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The 25 Richest People in New Mexico


   16. H. Garrett Thornburg Jr.

   17. Luthy family

   18. Nunzio P. DeSantis

   18. Gorham family

   20. Papen family  

From CROSSWINDS, New Mexico’s largest alternative newspaper

October 1996


Mutual fund and portfolio management, personal investments

$36 million


     Just because you're 2,000 miles from Wall Street doesn't mean you can't profit like you're still there. Thornburg, a former limited partner at the big New York brokerage of Bear Stearns, moved to Santa Fe in the early 1980s for the skiing, the scenery and the chance to run his own operation implementing his own ideas. Like this one: Buy depressed municipal bonds in states that are out of favor, such as post-oil-bust Texas, overtaxed Massachusetts and collapsing California. "We just love panics," he once declared. Or this one: Buy the shorter-length portion of a long-term municipal bond issue, giving up a bit of yield but shedding almost all the risk.

     Today, his Marcy Street-based operation, mainly Thornburg Management Co. Inc. and Thornburg Securities Corp., manages a rapidly growing collection of financial vehicles. They include six conservatively run bond mutual funds, a stock mutual fund, Thornburg Mortgage Asset Co., a mortgage pass-through stock company listed on the New York Stock Exchange; and money management services for other companies. With more than $5 billion of assets under management, the business--about two-thirds owned by the 50-year-old Thornburg himself--should generate an estimated $12 million to $15 million a year in management fees. A genial fellow married to a local artist, Thornburg considerably boosted his business's profitability a few years ago by convincing the state of New Mexico not to charge the onerous gross receipts tax on stock transactions.

      We can only speculate -- with envy -- about Thornburg's personal investment portfolio. But this we know: His financial ideas are so good, someone once wrote, that they either made money or were outlawed. ``In a few years, maybe,'' Thornburg told us. ``But I'm not there yet.''


17. LUTHY FAMILY, Albuquerque

Sunwest Bank management, stock

$35 million


     ``Which is the greater crime, to rob a bank or to own one?'' playwright Bertolt Brecht wrote in The Three-Penny Opera. We wouldn't dare to venture an answer, but several generations of Albuquerque's Luthy family can certainly attest to the lucrative nature of banking.

     Son of an Albuquerque mayor, Yale-educated Charles Frederick Luthy -- Fred to just about everybody -- joined the old Albuquerque National Bank as a vice president in 1924 when its assets were only $1.5 million. In 1938 he and bank president George Kaseman were in Hobbs watching workers drop nitro glycerin into an oil well to increase its flow when an accidential explosion took place. Kaseman was killed. Luthy was eventually chosen to replace him, although he suffered injuries that would render him blind within several years. He more than made up for his handicap with a keep memory and lots of secretaries to read him materials.

     When Luthy died in 1963 at age 69 -- he collapsed of a heart attack during lunch in the old Alvarado Hotel -- he had built Albuquerque National into the state's largest banking institution, with $150 million in assets. Luthy left behind a personal estate topping $3 million, real money in those days. Most of the wealth was bank stock placed in family trusts for Fred's widow and three chldren.

     In 1991, nearly three decades later, one of those children, Fred Jr., a 30-year company veteran, was elected president of what had been renamed Sunwest Bank. Its locally prominent slogan: ``That's my bank!'' The following year Sunwest, by then $3.4 billion in assets but suffering from serious loan losses, was sold to Boatmen's Bancshares of St. Louis. Sunwest shareholders got Boatmen's stock representing a 40% premium to the Sunwest market price. The last proxy for Sunwest showed a 8.2% Luthy family stake -- the largest single holding -- suddenly worth nearly $30 million.

     In late August Boatmen's agreed to be acquired by NationsBank of North Carolina, effective later this year. According to merger documents, that presumed Luthy family stake, converted into NationsBank stock, is worth about $33 million.

     Now retired from the bank but still a member of its board of directors, the affable, 59-year-old Luthy says, ``We won't confirm any numbers.''


18. (tie) NUNZIO P. DESANTIS, Albuquerque

Ex-CEO Diagnostek Inc., entrepreneur

$30 million


     Better to sell prescriptions than fill them. That's how Nunzio DeSantis got rich.

 A native of Canzano, Italy, who emigrated at age 9 with his family to Gallup, DeSantis earned a nuclear pharmacy degree from the University of New Mexico--while running a small pharmacy in Gallup. Upon graduation he chucked the hometown operation and moved to Austin, TX, to run a chain of pharmacies. He left after a falling out with his partners. ``I haven't had a partner since,'' he says.  After starting an El Paso company that prepared radioactive medicines, he merged it with a rival. In 1983 he started Diagnostek and took the company public, intending to set up a string of out-patient diagnostic centers.

