Photo by Matthew Turley
The Tao of Patrick
Float Like a Butterfly
By Melissa Bond
He’s affluent, storied, über-educated, and according to some people, Overstock.com chairman and CEO Patrick M. Byrne is completely nuts. After spending much of the past five years taking on Wall Street, the Securities and Exchange Commission (SEC), and about half the financial press in New York, in 2007 he picked a different fight in Utah.
He threw almost $3 million of his own money behind a statewide school voucher initiative, and when it failed, Byrne said that the Utah Education Association was a monopoly more interested in padding its own pockets and protecting its position than in improving education. He went on to say that Utah voters had failed their IQ test by not passing the measure. The public outcry was impressive, and caustic.
Blogger Gary Weiss summed it up this way: “Byrne’s [voucher-related] antics, combined with his previous history of making nutty stock market conspiracy allegations, has destroyed what was left of his company’s, and his own, reputation.”
Those close to him say that he’s unfazed by the criticism. That he likes the fight. It’s the Irish in him, they say, often going on to recite heroic beats from the mythic Patrick Byrne life story. They speak of the three bouts of virulent cancer he survived in his mid-20s, his impressive foray into heavyweight boxing, a black belt in tae kwon do, solo cycling trips across the United States. And on and on.
Indeed, all my research on Byrne fit into two startlingly neat categories: (a) The man’s a wing nut, or (b) the man’s a hero. Knowing that tidy stereotypes are often the human way of packaging the ineffable, I arranged to meet the man, the myth, and maybe the maniac.
Arriving at a renovated Salt Lake City high-rise housing a collection of modern, airy lofts—the perfect refuge for successful artists and bachelors—I scan the list for his name. It’s not there. After a phone call, he buzzes me in. Byrne opens the door wide, both arms out in a gesture of welcome that’s both enthusiastic and boyish. Light red hair sweeps back from his forehead in a floppy wave. Gray roots. Neck like a bull. He’s a big man, well over 6 feet, but moves with an ease that renders his height unthreatening. He limps a little from a torn hamstring that he got from horsing around in the warehouse at Overstock, the Utah-based, online discount retailer he took over in 1999.
I don’t mention the absence of his name on the doorbell list, but guess that it’s by design; he’s received death threats as a result of his open condemnation of “naked short selling,” the illegal practice of selling shares that one does not own. Someone even broke into his apartment once, moving an object into the very center of his living room just to make a point. We’re out here, the point said. We’re watching you.
He shuffles to the refrigerator, asking about dinner. He’s wearing designer jeans and a gray crewneck. Bare feet. He asks me to remove my shoes. “The guy downstairs,” he explains, apologetically. “You can hear everything in this place.”
We decide to order jambalaya from Squatters Pub Brewery and before the food comes, I nose around the two walls of books that frame his desk on the loft’s north side. Thomas Hardy, Aristotle, Ken Kesey, Warren Buffett. Byrne credits much of his financial know-how to Buffett, the self-made billionaire who Forbes magazine recently listed as the world’s richest man. Buffett’s closeness to the Byrne family resulted in an influential mentorship for the younger Byrne.
A framed triptych of Byrne’s smiling face sits on the middle of one of the bookshelves with a quote by Mahatma Gandhi written in silver ink between the photos.
“A friend gave that to me,” he says. “Gandhi claimed that in all social movements at first they ignore you and then they laugh at you and then they fight you and then you win.” He smiles slightly, almost embarrassed. I imagine that the quote operates as Byrne’s corner man when he’s in the ring. It reminds him not to give up, regardless of the actions of others. And more than that, it tells him that in the end, after they laugh at him and then fight him, he’ll win.
An East Coast Irish Catholic who grew up as a devout altar boy, Byrne was one of those kids who couldn’t get his nose out of books. He was in constant intellectual movement, always trying to figure out the way the world worked, to get to the underlying nature of things.
Byrne started training in martial arts when he was young. By the time he was a teenager, he was into boxing. In 1974, when Byrne was just 12 years old, he watched spellbound as Muhammad Ali destroyed heavyweight champion George Foreman in the now infamous Rumble in the Jungle that took place in Kinshasa, Zaire (now the Democratic Republic of the Congo). He devoured The Greatest: My Own Story, by Ali with contributor Richard Durham, three years later. Ali became one of Byrne’s first heroes. And it wasn’t just Ali’s charisma. It was the fact that Ali stood for something, that he was a man of character. Byrne reminds me that Ali took 29 months in jail during the height of his career for refusing to serve in the U.S. Army during the Vietnam War, famously claiming: “What’s wrong with me going to jail for something I believe in? Boys are dying in Vietnam for something they don’t believe … They’ve got to go on and either free me or put me in jail, because I’m going to go on just like I am, taking my stand. If I have to go to jail, if I have to die, I’m ready.”
