a mentor matters overall played an important role in your development as a leader.
Mutz: There is no question.
Scarpino: Have you mentored other people?
Mutz: I think I have. Yes.
Scarpino: Can you give me some examples?
Mutz: Yeah, well I’ll give you one, quick one; because it’s a recent one is, Cathy Langham, and she is the CEO of the Langham Logistics here in Indianapolis. I think I’ve played that role with her. I played it with others along the way, including those into politics, some successfully, some not so successfully. See, I have a lot of trouble getting young people to take my advice. But one of my pieces of advice about politics is: before you commit your entire life to politics and some people want to do that, thank goodness there’re still some who do, make yourself a little money; get a nest egg that you can fall back on, in case things don’t work out the way you want them to. And I really believe that is a sound way to go about it. Most of these young people are so imbued with excitement of the process they don’t want to do that and so they don’t accept my advice. But, I mean do you want some other examples of people I’ve worked with, I can …
Scarpino: Yeah, if you can give us one or two other examples that would be nice.
Mutz: Okay, well I started mentoring originally at Northwestern, with younger people in the fraternity who were interested in student government at Northwestern and one young man, whose name was Bill Cox, who was a freshman when I was a junior in Northwestern. And I had been member of the student governing board and the class president and all that stuff, and he -- yes he, kind of came to me and I responded, I would call that a mentoring relationship, because he wanted to do, some of the same things, just kind of an early way to remember that. Along the way, I guess I’ve to say that in the business world, at Synergy, I had a series of people who I worked with there, in a mentoring relationship. One of them and I can’t think of her name right this minute who was a former school teacher, who worked for us and I developed a program in which we would create a task force of individuals from different activities within utility to solve a particular problem. For example, how could we handle -- handle customer’s complaints faster? I mean that kind of stuff, and this woman turned out to be an absolute find, she was very good at putting these things together, facilitating the meetings, conversations, and so fo rth. That was a mentoring relationship. At Lilly Endowment, Cathy Minks, Cathy Minks was the Assistant Controller or Controller I guess of Lilly Endowment. (00:30:10) And I said, Cathy, for your true potential to be reached, you’re going to have to go to some place out, it’s not going to happen here. Now, back in those days, nobody left Lilly Endowment, it was like leaving the church or something your know. And so, she thought a lot about it, finally did leave. She became a Senior Vice-President of Anthem. A number of other things happened to her after that, I won’t get into the reasons why I thought she needed to move on, I didn’t think her talent would ever be fully recognized there, that’s a mentoring relationship.
Scarpino: We’ve talked off and on about networks and, I am wondering if you think that networks play a role in the development of successful leader?
Mutz: Well I guess, from my own personal experience, I’ve got to say, they did in my case. I don’t know that that’s a generalization that I can make. I mean, one of the things that Keith Bulen always use to say to me is, John now, for this project, see I was Dick Lugar’s, Volunteer Director when he ran for his second term of Mayor.
Scarpino: Volunteer Campaign Director,?
Mutz: That’s right, and I supervised the whole army of volunteers and, Keith said to me, he said, John what you want to do? As he says, recruit a group of 25, and he always said men, but wouldn’t have to be men who were or excited about politics, who’d like to make a difference and so forth. And get them loyal to you, that’s how he did it in essence. Well, that’s a network. And so, that was a way that the North Side Political Action Club, that’s mentioned in here, some place in my background. That was a network that I created, because I couldn’t find a way to get active in politics through the Dale Brown organization. And we recruited some 120 people into that thing who volunteered and worked in elections back in those days.
Scarpino: So, those days would have been in the ‘60s?
Mutz: Yeah. So I mean, yes, there is no question about the fact that building networks, made a difference in my career.
Scarpino: How would you characterize your, I guess your idea or your concept of leadership? What is the essence of leadership?
Mutz: Well, I think if you want to change the world, there’s two things you have to deal with. One is ideas and relationships and maybe relationship is another way of saying, networks. Maybe that’s what you’re referring to, but it seems to me that those are the two things that really can change the world. A really, compelling idea and building the relationships necessary to make it real. Now I think that’s what leadership is about.
Scarpino: I am going to ask you, your question that you actually raised about some one else, earlier in an interview and that relates to 50% of what you talk and that’s ideas and what was the source of your ideas? Where did you find the ideas that you built your leadership upon?
Mutz: Okay. Well, I found them by reading, by comparing other people’s ideas, enhancing them, building on them. That’s really a hard question to answer because, it’s -- but many of the best ideas come from the people that you recruit. And the question for the leader is, will he or she listen? I guess we ought to add to this, these characteristics of a leader is the ability to listen, not just talk all the time and, yeah I found some of my best ideas from the people that I have worked with.
Scarpino: Where would you put the ability to communicate and inspire, on your list of, qualities of leadership?
Mutz: Well as you know, I had in the earlier list, 5-6 names its right up there near the top. (00:35:02) See, I think we give energy to each other off on a -- maybe a Jungian kick, here to some extent, but I do believe that people can give energy to other people. I see it in gatherings of people; I sense it when I am with other people. So, I guess I would have to say that; part of this business of motivating people is through communicating your energy level to somebody else.
Scarpino: Let me see if we can frame this in a way that, that’s clear. I would imagine that to some degree or another, most human beings have ideas, they have relationships to one degree or another, they listen and communicate and so on . . .
Mutz: . . . Yeah . . .
Scarpino: . . . But, what is in your opinion that makes certain individuals use these things in ways that makes them stand out as leaders, what really distinguishes an effective leader?
Mutz: Well, I would start with authenticity. I would follow that with a certain kind of charisma and then the third thing I would add is intelligence.
Scarpino: I am going to ask you one of our standard questions out of order here.
Scarpino: The reason I am saying that for the record is, that when people look at these questions, but…
Scarpino: So, getting at what you said about leaders and what distinguishes effective leadership and the qualities of leadership. Do you think leaders are born, or made?
Mutz: I think you can learn to be a leader and I think it’s a learned talent. But the motivation to learn it is, it has to be there, so maybe that’s innate, I don’t know, we are into the argument here about the effect of environment on people and so forth. I don’t, I know that leaders can be trained, can learn.
Scarpino: What has worked particularly well for you, we’ve talked about your concept of leadership and your style of leadership, what has worked particularly well for you in terms of your concept and style of leadership?
Mutz: Well, I would say that -- let me give you an example of what I would say, a leadership situation. When I became Lieutenant Governor in 1981, the state was falling into a deep recession, a fearful recession, much worse than the most recent one we’ve had, and people were scared. For the first time they were recognizing the impact of foreign competition in a whole variety of fields -- electronics and automobiles, they were seeing high inflation, they were seeing high unemployment rates, and high interest rates. And. I was the Director of Commerce that’s my job as the Lieutenant Governor. And so, one of the questions is, what you do? The national economy was not vital; it was not dynamic. Indiana’s economy was even worse and so the question then for me was, do I walk in place and not do much, hope things change or do I go out and find some way to give these local communities hope? And I decided that was the right thing to do. Then my staff and I looked at the situation in Indiana and what we found out was, that in Indiana, there were only six communities in the whole state that had an organized Economic Development Program, only six.
Scarpino: Can I be bold enough to interrupt you and ask you if you remember what those six were . . .
Mutz: . . . Oh, I can’t tell you all, I can name a few of it. Indianapolis had one, Columbus Indiana had one; Fort Wayne had one, beyond that I can’t name them.
Scarpino: But that’s a pretty limited list?
Mutz: Very limited list, yeah. Now, when I say organizing Economic Developed Program, I mean where they had an official who had that responsibility and had a budget and all that kind of stuff. For years the Chambers of Commerce had tried to promote industry but that’s a different matter. Well, so I what I decided to do as Lieutenant Governor was, to get every community in Indiana that have it’s own Economic Development Program. And we would suggest that they commit to a public private partnership just like the ones we had here in Indianapolis, that’s something I learned before. So, it would be funded by local government at a private sector and may be by the philanthropic sector in the local community, that they get enough money for a small budget and have a small staff and that they even do an inventory of the community as to what are the pluses and minuses of this community? What kind of a selling tool or selling program would you put in place if you had a client or a possibility? And, so what I did, I went around the State meeting in community after community saying; build yourself a Local Economic Development Program. Now, those things are now called LEDO’s -- L-E-D-O, Local Economic Development Organizations. And we have over a hundred of it in Indiana now, I don’t know the exact number, but they have a State Association and all that kind of stuff. And I guess what I would say about that is, that in my mind is an example of taking a situation, trying to figure out how can you give people hope? Was built around that concept, I remember Brian Bosworth saying to me, ‘John, as a practical matter, there isn’t a hell of a lot we can do about this right now.’ And I’d said, Yeah, but is there something these people can do to help themselves? And this is how we came up with that you know? So, that’s an example seems to be of a leadership plan in such situations like that.
Scarpino: Do you think that at least in the political arena the ability of a leader to inspire people to believe that there’s hope for the future is a mark of an effective leader?
Mutz: Well it often is.
Mutz: You see at the same time I was doing that, then I got the legislature to pass all these Economic Development Incentive Programs that we’ve still have in place, and people were so afraid of the economic consequences of this recession that, it was preferably easy to get the legislature to pass most of these things.
Scarpino: And among those were?
Mutz: Well, these are tax abatements, grants for training workers for new jobs, infrastructure grants to local government, loan guarantee funds of one kind or another of it, there is probably 30 or 40 of them now. Tax increment, financing tips, we have in a new program now called Edge, and Edge is where you are able to produce additional benefit to the company based on the amount of income tax that the employees who works there will pay. So anyway, those are the kind of incentives I am talking about.
Scarpino: We’ve been talking about your concept and style of leadership and I asked you the question, what worked well for you, what did not work so well?
Mutz: Okay, well I can handle this on two levels, parallel to the effort I just described there, was then a decision back at the state level, well what kind of industry are we going to go after to fill in the deficit? And we concluded that the best opportunity in the short run were Japanese investments. Now, from my view point I would do this again, but it didn’t pan out the way I had expected to, in the sense that we were quite successful in getting Japanese investments in Indiana, over 60 during my tenure as Lieutenant Governor and I guess over a 100 up now. But I had, I did not realize at the time what a negative this might be from a political standpoint and that of course related to the xenophobia of Hoosiers about foreigners and about Japanese who had been our opponent in the Second World War, etc. I mean, part of this argument led into was well, the Japanese didn’t win the war but they are going to take us over now economically. Well, I -- so you said, something didn’t work well, I think that the Japanese investment worked very well, the 40,000 plus jobs we’ve got today, I think everybody’s pretty darn glad we’ve got them. But the part of it that didn’t work so well was, the political nature of how that was have used against me?
Scarpino: Did that play out when you ran for Governor? (00:45:02)
Mutz: Yes, it did. My opponent ran lots and lots of television commercials criticizing that approach and particularly criticizing the investment we made in the Suburu Isuzu plant investment in Lafayette.
Scarpino: Is that the one that’s on the edge of Lafayette, which is on the interstate highway.
Mutz: Yes, it’s the one that is just recently announced that a new line of Toyota cars will be built there, that’s right, yeah. I guess what I am saying to you is that the consequences of that on one hand they work pretty well, from a political stand point they did not work so well. That’s an example; I think another example might be going back to the business world for a second. One of the things that I think, at least back in the early days of my business experience, I had trouble with, was knowing when the right time to sell your business was. And the hamburger business is one of those businesses which I could have made a lot more money on it, had I sold portions of it or all of it a lot sooner than I did. That’s an example, I think of a judgment that in retrospect could have been better.
Scarpino: So you sold it in 1980, am I remembering that right?
Mutz: And I sold primarily so I could run for Lieutenant Governor.
Scarpino: Yeah, I was actually going to ask you that question, I noticed that day, I asked if you divested yourself of the things so you could run for the Governor.
Mutz: Well, mainly because my business partners were willing to let me serve in a legislature but now I am going to become a full time politician, that doesn’t work. So, yeah I had to make a change.
Scarpino: How are you doing on time?
Mutz: I am fine.
Scarpino: Okay. I have one more -- two more questions that I am going to ask you, could take ten minutes or so…
Mutz: That’s fine, lets go ahead.
Scarpino: And again these are off the same question list that we’ve provided you in advance, and its our ability -- the reason that we have these questions embedded in all the interviews is so that, after we’ve done 20 to 30 of these, then we have 20 or 30 angles of vision on the same question. And the question is was there an event or crisis or crises that helped forge your leadership? Are there defining moments that help forge your leadership?
Mutz: Defining moments? Well…
Scarpino: The term we used in the question were vendor crisis but…
Mutz: Yeah. Well yes, I guess there have to be some of those. I told you I was in the home building business for a while and that was a defining moment because we lost a lot of our money. And one of the questions you have to decide is to give up, go back and get a regular job or do you try to do something else. I eventually decided to try to do something else. That was a defining moment in my business career. Just have to understand that everything you do isn’t going to work and that one didn’t. I guess another one would be the decision that I -- I didn’t make the decision but it was in the gubernatorial election in 1988, where a newspaper reporter from Northern part of the state and I can’t think of which city, questioned Evan Bayh’s residence requirement or the residential requirement of the constitution, and Bob Orr felt this was significant enough that it ought to be decided and litigated. I think in retrospect I would have been better off to have said, Bob, don’t get into this, which I think he probably would have done. And let me call in a carpet bagger during the campaign. Somebody who never lived here and et cetera, et cetera, instead it made him into a bigger celebrity than he already was, the dramatic pictures of him going to court and walking out and all the rest of it, to determine whether he was eligible to run for office or not. Yeah, in retrospect that was a turning point in that campaign. I think that event plus the xenophobia of the Japanese plus the third thing which is always an election issue and that’s time for a change. (00:50:02) When I ran for Governor, the Republican Party had controlled the Government’s office for 20 years and so that was a typical kind of campaign approach. I don’t think Evan ever said, its time for change, he said, John’s been a great public servant but now we can do better, which was a good line.
Scarpino: But that’s what he was implying.
Mutz: Of course, that’s the way you said it, that’s right. Well, at any rate, those are significant moments in my career. I would have to say that the moment that Tom Lake called me and said, John will you come out and talked to me about being President of Lilly Endowment, that was a turning point because I had lost the election, was not sure what I was going to do, I had arranged the bank loan for another business venture and that gave me an opportunity to kind of get my financial house in order. See, when I was in public office, I had both kids in private colleges. I made $50,000 a year as Lieutenant Governor and my son and daughter both went to Northwestern -- they were a year apart. Then they went to Stanford, Yale, University of Chicago and Dartmouth, during all that time period. I mean I had to literally change my standard of living during that time period. I don’t regret it, it’s the best legacy that I think any parent can give their children other than their personal time. I guess the point I make there is that, when I lost the election, I didn’t have any money either, I was in a situation in which I had spent all my savings on the college education for my children and so the Lilly Endowment opportunity as I said helped me get my income to a level that was much more desirable, gave me opportunity to save some money to make some investments and then the other thing it did was, it gave me a platform to do some other things. I doubt if I would I have been asked to be a board member of PSI, had I not been President of Lilly Endowment. I doubt if I would I have been asked to be a board member of Merchants National Bank, had I not…
Scarpino: . . .that’s Public Service Indiana for the record . . .
Mutz: Yeah. I doubt if I would I have been a board member of Conseco. You can argue about the desirability of that but anyway that’s a historic fact. And there’s a bunch of other things that happened during that time period. I think Lilly Endowment was the platform for which I got the opportunities.
Scarpino: So post election it really did play a federal role in what’s happened in your career and your life since then.
Mutz: No question, no question. I guess I have to say that while I was there -- being on the PSI or Public Service Indiana board then gave me exposure to that board and then they asked me to become President of the company when the merger took place between Cincinnati Gas and Electric and Public Service Indiana forming Synergy. Now, that was an opportunity because from a financial rewarding standpoint the utility position was even better than Lilly Endowment. And gave me an opportunity to build my investment portfolio and so forth and it gave me opportunity to be an investor in new business ventures which is something that really has been an intriguing part of my life. And so, that was a pivotal moment too. I remembered Jim Roger said to me one day, ‘John I want to come up to your office and talk to you.’ Now, he is the CEO of PSI, so he comes up to see me at Lilly Endowment headquarters and he says, ‘John I want you to be President of the PSI’ -- well, that’s what he said, he said, I want you to consider being President of PSI, ones the merger is complete. And I said, well I’ve to think about that. See most people would have said, John you’d be nuts to leave Lilly Endowment, why would you do that?
Scarpino: Of course you’d already given someone else advice to think about when; it was time to move on?
Mutz: Exactly, exactly and I knew I had done about all I could do at Lilly Endowment at that point because the same kind of difficulties that Jim Morris had with Tom Lake, I began to have too. He was not an easy man to work for. (00:55.06)
Scarpino: Would you feel comfortable giving us a thumbnail sketch of the general kinds of difficulties?
Mutz: I don’t know whether Jim would be comfortable but I could be little more comfortable I guess in saying this, Tom took very personally -- well let’s go back in history. Tom Lake and Dick Wood were the candidates to become CEO of Eli Lilly and Co. and Mr. Lilly was to make the choice. Mr. Lilly was still alive, he was in his 80’s I guess, and he chose Dick Wood and the alternate prize was being head at Lilly Endowment. Now, Tom Lake took this quite seriously, he had enormous respect for Mr. Lilly and he had respect for the way Mr. Lilly ran his life, almost an anonymous donor, a behind the scenes practitioner and all that sort of thing. And Tom was always concerned that people like me or, Jim Morris, or Dick Ristine, all three of us came out of politics in way or another, would use Lily Endowment to further our personal ambitions and goals. I mean I think can state that pretty simply. He was worried that anybody who worked there would do that. And so he zealously guarded against that sort of thing happened. One of the things he got very upset about with me was that, the press still called me all the time for comments on this or that in some form, and my relationship with press has always been very open, I always respond to them, always answer their questions and he got very irritated when I would end up in the paper, talking about something like that and he also did not want me to use and Lilly Endowment’s implied power in the political process. Even though he didn’t have any trouble at all in using it in terms of rebuilding the center of any Indianapolis, so I don’t know how you balance those things out. As I said earlier, Tom Lake was a risk taker, even though he appeared to be the opposite and this city owes him an enormous debt in terms of what’s happened here. But as I say he was not an easy man to work for. Now the other thing is that I had difficulty working on that, he was an authoritarian kind of guy and I found it difficult to exist in an environment where certain things were allowed and certain things weren’t in terms of conversation. The women on my staff; particularly were affected by this. Women manage in a different way than men do. I mean in general, that’s not -- you know it’s a generality, but for example women like to gather around the table and try out ideas on each other, what do you think of this, what about this idea, etc. Now, at Lilly Endowment back in those days, if you had an idea you better be prepared to defend it to the end, when you got in one of those meetings. And that kind of atmosphere and environment, didn’t work very well. I felt it’s time for creativity and a number of other things. He from time to time would be a micro manager rather than picture person. I mean he’d look at the expense accounts of individual people out there at the Endowment and so forth. He had every right to do that; I am not suggesting he didn’t. But at sometime or another, my view of people was, unless I had reason to disbelieve them or feel they were taking advantage of me, I assumed they were doing the right thing. He had a kind of different view; it's my job to monitor. I am here to guard the reputation of Mr. Lilly, that’s really where he came down, all the time and I got to give them a lot of credit for that. I mean, that was the mission that he was handed by Mr. Lilly, apparently. Although Mr. Lilly himself was not that kind of a manager, he was a much different big picture kind of person, unlike his brother who was the micro manager, the bean picker, I mean the bean counter and so forth. I am telling you a lot about them, almost intimate details about this relationship, and I don’t know how far Jim would be willing to talk to you about it.
Scarpino: I think – I know -- what I am trying to get in here and what I hope, I’ll be able to get out of over the course of several years and what are some of the qualities, that distinguished leadership and among us I think the relationships and mentoring relationships and I mean obviously Mr. Lake in his own way was an effective leader. I mean no …
Mutz: Oh, no question.
Scarpino: I mean he had a different style than you did. (00:60:18)
Mutz: That’s exactly right . . .
Scarpino: So, there’s not one cookie cutter style for an effective leader.
Mutz: Yeah, that’s absolutely right.
Scarpino: And I think when I am most interested in is the way you contrasted his view of working with people and motivating people with yours, rather than trying to dig dirt, which I am really not interested in, so . . .
Mutz: Yeah. No, I mean as I said, Tom left a lasting impression on me and I’m going to tell you where it is. It is in the area of what I would call ethical behavior in the corporate and philanthropic world. He had a very strong feeling about that and I mean it may have been out of fear, I am not sure what all are the reasons he had, but he had it. He didn’t want anything negative to ever fall on the company or in Endowment. The kind of things that have happened at Lilly since he died, I think would probably cause him to turn over his right. I doubt that he could imagine the company advertising and reptile dysfunction drug. I would think, he would find that very difficult to imagine.
Scarpino: Even though, the drug itself must be extraordinarily profitable.
Mutz: Oh my gosh! Of course it’s profitable but that’s not my point. He didn’t think pharmaceutical companies should advertise.
