The Rise of the Roman Empire
Stephen Roman commands even as he sits uncomfortably on a shapely divan. The head of the Roman empire, as some wryly refer to him, would probably be more comfortable at the head of a column of soldiers, issuing orders with staccato insistence. But even here in his office—on the financially rarefied 39th floor of Toronto’s Royal Bank Plaza—the troops revolve around him with pin-perfect precision. His
self-confidence is palpable, like the smell of carefully cut flowers kept forever fresh in the office. The self-confidence doesn’t come from simply having wealth—over $ 100-million worth. Or even from being the head of Denison Mines Ltd., party to the biggest uranium sale in history. It’s something entirely personal. It leaves one overawed office worker wailing privately: “Sometimes I think even the flowers are bugged.”
It’s a power, blunt and rude, that steamrolls over the niceties of employees, politicians and fellow capitalists alike, just as his short, compact frame steamrolls over the lush carpet, past the curved spindly legs of expensive furniture. “I am a builder,” says Roman to explain his strength. “Between a builder and a person satisfied with temporal values, there is a great difference.”
Roman is not unaware that out there, beyond the rose-colored window, he is seen as a 19th century robber baron, a vociferous champion of corporate profits. The ¡cries of “ripoff’ that accompanied the Denison sale this year of 126 million pounds of uranium to Ontario Hydro, for $4.7 billion (part of a larger, $7.3-billion deal), were almost expected.
True, he stands to make a minimum profit of $630 million in the 30-year contract. But, he asks, would anybody believe him if he said he really wasn’t out to make money? Most people would just say he was crazy. So why should he bare his soul, talk about the true goal in his life? As a devout Catholic he already has a confessor, he says, a bishop, in fact, whom he has seen regularly for the past 14 years. But even Stephen Roman, who is always expecting to be knifed, who can be as insensitive as a bull munching on daisies.
wants to be understood sometimes.
So this time he talks. About the fact that intuition, pure and simple, guided his classic rags-to-rich es career. About his psychic vision. Once, he saw in detail the death of his nephew even though he was thousands of miles away. About his responsibilities to Mankind (he always says it with a capital M) that fill him with inner “should-dos.” Like building a church north of Toronto,
like spending over $750,000 to test a new respiratory disease treatment, like opening his coffers to test a controversial “cancer cure”—called Essiac—held secret by an Ontario nurse for over 50 years. He does all of this because he knows that “unless you grow spiritually with the situation, the monster leaves you behind.”
Somehow it’s not surprising to discover later on that astrologer and psychic Jeane Dixon, who met Roman at a White House dinner 10 years ago through mutual friend Richard Nixon, told a television audience
Roman was a “man of destiny.” “He has been touched by God,” she said. “Through his auspices we will have a breakthrough on cancer in 1981 ” Quite simply, what Roman wants people to know is that no matter how he is perceived, he is a spiritual man. His bottom line is faith. He just believes—in himself, Denison Mines, Roman Catholicism, capitalism and the emancipation of Slovakia, the country of his birth.
“Everybody is put on this earth to perfect a divine plan,” he says. “Mine is to save my soul.”
It certainly took faith at 16 years of age for Roman to leave his mother behind in Slovakia and emigrate to Canada with an elder brother. He was a young agricultural student but he worked his way as a farm hand, then a munitions-plant worker, playing the stock market, winning some and losing some. It took faith to continue speculating after selling out some gold claims for $15,000, only to find out later he could have had $500,000. As with most discoveries, it was partly luck that landed him with the right stake at Elliot Lake, north of Lake Superior—it happened to end up being one of the largest uranium deposits in the world. But it took the kind of hard-nosed manoeuvring Roman is famous for to put together the $59 million needed to build Denison Mines.
Even so, Roman’s self-faith is not universally shared. Not by the public—he calls them the “mob”—who twice defeated him when he ran as a Conservative federal candidate, at a total cost of $200,000. Not by the politicians—he calls them “creations of the mob”— who have been his natural
enemies. Certainly not by the inhabitants of Bay Street. They simply distrust him. He is not the typical success. They still smell the whiff of the young mining promoter about him. There are the vaguest hints that he must have done something “crooked” to have made so much money so fast. His public defence of right-wing-free-enterprise-individualism at a time when most of its proponents feel beleaguered and misunderstood leaves them squeamish. Lester B. Pearson once told him he was “50 years behind the apes” because of his êlitist view
on immigration, which in short amounts to: Give newcomers a test run and then throw the riffraff element out. Said one Bay Street analyst: “You’re always wondering when he’s going to hang himself.” One wonders too, had the huge Hydro deal involved a better-liked business leader, whether there would have been such an outcry over the amount of money involved in the contract.
