June 8, 2022 • 25 mins
One of the defining trends of the pandemic has been the creation of extreme wealth at the very top. This week on The Pay Check we take a look at the booming fortunes of the world’s growing billionaire class through one man: Larry Ellison. (Net worth, give or take $90 billion.) Ellison co-founded the tech company Oracle but he may be better known for how he spends his money: yachts, mansions, a tennis tournament. In 2012, he bought an entire Hawaiian island, Lanai — home to 3,000 people. For a decade its residents have anxiously watched Ellison slowly kill their small businesses and push up rents from afar. Then, during the pandemic, Ellison moved there. Bloomberg Wealth reporter Sophie Alexander traveled down to the island to see how the billionaire’s presence has accelerated his plans, and how locals whose families have lived there for generations are managing.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:11):
Peter Franklin had been running a successful woodworking business on Lanai, Hawaii,
when Larry Ellison, one of the richest people on the planet,
but nearly the entire island for about three hundred million dollars.
This was back in There are feelings of both angst
and excitement as Lenite residents prepared to welcome new billionaire
owner Larry Ellison. Larry Ellison loves to go shopping for
(00:35):
big things seton bought a Hawaiian island recently. In his
first interview since buying three months ago, Larry Ellison shows
he's as ambitious as he is rich. The news meant
that Peter had a new landlord, and at first things
went relatively well. For one, he had a new spending client.
Ellison's people asked Peter to make some furniture and hired
(00:57):
his shop, Lanai Woodworkers, for one of his first projects
on the island, building a Nobu, you know, the Japanese
restaurant known for its celebrity sightings. Here's Peter remembering one
of the earlier projects he did for Ellison. Mr. Ellison
was starting to spend more time here and the story
was he didn't like rectangular square tables. He didn't like corners,
(01:22):
and so they wanted this massive round table and they're
like so many other jobs. We did it, We got
it done. It was a nice table. Massively. The Nobu
job was finished six months after Ellison bought the island.
Chris Andrews, one of Peter's employees, remembers meeting Ellison for
the first time during its opening in late December of
(01:42):
that year. We're down there for the soft opening. At
one point I had to go to the rest of us,
so I pushed my chair back and bumped into someone.
All I apologize, is so sorry, And I turned around.
Here's a scrubby looking guy. Couldn't he believe use their
flannel shirt head shape? He said, Oh, I'm Ellison And
I said, oh, Mr Ellison, Well we did these walls
(02:04):
were lynn I would workers. We did your hostess stand.
He shakes my hand and says, we're going to do
great work together. January one. We had a distinction of
being the first company that he killed, the first company
he kills, but not the last, and it would be
a slow death. Ellison's management company, Palama Nai, which means
(02:24):
to cherish Lenai, first came to Peter with an ultimatum,
either he could sell his business to Polama or vacate
the building. When Mr Ellison bought the island, they came
to me and said, listen, we owned this building, we
want to use the building. You can work for us,
or you can go do something else. For Peter, the
(02:46):
choice was simple, keep doing what he'd been doing for years.
He sold the business and worked for Ellison for another
six years. Then not of nowhere again, Ellison's company decided
to shut down Lanai Woodworkers entirely. Masamoto called me into
his office and, as a surprise to me, called me
(03:07):
into his office and uh, well, me was closing a woodshop.
Kurt Matsumoto is the president of Ellison's management company. After that,
I asked her if we could buy any the equipment,
and he told me no. He recommended I leave the island,
and I was kind of shattered by that, kind of
made up my mind. Well, I guess I'm not leaving.
(03:28):
The problem for Peter is he might not have a
choice in the matter. Ellison also owns the apartment where
he lives, and there's a stipulation in the billionaires residential
leases that if you work for one of the landlords
companies and are fired. That's grounds to terminate your lease.
In other words, Ellison could kick him out of his
(03:48):
apartment at any time. So you're holding your bronake. It
easily say, well, listen you, you don't work for us anymore.
You have the vacate. And so it goes on an
island owned by a man who's so rich that if
he wanted to, he could afford to buy Lennai three
hundred times over. Jobless claims coming in, I mean really
(04:09):
jumping from the week before, pretty brutal. Three point to
a million records six point six million Americans filed for
unemployment lost week. Indian booking reminable, the worst impacted by
the pandemic. Well, now to the billionaire boom. According to
Bloomberg's supriocht charters are up over three hundred and a
(04:30):
billionaire was created every twenty six hours during this condetic
Larry Ellison loves to go shopping for big things. You
bought a Hawaiian island recently. No one not waiting in
line for a COVID test with the public roads. It
is time for a wealth tax and America welcome back
(04:53):
to the paycheck I'm Rebecca Greenfield. The growth and wealth
inequality around the world in recent decades has been driven
by explosive wealth creation at the very top. Before the pandemic,
billionaire wealth was booming. The top twenty richest people in
the world held as much wealth as half of humanity,
(05:17):
that's almost four billion people. Then during the pandemic that
gap got much wider. Here's a bile Aghmed, a strategist
from ox MAM International. This pandemic, we're witnessing the biggest
increase in billionaire wealth since records began. In fact, billionaire
wealth has increased more during the pandemic than it has
(05:38):
in the fourteen years combined, and a billionaire was created
every twenty six hours a year into the pandemic. It
only took ten billionaires to get all the wealth held
by half of humanity. Wealth isn't inherently bad, and a
lot of people argue that billionaires have benefited society by innovating,
(05:59):
creating jaw new companies, and they were in part incentivized
to do that by the prospect of getting very wealthy.
