Entrepreneur returns to troubled past Millionaire was delinquent youth, now assists them


Jim Hindman was an orphan, hustler and petty thief before he turned 8 years old.

By 35, he was a millionaire. Today, at 59, W. James Hindman has returned -- inevitably it seems -- to a world of juvenile delinquents.

Only now, he's running the show, overseeing more than 1,000 troubled teens in seven states in 11 residential treatment centers, including two in Maryland.

For at least the third time in Mr. Hindman's life, lightning has struck. He made his first fortune in nursing homes in the 1970s, then multiplied his wealth by building Jiffy Lube, the quick-oil-change franchise, in the 1980s. This decade belongs to his latest incarnation -- as chairman and CEO of Owings Mills-based Youth Services International Inc.

Yet even as he extends his hold over foster and rehabilitation centers, Mr. Hindman is still, in his own way, an orphan. His mother won't speak to him, his brother doesn't like him, and he remains restless in the pursuit of profit. But even more, his closest friends say, he is driven by the need to show again and again his own worth.

"I don't know if he'd appreciate me saying this," said boyhood chum J. Donnie Black, a Youth Services board member. "But probably deep down, Jim is an insecure throwaway kid who has to prove himself."

For all the millions he has made and lost, Mr. Hindman still possesses the hard edge and rough hands of a once pugnacious kid who ran the streets of Sioux City, Iowa, in secondhand knickers, high socks, black canvas sneakers, a denim jacket and stocking cap. "I was shining shoes when I was 4 years old," Mr. Hindman said, spitting out an unseen speck, as if it reminded him of his grimy youth.

Circa 1940, he was a rag-tag man-child with a gift for gab in a gritty blue-collar cattle town, already wise to the ways of bars and bordellos, sailors and prostitutes. He learned about the shoeshine shakedown, too, when a 10-year-old ruffian named Indian Joe and his two henchmen stepped out of an alley and demanded his shoeshine money.

Frightened, the youthful Jim Hindman didn't put up a fight, but as the three thugs left him in tears, a stranger standing nearby admonished, "Til you learn to fight for what's yours, you won't have anything."

Mr. Hindman never got the man's name, but he got the message. The next time he saw Indian Joe, Mr. Hindman whacked him on the head with his wooden shoeshine box so hard that the bully never bothered him again.

"He was a tough kid," said Mayer Kanter, a Sioux City lawyer who ran with Mr. Hindman in grade school. "Hell, he still swaggers."

And for good reason: His brainchild, Youth Services, began to flex its own muscle as it broke into the black for the first time last fiscal year, earning $2.1 million on revenue of $34.9 million -- the same year the company first sold stock to the public.

The bottom line: Juvenile crime pays.

About $3.2 billion is spent annually at the local, state and federal levels on youth rehabilitation programs. "It's unfortunate, but it's safe to say it's a growing market," said Alex C. Hart, an analyst with Ferris, Baker Watts Inc.

In 1991, studies show, one juvenile was arrested in the United States every 27 seconds. Reported juvenile crime climbed 68 percent between 1988 and 1992.

Rape -- up 27 percent.

Robbery -- up 52 percent.

Homicide -- up 55 percent.

"I believed the demographics," Mr. Hindman said of the seeds of Youth Services.

As a former delinquent himself, he also knew the life behind the statistics. While neighborhood children were riding their bicycles, he was stealing them. Or shoplifting candy, clothing or food. Later, as a teen-ager, he barely escaped jail when he and his friends tried to steal a pavement steamroller. He was too quick for the converging police officers.

"Listen," he said, "I come from a criminal background, I cannot put it any other way."

Even then, however, Mr. Hindman's life of crime foreshadowed an entrepreneurial spirit.

Not yet 7 years old, he and his cabal of friends would slip into a neighbor's yard and grab whatever wasn't tied down -- pipes, motors, bikes -- and sell it to a salvager. That night, they would climb over the fence, steal the same items again and re-sell them.