Scarpino: Oh I see.
Mutz: At all. See, this is to go back and see he was a pharmacist by original training and -- no, he had a very strong sense of what was proper and what wasn’t and this fellow Madison -- I guess his name is, the one that did the histories on the Lilly families.
Scarpino: James Madison.
Mutz: James Madison, yeah, he was offended by some of the stuff in those books and I would have to tell you, I thought those were some of the most gentle handling of difficult situations I have seen. There is no family in the world that didn’t have a little problem.
Scarpino: As long as you said it first time, I am not leaving a witness; I’ve read those books. I agree with you (laughter).
Mutz: Well, I’ve read it too, because that’s one of the things that we all did at the Endowment, we did lot of reading there. On the other hand, Tom was one of the people, who taught me to read more. He says, ‘John, it’s not wrong for you to sit at your desk and read a book.’ He said, ‘That may be the most important thing you read during the day, more important than the reports and the expense reports and all the rest of stuff, you have to sign.’ Tom left a lasting impression on me, and the other thing is now that I am responsible for Lumina Foundation, the morality and the system we use to run that place has been tremendously influenced by my experience at Lilly Endowment. One of the reasons they asked me to be Board Chairman was that, I had that experience. And I guess I -- one of the first things I did was, I went to Tom Lofton who was now Chairman of Lilly Endowment, and I said Tom, you’ve got the best grants management system available. You developed it, in fact I developed it when I was there with PEW Charitable Trust and with another Foundation. I said, ‘I would love to have this, for this New Foundation that I am responsible for.’ He said, you can have it, well, we’ll give you the software, so he did.
Scarpino: So, he basically allowed you to use their system in the Lumina Foundation.
Mutz: That’s right!
Scarpino: I want to ask a question, you should know the answer too, and then I am going to thank you for sitting with us for the second time but, where is the headquarters of Lumina?
Mutz: What is it?
Scarpino: Yes, the headquarters.
Mutz: It’s in the old LS Ayres building, 301, South Meridian.
Scarpino: I mean I know I can look at up in the phone book, but then it wouldn’t be in here.
Mutz: Yeah, no the Lumina Foundation -- see what happened was, that facility was renovated by a USA Group, which was the predecessor to Lumina Foundation. We have a good part of the seventh floor and then we use conference center facilities on the 8th floor that we share with Eli Lilly and some other tenants there.
Scarpino: I am going to talk more about Lumina Foundation with you later, but for now, I would like to thank you very much for sitting with us the second time, and talking for almost two and half hours and…
Mutz: All right! Host …and I’ll look forward to visiting with you next week, and I hope you have a very nice Easter weekend.
Mutz: Well, thanks….Total Duration: (65) Minutes
Scarpino: Are you ready?
Scarpino: Okay. We’ve already sound tested so.
Scarpino: I’d pretend that I was you…
Mutz: Al right, that’s fine.
Scarpino: Thank you very much, for sitting with us, for this third recording session, and just for the sake of caution, I am going to ask you again for, permission to record the interview, to transcribe the interview, and to deposit the interviews with you, in the IUPUI parsons special collections for the use of the patrons.
Mutz: That’s fine, I agree as I have before.
Scarpino: Okay, in that way if the paperwork gets separated from the interviews at some point in the future we still have your permission so . . .
Scarpino: I want to ask you two follow-up questions, two things that we talked about last time, based on my having listened to the CD, and then to talk about your -- State Senator, and State Representative, and the General Governor, and then, the election for Governor. We talked about the City Committee last time, and you also gave us a primer on the City Committee in the pre-interview. At the pre-interview, you said that the idea for White River State Park, came out of the City Committee, and in fact the idea had come up at a gathering, your Grand View Lake cottage.
Scarpino: Can you tell us how that idea came out of that particular gathering?
Mutz: Well, this was a retreat like arrangement, in which we spent a couple of days together and the themes that I have outlined for you, about the future of Indianapolis, built around amateur sports, the arts, the education, agriculture, food and nutrition, we talked about, how you would make those real, and among the proposals, was a conversation about the White River, and what everybody said was, here we have a landmark in Indianapolis, and the city has largely turned its back on the White River. You know that time it really had – it’s still that way to some extent and so we said, well why don’t we do something with the river front, that’s how the conversation started, and then the idea, no, the name White River State Park had not evolved at that moment, that was, matter of fact Bob Orr is the one who added the word state. (Laughter) We eventually, were referring to it as the White River Park and of course, Bob felt that if the State would provide funding for it, and to be deeply involved in the development of it, then it ought to be called quote a State park. There also was the big debate about the fact that the image of State parks back in those days was not as good as it should have been, and we believe that, because it didn’t have the kind of attention or the kind of financial support that it required. So, we created a separate White River Park Commission to administer the affairs of the Park, which makes it decidedly different than all the other State Parks in the system. Those are some of the conversations took place that weekend. We said we really wanted it to be a state and all that kind of stuff, so, that’s kind of the background.
Scarpino: Do you remember what year that it took place in?
Mutz: Well, I can’t tell you exactly.
Mutz: Well, I think, the way we could figure that out is we go back and take the year of enactment of the legislation that created the White River Park Commission and Louis Mayhern ???spelling??? and I were the authors of the bill in the State Senate to do that; of course this is like a lot of things in a legislature, you passed the bill that authorizes the creation of the thing, but the funding comes later and it did come later and as you know the funding has been spread out over every year -- every two years, since then as a matter of fact. We envisioned originally, this as having a greater amusement aspect then it does now. We discussed with Disney, with Knotts Berry Farm, with others, over the time period of development; inclusion of their features and one time we came very close with Disney we believe. Eisner, the CEO of Disney actually came to the Indianapolis, I spent time with him wheeled him around Indianapolis, and so forth, and they were thinking about doing a series of what they called ‘smaller regional attractions’ and this might have fit, well, one thing lead to another and they had other priorities for their investment capital, and they took a pass on this. Now, over the years, the park did develop, with some other features that we had not originally envisioned at that time. The Eiteljorg Museum, the State Museum, now we always thought of a state museum as being in this park, and one of the field trips that we as a group -- the City Community took was Toronto, yeah. Now Toronto has a lake front park and we saw ourselves kind of recreating some of the aspects of that. If you’ve ever been there, you know it has a water feature, it’s a little different and it’s built around a family attraction. Its also built around a concept in Toronto, in which the entire province regularly sends school children to Toronto, from the far reaches of Ontario, which and they’re really are far reaches in that part of the world, and when they get there, they go to the Lake Front Park, they go to several museums, and we saw a re-creation of the same thing in Indiana. It featured Indianapolis with application to the entire state, and it’s gradually occurred. The dream really has taken place. Now, there were some other things about the park that we wanted, that had never happened and I still think they ought to happen, but that’s . . .
Scarpino: . . . For example?
Mutz: Well, we saw it as having a central feature that could be identified with Indianapolis, much like the arch in St. Louis, the tower in Seattle or the -- I call it the Space Needle I guess that’s the name of it, and one of the visions that we had for this, now, this is not the City Committee’s vision it was one later on that my wife came up with when she was doing a study for Lilly Endowment on agriculture, food and nutrition. She actually did a fairly major study about how those things might evolve and she saw a giant version of the DNA molecule, created in a tower that would become a symbol and of course we saw this as cutting-edge, we saw it at the time Eli Lilly and Company were just beginning their work in this field, it seemed to fit and of course now that we got this new initiative now on economic development involving bio-technology would even be more appropriate. Now, one of the problems with these features is -- they are very expensive to build and usually not self-sustaining in terms of the revenues they produce. Even though you can take a ride in the arch in St. Louis -- the revenues from those rides do not sustain the maintenance of the thing. So, that was one of the problems that we had in that respect. But at any rate those are some of the White River State Park features.
Scarpino: When you started to answer the question about White River State Park, you noted that one of the things that motivated the discussion that ultimately lead to the idea of White River State Park was the understanding that the city had really turned its back on its river. And I assume that the late ship quality of life and sort of an overall vision for the future of Indianapolis, but what did you see when you look at the river on those days right on the edge of our town?
Mutz: Well, what you saw was an industrial complex. You saw fifty and eighty- year-old buildings that were related to an industrial era. Of course, you saw the IPL generating station which is still there, you saw a railroad running through the middle of the area and a number of other facilities -- a meat packing plant, a bunch of things that were related to the old Indianapolis. I mean that was in fact an industrial sector of the community. And, you know, we’re not alone though, lots of cities have turned their back on their rivers that ran through them and even the navigable rivers –the Ohio River was never considered to be a navigable river in sense of trade; the Ohio River obviously is, though Louisville, Kentucky, only recently has finally figured out, this is a beautiful river. We’ve got to plan around it make it attractive; use it for a lot of kinds of community and living experiences. Well, as I said, for some reason a lot of cities turned the other way. Even the State House in Indianapolis, when originally designed, was to front toward the river, not toward downtown. That the actual real architectural front is on the side that looks out toward the complex there are to the west. (00:10:02)
Mutz: Well as you know, almost everybody else thinks that the other side of the State House as being the front entrance to the State House because it faces the Circle; the Circle being in the center of things in Indianapolis. So, I mean, yes, you are absolutely right, what we see is, almost a change in terms of how people think about their downtown.
Scarpino: And that was obviously one of the goals of the Committee was to, get people to think differently about downtown?
Mutz: Yeah, I think it is, the same sort of transition that Mitch Daniels is attempting to achieve here in Indiana right now; Mitch is, from a popularity standpoint, at a low ebb in his political career, I hope it’s the lowest it gets, but, the point I make is that he -- everything from changing time, that is daylight savings time and toll-road leases and privatization, a whole variety of other changes there, are aimed at saying, Hoosiers need to change, we need to get used to change, we don’t like it but we need to get used to it. Well, we were thinking the same way, at that particular time, and it was not quite as radical a change as we are seeing now or experiencing now; but the crisis wasn’t as severe then. We still had a viable economy in Indiana, our economy is almost not viable today. So, it seems to me that, you’ve hit right on a key point, and I didn’t emphasize it enough when I was talking about it. We were saying this is a time to think differently.
Scarpino: Do you -- now, when you walk around downtown, or go over to the State Museum, or take a stroll through White River State Park; do you think, that the kinds of activities, initiated by the City Committee, have kept downtown Indianapolis, economically and culturally viable?
Mutz: I do, beyond our fondest hope. The thing that always makes me feel good is two things. One is to be able to walk, from the river, to the Circle Centre Mall, and then, out to the IUPUI campus. Now in Indiana, we don’t walk that much; but in New York City that’s not a long walk, it really isn’t, and I have done it. I tried to do it at least twice a year, partly because I want to see -- you can see things much differently when you walk, than when you drive by. And so, that’s one thing that makes me feel good is to be able to walk, and take a look at those things. And the second thing is to be downtown at night. We have, comparatively speaking, a dynamic nighttime economy, in Indianapolis downtown. Very few cities our size do. Downtown Cincinnati doesn’t, downtown Columbus Ohio doesn’t, downtown Toledo doesn’t, downtown Cleveland really doesn’t although there is a piece of Cleveland, that’s pretty exciting, and -- we’ve visited a lot of these places during the City Committee area, I mentioned the visit to Toronto. We also went down to Atlanta, when we were thinking about the dome stadium. We wanted to see, their dome stadium, and spent some time with them, find out how they financed it and all that sort of thing. We did a lot of these field trips.
Scarpino: So, the dome stadium was another idea of the City Committee?
Mutz: No, I shouldn’t say that, I don’t think I’d really call that a City Committee idea, we wanted Market Square Arena obviously . . .
Scarpino: . . . You mentioned that . . .
Mutz: . . . That’s the predecessor; it’s not a dome stadium in the same sense. Well, I guess it is, I don’t know, what you call of its basketball arena and, I don’t think, the City Committee, at that era, really envisioned tearing it down; that came a long later, in all fairness . . .
Scarpino: . . . I can’t resist asking you this; did you play any role in the move on the coast in Indianapolis?
Mutz: . . . I played only a minor role. When you interview Jim Morris, which I know, you are going to do; you’ll have a chance to ask him more about that. There were four or five key players in that; I was not one of them. I was in the State House at that point and I did play a role in seeing to it that, the things that were done at the state level, that were necessary to make this happen, did happen. But, I was not a key player on that point.
Scarpino: As, you reflect back, on all the changes, that have taken place in downtown Indianapolis, many of which originated as ideas of the City Committee and the group people you’ve worked with, do you think it’s an example of you exercising leadership?
Mutz: Well it -- that’s a good question because this was something, that came from a group of people, exercising leadership. You normally think, of leadership as, being a solitary activity, it isn’t necessarily a solitary activity. And that may be a key question to think more about the future, that I haven’t thought too much about. You talked earlier about networks?
Scarpino: I got it out without leaving a witness. (Laughter). Could you talk a little bit about but I mean I realize that I sprang this on you, but it does seem to me, that leadership is more than a solitary activity in the institutions like, the City Committee play leadership roles, and it’s somehow -- it’s greater than the sum of its parts, could you talk a little bit about that institution exercising leadership?
Mutz: Without any question, the City Committee did provide leadership, as a group, and individually, I mentioned projects like, the Pan American Games, and the Sports Festival, that we held in the city. Those both were, City Committee activities, the people that actually lead the events, came from the City Committee, Ted Bone, being one of them, for example. But, the question you are raising here is -- what happens when this kind of a group, gets together, and I guess what I think happens is a cross pollination of ideas, and energy, and then if you like each other, and you get along, which we seemed to do -- and we got along with very diverse people, this was a diverse group really, in a lot of ways. Suddenly the common goal, of greatly improving the city, that all of us, had some strong emotions for, most of us were natives of the city; kind of brought us together, in a kind of an unusual way. I am having difficulty quite frankly, putting my finger on the difference between individual leadership and group leadership like this. It may be that individual leadership initiatives come from those—ultimately, somebody does have to be a leader, in a situation. There’s that old joke about you can’t have co-presidents, and co-chairmen seldom work kind of thing but, there is an energy that comes from that kind of a situation and it did.
Scarpino: One other question that came up as I listened to the CD from our last interview: you mentioned that our current Governor Mitch Daniels was mentored by Keith Bulen, now I understand that he is a little younger than that coterie of people we’ve been talking about up until now, but he nonetheless was a product of Keith Bulen’s mentoring.
Mutz: There is no question that, if you wanted to hear one of the best tributes to Keith Bulen, you should have heard Mitch Daniel’s eulogy at his memorial. Probably the best expression I’ve heard -- I don’t know whether that’s memorialized some place or not but if it isn’t, it would be a great piece to keep. Particularly now that Mitch has become Governor, nobody dreamed he’d be Governor at the time he delivered that particular eulogy but yes, there is no question, that Keith had a big impression on Mitch.
Scarpino: What was Mitch Daniels doing when Keith Bulen identified him as somebody he was going nurture and mentor?
Mutz: He was a bright, young college kid, and you see, he was the son of Dotty and Mitch Daniels Senior. Both of them were avid volunteers and active in the local Republican Party. They were part of the Action Committee. Dotty Daniels; I can remember Dotty for years and years, long before I ever even knew her children. You know, she was Republican World Chairman, and all these things, that we attribute to the activity of those days. You know, Keith knew Dotty and Mitch, loved them, trusted them, and when Mitch came along, and expressed a little interest in politics, Keith was quick, to try to find young people, places to volunteer.
Scarpino: Now, he was in Law School when Keith Bulen first . . .
Mutz: Well, I think he was -- that little piece of history, I am a little unclear on and perhaps you should check some place else but when Keith first brought Mitch into his inner circle, so to speak, he was working in an operation that Keith ran to run campaigns for people. Now, I am not sure whether this was a full profit venture or not, but it was during that time that I really got involved with Mitch because Mitch was the campaign manager for my campaign against Dan Burton for the State Senate, in 1974.
Scarpino: Did the operation to run campaigns have a name?
Mutz: It did, and I can’t think of it right this minute. Yeah it did, it has a specific name, and I can’t give it to you right this moment.
Scarpino: I am going to follow up on something that I know we talked about before but so that I get it in here, you mentioned the Republican Action Committee? Briefly, what was that?
Mutz: Well, Republican Action Committee, was this group of, Republican office holders, and volunteers in part led by the office holders, and by two individuals, John Burkhart, the founder of College University Life Insurance Company, and John Niblack, who was the Circuit Court Judg in Marion County. They were the two, titular leaders and more titular they were the real muscle behind this effort. We took -- we went about the process of taking the party control away from H. Dale Brown, who was the party boss, I’ll call him, and we did this by electing precinct committee men in over 200 precincts in Marion County. Enough votes in the County convention, so that Dale Brown didn’t even run, he didn’t stand to be re-elected and then, our candidate for County Chair was Keith Bulen. Keith came along, during that time period; he was not one of the original members of the Action Committee, but he was one those people we sought out and I remember the Republican office holders, was including my mother-in-law, Marsha Hawthorne; she said, Keith is the right guy to do this and that’s what happened.
Scarpino: I should just say as an aside that when we interviewed Keith Bulen many years ago, he had some very nice things to say about your mother-in-law also. (Laughter) Ok, I would like to talk for a few minutes about your career in the state, as a State Representative and a State Senator and if I have the dates right, 1967 you ran successfully, for State Representative and then you served as State Representative through 1970.
Mutz: Now, I think we need to clarify that the elections are in the even numbered years, so I was elected in `66, my first service was, in the session of `67.
Scarpino: I did have that in mind (laughter).
Mutz: I am just in, for the sake of the correctness and then, the sessions in those days were held every two years; they were by-annual sessions, and they lasted only 61 days. These were actual calendar days, so we are talking about a much briefer kind of stint at that time.
Scarpino: We have already talked about, the fact, that you still have an active career as a business -- and we have also talked about the fact, that you ran in 1964 and lost, but, to what do you attribute your success in `66?
Mutz: Well the success of the Action Committee. I was nominated on an Action Committee slate. See, when we slated people, we slated every office on the ballot and we pushed the slate and asked the constituency in each precinct as we elected new precinct committeeman -- this was an era where there was a lot of personal contact between Precinct Committeemen, and the people who lived in the precinct and all that sort of thing.
Scarpino: So, one of the jobs then of the Precinct Committeemen was to turn up vote.
Mutz: That’s right -- for the right people.
Scarpino: I know, I understand, just down the street (laughter).
Mutz: I always laugh about these people who say isn’t this wonderful, we had a great turn out. Well, our philosophy wasn’t great turn out, it was great turn out of our people and I guess, this goes back to Abraham Lincoln, there is a famous quote by Abraham Lincoln who said -- and I’ll paraphrase it; he said, ’Make a list of all the voters, determine those who are for you, and those who are against you, and make certain, that those that are for you get to the polls.’ Now, that is the philosophy, and that’s elementary and simplistic, but which one has to turn out, out of the people, who are going to support you. That what’s its about.
Scarpino: So, really electing all those precinct committee members was creating a partisan grass-root structure.
Scarpino: And it worked?
Mutz: It absolutely worked, and of course -- I think I told you earlier that state representatives were elected at large at that point from the County. So I was just part of the slate, I mean we all won, that’s what happened.
Scarpino: You seem to have been a very busy, and productive generous State Representative, I know, that 1967 you were a member of the Ways and Means Committee and you were a Chairman of the Interim School Finance Committee, and then in 1969, you were the Chairman of the Finance Committee, and I read that in 1969, you authored nine successful bills. Was it customary, in those days, for freshman representatives to be assigned a Ways and Means or to chair committees?
Scarpino: Well, it wasn’t, except for the fact that what we did was, once we had taken control of the legislature, you have to understand that legislative control switched from Democratic Party to Republican Party…
Scarpino: In the `66 election?
Mutz: …yeah, and it was a landslide election and the Marion County Organization, had been enormously responsible, not totally, but enormously responsible for that switch. So Otis Bowen came to be Speaker of the House. He’d been minority leader two years before and so, the Marion County delegation, negotiated as a delegation, this was Keith Bulen’s model and first thing we did was elect a chairman, Larry Borst, became the Chairman of the delegation, at that point and in our negotiations we want to originally -- this will be an interesting story for you -- but originally, there were two candidates for speaker. A representative from Noblesville named Billy Howard and Otis Bowen. Now, all of us, had been courted by both of these candidates during the year. After the primary, speaker candidates come around and talked to the Republican candidates to get their support for speaker saying; this is how you campaign for that office. Well, we had decided, Billy Howard was our guy, and so, the actual vote is a ballot vote, it’s a private ballot and so you don’t know who voted which way. But, we had essentially said to Billy Howard, all the Marion County votes are going to go to you. But that didn’t happen; that there was at least one of them that didn’t and that was, we believe now, Charles Bosma, who is Brian Bosma, the current Speaker of the House’s father, who was in that delegation with us. Now, he was a prior legislator, he’d been a legislator couple of terms back; and he knew Bowen, and he liked Bowen and he trusted him, and they had a lot of common realities between the two of them. So, I think he -- we don’t know this; we’ll never know the sure of it but that’s our assumption that Charlie voted for Otis, and that is probably the ballot that he won with. It was very, very close, and I don’t remember the exact count, but it was like one vote. And, so -- then the question was -- well, here we are, we have supported the wrong guy, how do you get what you want out of this? Well, this is a sign of a very unusual leader, but Doc Bowen said, ’I am not going to take retribution out on you people. I want to know what you want, and I’ll do my best to accommodate you because you have brought some of the brightest people, in recent years, to the General Assembly.’ So, we had four Committee Chairmen, out of our delegation from Marion County, plus a Ways and Means slot and I was the Ways and Means selection out of the group. Now, I was, because I had specialized in terms of finance during the primary and so forth.
