Claus, Inc.

Many humans have long entertained a belief in a benevolent man who enters their homes once a year and leaves gifts for children as a reward for good behavior. Nearly three-quarters of Americans say they typically received Christmas Eve visits from Santa as children, and one in five adults says they are the parent or guardian of a child in their home who believes in Santa, according to a Pew Research Center study published in 2013.

I, too, count myself as a believer, having had my own experience with Santa when I was eight years old. I vividly recall catching a glimpse of a large, bearded man in a red suit pulling things out of a bag in our living room one Christmas Eve. I stood in the doorway and watched him place gifts under the tree and stuff the stockings we had hung on a bookshelf (we didn’t have a fireplace). At one point he stopped his work and seemed to be aware of my presence, so I quickly made my way back to bed.

Since then I have often wondered about the man we know as Santa Claus. Who is he? Why did he take on this role? How does he deliver so many gifts around the world on a single night? There is no lack of published material about him, but as far as I can tell there has been no formal interview with the man who has played such a large role in so many lives.

Until now. Through a long investigation I was able to locate Santa, and after much negotiation with his public-relations team he agreed to meet with me and talk about his life’s work. We decided I would travel to his office, which to my surprise was located not at the North Pole but in the Bahamas. My trip included a series of what seemed to be calculated delays and last-minute changes that I assumed were meant to disorient me so that I could not later divulge his precise location.

When we finally met, it was in a comfortably furnished office in a nondescript cottage with a spectacular view of the ocean. I had envisioned a large man with an ample belly and long white beard, but he was tall and thin with well-trimmed facial hair. He appeared to be in his late fifties and was dressed casually in shorts, flip flops, and a colorful printed shirt that made him look like a tourist. We sat on a terrace overlooking the water, and he smiled and laughed often during our time together. Though he was patient with me, I could also tell that he was holding back some information, either for privacy concerns or to preserve some air of mystery.

I could have continued talking for hours, but an assistant finally signaled that our time was up. Santa stood and stretched, looking past me and into the setting sun. A smile crossed his face, and he leaned over and whispered something in my ear—it’s too personal to share, but it made me smile. He shook my hand, and, laying a finger aside of his nose, he winked and walked away.

 

Patrick Rockenbach: I don’t think I’ve ever seen an interview with you published before. Why is that?

Santa Claus: I try to keep a low profile, and, as you found out, I’m not easy to reach. But honestly no one has ever asked before.

Patrick: I find that hard to believe.

Santa: I think when you get to a certain status like I have, people see you as unapproachable, or they have already formed an opinion of you, so they don’t bother to ask. Plus there is a segment of the population that doesn’t believe I exist.

Patrick: So why now?

Santa: As the world gets more complicated and everything starts to move so fast, we tend to lose sight of the simple things that bind us all together. I thought it was time to set the record straight that I am a real person and the CEO of a large corporation that does a lot of good in the world.

Patrick: I think referring to yourself as “the CEO of a large corporation” is going to rub some readers the wrong way. Many people feel that commercialism is ruining Christmas.

Santa: I understand. It didn’t start out that way, but at some point the size and scale of what we do just exploded exponentially. It made sense to incorporate. Plus we had to protect our intellectual property and limit our liability.

Patrick: What kind of corporation is it?

Santa: On the surface you’d assume we’d be a goods and services company, but in reality the majority of our holdings are technology related. Our mission is to contribute to peace in the world by promoting collaboration among nations through education, science, culture, and communication.

Patrick: You mentioned technology holdings. I wouldn’t have expected that.

Santa: Most people wouldn’t, but we’ve been part of a great deal of innovation over the years, and that can be very profitable. If you add in all the licensing revenue from my name and likeness, let’s just say we’re a multibillion-dollar corporation.

Patrick: Is that why you are here in the Bahamas?

Santa: The North Pole is great for the brand, and we have a satellite office there, but’s it’s really cold, and we couldn’t ignore the tax advantages any longer.

Patrick: Let’s go back to the beginning. How did you get your start?

Santa: I was born in a small village called Patara, which was Greek at the time but is now part of Turkey. My parents died during an epidemic when I was young. They were very wealthy, and I’m not sure where it came from, but as a result I was able to live a comfortable life.