The tykes were doubling their profit.

In time, Mr. Hindman sharpened his financial skills with a master's degree in hospital administration from the University of Minnesota, but the profit concept remained the same as he and a wealthy partner bought and sold nursing homes in the 1970s.

He was making money -- lots of it. On paper, he was once worth more than $100 million before Jiffy Lube buckled under debt in 1989. Still, after Pennzoil Co. bought the company a year later, Mr. Hindman emerged from the deal with $2.3 million, enough to quietly lick his wounds.

Instead, he created Youth Services in 1991.

"When he first told me he was going to try and do something to help with the problem of inner cities, I said, 'Why do you want to do that?' " Mr. Black recalled. "He said he really felt that all his life he's been in training for this particular assignment."

Already, the company is well positioned, if only because Mr. Hindman has limited debt, a lesson learned from Jiffy Lube.

Like the quick-oil-change venture, Youth Services is creating its own market. There is virtually no competition -- other than from smaller, privately owned regional programs. National in scope, Youth Services has staked out residential treatment centers in Arizona, Iowa, South Dakota, Tennessee and Utah. The newest program opened in Missouri last September.

In Maryland alone, Youth Services has netted more than $64 million to manage two state-owned residential treatment centers the Victor Cullen Academy in Frederick County and the Charles H. Hickey Jr. School in Baltimore County.

But in its quest for profit, Youth Services has been accused by some Hickey teachers and former staffers of cutting corners on schooling, job training and supplies. Moreover, child advocates continue to question how a profit-driven business can provide quality care.

"It has to affect how you spend your money," said Sam Ferrainola, director of Pennsylvania's Glen Mills Schools, a nonprofit juvenile rehabilitation center. "You have to have money left over for people who have shares" in the company.

Others, however, insist that Youth Services must maintain high standards precisely because its financial survival depends on it.

"Market forces themselves would kill them," said Charles W. Thomas, professor of criminology at the University of Florida. "Part of the concern is that somebody is deriving a financial benefit off of someone's discomfort. Of course, we don't think of neurosurgeons as bad people, but they derive a financial benefit from operating on your skull."

If Mr. Hindman was singularly motivated by money, associates say, he would be a billionaire today.

Link to the past

Something else seemed to be at work, a connection between past and present: In 1992, Youth Services opened its doors at the Clarinda Academy in -- of all places -- Iowa, about 120 miles south of Sioux City, where long ago a 7-year-old boy named Jim Hindman became an orphan at the Boys and Girls Home.

Youth Services is competing with the very orphanage where he grew up.

Yet it should come as no surprise. Mr. Hindman has been causing trouble for the Boys and Girls Home ever since he was an orphan there. "He was a handful" according to records, said Robert P. Sheehan, president of the orphanage.

It was a spit and polish place, fenced in a quaint single-family home neighborhood, run by regimentation: 20 boys to a room, six or so bathroom sinks for every 40 children, all moving at a deliberate clip from one task to another.

On his first day there, a 7-year-old Mr. Hindman defiantly announced: "You'll never keep me here."

The house matrons simply responded, "We'll see about that."

He found himself that night in a cell, and thus began his education in discipline. "They had a little thing called a willow switch," Mr. Hindman said.

Over time, he thrived. He became a leader of boys, an athlete, even studious. By the time he left the orphanage in the ninth grade, he had already taken command of the laundry, a duty that unofficially included changing the linen of bed-wetters before the matrons caught them early in the morning.

"I know what it's all about," Mr. Hindman said of his shared experience in an orphanage. "There really was someone who lived their life."

Giving kids a chance

Youth Services is designed to give young offenders sent to the centers by the courts the same kind of chance he had -- whether it is a high school equivalency diploma, training in a trade such as carpentry or auto mechanics, or even study in poetry.

The results: Youth Services claims it has put a stop to escapes at Hickey and kept its recidivism rate down to about 20 percent in an atmosphere touted as "positive peer culture."

