Another viewpoint on Steve Brocato

Written by Laurance Sargent September 16, 2009 02:36 pm

A letter written by Gary Dielman and printed by the Baker City Herald was recently forwarded to me. Mr. Dielman raised a number of questions about Steve Brocato’s past job experience and his qualifications to hold the job of city manager.

I have direct knowledge of Steve’s capabilities, character and history and would like to provide some clarification.

Steve is a strong leader, and like most strong leaders, he can be rough around the edges and irritating at times. But he’s smart, he’s principled and he’s tenacious and I believe that Baker City is lucky to have his services.

I hired Steve in 1981 from an ocean carrier to work at Trans Ocean Leasing (TOL), a container leasing company in San Francisco. Over the next few years we kept in contact but moved in different directions within the company. Steve moved from a sales manager in San Francisco to manager of TOL’s Midwest office in Chicago.

In 1983, I participated in the startup of a new leasing company called Leasing Partners International (LPI) based in the United Kingdom. As the company expanded, we opened an office in the U.S. and offered the manager’s job to Steve. After six months with us, Steve opened an office in San Francisco to start up operations in North and South America. He traveled a lot, worked entirely on his own and succeeded in breaking through serious competition from some much larger companies. During this period, Steve was a leader in establishing computer network usage within the company (against a lot of resistance from people like me!). In about 1986, he was promoted to Vice President of the Americas, based in San Francisco with a small staff.

At the time, our entire organization, with offices in Singapore, the U.K. and the U.S., probably didn’t exceed 15 people worldwide (we utilized Information Technology to keep the head count down). The company was prospering — we had grown from a startup fleet of 150 refrigerated containers to about 8-10,000 units. We then purchased another leasing company called IEA, also based in San Francisco that specialized in dry containers based on Limited Partnerships sold throughout the U.S. This was a stressful period during which some employees expressed frustration at the takeover of a larger company by the smaller LPI.

In about 1993, the two companies were merged into one with a new name, The Cronos Group. Steve was promoted to Vice President Corporate Affairs, a position that was heavily involved in the public offering that was soon to follow. Steve was responsible for all public interaction, including the press, NASDAQ, brokerage firms, lawyers, investors and shareholders. In 1995, after much accounting and legal scrutiny typical of all companies seeking a public offering, The Cronos Group was successfully launched on the NASDAQ (CRNS) with the assistance of Morgan Stanley and Alex Brown Co’s. At that time, our fleet totaled about 15,000 refrigerated, 200,000 dry and about 2,000 tank containers.

I might add that the company had grown to 17 offices with over 150 employees worldwide making Cronos one of the top ten container lessors worldwide. It was an amazing achievement taking the company from essentially zero to a listing on a New York Stock Exchange in less than 10 years. Steve played an integral role in this achievement.

As Mr. Dielman says, in about 1997, while Steve was VP Corporate Affairs, it was noticed by our auditors that certain funds transferred by European investors had never been received by the company. This resulted in an investigation by the SEC and the eventual removal of the Chairman, who incidentally was also the largest shareholder at that time. Steve was in no way involved nor were any of the other officers in the company. A number of organizational changes were made in an effort to “steady the ship” including the appointment of Steve as president. Steve and other officers worked diligently to find a “white knight” to become the majority shareholder but without success.

During this period a good deal of internal bickering was going on and after awhile, Steve not sensing any clear solution, and wanting to start a family (and stop the travel) resigned and returned to the U.S.

So that briefly describes Steve’s history as I knew it. I hope that my comments will help to “clear the air.”


Laurance Sargent retired as deputy chairman of The Cronos Group. He lives in Delray Beach, Fla.