Most of my memories of them are through the eyes of a child. My father’s hands were big and strong. I can still remember what it was like when he held my hand. It made me feel safe and secure. My mother always had a smile and a big hearty laugh. I think that’s where I got it.

I wish I’d had more time with them and often wonder what they would think of all this. They were hard workers and made a point to help friends and neighbors in need. I have memories of my father quietly handing out money to people he met on the street.

When I was in my thirties, I was appointed Bishop of Myra. Since we were on the coast, I would be asked to pray for the local sailors before they shipped out to sea. I saw how their families struggled while they were gone, so I tried to help out with small amounts of money and gifts for the children.

Patrick: So that’s how the idea of giving started? As a way to honor your parents?

Santa: I’ve never really thought about it, but I guess so. We all look up to our parents and try to make them proud of us. I’m no different.

Patrick: Once you became known for your philanthropic work, how did you deal with the financial nuts and bolts of it?

Santa: [Laughs.] Not very well at first. I can identify with people who win the lottery. Once you have the means to do just about anything you want, you can blow through your cash pretty quickly. My parents left me a sizeable nest egg, but I could tell after a few months that it wasn’t going to last. I was like a dot-com start-up back in the early 2000s. I had a negative cash flow, but unlike some of those businesses, I had no opportunity to monetize. I was giving stuff away, and you can’t build a sustainable business that way.

Patrick: It’s so strange to hear you talk like that. When people think of Santa Claus, they just assume everything is “magic.”

Santa: I know, but unfortunately I didn’t have any magic. All I had was a rapidly diminishing bank account and insatiable demand. You know the old saying about necessity being the mother of invention. That was the story of my early years. If it didn’t exist, I had to make it up.

Patrick: Didn’t the Church help you out?

Santa: No. I was doing all this on the side. Nicholas, Bishop of Myra, by day and mysterious gift giver by night.

Patrick: Like Clark Kent and Superman.

Santa: More like Bruce Wayne and Batman. I don’t have superpowers. Most of what I do is built on technology.

Patrick: So you needed an alias. Is that where Santa Claus came in?

Santa: I go by many names. Santa Claus is just one of them. You can google it, but much of my legend in the United States is based on the 1823 poem “A Visit from St. Nicholas” [commonly known as “The Night before Christmas”—Ed.]. Toss in some Norman Rockwell paintings, a few movies, and a series of Christmas specials back in the 1960s and you’ve got what I’d call the modern idea of Santa Claus in the US.

Patrick: Before we go on, I have to say—you look very good for a man who is over 1,700 years old.

Santa: Thank you. I try to work out, watch what I eat.

Patrick: It’s got to be more than that.

Santa: Let’s just say that I have access to some cutting-edge medical technology and leave it at that.

Patrick: I think an obvious question to ask here is one about distribution. There are so many people in the world. The number of presents you have to deliver is beyond comprehension.

Santa: True, but not every person participates. Our target audience is children twelve and under. One thing that we have seen over the years is how the idea of giving has expanded and some people act in my name, which removes them from our process.

Giving is kind of like a snowball. It starts small but just keeps growing and growing. Sometimes I think it’s too much, but when you see someone take the time to think of another person it can’t be a bad thing, right? Gift giving between adults has just exploded in the last hundred years or so. I think some of it has to do with additional disposable income. That didn’t exist for much of history.

Patrick: Why is twelve the cutoff age?

Santa: We’ve found that once a child hits their teenage years, things start to change. Maybe it’s puberty, but the ability to believe in things you can’t see really drops off at that point. There are exceptions, of course; the age is different depending on the country. But you have to draw the line somewhere.

Patrick: You refer to “we” quite a bit. How large is this organization?

Santa: [Laughs.] I have a lot of help. We have specialists in research and development, IT, purchasing, marketing, human resources, accounting and finance, and so many others I don’t even remember. I’d hate to be onstage at some awards show; I know I’d forget someone’s name.

Patrick: But you’re Santa Claus—your job is to remember everyone’s name.

Santa: I’m over a thousand years old; it happens. That’s where technology comes in. That’s the real Christmas magic. Several decisions we made early on had a huge impact. First was to treat every country in the world as a unique franchise—like how McDonald’s has a Big Mac in every country but also includes local flavors. That also allows me to outsource. Second was to limit the size and scope of the operation. We deliver only to children. Third was to run on an opt-in model versus an opt-out model.