This, in some ways, explains Byrne’s inability to unplug from his own fights: the school voucher issue, or the jihad against Wall Street that’s so deep in its complexity it’s like going headfirst into Alice’s Wonderland. Byrne believes in these fights. And he won’t apologize for them. He’s going to go on just like he is, taking his stand. Telling Utah voters that they’d failed his IQ test because they voted down school vouchers was, he says, just strategic, inflammatory rhetoric designed to keep the topic on the front page.
And maybe, like Ali, Byrne knows that inflammatory rhetoric will get you further than some kind of strident humility. You’ve got to float like a butterfly. You’ve got to sting like a bee. And when you see those opponents, you’d better hit them so hard they’ll need a shoehorn to get their hats on.
Byrne was raised in New England and Maryland, the youngest of three sons in a family that he claims lived the Horatio Alger dream, a reference to the 19th-century American author who wrote approximately 135 dime novels that are often described as rags to riches stories. And while rags to riches may be a romanticized version of the Byrne family’s ascent, the youngest Byrne was not born with a silver spoon in his mouth. Both of his parents had the privilege of going to graduate school, but those early years were painfully poor.
His father, Jack Byrne, took the armed-services route into the middle class. He served with the U.S. Air Force, got a master’s degree from Rutgers University, and then landed an insurance job making $30,000 a year. Within 10 years he’d worked himself up to executive vice president and soon thereafter left to become chief executive to the then-ailing auto insurance company, Geico. In watching his family climb the socioeconomic ladder, the young Byrne noticed that the values held at the lower rungs of the ladder didn’t always match those of the higher rungs. His mother, a homemaker and school librarian, was the family’s ethical epicenter.
“She was very much the Irish matriarchal figure,” Byrne says of his mother. “She wasn’t demanding in the sense of being a pushy parent, but she was very black-and-white about matters of ethics.” I ask Byrne what his mom thinks of his business dealings and he tells me that regardless of the level of outward success—if he “took over Google” for example, or made millions more than he already has—she’d likely look at him and say: That’s great sweetie, but when are you going to do something that’s really important?
This emphasis on personal and social ethics is something that Byrne feels was inscribed in him at an early age. He’s a Catholic/Taoist hybrid, blending the Catholic’s sense of duty with the Taoist’s detachment. He started reading books on Buddhism when he was just 11 and at Dartmouth University, Byrne completed his undergraduate work in philosophy and Asian studies. He went on to get his master’s degree from Cambridge University in England and a doctorate in philosophy from Stanford University. By the time he was 21, Byrne had translated and eventually published his own version of the Tao Te Ching, a fundamental book of Taoist thought. Byrne feels very guided by the principles of the book. They’ve undoubtedly helped in his business dealings, but also were helpful when, just after Dartmouth, the life he knew crumbled.
He was in his early 20s when they diagnosed him with testicular cancer. And he had it not just once, but three times. By the third round, he says, he was done. “I had a particular kind of chemotherapy called Bleomycin,” Byrne recalled. “I’ve had more of it than about any living person on the planet.”
The cancer was so virulent that they put him in an experimental group with six other participants. The chemotherapy was given in doses designed more as a check for toxicity than for efficacy. Byrne says that he would throw up 30, maybe 40 times a day. The other five participants died. “That left me,” Byrne says. “And in my heart, I thought I’d reached the end.”
Looking back, Byrne says that the cancer was actually harder on his parents than it was on him. He was an invalid for much of his 20s, and his mother slept by his bed for nearly three years. This really cemented their relationship. And while the cancer was hard, even harder for Byrne was getting to death’s doorway, getting ready to shake hands, and then having nothing happen. There was no handshake. He waited, but the cancer didn’t come back.
Byrne identifies his brush with death as one of the main forces shaping his life. He tells a story about Ivan Pavlov, the Russian scientist known for discovering classical conditioning by getting dogs to salivate at the ringing of a bell. The story goes that one spring, floods swept into the laboratory basement, nearly killing many of the research dogs. For close to a week, the animals were trapped in partially submerged cages with no food and no avenue for escape. When the surviving dogs were rescued, Pavlov discovered that somehow they’d been deprogrammed. They no longer salivated when he rang the bell.
“I think that [nearly dying] left me deprogrammed in a way,” says Byrne, “like Pavlov’s dogs after the flood. There’s not much that anyone can do or say about me now that can bother me.”
