Mr. Big

Ron Watt lived large. He flamed out the same way.

Ron Watt
The sound of the Hermit Club piano was melancholy, its notes shimmering above the drinks like summer rain. Nearly 50 men, mostly middle-aged, crowded the bar to listen. They were touched by the moment and the melodies, played by a man in financial ruin and destined for federal prison.

Most, in some way, had marveled at Ron Watt, the piano player, for he radiated an air of success, charm, talent, generosity, and above all a positive confidence that attracted friends and clients. Now, as his melancholy rippled across the keys, it was more than just the blues in the night that made them pause.

Watt was the perfect man for this hospitable setting. The Hermit Club is a timbered structure with a medieval air, hidden in an alley near Playhouse Square. Founded a century ago, it was a haven for businessmen who enjoy music, the stage, and grog. While not the most elite of the city's old clubs, it may be the only one to retain the spirit in which it was founded. On its walls hang posters promoting theatrical performances, and in the bar members still roll dice for drinks.

On this night the club, its priorities in order, was honoring Watt with a benefit to help defray his bar bill and back dues, which were nearly $4,000.

"Remember when we were young and everything was out there for us to take?" asked insurance executive Robert Grevey, his elbow resting on the bar. "Look what life brings. Can you believe that Ron is going to jail?"

A younger man overheard the remark. "Did things like this happen to people, say, 25 years ago?" he asked, as if fraud had just checked in with the 21st century.

A feeling of disbelief permeated the gathering, making it difficult for those present to accept that one of their most celebrated members would be joining a new club: the federal prison in Morgantown, West Virginia.

There was a time when Watt, 62, was an admired figure in Cleveland. If you needed public relations, there was no better place to deposit an advance than at Watt, Roop & Company.

His congeniality, flamboyance, and eagerness to pick up the check made him strikingly different from others who practiced the staid art of public relations. Watt and his partner, James J. Roop, were a colorful team in a business largely staffed by the conservative and conventional, who echoed their client's wishes and tracked billable hours with clocklike precision. In those early days, Watt, Roop appeared destined for fame, fortune, and above all fun.

Everyone wanted Watt at their side. His list of clients ran from FedEx to the Cleveland Browns. He served on 15 boards, including those of the Red Cross and the Tri-C Jazz Festival. He was the national chairman of the Public Relations Society of America Counselors Academy, as well as chairman of its ethics and standards committee.

Watt's unconventional approach attracted talent, clients, and fees. He bought lunch, lent money to parking-lot attendants, played the piano wherever and whenever, and never seemed out of sorts with the world.

"In the beginning, Ron was as good as you get in this business," Roop would say years later. "He cared about the firm, its people. And then something happened."

Beneath the gaiety and glamour, there was something troubling about Watt. Those closest to him sensed that he was distracted, bored, and plagued by a work ethic that abhorred the ordinary.

Chief among those concerned was Roop. He'd come from Chicago to Cleveland in 1981 to join Watt at a public-relations firm then called Hesselbart & Mitten/Watt, an emerging venture headed by a dapper advertising man, Robert Mitten.

Watt, with his boundless creativity, and Roop, with his restrained bottom-line squint, seemed a formidable fit. From afar, they appeared to be a pair of merry men, earnest in their pursuit of both commerce and cocktails.

But privately, Watt felt that Cleveland was a drawback -- a place where it took too long to be recognized, to become "someone." By the time you were anybody, he believed, you were 65; the elderly business titans were holding the young Turks back. He was a Slovenian kid from Collinwood and Euclid, trying to buck Cleveland's caste system.

He grew up in the 1950s in neighborhoods that instilled the lasting ambitions and insecurities of immigrants. They had endured the Depression and World War II, and they were accustomed to long, hard hours of work, much of it mindless, with few breaks. Watt was among that first generation from ethnic families to attend college.

Perhaps it was the ceaseless toil around him that gave rise to his contempt for the routine of work. Some believe that Watt held labor in little esteem -- an attitude that would play into his downfall.

Watt and Roop bought out Mitten in 1986 for $1 million. They set out to blaze a path through the bland public-relations cosmos of Cleveland, bringing in such large clients as Mednet, University Hospitals, and Invacare. The firm itself was a fun place to be, with few protocols and a camaraderie that extended into the night.