It’s fitting nonetheless that Roman’s fortunes have been interlocked with those of uranium—a controversial figure at the heart of a controversial fuel. Uranium inspires the same sort of love-hate relationship, alternately the savior in a fuel-hungry world or the hidden enemy whose use may exact a huge ecological price. Roman got rich with the first uranium boom in the 1950s when the United States was the major buyer. But a slowdown in the nuclear arms race and a growing alarm about the potential dangers simultaneously dried up
the market and brought the sale of uranium into the political ring. In attempting to keep his mine open, Roman inevitably got entangled in politics, and minor explosions ensued. The first came in 1965 when Pearson, then prime minister, vetoed a $ 1 -billion sale to France—which would have been the largest commercial deal of its kind—because of U.S. pressure to keep France out of the nuclear club, even though Pearson himself had pleaded with Roman to find some way to keep the mining town of Elliot Lake alive. The uranium had to be stockpiled.
The next came in 1970 when Pierre Trudeau blocked the sale of Denison to the foreign-owned Hudson’s Bay Oil and Gas Ltd. To this day Roman fumes that Trudeau completely misunderstood his intention—to effect a complicated trading of shares which would have given him control of the U.S.-based company, which in turn would control Denison. A verbally bloody encounter with Trudeau merely resulted in Roman suing the Prime Minister and his energy minister for $104 million.
He lost that round.
But uranium is golden once more ando
Roman seems to have recovered his Midas touch. Nuclear reactors are taking on a® larger role as a source of energy. And the^ world price of uranium has skyrocketed (from $4 a pound in 1971 to $45 currently), thanks in part to the operation of an international uranium cartel from 1972 to 1975 (which Canada helped to initiate along with South Africa, Australia, and France), but also because of the pressure from the oil crisis. So in 1974, when Ontario Hydro started negotiations with Denison and Rio Algom Ltd. (an affiliate of Preston Mines, the other company in the deal) to secure an adequate supply for its $ 14-billion nuclear reactor program, the undercurrents were strong enough to sweep away the most
carefully planned forecasts. The bill was going to be very steep. Ontario was already irritated that while it possessed most of the uranium in the country, the metal fell under federal jurisdiction for security reasons. The province pushed the federal government to institute a two-price system as with oil, or at least to pressure Denison by restricting export permits. But the feds weren’t buying. Ontario Hydro even studied the possibility of buying out Denison’s uranium assets—setting up a special team which did its work so secretly that it wasn’t discovered until much later. (Recalls one consultant: “They wouldn’t let the papers out of the office. We were locking them up in a safe. We were going around like a bunch of spooks.”) Hydro and the Ontario government ultimately decided against that route, mostly because it was not in line with Conservative philosophy on public
ownership. When Roman found out about the manoeuvrings, he was furious. But ultimately he was the one who fashioned the deal, who decided to take the advice of his good friend, Ontario Premier William (Roman calls him “Billy”) Davis, and give Ontario consumers uranium for slightly less than the world price.
Nonetheless, when Ontario opposition critics finally saw the deal when it was made public at the end of last year, they were appalled, the NDP typically calling for nationalization of Denison. Certainly, in the light of the dramatic increase in the price of uranium, it seemed that the least Hydro could have done was to buy shares
in Denison like any other investor. A nervous Davis referred the contract to a select committee for approval rather than take the flack alone. But after holding 18 meetings and hearing 39 witnesses, the divided committee failed to approve or offer alternatives, even though the committee’s own staff had concluded that any penny below the world price was a saving.
It’s true that Denison has what amounts to a guaranteed annual income for 30 years—a minimum profit of $5 per pound of uranium, plus half the difference of the world price. Denison and Preston both get (from Hydro) $340 million in interest-free loans ($25 million of which goes to Deni-
son, immediately) to expand the operations of the mines. But Hydro can pull out of the deal if the price of uranium bottoms out, the province gets almost $650 million in taxes, and 2,500 jobs will be created in Elliot Lake. And even at the $7.3-billion price tag, uranium is still the cheapest source of energy, amounting to about two cents per day per household. To produce the same amount of energy with Alberta coal would cost $65 billion, or with oil, $67 billion. Said counsel for the committee, Alan Schwartz: “There is nothing that leads me to believe that Roman ripped off the consumers in this case.” Roman himself, measuring the deal against some inner yardstick, stabs a finger in the air and says sternly: “I want to emphasize to you that Ontario Hydro has a good deal.”
Public criticism is just background noise to Stephen Roman. “The critics just don’t exist for me,” he says. But it rankles that despite his successes, or perhaps because of them, the final benediction of being “accepted” has always been denied him. He certainly has the trappings. He has the required 17-room country mansion, a half hour by limousine from Toronto, with its 1,200 acres of prime land, its carefully planted trees, its wall-to-wall marble, its country gentleman’s library with a fireplace that Roman keeps blazing when guests come for dinner. He has the beginnings of a dynastic family—seven children, two of whom work for Denison. He
has the Gulfstream II jet. He has the right hobby—raising prize-winning Holstein Friesians. (One three-year-old made the Guinness Book of Records when it sold for $65,000.) He has been awarded two honorary doctorates of law. His dedication to the church—he has a private mass read in the Greek liturgy every Sunday afternoon in his house—has been recognized by Pope John XXIII who awarded him the order of Knight Commander of St. Gregory the Great. And he was the first and only Canadian lay auditor to the Vatican Ecumenical Council in Rome.
