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Linda Minor: Follow The Yellow Brick Road – Part 4
FOLLOW THE YELLOW
BRICK ROAD:
FROM
HARVARD TO ENRON
PART FOUR
by Linda Minor
© 2002
republished by
permission
Earlier Linda Minor On
ENRON On Scoop….
FOLLOW THE YELLOW BRICK ROAD - PART 3
The Full
Series - Linda Minor On ENRON….
- Part 1. http://www.newsmakingnews.com/lindaminor/lm3,19,02harvardtoenron,pt1.htm
- Part 2. http://www.newsmakingnews.com/lm4,4,02,harvardtoenronpt2.htm
- Part 3. http://www.newsmakingnews.com/lm4,17,02,harvardtoenronpt3.htm
Part
Three showed us how America got into the oil business with
Saudi Arabia. Edwin Pauley was a spy within the White
House, acting as a funnel for campaign funds going to FDR,
while at the same time gathering and transmitting
information about oil policy and captured Nazi and Japanese
assets back to his California business associates.
Pauley's importance comes from his role in the 1950's
when, with an oil concession from Mexico, he worked with
Howard Hughes and George Bush, allegedly exploring for oil
in the Gulf of Mexico. Pauley taught Bush how to launder
money through corporate subsidiaries to be used for
political payoffs as well as in financing of campaigns.
Both Pauley and Bush used this system to finance Richard
Nixon's presidential campaigns, and it was this laundering
scheme which was discovered after the 1972 election, when
a check drawn on a Mexican bank account of a subsidiary of
a Houston corporation controlled by Bush's friends appeared
in the Miami bank account of a Watergate plumber. The
Nixon tapes revealed that the financing scheme could blow
the lid of the “whole Bay of Pigs Thing.”
Thus, it is important to study Pauley to learn how the money works in politics. It is also important to find out, if possible, where the assets of Pauley Petroleum ended up, as well as to learn what happened to Zapata assets -- because these companies were used by the intelligence group to which the two men owed their loyalty. We know from Part One that Pug Winokur, working under the cover of David Murdock's Pacific Holdings, was involved in distributing the Zapata assets, or the proceeds thereof, to Bush's fellow shareholders, who had elected a board of directors with long-term connections to Shell Oil, AtlanticRichfield (Arco); Apco Argentina, a subsidiary at that time of Transco Pipeline (now the Williams Companies); General Signal Corp. (in which Pauley's friend Sam Mosher was involved), First City Bank of Houston, which was then involved in several joint ventures with N.M. Rothschild bank in London; S. Pearson and Sons, a London-based exploration company through its North American subsidiary, Midhurst; Camco, Inc., a Canadian appliance company controlled by Canadian General Election, in which Queen Elizabeth had the largest block of stock.
In Part Three we also discovered that after Pauley's death, his petroleum company, whose primary asset was a concession to drill in Colombia, was acquired first by Hondo Oil and Gas, a company owned by Robert O. Anderson and his sons. Anderson had operated AtlanticRichfield since 1969 and set up Hondo after his retirement. Hondo borrowed massive amounts of money from Lonrho (formerly the London and Rhodesian Mining Company and never repaid the loans, which were secured by stock options, resulting in Lonrho's acquiring title to all the Hondo stock. The story in Roswell, N.M., Anderson's home, was that “Hondo, founded by Anderson in 1986, was unsuccessful in a South America venture. A well drilled in the mountains of Colombia failed to produce as expected, and Hondo's stock price declined to about 3 cents per share just before the buy-out.” (Click.). (1)
What Lonrho Represents
Although Lonrho had been managed by Tiny Rowland since 1961,
the chairman was Duncan Sandys (Lord Duncan Duncan-Sandys),
who had not only been married to Winston Churchill's
daughter, before she left him and later committed suicide,
but also served as Secretary of State for Commonwealth
Relations and Secretary of State for the Colonies. The
other members of the board have included such notables as
(1) Sir George Bolton, who served on the board of the Bank
of England for twenty years, as well as having been a board
member of the Bank of International Settlements; (2) Sir
Edward du Cann, an M.P for 32 years and chairman of Keyser
Ullmann, a London merchant bank; (3) Nicholas Elliot, a
senior department head in MI6 (see Click.);
(4) Maj. Gen. Sir Edward L. Spears, chairman of Ashanti
Goldfields of Ghana in 1967, when Lonrho took it over; (5)
Sir Peter Youens, an Oxford graduate, member of the
Colonial Administrative Service in Africa before becoming
Secretary to Prime Minister Banda when Nyasaland became
the independent country of Malawi; and (6) Alan Ball, son
of Sir Joseph Ball, a former member of M15 and deputy chair
of the secret spy-hunting Home Defence (Security) Executive
during World War II. (Click.)
