My View

BY DON SORCHYCH  |  October 21, 2015

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don sorchychG. Russell Chambers

I have written about a few “unforgettable characters” in past columns. Russell Chambers was one. I tried to get in touch with him, unsuccessfully, then I saw a notice he died on March 27, 1995. I have been unable to find an obituary.

I left Harris Corporation in 1979 after I missed the presidency by one vote. I had been wooed by an engineer friend to join a startup as CEO. The company was Datamedix in Boca Raton, Florida. The firm was developing an electronic monitor to replace tape units for twenty four hour heart monitoring. The story of the firm is worth writing about too, but for now I will focus on Chambers.

Chambers often visited us in attempts to find out the algorithm we used to detect abnormal heart functions. Chambers was the CEO and Chairman of Intermedix, the world’s second largest pacemaker company behind Medtronic. He often arrived in old beat up car as if he were undercover. He was charming and anyone he mentioned was talked about in amazing detail – age, names and ages of their children and graduation dates.

Later when I met his doctor son, he spoke of his father as a genius, and he certainly was. He also wasn’t shy about admitting he had $30 million in cash and investments but said it didn’t compare with his sometimes boss and friend Wayne Rollins of Atlanta, Georgia who was a billionaire. Rollins was an investor in and board member of Intermedix.

After about a year Chambers tried to buy the company, but German investor Gruenenthal (inventors of Thalidomide, the drug that caused serious defects in unborn children) refused and fired me because we had a successful showing of our product and they wanted it.

Chambers agreed to fund a start up. We were sued by Intermedix but settled successfully. I named the company Medicomp. My plan was to get it started and then go to Intermedix as CEO.

Chambers ambitiously bought and/or started companies in fields such as orthopedics, semiconductors, masks for semiconductors, pyrolytic carbon for heart valves, swimming pool chlorinators and more. He carried a long list of potential acquisitions and made frequent use of their “airforce,” three jets and helicopters.

I moved to Intermedix headquarters in Freeport, Texas and flew all over the state in helicopters delivering jackets to cardiologists sporting our car racing entries. The car racer whose job it was to excite cardiologists was killed in a race. When the car hit a wall and went airborne the lettering was clearly visible, “INTERMEDICS, our business is life.”

Russ called and sought my opinion which was, “Get the hell out of the racing business.”
He didn’t.

I went to a cardiology convention with our French distributor and his best Parisian cardiologist. The distributor called me aside and said, “The doctor wants a raise.” I told him I didn’t understand. He said, “Surely you know we pay the doctor 15 percent of the pacer value and he wants 25 percent.” I asked if he had ever heard of the corrupt foreign practices act.

The salesman said, “I don’t care about your stupid American laws. I want an increase for my customer.”

I flew back to Freeport and met with Russ. I said you told me you had cleaned up your sales problems. He said, “We are working on it; be patient.” I told him again about the federal investigation on kickbacks. I asked him to schedule a Lear jet to take me back to Florida.

Later the feds indicted one doctor and a nurse and backed off even though kickbacks were rampant at the time.

Russ continued to fund Medicomp and we had a cordial relationship. He asked me to manage three of their non cardiology companies in California, which I did.

Then the Wall Street Journal hit the streets with a front page bomb.

Apparently Russ had been the long standing Chief Engineer for Rollins. Among other things Rollins sold and installed cable services.

A lawyer made an offer to a Massachusetts selectman (councilman) of a bribe if he would vote for Rollins’ system. The selectman went to the FBI and they wired him. They held a meeting and the lawyer assured him Russ would fly in an Intermedix jet, provide cash and Mr. Rollins also would back it. (BTW Russ always referred to Wayne Rollins as Mister Rollins.) Both Mr. Rollins and Russ were southern gentlemen. That too, is another story.

Medtronic wasted no time, copying thousands of the articles and shipping them all around the world. I called Russ and all he would say is he never met that lawyer.

Intermedix decided to go public. The New York Stock Exchange required they install two venture capitalists on their board. One of them demanded a review of all the subsidiaries; they cut several, including Medicomp.

In a short while they sold Intermedix to a foreign company and my replacement made $10 million by selling his stock on the exchange.

Russ often spoke of his close relationship with the 18 year senator, Howard Baker. They grew up in Tennessee next door to each other. After his Senate days he was Chief of Staff for Ronald Reagan, an ambassador, a lobbyist and a lawyer.

When I asked Russ again about selectmangate, he said don’t tell anybody but Howard took care of it for us. Did he ever. Try to find it!

On another historical note, when I moved to Datamedix I bought a nice house in Lighthouse Point with a dock suitable for several boats. It was only a short distance to an inlet, the Atlantic ocean and great fishing. Intermedix bought it from me at cost. Later on Medtronic claimed Intermedix was using it for a place doctor customers and their nurses could play. I believe it.