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DA LA MOORE FELL HARD for Richard Rainwater the moment he told her, "I view you like an equity investment."
"It was the ultimate compliment," says Moore, a woman who believes that business and love are similar games. She was then the highest-paid woman in banking. He was renowned as one of America's most ingenious investors. Since they merged matrimonially, Moore has taken charge of Rainwater's stock portfolio as well as his life. SHE'S NOT WST MRS. In 3112 years as CEO of Rainwater Inc., RICHARD RAINWATER: she has nearly tripled her husband's net OUTRAGEOUS AND worth, to $1.5 billion. UNSTOPPABLE, SHE'S What's more, she has eagerly adopted WON LOVE, MONEYa crucial role that Richard has always ADD THE UPPER HAND loathed-that of the tough-guy, dissident AT COI.EIMBIAHCA. shareholder. When the couple bought BY PATRICIA SELLERS into Mesa last year, it was Darla who booted the oil and gas company's founder, the once notorious corporate raider T. Boone Pickens. And, in this year's biggest business drama, it was she who forced out Columbia/HCA CEO Richard Scott after the health-care giant got slammed
PHOTOGRAPH BY DAVID STRIC : September 8, 1997 FORTUNE-

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says Columbia's new CEO, Dr. Thomas Frist Jr., who was Moore's anxious ally. To get a picture of Darla Moore, imagine, say, a cross between the Terminator and Kim Basinger, with a wicked South Carolina drawl. Upon first meeting, she can come across as a prima donna, tough and aloof. As she warms up she can turn fun and flirty, even girlish, though the shift is deceptive. "She's a cut throat killer underneath," says her friend Martha Stewart, with admiration. Like most women who reach the heights of corporate America-a rare breed -Moore is paradoxical. She collects 18th-century French furniture and rare books (her favorites: tomes by Adam Smith and de Tocqueville). She also hangs out at hot-rod events with Rainwater, who owns the world's fastest street car. Riding Moore the opportunist popped a shot at a Knicks game. shotgun in his modified red S7 Chevy, Moore has gone with a massive criminal investigation. from zero to 66 in 1.2 seconds. "The thrill "I've harassed guys all my life," Moore of my life," she says. says, surveying the view from the back " Darla isn't usually one to sit back and
let others drive. Last year at a New York Knicks game, she caught an errant ball. When the ref asked for it, she took aim at the basket instead. It was an air ball. "If I didn't have blonde hair and blue eyes and hadn't been dressed the way I was, I would have been hopped out of Madison Square Garden in a second," she says.

patio of the Rainwaters' hillside villa in Montecito, Cal., a few miles south of Santa Barbara. It was here, overlooking their vast gardens, that Darladished it to old Boone, and where she strategized with Columbia board members to run off Scott. Darla isn't currently on the board, but she and Rainwater together own about $260 million of Columbia stockan investment that certainly isn't out of the woods yet just because of Scott's de parture. They agreed to talk exclusively with FORTUNE about the mess at the world's largest health-care company, which Scott and Rainwater started a dec ade ago by each pitching in $125. 000 to buy two Texas hospitals. Among their revelations, Moore and Rainwater say they clashed over whether Scott should stay or go as CEO. She won. As federal agents canvassed Columbia, Scott defiantly refused to acknowledge the trouble, and Moore campaigned for his departure. "Darla was a responsible shareholder who did what had to be done,"