Those first few years, the firm did so well that Watt would refer to a million dollars as "chump change." He believed he had a gift for accumulating money.

The nuts and bolts of agency life -- time sheets, billing, the minute details of client relations -- were left to the sometimes brusque Roop. But as time went by, Roop became increasingly concerned over Watt's leadership.

Bored with public relations and Cleveland, and suffering from a wandering attention span, Watt decided to start a side business, one that would propel him to the status he felt entitled to and enable him to achieve the twin goals of fame and fortune. He traveled to New York to become an agent for major jazz musicians. After all, he knew jazz and public relations, and believed he had the charm and wit to move in those circles. There was also an expensive fling with a sports-marketing venture.

Roop did not like these ideas. Part of Watt's mystique involved expense accounts that could support a small suburb. He was well known at the Pierre in New York, the Drake in Chicago, and the Hotel Bellaire in Los Angeles. His generous tips ensured that the next time he arrived, he'd be welcomed. And he loved it.

But the jazz business fizzled. By his own admission, he spent over $350,000 in travel and entertainment expenses. The sports venture also struggled. Meanwhile, Roop tried his best to explain to the agency staff that these costly efforts were made as investments in their futures.

But Watt seemed to be getting increasingly out of control. One day, in an act of defiance, he resigned from every board on which he served, in essence giving up his quest down the yellow-brick road of the city's civic life. He and Roop were on their way to the clash that would end their relationship, which had once shown such great promise.

Watt hired a New York consultant to evaluate the future of Watt, Roop & Company. Not surprisingly, the consultant found that the future had no place for Roop.

In many ways, it was a friendly parting. Watt, always generous, saw to it that Roop left the firm with some lucrative accounts and more than $600,000 in cash. Some believe that Roop was overpaid, that Watt was simply trying to inflate the value of his own share of the company.

After all, Watt didn't pay for the buyout. That was covered by two aspiring young executives, Michael Zimmerman and Mark Willis, who took out substantial bank loans to purchase tickets into what would become a theater of the absurd.

At first the new partnership at Watt, Roop flourished. Zimmerman took over the operations side, and Willis managed big accounts like FedEx. Watt continued to look for ways to build the firm, adding advertising components and looking for other businesses that might spark his enthusiasm.

Despite the income from new clients, however, Watt continually borrowed from banks to keep the firm going. The company was woefully overstaffed, the search for new business never consistent, and the work ethic waned, as unsteady as a flag that flaps with every passing gust. According to one former staffer, Watt's monthly expense account ran as high as $25,000.

But he never missed a payroll and often paid it from his personal line of credit. His record for meeting his obligations was good, so he would pay off one loan with a new one from another bank.

Outwardly, Watt exuded success. He wore tailored clothes, his Rolex visible beneath shirtsleeves neatly punctuated with cuff links, and his smile was a beacon. He was positive about everything, even when things were awful. Whether he liked the business or not, he was superb at public relations -- especially when it came to his own interests.

When Zimmerman became alarmed about finances, Watt dismissed his fears, promising another big account just around the corner. He would rather borrow more money himself than cut staff. It was a performance that earned him the sobriquet "Mr. Big."

Mr. Big had some big moments. New clients would show up, just as Al Lerner did when he bought the new Browns franchise in 1998. He was billed more than $250,000 for a few weeks of work. Even Lerner, no slouch with a dollar, blinked at the figure.

This was Watt's idea of a coup, a three-pointer with the game on the line. It was his basketball analogy, and he was the intrepid long-range gunner. Unfortunately, the percentages from that range are never high.

Fleishman-Hillard was the hottest public-relations firm in America -- if not the world -- when it came knocking on Watt's door in 1998. The St. Louis firm's beginnings were similar to those of Watt, Roop, but it had blossomed into a publicly held company with offices worldwide.

For the first acquisition it would make as a publicly traded company, F-H was eyeing Cleveland businesses. Although his desperation was not obvious to outsiders, Watt was looking for a way to save his firm. A buyout by F-H would not only accomplish that, but add the kind of imprimatur that Watt relished. There was something exciting about being able to tell the town that the world's largest PR firm had come courting.

Negotiations were lengthy. Watt was playing for a big payoff, but the more closely F-H looked at the books, the less it was inclined to offer. Some involved say that F-H failed in its due diligence, succumbing to Watt's charm and expansive talk. The deal was consummated with a casual audit.