Many of them also use their money to give back
in ways that better the world, by, for example, funding
research that creates things like vaccines. But money is power,
and increasingly one group of people is accumulating so much
(06:21):
wealth that in some ways, it can bend the world
to its whims at the expense of others. One such
billionaire is Larry Ellison. According to Bloomberg's Billionaires Index, which
tracks billionaire wealth, he's worth around ninety billion dollars depending
on the day. That's nearly double what he had before
(06:42):
the pandemic. Ellison made his money as the co founder
of Oracle, a software company. He's part of a new
generation of scions, wealthier and more powerful due to a
soaring stock market that has primarily benefited American technology giants.
They have an unfathomable amount of wealth to most people,
(07:03):
even probably themselves. Ellison may be best known for how
he spends his money, mansions, yachts, a tennis tournament, and
buying of the island of Lenai, the two Four Seasons
resorts there, around a third of its housing stock, and
practically all the commercial properties. Plenty of wealthy people own
(07:25):
private islands, but Lanai stands out. It's home to around
three thousand people, many whose families have lived there for generations. Overnight,
when he first bought it back in Most of those
people got a new boss, or a new landlord, or both.
Now they have a new neighbor. Like many office workers
(07:47):
stuck in their homes during lockdowns, Ellison relocated to one
of his many properties on Lanai. With the billionaire's attention
focused on the island now more than ever, residents are anxious.
None of them wants to become the next Lanaii woodworkers.
Sophia Alexander, a reporter on Bloomberg's Wealth Team, went to
(08:09):
Hawaii to see how things are playing out. There's a
reason people conjure images of Hawaii's sandy beaches, sunny blue skies,
and rolling green mountains when they think of paradise. Lanai
is no different. Approaching the island on the ferry from
(08:31):
Maui's Lahinah Harbor, It's hills look buttery soft. The Pacific
water that surrounds it is a deep blue, so clear.
In some parts you can see the ocean floor and
a ring of clouds hovering around the islands. Mountain Peak
is called Mount a Lay because it looks like the
island is wearing a lay the Polynesian flower garland. It's
idyllic so it's easy to see why someone would want
(08:54):
to buy a Hawaiian island if they could. We know
that you've made tons of headlines recently ying in island
in Hawaii, Lenna, buying tons of homes. How many homes
do you own right now? Um, well, let's see homes
that I live in? Or why do you buy the
home if you don't live in? Well, for example, I
bought a home in Newport, Rhode Island, which I'm converting
into a nineteenth century European art museum. Larry Ellison didn't
(09:18):
respond to my emails asking to talk to him for
this story, and his management company didn't make any of
its executives available to me. We did find this one
interview he did on CNBC back in two thousand twelve.
Back then, he said he wanted to make Lenai a
sustainable paradise and help local start small businesses. He also
(09:38):
goes on and on about his plans for his own
art museums and his desire as a kid to be
a pilot, which is why he now has his own
planes to fly. But Lenny isn't just a mansion or
a jet. It's a community and one small decision from
Ellison can change everything. It's like a real life version
of SIMS, the World Building video game. Now a decade
(10:02):
has passed and Ellison and his company have changed a lot.
On the Nai Lanai woodworkers closed, so did the family
owned pokey shop and the car rental business and more
recently the cafe down the street. Most day. They were
given no explanation for their demise in and of itself.
When they buy this business or take over this business
(10:24):
doesn't seem much but in totality that that is a
concern from an economic standpoint, and just from the I
think from the perception residents have of what they're doing
on much control they have. Was it a metaphorm looking
at is throwing a crab, you know, part of cold
water and turning on the stole and you know, realize
(10:47):
that they're being boiled to death. That's Bochema, a retired
social worker who grew up on the island and is
one of the most vocal members of the community. We're
in Dole Park, the quasi town square of Nay City,
which got its name from James Dole, who bought the
island in one years ago. Dole decided to turn the
(11:08):
island into the world's largest pineapple plantation. So yeah, I
mean the Pineapple dictated how life went, you know here
in our community. And the old Pineapple, I mean they
basically took care of everything. They ran the barge to
and from Oahu. You kind of ran the clinic, they
ran the hospital. I mean, you know, they ran everything.