     The real money came when he drew on his pharmaceutical background, saw an opportunity and grabbed it. In 1987, Diagnostek purchased Health Care Services Inc., a struggling Pennsylvania mail-service pharmaceutical company, and moved it to New Mexico. DeSantis got the New Mexico legislature to axe a ban prohibiting the filling of out-of-state prescriptions. His timing was exquisite. Big insurers were pushing for the volume savings available if hundreds of thousands of patients around the country could be served out of one extremely big pharmaceutical warehouse in a low-wage place like Albuquerque. After one year under DeSantis's control, the company doubled its revenues to more than $100 million.

     Diagnostek had hit $650 million in yearly revenues by 1994 when DeSantis sold the company to arch-rival Value Health after a deal with another competitor fell through. In the transaction, DeSantis personally received an estimated $37 million in stock and cash. Nasty shareholder litigation charging that Diagnostek had pumped up its financial statements was settled out of court.

     Now here's some hot news that was unreported locally as we went to press:  DeSantis is back running another public company in Albuquerque.

     Even while heading Diagnostek he had started CAPX, a small public company that bought life insurance policies from dying AIDS patients. Eventually, CAPX became AutoLend, a Miami-based finance company. DeSantis held a 13.1% stake but was not part of management. However, struggling AutoLend was plagued by everything from executive incompetence to thieving employees. The NASDAQ Stock Market finally delisted it in May.

     DeSantis was one of several shareholders who sued incumbent management in Delaware. As part of a settlement ending the litigation, DeSantis last month became Autolend's new CEO and moved the operation to Albuquerque. ``It's still a public company, and we got $14 million in the bank,'' he says. ``We're getting out of the auto loan business and we're evaluating opportunities.''

     Given DeSantis's track record, stay tuned.


18. (tie) GORHAM FAMILY, Albuquerque

Oil & gas

$30 million


     A native of Missouri, where he was trained as a petroleum geologist, Frank Gorham Jr. came to New Mexico after World War II. After years running the exploration efforts of Public Service Co. of New Mexico, he struck out on his own, forming Questa Petroleum t work the San Juan Basin. .By all accounts Gorham was quite successful. In 1994 he gave $600,000 to the University of New Mexico Law School to endow a chair in the name of a local judge who presided over a case that Gorham won.

     His son, lawyer Frank Gorham III, now runs Cinco General Partnership, the successor to Questa Petroleum and owned by Frank Jr.'s five sons. Gorham The Third is one of the relatively few businessmen in the state willing to speak out publicly and forcefully about New Mexico's stifling business climate. "New Mexicans need to wake up and realize that our future is dependent on expanding our private sector," he wrote in a 1993 Albuquerque Journal column. "Our legislative leaders must be forcefully told that the status quo is unacceptable."

     But there is a limit to his speech. Gorham III told us he was not interested in being on this list.


20. PAPEN FAMILY, Las Cruces and elsewhere

Rio Grande Bankshares, inheritance

$28 million


     We would have put former State Sen. Frank O'Brien Papen on this list except for one small factor. He died in March at age 88 after a long illness and one hell of a business career. A native of Las Vegas, NM, he moved to Las Cruces in December 1941 to sell insurance -- arriving the same week as Pearl Harbor. His first big break came, according to a 1991 bank-commissioned history titled "Southern New Mexico Empire" by Leon C. Metz, when he sold a big umbrella policy to the local Catholic diocese.

     In 1951 Papen bought his first stake in the First National Bank of Do–a Ana County -- 11 shares -- and four years later joined its board. By 1957 he acquired a majority interest using borrowed money and engineered a boardroom coup that ousted management he considered stodgy and old-fashioned. Total assets then were still less than $10 million.

     Papen later became the bank's president and chief executive officer. His timing would prove to be perfect, as the Sunbelt boom brought residents to the desert college town and budding El Paso suburb and deposits to the bank. Assets of the parent holding company, Rio Grande Bancshares, which also include a small bank in Roswell, now top $380 million. First National became the only bank of any size in New Mexico controlled by a single family. Its 10-story headquarters building in Las Cruces is said to be the tallest in southern New Mexico.

     A long-time political force in the area, Papen served several terms in the state House and Senate. After losing a Democratic primary race for renomination in 1984, he retired to his bank and his considerable civic activities.

     Astute estate planning has allowed the Papen family to retain its estimated 60-percent stake in the above-average-in-profitability bank holding company and three of the seven seats on its board of directors. The chairman is Papen's only surviving child, Michele Papen-Daniel of Los Angeles (a son, Frank Jr., died at age 10 when hit by a car). Papen's widow, Mary Kay, resides in the Las Cruces area, as do various stockholding relatives, including John Papen, the bank's executive vice president and a nephew of Frank.

     Papen family members could not be reached for comment. Ben Haines, First National's current president and a veteran employee, politely declined to confirm any stockholding numbers, saying only, "Ownership percentages haven't changed in years."