with the help of only two associates, select the companies. Then Darla, whose ambition seems limitless, executes the deals. "My wife wants to rule the world," says Rainwater, only half facetiously. Her test of true grit came with Colum bia/HCA, a business Rainwater started with Rick Scott in 1987, a few years before Darla (or "B.D.," as Rainwater says). At the time, Rainwater was a Fort Worth investor, having just struck out on his own after 16 years with Texas' Uber-rich Bass family. He had made the Basses billions by acquiring big stakes in distressed companies like Disney and Texaco when their stocks were really cheap. Having helped recruit Michael Eisner to Disney in 1984, Rainwater had made some $100 million for himself and was on the hunt for new ways to invest it. He met Scott, a scrappy 34-year-old lawyer who specialized in hospital mergers and acquisitions, and found they shared a vision-to build a national multiservice health-care chain. To attract the best practitioners, they came up with the idea of selling doctors equity in the business. Moore got involved in early 1994, when she became CEO of Rainwater Inc. and replaced her husband on Columbia's board of directors. This was Rick Scott's heyday. In two years he nearly tripled Columbia's revenues by merging with four other companies, including Hospital Corp. of America (HCA), a big Nashville chain that Rainwater was a major investor in. Darla and Richard, in fact, convinced Tommy Frist, the courtly surgeon who was then HCA's chief executive, to let Boy Wonder, Scott, be CEO of the combined companies.
From Darla's perspective, she spotted trouble early on at Columbia. When she resigned from the board in early 1996 because the Rainwaters' in-

sl w ai

Rainwater agrees, telling his wife, "You pull off everything you try to do." A charming and free-spin
nist, Rainwater, 53, seems , Moore, 43, just fine. He has astutely

stment in Magellan Health Services

sed a conflict of interest she fell

heavy lifting to his cunning and stunning queen of capitalism-- "Little Precious," he calls her-so that he can focus on the big picture, re tion (he has reduced his golf handicap from 30 to 12), and, of course, Darla. When he meets her friends, he introduces himself this way; "Hi, I'm Richard, the househusband." In this unique partnership he remains the investment visionary, choosing industries into which the Rainwater money flows. (See "Rainwater's Investing Strategies" for his tips.) Darla and Richard together,

easy about Rick Scott's management style.

The Columbia l
ca present a litany of issu

leave little time for debate. Darla kept up with the industry scuttlebutt, which was that Columbia was horribly difficult to deal with. And the press started hammering the health-care provider, charging that its cost cutting compromised quality medical care. Yet whenever Moore and Scott talked, which was every few weeks, he always told her not to worry, that "everything's great." Moore did worry, though. Late last year