(11:31):
So they had a lot of control over what happened
in town. Butch grew up on the island during plantation days,
when everything was regulated by the company. Whistles marched the
start of our work day and whistles marked the a
p m. Curfew. The control over seemingly every aspect of
life and the dependence on the company for family's well
(11:54):
being created what locals still referred to as a plantation mentality.
What's this in the plantation? Is this idea that if
you work for the plantation, you don't speak out against them,
and that holds true no matter what to this day.
That's Solomon pele Halla Halla, a seventh generation Lenian who
goes by Saul. He also grew up during the plantation days.
(12:17):
My parents then, we're both the workers of the pineapple plantation.
My mother was a pineapple picker and my father became
a heavy equipment operator and a truck driver irrigating the
pineapple fields. First all, there was one instance in particular
that crystallized the wealth gap between the Nays residents and
(12:37):
Lenie owners, a divide that's only grown bigger With Ellison.
I took a part time job. In the evening, I
did bartending as our part time, you know, And on
one day a group of people came in to have lunch,
and they are unusual group of people because the women
had Mike strolls on and I was serving their drinks.
(13:00):
So they were ordering martiniz for lunch. And then when
they were getting ready to leave after their lunch, they
were walking out with their martini glasses and as a bartender,
I'd just said I better go and retrieve the glasses.
So I started to walk out of the hotel and
then the manager saw me, and then she stopped me
(13:20):
and she says, where are you going? And said, I'm
going to go and get the martini glasses from those
people that are leaving, And then she's stopped and she says, no,
let them go. And I said, why they're taking our
glasses and she says, these are the board of directors
(13:41):
for the Doll company. Yeah, that helped me to realize
that this plantation was supporting the people that we're having
martini lunches. And so I asked her, I said, so
they're leaving right now, Are they going to go in
into the pineapple fields to thank my mother and my
(14:04):
father for what they do to give them their flaunting wealth?
And she says, I don't think so, And then I
was crushed at that moment. Doll closed its plantation after
(14:34):
its parent company was bought by a billionaire named David Murdoch.
Murdoch is what locals now call a poor billionaire. He
was only worth a couple of billion dollars compared to
Ellison's roughly nine billion dollar fortune. People told me they
remember Murdoch routinely complaining about how much money he was
losing from the island. Ultimately, when he could no longer
(14:56):
afford to keep it running, he sold it to Ellison.
But Murdoch's impact on the island was enormous. He's the
one who built the two hotels and oversaw the transition
from pineapples to tourism. The change wasn't easy, and he
tangled with many of Lenais residents during his reign, often
getting into screaming matches with locals. But unlike Ellison, people
(15:19):
here told me the island's previous owner was at least
willing to talk to them face to face. For me,
that is a relationship, and that is one that allows
us to interact whether we agree or disagree. I've had
that relationship with with Murdoch because when he was wrong,
when he had no idea about it, I wouldn't hesitate
(15:41):
to him, and he would always tell me, you know,
you're a thorn in my side, you know, And I
took that as a compliment. Now with Ellison, it's a
completely different story. Solve remembers approaching the president of Ellison's
company to ask for a meeting with the new owner.
I say, Kurt, I would like to request a meeting
(16:02):
with Ellison in person. Kurt's response to me, and I'll
never forget this, He says, I don't mean to be disrespectful,
but that is not Ellison's style. Those are the exact
words they've been ingrained in me from that very moment.
And my response to Kurt was, first of all, that
(16:26):
is disrespectful, But beyond that, I still have an expectation
that we need to sit down and meet, you know,
and so I make my requests. So I've been waiting
now for ten years to have a conversation, just to
get to meet this person who somehow this mystic and
(16:50):
this mover and shaker in a community of which we
don't get to see you or no, and my requests
have never been acknowledged or responded to. I also to
speak with Kurt Matsumoto, the president of Ellison's management company,
but he didn't respond to my emails. A spokesperson for
Poulama did suggest I talked to Diane Presa, who acts
(17:12):
as a liaison between the company and the community. She
didn't seem to want to talk much about Ellison's plans,
but she was the only person from Ellison's company who
agreed to be interviewed. So I had to ask, do
you feel like you have a broad sense of what
the plans Polama has for the community? Are? You know?
Things change at Puloma all the time. So I hate
(17:34):
to say something and then it doesn't happen, you know,
I guess like long term plans, you know, um I
would say no, while the uncertainty is scary for people
like Saul and Butch, who have lived on l Nay
for decades. There's more at stake for the younger generation
(17:56):
that worries about its future here on the island. Take
Michelle Fuji, a thirty eight year old high school math
teacher who grew up here and is raising her two
kids here. She loves lenai An enthusiastically offered to drive
me around to show me her favorite parts of the island.
Like pretty much everyone else here, her speedometer rarely topped,
(18:17):
and it seems like she waved at every passing car
and person. Let's see if Auntie wants to ride because
she's walking to the rain. Sorry, that's Auntie. You like
when ride it is raining? You sure? Okay, you go
girl with your exercise. Everyone seems to know everyone here.