In the same era that former African colonies of Great
Britain were gaining independence, riots in urban Black
communities were occurring in the United States. Fear of
a takeover by blacks was rampant in conservative
governments in both countries during that time. South
Africa became an independent country in 1961 and Rhodesia
(now Zimbabwe) in 1965, at the same time that MI6,
formerly known as SIS, took on a greater role in ensuring
that British investments there would be protected. (Click.)
It has been suggested that Tiny Rowland was brought to
Lonrho and used as a tool of intelligence operations to
suppress Black-African uprisings against the white minority.
(Click.)
This same racist fear was vented in 1985 when Tiny
Rowland, while still manager of Lonrho and at the same time
acting as owner of The Observer, attempted to
prevent Mohamed Al-Fayed from acquiring Harrods department
stores. (2) For years
Anglo-American Corp. has been a large shareholder of Lonrho.
Anglo-American was founded by Cecil Rhodes and operated
since his death by the Oppenheimer family. (3) Rhodes left
his shares in trust to set up the Rhodes scholarship fund at
Oxford. After his death, the fund was managed by Lord
Alfred Milner, who set up the Round Table group to
administer the trust based on the ideas of Fabian
socialism. In the 1920s Lord Milner also was chairman of
Rio Tinto Zinc (RTZ), the world's second largest raw
materials producing company. Another large shareholder of
Lonrho was the British South Africa Company--a trading
company founded by Cecil Rhodes and incorporated by royal
charter in 1889. In the 1930s this chartered company
hired an American to be its president--Thomas Ellis
Robins, the son of Major Robert P. and Mary la Roche Ellis
Robins, who was born in 1884 in Pennsylvania, a graduate
of the University of Pennsylvania and a Rhodes Scholar
from 1904 -1907 to Christ Church, Oxford--the first Rhodes
Scholar from Pennsylvania. He was also a director of
Barclays Bank, African Explosives and Chemical Industries,
Anglo-American Corporation of South Africa, Wankie
Colliery Co., Premier Portland Cement (Rhodesia), De Beers
Consolidated mines, Union Corporation, Rhodesia and
Nyasaland Airways, and he was a Trustee of the
Rhodes-Livingstone Museum. He became a British citizen
in 1912, having married Mary Wroughton from Berkshire that
year. In 1946 he was Knighted. He also became a Knight of
the British Empire in 1954. In 1958 he was made a Baron,
which gave him the title of Lord Ellis Robins, 1st Baron
of Rhodesia and of Chelsea. (Click.)
RTZ was formed in the 1870s by China opium trader Hugh
Matheson, who was a principal in the Hongkong-based firm
Jardine Matheson. The Rothschilds have a significant stake
in the company, and Queen Elizabeth II is a significant
investor, according to Charles Higham's biography of the
Queen. Anglo American and RTZ combined control a stunning
percentage of the Western world's most important precious
minerals. Lonrho, which recently changed its name to
Lonmin, owned a third of Ashanti
Goldfields stock. Rowland lost control of Lonrho
in 1993 to German businessman Dieter Bock, who four years
later left Lonrho to become President of TrizecHahn Europe
and Vice Chairman and a Director of TrizecHahn
Corporation. (Click.).
Bock traded five UK and German real property projects to
TrizecHahn, North America's second largest public property
company, in exchange for 4% of TrizecHahn stock.