Scarpino: And you were also Chairman of the Inter School Finance Committee?
Mutz: Well, that came along later. Yeah, that was a situation in which, almost everybody realized the school formula; that is the distribution system, for distributing aid, the local school corporation was broken, and needed to be fixed and so, I chaired that committee, and we re-wrote the school formula and actually passed it in 1969. My colleague in doing that, is and unusual colleague in that -- she was a Democrat, her name was Carolyn ???spelling?? Johnson. Now Carolyn Johnson is a -- was maybe still a faculty member, here at IUPUI, in the School of Public and Environmental Affairs; but, I gotten to know Carolyn, because she was, at that time a staff person for the State Commission on tax and financing policy . . .
Scarpino: . . . Which was it?
Mutz: . . . A study group, largely business people, and others who were appointed by Governor, and Speaker, and President pro-tem and so, Carolyn was really one of the brightest, and best informed, on public finance, that I came across and its ironic that a number of years later, Carolyn, and I, co-taught a course here, at IUPUI, at the School of Public and Environmental Affairs. But anyway, Carolyn was my colleague, adviser, in re-writing the school forum and she taught me off a lot, about the public finance, and about the legislative process -- so that’s the history of that.
Scarpino: Who was that -- was there one individual that made a decision that Marion County’s representative support would not go to Otis Bowen?
Mutz: Oh absolutely, yeah. I mean, he asked us, what we thought and, I got to tell you that Billy Howard was a more dynamic leader, in the sense of more outgoing, of more charisma, whatever the word is. Doc Bowen, who of course I worked with over the years -- and as I think, Doc and I haven’t always been on the same side, that’s one of the examples. But, Doc is one of these people who wears very well over the years. He also has a memory that is almost perfect. He remembers who was with him, and who was against him, at a given moment of time, and he doesn’t openly take retribution, but he remembers when key questions come along; a very subtle kind of leader in a sense.
Scarpino: When, he won the Speakership with a razor-thin margin, it may be one vote.
Mutz: Yeah, I think it was.
Scarpino: And, he elected, at that point not to take retribution, but to re-chapter the Marion County delegation, would you define that as a pivotal leadership moment for him?
Mutz: I think, it definitely was because there were so many more things historically to come along after that. Doc wanted to be Governor, and he ran for Governor, against Ed Witkin in the State Convention. Bulen was a Witkin supporter, I think, I’ve talked to you about this previously and Doc continued his desire to be the Governor, and was one of the few people in history to successfully run for Governor from the Speaker’s role, its not a normal place for somebody to make their case, to be the Governor. You know I think, it’s a -- it isn’t a case of, that Bulen ultimately saying, ’Well Doc, I appreciate the way, you handled it yourself.’ It’s the give and take of the political process.
Scarpino: Is there anything else that took place during your terms as a State representative that I should have asked you about? Didn’t have quite the insight to do . . . . (Laughter).
Mutz: Well, those years, as I said, the legislature was a really part time endeavor at that point, we were beginning a number of interesting ways of thinking about Marion County and I guess one of our major goals as a legislative delegation was to get a local option income tax passed and Bowen was absolutely opposed to it and his platform was essentially that the legislature should limit the revenue capability of local government, so called property tax control program, property tax relief program; Doc had an interesting slogan during his campaign for Governor and he said, his line was, he listens and this was built along the line of the friendly, family doctor who comes and holds your hand when you are sick . . .
Scarpino: . . . And I say for the record that he was a medical doctor . . .
Mutz: . . . Yes, he was a medical doctor, that’s right, yeah but the thing that was really interesting during that time period that we always get a kick out of was that he was, he based his campaign on property tax relief, the replacement of property taxes with other state collected taxes, sales and income taxes and he, they ask him what should this program look like, how high you want to raise this and change that, and he said I don’t care about that, that’s something the legislature and its wisdom is going to work out. He said I believe in the legislative process but he said there are three things I want it to be and that was substantial, visible and lasting. Now, if you were in a campaign back in those days, you heard that line substantial, visible and lasting 900 times during that year-and-a-half and of course I still kid Doc about it when I see him, you know he gets to town, he is still a director of the Lilly Endowment here in town and so forth and I kind of give him a hard time about an occasion; at any rate, that’s a very good example I think of something I said, last time we talked and that is that Doc had an agenda, and no matter what else is going on that agenda was way up here at the top, now he also however and he kept it in front of the public, in front of the legislature and all people he was working with that he also of course had a project, a program for everything you can imagine. He is the only Governor I ever dealt with, whose State of the State Address was so long that they had to take a break after the first half, so everybody could go into the rest room and so forth and then came back and finished and that’s before the time when we televised it, television would never have allowed this and you know you had to -- for an hour and fifteen minutes or something. Now to contrast that, his immediate predecessor Ed Witkin, he once gave a State of the State Address that I heard that lasted four-and-a-half minutes.
Scarpino: Oh my…
Mutz: Yeah and he essentially said everything is just fine in Indiana I am proud to be your Governor, you guys have done a good job and the less you do the better. And said a few other nice things and sat down.
Scarpino: Marion County Delegation was applicating a local option income tax…
Mutz: I carried the bill.
Scarpino: To what end?
Mutz: Well, it never got out of the committee . . .
Scarpino: . . . No but I mean you had it passed, what did you, why did you want local option income tax?
Mutz: Oh because we had -- again, back on the background of this we had all these dreams about downtown Indianapolis and about the community and about the image of sports and all the rest of it and we saw this as a revenue source to make some of those things happen and you have to have some money to make that kind of thing and of course the Lilly Endowment began to get active and Lilly Endowment was always willing to support things, but they wanted somebody else to do something too. They were looking for magic money or participation.
Scarpino: You ran for State Senator in 1970 and served from 1971 to 1980 and in that time period you were Chair of the State Budget Committee of 77-78. What do you think were your greatest success as a State Senator?
Mutz: Well, before we get to that, I want to mention one other thing: I believe while I was still a House member, not this maybe a Senator, this is okay its in this category.
Scarpino: Okay (laughter).
Mutz: One of the things that there has to be mentioned was at the time period when the White Rivers State Park was created and Louis Mayer ???spelling??? and I were Senators at that point co-authored the bill but of course, part of the reason for doing this was that I had available to be a match from Lilly Endowment, so what I did was, I went to Lily Endowment and said this is our proposal. Now, Jim Morris was there at that time, he was not I don’t believe an officer yet of the endowment but he clearly had the era of Tom Lake and when I actually met with Tom Lake and it was very unusual, very few people ever got to see him. And I said you know what we want to do is to we want to is to build this urban park its a convening location for the State Capital et, cetera. And now we see things that would benefit children and variety of family events and so forth. And I said we’d like to ask you to provide a match if I get money in the State budget, what I’d ask was for five million dollars if I get ten million dollars in the State budget and they made the -- that commitment. So when you’re talking about a project like this if you’ve got that kind of piece of financing, even though was I said, really there’s no finance in the original bill had to be added to the budget bill later in the session. So, I’d have to consider that one of those important moments; I think the complete rethinking of our mental health and program for the middle-aged, the mentally disabled, mentally retarded as we called them in those days was another important moment in my career, we began the group homes, the gradual closure of state hospitals and state institutions, we tried to do this in a way which we were not throwing people out on the streets which has been one of the criticisms made of reform in that area. It happens, that one of the people who worked for Otis Bowen, who would later work for me was Brian Bosworth, who I mentioned to you earlier. Well he is the person who helped me design this program for the mentally retarded and it was just a series of a group homes around the State of Indiana and they still are there and they’re prospering and working. I guess, I’ll have to say one or the other accomplishments had to be the regular continuity of money for the development of the IUPUI campus. I was always involved to the budget and so in every session I had to make sure there was a little money in there to buy ground to what became available and that’s what we did. Along that line, in addition to that, were the state appropriations that were matched by Lilly Endowment and others which created this campus, the library, the conference center; all those things are really on the category I think that took place during that time.
Scarpino: So, in your service on Budget Committee and later as Chair of the State Budget Committee you helped to facilitate that. John
Mutz: That then I think the other thing that I’d looked to with a little pride I guess is the revenue prediction system we used in Indiana. It’s unlike any state in the Union and that’s something that we perfected during my tenure as Chairman of the Budget Committee and as a member of the Budget Committee. I’m not sure whether you’re familiar with how this works or not, but what we have is a situation in which the State Budget Director gets a group of economists whose will is to make independent predictions about the State economic performance during the next bi-annual period. Now, those then go to a technical committee who take the predictions as to income growth and things like that and then apply it to historical data as to how that will affect income tax collections, sales tax collections and the like. This is a by part as an activity with two appointees in each group coming from the political party members of the State Budget Committee. The tie vote is the Budget Director who of course reports to the Governor and in the event that there is a disagreement, the party of the Governor wins in essence but there seldom ever is any disagreement. I got to tell you that for years, this system for projecting State revenue was not infallible but remarkably close to reality. What frankly has happened over the last six years – I think that’s right, they’ve been off, not nearly as accurate. And I attribute this to the economic change that’s taken place in the Indiana economy and in the world economy and this is the shift from manufacturing to service in a lot of ways. But in terms of accomplishments, I think that the revenue projection system, at least when we got to a legislative session, we didn’t argue about how much money there was going to be, we argued about how to spend it. Now in most States they spend as much time, arguing the credibility of your revenue projections verses your revenue projections and so that sounds like a small issue but I consider that from a government standpoint to be an important kind of thing. Another thing that I was involved in during this time period was the creation of the ‘rainy day fund.’ The rainy day fund was an idea that I brought to the legislative process, I introduced it several sessions in a row and ultimately it got passed but only I had left the legislature. I was Lieutenant Governor when a young representative from Bedford was the author of the rainy day fund. It was the same program that I had espoused. I have to say that in the legislative process, it’s often the case, what you want to do doesn’t always get done the first time, you got to try it out, sell it, test it and so forth.
Scarpino: Was the idea of a rainy day fund a controversial idea when you raised it?
Mutz: Yeah, it was, it controversial because it was thought to take some of the discretion away from the legislature and put it in the hands of the Governor. There are other things I was involved in when you’re a member of the budget committee, you have your finger on the pulse of every state expenditure, that resides at all, so involved in those sorts of things. The other thing I’d point to during that time period was the creation of the Automobile Excise Tax, now there are not many politicians who want to say, ‘I created this wonderful new tax.’ The Automobile Excise Tax was in fact a substitute for a Personal Property Tax on automobiles. It is one of those things that people don’t like but it is a very fair tax. It’s based on a reasonable kind of value and was a great improvement for two reasons; one, fairness, but the other was it was more reliable. We collected more money from it.
Scarpino: I can’t resist saying this to -- at least twice in your career and legislature, you were as a Republican person to raise taxes, excise tax and local option tax. Did that have come back at you?
Mutz: Well, yes of course it did. The excise tax in particular did because Evan mentioned it in the campaign for Governor in 1988. And of course, that’s one of those charges that’s very difficult to answer in a 30-second television commercial and so far; my tax is more fairer than yours and that kind of thing. But nevertheless, you have to ask yourself when you are in a legislative situation, you know what is really the right thing to do and what good government? Everything can’t be based on the next campaign and there are whole bunch of other things in my legislative career, bills I authored and all that kind of thing; some of which could be controversial. I may have mentioned earlier the mental health situation. When I went to Madison, Indiana and sat in on this four hour meeting whereby by told them why we shouldn’t close their state hospital at Madison. Those kinds of things ultimately have to happen.
Scarpino: While you are in the legislature, you played a role in the legislation that ultimately created Unigov to combine certain elements of City and County Government in Indianapolis . . .
Mutz: . . .And that was in the House not the Senate . . .
Scarpino: . . . Right, right. I kind of skipped over that and I wanted to come back to it. Can you briefly tell us just your legislative role?
Mutz: Yeah. I think I mentioned to you earlier, the meeting at John Burkhart’s house, where we came across the idea of a unified metropolitan approach. I was in a group of handful of legislators who actually wrote the bill during the interim time period and I mentioned all of these volunteer lawyers; we used to travel around the county during that time period and Dick Lugar would get up and give a pitch for unified government and somebody would get up and complain about something and so forth and Dick will say ‘Well we didn’t really mean to do that and so far these lawyers have taken notes,’ and they go home that night and change the bill. I mean it was really a work in progress all the way through the public hearings and so forth. The bill itself, I was not the author of the bill, Ned Lamkin was the author of the bill in the House. But I was one of those who helped write it, I figured out along with the lawyers this unusual set of circumstances in which you got independent taxing districts super-imposed on one another. Now our original vision was to have one taxing district for the entire County, one tax rate, schools and everything. And we could have done it if we had schools in the mix. But the way it was, because of the political compromises, we had a separate district for police service, separate district for fire service, separate district for parks, sanitation, I can’t remember the whole list. And so what you had there was a very complex kind of taxing arrangement. Then of course we cut out the three excluded cities: Speedway, Lawrence and Beech Grove were excluded from portions of this program, but not from the special taxing districts, unless they had their own police departments or own fire department. So, yeah, I was deeply involved in the creation of the thing.
Scarpino: The individuals that you worked with, in the political round were extraordinarily successful at wrestling control of the Republican Party apparatus from the gentleman who had been a long-term political boss from Indianapolis, you elected precinct a County precinct men who helped to turn out the vote, you took over the state legislature en masse which leads me to ask you: was one of the goals of Unigov to further solidify the control of the Republican Party of Indianapolis?
Mutz: (Laughter) Well, we like to think that when we visualized this idea the first time, we saw it as a masterstroke for better government, more identification for everybody in the County and so forth. Clearly Keith Bulen knew and understood the fact that this made it possible to elect Republican Mayors for a longer period of time, and if you look at the quotes from Keith, nationally and otherwise, he occasionally said something about it, not very often but he did say something about it. So yes, it was involved in the struggle for power, I think you could say that.
Scarpino: Looking back on it now, over several decades, are you satisfied with the way Unigov has played out?
Mutz: Yes and no. I would have to say that I think that Unigov along with the Lilly Endowment’s involvement in the County and the quality of private sector leadership made the difference in redoing the city and the state capital. But Unigov was not the perfection that we had hoped for. I would have, I mean if I go back and redo it today I’d put schools in it. You may recall that Unigov itself became one of the issues when bussing was ordered by Judge Dillon here in Marion County. And the reason was that we froze the school boundaries in the Unigov Bill that then existed. So Indianapolis Public Schools could not be expanding, so individual school districts all had their territory. Dillon found that to be discriminatory, that was one of the key findings in his order. So, first of all I regret that the schools weren’t in it. Secondly, I regret that we didn’t consolidate law enforcement at that time, but politically, neither of those was possible, because just this just this year you’re seeing a law enforcement consolidated. We had not really considered the township trusty and all that issue at that time, that was not something high on our list but the other things; police and fire and so forth we thought you know it would be nice to consolidate those two. Again, the political realities of the moment made it impossible to do that. Now there is another thing I really regret and that is that we also, in an effort to get votes from legislatures outside of Marion County, we froze the boundaries of the new metropolitan area, so annexation wasn’t possible. Now in retrospect, that was a big mistake, because it made it impossible to annex into Hamilton County and into Johnson County et, cetera. Which in today’s world you could argue might be a desirable thing to do.
Scarpino: What were the political realities that prevented consolidating schools?
Mutz: Race, primarily; under the surface, it was tailored in a different kind of conversation in those days, it was tailored in pride about Lawrence Township School system, pride in Speedway School system. Our system is a good one et cetera, et cetera why should we lose it? We’d like local control, all of those things. Under the surface however was the beginning of the ‘white flight’ and it was real in Marion County at that point. The fear was that the system as themselves would deteriorate if, those kind of things happened. Now, in my opinion, the whole system would have been a lot better if it hadn’t happened that way.
Scarpino: What were the political realities that prevented the consolidation of law enforcement and fire departments?
Mutz: A Republican Sheriff and who is one of the action committee’s key members.
Scarpino: What was his name?
Mutz: His name was Lee Eads, E-A-D-S. Lee was one of those people we brought along and we needed him. He was the key player in the situation. So you don’t just turn around and cast out one of your colleagues who has put this cop coalition together you know. Along that same line of course we did eliminate the County Commissioners. They were not particularly involved in our effort and as strange as it may seem at that time, two of them were Democrats at the point, one was a Republican.
Scarpino: How did you – let’s see how I want to frame this. We got a recent controversy in the city about consolidating law enforcement. How did you respond to that controversy that unfolded, I mean at one point you were in favor of consolidating? Do you think it still makes sense?
Mutz: Oh! Yes, oh yeah, I think it still makes sense and -- but not because its going to save a whole lot of money. I don’t -- we never saw Unigov as a big money saver but I think it makes sense for the law enforcement system to be a unified system.
Scarpino: I believe that in 1970 you ran for Republican State treasurer? I saw a very handsome picture of you on a campaign flyer. You were not successful in that bid?
Mutz: No, that’s right, I was nominated by the Republican State Convention, the -- my opponent Jack New ???spelling??? in the fall, won. This was a very narrow loss in that election, not just for me but for all Republican candidates. Dick Roderbush ???spelling??? was at the top of the ticket, he was running for United States Senator, he was a Congressman against Vance Harkey ???spelling???. Roderbush lost by 4500 votes statewide which is just next to nothing. I lost by -- I would call 30,000 statewide, the smallest margin of any of the state candidates except for Roderbush. Bill Sailen ???spelling?? was running for Secretary of State, Trudy Etherton was running for State Auditor -- we all lost by a razor-thin margin. There was one judge who didn’t win. His name was Paul Buchanan, and he is still alive as the matter of the fact, I saw him not too long ago. He was the one exception. We’d never been able to figure out how Paul Buchanan pulled that off but we suspected it was his contacts with lawyers all over across the State.
Scarpino: Why do you think the election was so close I mean from, race to race to race?
Mutz: It was a party election and that was a Democratic year Harkey ???spelling??? of course was an incumbent, it’s always harder to beat an incumbent. I don’t have enough data poll-wise and so forth to give you a good answer, well, for, you know all the other reasons.
Scarpino: I want to talk to you in a minute about your services as Lieutenant Governor, but before I do that I’m going to ask John to ask anything. This is John Beeler. (00:60:04) Beeler: I think I can save it for the end, I think I might have it answered, possibly by the end.
Scarpino: You were elected Lieutenant Governor in 1980 and then served from 1981 to 1989, on your major days you were President of the Senate, Executive Director of the Department of Commerce Committee of Agriculture Director of the Department of Employment and Training Services and I want to ask you a little bit about each of those areas.
Scarpino: Just for the record because we’ve spent a lot of time trying to business career and I noticed that on your resume, there’s a, it shows that your association with several leasing corporation and fast food management both terminated in 1980 and did you have to divest yourself of those as you made the choice to run for the Senate Governor?
Mutz: Yes. Well, I mean, I wasn’t forced by law, I was forced to do so by partners in the businesses and I don’t mean that they forced me; it was a situation in which they had been generous people in making it possible for me to serve in public life and do the other things. And doing it part-time is one thing but doing it full-time is another. So it seemed an appropriate time to divest ourselves of the fast food business and then I just of course resigned from Circle Leasing.
Scarpino: So, you were really making a major career, a life-altering career move here (Laughter) as you decided to go to run for Lt. Governor.
Mutz: Yes, that’s right, although you know I made a decision to run for state office back in 1970 with the same people and after I lost, they invited me to come back to the business again. So, that option might have been available, but there was no agreement I can assure you of that.
Scarpino: What were your major responsibilities as President of the Senate?
Mutz: Well at the time I became Lieutenant Governor, all a Lieutenant Governor essentially did is preside over the Senate, vote in case of a tie, and render decisions as the Presiding Officer of the Senate. The real leadership of the body was in the hands of the President pro temp. That change had been made several years before and there was a decision made -- back in history when Dick Foltz ???spelling??? was the Lieutenant Governor, I believe, before Bob Orr became Lieutenant Governor. At that time the Lieutenant Governor actually appointed Committee Chairman, controlled the flow of Legislation through the Senate and so forth and the Senate decided this was not a good situation; they wanted control of their own body; that is move it out of the Legislative, I mean, out of the executive branch in the legislature branch. That was a basic decision; I wasn’t involved in making that decision.
Scarpino: When you moved into the Presidency of the Senate in 1981, who was President pro temp of the Senate?
Mutz: Well, Bob Garten ???spelling??? was.
Scarpino: What do you consider to be your major accomplishments in that position?
Mutz: As President of the Senate?
