'Eccentric Billionaire' spotlights John D. MacArthur's dark side

ByLinda Castellitto, Special for USA TODAY

— -- Devotees of PBS are familiar with John D. MacArthur's name because of The John D. and Catherine T. MacArthur Foundation, which has long provided fianancial support for many public television productions.

Also, every year, about 25 standouts — architects, writers, economists and other luminaries in the arts and sciences — are named MacArthur Fellows. Each "genius grant" recipient is awarded a $500,000 grant, dispensed in quarterly installments over five years.

The foundation also donates to groups and individuals that work toward peace, justice and equality.

It's reasonable to think, then, that the foundation is the perfect legacy for two generous, open-minded people dedicated to improving the human condition.

That might be the case for Catherine. However, according to Nancy Kriplen's The Eccentric Billionaire: John D. MacArthur — Empire Builder, Reluctant Philanthropist, Relentless Adversary, the same can't be said for John.

Upon his death in 1978 at age 81, MacArthur was the third-wealthiest man in the USA. He had also alienated nearly his entire family and countless business associates. But, Kriplen writes, MacArthur was a creative and clever businessman; his gift for salesmanship may have been inherited from his father, William, a traveling salesman who became a celebrity preacher.

At age 23, after serving in the U.S. Navy and Canada's Royal Flying Corps, John MacArthur was working for brother Alfred at National Life Insurance, where he demonstrated "undeniable talent in the insurance business." He also developed an interest in Alfred's 18-year-old secretary, Catherine T. Hyland, despite being married to Louise, mother of his two children.

Nearly a decade later, he and Catherine left National Life to work for State Life Insurance. They later founded Marquette Life Insurance, which they kept afloat even during the Great Depression and the difficult years afterward.

Surviving the Depression, Kriplen writes, was likely due to John MacArthur's penchant for scamming customers, vendors and investigators. He routinely discarded claims ("Heck, if someone really had a claim, he figured he would hear from him again") and misaddressed checks to keep money in the company coffers a bit longer.

His questionable ethics persisted as he and Catherine continued to acquire insurance companies and increase the MacArthur wealth.

Bankers Life garnered positive press in the late 1940s for employing 650 older and handicapped workers. Of course, Kriplen writes, "With John … there was often more to any action than what appeared on the surface."

The twist to this story of diversity in hiring? "(The) basement ceilings were unusually low. … Bankers was still able to make this usable space, however, by hiring dwarfs as custodians."

Tired of John's dubious practices and penchant for groping female employees, Kriplen writes, Catherine left him in 1948. Perhaps, Kriplen muses, it was due to his attempt to seize ownership of Catherine's stock in Bankers Life — or the revelation that their marriage wasn't legal.

After legal and financial maneuvering, Catherine's stock and relationship with John remained intact. The two moved to Florida in the 1950s when John began investing in real estate; he eventually built an empire that spawned the town of Palm Beach Gardens, among other lucrative endeavors.

It was in Florida that the MacArthur Foundation was established: In 1970, 73-year-old John realized his will "was a disaster from a tax and estate planning perspective. … The federal government would take most of it in taxes."

John took the advice of attorney Bill Kirby and formed a charitable foundation to preserve his fortune. According to Kirby, John said, "I'm going to do what I do best; I'm going to make (money). You guys will have to figure out after I am dead what to do with it."

It's disheartening to learn a foundation that awards $260 million a year (and has more than $6 billion in assets) was established to avoid estate taxes. What's more, the book reveals a man who in many ways embodies the American Dream but whose eccentricities sometimes morphed into cruelty.

MacArthur's life is a story worth telling, and there's plenty of family detail, from his seven siblings to sister-in-law and actress Helen Hayes, to son Rod, who founded the Bradford Exchange, the direct-marketing leader of collectibles. The book delves into MacArthur's business practices but may not dig deep enough for those curious about the nitty-gritty of how he negotiated company sales or brokered specific real estate deals.

The Eccentric Billionaire tells the tale of a contradictory and mysterious man who amassed great wealth over several decades but is far from well-known, who founded an influential and generous foundation about which he cared not a bit. Perhaps it's fitting, then, that his biography can get only so specific: Those who knew him likely didn't completely understand him, either.

Linda Castellitto is a freelance writer based in Raleigh, N.C.

ABC News Live

ABC News Live

24/7 coverage of breaking news and live events