King Kinder

Rich Kinder has made a cool billion dollars since leaving Enron. Now he’s ready to take over the world, or at least the nearest pipeline.

Rich Kinder didn't wear a tie. And he wasn't in a hurry. There was no reason to be. He was on top of the world.

The analyst conference had gone perfectly. The main ballroom of the Four Seasons Hotel had been filled with money managers, hedge fund whizzes, equity analysts and other high-strung overachievers. Kinder, Park Shaper and other honchos from energy giant Kinder Morgan had methodically plowed through every facet of the company's numbers and operations. By 3 p.m., the presentations were over and the room began to empty as analysts from across the country headed for the airport.

Kinder, dressed in black slacks, black-and-white-checked blazer, black tassel loafers and a starched blue button-down shirt, was still hanging around, talking to the last few money men. Kinder had plenty of reasons to answer their questions. His three New York Stock Exchange-listed entities are the hottest stocks in Houston -- or anywhere else, for that matter. In a roller-coaster market that's battered nearly every company, investors have found islands of stability -- and real profits -- in his Kinder Morgan Inc., Kinder Morgan Energy Partners and Kinder Morgan Management. Between the market swoon of late October and the analyst meeting in late January, the three companies had appreciated in value from 13 to 27 percent.

Kinder's new companies deal in solid assets: tanks, wharves and pipelines.
Robert Bryce
Kinder's new companies deal in solid assets: tanks, wharves and pipelines.
Kinder has put aside his penny-pinching ways for a new River Oaks mansion.
Robert Bryce
Kinder has put aside his penny-pinching ways for a new River Oaks mansion.

He was fully confident that they could keep growing at a 15 percent clip for the next several years. Kinder wasn't smug about it. He was confident. That attitude was reflected on the spiral-bound, 200-page Kinder Morgan notebook that each analyst received. On the cover was written: "Same Old Boring Stuff: Real Assets, Real Earnings, Real Cash, January 2003."

The time and locale of the analyst meeting had more than passing significance. Almost exactly two years earlier, Jeff Skilling, Kinder's successor as president and chief operating officer at Enron, had stood in that same ballroom talking in just the same way with the Wall Street money guys.

At that now infamous gathering, Skilling, with company chairman Ken Lay at his side, had exhorted analysts with his contention that they should value Enron at precisely $126 per share -- far above the $82 or so the stock was then fetching. The session marked the acme of Skilling's ego trip as well as the beginning of the end for Enron. Seven months later, Skilling suddenly and inexplicably quit the company. Four months after that, in December 2001, Enron filed for what was then the biggest U.S. bankruptcy ever ($63.4 billion).

Today, Enron is a smoldering ruin. Skilling and Lay await subpoenas and possibly indictments. Meanwhile, no one has emerged from the Enron wreckage looking smarter than Rich Kinder.

Lots of oilmen in Houston have built empires in a big hurry, making tens or hundreds of millions in a decade or two. Kinder has outdone all of them. In just six years, he's built three companies with a total market capitalization -- the value of all of their stock -- of $13.5 billion. And those companies are critically important links in the American economy. Kinder Morgan's facilities carry about 15 percent of the natural gas and gasoline used in America every day.

Since early 1997, Kinder has parlayed his $30 million retirement package from Enron into a $1.2 billion fortune. He's done it under the noses of the smartest energy people in the world and he's done it with an easily understood business model and a hard-assets-are-the-only-way approach. Plus, he's done it quietly, without a whiff of impropriety, self-dealing, executive excess or dot-com shenanigans.

Throughout the '90s Ken Lay was the undisputed king of Houston's Energy Alley. Rich Kinder now wears that crown. And, at age 58, he has vaulted to the throne more quickly than perhaps any other man in Houston's history. Throw in his friendship with the Bushes (both 41 and 43) and his plans to give away his vast fortune, and Kinder is, without a doubt, the man of the moment in Houston.

Richard Dan Kinder was attending the University of Missouri when he met two other students who would play critical roles in his life: Ken Lay, his future boss at Enron, and Bill Morgan, who would become his partner at Kinder Morgan.

Kinder was born and raised in Cape Girardeau, a Missouri hamlet on the banks of the Mississippi that has gained fame as the hometown of conservative bloviator Rush Limbaugh. Kinder's father was a life insurance salesman, his mother an English teacher. His brother is now a surgeon in their hometown.

At the University of Missouri, Kinder was president of his Sigma Nu fraternity during his senior year. Richard Brownlee, a frat brother a couple of years younger than Kinder, remembers him as a "brilliant, brilliant guy." "He was a serious student at a time when a lot of us were just listening to the Beatles." He recalls that Kinder dated an equally mature sorority girl named Anne Lamkin. "They were adults when a lot of us weren't."

Kinder was remarkable for another reason: He didn't own a pair of blue jeans. "Back then, we wore jeans and Weejuns all the time," recalls Brownlee, "and he had slacks on all the time."

When Kinder finished law school in 1968, the Vietnam War was raging. So he entered the JAG Corps as a lawyer for the U.S. military. After a four-year hitch, he went into private practice. But in 1980, former classmate Morgan told him about a job opening for a lawyer at Florida Gas, a pipeline company based in Winter Park, Florida. So Kinder moved to Florida, where he was reunited with Morgan.

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