Patrick: Let’s take those one at a time. I think most people think of one Santa Claus, not multiple versions that vary by country.

Santa: Remember, when I first started out it was just in my village, so it was possible to sustain a one-man operation. As word began to spread, the volume increased, and so did the requests for special orders. I had to bring in some help, or I never would have survived.

Patrick: Is that where the elves come in?

Santa: I prefer to refer to them as associates. There are really two groups: production and distribution. The “elves” assist with production. I have outsourced the actual delivery to a number of “alternate versions” of myself.

Patrick: Like the mall Santas?

Santa: They are part of the public-relations team, but I also have individuals who make personal appearances on Christmas Eve in homes around the world. The actual persona of the individual depends on the local custom. For example, in the United States it’s Santa Claus. In Germany it’s Der Weihnachtsmann, and it’s Father Christmas in the United Kingdom. It helps to keep things more personal and also gives back to the local economies. I also make some personal appearances and deliver gifts myself every year. I think it’s important for me to stay connected.

Patrick: But you do not personally visit all of the children of the world on Christmas Eve?

Santa: I’m afraid not. That would be impossible.

Patrick: Frankly that’s a little disappointing.

Santa: I think the idea of children around the world being united by an annual event, regardless of how it happens, is pretty fantastic. The fact that it is not a single person that carries out the process is irrelevant. It still happens. There are so few things that unite us anymore. It’s comforting that so many share this common experience.

Patrick: Getting back to the process—What did you mean by opt in or opt out?

Santa: We have a standard contract that allows parents to opt in to the concept of Santa Claus. In exchange for presents for the child, they agree to allow access to the home, limit our liability, and propagate the legend. It’s a win-win: we continue to build our base, and the parents get years of good behavior from their child.

The key is that they have to opt in to participate. If we set it up as an opt out, that would have meant we had to accept almost every child into the program, which would have been a nightmare.

Patrick: So some children are just excluded? That doesn’t seem fair. Why do the parents get to decide?

Santa: Parents make many decisions for their children. This is no different.

Patrick: Why would a parent not participate? It’s free stuff for their kids.

Santa: There are a number of reasons. Some don’t like the terms and conditions of the contract—mostly lawyer types that don’t like to grant access and waive liability. Others don’t like the idea of exchanging gifts for good behavior.

A few parents decide to take on the responsibility themselves—they act in my name so that we can concentrate on helping other people. There may be a few holes in the process, but we’ve gotten pretty good at making sure we don’t miss anyone.

Patrick: That means millions of people know about this and no one talks. How is that possible?

Santa: We have very solid nondisclosure language in the contract, and there are some pretty significant penalties if someone violates the agreement. We also have technology that wipes the memory from the parent once their child’s participation in the program ends. I’d rather not get into details, but it’s kind of like when someone is able to take control of your computer remotely.

Patrick: That sounds like mind control. If that’s true, you have access to literally millions of people that you could make do anything you wanted without their knowledge.

Santa: You make it sound very sinister. It’s not like that. We have to have the support and consent of parents, but not always their full knowledge of the details, or we couldn’t continue.

Patrick: Kind of like a dictator.

Santa: That’s a little extreme. All of this is laid out in the contract; no one is forced to participate. I am the face of the organization, but we have a board of directors that approves all decisions and a very structured risk-and-compliance group that ensures we follow our corporate code of conduct and adhere to our mission statement.

The process we have today was built over many years with very strict testing and controls. If something didn’t work, we either improved it or abandoned it.

Patrick: How do you track the children’s behavior over an entire year?

Santa: In the beginning it was much easier. It was a small village, and everyone knew each other, so you heard things. The challenge came once word started to spread that there was this guy giving away free stuff. It got out of control pretty fast. I had to build a process to identify who qualified and who didn’t. Parents have to monitor behavior as part of their contract.

Patrick: “You better watch out / you better not cry / you better not pout”—it seems like you are encouraging children to hold their emotions in check.