(18:39):
People refer to their elders as aunties and uncles. I
routinely saw people hugging. A stranger even invited me to
his kid's birthday party on the beach. Ellison is not
part of any of that, and it doesn't go unnoticed.
I think a big difference between Murdoch and Allison is
is just the connection to the community. Like I and
(19:00):
and I maybe it's like, you know how there's like
the five love languages and what is your best like
love language UM, And so maybe Murdoch was like words
of affirmation or service, you know, where he would actually
come out UM or quality time and spend time with
the community members, like people knew him by like first name,
(19:21):
and you know, whenever he would come home, like sure
there's still that plantation boss mentality and everybody bowed down
and you know, praise you. But at the same time,
it's like people knew who he was. When you've seen
his face, you would recognize him and he would greet you.
Ellison is a little bit different. I've never met him.
Without any insight from Ellison, that leaves Michelle to fill
(19:43):
in the blanks about how his company's plans will affect
her life. I don't think that I'm fully Like if
I had to put my money on whether or not
Poulama is solely in it for the best interest of
our community, I would not put my whole fortune on it,
(20:04):
you know what I mean. Since the pandemic started, more
rich people seem to be moving to the island. Michelle
is worried about the community becoming more divided economically. One
of my biggest fears is that the people of this
community will sort of be the ones that would be
caring for the elite rich that can't afford to actually
(20:25):
live here one day, and that's our sole purpose. Like
as an educator, you would think that we would want
our students to graduate and aspire to be more than
just somebody's servant. Michelle and her fiance have three kids
(20:47):
between the two of them and are excited about getting married,
but she says it's getting impossible to find housing, especially
after Ellison moved to the island and the pace of
his construction projects have picked up. All those projects need
people to build them, which means more construction workers living
on the island taking up the already limited housing options.
(21:10):
There's no houses. Really, isn't any homes that we could
affordably rent, you know, Like I think now, if we
were to try and find the house that was being
rented by some local family, we would be paying like
two dollars a month, because that's what construction workers would pay,
or that's what you know, the market would allow for.
(21:33):
To alleviate the housing crunch, Ellison is building more homes
on the island. The plan initially had units for sale,
but something changed and now they're all only for rent.
At first, Michelle was against the project because of the
change and the fact that the units will all be
fully furnished, making it feel like they're for outsiders moving
(21:53):
to the island temporarily. But with her wedding coming up,
she's desperate for options. That where my sway changed, you know,
Like then it's like, okay, well, if we're thinking about
the future as a married couple and we're not able
to live together unless we you know, I don't want
to say sell out because it's not really selling out
(22:13):
because we're not really selling anything, but it definitely changed
my perspective of things versus it just being like, you know,
we gotta think about ways that we're going to merge
our family, and that right now would be a solution.
Younger families like Michelle's have been moving off the island recently.
(22:35):
Michelle said she worries that if she did leave and
gave up her housing and her job, then there'd be
no way for her or her kids to return because
everything is becoming so expensive and there are so few
employment opportunities outside of working for the billionaire around the world.
As the rich get richer and decided to move into
(22:56):
your neighborhood, changing it to fit their tastes. People often
throw around the word gentrification, but on the night it
goes beyond that, because it ultimately comes down to the
tastes of one person who increasingly dictates who and what
is allowed on his island. And in this version of gentrification,
(23:17):
you're not pushed further from the city center. You're pushed
into the ocean, and who knows if you can come back.
When I first started reporting on this season of The Paycheck,
(23:38):
an economist named Gabriel Zuckman told me something that's stuck
with me. He said, if you think about it, extreme
wealth inequality is inefficient. To someone like Larry Ellison, an
extra billion dollars doesn't change his life that much, but
that amount of money for the thousands of people on
(23:59):
the island, it would drastically change their lives. When you
own a hundred billion dollars, it's just useless. It's not
changing their lifestyle. It has no meaning. And whereas an
extrat billion, you know that that could be I don't know,
paid in taxes spent on education and healthcare, on infrastructure
(24:22):
that that is valuable. Next week on the Paycheck. We
had to a place where the government's decisions about how
to manage the pandemic had unintended consequences for women. I mean,
as public had professionals. We must do better. We have
to educate people. We had to educate communities, We had
(24:43):
to educate po data. It will be a mainting if
we can help them to work together with the physicians,
for them to learn more and to be working together.
Thanks for listening to The Paycheck. If you like our show,
please head on over to Apple Podcasts or ever you
listen to podcasts and rate a review and subscribe. This
(25:04):
episode was hosted by me Rebecca Greenfield and reported by
Sophie Alexander. It was edited by Shelley Banjo with help
from Francesca Levi, Janet Paskin Rocksheeta Soluja, and me. We
also had editing help from Daniel Balby, Kristin B. Brown, Gildaa, Carly,
Nicole Flato, Melissa McDonald, and Kai Schultz. This episode was
(25:27):
produced by Gildaa, Carly and sound engineered by Matt kim Our.