Mutz: I don’t think, I can claim any great accomplishments in that role. The only thing I could say about that time period was that for the first time in a long time we had no scandal in that body. I laughingly used to tell Bob Garten I said you’re the only President pro temp that I served with or under who wasn’t indicted. And you see the two predecessor President pro temps were: Chip Edwards and Phil Goodman ???spelling???.
Scarpino: And what were they indicted for?
Mutz: Well, they were indicted – well that’s a good --- I don’t know the exact charge, both of them actually served time and they were involved in payoffs I guess you’d call them; the use of private helicopters and airplanes and stuff like this and they also got some cash payoffs down the line, allegedly. That’s historic fact at this point I guess.
Scarpino: We spent a lot of time talking about leadership and your experience and understanding in the areas of leadership, how did you exercise leadership as President of the Senate? (00:65:00)
Mutz: Well, you really don't. Let me -- just to give you an example, the efforts of the Senate to take control of that body themselves. The Lieutenant Governor did not even attend caucasus you see so, I was truly a part of the Governor’s organization at that point, not part of the Senate, but it is a formality of sorts. But it’s pretty much like Federal system.
Scarpino: So there was no exercise in power or . . .
Mutz: . . . Well, I wouldn’t go quite that, quite that far. Yeah, I had served in the State Senate for nine years. I would spend lots of time with all these men and women. So when it came time to lobby for the administration’s legislative agenda, I was probably the best person to do that. I could talk to everyone of them about our proposals, and it was during that time period that we passed this huge number of economic development programs in Indiana. Those were all legislative proposals of mine supported by Governor Orr. So I was very, very successful in getting those all passed during that time, but it’s hard to split my role as President pro -- I mean as President of the Senate, and as Lieutenant Governor at that point. Clearly my personal relationships made a lot of difference in that situation.
Scarpino: Is that one of the reason you got tapped to run for Lieutenant Governor?
Mutz: Well I didn’t get tapped. I was nominated in a direct primary in Indiana. I’m the only Lieutenant Governor in Indiana history who was nominated in a direct primary instead of a State Convention.
Scarpino: And a direct primary, is what?
Mutz: Well, a direct primary is where you run in a statewide primary election, and every single voter gets to vote for you, or against you, or for somebody else. The primary I ran in, there were four candidates for Lieutenant Governor, including Ralph Fenata, ???spelling??? who was the head of the Bureau of Motor Vehicles, which was a highly politicized agency at that time. Kermit Burrows, ???spelling?? who was the speaker of the house, and the fourth one was a guy named Gary, Gary Collins, I think that’s right, from South Bend. What I’d have to say about this is, I won a very close primary. There was few votes separating for three of us. The outsider from South Bend got 4,000 votes, something like that. But I was fortunate enough to win that primary, and that’s how I became Bob Moore’s running mate, he didn’t pick me.
Scarpino: Okay. You served as an Executive Director of the Indiana Department Of Commerce, and I assume in that capacity, not only where you promoting the economic development of the state, but also advancing the administrations’ economic agenda. But I read that you were chief negotiator for the ten month bargaining session that brought the approximately $550 million dollar Subaru-Isuzu plant to Tippecanoe County?
Scarpino: Can you tell us a little bit about those negotiations, what was involved in that?
Mutz: Well, sure, but that was one among literally hundreds of deals in which I was involved in the negotiation. Our approach to the situation -- we had a staff of people, who were mostly bright young people, with not a whole lot of training, but who were quick learners. And they managed each of these new industrial or economic development projects. But there was hardly a single one that I wasn’t involved in, in someway. Now, it could be very simple, no more then a phone call to the President of the company, saying this is Lieutenant Governor Mutz, just want you to know that the state of Indiana really wants you to come …Total Duration: 69 minutes.
Mutz: . . . in Indiana, if you don’t get exactly what you think is fair and reasonable from my department give me a call all that sort of thing.’ The personal touch I think in selling anything is very important. As a matter of fact this is one of the things that Mitch Daniels has latched on to, literally dozens of these prospects who come through Indianapolis for one reason or the other have a brief visit to his office. It’s part of the selling technique. It’s not unusual for example for Jeb Bush to call some Indiana companies, tell him how great it is to operate in Florida and so forth. I mean, that’s part of the business. But, the Suburu-Izuzu thing was a celebrated issue because Indiana had lost out on a previous auto plant, which went to the state of Illinois. And we negotiated on that one, lost the deal.
Scarpino: Was that a Honda Plant?
Mutz: No, it was a Chrysler plant. And so there are people who say, ‘Well Mutz can’t get the big one done.’ This was one of those -- this is political stuff but that’s the way it is.
Scarpino: And it’s like being compared to Payton Manning.
Mutz: (Laughter) Yeah. That’s right.
Mutz: Well, that’s a flattering comparison at any rate. So, our office in Japan -- see during my tenure as a Lieutenant Governor we also opened the office in Japan, in Tokyo. We also opened offices in Brussels, later in England. I can’t remember we only had four, five, they had many more representations now than we did then. At any rate, the works that we did there was finally a situation in which Fuji Heavy Industries, which is the parent company of SIA in Lafayette, made it clear that they were going to be build a plant some place in the United States and they’d finally decided there were three states that were ones that seemed, location wise in the right place and so forth. And so, the issue was then, can we get that in Indiana and we showed them sites in a number of locals. They finally decided they liked the Lafayette location best and I made four trips to Japan involved in that transaction. And I was involved in the actual give and take on the final day, when we shook hands and celebrated the new plant and so forth.
Scarpino: What was the nature of that give and take?
Mutz: Of the what?
Scarpino: Give and take.
Mutz: Well, the give and take had to do with -- can you provide us a sight free of charge? This was an unusual a set of circumstances and I remember calling from Japan to a lawyer named J.B. King who was at that time was at Baker & Daniels here in town. J.B. and I had worked together on automobile excise tax, back in the legislature and all kinds of things, and he had been an advisor to Otis Bowen and so forth I think. And I said, ‘J.B. here’s the deal and it’s a big deal and about three thousand employees, we think etc., and I said, ‘Is there a way, legally to do this?’ And he said, ‘Well, I think so but I'm not sure, call me back in six hours.’ So, we did and he said, ‘I think we can do it’ and I said, ‘Well, are you prepared to put a team of lawyers on this to get it done’ and he said, ‘yes’ So, that’s the first step in this process. Other things we negotiate were training grants, the construction of an inter-state highway interchange that directly serves that plant, the widening of the road, which incidentally I may have told you, was the Baton ????spelling??? Memorial Highway where we located this thing, this was related to the -- criticism that ultimately took place because of the Japanese investment. Those are samples of negotiations. There is a memorandum of agreement that we signed, which is not legally binding but what it was is a -- an agreement signed by me on behalf of the state of Indiana that I will use my best efforts, to get the legislature to do all the things necessary. And that’s kind of what happened, it was a lengthy process, that memorandum of understanding I think, it may be probably records available for something. (00:05:05)
Scarpino: Were the tax breaks involved . . .
Mutz: . . . Oh yeah, yeah I mean tax abatements and things of that kind.
Scarpino: You mentioned training grants. These are grant to train workers?
Mutz: Yes, and then we also set up a special arrangement with the Employment and Training Department that I have headed to do the preliminary interviews in screening of the thousands of people that applied for these jobs. These were sought after jobs and there were jobs in the $45,000 to $60,000 range. They were -- we had huge numbers of people who wanted them and screening 10,000 applicants alone, is a big task. So, we set up a special system to do that and -- but that, we did that in other plants as well. You see there was another big assembly plant that came into being during my tenure and that was the General Motors Truck Assembling Plant, south of Fort Wayne and that’s a case where I was forced to work with a Democratic Mayor. And the arrangements we worked out there were, I think; again tax abatements and roads and the same general things were involved. But that was a big new edition and of course it came at the time that International Harvester was leaving for one year and they badly needed this economic shot in New York. The guy who was the mayor of Fort Wayne at that time is now a state legislator, as a matter of fact in Fort Wayne, oh, I am sorry . . . [Recording paused]
Scarpino: In terms of the Suburu-Izuzu just off of Tippecanoe County, just off of 65. I assume that one of the attractions must have been availability of sufficient power, around the plant . . .
Mutz: . . . Yeah . . .
Scarpino: That’s a REMC up there, a rural electric coop.
Mutz: . . . Not exactly . . .
Scarpino: . . . It’s not…
Mutz: No. What you had was the site that we had picked, was a split site, meaning that it was partly served by PSI and part by the REMC. And one of the negotiations I had to get involved in was to, get the REMC’s to give up that little piece of territory and we succeeded in getting that done. They were not equipped to provide the kind of power that the plant of the sight needs, but of course they were paid something for their relinquishment of the territory.
Scarpino: That was the reason I asked you that question is because, at least in the energy history of the state there is a long contest between the investor and utilities on the rural electric coops for territories . . .
Mutz: . . . Exactly. That’s right . . .
Scarpino: And so you stepped into that, right now? Some were ironic in the sense that later on you became the head of the -- in the version of that power company.
Mutz: That’s right. Well, that’s actually the same version. I mean that’s the same company, yeah.
Scarpino: . . . That’s PSI . . .
Mutz: Yeah, that’s right and it is still PSI today although it’s wholly owned sub. But at anyway, I guess what I’m saying is that, that’s not the only time that we had split territory, but this is a -- now we worked with the REMC when the territory was all in their jurisdiction, that’s a continuing problem in Indiana. Over the years, I have never been a favorite of the REMC advocates. That was probably another issue in the election campaign of ‘88 although I’m not nearly as highly profiled as was the xenophobia that I mentioned earlier. The bad with the REMC --it seems to me, is one of the situations in which, in the early days it was not economically exciting for the early power developers to wire the countryside and so this was -- came out of the Roosevelt administration and was an effort at bringing power to the country. And it was a great thing for the country. I mean, I remember my own grandmother down near South of Columbus, l, well; when I would visit down there, when she first got an electric dryer, this was a big deal. We had an electric dryer for a long time in Indianapolis, and so we went to Columbus and bought a dryer. I went with her to do this. So, I understand the importance of that. On the other hand, these government involvements like that have a habit of never ending, once they accomplished their goal, and I think you could make the case that the energy system would be more efficient if we didn’t have this unusual power provider in the middle of the system. The people that run the REMC will give you far different view, locally owned, locally controlled, investor owned all that kind of stuff.
Scarpino: In the interest of this I should probably say from the records that I have done a series of all these three interviews with, excuse me, former PSI folks and with the variety of individuals associated with REMC’s including Mr. William Park ???spelling??? who was a lawyer, who put that system together. I interviewed him the day before he died.
Scarpino: So, just for the record those interviews exist and . . .
Mutz: Well, I wondered how you knew this much about it. But that was one of the -- mean there was a long list of items that had to be dealt with during that negotiations, that’s one of them and you’re absolutely right.
Scarpino: I read almost every Utility Commission ruling on that, I mean I spent six month doing research on this before I had anybody’s time, but I do know that it was significant issue when I was wondering how you negotiated those shoals as Lieutenant Governor?
Mutz: Yeah, well of course I went to the heads of the utilities and said you know, this is too good a deal for Indiana, we can’t allow this territorial dispute to be a problem. And of course, I had strong support from the Indiana Utility Regulatory Commission and I had the leverage of the Governor’s office, lot of things going for me in that situation.
Scarpino: What kind of leadership skills did it take to negotiate deals like that?
Mutz: Well, I think you have to have some kind of clear idea of where you want to end up, before you start the negotiation. And then decide what are you willing to give up in order to get there. And then, what is the tolerance level of the legislature for the dollars involved. And you had to think about all those things. And I have to say this to Bob Orr’s credit; he virtually left me alone on that issue. He never got in and tried to, you know, second guess me, or say well, why to do this, why to do that? He trusted me to do that. Now, I had a lot of advice, a lot of good help from the talented people around me, but the final decision had to be mine, ultimately as to what we are going to offer and so forth. And you could argue that I could have gotten it for a little less. It might be, but in retrospect now, with what’s happened there, I think it was a very good deal for the State of Indiana.
Scarpino: Do you think that one of your skills as a leader is the ability to sell an idea?
Mutz: Well, I do and I think if you don’t have that ability or at least the willingness to learn how to do it, pretty hard to be in a leadership situation, yeah.
Scarpino: Do you think that your experience in business helps you hone the skill? John Mutz Yes, I really do. I mean when I was in the equipment leasing business; you negotiate every single transaction. You know it’s an interest rate, and terms and conditions and negotiations. When I would put a new fast food hamburger Restaurant, you go to a perspective landlord and say, I either want to buy your ground or I want to lease your ground or I want you to build me a building and lease it back to me and so forth. And you then go into a series of negotiations as to what those terms and conditions will be. Now, you always have a lawyer with you, to help you on some of these kind of things. But the give and take of those situations does hone your skills, no question.
Scarpino: You established a corporation for innovation development. Can you talk a little bit about what that was?
Mutz: Yeah. The corporation for innovation development was designed to create a venture capital network, in the state of Indiana. And it’s now known as CID Ventures. And, well I have to say to you this is that once we got through the early stage of this economic development program, with all these tools to get new investors to come to the states over. Then it became very clear to me, and to Brain Bosworth and Allen Kimball, who were my two main advisors, that we were looking after the short-term interest of the state, but not the long-term interest. (00:15:11) And so we decided we needed some initiatives that talked about the future. We knew then that we were going to have a need for more innovation in the state, more entrepreneurial activity and so forth. So we started three entities, to accomplish that goal. One was CID, which was to develop a network of venture capital . . .
Scarpino: . . .Corporation for Innovation Development . . .
Mutz: . . . That’s what we called at originally, that’s right. The second one was C.S.T the Corporation for Science and Technology and that was a, entity that receives state appropriations and made grants and loans to emerging companies. It also made grants to universities and others who collaborated on research of one kind or another. It is the forerunner of the 20th century fund that is currently in existence here in Indiana. And then the third one was called, may be on your chart there, but it was designed to be a small business assistance operation, and its purposes was to provide counseling and mentoring, if you want to call it that for small business developers. And we saw all these as essential ingredients in this business of redoing the Indiana economy, because it was becoming -- it wasn’t clear to most people but it was in my gut that we had a lot of changing to do in the state, And it was very hard right then, to get people very alarmed as they are today, because we still had. You know after the recession was over, this industrial economy came back again.
Scarpino: What do you think was the nature of the changes that neeedd to take place, what were the points on the horizon you wanted to march the state towards?
Mutz: Well, when I saw what happened in the early 1980s, with the imprint of the Japanese automobile undustry in the United States, it was pretty clear to me that the day of an insulated US economy was over. And what that means of course is, that as long as you’ve got other countries that have some ability to do creative thinking, we are no longer the only game in the world economy, that competition its going to happen, and it did. So, those efforts were on the part of our department and our administration, efforts at saying, it’s important to be competitive right know on this new investment because we’ve got to do somethings that shift the Indiana economy. Those were the first steps. Now, there was another one that took place later, and that was the creation of the Indiana Economic Development Corporation and that’s the same name incidentally as Mitch’s corporation to do this, but we saw that as a master planning operation, thinking about economic plans for the future. What should the Indiana economy look like, should it be regional, should it be – how should it be structured, what would be the major building box and so forth? And Brian Bosworth became the first president of that operation. And they did some good work now when Evan become Governor, he essentially ignored it and it had a Director for a while what’s his name? Think of it -- anyway he works for -- Tom Miller did a lot of work on the current Economic Development Plan for state of Indiana. So, those were some of things you see, that’s another thing about leadership. It seems to me, none of those things would have a great deal of impact during my administration, it seems to me, one of the objects of leadership is to think down the road a little bit and see what kind of lasting impact you could have. So you know, I don’t regret doing those things; I think they were the right things to do.
Scarpino: The Corporation for Innovation Development, you talked at, this was through venture capital Network, what was the source of the venture capital?
Mutz: Well, the initial operation was set up like this: a state chartered corporation was created and this state charted corporation then sold partnership, I think that’s right, yeah -- interests and I went out and personally solicited individual companies largely intuitional in nature, now we raised $9.6 million in this first fund. (00:20:17) Then I also recruited the board members and the board members were prominent members of the state business committee. Dick Wood, CEO of Eli Lilly & Company, Ian Rolland, CEO of Lincoln Life in Fort Wayne, Dick Rosenthal, CEO of the largest bank in South Band at that time, John Fisher, CEO of Ball Corporation in Muncie Indiana. I mean, those are samples of the kind of people that we recruit. And these men surprisingly, took this on serously. I mean, they helped to sell the rest of the interest in the first fund, they aggressively managed it, and then they hired a professional to run, and that was what I wanted to happen. Now, the incentive for doing this was a series of tax credits, granted by the legislature to the investors, in this situation. And this was a complicated idea because we wanted also to create other venture funds, and so the same tax credits were made available to them, if CID granted to these other venture funds . . .
Scarpino: . . . So, Corporation for Science and Technology was one those on the venture capital?
Mutz: No, no, that’s a whole separate entity. A state charted corporation with state appropriations to support it. But, all the money in CID was private money. And after the initial phase of its development it was my intention, that it no longer has anything to do with government or politics. The idea was that venture fund shouldn’t be making grants on the basis of political favoritism, it’s a decision as to what’s a good investment or none and we also found that the venture capital industry is one, which is in networking kind of industry. You make arrangements with other venture firms, they invest in your deals, you invest in heir deals, that way you spread the risk and so forth. I guess the intention of the first CID fund was that it be primarily devoted to Indiana companies, but we didn’t mandate that in this situation. And nearly all the others were, and the first fund, was an amazing success. Returned – a substantial return on investments, I can’t quote the figures exactly but two or three times the amount invested and many of the investors had already written off the investments. And I remember Tom Miller that time who was Chairman of the Indiana National Bank and they put a million dollars in or eight hundred thousand --I remember something in that category, and he said, John I’ve just came from the board meeting and I said was everything all right and he said yeah. And he said, I had to eat a humble pie. He said, I had to tell the board that we have received a substantial return on the CID investment and I had asked the board, several years earlier to write it off because they thought it was just kind of a civic thing they ought to do to support me and what we were doing. This one of those, this is a risky proposition from that stand point. But the early going in CID was quit successful. Fund 2 was as good as fund 1 and fund 3 was successful.
Scarpino: What were some of the investments that stand out?
Mutz: Boy, I don’t know that I can quote them for you all. I have to get to the -- CID maintains a complete list of all the investments from the very beginning in all the funds and you can see them there. But they are not names that you would readily pull out.
Scarpino: You were involved in Sate Enterprises Zone Program?
Mutz: Yes that’s another Economic Development Program that we started. The Enterprise Zones, the Film Commission, the one that’s devoted to the development of the downtowns of small towns.
Scarpino: Main Street?
Mutz: Main Street, those were all part of this long list of things that we put in place, and the Enterprise Zone thing, was a experiment that I had read about from an economist named Butler, who had written extensively about his experience in United Kingdom. It was a, kind of one of those things that conservative economist banding about as a great idea and so forth so I said, well, lets give it a try and we did in Indiana. (00:25:03) Now, with limited success I have to say, the enterprise zones are being phased out now, largely because the tax breaks that we had created for them are gone. The inventory taxes will be eliminated and so the major revenue source for the enterprise zone commissions will be eliminated.
Scarpino: The inventory tax was the major revenue source for the Enterprise Zones?
Mutz: Yeah, the deal was that within the zone industries that that operated there got a break on their inventory tax and then they were originally asked to contribute roughly 10% of that break to the Enterprise Zone Commission, which administered the quality of life issues in the zone . . .
Scarpino: . . . Infrastructure, roads that kind of thing?
Mutz: Well and also, job for people and all kinds of other things. Yeah, Enterprise Zone Commissions are non-profits in Indiana and there are a lot like Neighborhood Development Corporations.
Scarpino: Intelenet, when was that? Sounds very high tech but I…
Mutz: All right, well Intelenet was an effort at wiring the states educational institutions, so that they were digitally connected. And I was successful in getting that bill passed on Intelenet and help create the first Intelenet Commission so forth. We got a professor from Purdue on loan to run it for us. Chinese American, really brilliant guy and it’s the forerunner of the system we have now in place in other words, but part of my feeling here was, libraries for example; we ought to be able to get resources from a library any where in Indiana no matter where it is and get it in really in a short period of time. I think it is the forerunner of the kind of thing that we see now, has been taken for granted. How can we expect the state prosper unless we have broadband available almost all over the state of Indiana, you know?
Scarpino: Okay. Indiana Export Finance Authority, what was the purpose of that organization?
Mutz: That was to provide financial assistance to companies that sought to export products outside the United States, and our goal there -- that’s when that Bob Orr really inspired. Bob was always of the opinion that Indiana businesses were too insolated form the rest of the world. They should sell their products outside of the continental United States. And so, we devised a whole bunch of things to -- and that’s one of them. Largely we job owned it a lot, I mean its that kind of thing.
Scarpino: That includes agriculture also?
Scarpino: I just looked at my notes by the way, overseas offices representing Indiana. in London, Amsterdam, Tokyo and Taipei.
Mutz: That’s it.
Scarpino: So, Steve Carter who is currently the states attorney general was on your staff when you were Lieutenant Governor?