Watt, Roop appeared financially marginal at best, but it wasn't until after the sale had closed and another audit was performed that F-H discovered its acquisition was $500,000 in the red.

Watt says that F-H paid nearly $700,000 for his company -- not even enough for Zimmerman and Willis to pay off their loans. At the time, Watt personally owed $1.2 million in bank loans. Much of the money, he says, went to keeping the firm alive until F-H could take it over.

In addition to the cash, F-H offered Watt a bonus plan that over time could yield as much as $6 million, he says. He received a $250,000 salary, two cars, and memberships in five clubs.

To a close observer at the time [disclosure: The writer of this story was an employee during the transition], the joining of F-H and Watt had all the makings of a train wreck taking place in slow motion.

The clash of cultures was evident from the outset. F-H believed in working through lunch, with a tuna-fish sandwich at the desk. Lunch for Watt consisted of drinks and wine at the club.

F-H executives were young, ambitious, and dressed in off-the-rack St. Louis. Watt wore a beret, silk pocket squares, and tailored suits -- one, woven in Italy, sported pinstripes formed by the tiny words "Watt, Roop." He was the three-point shooter who would fire and forget.

The Watt, Roop staff found itself in an environment that was foreign, both in corporate manners and competitive spirit. F-H people fought over accounts like wolverines. Their billable hour was nearly biblical, their discussion of earnings interminable, and their fees were unbelievable for Cleveland. And there was no real focus on becoming part of the city, which was Watt's strength.

Much of the Watt staff didn't meld with the new order -- especially Watt himself, who was becoming more disdainful of F-H with each passing week. And F-H was clearly unhappy with the performance of its new office, though in 2000 the local firm had its best financial year ever.

One former F-H executive said there was lasting rancor in St. Louis over the deal and what were believed to be Watt's misrepresentations. Watt, in turn, maintained that F-H had misread the financials and that the Cleveland branch was forced to jettison accounts that conflicted with F-H business.

Watt was told to cut staff by 10 percent, starting with senior employees. He refused, arguing that older staffers knew the town. The rift between Cleveland and St. Louis grew.

In meetings, F-H executives spoke of the bottom line. Watt responded with dreams and schemes. Clearly bored, he spent his time writing several self-published novels that he promoted and sold to friends.

St. Louis sent Watt two wake-up calls. In 2001, they cut his salary by some $40,000. In a symbol of defiance, he bought a Mercedes and contemptuously displayed it before F-H officials.

The next year, Watt was told that he would not receive his bonuses. This was very bad news. By February 2002, he was spending between $10,000 and $12,000 a month, servicing his bank debt.

F-H also fired Watt's longtime colleague and partner, Mike Zimmerman. Six months later, Watt and F-H agreed to part. He received a $250,000 severance.

If Fleishman-Hillard has a different story to tell, it's not talking. Douglas Bell, general manager of the Cleveland office, says that the company doesn't comment on internal matters. He does say that the local office is thriving.

Zimmerman promptly started his own public-relations firm, and it grew to 16 employees. But Watt seemed lost.

Deep in debt and with his steady income running out, Watt tried not to panic. He had always lived by his wits, and the banks had always believed him. He thought he could get a second mortgage on his house, a line of credit . . . He'd buy some time and get another business together.

But he was able to pay only the interest on his loans. By 2003, it all became a blur as he plummeted through free fall.

By late 2004, there was no way to ignore the crash that lay ahead.

The banks -- National City, First Merit, U.S. Bank, and Huntington -- were growing concerned about Watt's outstanding balances. They had been told that the loans were supported by Watt's financial position in F-H. But he had none.

Huntington triggered the final, frenzied collapse. Watt had been paying $800 in monthly interest on a $150,000 loan. The bank wanted to up that amount to $5,400 a month, a sum he couldn't deliver.

During the negotiations with Fleishman-Hillard, Davis & Gilbert, a New York law firm, had represented the St. Louis company. In his files, Watt had copies of letters from one of the firm's lawyers, Brad Schwartzberg.

In a desperate move, Watt duplicated the letterhead and forged a letter from Schwartzberg, stating that the law firm confirmed that Watt held $10 million in stock in Omnicom, F-H's parent company. He then had a friend in New York fax the letter to Huntington.