TrizecHahn also owns 16.7% of Barrick Gold, the world's
second largest gold producer. Barrick was controlled by
Peter Munk, who was set up as chairman, he claimed, by
Adnan Khashoggi who owned the company stock.(4)
Until recently the entire section of office
buildings in downtown Houston where Enron and Halliburton
(through its subsidiary, Dresser Industries) leased space
was owned by TrizecHahn. The acquisition of this real
estate was accomplished in a manner similar to the way
Lonrho acquired Hondo--debentures, secured by stock
options, not repaid. Munk had merged his company with
Trizec, a company created by William Zeckendorf and a
syndicate composed of Hill Erlanger of Boston and a branch
of the Canadian Bronfman family. Much more about this
real estate method of money-laundering will be in the next
segment to air later in the summer. But what we are
finding out is that the assets of both Zapata and Pauley
Petroleum ended up in the hands of British and Canadian
companies, whose shareholders include British aristocrats
and the royal family, who are carrying on the looting of
what was one a colonial empire. It is interesting to note
in this connection that Lonrho (now Lonmin) has its
headquarters at 4 Grosvenor Place in London, across the
street from Buckingham Palace. Before its demise, Enron
had its London headquarters at 40 Grosvenor, at the other
end of the block from Lonrho, but still just across the
street from the Palace. This real estate in Mayfair was
developed by Gerald Cavendish Grosvenor, the Duke of
Westminster, who still owns almost all of Mayfair, subject
to leases. Enron had 3,000 subsidiary corporations, most of
which were based in the Cayman Islands and other British
offshore banking territories. The contracts for its
online trading transactions provided that they would be
performed under the laws of the United Kingdom, even though
the location of the company was Houston, Texas. So who
really benefited from what happened at Enron? Where did
the money go? Enron must be left for a later segment.
We are following Pug Winokur's career, and the goal of
this part is to examine the Penn Central Railroad, with
which Pug Winokur was involved from 1980 until around 1987,
to determine who was involved in that debacle.
The merger between the Pennsylvania Railroad and the New
York Central Railroad became effective on February 1,
1968. Bankruptcy occurred on June 21, 1970. The
build-up to the merger, which had been planned throughout
the 1960s and before, is even more fascinating than the
aftermath of the crash. The study of the Penn Central
railroad could be lumped into a university history
class, changing the name from Post-Civil War American
History to “The Arrival and Departure of the Railroad in
America.” That title would just about cover all the
topics conspiracy theorists love to dwell on but do not
really understand. A very brief summary is necessary here
just to keep the broad outline of our purpose in mind
for this series. Railroads were projects that required
the services of investment bankers. After the Civil War,
expansion was the watchword in America--moving into and
exploring the frontier, developing the resources, farming,
mining--which led to the overwhelming need for
communication, transportation and distribution. These
systems were built using “networks”--which, we will
learn, is another word for syndicate. Any project needing
money can be drawn as a line beginning at the local area
in need of the capital, back to the investment banker,
who can be depicted as a circle with a series of lines
branching out from his center. These lines connect to the
banker's sources of funds for investment. The reason we
have such a difficult time understanding history is that
most of these sources of funds are secret. The banker
tends to promise his clients that he will not reveal their
identities to the public, and he accomplishes this goal by
use of his friend, the Wall Street lawyer, who drafts
legal documents like trust agreements and contracts
which remain buried in the lawyer's office, stamped with
a big red stamp that reads: “Confidential, subject to
attorney-client privilege.” As a result, conspiracy
theorists talk about the “Morgan Interests,” the
Rockefellers, the Rothschilds, etc., etc., as though these
bankers were using their own money. Be assured, they were
not. What they were doing was putting together
syndicates of capital, melded together with
contracts. Every project begins in a place--usually a
small locality where people live. The people who live
there don't have the money to pay for the project at the
time it is desired. Often, they don't even know they need
the project, but someone with a much more global scope
has put some numbers together and decided the
demographics warrant the project to be built in this
locality. The next step is bringing the money from outside
the place where the project is to become reality and
then to create a financial framework that will cause the
resulting cash flow emanating from the local project to
return to the sources of the capital that brought the
project into being. The framework for how this system
of moving the money around is referred to by investment
banker types as “the financial model.” Designing a
workable model requires not only vision, but also respect
for the individual parts that make up the whole. Ending
up with a financial model where every component wins,
and nobody loses is a very difficult task; usually the
will of the capital sources wins out. The only power the
localities have been able to wield has been through
government action or unions. Seeing this concerted
action as detrimental to their interest, wealthy
capitalists have devised means of getting around it--such as
bribery of officials, funding political campaigns, and
limiting labor union effectiveness through control of
the workers' pension plans. If a university history
course were designed around teaching Americans about
railroads, there would be separate chapters covering various
parts of the country where railroads were built.