Original music is by Leo Sidron. Special thanks to Magnus Hendrickson,
Mckinnonda Keeper, Margaret Sutherland, Stacy Wong, and Aisha Diello. Francesca
Levy is Bloomberg's head of podcasts. See you next week.
Peter Franklin had been running a successful woodworking business on Lanai, Hawaii,
when Larry Ellison, one of the richest people on the planet,
but nearly the entire island for about three hundred million dollars.
This was back in There are feelings of both angst
and excitement as Lenite residents prepared to welcome new billionaire
owner Larry Ellison. Larry Ellison loves to go shopping for
(00:35):
big things seton bought a Hawaiian island recently. In his
first interview since buying three months ago, Larry Ellison shows
he's as ambitious as he is rich. The news meant
that Peter had a new landlord, and at first things
went relatively well. For one, he had a new spending client.
Ellison's people asked Peter to make some furniture and hired
(00:57):
his shop, Lanai Woodworkers, for one of his first projects
on the island, building a Nobu, you know, the Japanese
restaurant known for its celebrity sightings. Here's Peter remembering one
of the earlier projects he did for Ellison. Mr. Ellison
was starting to spend more time here and the story
was he didn't like rectangular square tables. He didn't like corners,
(01:22):
and so they wanted this massive round table and they're
like so many other jobs. We did it, We got
it done. It was a nice table. Massively. The Nobu
job was finished six months after Ellison bought the island.
Chris Andrews, one of Peter's employees, remembers meeting Ellison for
the first time during its opening in late December of
(01:42):
that year. We're down there for the soft opening. At
one point I had to go to the rest of us,
so I pushed my chair back and bumped into someone.
All I apologize, is so sorry, And I turned around.
Here's a scrubby looking guy. Couldn't he believe use their
flannel shirt head shape? He said, Oh, I'm Ellison And
I said, oh, Mr Ellison, Well we did these walls
(02:04):
were lynn I would workers. We did your hostess stand.
He shakes my hand and says, we're going to do
great work together. January one. We had a distinction of
being the first company that he killed, the first company
he kills, but not the last, and it would be
a slow death. Ellison's management company, Palama Nai, which means
(02:24):
to cherish Lenai, first came to Peter with an ultimatum,
either he could sell his business to Polama or vacate
the building. When Mr Ellison bought the island, they came
to me and said, listen, we owned this building, we
want to use the building. You can work for us,
or you can go do something else. For Peter, the
(02:46):
choice was simple, keep doing what he'd been doing for years.
He sold the business and worked for Ellison for another
six years. Then not of nowhere again, Ellison's company decided
to shut down Lanai Woodworkers entirely. Masamoto called me into
his office and, as a surprise to me, called me
(03:07):
into his office and uh, well, me was closing a woodshop.
Kurt Matsumoto is the president of Ellison's management company. After that,
I asked her if we could buy any the equipment,
and he told me no. He recommended I leave the island,
and I was kind of shattered by that, kind of
made up my mind. Well, I guess I'm not leaving.
(03:28):
The problem for Peter is he might not have a
choice in the matter. Ellison also owns the apartment where
he lives, and there's a stipulation in the billionaires residential
leases that if you work for one of the landlords
companies and are fired. That's grounds to terminate your lease.
In other words, Ellison could kick him out of his
(03:48):
apartment at any time. So you're holding your bronake. It
easily say, well, listen you, you don't work for us anymore.
You have the vacate. And so it goes on an
island owned by a man who's so rich that if
he wanted to, he could afford to buy Lennai three
hundred times over. Jobless claims coming in, I mean really
(04:09):
jumping from the week before, pretty brutal. Three point to
a million records six point six million Americans filed for
unemployment lost week. Indian booking reminable, the worst impacted by
the pandemic. Well, now to the billionaire boom. According to
Bloomberg's supriocht charters are up over three hundred and a
(04:30):
billionaire was created every twenty six hours during this condetic
Larry Ellison loves to go shopping for big things. You
bought a Hawaiian island recently. No one not waiting in
line for a COVID test with the public roads. It
is time for a wealth tax and America welcome back
(04:53):
to the paycheck I'm Rebecca Greenfield. The growth and wealth
inequality around the world in recent decades has been driven
by explosive wealth creation at the very top. Before the pandemic,
billionaire wealth was booming. The top twenty richest people in
the world held as much wealth as half of humanity,
(05:17):
that's almost four billion people. Then during the pandemic that
gap got much wider. Here's a bile Aghmed, a strategist
from ox MAM International. This pandemic, we're witnessing the biggest
increase in billionaire wealth since records began. In fact, billionaire
wealth has increased more during the pandemic than it has
(05:38):
in the fourteen years combined, and a billionaire was created
every twenty six hours a year into the pandemic. It
only took ten billionaires to get all the wealth held
by half of humanity. Wealth isn't inherently bad, and a
lot of people argue that billionaires have benefited society by innovating,
(05:59):
creating jaw new companies, and they were in part incentivized
to do that by the prospect of getting very wealthy.