The next day, a Huntington official called Watt with the sobering news: The bank had spoken with Schwartzberg. It knew that the lawyer had never sent the letter and that there was no such stock.

The banker asked Watt and his wife, Simona, to come to his office the following day to put up their Lakewood home as collateral.

Watt's house of cards, which had teetered so long, finally buckled. His nerve collapsed with it.

The next morning Watt took a small bag of clothes, $1,800, his passport, and his many credit cards and left his downtown office at 10:15 a.m. Getting on the Shoreway at East Ninth Street, he shut off his cell phone and abandoned his past.

He felt exhilarated as he drove to Toronto, free from the mounting stress that had settled over him. True to style, he checked into the Four Seasons, forgetting that a broke man can no longer live so large. Upon learning that the room rate was $600 a day, he moved to a nearby Howard Johnson's.

His first thought was to fly to Amsterdam, but the Toronto cold turned his thoughts to someplace warm, someplace intriguing -- someplace like Cuba. It took a week to get a flight. He spent much of that time in the Four Seasons bar, chatting with a bartender who had not missed a day of work in 53 years -- a feat Watt found remarkable.

Back in Cleveland, Watt's disappearance was in the news, and his wife, son, and three daughters were frantic. He had shut off his cell phone, which was full of messages. By the time the family traced him to Toronto, he was gone.

Watt was the only American on the flight to Varadero, about 100 miles from Havana on the white sands of the Cuban Riviera, a place favored by Al Capone in the 1920s. He checked into the Arenas Blancas resort and thought about disappearing and playing piano in Panama, getting a job aboard the yacht of a wealthy businessman, or perhaps writing for The New Yorker.

He sipped rum, smoked cigars, and hung out with a Canadian carpenter, an actress from Sweden, and a 300-pound man who looked like Robert De Niro.

There were surreal moments in Cuba. He dreamed that the late Cleveland jazz great Hank Geer came to him in the night and told him not to worry. The next morning, as he watched a lone bird perched on a nearby table, it seemed to stare at him. He was certain that the bird was Geer reincarnated.

Pink telephone slips in Spanish began to accumulate under his hotel-room door -- friends had traced him. A message from a man he thought was once connected to the CIA assured him that help was nearby, if he needed it.

Finally, there was a message from Simona, begging that he simply let her know whether he was well. The message brought him to his senses. He called her from a roadside phone, promising to return in a few days.

He flew to Toronto and drove through a blinding snowstorm, arriving home at 5:45 p.m. on Christmas Eve to what he would later call the best Christmas of his life. But the worst of times was still ahead.

Almost everything he owned was lost. He was carrying $150,000 in credit-card debt alone. Friends and lawyers advised him that bankruptcy was the only way out.

Still, he thought he could endure. His luck and personality had worked for him in the past. His friends had been supportive.

Then, on a May afternoon last year, in an alley bar off West Sixth Street, he realized the seriousness of his situation. Two young men approached, flashed credentials, and said they were from the FBI.

At first, Watt thought it was a joke. Two guys -- one Brian, the other Bryan -- saying they were from the FBI? Funny. But when reality dawned, there were no laughs.

They asked him about the bank and the fake letter. They told him to get a criminal lawyer. Any thought of reconstituting his life disappeared with the encounter.

"I'm saying to myself, how could I have created this mess?" he would later say. "I was immature, I got bored easily, I lost sight of the basic business, I needed a challenge. How could I have done this?"

He had defrauded banks of $1.5 million.

There wasn't much to do but arrange the best plea he could get: three and a half years. In court, the prosecutor pointed to Watt's Rolex and called him a victim of his lifestyle -- a remark that touched a nerve.

With a few days of freedom left, Watt sat at the bar at Swingos on the Lake. Well-wishers gathered and bought a round.

He spoke of his life and troubles, saying that he felt like a spectator to the events of the past few years. The only thing that angered him was the suggestion that his lifestyle had led to his fall. "I don't feel bad for myself," he said. "I regret what I did to my family. This is not how it was supposed to be. But I'll be back. This will be a learning experience. I've always made the best of things."

He paused, looking out over a cold and desolate Lake Erie. "You know, I had a premonition a long time ago that something like this would happen," he said. "That I would blow it all."

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