The Richest Man You've Never Heard Of

In 1991, with the cockiness and foresight that are the hallmark of bona fide visionaries, Bartmann assembled the 17 survivors of his Muskogee massacre in their new Tulsa offices for a two-week summit. The first order of business was to draw up a mission statement. No nebulous, platitudinous aspirations here: with almost laughable bluntness, the document stated that CFS would "achieve net earnings each year equal to at least 200% of the previous year." Then, said Bartmann, because the company would be growing so quickly, it would be hard to inculcate new hires with the vital procedural minutiae. So the group drew up 200 pages of step-by-step process rules, right down to how the phones should be answered--an entire Napoleonic Code for a nation of only 17 citizens.

What Bartmann knew was that every aspiration he had for CFS depended on one thing: the ability to collect debts at a rate no one had dreamed of. "People still see CFS's performance as a sort of alchemy," says Bartmann watcher Sean Sheerin of Duff & Phelps Credit Rating Co. "How do you take straw and weave it into gold?" Mainly, Bartmann divined, by turning collecting from art into science.

The exhaustive systematizing now looks prescient: with the company expanding by 50 employees a week, its three-volume procedures manual, which is continually updated, serves as the centerboard of what by all accounts remains an extremely tight ship. The militaristic principles are also hammered home at CFS University, the seven-week boot camp for newly hired collectors. Credit-card guru H. Spencer Nilson calls CFS "the largest, best-trained, and most efficient debt-collection operation in the world."

And Bartmann has managed to assemble this "elite corps of collectors"--as one analyst calls it--despite a 2.8% local unemployment rate. How? For starters, he pays salaries that are 150% of the industry norm. Then there are the lavish junkets. CFS is making plans to rent two 100-car trains to transport employees and their guests to a Kansas City Royals game--possibly the largest U.S. rail movement of personnel ever. There was the all-company trip to Las Vegas (each person received $500 in gambling money), and the Caribbean cruise, on which four couples were married. (Bartmann gave away the brides.) Oh, and then there's the CFS summer camp--free for the children of employees (500 of whom attended this past summer). Suddenly, many employees are gung-ho on careers in collection: turnover after six months is a slim 5%, set against an industry average of close to 100%. Lately, Bartmann has been catching heat for driving up salaries in Tulsa.

Not that he has created a workers' paradise. The work, those involved concede, is repetitive and grueling. And Bartmann, preternaturally hard-driving even by entrepreneurial standards, can turn apoplectic when CFS's performance is subpar. "There's an incongruity between Bill's vision and what he reverts to when the going gets tough," says one former employee who asked to remain anonymous. "His management style has been characterized as management by intimidation. One day he's very friendly; the next he's chewing your ass like it's never been chewed."

The pressure-cooker atmosphere wears on many, but operations director Learned is unapologetic. "We position ourselves like the Marine Corps," he says. "It's hard to get in, and it's very demanding once you're here, but if you're good enough, boy, what a ride."

The Next, Bigger Thing.
New Year's Day, 1994. The Mirage hotel, in Las Vegas, where Bartmann holds an annual planning session with his top officers. (Bartmann loves the blackjack tables.) "This year," he announced to them, "we're going to do a securitization."

The small audience sat stone-faced. "We didn't even know how to spell the word," recalls Learned, much less grasp what a far-fetched notion Bartmann was proposing.

The problem with their business, Bartmann proceeded to explain, was the extended time lag between the purchase of millions of dollars in bad debts and their actual collection. To get through the interval, CFS had to take on expensive bank financing. Not only were the interest costs a drain on the bottom line, but the perennial shortage of cash was a major speed bump for growth because it prevented CFS from buying yet more debt.

So Bartmann proposed to do what had never been done before: take thousands of nonperforming debts, bundle them together, and serve up the package to investors as a bond. By turning the bad debts into a security--"securitizing" them, in Wall Street parlance--CFS could generate immediate cash and then use the liberated money to buy more bad debts. It would be a slingshot for growth. That is, if Bartmann could get Wall Street to swallow the idea.

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