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s, select ambideals. '," says :olum:d with Darla time, r, havi years le had Ig big )isney really I Eismade as on met speluisi-to care they seqThen I red of i. In revpa ..ica ava ch the lief be she started voicing her concerns to RainWall Street would take morning (Darla and Richwater and Frist, Columbia's vice chairman care of the Rick Scott 11 ard were still in bed), Scott and largest individual shareholder. Neither problem by forcing a called her in Montecito. of them was losing faith in Scott yet, howshakeup. "How ya doin'7" she asked. r all, profits were going up some Moore wasn't willing to "Great," Scott said, true year. The stock was rising steadily. wait. She wanted to merge to form. "I'm doing great." And Columbia, with $20 billion in reve2 Columbia with the indusDarla begged to differ. n nues, was America's most admired healthtry's No. 2, Tenet Healthsi "Rick," she said, "it's over." care company, according to FORTUNE's care, and install Tenet's A merger between Coannual survey. CEO, Jeffrey Barbakow, "MY STRENGTH IS lumbia and Tenet never But Moore trusted her instincts, which as chief executive of the came together. Pending the SEEING THROUGH THE proved to be right. She says, "My single combined compa ny. Not government findings, the greatest strength is seeing through the only did the deal make SMOKE INTO CHAOS, two companies couldn'tsmoke into chaos, and operating where sense financially, but it agree on the value of Co AND OPERATING everything is exploding." In March federal would also allow Scott to lumbia's stock. So Scott re agents, suspecting that Columbia was over- depart Columbia WHERE EVERYTHING with relsigned, and the board charging Medicaid and Medicare, raided ative dignity-Rainwater's elected Frist as Columbia's IS EXPLODING." company offices in El Paso. The day the biggest concern . Fast desnew CEO. news hit the papers, Moore talked to Scott ignated Moore as the inon the phone. He assured her the company termediary for a Columbia-Tenet merger. ick Scott wasn't the first guy had done nothing wrong. "Rick was disHer role was unusual and remarkable, says Darla messed with_,'Before dainful" of the investigation, Moore says, Columbia board member Michael Long, Scott, there was Bt h Pick even though the federal government supa partner at Brown Brothers Harriman: ens. The cantankerous oilplies about a third of Columbia's revenues. "Even though she wasn't a company officer man who terrified CEOs She adds, "You don't spit on Uncle Sam." or a director or a big fund manager, she during the Eighties was by last year facing Her wisest strategy, she decided, was to was so insistent. She got us to listen to her." what some might call divine retribution. The strengthen her ties with Frist, who by this It seemed only a matter of time before stock of Mesa, the compan y he had founded time was feeling completely shut out by Scott would be gone. But the moment came at age 28, had sunk from $48 to less than $3, Scott. A few weeks after El Paso, Frist gave sooner than anyone expected. On July 16, and Pickens was threatened by proxy fights Scott a nine-page letter outlining Columbia's the feds seized documents from Columbia and possible takeover. Smelling opportunity, problems and possible solutions. Scott never locations in seven states. Early the next Moore and Rainwater offered to help by acknowledged the letter. "I buying some stock, selling new didn't know what to do," Frist Columbia's Scott (left) was Boy Wonder; Frist tried to be mentor. equity, and refinancing Mesa's recalls. "It was the most perplexout-of-control debt. To Pickens, ing thing in my career." He this was a friendly partnership. thought about quitting. Darla He figured he'd stay at the helm urged him to hang on. for a while. Rick Scott didn't know it, Before the deal was done, but the noose around his neck Pickens and his attorney flew tightened just before the July 4 o Montecito. On the Rainweekend. In Montecito, Moore waters' Power Patio, Darla told got a surprise visit from Frist, Pickens that he had to step who said he was too angstdown, that his reputation was a ridden to enjoy his holiday in problem. "I tried to be as tact Aspen. They spent all afterful as I could, but tact doesn't noon on the patio devising a come easily to me," she says. plan. Rainwater sat in for a Pickens says he holds no grudge. Mesa is back on firm ground, and following a merwith another oil company to create Pioneer Natural Resources, Pickens' total holdings have doubled in value. The Rainwaters, meanwhile, have gained a $161 million profit on their $66 million investment. Rainwater treasures his wife's sang-froid: "The difference between Darla and me is that I'll take a lot of time and effort to solve a problem with-