On my tour of byrne’s apartment, I comment on the three large lithographs hanging on a wall in his bedroom. They’re a series of portraits in Andy Warhol’s signature pop-art style. Byrne smiles and asks if I can identify them. I’m clearly being given a test of some sort and when I identify the first as Rainer Maria Rilke, Byrne is pleased, even though it’s Franz Kafka. I’m close; they’re both German writers. There’s a little kid inside of him that likes this game. The second, just over his bed, is easy. “Mao,” I say and then halt at the third.
“He’s another communist,” Byrne says, helping me. He wants me to get it.
“Lenin,” I say after a minute and we’re both pleased.
“That’s 2.8 out of 3,” he says, smiling broadly. “Not that many people get all of them.”
When I ask why he has two communists and an existentialist over his bed, he shrugs. His brother gave them to him and—you know, they’re Warhol’s. Byrne’s family has always viewed him as a bit of a radical. When he was a kid, his parents gave him a blanket that had 100 white sheep lined up on it with one black sheep in the corner facing the opposite way. Byrne says that a lot of times, he sees things differently than other people. Or perhaps it’s just that he can’t look away from what he’s seeing, can’t pretend that it isn’t there. He references Thomas Szasz, a psychiatrist living in the 1950s who wrote a classic book called The Myth of Mental Illness.
“He was the one who said that most people diagnosed with mental illness have a type of integrity,” Byrne says. “They see the pink elephant in the room and they can’t pretend that they don’t ... It turns out they’re having a rational response to what’s around them.” Byrne offers this as one explanation for his Wall Street jihad and his relentless push for school vouchers. A lot of people think that he’s out of his mind.
Byrne’s fight with Wall Street started several years ago when he was contacted by several bloggers who warned him that the technique of naked short selling was going to be used against his company. My questions about the subject are met with the kind of laugh that erupts out of a long-held tension.
“It’s crazy, I’m telling you,” Byrne says in near disbelief. “It’s a rabbit hole that just gets deeper and deeper. It’s the kind of thing that you can’t believe until you start following the facts.” He warns me that I don’t have to dig very far before I get to organized crime and a crack in this country’s financial system that Byrne believes will make the stock market crash of 1929 look like a day in the park.
A few days after my first meeting with Byrne, I contact Mark R. Mitchell, a former editor at the Columbia Journalism Review. Several years ago, when Mitchell started following Byrne down the rabbit hole, he began receiving anonymous threats. He was assaulted on the street and told under no uncertain terms to stop talking to that Irish guy. The threats continued in a way that Mitchell doesn’t really want to discuss. He quit his job at the Review and took some time off. A year later, he contacted Byrne again. He wanted to resume his descent into the rabbit hole. He just couldn’t get it out of his mind. And while Mitchell doesn’t want to show their cards yet, he says that he’s gotten involved again because the scandal is so unbelievable. He’s also doing it because, he says, Byrne is such a good guy, one of the most honest men he’s met.
“People who get to know him think that he’s just this incredible guy. It’s a complete divergence from what you read in the media. And the reason is because there’s this group of journalists who take their cues from hedge funds who make their money by trashing Patrick Byrne.”
In a 2006 article in The New York Times titled, “Overstock’s Campaign of Menace,” Joe Nocera wrote that it was Byrne and not Wall Street or the financial media who was running the conspiracy. “Byrne is using the courts, the Internet, his taunting emails—and even his conspiracy theory—as part of a thinly disguised effort to squelch any and all criticism of Overstock.”
But Overstock is not the issue, according to Byrne. The issue is the fleecing of the American public by the secret siphoning of a few hundred dollars from each household that invests in any number of publicly traded companies.
Byrne calculates that, all told, hundreds of billions of dollars are flowing into several dozen hedge funds that are in collusion with Wall Street banks. And the SEC, the regulator of our nation’s capital markets, is in on it too, according to Byrne.
The rabbit hole gets deeper. It’s a seemingly endless labyrinth of blogs and posts being set up under false names, connections to the Russian mafia, accusations of entrenched cronyism, and the fevered trading of barbs, as if they were all thrashing about in the rabbit hole like a sack full of birds.
Floyd Norris, also of The New York Times, characterized Byrne in one of his blogs as a bad businessman but an entertaining showman. And the man who loves to hate Byrne the most, Gary Weiss, a former BusinessWeek reporter, has given a remarkable percentage of his blog space to articles about Byrne, calling Overstock a “miserable little company” and referring to Byrne as a “loony,” a “wack-a-doo CEO” and a “corporate clown.” Byrne has responded in kind on his blog, Deep Capture, by calling Weiss a “Psychopath and Scaramouch,” the term “scaramouch” referring to a stock character in commedia dell’arte who is depicted as a boastful coward or a buffoon.