Many of them also use their money to give back
in ways that better the world, by, for example, funding
research that creates things like vaccines. But money is power,
and increasingly one group of people is accumulating so much
(06:21):
wealth that in some ways, it can bend the world
to its whims at the expense of others. One such
billionaire is Larry Ellison. According to Bloomberg's Billionaires Index, which
tracks billionaire wealth, he's worth around ninety billion dollars depending
on the day. That's nearly double what he had before
(06:42):
the pandemic. Ellison made his money as the co founder
of Oracle, a software company. He's part of a new
generation of scions, wealthier and more powerful due to a
soaring stock market that has primarily benefited American technology giants.
They have an unfathomable amount of wealth to most people,
(07:03):
even probably themselves. Ellison may be best known for how
he spends his money, mansions, yachts, a tennis tournament, and
buying of the island of Lenai, the two Four Seasons
resorts there, around a third of its housing stock, and
practically all the commercial properties. Plenty of wealthy people own
(07:25):
private islands, but Lanai stands out. It's home to around
three thousand people, many whose families have lived there for generations. Overnight,
when he first bought it back in Most of those
people got a new boss, or a new landlord, or both.
Now they have a new neighbor. Like many office workers
(07:47):
stuck in their homes during lockdowns, Ellison relocated to one
of his many properties on Lanai. With the billionaire's attention
focused on the island now more than ever, residents are anxious.
None of them wants to become the next Lanaii woodworkers.
Sophia Alexander, a reporter on Bloomberg's Wealth Team, went to
(08:09):
Hawaii to see how things are playing out. There's a
reason people conjure images of Hawaii's sandy beaches, sunny blue skies,
and rolling green mountains when they think of paradise. Lanai
is no different. Approaching the island on the ferry from
(08:31):
Maui's Lahinah Harbor, It's hills look buttery soft. The Pacific
water that surrounds it is a deep blue, so clear.
In some parts you can see the ocean floor and
a ring of clouds hovering around the islands. Mountain Peak
is called Mount a Lay because it looks like the
island is wearing a lay the Polynesian flower garland. It's
idyllic so it's easy to see why someone would want
(08:54):
to buy a Hawaiian island if they could. We know
that you've made tons of headlines recently ying in island
in Hawaii, Lenna, buying tons of homes. How many homes
do you own right now? Um, well, let's see homes
that I live in? Or why do you buy the
home if you don't live in? Well, for example, I
bought a home in Newport, Rhode Island, which I'm converting
into a nineteenth century European art museum. Larry Ellison didn't
(09:18):
respond to my emails asking to talk to him for
this story, and his management company didn't make any of
its executives available to me. We did find this one
interview he did on CNBC back in two thousand twelve.
Back then, he said he wanted to make Lenai a
sustainable paradise and help local start small businesses. He also
(09:38):
goes on and on about his plans for his own
art museums and his desire as a kid to be
a pilot, which is why he now has his own
planes to fly. But Lenny isn't just a mansion or
a jet. It's a community and one small decision from
Ellison can change everything. It's like a real life version
of SIMS, the World Building video game. Now a decade
(10:02):
has passed and Ellison and his company have changed a lot.
On the Nai Lanai woodworkers closed, so did the family
owned pokey shop and the car rental business and more
recently the cafe down the street. Most day. They were
given no explanation for their demise in and of itself.
When they buy this business or take over this business
(10:24):
doesn't seem much but in totality that that is a
concern from an economic standpoint, and just from the I
think from the perception residents have of what they're doing
on much control they have. Was it a metaphorm looking
at is throwing a crab, you know, part of cold
water and turning on the stole and you know, realize
(10:47):
that they're being boiled to death. That's Bochema, a retired
social worker who grew up on the island and is
one of the most vocal members of the community. We're
in Dole Park, the quasi town square of Nay City,
which got its name from James Dole, who bought the
island in one years ago. Dole decided to turn the
(11:08):
island into the world's largest pineapple plantation. So yeah, I
mean the Pineapple dictated how life went, you know here
in our community. And the old Pineapple, I mean they
basically took care of everything. They ran the barge to
and from Oahu. You kind of ran the clinic, they
ran the hospital. I mean, you know, they ran everything.
(11:31):
So they had a lot of control over what happened
in town. Butch grew up on the island during plantation days,
when everything was regulated by the company. Whistles marched the
start of our work day and whistles marked the a
p m. Curfew. The control over seemingly every aspect of
life and the dependence on the company for family's well
(11:54):
being created what locals still referred to as a plantation mentality.
What's this in the plantation? Is this idea that if
you work for the plantation, you don't speak out against them,
and that holds true no matter what to this day.
That's Solomon pele Halla Halla, a seventh generation Lenian who
goes by Saul. He also grew up during the plantation days.
(12:17):
My parents then, we're both the workers of the pineapple plantation.