he o,d

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be integrated), Darla wasn't hugely popular. "I was on the fringe. I rejected what you do to be popular-the beauty queen! cheerleader/sorority thing," she says. "I must have had an air of superiority about me, but I felt destined for bigger things." Her first big thing was a summer internship with Senator Strom Thurmond during college at the University of South Carolina. "It was so heady to be around power," she says. "It was my first access to people who had control of their lives," After college, Thurmond got her a job as a researcher for the Republican National Committee. It was 1976, post-Watergate, and an awful year for the GOP. (Carter beat Ford.) Moore realized that politics wasn't her game. "It dawned on me that this is all borrowed power. The guy who's powerful one day is nobody the next. I found nothing gratifying about it." She opted for business school, at George Washington University in D.C., though she hadn't a clue what she wanted to do with her life, Soon after graduating in 1981, Moore entered the training program at Chemical Bank in New York City with 31 other MBAs. She went into a hardball area of banking where few others wanted to go:' the bankruptcy business. "A mentor had After Moore axed Mesa's Boone Pickens, the value of his holdings doubled. advised me, `Find a niche and become the very best at it,' " she explains. "I saw the out hurting people's feelings and reputa- timed her laps in the swimming pool and bankruptcy area as a career opportunity tion. By the time I'm ready to act, Darla coached her on the basketball court. He took because it had no cachet, no protocols, and will already have the job done." her fishing and hunting; Darla shot rabbits no women." and birds. Eugene Moore even made sure Her boss, Bob Conway, believed ChemEither he's naive or he's coy, that, by age 8, his daughter knew how to ical could make a lot of money by actually but Rainwater says the map a football team's field soliciting business from source of his wife's rabid am- formations. bankrupt companiesbition is "a mystery" (Hence Her mother pushed her imagine that-and offerher allure.) Really, it isn't so too, but in other areas like ing them loans at really difficult to fathom if you study Moore's music (piano) and acahigh interest rates. He past. Darla Dee, as she was known back demics. If Darla Dee sent his 30-year-old prothen, grew up in the tiny tobacco hamlet of brought home straight .A's tegee knocking on the Lake City, S.C. (pop. 8,398). The first of -and she did-Lorraine doors of lawyers, accoun two daughters born to Eugene Moore, a Moore figured she could tants, and investment schoolteacher and coach, and his wife, be a nurse or a teacher, bankers who specialized "I TOLD BOONE PICK Lorraine, who worked at the Methodist both good professions that in bankruptcies. "Being a Church, Darla Dee spent weekends and allow a woman to follow woman gave me a com ENS HIS REPUTATION summers at her grandparents' 125-acre her husband wherever he petitive edge," Moore WAS A PROBLEM. I farm just a few miles away; five black fam - moves. "She kept telling says. "They would much ilies were tenants there and worked the me, 'I'll never do that. I'll TRIED TO BE TACTFUL. rather have lunch with me fields. "The environment embodied big - do anything but that!' " than with other men." BUT TACT DOESN'T otry and control," Darla says, "but at the her mother recalls. "We It was part ingenuity same time, it was warm and loving." argued a lot, and I always COME EASILY TO ME." and part luck, but Moore's Eugene Moore, an all-star athlete in col- lost." Darla's sister, Lisa, timing was impeccable. lege, wanted his eldest daughter to excel at was better at fulfillin This was the dawn of the every sport. He had no sons nor sisters, and Mom's expectations: Lisa is a nurse, with a LBO era, and when debt-ridden giants like so, he says, "I treated Darla like a boy." He husband and two s, Texaco, Macy's, Federated Department set up a track in front of the house and In high school (all white, since Lake Stores, and Eastern Air Lines went bankclocked her 50- and 100-yard sprints. He City was one of the last American towns to rupt, they turned to Chemical, and to 68 FORTUNE September 8, 1997

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Moore, for help. Chase Manhattan vice are a management problem," her boss told banking industry as the Queen of DIP chairman James Lee, her former colleague her. She eventually learned to hang on to (debtor-in-possession financing), she was at Chemical, remembers FORTUNE 500 good employees-business was boomin g, generating huge profits for Chemical (at CEOs strong-arming Moore to get lower after all-but she always made sure every- least $100 million during her last years rates on loans. "Darla would turn to the one knew: You don't mess with Darla. She there), and she was earning more than $1 CEO and say, deadpan, `You are bank- walked into one meeting with the senior million annually. They met in Fort Worth rupt,' " Lee recalls. "She's totally fearless." management of a major retailer and an- on a deal to finance Farley Industries, an She was hell to work for too-intolerant nounced. "Put on your rubber underwe ar, underwear company, of all things (Farley of anyone who couldn't deal with problems boys. It's going to be a long evening ." owns Fruit of the Loom). Their first two as decisively as she. When Moore was 33, When Richard Rainwater bounded into encounters were platonic, but sparks flew. some of her subordinates quit on her. "You Darla Moore's life, she was known in the "I thought I was going to hyperventilate

Mr. Darla Moore on the promising industries of tomorrow

ichard Rainwater had $2.000 to his name when he graduated from Stanford Business School in 1968. Thanks to an uncanny knack for predicting industry trends, he has inR creased his wealth 750,000-fold. Yet he's so low-key that you can't even find the Rainwater Inc. office in New York City; its name isn't listed in the phone book, nor does it appear on the door of the office itself. Only with Darla's prodding--oh, how she sways powerful men-did Rainwater agree to share his outlook:
What's your investing strategy?

Rainwater's Investing Strategies

As they raise their living standards, oil, gas, and minerals will become much more dear. Around 1999, we should see a tightening in the world's resource base.