A week after my initial meeting with Byrne, I contact Kim Campbell, president of the Utah Education Association (UEA). While some 62 percent of Utahns voted against the voucher referendum, I tell her that Byrne is working with groups in South Carolina, and that he has high hopes that this country’s next president will be open to the voucher idea. Campbell has been spending all her time lately at the legislature. She sounds tired but finds a small corner for us to talk in between meetings.
In her answers to my questions, Campbell is diplomatic. There’s no inflammatory rhetoric, no punches. She sticks to the issues. Her comments are practiced, measured. She tells me that she debated Byrne once and that he was cordial. But it’s clear that she thinks he’s wrong on the education issue. “[Byrne] clearly doesn’t understand what’s going on in our schools,” Campbell says. “This is what gives me the feeling that his ideology springs from the privatization side of the voucher movement.”
Lines get drawn between Byrne and the UEA. Campbell sees vouchers simply as a way for private enterprise to take money from the school system. She thinks it’s about the dollar signs and not the kids. Byrne claims that privatization will combat the monopoly that he thinks is ruining education in this country. He believes that effective reform only will happen when parents have the freedom to choose which schools work best for their children.
“The whole point of having a monopoly,” he says, “is to sell an inferior product at an inflated price.” And he argues against the claim that vouchers will take money from public schools. The program was designed to take money out of the general budget, not the school budget. He says that there’s a lot of misinformation. As for the comment that Utah voters were idiots to vote down vouchers? “I’ll never apologize,” he says. The whole thing ticks him off.
When i arrive for my last interview with Byrne, I push open the door to his apartment. It’s been left slightly ajar. I walk to the kitchen counter and stand awkwardly. No Byrne.
After a moment, he emerges from behind the wall to his bedroom. He’s wearing a rumpled beige sweat suit. He apologizes, says he’s been working at the computer all day. This is clearly a Byrne that has temporarily set aside both fists and charm as if taking off a mask. I think of a brief aside he made when explaining his bachelorhood, the fact that his relationships are both extremely private, and few and far between. He’d called himself a “high-functioning shut-in … an autistic.” And whether Byrne meant this literally or metaphorically doesn’t matter. It’s clear that there’s a split between his public and private selves that borders on the painful. Byrne still wrestles with these parts of himself: the charmer and the autistic, the hot-blooded Irish and the Taoist/Catholic.
He sits back on the couch, rests his legs lightly on the table in front of him. “When I dream of my fantasy life,” he says, “it’s living in a cabin in the middle of the woods. And I mean it—as far from everybody as possible. I just want solitude and I want my books … It’s difficult. I don’t at all groove on being in the public eye.”
He tells me that he just wants to finish one thing in education and then he’ll fade away, maybe move to a ranch in Canada or Montana where he can be alone and where, he tells me, he can see them coming from a mile off. He tells me a story: Years ago, he and three friends had a joke. There’s a starlet on a casting couch who wins a role in a B-grade movie. Each take consists of the other actor dumping a bucket of water on her head and slapping her in the face with a fish. After about 40 takes, the starlet finally jumps up and yells, “Wait! Wait! Just tell me, who do I have to sleep with to get out of this movie?”
Byrne smiles. The Taoist and the Irish in him love this joke. He says that until it’s time to exit the movie, he’ll stand inside the tornado. He’ll be a hotheaded, imperfect monk, and he’ll fight Wall Street with heavyweight gloves, feinting quickly left and right. He’s good with his hands. He’s not scared of the fish. And the man knows how to land a solid punch.
As I descend the elevator and get into my small car, I’m suddenly overwhelmed with the immense presence that Byrne leaves in his wake. He’s either loved or hated; deified or cut to shreds with well-positioned shrapnel. I wanted to know why. What I found was a man whose personal narrative seemed less interestingto him than it did to the rest of the world. He was neither oblique nor inflamed with ego. And I found myself rooting for the steeliness of his resolve, his inability to be moved from a target that he’s latched onto, his lack of apology. Delving into his uncertain depths—the autistic ruminator and the shut-in—seems to miss the point. The man’s no wing nut. And the feeling that I’m left with is similar to that of watch-ing Ali in the ring with Foreman in Kinshasa. Ali hung on the ropes taking round after round of Foreman’sblows, egging him on until Foreman exhaustedhimself. This is when Ali moved in, his arm more than an arm, his punch more than a punch. Ali was pulling from something greater than just Ali. And Foreman went down.
Melissa Bond is associate editor and poetry editor for the Wasatch Journal. She is the 2002 recipient of the Mayor’s Artist Award for the Literary Arts and was named the Best Poet in Motion by Salt Lake City Weekly in 2006. Her book of poetry, Hush, was published in 2006. She lives in Salt Lake City.