My mother was a pineapple picker and my father became
a heavy equipment operator and a truck driver irrigating the
pineapple fields. First all, there was one instance in particular
that crystallized the wealth gap between the Nays residents and
(12:37):
Lenie owners, a divide that's only grown bigger With Ellison.
I took a part time job. In the evening, I
did bartending as our part time, you know, And on
one day a group of people came in to have lunch,
and they are unusual group of people because the women
had Mike strolls on and I was serving their drinks.
(13:00):
So they were ordering martiniz for lunch. And then when
they were getting ready to leave after their lunch, they
were walking out with their martini glasses and as a bartender,
I'd just said I better go and retrieve the glasses.
So I started to walk out of the hotel and
then the manager saw me, and then she stopped me
(13:20):
and she says, where are you going? And said, I'm
going to go and get the martini glasses from those
people that are leaving, And then she's stopped and she says, no,
let them go. And I said, why they're taking our
glasses and she says, these are the board of directors
(13:41):
for the Doll company. Yeah, that helped me to realize
that this plantation was supporting the people that we're having
martini lunches. And so I asked her, I said, so
they're leaving right now, Are they going to go in
into the pineapple fields to thank my mother and my
(14:04):
father for what they do to give them their flaunting wealth?
And she says, I don't think so, And then I
was crushed at that moment. Doll closed its plantation after
(14:34):
its parent company was bought by a billionaire named David Murdoch.
Murdoch is what locals now call a poor billionaire. He
was only worth a couple of billion dollars compared to
Ellison's roughly nine billion dollar fortune. People told me they
remember Murdoch routinely complaining about how much money he was
losing from the island. Ultimately, when he could no longer
(14:56):
afford to keep it running, he sold it to Ellison.
But Murdoch's impact on the island was enormous. He's the
one who built the two hotels and oversaw the transition
from pineapples to tourism. The change wasn't easy, and he
tangled with many of Lenais residents during his reign, often
getting into screaming matches with locals. But unlike Ellison, people
(15:19):
here told me the island's previous owner was at least
willing to talk to them face to face. For me,
that is a relationship, and that is one that allows
us to interact whether we agree or disagree. I've had
that relationship with with Murdoch because when he was wrong,
when he had no idea about it, I wouldn't hesitate
(15:41):
to him, and he would always tell me, you know,
you're a thorn in my side, you know, And I
took that as a compliment. Now with Ellison, it's a
completely different story. Solve remembers approaching the president of Ellison's
company to ask for a meeting with the new owner.
I say, Kurt, I would like to request a meeting
(16:02):
with Ellison in person. Kurt's response to me, and I'll
never forget this, He says, I don't mean to be disrespectful,
but that is not Ellison's style. Those are the exact
words they've been ingrained in me from that very moment.
And my response to Kurt was, first of all, that
(16:26):
is disrespectful, But beyond that, I still have an expectation
that we need to sit down and meet, you know,
and so I make my requests. So I've been waiting
now for ten years to have a conversation, just to
get to meet this person who somehow this mystic and
(16:50):
this mover and shaker in a community of which we
don't get to see you or no, and my requests
have never been acknowledged or responded to. I also to
speak with Kurt Matsumoto, the president of Ellison's management company,
but he didn't respond to my emails. A spokesperson for
Poulama did suggest I talked to Diane Presa, who acts
(17:12):
as a liaison between the company and the community. She
didn't seem to want to talk much about Ellison's plans,
but she was the only person from Ellison's company who
agreed to be interviewed. So I had to ask, do
you feel like you have a broad sense of what
the plans Polama has for the community? Are? You know?
Things change at Puloma all the time. So I hate
(17:34):
to say something and then it doesn't happen, you know,
I guess like long term plans, you know, um I
would say no, while the uncertainty is scary for people
like Saul and Butch, who have lived on l Nay
for decades. There's more at stake for the younger generation
(17:56):
that worries about its future here on the island. Take
Michelle Fuji, a thirty eight year old high school math
teacher who grew up here and is raising her two
kids here. She loves lenai An enthusiastically offered to drive
me around to show me her favorite parts of the island.
Like pretty much everyone else here, her speedometer rarely topped,
(18:17):
and it seems like she waved at every passing car
and person. Let's see if Auntie wants to ride because
she's walking to the rain. Sorry, that's Auntie. You like
when ride it is raining? You sure? Okay, you go
girl with your exercise. Everyone seems to know everyone here.
(18:39):
People refer to their elders as aunties and uncles. I
routinely saw people hugging. A stranger even invited me to
his kid's birthday party on the beach. Ellison is not
part of any of that, and it doesn't go unnoticed.