RAINWATER GROUP
COMPANY VALUE OF HOLDINGS in millions Crescent Real Estate Equities $426.6 Columbia/HCA Healthcare
Pioneer Natural Resources (formerly Mesa Inc.) $227.2

I find moments in time when you can create great companies in industries that are going through major change. I'm interested in large industries and in companies that offer products the whole world needs to develop and go forward.
So what appeals to you these days?

We have 30% of our money in oil and gas, 30% in real estate, 25% in health care, and 15% in cash and other assets. With oil prices so low, why oil and gas? The world has adopted unfettered capitalism. We've gone from fewer than a billion people living under capitalism a few years ago to four billion people playing the game today.
Richard Rainwater, hard at work at their M lontecito estate

What about real estate? Our investments are concentrated in the South- Magellan Health Services $107.1 western U.S. If the oil Mid-Ocean Ltd. $37.2 and gas markets tighten, Crescent Operating Co. $21.5 Houston could become the center of the world. All other assets $210.0 Since financing shifted (interests in Monet Group, from S&Ls to the public, Natural Gas Partners, Texas Rangers. Staubach Co., etc., cash) the market cap of the $1.5 billion REIT [real estate invest- Total ment trust] industry has gone from $9 billion in 1990 to $100 billion today. I think it'll be $1 trillion in ten or 15 years. You own Columbia/HCA and Magellan Health Services, a psychiatric -care company. Why? There's a cascading of people into old age, the prime years for health care. And there's a technological revolution that's providing ways to help them live longer. So health care will continue to grow as a percentage of our GNP Mental health care is another attractive business--it's a serious problem in many countries, so we see Magellan expanding into foreign markets.
What's your view of the overall stock market?

to be an investor? More and more people around the I buy soft drinks and software and cellular phones. Cola and Microsoft and Motorola will benefit enormot

It looks better from a long-term standpoint than ever. As living standards rise around the world. America will continue to dominate. How can you make a case that you don't want