But all that, in the WASP world of Canadian money, makes him seem like an outof-date Renaissance papal prince. After he built one of the most luxurious retreats in Lyford Cay in the Bahamas, two Canadian WASPS managed to keep Roman out of the local club. The club quickly regretted it, but Roman was so stung that it took a number of appeals before he would consent to join. But perhaps the ultimate sign that Roman is still not a full-fledged member of the establishment is that he is not on the board of any chartered bank. “I guess nobody offered it to me,” he says. And then adds impatiently, “Anyway, I don’t have time to be on other people’s boards.”
In the world of buy and sell where emotion and instinct play as important a role as expertise and facts, Roman’s non-establishment status does make a difference. Those analysts and investment counsellors
who have been hooked by Roman’s power and performance—“We’re a small group of us,” says one—form a sort of outsiders’ club. In their estimate, his stock has always been undervalued. A portfolio manager explains why rather bluntly: “If Roman was a Scot, his stock would be selling for much more. It’s as simple as that. Hunkies are not supposed to make much money.” It’s true Roman has kept Denison relatively debt free, but his character is not designed to put nervous investors at ease. He is notoriously autocratic. He runs Denison as if it were a “one-man business,” as one analyst put it, and it very nearly is, since he controls directly or indirectly about one third of the stock. A former director of Roman Corp. (his holding and exploration arm) recalls annual meetings that lasted a bare 12 minutes. At Denison annual meetings, questions would often go unanswered. “All his employees hold him in fearful awe,” said a consultant who worked for him briefly. “That’s no way to live.” He annoys subordinates by making all major decisions alone, usually after a good night’s sleep, and always according to his own inner values. He’s been known to disregard completely the advice he seeks. Once he paid a U.S. consultant $8,000 to work out an election campaign strategy, only to ignore it. The consultant, Hal Evry, remembers Roman’s first words to him: “I’m me and I don’t want to be anyone else.”
It’s shortly after the Hydro deal, and the Toronto offices of Nesbitt Thomson Securities are overflowing with murmuring moneymen (and one woman) from Bay Street. Stephen Roman is doing the unusual—he is actually going to sit through a cold luncheon of potato salad and corned beef and explain himself. In their own intuitive way, the buyers and sellers sense that it may be time to re-evaluate him. After a number of lean years, Denison stock is enjoying a turnaround. After plunging to a low of $18 in 1971 (from a high of $87 in 1967), the stock has slowly advanced to around $67. In fact, Denison is moving to buy more uranium deposits in Saskatchewan, Roman tells the group with some pride, to meet foreign orders. (As it turned out, Denison was later frozen out by a matching bid from the Saskatchewan Mining and Development Corp.). In a neat blue suit, his face always somewhere between a glare and a grin, Roman lives up to expectations. He takes a swipe at the “socialist-minded” government for encroaching on profits. He declares the English parliamentary system the best in the world. He cheers the defeat of the Communists in the French elections (as head of the Slovak World Congress. Roman’s great hope is to see Russian influence out of Slovakia). His answer for the ills of society is to give all workers a participation in profits—an easily understandable motive for working. He has even published a book (called The Re-
sponsible Society, written with economist Eugen Loebl, a former Czechoslovakian government official) which sets out his own grand design. Now, if one can just apply the Judeo-Christian philosophy to economics ...
But one analyst is impatient. He wants to get beyond “all this philosophical stuff.” It’s all very well for the head of a corporation to have a philosophy, but what he wants is something a bit more tangible. Roman is full of assurances. Denison’s ventures into Mediterranean oil explorations and coal in Alberta and B.C. will pay off, he says. And as for the price of uranium, even if new deposits are found, the world price by 1985 will go up to anywhere from $85 to $ 110 per pound. It’s easy to believe the old mining promoter. His faith floods the room. But the question must be asked, and someone asks. If Denison has such terrific potential, why does he think the stock sells at a comparatively low price? The Ontario Hydro study to buy out Denison, after all, had put the value of the stock, for Hydro’s purposes, at $156 a share. Roman gives way to one of his very occasional public outbursts. “I’m not part of the establishment,” he says, fingering an old resentment. “One has to live that down. There are people who don’t like my type of character because I am non-conformist. People say, ‘We don’t know what Roman will do tomorrow.’ They don’t understand my commitment.” Perhaps not, but within a few days of the luncheon, the Bay Street chatter was that Denison is looking more and more interesting, and its stock has been climbing steadily, selling well above $70 a share this month. Maybe it’sjust Roman faith at work again.
Roman flogging the book he co-authored: a design for his version of a ‘better world’