I think a big difference between Murdoch and Allison is
is just the connection to the community. Like I and
(19:00):
and I maybe it's like, you know how there's like
the five love languages and what is your best like
love language UM, And so maybe Murdoch was like words
of affirmation or service, you know, where he would actually
come out UM or quality time and spend time with
the community members, like people knew him by like first name,
(19:21):
and you know, whenever he would come home, like sure
there's still that plantation boss mentality and everybody bowed down
and you know, praise you. But at the same time,
it's like people knew who he was. When you've seen
his face, you would recognize him and he would greet you.
Ellison is a little bit different. I've never met him.
Without any insight from Ellison, that leaves Michelle to fill
(19:43):
in the blanks about how his company's plans will affect
her life. I don't think that I'm fully Like if
I had to put my money on whether or not
Poulama is solely in it for the best interest of
our community, I would not put my whole fortune on it,
(20:04):
you know what I mean. Since the pandemic started, more
rich people seem to be moving to the island. Michelle
is worried about the community becoming more divided economically. One
of my biggest fears is that the people of this
community will sort of be the ones that would be
caring for the elite rich that can't afford to actually
(20:25):
live here one day, and that's our sole purpose. Like
as an educator, you would think that we would want
our students to graduate and aspire to be more than
just somebody's servant. Michelle and her fiance have three kids
(20:47):
between the two of them and are excited about getting married,
but she says it's getting impossible to find housing, especially
after Ellison moved to the island and the pace of
his construction projects have picked up. All those projects need
people to build them, which means more construction workers living
on the island taking up the already limited housing options.
(21:10):
There's no houses. Really, isn't any homes that we could
affordably rent, you know, Like I think now, if we
were to try and find the house that was being
rented by some local family, we would be paying like
two dollars a month, because that's what construction workers would pay,
or that's what you know, the market would allow for.
(21:33):
To alleviate the housing crunch, Ellison is building more homes
on the island. The plan initially had units for sale,
but something changed and now they're all only for rent.
At first, Michelle was against the project because of the
change and the fact that the units will all be
fully furnished, making it feel like they're for outsiders moving
(21:53):
to the island temporarily. But with her wedding coming up,
she's desperate for options. That where my sway changed, you know,
Like then it's like, okay, well, if we're thinking about
the future as a married couple and we're not able
to live together unless we you know, I don't want
to say sell out because it's not really selling out
(22:13):
because we're not really selling anything, but it definitely changed
my perspective of things versus it just being like, you know,
we gotta think about ways that we're going to merge
our family, and that right now would be a solution.
Younger families like Michelle's have been moving off the island recently.
(22:35):
Michelle said she worries that if she did leave and
gave up her housing and her job, then there'd be
no way for her or her kids to return because
everything is becoming so expensive and there are so few
employment opportunities outside of working for the billionaire around the world.
As the rich get richer and decided to move into
(22:56):
your neighborhood, changing it to fit their tastes. People often
throw around the word gentrification, but on the night it
goes beyond that, because it ultimately comes down to the
tastes of one person who increasingly dictates who and what
is allowed on his island. And in this version of gentrification,
(23:17):
you're not pushed further from the city center. You're pushed
into the ocean, and who knows if you can come back.
When I first started reporting on this season of The Paycheck,
(23:38):
an economist named Gabriel Zuckman told me something that's stuck
with me. He said, if you think about it, extreme
wealth inequality is inefficient. To someone like Larry Ellison, an
extra billion dollars doesn't change his life that much, but
that amount of money for the thousands of people on
(23:59):
the island, it would drastically change their lives. When you
own a hundred billion dollars, it's just useless. It's not
changing their lifestyle. It has no meaning. And whereas an
extrat billion, you know that that could be I don't know,
paid in taxes spent on education and healthcare, on infrastructure
(24:22):
that that is valuable. Next week on the Paycheck. We
had to a place where the government's decisions about how
to manage the pandemic had unintended consequences for women. I mean,
as public had professionals. We must do better. We have
to educate people. We had to educate communities, We had
(24:43):
to educate po data. It will be a mainting if
we can help them to work together with the physicians,
for them to learn more and to be working together.
Thanks for listening to The Paycheck. If you like our show,
please head on over to Apple Podcasts or ever you
listen to podcasts and rate a review and subscribe. This
(25:04):
episode was hosted by me Rebecca Greenfield and reported by
Sophie Alexander. It was edited by Shelley Banjo with help
from Francesca Levi, Janet Paskin Rocksheeta Soluja, and me. We
also had editing help from Daniel Balby, Kristin B. Brown, Gildaa, Carly,
Nicole Flato, Melissa McDonald, and Kai Schultz. This episode was
(25:27):
produced by Gildaa, Carly and sound engineered by Matt kim Our.
Original music is by Leo Sidron. Special thanks to Magnus Hendrickson,
Mckinnonda Keeper, Margaret Sutherland, Stacy Wong, and Aisha Diello. Francesca
Levy is Bloomberg's head of podcasts. See you next week.
Popular Podcasts
Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
40s and Free Agents: NFL Draft Season
Daniel Jeremiah of Move the Sticks and Gregg Rosenthal of NFL Daily join forces to break down every team's needs this offseason.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.