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and collapse," Moore says. "This was the looking for the meaning of success and hapbunch of small investments and partnermost intense, complex guy I'd ever met. I pines s. Around the time he married Darla, ship interests and redirected the money thought, `This cannot be.' " Trouble was, Richard had what you might call a midlife into publicly held companies where she she was in a serious, long-term relationcrisis, or maybe an epiphany He quit work- could make a big impact-which, as we ship with a man in New York. Rainwater, ing for a year. "Quit working? He quit func- now know, she did. little did she know, had just separated from tioning!" Moore says. He wrote reams of Darla Moore is eight pounds thinner tohis high school sweetheart and wife of 25 poetry to Darla. (A sample: "All we've ima- day; those frenzied final days at Columbia years, Karen. (They have three children.) gined, shared. All we've took their toll. She's also Shortly after that second meeting, Rainhidden, bared. Out of ourfamous now as the woman water called Moore at her Chemical of- selves at last, and into each who detonated one of the fice. When she picked up the phone, she other. ") He became quite most meteoric entrepreblurted, "Well, do you miss me?" introspective-he and neurial careers of the dec"I do," he replied. Darla are fans of The Road ade. Some people are say"I think we have a problem," she said. Less Travelled, the spiriing, "Richard Rainwater "I think we do too." tual-growth book by M. began Rick Scott's career. He flew up to New York to see her. SitScott Peck. Through Cres E Darla Moore ended it." ting down to dinner that first night at the cent Real Estate Equities, "It's a good headline," Regency Hotel, Rainwater told Moore, WHEN I WAS 15, a company that he started, she says, "but Rick's career "I'm not interested in having an affair. I'll he bough t Canyon Ranch, I TOLD MY FRIENDS probably isn't over. I'd go forward with this only if you're inter- Ame rica's No. 1 campthink he'd go build another ested in marriage." I'D MARRY ROYALTY. ground for the healthcompany, and he'd have She shot back, "You're too big. You crazed rich. And thanks to WHAT I DID WAS tremendous support in the have too much money. And you're going to weigh t-training and aeroinvestment community. ruin everything I've worked for." MARRY THE CAPITALbics, he lost 40 pounds and Remember, Rick has been Moore knew exactly what she was doing. pared his body fat from IST EQUIVALENT." accused of nothing illegal." As she says, "When I was 15, 1 announced 27% to 19%. "Darla's body She adds, "He's a great to my peer group of girls that when I mar- fat is in the middle range of performer under the right ried, it would be royalty What I did was femal e Olympians," Rainwater boasts. circumstances. Unfortunately, Rick' s greatmarry the capitalist equivalent of royalty." No trophy wife, Moore kept her job at est assets-his drive and his optimismLike any smart executive, she wasn't Chemical. "I didn't want to be viewed like turned into his greatest liabilities when he about to be acquired easily. She told Rich- all the rest of them," she says. "You know, was faced with the government onslaught." ard and her close friends that she dreaded here comes Megabucks, and now she's by She hasn't spoken to Scott since he left becoming "Mrs. Rainwater" and losing the pool." At the end of a long day, she'd Colum bia in July. Rainwater has called him her identity "It was the only time in my life come home to Richard, who would hand three times. Scott hasn't called back. (He I was certifiably unstable," Moore says. her a drink, put on some music, light canalso declined to return FORTUNE's calls.) But Richard did "his wooing thing." He dies, set out a basket of crudites, and rub At Columbia, meanwhile, Frist is maktold her, "When I see a unique and re- her weary feet. Really. Richard's friends say ing radical changes and undoing Scott's markable opportunity, I commit quickly he simpl y loves being in love. Richard and vision. He's prohibited equity stakes for afand I invest heavily, because if I don't, Darla are not only one of capitalism's most filiated doctors. He's eliminated shortsomeone else will." powerful couples; they're also the most outterm cash bonuses for executives. He's put "I thought, `This is my kind of guy. rageously affectionate. He's like a puppy the brakes on acquisitions, he says, "until Where have you been all my life? You dog around his Little Precious, nuzzling his we have a strong value system in place." think just like I do.' " face into her neck. "She's a babe,"' he says, He's also cooperating with the governThey canceled a big wedding planned "and everybody else says so too." She calls ment. The new strategies will curb Columfor January and married on the spur of him "Sweet Pea," but more often he's bia's reven ue growth, at least short term. the moment on a rainy Friday the 13th in "Buc kwheat," a reference to one of the The stock , at $321/x, is down 28% from its December 1991 at Manhattan's Brick Pres- boys in Our Gang. The little girl on the February high-and for the Rainwaters, byterian Church. From that day on, Rich - show, you may recall, was Darla. that's a $100 million loss on paper. Asked ard Raines; ter got everything he bargained The lovebirds' business partnership be- wheth er Columbia shares are a good buy for and mere rnest three years ago when Raintoday, Rainwater simply says, "It depends isioned a boom in Southwestern on what the government does." ack in Montecito, it's a gorr "rescent. He asked The outlook on Darla Moore is much geous Sunday afternoon. Moore at Rainwater Inc., clearer, "She's the best investment I've are is in black spandex and which had net assets of about $600 million. ever made," Rainwater says. "She wants tikes. Rainwater: always Mr. She quit Chemical and plunged in, stream- to do not just a little more, but a lot more." Casual, is wearing an Indiana lining the business. "It was embarrassing," Yes, her plan is to hunt bigger prey and do x T-shirt (though he co-owns the DalI used to calculate net tougher deals and stage las Mavericks) and gym shorts. "We're just worth more audacious was to sit down every month or so, power plays. Asked what she'd like etched regular folks," Moore says. As if. estimate our holdings, and look up the on her tombstone, she replies: "Darla It sounds too California, but Darla and stock prices in the paper. We'd get close, Moore never let a problem overwhelm Richard share a particular passion: They're plus or minus $10 million." She sold a her-not even Richard Rainwater." 13 72-FORTUNE September 8, 1997