Mr. Hindman knows the journey. But he keeps moving, from one adventure in his life to another. When he made his first million in nursing homes, he looked around and remarked:

"Is that all there is?"

It wasn't. A ferocious linebacker in his own youth, he became a football coach in 1976 at Western Maryland College in Westminster. Intense, blunt, emotional, he was a sideline pacer, a detail man who drew up lists of lists, expecting of his players perfection in drills -- in tackling, pass deflection and shedding blocks.

His impact showed in the won-loss record. In 1975, a year before he arrived as an assistant coach, Western Maryland went 2-7. In his second year as head coach in 1978, the team finished 7-1-1, good enough for an eighth-place national ranking in the NCAA Division III poll.

"He has some of the traits of Vince Lombardi," the fiery Green Bay Packers coach, said Dave B. Dolch, a former team captain who now runs the Victor Cullen Academy.

Not surprisingly, Mr. Hindman's Youth Services office is dominated by a portrait of the legendary Lombardi, with a rare pensive smile.

In a reflective moment of his own, Mr. Hindman conceived another giant -- Jiffy Lube.

Business vision

It was in the spring of 1978, and the coach was holding court with a handful of players in his cramped office when one young man declared that it was no longer possible to make it financially in America. That he would apply for a job with the Social Security Administration. And that Mr. Hindman's nursing home success could not be repeated.

"If I chose to replicate a nursing home business, I could do it," the coach said matter-of-factly.

There was a moment of silence, Mr. Dolch recalled, then the boys turned the subject back to football.

Jiffy Lube International was founded in 1979, ultimately becoming a corporation with more than 1,000 outlets. On the surface, there appeared to be no connection to his other pursuits -- except for one conspicuous fact: he hired several of his former football players, set them up with Jiffy Lube franchises and even lent them money.

Again, he was helping his boys -- but it was a business strategy that backfired when Jiffy Lube defaulted on more than $69 million in loans in 1989.

"That was the problem with Jiffy Lube," said Vince R. Arioso, a boyhood friend who owns nine quick-lube outlets. "He wanted to help everybody, serving as a bank for a lot of franchisees."

Family split

Mr. Hindman's largess also extended to his mother and brother -- but neither will talk to him, nor say why.

"I'm not too close to him, I'm not too fond of him," said Robert Hindman, his 57-year-old brother, who owns a Jiffy Lube in Grand Island, Neb.

In turn, Jim Hindman said, "We're just not on the same wavelength."

Neither is his mother, Dorothy Cleveland.

"Don't call me for any information. I won't give any information, that's all there is to it," she said when asked about her son, who bought her a new Chevrolet and three-bedroom home in Iowa.

His relationship with his father was even more remote. Shortly after he was born, his father, the late Robert Hindman, then 16, abandoned the family, leaving his mother to support the family as a hotel maid in Sioux City.

The Hindman's never lived long in any one place. It was a poor, nomadic life bereft of happiness even before Ms. Cleveland turned over her children to the Boys and Girls Home.

"She was a hard-looking woman," said boyhood friend Carlton O. Tronvold. "There wasn't anything it seemed that would please her."

Mr. Hindman, his friends say, never got the love and affection of his mother.

Instead, the father of two found comfort elsewhere -- in his own family, or in helping his adopted one, whether it was on the football field, at Jiffy Lube or through Youth Services.

"What he's doing today is very understandable," Mr. Tronvold said. "If you have a mother who really doesn't care and a father who you really don't know."

But Mr. Hindman will never rest, Mr. Tronvold believes. "I don't think there's any question he's continually proving himself, demonstrating 'I can do this, bigger, better, faster, tougher,' " he said.

The only question is what Mr. Hindman will do next.

"I don't know, but I do know there will be something," Mr. Arioso said. "It's just a matter of when and where. Something that strikes his fancy. YSI is not the end of the line."

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