Santa: I think it’s important for children to be able to express themselves, but the goal is to try and reinforce positive behavior. It was a little difficult at first. Who am I to say what’s good and what’s bad? Fortunately, there are some universal truths that cross all cultures, and we are dealing with kids here, so I tried to keep it simple and base it on the golden rule: do unto others as you would have them do unto you.

Patrick: “He sees you when you’re sleeping / he knows when you’re awake / he knows when you’ve been bad or good”—that sounds like Big Brother.

Santa: It sounds much more intrusive than it actually is. Frankly it is a little unrealistic to watch someone 24/7, so we rely on some proprietary algorithms to identify peak times of naughty behavior and then randomly sample children during those windows.

In recent years we also have a trove of information available through social media. We built a popular free social-networking website that allows registered users to create profiles, upload photos and video, send messages, and keep in touch with friends, family, and colleagues. You’d be amazed how much information people are willing to share.

Patrick: Are you talking about Facebook?

Santa: I can’t confirm or deny that.

Patrick: Even with social-media data, you only use a sample of behavior. Couldn’t a child end up on the wrong list?

Santa: [Shrugs.] It’s possible but not likely. Our technology is state of the art, and we have a number of protocols in place to weed out false positives for both naughty and nice behavior. The National Security Agency has been coming to us for years.

Patrick: That’s a little scary, especially for people concerned about privacy.

Santa: It’s no different from signing up for a club membership at the grocery store. Yes, you do give up some personal information, but most people feel the payoff is worth it in the long run. If they change their mind at any point, they can opt out.

Patrick: Do many opt out?

Santa: Not many. It’s a pretty good deal.

Patrick: How do you make all the toys?

Santa: I have always had assistance in the production of the actual toys. The first “elves” were really just people around the village. I would send out requests to the local merchants, and they would provide whatever the children were asking for. That’s where much of my family fortune went: paying the merchants for the toys. That’s when I realized that if this was going to be a long-term project, I’d have to make changes.

Patrick: So did you travel to some exotic location and find a group of people that you transported to your shop at the North Pole to help?

Santa: I think you are confusing me with Willy Wonka and the Oompa-Loompas. It’s not as exciting as that. I started to ask for volunteers to donate goods. I appealed to their sense of giving and was able to convince the local authorities to give them a break on their taxes. It was the equivalent of a nonprofit today.

Patrick: But you said earlier that you are a corporation.

Santa: That came much later as we expanded. We still operate as a nonprofit in a sense. We don’t have shareholders and I certainly don’t keep any of the profits; they go back into the operation and fund what is a large endowment that helps us to continue operating. In addition to the gifts we give at Christmas, we also help to fund a number of other charities throughout the year.

Patrick: Who actually makes the toys then?

Santa: We subcontract that out.

Patrick: To whom?

Santa: We receive a request from a child. Once we verify the child is on the nice list, we search for the best deal on the item they are requesting. We review options from various retailers and identify the best match for the best price. Because we purchase in huge quantities, we are able to get a bulk discount.

Patrick: That sounds like Amazon.

Santa: [Laughs.] There’s a reason for that. Our model was developed by one of our associates, and when we found out how well it worked, we decided to roll it out to the general public.

Patrick: Are you saying Amazon’s business model came from you?

Santa: I would not be able to confirm or deny that.

Patrick: That’s not what I expected to hear. The common belief is that you have elves in a workshop making handmade toys.

Santa: We do some things internally, but the vast majority of items come from companies like Nintendo, Microsoft, and Apple. Technology has advanced too much over the years. There is no way we could make an Xbox or an iPad. We have to go straight to the source. Plus we have to be very aware of copyright and trademark infringement.

Patrick: How do you deliver all these gifts in one night?

Santa: We have an operation that offers a complete suite of online services for shipment preparation, package tracking, rates, and tools tailored to the needs of international shippers and small businesses.

Patrick: That sounds like FedEx. Did they copy you as well?

Santa: I can’t confirm or deny that.

Patrick: What about the reindeer and the sleigh?

Santa: There was a time when I used a sleigh pulled by reindeer, but as the list grew larger, it just wasn’t possible to maintain that. The reindeer are now just for show, part of promotion and marketing.

We’ve built distribution centers in or near all major cities. When a gift enters a hub, the shipping address is scanned and entered into the tracking system. The gift eventually reaches a truck sent out for local delivery.