Mutz: That’s right.
Scarpino: What he did in your staff over there?
Mutz: Well his first assignment was agriculture. He was my agricultural specialist. My liaison to the State Fair Board, my liaison to my Department of Agriculture that I had within the Department of Commerce at that time, since then, the states created a separate department. Steve was the one who traveled with me when I was doing Ag. speeches and things involving that part of my administration, yeah.
Scarpino: Did you play mentoring role with him if as he rose to (Voice Overlap).
Mutz: I think so, yeah. Steve Carter was introduced to me originally by Keith Bulen, because he introduced me to his parents. His parents were Lake County volunteer politicians in Southern Lake County. So, I first ran for State Treasurer in 1970 I met the Carters and they helped me in my campaign up there. And so then, when Steve was getting out of law school and all the rest of it, he became available and he was one of the people that we added to the staff.
Scarpino: It was little bit like Mitch Daniel’s work, Keith Bulen knew the parents.
Mutz: Yeah, exactly. And then what happened of course was that, Steve was one of my brightest and most capable people and when Mike McDaniel, who was actually my Executive Assistance as Lieutenant Governor, what he did was leave the Lieutenant Governor’s office to run my campaigns. And he’d take a leave of absence and spend a year of running a campaign and Steve became my Executive Assistance, when Mike was not there.
Scarpino: Lets see, you also served as Commissioner of Agriculture. I understand that you managed a family farm. (00:30:13)
Mutz: I did for a long time, my grandmother lived on that farm till she was 88 -- that’s not right, I guess 90; at any rate; we moved her to a retirement facility here in Indianapolis. She died when she was 97 and after she left the farm it was pretty much left up to me to be responsible for.
Scarpino: So, in your spare time you managed a large farm?
Mutz: Well that’s not large farm, about 450 acres something like that; south of Columbus Indiana. And we operated the farm on a share basis, meaning that the proceeds of the crops each year are split between the tenant and the owner.
Scarpino: Soybeans and corn?
Mutz: Soybeans, corn, and some winter wheat, that’s right.
Scarpino: What would you consider to be your major accomplishment especially of agriculture?
Mutz: I don’t know, it is pretty hard to zero in on any single big accomplishment. I think probably, the work we did in the exporting of Indiana corn and particularly soybeans, may have been the most important breakthrough that took place . . .
Scarpino: . . . Where were the developing markets, what part of the world is…
Mutz: . . . Asia, and you see the issue then and still today is that soy beans are a major food product in the Orient and tofu for example is a soy bean derivative. And soy beans for tofu production, are a different kind of soy beans than the traditional soy bean that’s grown in Indiana. So one of the things that we tried to do is, to get some farmers to start thinking about tailoring their product for the export market. Now there is a lot of that happening today, but we just began that process then. That’s an example.
Scarpino: Did you have to eat tofu to promote this?
Mutz: (Laughter). No. Well, the other things that I might mention is -- we did work on specialality products of crops too: asparagus, popcorn, things like that.
Scarpino: Did you have anything to do with Orville Redenbacher?
Mutz: Nothing, other than that I met him a couple of times. I attended the popcorn festival in Valparaiso Indiana, Parade Marshall several times, and rode with him on the float a couple of times up and -- nothing other than that.
Scarpino: What was the Hoosier Hay Express?
Mutz: Well, there was a period of time when there was an enormous drought in the Eastern half of the United States and the hay crop had literally been consumed and deteriorated. And so, we organized a major trainload of hay that was transferred from Indiana to -- I want to say South Carolina. And this was a thing that my department organized and got together, we got the railroad to donate the cars and I actually went out and met with a Democratic governor and delivered the hay and all that kind of stuff.
Scarpino: I would like to, in the time we have left -- begin to talk about your campaign for governor, 1988. Who were the key members in your campaign staff, helped pull it together for you?
Mutz: Okay well, clearly Mike McDaniel was one of them, my son was one of them . . .
Scarpino: . . . Your son’s first name?
Mutz: Mark, well his real name is John Mark Mutz, but we call him Mark. He was a lawyer an associate at Barns & Thornburg here in town. And he took a leave of absence from Barns & Thornburg with their blessing, I might say, I think nine months, and worked on the campaign and he now like became my best friend in that time period but stopped being my son and became my colleague, a very important moment in our relationship. The other principles in that campaign would have been Rex Early, who was the head of my fund raising activity, (00:35:03) Van Smith of Muncie Indiana who was the chairman of the campaign, those are key players then there were some others.
Scarpino: Who were the people that helped you develop your issues and strategy?
Mutz: My son, he organized in Bulen fashion, a group of young lawyers who were friends of his and I think they were 21 of them. Each one was responsible for a policy paper. I had the most extensive file of policy papers I think any candidates ever had. We called them white papers; I don’t know what else you would call him. They included everything from mental health and mental retardation to highway construction etc. Steve Goldsmith came along as my running mate and he refined that the policy papers on the criminal justice system on the over crowding of the prison population a variety of those things.
Scarpino: He Later went on to a political career including Mayor of Indianapolis.
Mutz: Well, he was already a Mayor then that’s right yeah.
Scarpino: I should have checked the tape before I spoke.
Mutz: Yeah, he’d been prosecutor, then mayor.
Scarpino: And your opponent of course was Evan Bayh.
Scarpino: He was the son of a well-known Senator from State of Indiana, Birch Bayh. Can you just talk on certain key parts of the campaign?
Mutz: Well, the campaign was significant for several reasons in the sense that one of the early traumas in the campaign was something I described for you earlier was they question is to whether, Evan was even eligible to be governor of Indiana and without any question the hassle over that originally started by a newspaper reporter who raised it in a column, followed by the court test in which the Indiana supreme court was asked to decide, is he eligible or not? Now, in Indiana there is a section of the constitution that says you must have been a resident of the State of Indiana for five years and in the normal sense of residency, Evan doesn’t, didn’t qualify, but the court found that he was qualified. He, of course, was living with his family in Washington DC, and you could make the conclusion that that’s the same as living in Indiana if you’re a member of Congress. Again this is one of those situations -- the courts have taken a very liberal position on residency requirements. I think I really would have been better off in that campaign, had that never happened and that I’ve referred to him as a corporate beggar during the whole time of the campaign and pointed out his lack of experience etc. It took away one of the major issues in the campaigning part, and it gave him an enormous amount of public scrutiny and he almost looked, during that moment in the history of the whole thing, like a victim. So psychologically and so forth, it’s easy in retrospect to say, but I only wished it would have been done in a different way. However, that’s what happened and Bob Orr in particular, thought it was really important that this determination be made and I think Bob was speaking from a good government viewpoint. It was not an issue of wanting to rule Evan in or out, he thought it was a determination that ought to be made, and that’s a kind of guy, Bob Orr was. I mean, I have to give him credit for that. All right, so having said that, I see that is the first piece of the campaign. The second piece of the campaign was that period in which you attempt to get the public to know you. Now, this may come as a surprise to you but once Evan announced and got into the campaign, I was always behind in every poll that we took during that time period. I’d never ever passed him in our polling. Even though I was an incumbent Lieutenant Governor, people didn’t understand the difference between Evan and Birch and there are people to this day, who still call him Birch, I mean it still happens. I mean, Birch Bayh was a very popular United States Senator three term in 18 years, lost to Dan Quayle and presidential aspirant etc., close friend of the Kennedys actually he was in one of the Kennedy plane crashes, pulled Ted Kennedy out of the plane. (00:40:15) And I know Birch pretty well, what I am trying to say to you is that, that on the basis of name recognition and other kinds of measures, Evan started out ahead and stayed ahead throughout the campaign. Our tracking in polling, it showed our closest head to head, two weeks out, from the Election Day. And it was a close election but we never quite got over the hill, so to speak in terms of the head to head projections. But anyway, the second part of campaign is this business of get your candidate better known, what sort of a human being is he -- not an issue thing but, so we did lot of television commercials and so forth. We raised $4 million for this campaign and Evan raised about the same amount of money and …
Scarpino: . . . Was that a lot of money?
Mutz: That was a whale of a lot of money, that’s right. It was a record breaker from that standpoint, yeah. Now the second or the third part of the campaign was after the State Convention and I should point out that the State Convention picks the Lieutenant Governor nominee at that point. And so, we did some polling and tried to decide, who would be the most helpful Lieutenant Governor nominee? And Steve Goldsmith was the one that helped us the most. He also was an unbelievably bright and fascinating policy wonk, that’s really -- Steve is not a warm and fussy personality but there is nobody I know who is a more careful student of the policy and willing to try and do ideas and so forth. He would have been a great a very Lieutenant apparently. We would had a lot of fun because we would to tried a lot of new things, done a lot of things that I badly thought needed to be done, and we had this whole group of 21 white papers prepared for our action plan and we were prepared to govern. So, the next phase of the campaign was the picking of the Lieutenant Governor nominees, and you may remember that Evan had -- because of his popularity forced Frank O’Bannon to drop out of the race for Governor. And, so Evan did a very wise political thing, he asked Frank to be his Lieutenant Governor and Frank decided to do it. That was a very wise political decision on his part. So, that then set the stage for the fall. Now the fall campaign was full of things involving the xenophobe question that I’ve raised with you before.
Scarpino: . . . Raised at Suburu-Izuzu and foreign investment . . .
Mutz: Foreign investment in general, paid too much, give away the state’s money and they were playing to a clear problem that we had it showed up in all of our focus groups. There was animosity on the part of lots of ordinary users, to this business of quote, selling out to the Japanese or at least that’s how it appeared anyway, or it could appear. Also involved at the end of this campaign were accusation involving what would happen to organized labor. One of the things that Evan needed to do because he was looked upon as fairly conservative democrat; was to reactivate, reenergize the traditional base of the Democratic Party. And so to do that, he made commitments concerning collective bargaining for public employees and things of that nature. One of the interesting things about this campaign was at one point, he even got into a bit of a conversation about whether he wanted to unionize University Professors on the College Campuses in Indiana? And, I think we did not think that was a good thing for the institutions and we did run some commercials in opposition to that viewpoint. But at any rate, the fall part of the campaign was build around the kinds of issues I am talking to you about here. (00:45:01)
Scarpino: What were your issues?
Mutz: Well, let me finish his, but underlying everything he was doing was it’s time for a change. Twenty years of Republican rule that kind of thing, you know. And the line he used all the time was, John has been a wonderful public servant and we owe him a lot of gratitude, but it’s time for a change and we can do better. I mean that’s a pretty potent kind of thing. Now, our campaign was built around ‘First of all experience,’ and somewhere or the other, I was never able to get this point, well established. You know there is hardly a man or a woman in a plant or a factory in Indiana who would want the guy working next to him to have just started there, when somebody who has run that machine before; because it’s safe (Inaudible). And yet, when it comes to government we have a lot of trouble convincing people that experience is important then all. But any way, included in our campaign promise was a commitment of no tax increases. And you may recall it at that particular point; the state had a two billion dollar surplus. And my view at that point was that; give a normal economic condition, even close to normal that we could manage that state without at a major tax increase. We also had positions on economic development, which we probably already had a pretty good record and so we were running, ‘on our record,’ but those are the things that we were involved. I have a complete file of the television commercials that we ran at home and I don’t them out very often. Some time when I am very depressed here of, there are two things I do, I listen to my concession speech after I lost the election, which was more lengthy than most concession speeches and I said a number of the things that I wish I’d said at the campaign. And then secondly I also rerun the video of my daughter’s wedding that was held on the State House, that she was actually married on the floor of the State House. We built an altar at one end; it was a beautiful wedding. The only problem was it didn’t take, she was divorced thirteen months later and she’s since remarried and then it’s a wonderful marriage and she has three children and so forth. But, you do have a few of those things that kind of remind you of your -- of the scisitudes of your life. I mean, either there are times when things will go up and sometimes when they go down, you need to find some balance I think in that periodically.
Scarpino: To what -- you did when the election I am saying for the record-- because the tape recorder doesn’t know that.
Mutz: Right, that’s right.
Scarpino: To what you attribute the outcome when you think back on it?
Mutz: Well, when I think back on it, I say, first of all, the decisions that were made concerning the residency issue, I think has an impact. Secondly, the by name, the by reputation were very strong. Evan is a very attractive candidate, he is a nice looking guy, have a beautiful wife, and he was a person who with about the same amount of money to spend as I have. Unlike previous Republican gubernatorial aspirants, I did not out spend my opponent and the others all did, and I am talking now from Witkin, Bowen, and Orr twice and Witkin I mean and Bowen twice. In Indiana, I know we call this a Republican state and historically it is, but in election where you have two people of --who are good candidates and who are reasonably articulate and you have about the same amount of money you’re going to have a close campaign, and we’ll see more of those things happening.
Scarpino: For now we just saw a reversal of fortune in the last election. You talked little bit about the scandals in the State House. Do you think of that fit into his claims of primary change?
Mutz: Well, we didn’t have any great scandals during the Orr years that I’ would put my finger on. Frankly he had a bigger problem than we did. The governing the state of Indiana with it’s -- at that time some twenty eight thousand employees and so forth, it’s a ponderous task and you’re going to have some human frailty in this situation. (00:50:11)
Scarpino: When we visited during the pre interview, you described that losing an election after twenty years of public life was a form of grief.
Scarpino: What did you mean by that?
Mutz: Well, what I meant by that is, that when you had put your heart and soul into an effort to prepare for that and to do something, and then you’d no longer is there, it’s no longer available, it’s not part of your life, it is removed. That is quite similar in a lot of way psychologically, to when you lose a loved one. And I still suggest that it’s nearly as severe as losing a spouse or particularly a child, which has got to be the hardest one of the losses to bear, I think. But it is a form of grief and you go through the same process of dealing with that grief that you do when you lose a loved one. And some people do it in a different way, some people take longer than others and so forth. But I was very fortunate in the sense that three months after that happened, Tom Lake came to me and said, ‘I’d like for you to consider being President with Lilly Endowment’ and that was an enormous uptake in my life. I said that was a turning point of my life, no question about it.
Scarpino: And that may actually be a good time for us to say thank you because I know that you have an appointment.
Mutz: I do, and I have got to have to, yeah -- move on.
Scarpino: Thank you very much and we’ll afford to see you one final time.Total Duration: 52 Minutes.
Scarpino: …That we will get you to sign a release form before you leave.
Mutz: Yeah, we do that every time, that’s fine, okay. So, are we recording? Beeler: Yeah. We are recording it.
Scarpino: Okay, well, Mr. Mutz I would like to thank you for sitting with us for a fourth and final recording session and once again just for the sake of formality and posterity, I want to ask on record for your permission to record this interview, to transcribe the interview if we like to do so, and to make the recording and the transcription available for researchers at the IUPUI Archives and Special Collections.
Mutz: I certainly am pleased to do that.
Scarpino: Thank you very much. Last time we talked, we start the last portion of the interview talking about your run for the governorship, which was a close race, but in which you were not successful. And there are a couple of questions that I’d like to ask you about that and then go on and drags up. You lost the election for Governor but you had lost other elections in 1964 and 1970. You have reversals in business that you talked about. What made this one different?
Mutz: The thing that made it different, I think primarily is that it’s such a public sort of an event, losing of election for State Treasurer is public but not nearly so high profile as this was. And the other thing of that, what made it different was; that I’d spent an awful lot of my time, effort and actually heart and soul, in a sense, in preparing for this, not the election but for serving. Some politicians love the election process; they just love the handshaking and the campaigning and the speech-giving and so forth. Bill Hudnut who I would say really likes that stuff. Dick Lugar on your hand, I see as a person who does it because it’s necessary. But his real love is the love of ideas, the idea of getting something done, implementing programs. So, it’s kind of the difference between the policy wonk and the politician and I would fall more on the policy wonk side. So, for example, you can argue this was a waste of time now in retrospect but, my campaign staff and my son, primarily, who took time off from his job as a lawyer with Barnes & Thornburg developed a series of the positioned papers for me and they were over 30 of them on everything from reforming the court system, the correctional system to economic development. And frankly, I thought they were pretty good, some of them, and I thought there were things that really spoke about the future of Indiana. In some of those you’ll find in the Mitch Daniel’s agenda and you found a lot of them in the Steve Goldsmith agenda when he ran for governor, obviously he didn’t win either. And in‘] one of the reasons that Mitch’s popularity rating is high right now and Goldsmith didn’t win his, they scared people with the amount of change they thought was necessary for Indiana. So, you ask what I’ve learned from all this, I mean those are some of the things I’ve learned, I guess I’d have to say that, the major difference, first, it’s so public. Secondly, I’d spent so much time and effort committing myself to doing this job and it also -- I found unlike the other elections I lost I had to go through a grieving process after this was over and that may sound melodramatic but it is a form of grief and it takes a while to get your focus turned around and think of other things you wanted to do.
Scarpino: Well, the subject of these particular interviews down the line, subject is Leadership and I am wondering as you look back on that experience, do you think that good leaders learn from failure as well as success and if so, what did you learn?
Mutz: Well, I think you learn more from failures than you do from success. Among other things, success tends to feed the ego of a leader. I am not always sure that’s a healthy thing. In losing, you certainly have to alter your ego to some extent that, it has that impact on you. My wife use to say, ‘I insisted John continue to carry out the trash every week in our house,’ even though he is this high flying political person you know. And she says, ‘That way we keep him up humble.’ Well, I think there is humility of sorts that need to be infused into the lives of leaders. Those who never have it, I sometimes wonder if they don’t have the idea I am so good, I am so smart, I am got to be right all the time and you’re just not right all the time. (00:05:02) And -- I see Dick Lugar’s election losses as being important moulding factors in his life and the first one was the loss of the presidency of the Indianapolis School Board, sounds like a small time deal compared to where he is today. But, he took it, it was a hard pill for him to swallow, and of course he lost his first race for the US Senate. So, those are moulding characteristics I believe that make a leader more effective. Now, he said what else did I learn from this, well first, I learned about xenophobia big time in this election and its underlying a role in the human psyche, as I told you earlier, I read a lot of Jung and I believe that xenophobia is in the collective unconscious to use Jung’s term. You don’t have to agree that there is a collective encounters, but I think that the … Host . . . You’re talking here particularly about the Japanese Investments . . .
Mutz: . . . Yes, it’s the Japanese investments that we’re talking about this earlier, I think in the comments but, its head has cropped up again, right now, on the toll road matter it is scrapped up on the Honda plant issue, it has cropped up on the BAA takeover by the same company that is going to be the lessor of the toll road and so forth.
Scarpino: That’s at the airport.
Mutz: Yeah, that’s been at the Indianapolis airport. And those are -- its got to qualify this stuff because somebody else would -- out of context will know what I am talking about.
Scarpino: I am imagining somebody listening . . .
Mutz: Exactly, that’s fine. But at anyway, I guess what I am saying is, that’s the second big issue I learned about this, and I was flattered actually to be invited to a couple of universities to actually give a couple of talks about the xenophobic attitude of people that’s kind of under the surface, the way he talks a lot about it. But I guess the third thing I learned about this was that: I spent far too much time dealing with the Republican portion of the electorate. That’s one of those old saws about the politics that the campaign system is changing, and it changed during the time period I was in politics. And so, the independent voter became a lot more important in this situation, that’s another thing I would see.
Scarpino: So you think you played too much to your base .
Mutz: Yes. And I didn’t get all the base in spite of that well
Scarpino: Well, when we started this series of questions, you mentioned Steven Goldsmith and the current Governor Mitch Denials and yourself and you talked about change. Do you think that it’s a mark of effective leadership -- to be able to persuade people of the need for change?
Mutz: I think its important that leaders have an agenda and a vision and that they are able to articulate it towards -- I think you may have asked me earlier but my view of leadership in general, I think one of the five key ingredients of that is in fact, the ability to focus on a limited agenda, hold it in front of the public you are working with, whoever they have to be and continue to work with them. I mean to pound on them, to use the holy pulpit if you want to call it that to, to make those items happen. I really do think that’s a really important question.
Scarpino: What did you intend to do for a living following the election?
Mutz: Well, that’s a -- you really got me on that one. But the answer was, I – I never thought about the post election career. I was so focused to spent so much time and energy on this sort of thing. And as I may have told you earlier, during the time I was in public life, I spent nearly all my personal savings so that my kids could go to -- what I considered to be really fine schools and getting good at educations that was the legacy, I saw as being important. So I found myself unemployed and with very modest savings remaining at that point, so I hadn’t really thought of much or lot about that. Now, I had been a businessman most of my life, and so I realized there are some things in that arena, I could go back to again. Not a lawyer, not a professional in the normal sense. So, I think I may have told you, I had already gone and received a commitment for a bank loan to start a business venture and then the Lilly Endowment offer came along and I decided that was too unusual and unique in experience to pass up. (00:10:27)
Scarpino: Tom Lake from the Lilly Endowment contacted you, was that a surprise?
Mutz: Absolutely, out of nowhere, this happened. I was -- may be it was February, of the year after the campaign and Tom called – maybe because I knew Tom, not really well. I am not sure many people knew Tom well, but anyway, I had worked with him on the White River State Park and number of other things where nobody had made challenge grants and so forth. And he called me up one day; he says John, would you like to talk with me about running the Endowment? And I gulped a couple of times and said, well, I would be delighted to do that. Then he said, well would you come up to my house? He said, I don’t want you coming to the headquarters of the Endowment, everybody will know you’re there, and it will be an item of discussion and rumor and so forth. So I said sure, and we made a arrangement and I went out and met him at about 8:00 in the morning, which Tom liked to do early at morning and we spent a good part of the morning talking about what he wanted to accomplish, his approach to leadership and all that sort of thing. And then, he said, well, can we make a handshake agreement today? And I said no, I can't do that; I said I first of all have to do some personal thinking about this. Secondly, I want to talk with my wife and thirdly I said I would like to know what the compensation package would be? I mean I had been in business in and out for a years and I’ve decided, the best time to have leverage is then, not after you’ve already said yes, I’ll do it. So, I went home got together with Tom a second time, again at his home, and this time we talked compensation level and relationships and the environment and so.
Scarpino: Why do you think he asked you? You mentioned that it is the first time he talked to you about what he wanted to accomplish, he must have had what he wanted to accomplish and you in mind together. How did those two things fit together, seeking you to lead and what he wanted to accomplish?
Mutz: Well of course, Tom spoke in his own way for the Lilly family at that moment of time. He felt he took very deeply his responsibility as a representative of the Lilly family. And he said, our big concern is the state of Indiana more particularly the city of Indianapolis. And he said, I need somebody to be out front in this situation, and to represent the Endowment in a public way. He said, ‘You run the staff and I’ll run the Board.’ And if there ever was an organization in which a Board Chairman ran the board of business, this has got to be it – you can argue pro or con, but his philosophy was that the job of the staff was to propose and seldom ever did the Board ever change anything that was proposed. But of course it was carefully filtered through Tom before it was presented to the board. This -- the Board of Lilly Endowment at that time didn’t have a committee system, didn’t have a number of the functions that most boards have. So, we discussed this -- just as we are talking here, this arrangement how he saw the situation to work. You asked me, why do I think he wanted me to do this job, and I can't really tell you exactly, except to say that he wanted somebody who he thought had the respect of leadership in the community, although Lilly Endowment doesn’t have to work too hard to get respect. I mean its -- kind of there and for a very good reason its an honorable institution, it really is. But, I think he also wanted somebody who would shake the place up a little bit, now he never said that. (00:15:03) But, he asked me to think about the future. Now, I decided that it was presumptuous to step into an organization of this nature, and I frankly didn’t have an agenda. I had no agenda for Lilly Endowment. I spent my entire first ten months interviewing and talking to the staff and to the few other outsiders, but primarily the staff. And out of that, I began to create an idea as to what our plan for the next three to five years should be, and included in that for example, was the vision of community foundations -- State of Indiana, public school reforms and a variety of things that were a little different and were like. And the other folks who I worked with there, including Mike Carol who, the person is deceased now, and a Craig Dykstra who came on very shortly after I was there as the head the group religion or the division of the Endowment. Both had all kinds of ideas. -- I mean, they were waiting for an opportunity to put those ideas in effect. Now, what you have you’re here is, situation which my predecessor Jim Morris – he and Tom had some disagreements I think it’s clear.
Scarpino: We’ve talked about that in length.
Mutz: Yeah, and I would be -- I don’t know what Jim Morris is – he didn’t willing to say about them, because Jim is a very careful individual when it comes competences and things of that kind and well he should be. But, anyway that there is no question about that so, this was a new page in the Endowment’s history and I had a chance to work on it for the first five years.
Scarpino: If we look at some of the elements that constitute the Lilly agenda, really one of the things’ community development foundations?
Mutz: But, well that the community foundation -- let me go back and say again. One of Tom’s great concerns was, that here is an Endowment funded entirely by one stock. So, the vicissitudes, the ups and downs of that stock’s performance could have an impact on how much money you had to give away in future time periods. So, he didn’t like commitments that went way out into the future. On the other hand he realized the value of long-term commitment to something that matters, which is a difficult kind of a paradox. So what we were thinking about that was, how we could put together programs that had -- what I call an accordion aspect to them. You could expand or contract them depending on how much money you had. Well the community endowment, I should say the, the community foundation initiative has that capability, and so, what we did there of course was, one of the ways to greatly expand distributions -- was to give more challenge grants to community foundations and then later Lilly has taken up the idea of using that community development network as a way to do things all over Indiana. But they don’t have to make the decisions and they don’t have to administer all the brands and so forth. So what you do is, you give a chunk of money to a community foundation at the local level and then your market for education reform or your market for a sustainable community development matters or something of this kind. And then let them decide how to use at the local level and of course the philosophy is I thought again is a sound philosophy, is that local leaders know better what’s needed to local community then somebody sitting in Indianapolis. So that, the idea I am getting at here was that; a number of the program that we put in place, had this accordion aspect to them and that was one of them.
Scarpino: Could you talk a little about the Lilly Endowment, and its religion initiatives? During your years as President, I think Craig Dykstra was involved in that?
Mutz: Yeah, but that, that the person who really put them -- the thing together originally was Bob Lynn ???spelling?? and Bob Lynn was a national recognized scholar in this field. And Bob is one of those people who taught me one of their early lessons on leadership, and that is; there is a time to go and a time to stay. And Bob says, I’ve done what I can do here and it’s time for me to move on. He could have stayed there for his entire career, still live, he could still be there, if he wanted to be. But he sets time for new ideas, a new people, and new generation of leadership so to speak. (00:20:14) And knowing when to quit is not always so easy; we’ve talked about this before. If you have an involuntary retirement like my loss in 1988, you know that’s one thing. But, there are times to step down, what we’ve seen recent elections of the Indiana General Assembly, involving Larry Borst and Bob Garden, both wonderful public servants in my opinion and yeoman performers, in a whole lot of ways. But they probably should have stepped down, a little bit earlier than they did. But they didn’t step down; they were forced to do so.
Scarpino: So, Robert Lynn ???spelling?? was the initiator of the religion.
Mutz: He was Vice President of religion for the Endowment and he is the one who set up the programs that cut across really, several areas. First of all, he activated the program involving the black denominations, which is a huge program, at Lilly, I think an important one but one that he put in place. Secondly, the study of the deterioration of the vitality of mainline Protestantism in the United States. Bob initiated that -- the Protestantism, one of the first scholars in America to side it and so forth. The third thing that Bob did was he made it possible for Lilly Endowment to get out of just mainline Protestantism. He engineered programs involving Roman Catholicism, Judaism and even occasionally some inquiries into other of the world’s Fundamental religious denominations or organizations. And so, I consider those to be the initiatives that Bob brought to this table. If he were sitting here, he might describe this in a different way – this is the laymen’s way of looking at it. Craig brought a great deal of sophistication to the things Bob had already thought about. And for example, what are Craig’s early initiatives that I thought was a brilliant thing was the future of theological seminaries in the United States. I guess one of the great things that Lilly did while I was there – I mean, the problem was that they were dying on the vine, financial support primarily I think was their problem and part of it was if you don’t have an outstanding alumni core in theological work who make a lot of money. There just isn’t a lot of new money going to coming in from your alumni. And so, we came up with the idea of Lilly Endowment of funding development directors for theological seminars and we held seminars on fund raising and a whole variety of things. But we funded on a three-year basis, Development Directors for 25 seminaries in the United States, later on; another 25 as I recall. Well, of course what happened was we began to develop a cadre of professionals in this field, who stopped to move from one place to another and there was a new industry in the sense there. Well, of course our philosophy was that if the development director couldn’t justify his own salary and that of his staff and overhead so forth, it would be a surprise. Even the mediocre ones could do that. And the result of this was that a new era evolved. Now does, that mean that the theological seminars are out of the woods in terms of financial situation? No they are still having trouble; one of the classic seminaries in New York City is still struggling. In fact had to give its library to Colombia University because it couldn’t afford to supervise and take care of this huge volume or this huge collection. Host And for the record what’s the name of it?
Mutz: I’ll think of it. Well, I’ll think of it in a minute.
Scarpino: It’s all right.
Mutz: It just slipped my mind here yeah. It’s like on of those things you just. Bepko: It’s not Union is it?
Mutz: Yes, it’s Union Theological Seminary. Yeah, Union has gone through some very difficult financial times. CTS here in Indianapolis, difficult financial times. CTS is in better financial condition than Union is right now and I think it’s partly due to the aggressive fund raising efforts that’s gone all there. So, as I said, that’s an example of some of the things that Craig also get concerned about retirees in the Roman Catholic Church. (00:25:04) Again, if you don’t pay people during their working career, it’s hard to accumulate retirement programs for Catholic Priest and Nuns. So what you do about this? Well, Lilly didn’t put a big bunch of money into retirement funds. But what it did was, was do a major National Study on the condition of the Roman Catholic Church. The Roman Catholic hierarchy took note of this and gradually has corrected the problem. Now they’ve got some other financial difficulties from time to time, but in any way, what I am getting at is, those were the sort of kind of things that Craig initiated.
Scarpino: Education was another of the major initiatives while you were present at Lilly Endowment, Hoosier scholarships and middle grade improvement? One program that seemed rather successful and another seemed to flounder a bit?
Mutz: Yeah, well the scholarship program -- that’s one that’s also the question, whether it was successful or not? Our goal of the scholarship program was in fact, to fill in the gap for middle-income families. It’s obviously possible for wealthy families to send their offspring to college. The poor children at that time had fairly substantial support because it was the moment at which the Pell Grant was more substantial as a percent of the total that it is today. The Pell Grant has fallen behind, but anyway this middle income – Craig was the one that the Endowments Management felt, it was having difficult getting it done. And so our scholarship program is meant to fill in the gap in the middle-income section. Frankly, that was a limited program; it didn’t go on forever, but put a lot of money in it. It has not solved the college cost problem, put it that way. And even if we were to go back and do it again now, it wouldn’t solve the college cost problem. But any way that where that was. The second thing was the Middle Range Improvement Program. We had great hopes for that and we did it in some of the most difficult middle grade environments you can imagine.
Scarpino: Such as?
Mutz: Well, IPS, I think it’s a good example. Guest: That will qualify.
Mutz: (Laughter) Yeah. Okay, and so the situation there was that, what is it, the Hawthorne Effect? I think that’s the one that people talk about in which -- because of the new attention to a situation, you can accelerate performance and so forth temporarily, and that’s what we did there. Temporarily, we really did increase performance in the middle grades but it didn’t last. And middle grades, I think are the most difficult of the entire twelve grades of K through 12. And, but it was not a glowing success. Now, since I left the Endowment, they have done what they call Cape Grants. The Cape Grants would give into Community Foundations and they in turn will use, for school reform in local communities. It’s too early yet to know, how effective those have been, but at best they have been modestly effective. So, reform in public schools is a very difficult problem. Now, I’ll have to say here for a minute, I don’t want to take a lot of time from your agenda here but, the most exciting and far reaching school reform program that we proposed, was one which was designed at changing public will about school reform in Indiana . . .
Scarpino: . . . That’s the willingness of the public to support reform . . .
Mutz: . . . Public support, exactly. And this was a combination of local organizing, community-by-community by actually county-by-county or school corporation by school corporation. And then a media campaign which supported school reform and the idea being that in the studies we had done, you need both of these tracks taking place for things to happen. The local organizing effort is where you finally make decision about what you want your school corporation to look like? What you want to do? But the media gives it credibility, surprisingly enough in our world. If the media is talking about it, it must be important and I don’t subscribe to that philosophy but that was the idea. And we have set aside an enormous amount of money even to Lilly Endowment, to do this, and we are going to rule about, television market by television market and our first market was to be the South Bend television market. (00:29:56) And this one of those programs that I worked really a lot of times spent personal time on with our staff and what happened was, the board agreed to the first step, which is of $3.5 billion grant I believe for the South Bend area, over a three year period of time. And then too much later, they rescinded tthat approval and you know, I would have to tell you, that was the most disappointing moment in my life at the Lilly Endowment. And I might still be there, but I doubt that, but I might still be there . . .
Scarpino: . . . Am I reading between the line, for conflict between leaders there because if the board didn’t do anything without Tom Lake’s approval . . .
Mutz: . . . That’s right . . . Guest: . . . he must have had a different vision of what the Endowment should have been doing when you have . . . John Mutz . . . He and his lawyer did. Guest: Okay. On the subject of leadership, you and I’ve talked a lot about leadership, 7 or 8 hours about individual leadership, group leadership but it seems to me, as I listen to you talk about Lilly Endowment that, it may be possible for institution to exercise leadership. Was Lilly Endowment exercising leadership at some of these programs that we’ve talked about education, religion, down town Indianapolis?
Mutz: Oh I don’t think if there is any question about it. There are the 500 pound gorilla in this community. They are the good housekeeping seal of approval on projects. Guest: Because in religion and areas like that, I mean their reach have far exceeded Indianapolis …
Mutz: . . . Exactly. That’s right. But, there’s the biggest chunk of money in the game. There is no body that comes even close to Lilly endowment in terms of grants to religion. Guest: So, is money the sole reason why the Endowment exercise leadership?
Mutz: No, it is what I consider to be the other and maybe the biggest aspect of foundation philanthropy and that is the ability to convene people around an issue. I laughingly -- maybe I’ve said this before in these one of these gatherings – in one of these meeting we’ve had, but whenever I called a meeting at Lilly Endowment, people always came. I mean they were always, they Had to -- either they came or had an awfully good reason why they couldn’t be there and I guess my feeling is the convening power is more powerful than the money, but the money is what gets people to the table. And I guess what I am saying to you is, that yes, Lilly Endowment employed leadership in a variety of ways; subtly, behind the scenes, to say the least. In the case of this school reform thing that one of the arguments against it was, this is too hot a political issue. Sooner or later we are going to get our feet in the middle of contested political questions. Well, yeah, I warned the board about that when it was approved the first time. I said, ‘Look if you don’t walked to get in the thick of the debate about what to do about schools and so forth, then don’t do this.’ Well, they all said we want to do it, then well of course, things changed. And I guess what I -- they were concerned about the -- what I would describe as the risk of being in the middle of political controversy. From time to time they’ve been in controversy. I mean, you can argue about building a Dome, the old RCA Dome now, about ready to beat the dust as whether that’s a proper use for philanthropic money, you can argue about that, which people did quietly, not very loudly, but did. And there’s some other things that Lilly Endowment has done. But in general yes they do exercise a leadership in this community, and taken as a whole its been a remarkable asset for this community. Most communities would give everything to have a Lilly Endowment in their midst. In Philadelphia the Pew Charitable Trust use to be just like Lilly Endowment was and then their leadership said no, we’re going to become national, we’re going to stop being the sustainer of one of one these institutions in Philadelphia. Fortunately, they did with some judgment and they did it over several years so no institutions just absolutely fell off the financial cliff, but once you become important to a community, then you got an obligation there. And Lilly has clearly set itself up in that sort of circumstances as being – well, I don’t know what the Symphony, the Zoo, the Children’s Museum, the Eiteljorg, the IRT and what they’d do without Lilly Endowment. (00:35:07)
Scarpino: I am going to give back to you a quote that I wrote down when we did a pre interview with you, without the recorders on, and it relates to Lilly Endowment philanthropy and I am paraphrasing a little bit, because I am reading my own notes but you said in philanthropy, what you learn from what does not work is a significant as what you -- as what does work. Could you expand on that a little bit, particularly with an eye toward leadership, individual leadership, institutional leadership?
Mutz: Well, of course one of things that you learn and the quickest one is about risk taking in terms of leadership. Effective leaders get out on a limb and they stake their personality and their reputation to some extent, while they are out on that thing. And in my opinion that risk taking thing is one of the marks of leadership and if you fail that doesn’t mean you are done as a leader, because you have all kinds of examples of people who have failed, turned around and figured out how to do it and have done other things or the same thing. that you know – so, I think that’s the first thing is, this business is about that risk taking. Now, I am the first to admit that people who get out into the leadership roles so forth, become more risk averse, to some extend the more success they have. Now there are a few exceptions.
Scarpino: They start to hold the ball, at the end of the game.
Mutz: Yeah, that’s right, on the other hand you’ve get the Steve Hilbert’s of the world, who -- well it works the other way and they become so imbued with their leadership ability, that they feel they can’t make a mistake. And that’s where your ego, I think, gets the best of you in that situation.
Scarpino: How would you assess your own impact as head of Lilly Endowment?
Mutz: Well, I think I did what I could there and I had reached a point where I had churned -- I guess I churned up the water as to some extent, changed a lot of attitudes, change perspective and I think I’ve done about what I could do, but partly because Tom and I did have a little different vision.
Scarpino: How do you think you changed that too as a perspective?
Mutz: Well, one of them -- we changed pretty dramatically, the tenor of the meetings at the Endowment. This was a highly authoritarian kind of culture when I first got there. If you went to a meeting and presented an idea, you better be prepared to defend that idea. Why is this good? Why is this going to work and so forth? The kind of meeting where you throw an idea out, that may be crazy on the surface, but may be that genesis of another idea, that kind of environment wasn’t acceptable early on when I was at the Endowment. It’s particularly important to black women, in my opinion, that they like the idea of an environment where they can throw an idea out, play with it, see what their colleagues think about it and so forth. And what I found out was, when I went to the Endowment is I kept saying how can I get creative thoughts out of all these people with all these degrees, I had whole bunch of Ph.D’s and so forth, and one of the things I did, I went down to Lilly the company and asked to meet with the people who work at the bench, had patents in their names and so forth. And I said, how do you generate ideas? Back on those days Lilly was pretty authoritarian too. Changed a lot, largely in my opinion, through the leadership of Randy Tobias, he was a breath of fresh air then. But any way, I went with these people on the bench and they were really bribed from all over the world. And I said, ‘How do you get this done?’ They said, well first of all it’s a collaborative thing. And that was really important to my way of thinking because they said, ‘We don’t sit at the bench and suddenly as in the Ford or Ford commercial, we get an idea in our head, its one that is moved and changed around and challenged and pushed and so forth.’ And they said ‘The reason we are here in Indianapolis, there’s lots of places we could be. And other people that might like to employe us, we are here because the best people in our field work here and we want to collaborate with them.’
Okay. That’s a real lesson, from my standpoint in terms of idea generation. The second was that all those, in spite of the authoritarian environment, in fact they saw a authoritarian environment as a challenge. How can I get around this? How can I get this done? And I remembered a couple of women in this group who were really out spoken, they say, I am going to go and see Mel Perelman ???spelling???, he was then President of Lilly Research Laboratories and tell him, and she did. I mean, she often did that. Well, here’s a Ph.D. with a couple of patterns in her name of a very apparent contributor. Like a lot of companies, they had rigorous reporting schemes and programs you are supposed to work on but to Mel Perelman ???spelling???, he made it possible for them to use 10% of the timeline on any thing they wanted to think about. Dream about this, dream about that, and I have to give Mel a lot of credit for his willingness to do that, because he was under a lot of pressure to produce results. You know new drugs in the pipeline and all those kind of stuff. So, those were important lessons for me and so I went back to the Endowment and we gradually put some of those things into place. Now, simple things I told you, about the parking place once before that, those are symbols of that sort of thing.
Scarpino: I am going to, in a minute ask you the last few of our standard leadership questions, but before I do that, I am going to provide an opportunity for the other people who are sitting in the room to ask questions if they want to. So, Gerry Bepko would you wish to ask anything? I think we can take a quick break (Laughter).Total Duration: 42 Minutes
Host Wait, wait, do you want to ask anything?
Mutz: I do have a few questions.
Scarpino: Okay, what I am going to do then is I shouldn’t have turned the recorder off and Jerry asked for a break. I am going -- the business about who won the election I think we have won it with an ad in there about the cartoon with even the money comes out of the pocket. (Laughter).
Mutz: Yeah, by the way I heard your interview on the radio the other day about the new football stadium.
Scarpino: Yeah I was, you listened the radio at a weird time, it was like 9, 10:30 in the morning.
Mutz: Well, I often, I don’t already I don’t really listen to WIBC except when I am on the road and I don’t know what the traffic is, and I was out going somewhere and I turned around to get the traffic to find out there you were.
Scarpino: Okay, we’re back on and while we had the recorder off, one of the people in the room brought up an issue about Gerry Bepko, about the aftermath of the election for Governor, in which he mentioned that he has introduced you to public affair and raised the question about who really won and you mentioned a cartoon that was in the [Indianapolis] Star.
Mutz: Well, of course, what had happened was the State of Indiana was having some budget problems and Evan Bayh who I’ve lost to in the election was struggling with those questions and the other trail cartoon showed me sitting at the desk with money all over the desk and coming out of my pocket and so forth and showed Evan with a worried look on his face and the line was somewhat, “Who really won?” So, that’s kind of fun with the process.
Scarpino: I am going to ask John Beeler who is the Graduate Research Assistant on this project, if he wants to ask a few questions and then we’ll move on with some of the standard questions that we have on leadership. John Beeler: Mr. Mutz, how would someone in 2006 go about forming a City Committee in the Indianapolis? If you would really go out and do it right now?