Patrick: Now that really sounds like FedEx. If you used an army of FedEx drivers to deliver presents on one day, that would overwhelm the system.

Santa: You don’t really think all of those deliveries are made in a single night? Obviously some are made on Christmas Eve, but that doesn’t mean we have to move everything around the world in a single night. We receive letters and gather information year-round to monitor what toys will be in demand. We use proprietary software to predict what a child will want and then pre-stage the products around the world.

Patrick: Isn’t there some risk in trying to predict what children will want? What if you’re wrong?

Santa: It happens. We have a massive inventory of unwanted toys. I can’t tell you how many ZhuZhu Pets we have in storage. Fortunately things are cyclical, and there is always demand for nostalgia items. Give it some time, and a toy becomes popular again. When that happens, we either put the product back into rotation or we sell it through an online auction and shopping website.

Patrick: Sounds like eBay.

Santa: [Silence.]

Patrick: This unwanted inventory—is that where the story of the Island of Misfit Toys comes from?

Santa: [Laughs.] Many of those Christmas specials have some truth to them.

Patrick: Let’s talk about that for a minute. You have been celebrated in story and song for hundreds of years. How do you feel about these portrayals?

Santa: We have a very good publicity department.

Patrick: So all of that is part of the process?

Santa: Of course. Any corporation needs publicity if it’s going to continue to grow. We need people to believe, and for that, we have stay in the public eye. Our client base continuously turns over. If we lose a generation of children, it would put us at risk.

Patrick: I’m sorry to be cynical, but that sounds like an answer from a Fortune 500 executive.

Santa: If we want to continue providing gifts to children and keep the spirit of Christmas alive, we have to be practical. I started this many years ago because I saw a need in my community, and that need stills exists today. We had a good thing going in my village, and we could have kept it small, but it was something that needed to be shared.

I’ve dedicated my life to this idea of helping those in need. For most corporations giving back is just a tax break. Our company truly believes in our mission, and everyone is on board or else they don’t last long. I’m a big believer in the idea that it is better to give than receive.

Patrick: Still, in an operation as big as you describe, there have to be employees who are just going through the motions.

Santa: Every year I visit different areas of the company disguised as an entry-level employee to discover how things work. If I see anything that deviates from our core beliefs, I take immediate action to correct it.

Patrick: Several times in our conversation you have referenced the harvesting of personal data. In today’s environment where privacy and data sharing is such a concern, do you see that changing?

Santa: We are very careful with all our data, and we don’t share information with anyone. Our security system is state of the art. Our internal protocols make it virtually impossible for anyone to use our data even if they were able to access it.

We also remove all personal indicators from our data once a child leaves the program. I can no longer tell you what you received for Christmas on any given year. We keep the general information to help us with our distribution patterns, but everything else is scrubbed.

Patrick: What’s your favorite toy to deliver?

Santa: I love giving bicycles. They just represent freedom to me. You don’t see it as much today, but there was a time where, when you gave a child a bicycle, you were giving them the world. They could go anywhere and do anything. It’s a shame that a child can’t roam the streets on their own and explore anymore. Now it is more about the latest gadget: gaming systems, phones, things like that. I’d rather see a child use their imagination than lose themselves in a virtual world someone else created. I’m sure that makes me sound old-fashioned, but there is great value in an idle mind.

Patrick: But you’ve incorporated technology into your business model quite a bit, from what you’ve told me.

Santa: Some of the virtual reality games are incredible. I guess I’m just old school. Why do you need virtual reality when actual reality is right there? I like things that you can touch. Give me a doll or wagon any day.

Patrick: Do you have any regrets?

Santa: How does that Sinatra song go? “Regrets, I’ve had a few”? I’ve made mistakes over the years. You make the best decision you can with the information you have at the time. I don’t like the idea of rewriting history. Study it, learn from it, and then move on. Tomorrow is just around the corner.

Patrick: What about children of your own? Do you regret not having any?

Santa: I do have children. Millions of them.

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Patrick Rockenbach lives in Whittier, California, with his wife and three sons. He spends his days working in the financial-services industry but has always dreamed of being a writer. This is his first publication. It only took fifty years to achieve.