Mutz: Well, you know I don’t know, because I had hoped for quite a while that this would happen again. There’d be a rebirth of this sort of thing. I kind of hoped that some of the leadership organizations like Stanley K. Lacy Leadership, which has a built-in alumni and group of people that you’d think might fit in this category. But, you know what I think their ingredient would be that would make this work? And that would be is if Lilly Endowment or the Central Indiana Community Foundation would be the convener, that they don’t have to read it, they’re have to tell people what to do et cetera. In fact, it’d better if they didn’t. But I think somebody with convening power could get this done. I have to tell you quite frankly that the City Committee came together, first of all because Jim Morris. And they came together because of what he said, that he was not at that time President of Lilly Endowment but he was a Program Officer. But everybody knew he was working with the approval of the leadership that re included Tom Lake and so, it was fun; we had a good time in that situation. But the leadership of the whole thing then just began to come together because we interacted with each other. We did a lot of stuff socially too. It was fun, I mean as I think, I told you before, I can’t think of anytime of my life, when I was more excited about getting up in the morning and I’ve involved in my business, yes. But, this was where the real excitement comes, you know. John Beeler: So, with regards to this, say someone got this power to convene – what do you think the composition of the 2006 City Committee would like, in comparison.
Mutz: Clearly it has to have a woman in it. I mean, that in my mind was a big piece of the total population that wasn’t present. Secondly, the effort at a little more diversity probably would be appropriate in today’s world. And I guess it was that occurred to me about this, since then is that, within the religious community there is some leadership developing, that might logically be included there. John Beeler: Is that the lesson you’ve learned from Lilly?
Mutz: I think when I was involved with Lilly Endowment, yes; it definitely taught me that. And it was also the time period when Dick Lugar was Mayor of Indianapolis and we were worried about racial problems here, and damage and physical harm. And it was the Religious Committee that stepped up in my opinion that made the difference. I’ve said this to you; I think in previous interview session. And it was primarily meant at that point, of the Protestant religions, and the Catholic religion, who came together with the African American leadership, and said; “We can walk down the streets together,” Dick prevented this from happening. (00:05:21) Now, I am making this all dramatic here but, it was pretty dramatic and out of that came up bunch of the other things, which I think, I don’t want to say defused this issue, that’s terrible jargon. But, I think it eliminated, what could have been a terribly bad situation. John Beeler: Switching to your work as Lieutenant Governor and trying to get foreign investment, did you have a strategy for dealing with the xenophobia; you talked about the nature of xenophobia but did you have a specific strategy?
Mutz: Well, our strategy obviously wasn’t as effective as we’d like for I to be. Of course what we’re talking about in this respect, that people wanted jobs badly. We had a terribly of scary set of circumstances with double-digit unemployment. I think, more than double what it is at presently. And our strategy of course was that this is good for your economy. And secondly, that nearly everybody in these new foreign investments, who worked there, will be Americans. There’re very few foreign citizens here. Our other strategy was to get local communities. Religious leaders never find local community like a good old place like Greensburg or someplace like that, and get them to rally around this new investment, and to welcome the people when they got there. I mean, this is one of those things that once you get to know the Japanese, they really aren’t as scary as they seem to be to a lot of people at that moment, but that was the strategy. Beeler: Okay, I guess that also speaks to the third question I had, in that, what this Hoosier leadership looks like as opposed to, leadership in another state or…
Mutz: I am not sure I am qualified to compare ‘Hoosier leadership.’ There’s no question of the fact that we don’t have as much of it, as we seemingly had 20 years ago and 30 years ago. Now part of that is due to the fact that so many of our industries are no longer owned or headquartered here. I mean that’s a clear deficiency in the leadership pool. I believe that in the longer haul the philanthropic community will fill in some of the vacuum of leadership. In my book, Fund Raising For Dummies, I talk about the rise of the non-profit sector as a leader of the local communities. The other part of that is the university community. It will become more important and you can already see it happening in Indiana. I mean, who would have ever thought of Purdue University advertising on billboards and calling themselves the business makers? I mean 20 years ago, the Faculty Senates and others were very, very disturbed about that kind of stuff. They saw it as an infringement on academic freedom and all kinds of stuffs, and there may be people at Purdue who still feel that way. But, there’s definitely a change, there’s a leadership coming from the University Community, which is part of the non-profit sector.
Scarpino: So, do you see as a result of economic change in Indiana, and the Midwest, a vacuum in leadership?
Mutz: Well, to be sure there is somewhat of a vacuum, particularly in individual communities, and what to do about that, I am not sure. As I said, I think it’s going to come out of the philanthropic sector to start with. Obviously, the political sector has always have been part of that. I mean for example right now, every local government leader, County Commissioner, or Mayor, consider as part of his portfolio economic development. That’s not in burnt statue to anywhere; that was never envisioned, as a responsibility of a mayor. You’ve got mayors not traveling all over the world, looking for jobs, for people and investment opportunities, and so forth. So, yeah the circumstances are changing. The Middle West as a region has a lot of these difficulty, I mean, we’re not unique, Ohio suffering, at Illinois and Kentucky, so forth. Michigan even describing itself as a depressed state in a sea of prosperity, I would just, I’m not sure that’s exactly the image I’d want to project but anyway that hurts some people, referred to them that way. (00:10:19) And that’s the decline in manufacturing the increase in the service industry and so forth. But overall, the big question is how do you get brightest people who want to be here, to come here? See, I thing the place where the exciting future is going to be is where, people congregate around an intellectual pursuit, now that sounds like a elitist kind of stuff, but I think it’s true.
Scarpino: Is that how you practice leadership over your career, by trying to facilitate people congregate -- congregating around intellectual pursuit?
Mutz: Well, I had never said it that way until right now, but maybe that is one of the things that I did. Beeler: You used the word convening a lot today.
Mutz: Yeah. Beeler: Can you think about how you were personally -- maybe even unintentionally brought people together, when they didn’t necessarily, they wouldn’t have otherwise got?
Mutz: Yeah, well it’s happened over and over again, I can think of some examples but, I remember on the things we did at PSI, when I was there, was we were trying to cut cost and become more efficient. And so, I put together a group of interdepartmental and interdisciplinary teams, to study a specific project or to specific activity. It might be turning on and off electric users, that’s the same. And I got a former schoolteacher who was a woman, who was the convener of these things. Now, I was actually the convener, but she was in-charge of details and setting the agenda and all that stuff. And this is not a new idea, it’s the same thing you find in these other leadership techniques that are espoused by leadership and business experts. But the thing is, it has real energy when you get that group together, these people say, well, I’m doing something that’s important, this could change the way we do business here. We can shorten the cycle time and all that kind of stuff. Well, I got a lot of benefits other than that, that were not originally my intention, all I really wanted was the policy question, how do we do this better? But it got a bunch of other benefits in addition to that. Beeler: Yeah there’s something else you’ve mentioned before is genesis and how something can turn into something else. At a meeting -- and you find that you’ve incorporated that into your personal style of leadership.
Mutz: I hope so, I told you about the devil’s advocate in meetings and I mention today, the question of who we were really talking about. Four-year degree granting institution for Indianapolis Public University and out of the conversation came Unigov. Well that’s pretty fertile territory, that kind of a meeting.
Scarpino: I’m going to shift back to some more of standard questions. I am going to ask you few of more of our standard questions and then we want to talk to you in the remaining time about Public Service Indiana and Lumina. Do you see a distinction between leadership and management?
Scarpino: Can you explain a little bit what do you think the distinctions are?
Mutz: Well, there’s a lot of authors who’ve done a better job more articulately than I can but, leadership has to do in my mind, not mainly with the motivation of people, and the ability to bring the creative instincts and creative ideas, out into the open and get them all on the table. Management on the other hand is taking the visions of leadership and making them work, implementing them in essence. So, they’re both important, but I think their roles are different.
Scarpino: Do you think it’s possible to be a good leader and a bad manager?
Mutz: Yes, yes we’ve got all kinds of examples in the business world on people who were visionaries, but when their business got to be more matured, they were not the right person to run into that point.
Scarpino: We’ve spent quit a bit of time, talking about and to getting you to talk about your style of leadership and to characterize, to describe yourself as a leader. And I am wondering if you can think of one event or incident that best demonstrates your style of leadership, you just have to pick one thing as an illustration. (00:15:04)
Mutz: I really can’t because each of these events kind of alters your approach and molds how you do it. But I do think the challenge of a very depressed Indiana workforce when I first became Lieutenant Governor is the best example I think, in which we talked about a vision for the future, we talked about a specific group of programs to implement that vision and then we talked off a lot about, carrying the message, communicating the message. As I’ve mentioned to you earlier in my leadership discussion, where the aspects of leadership is communication. It doesn’t necessarily mean you have to be a great public speaker, but you have to find ways to communicate with people on levels other than just the rational. This idea -- you can make more money if you do this, that’s one motivation but there’s a lot of others.
Scarpino: Now, we’ve a couple of questions that relate to leadership in terms of impact, influence, perceptions that other people have of leaders and I’ve already asked you one of those questions which is, do you think leaders are born or made? And we’ve talked about that. But the other question that I haven’t asked you is: do you think it’s important and necessary for a leader to have a positive, reasonably well supported set of goals and projected outcomes?
Mutz: I think a leader needs to have a vision for where he wants to go or she wants to go, but sometimes the outcomes are not readily apparent. Collins, Don Collins in his book, Good To Great and all that sort of thing, what he thinks is first the right people then the ideas.
Scarpino: So may be there’s a difference sometimes between projected out comes and actual outcomes?
Mutz: Yeah, that’s right, because I think what you do is, once we get all these people assembled, who you hope will be your creative engine in your leadership to implement, you better listen to them. What you think the governization ought to be isn’t necessarily the right thing. Now, there are certainly other examples of leadership style that are far different to then, if you were to interview Bill Cook for example, from Cook in Bloomington, Indiana.
Scarpino: I have met Mr. Cook.
Mutz: Yeah. His leadership style is much different in this situation, but it starts with listening. People thing Bill just suddenly had all these great ideas. He is the world’s best listener, when it comes to talking to medical practitioners. He can sit down with a M.D., he’s not a doctor, biology major he may be, but not a doctor. But when he listens to a physician talk about what it is he needs to get something done to cure this or to cure that and so forth. Bill is a great listener, and then he figures out well how can we produce a product that will get this done? So, even in his case, which ranges a different style than I might suggest here, he’s a wonderful listener. He also is a person who realizes that there are lot other good ideas out there besides his, and he is willing to at least listen to them. He has one interesting characteristic and that is that he does not like partners, does not want to give up ownership of his business to any body else, he owns it all and that’s a very unusual kind of approach, but any way.
Scarpino: But one more -- actually our final standard question is: can there be a great leader who pursues goals or outcomes, questionably or utility or morality?
Scarpino: Was Hitler or Idi Amin were great leaders?
Mutz: Well they certainly were.
Scarpino: I just picked two bad people.
Mutz: Yeah, but they were pretty bad. I guess I’d have to say that, clearly, there are some leaders whose vision is not necessarily morally appropriatable or in the best interest of society and they’ve been pretty good at, taking an awful lot of people to the brink. Ultimately though, I think that the morality of your actions does confront you at some point in this process. Now, my wife says, I am a dreamer, that’s not true. She says a lot of really bad people succeed in; probably they shouldn’t, that had been her attitude. (00:20:03) But I do believe that ultimately the people that you lead catch on.
Scarpino: But if we are -- if one of the goals of this project, over the long haul is to, attempt to figure out what the essence of leadership is. Do you think that somebody who is pursuing goals or outcomes that are questionably used or questionable morality, are they actually exercising leadership?
Mutz: Well, you’re asking me whether or not because the moral aspect or the legal aspect or the -- what's best for society aspect doesn’t seem to be present in their thinking. I think most of those people walk down their path thinking that that is not the case. What they are doing, the goal is so important it’s got this means and ends argument that we deal with all the time. But – so I think they think probably they are right, you can't help the zealous drive; zealous is a negative word that determines drive or the enthusiastic drive to succeed, if you think what you doing is wrong. Now, is Tony Soprano a leader? You know he’s a fictional character on the television program, but is he a leader? Well yeah, in his element he is.
Scarpino: A Mafia boss could be a leader of the development, right? Beeler: Ken Lay, right?
Mutz: Yeah Ken Lay, good example (Laughter).I went the other day to see that movie called The Smartest Guys In The Room, that’s an interesting take on that.
Scarpino: In 1993, you moved Lilly foundation to Public Service Indiana, which we even call PSI, which then I believe is the largest investor on utility in the State of Indiana. You served as President of PSI. As far as I know, you had no prior experience in the Electric Utility Industry. How did this move from Lilly to PSI come about?
Mutz: Well it came about because, Jim Rogers who was the Chairman of the Board of PSI -- I was in the process of engineering a merger, between PSI and Cincinnati Gas and Electric. And the result of that merger was called Synergy. Synergy was then later, just recently merged with Duke Power and it’s -- now every body is going to be called Duke Power. But anyway, Jim believed very strongly in the importance of a community presence, particularly on the part of utility that serves so many small communities. It wasn’t Indianapolis; it was everything around Indianapolis, 52 counties. And so, he needed somebody with a fairly high name recognition, and persona, or presence in the minds of people, and he thought one of the ways to assure Indiana that he wasn’t going to turn his back on these communities that had supported him during the hostile takeover with IPL and all the other things he tried to do. So the idea was to bring somebody in, who had some credibility and who could maintain the image of the utility, during that transition period, that’s why I was hired.
Scarpino: I – actually I read some of John’s research to give credit where credit is due, but there was an article in the Indianapolis Star, about the time that you assumed that position, and I am just going to quote two lines from the article and you can tell wonder what your reaction is and the Rogers is referred to James Rogers who is the Chairman and CEO. It said, ‘Rogers was looking for a second-in-command, who can stick up for PSI’s Indiana operations once its parent company merges with Cincinnati Gas and Electric Company to form Synergy Corporation, in Ohio. Utility watchers Rogers believe that Mutz, will give PSI something Rogers couldn’t, unquestionable loyalty and commitment to Indiana.’ Is that, do you think that’s an accurate statement?
Mutz: I think it’s an accurate statement, yeah, that’s what Jim wanted and that’s what I did.
Scarpino: Were you taking leadership risk making that move? You had no background in the utility Industry?
Mutz: Well of course I was, a lot of people told me I was nuts, why would you leave Lilly Endowment where you have all this money and all these things to do and so forth. And I saw there’s a new challenge, and then I also saw it as an opportunity to do some things that I had never done before . . .
Scarpino: . . . Such as?
Mutz: . . . Well, to run a large corporation with – at that time, 4000 employees, find out what the corporate internal structure is really like, I worked it out with Alcoa, which is a big company, where I was just a beginner there. This was a different view of that. It was also an opportunity to work with a guy who had respect for, in Jim Rogers, even though he is 10 years younger than I am, he is on of the most innovative corporate leaders I have ever worked with. (00:25:11) So, I thought that would be fun too. Now the other thing is, I think I told you earlier that my situation at Lilly Endowment -- I could have stayed there but, I think I’d done the things that I could do most effectively, so it was kind of time to move on. So those are factors, now, the risk of course really isn’t as great as maybe you think it is in the sense that, utilities at that time, have a off a lot of talent inside on the technical stuff. I wasn’t going to screw up the generation of power at one of the power plant.
Scarpino: We often have blackouts?
Mutz: No that’s right, I mean like, my role is in at different level and in a different arena, mainly the political arena as well as the public arena. So, I was in an arena there that I was familiar with, even though I’ve never been a utility executive. Then they sent me to utility school for eight weeks at Edison Institute -- has a program for, what they call emerging utility leaders. Everybody in the group laughed at me because I already had the title -- they said well, you don’t need to come here. But I said, you don’t understand how little I know about this. But that’s the story.
Scarpino: What were the key issues that you faced as President of PSI?
Mutz: Well, the first one dealt with the purpose that I was there, the reassurance of local community’s leaders, that Jim wasn’t leaving them out on a limb. Secondly, it was a time of turmoil in the electric business because the national debate was beginning about deregulation of electricity and Jim is and continues to be an advocate of deregulation. And our policy, and I must admit my own approach, was one that suggested that deregulation properly implemented was a good thing, for the consumer and good for the utility business. That whole idea was not very popular with the other utilities in Indiana, the other four electric utilities were, and were not …
Scarpino: And they were Indianapolis Power & Light Utilites?
Mutz: And that was Power & Light, NYTCo and in the Northern part of the state, SIGECO in the Southern part of the state, the REMC movement and then AEP which was an Ohio utility that have the northeast part of Indiana. So, I was one among five who was an advocate for competition and the others didn’t like it, that’s the second issue. The third issue was related to this business of how do we reduce cost in an industry that traditionally never had to be too concerned about cost? I mena, I know that sounds funny but in the utility business you make a new investment, you put it in the right base, get the IURC, the utility regulators to approve it and raise rates. And of course that’s one of the reason for example right now that the automobile industry in United States is in trouble because they had that kind of monopoly in the automobile because suddenly foreign competition came in and they were not able to compete very well, and they are still struggling with it. Well, we had decided at PSI that we needed to find ways to cut cost and to do it effectively. And so, that’s the third big challenge. I think those are the ones I had listed as most important.
Scarpino: What you think you’ve learned about leadership, as President of PSI?
Mutz: Well I learned -- the biggest thing I learned there was that difficulty in moving people to change, who didn’t want to change . . .
Scarpino: . . . And that would be on utility deregulation and cost cutting and . . .
Mutz: Well, those things, but mainly, they are our own employees. An average employee had been there 24 years, I mean this was an unusually old workforce and most of them had in mind the old cycle -- work your career all of in place, get to age 62 or whatever the retirement age would be, retire and go on with a happy life. They were -- there was no sense of urgency in this workforce and that was one of the things we were trying to…
Scarpino: . . . Was work force motivation and work force development one of your tasks?
Mutz: Yeah, but just see, we’re going to hire a lot of people, because they were all ready there and so the question is, how you motivate these people and I remember a number of people said, John, I really don’t care about doing this. I want to get three more years and then I am out of here. (00:30:08) As some of these people were there, some of the bright people in the workforce but they had lost any desire to do that.
Scarpino: If I read my notes correctly, in 1999 you stepped down as a President of PSI and became Vice Chairman?
Scarpino: What’s did that entail?
Mutz: Well, what would had happen was, actually I had only signed on for a five years, when I first took the job, but it already seven years and I wanted to move on to some other things, and also I wanted to teach at Northwestern university where that the Medill Schools of Journalism that offered me a adjunct professorship for one quarter so I could live on campus and teach…
Scarpino: So did you that?
Mutz: I did it, yes, that fall. That’s also the fall I wrote the book called Fund Raising For Dummies, and I was having great time and I had enjoyed it, my wife and I lived on campus, I kept office hours, saw students, created papers and all that sort of thing.
Scarpino: Did anybody ever tell you that the dog ate their homework?
Mutz: (Laughter) I never had that one but I had some other experiences yeah. These were graduate students, they were candidates for master’s degrees, they were pretty serious people and surprisingly pretty old. My oldest student was 38 years old, so this was not as bunch of kids. They were seasoned people and many out of them had already been out in the work world, you know so that was a good experience. So yes, I did those things.
Scarpino: So, Vice-Chairman was…
Scarpino: What kind of a position?
Mutz: Well, it was a position in which I’d still maintained an office here in Indianapolis. I was responsible for discussions with the other utilities about policy and I worked directly with our legislative teams, the lobbyists at workforce, is that what sometime that I also use to supervise, as even I was actually a utility officer. I also was in charge of foreign investments that we have, so we had investments in the United Kingdom and in South America rather large (Inaudible) and I traveled to those parts of the world on a regular basis to participate the board meetings and so forth. So, it was a, I called it transaction from active involvement too.
Scarpino: So, really in 1999 you were transitioning out of PSI?
Scarpino: Did you ever consider running for mayor of Indianapolis?
Mutz: I did it for a very short period of time and probably got in the press at one time or another.
Scarpino: Yeah I admit it did, yes.
Mutz: Yeah, I talked about it, and the party hierarchy at that time thought that Sue Ann Gilroy was the better candidate and for one reason I had a lot of arguments politically was the hierarchy of that time. I am thinking, primarily of the Sheriff of that time, Jack Cottey was his name and he was a power in Marion County politics. Jack and I just don’t agree on lots of things.
Scarpino: These were political arguments?
Scarpino: What was the nature of those, what was it you disagree about?
Mutz: Well, I think largely I would well for example; I wasn’t in favor of the consolidation of the Police in the fire districts in Marion County. He being Sheriff was opposed to it, unless he ran it all. We had disagreements about the quality of candidates for office, I hate to get in to personal stuff here but yeah we disagreed about his approach, techniques and so forth.
Scarpino: So, you elected not to run.
Scarpino: In 2002, you became Chairman of the City of Indianapolis, Department of Water Works? That was a short-term position?
Mutz: Well, I could be still be there if I wanted to be. I think I was an appointee of the President of the County Council, who was Bart Servos.
Mutz: Now, I was philosophically opposed to the city buying the waterworks in the first place, but once it was decided Bart asked me, if I would be his -- one of the two candidates to be a nominee and it was just was a deal which was worked out directly by Bart Servos and Mayor Bart Peterson.
Mutz: And, Bart was delighted to have me there because it was a political buffer for him. Here’s a high profile Republican supervising the acquisition and kinds of difficult employee issues they had. (00:34:37)
Scarpino: So, that was the task, was to supervise the acquisition by the city?
Mutz: That’s right.
Scarpino: Okay, so…
Mutz: And I stayed down there for I think a year and a half or so and then, some other opportunities came along and I thought it would be best if I resign from that.
Scarpino: What were some of the challenges that you faced that you supervised that?
Mutz: Well, I think the biggest challenge was the resolution of employee relationships in this new environment. Like most utilities the people that work at Indianapolis Water Company had been there long time. They were the beneficiaries of the monopolistic environment, where they had an unbelievable personal benefits in addition to their salaries, pension programs, et cetera., health insurance, all the rest of it. And of course the issue was, like in any merger, you’ve got a company that’s going to -- you’re going to go to work for it now that has a different benefit package. The question is how do you resolve? That was our biggest issue. And we have lots of difficulties, whether there were demonstrations by disgruntled employees, and I mean, the hearings that we held at that time were well attentive to settle these things.
Scarpino: I remember that. Why were you opposed to the city acquiring the water utility?
Mutz: Well, philosophically I think utilities like this are more efficiently run by for-profit organizations -- to state it very simple. My experience had been at PSI that, we were a lot more efficient in spite of our inefficiencies than we were the ones that were, the electric utilities that were run by cities and things of that kind. And if the profit motive is a good motivation in a utility set of circumstances, I’ll put it that way.
Scarpino: What’s the motivation behind the city acquiring that water utility, in your opinion was it related to quality and efficiency of service or politics or something else?
Mutz: It was xenophobia.
Mutz: Here it comes again. Yeah there was this fear of having a foreign company owning our utility.
Scarpino: And the foreign company was?
Mutz: Well, I can’t remember now the name of the foreign company, but the logical acquires when NIPSCO put it up for sale. See NIPSCO bought the Water Company originally because they thought this a way for us…
Scarpino: . . . Northern Indiana Public Service . . .
Mutz: Yes, that’s right.
Scarpino: An electric utility.
Mutz: That’s right and what they wanted to do was to get at the Indianapolis electric customers. They said, all we do, we’ll buy this utility, now we’ll have a base to go after the electric business in Indianapolis. Well, deregulation didn’t come to Indiana, so Apalco still had control of that. Water utilities do not perform well economically compared to other investments. I mean, when I was at PSI, Jim Rogers said, ‘John, check this out,’ so we did an in-depth look at the water company. We decided that we could deploy our capital more efficiently in other places and this was not an acquisition that earned enough money to make sense, so we took pass on it. I looked at a lot of acquisitions when I was at PSI, so NIPSCO found out the same thing, this is not going to work for us, so they put it up for sale. The only logical buyers were United Water and this French outfit that we’re talking about. United Water was also owned by a foreign company and so that’s what happened.
Scarpino: Jim Morris worked for the Water Company and …
Mutz: Yes, he did, indeed and he was still there when I was involved in this transition.
Scarpino: You have been on numerous Boards of Directors including Conseco, when did you serve on a Conseco Board of Directors?
Mutz: Well, I want to say that it was from, ’98 -- we would have checked this out, I can’t remember, it’s on my resume . . .
Scarpino: Actually, probably rule number two in the oral historian’s book is don’t ask the narrator a date and I just did it. So… (Laughter)
Mutz: Yeah I can’t give you exactly but it was during the time that I was at the Lilly Endowment and at Synergy.
Scarpino: All right. You were on the Conseco Board during a time of turmoil and controversy in the company?
Mutz: Yeah, I missed all the gravy days, its mainly after I became a Board Member, we began to fell into some of the difficulties that eventually caused the bankruptcy and . . .
Scarpino: . . . Could you summarize those? (00:39:59)
Mutz: Well, the major problem with the company was twofold. One, Steve Hilbert decided that we would branch out into the financial services into …
Scarpino: . . . And Steve Hilbert was the CEO?
Mutz: . . . He was the CEO of the Conseco. And he was looking for an acquisition, and the acquisition turned out to be the largest provider of financing called Green Tree, for manufactured houses. Manufactured housing is a very tough business to begin with and financing them is much different than regular houses, because they deteriorate the value the minute you buy a new one, unlike automobiles, rather than houses. There is not an appreciation generally speaking. So, what we did, we bought what appeared to be a very financially successful financier of manufactured housing, all over the United States, huge operation. Added dramatically to the Conseco customer base and fit into Steve’s idea of Middle America. He said, we are financiers and insurance people for Middle Americans, not for Wealthy Americans, not for Poor Americans, but Middle Americans, and nobody else is really in that space and that’s true. The most people in those financial services businesses want people to talk, and so that was the philosophy, not an unsound philosophy. But the company turned out to be an unsound purchase and you could make the argument that if you go back and restate the accounting method that they never made any money in the history of the whole company, even though it appeared that they did. But at stake, was -- were two kinds of accounting, and this is a complicated -- don’t want to get into it now, but the point being that, during the turmoil that we actually voted on the board to go back -- to go to the normal kind of accounting for Green Tree, but it was too late. And then the second thing that happened was the investment community lost their enthusiasm for Steve. Steve was one of these guys, self-made human being, never finished college, went out to raise the money going door to door to get started in the insurance industry. It’s a rag-to-riches -- it’s a wonderful story. And Steve had a vision about the consolidation of the insurance industry that was very sound and worked. It was an industry full of a lot of waste and when you brought together two or three insurance companies, and consolidated the back off his operations; there were great profits there, right possibilities for profit. And so, I mean as a consolidator, Steve was enormously successful. The consolidation however with Green Tree was not a good acquisition, and what happened was, his reputation for being the high flying deal maker, was damaged…
Scarpino: . . . Because of Green Tree?
Mutz: . . . Because of Green Tree, and as a result, the investment community began to clamor for his resignation, and I was on the Board of Conseco when we had the meeting in which he resigned. And I was one of those who had to sit with him during this time period, this meeting lasted out at nine in the morning and ended at seven that night, and it was a very difficult meeting. Now, a little bit I dreamed that I’d still beyond this board, several years later when Gary Wendt, a nationally known business leader who had been successful at GE, became our CEO and then I was the one who’d have asked to ask Gary Wendt to leave, which I did. I was Chairman of the Committee for the Reorganization of Conseco and Chairman of the Bankruptcy Committee at Conseco . . .
Scarpino: . . . Because Conseco went into bankruptcy, receivership . . .
Mutz: That’s right, and then of course when the bankruptcy ended and they, as we say, came out of bankruptcy, established new corporate a new accounting system, so forth. Then the new owners of course had their own people they wanted on the board at that time and so I resigned.
Scarpino: Was that a leadership risk for you to be on the board like that?
Mutz: Absolutely, I didn’t think it was when I first got involved or I’d probably wouldn’t have joined that board. And I did a lot of due diligence to try to figure out if that was a company I should go to, because they were operating so differently than other people in the insurance business. And what I did was, I hired the insurance expert Ernst & Young here in town, to do a careful look for me because he didn’t audit them, he had no relationship with. And after learning what he told me, as an insurance consolidator, he said they are good. (00:45:04) And he also said, Rolly Dick is a sound financial manager; he was the CFO there. And I let him spend a lot of time with Rolly, and yes on the basis of those conversations and that research that I joined the board. Now, again you take a risk when you are on the Board of somebody who has the kind of volatile personality and exuberance that Steve Hilbert has. But I like Steve, I still like Steve, but it was a situation in which, yes you take a risk when you are involved in a situation like that. Now, the other risk I took was financial, one of the big things that led to lack of confidence in Steve Hilbert was, a program he put in place that allowed officers and directors of the company to buy company stock with loans guaranteed by the company. Now, such a program is designed to align the interest of Board Members and officers with the interest of common shareholders. That is normally considered to be a desirable kind of alignment. The problem we had here was that Steve put no limits on how much of this that these individuals could do. And so you had some directors and some officers who were buying 20 and 30 and many more millions of dollars of Conseco stock, with loans guaranteed by the company. And of course they wanted me to do this too, this is one of the ways you demonstrate to the financial community that you have confidence in your business. And I said well, yes I’ll participate, but I am not going to buy any more stock with a loan of this nature that I cannot afford to pay back from my existing monies and assets, if everything were to go badly. So, I could remember my wife saying to me on several occasions, John don’t be greedy. This is supposed to be the great answer to additional financial success. And I ended up, having to pay off my loan in Conseco of 1.3 million dollars, and that was that something you do on the installment basis, that’s cash on the barrelhead you have to pay. And I was one of three members of the board who paid off their loans. Some of those loans are still not paid off or some are still pending in terms of litigation. Some were settled.
Scarpino: So, when the company went bankrupt those loans were called in as well?
Mutz: Not at that time, no. Gary Wendt concluded that you had a conflict of interest on the board, if you had a big loan and still served on the board, and I believed Gary was right, and I supported him in this. The point being that this financial obligation becomes so big and so important to you that your actions on behalf of the company and other shareholders is favored or altered. So, Gary went to the board and he gradually got individuals like me to say, either you pay off your loan or you resign from the board. And I went individually to the other board members and said, I am going to pay mine off and I want you to do the same. And if you don’t, then we are going to invoke a section in the Indiana Statute that allows the board to relieve those directors of their responsibility. It’s a section seldom ever used. So, this was a tense kind of situation with men and women who you had previously worked with and so forth. But I did get the resignations of all them except two, and two of them we had to, as Donald Trump, we had to fire him. They were relieved from their board responsibilities and those were not very enjoyable circumstances when you have to deal with that. So, then of course along came the bankruptcy and there is a whole lot of people you got hurt in bankruptcy.
Scarpino: So this is a business about the loans of the conflict of interests really predated bankruptcy.
Mutz: Oh, yes.
Scarpino: So, the company was on a downhill slide when this was happening.
Mutz: That’s right.
Scarpino: Would you consider what you were faced with as a member the board and be paying your own loan and persuading your colleagues to do the same, and resignations, and firings is -- does that have anything to do with leadership or the fact that, sometimes maybe a leader has to have the courage to do things that are difficult? (00:50:04)
Mutz: Yes I think it does, I mean I do think that is the test of leadership, when you’re put in those situations and you don’t run. Now I’ve had some people who said to me, John, when you resign from the board, why do you want to put up with all these? And to be candid with you to say, first of all I felt I had a responsibility to follow through. But I also felt that my own personal integrity was in stake. I thought that you know the -- may be the major thing that recommends John Mutz, in the long run, it’s not my money, it’s not my intriguing ideas, its my integrity.
Scarpino: Where do you think that integrity fits in the panoply of leadership qualities?
Mutz: Well I think it’s extremely important and I -- those were really difficult kinds of moments when you deal with that kind of stuff. I remember another case, which I’ll mention real briefly and that was, one of the members of the board of PSI was confronted with a proposal that PSI put on its board a prominent political personality, who likely would be elected to the U.S. Senate for the interim time period between when you left one office and took of another. And another board member on the PSI board said no, Jim – this is Jim Rogers -- I don’t think this is in the best interest of this company, and I really don’t think it’s of the best interest of the individual at all. And this happened to be the Chairman of the Committee that hired Jim Rogers, who said this and Jim says, well. Well, I’ve heard enough, we won’t do it. So, he didn’t even press the board to do it. That’s leadership. And it is the kind of thing that often makes you unpopular temporarily and that’s happened to me on occasion, but I think of that example. And I have to say that example, one of the things that kind of led me to where I was when I got to the Conseco situation, because it happened before that and I really did suffer with lot of these people. I think we did the best we could for Conseco at that point. In fact the company still exists here in Indianapolis and still employs people. These may be a legacy from that.
Scarpino: You think it’s on the rebound?
Mutz: Yeah financially, yes I think it is and the trick here, which has nothing to do with leadership particularly, except to say they need an A or A minus (A-) rating so that they can sell their insurance products in competition with the other big insurance companies. There are B plus, (B+) something or the other right now, and I think they’ll get that rating from the insurance rating agencies.
Scarpino: What do you think you’ve learned as a leader from the trials and tribulations of serving on that Conseco Board during those difficult times, personal difficult times?
Mutz: Yeah well, yeah I think I learned the importance of even though everybody else seems to be walking to a different drummer, if you really have strong doubts, speak up and I -- it was not an easy thing to do. Don’t get me wrong, I wasn’t the only one who felt this way but I usually was the only one who would articulate at these meanings.
Scarpino: Do you think there’s a difference in what you think about leadership between leadership in a situation like that, and leadership in a political arena? I mean, would a politician have been as likely to express, clearly express, strong reservations the way you did in a more private setting?
Mutz: Often not, but some times they do, even though it’s an unpopular thing to do, which you know a lot of the really tough decision politics, still are not public. There are some moments when you are tested. However, I’m not sure I mentioned or not, the time I was offered a bribe or not when I was running for Governor.
Scarpino: No, you didn’t mention that.
Mutz: Well, I was raising money doing all the things you do and I was down in Southern Indiana, and a group of County Commissioners in one County asked to have a meeting with me in a Conference room at the private airport in Clarksville, Indiana, which I did. (00:55:13) I made a big mistake, that meaning, for some reason that I didn’t have a staff person with me, a witness. I should have had, and we sat on at the table and these guys describing their economic development project and it appeared to me, being nothing more than a request to give them some money to build road in their community. And I said, well there are no jobs at the end of this road right now. May be there will be some day, but there aren’t now. I said our program isn’t for that so forth. Well, that moment this one guy threw this envelop on the table, and all these checks fell out on the table. They were checks made out in blank, signed with amount on them, which the recipient could have filled in. And I looked at the checks, I didn’t touch them. I didn’t pick them up. I just looked. I knew what they were after I could read the front of them, and I said, I am leaving, I never want to talk to you guys about any of this again. You see, had I had a witness, I would be in a position to have maybe confronted them in another way. I made a big mistake; I should have had somebody with me.
Scarpino: In the last couple of minutes we have left, I want to do two things. I want to ask you to describe what you do at Lumina Foundation? And then I wanted to give you chance to say anything that I wasn’t smart enough or clever enough to ask you, or that John didn’t beat me with the stick hard enough to help me figure out what to say. So, can you – you are now the President of Lumina Foundation?
Mutz: No I am chairman of the Board.
Scarpino: Okay, CEO – er, Chairman of the Board. What is Lumina Foundation and what are your leadership responsibilities there?
Mutz: Well, my leadership responsibilities are to lead the board and be the major consultive individual with the CEO. Martha Lamkin is the President and CEO. I believe the style of leadership is the coming thing not just in the non-profit world, but I think eventually we’re going to have a division between the executive and the board chairman in more and more corporations. I think it’s the right thing to do with that another day. At any rate, Lumina Foundation is what’s called the conversion foundation. It’s a foundation which was formed from the assets that were acquired when USA Group, another non-profit, sold it’s assets to Sallie Mae and we got three of the – say, $400 Million in cash and $ 380 Million in Sallie Mae stock, New York Stock Exchange Company. And then when you get all that money it’s not yours, it’s in the public’s purview, so we formed the new foundation and that’s what Lumina is. And it is committed to access and success in post high school education and training of all kinds. Our major emphasis currently is on community colleges nationally, and secondly, on how to solve the community of the cost problem of getting a college education?
Scarpino: So, you make grants to community colleges to…
Mutz: Well we do, but our – we are interested in policy changes we don’t do scholarships or anything like that, and we are interested in how you change the system so, its more affective. And so, our national program between community colleges right now is operative in seven states, and it’ll gradually expand. And our program on college cost is aimed at two aspects of college cost: one is the sticker price that the family or the individual pays and the second one is the actual cost of education within the institution they are two entirely different things and they are related but there are entirely different things. So, that’s the work what we’re doing there. But my major responsibility there has been to put a brand new foundation, get it up and going. And not many people get a chance to do that. Kind of like the economist who just have to build his own country. That’s what happened in Latvia and Lithuania. They certainly had a chance to redo the system. But any rate that was the difficulty and of course I inherited a board, which came from the two organizations that spawned this thing. So…
Scarpino: . . . U.S.A. and Sallie Mae . . . (00:59:57)
Mutz: . . . Yeah so I had four Sallie Mae directors and seven -- yes that’s right -- directors from U.S.A. Group. So, I was not Board Chairman to start with. Another gentlemen from Washington DC Ed Mckay was the Board Chairman. They have made me the Vice Chairman with the assumption that they’d move me up to Chairman when he retired as Board Chairman. Now, he was he in his 89 and it would be in 90 some odd years when he retired. So, they because of my foundation experience at Lilly . . .
Scarpino: . . . How did you get hooked up with Lumina Foundation?
Mutz: Well, I got hooked up with Lumina because I was a director in U.S.A. Group before him I was one of the ones that moved over.
Mutz: And I got to be a director of U.S.A. Group primarily I suppose because of my experience as Lieutenant Governor and at PSI and all the other stuff. I mean your exposure in these other situations makes you a candidate for some of the other alternatives.
Scarpino: How do you exercise leadership’s Chairman of the Board?
Mutz: Well . . .
Scarpino: . . . And I mean I spoke early I said CEO and I know that so we will correct that for the record.
Mutz: All right. Well, you exercise leadership I think through two ways. One is your direct influence on the CEO. My relationship with the CEO is a very strong one it’s a consultive relationship…
Scarpino: . . . Who was the CEO?
Mutz: Martha Lamkin.
Mutz: And, she talks to me privately, casually about all kinds of things that are on her mind. See, CEO’s. That’s a lonely position and they don’t have a whole lot of people they can talk to. Maybe a spouse but not a whole lot of people you want to share some of these difficult questions particularly personal questions and so forth. So, as a board chairman that’s one role I play and I do have a quite a bit of influence on what happens through Martha. The second is that the Board is responsible for developing the overall work plan for the Foundation and for the management of the assets of the Foundation. So, we now have a billion almost $300 billion dollars. The reason we got so much money is Sallie Mae stock was an antirecessionary stock and it doubled in value in six months. So, that’s why we’re as big as we are. Next to Lilly Endowment we’re the largest foundation in Indiana. So, in developing the policy for the work of the Foundation and the policy for the investments and we do that at the board level -- now see, I’ve set up a much different kind of philosophy about this board then Tom Lake did at Lilly. We have a committee system and most of the power is vested in the committees. Our investment committee has a very big agenda and a lot of authority to control the policy and what we do. Our program policy committee has a lot of authority in terms of the program. Our compensation committee has a lot to do with how we compensate our employees and benefits and all that sort of thing. So, I’ve vested the power in the committees and I’ve given the committee chairman lots of authority. But, in every case they consult with me on most of the issues before they do them. So, that’s a different technique.
Scarpino: Is there anything you would like to say about your leadership experience and your leadership’s style or what you’ve learned as a leader if I just have the insight to ask you?
Mutz: Gosh. You gentlemen have been very thorough in your research and in your questioning and there isn’t anything I can add except to say that people who think of themselves as leaders are who seek to be leaders need to do what we’ve done here. This business of being asked to think in depth about the questions you’ve raised and that the second thing, of just laying out the history of what’s happen to you over your life, is a very viable experience.
Scarpino: So, you think embedding those questions in some modified life history worked?
Mutz: Yeah, but not just that I think they have also -- this exercise probably, makes me better equipped to lead in whatever ways I may have an opportunity to do so in the future. It’s a -- well, one of the things we use to say about organizational leadership is that there is power in history. And one of the things that we did in every group I have been involved in almost. We did a timeline. We actually put a big piece of paper up on the wall and the first date is the founding or whatever the beginning of the organization is you bring it up to the press. (01:05:02) Now, on the lowest level you put world events on there. You know II World War. Beatles come to America. Certainly that’s both cultural and historic. Then you had a next line which is history at the local level wherever you operate and in the top line is the history of the organization and in that, at the Lilly Endowment we even had the names of the officers of the foundation back from the beginning; and when they came and when they left; and when certain programs were started and stuff like that. There is amazing power in the study of your history. It gives you an inside that you would never guess. I mean I must have been one of those skeptics about this you know. What good does it do to go back and look at history?
Scarpino: Well, that’s one of the agendas that’s folded into this project is try to see if understanding the history of leadership is of use to leaders in the present.
Mutz: Well, organizationly, I can say without doubt it is very helpful and I think now I having experience this set of the interviews, I can think it would be valuable to leaders individually. Now, whether in espouse a leader or a young person moving up the ladder and all that sort of thing. How they would feel about this I don’t know for sure but I told you earlier that I did a lot of reading in this field; and I think it did assist me in that time period. So, I think it’s both good for individuals and organizations. Speaker: Well Mr. Mutz thank you very much for taking the time to sit with us for interviews to share your insights with us. I learned much more from this than I contributed and I’ll tell you that it’s a very interesting and illuminating experience for me. So, thank you very much and thanks to John for background research.
Mutz: Well, I learned more from it than I gave to it, no question.Total Duration: 67 Minutes.