Perhaps the most important chapter would be the story of
the Pennsylvania Railroad (PRR) and the New York Central
(NYC), which were themselves amalgamations of even shorter
lines which had come together under centralized
management. Even before John Kennedy took office the
Pennsylvania Railroad had been lobbying on behalf of the
merger, which JFK did not favor. In fact, he rejected it
without too much discussion once he realized that it
would result in the loss of a significant number of jobs
held by union workers. But Kennedy's opposition did not
kill the clamor on behalf of the PRR proposal. They had
support from Lyndon Johnson and Richard Nixon, and they
played the long odds. Walter Hubert
Annenberg The largest
block of Pennsylvania Railroad stock in 1962 was held by
Walter Hubert Annenberg, son of Moses “Moe” Annenberg,
who was introduced in Part Two of this series as being
connected to the Chicago organization that moved into
Los Angeles through Arnold Kirkeby's acquisition of a
half-interest in Janss Investment--where Victor Palmieri
spent many years of his career. Moe had made sure his
son was more acceptable to elite members of the syndicate,
having sent his son to The Peddie School, and later to the
Wharton School at the University of Pennsylvania
(apparently he didn't acquire an academic degree).
Peddie was established in 1864 as a Baptist prep school in
Hightstown, N.J., convenient to Princeton, Rutgers and the
University of Pennsylvania. It is no surprise that the
Annenberg Foundation fails to mention Walter's father's
syndicate connections to Meyer Lansky and Lucky Luciano,
and simply gives him credit for bringing us those wonderful
American publications--Seventeen Magazine and
TV Guide--not to mention his early fascination
with numerous Philadelphia radio and TV stations in the
early days of the expansion of those media, before moving
into funding of the communications department at the
University of Pennsylvania. Most of Walter's
biography set out at the website for the foundation details
various “charitable” works, which you will find to be
typical for any foundation funded with dirty money;
crime pays in the form of buying prestige for the
criminal and his family. Walter's second wife was Leonore
Cohn, niece of the Columbia Pictures magnate and former wife
of Lewis Rosenstiel of Schenley Distillers. Annenberg
also served as a Lt. Commander of the Naval Reserve and
owned the Philadelphia Inquirer and Triangle
Publications. Walter Annenberg had his primary residence in
Wynnewood, Pa., but kept another residence near Palm
Springs in Rancho Mirage, California (called “Playground
of Presidents”), that included a private golf course.
Walter funded the campaigns of several successful
presidential candidates, and, as a result, was rewarded
with the prize plum--appointment as Ambassador to the
Court of St. James in London. (5) Moe Annenberg had
based his daily racing wire service out of Milwaukee,
after first gaining power by being the muscle behind William
Randolph Hearst's Chicago Examiner circulation
war. Annenberg's full partner in ensuring
Hearst's success was Al Capone, who had worked with
Luciano in New York before going to Chicago. (6)
Howard Butcher
III, the University of Pennsylvania
The second largest shareholder of the
Pennsy Railroad was Howard Butcher III, a 1923 graduate
of the University of Pennsylvania. Butcher's father
(Howard, Jr.) had graduated from William Penn Charter School
in 1893 and attended University of Pennsylvania for two
years. He worked as a bond salesman for ten years
before becoming a partner of Butcher and Sherrerd, then
a member of the board of governors of the Philadelphia Stock
Exchange from 1922-46, for which he served as president
1934-40. He joined the board of governors of the NY
Stock Exchange in 1924-29 and 1945-49. During World War
I he served overseas with the YMCA and was also a member of
the Hospital Board of the University of Pennsylvania.
(8) The Butcher family's life
was based around the University of Pennsylvania, whose
investments they had long helped manage. In fact, it is not
really clear whether the Pennsylvania Railroad shares
Butcher was holding in his name were actually his or
whether they belonged to the University. Following the
Penn Central bankruptcy filing in 1970 a cursory
investigation was made to discover whether there had
been any wrong-doing involving the sale of shares by
Butcher & Sherrerd just prior to the bankruptcy. This
less-than-thorough inquiry was performed by the law firm of
Drinker, Biddle & Reath, which has also had a
longstanding relationship with the university. Another
firm involved in the inquiry was then called Drexel,
Harriman & Ripley, which handled the university's investment
account. The orders to sell the university's Penn
Central stock were given by George Connell, who
continued with Drexel, Burnham & Lambert after the bank
changed its name. Drinker, Biddle also handled
litigation that was brought as a class action against
outside directors of the Penn Central in the early
1970s. One of the attorneys handling this defense was
Raymond K. Denworth, Jr., who was a member of the
University Board of Trustees until his death in 1999.
(9)
It can do no harm in reminding the reader at this point
that Michael Milken, a summa cum laude graduate of the
University of California at Berkeley, finished his M.B.A.
studies at the top of his class at Wharton Business School
in 1970 when he began working as a researcher at
Philadelphia investment bank Drexel Harriman &
Ripley. (10) Drexel Harriman &
Ripley had been founded in Philadelphia by the father of
Anthony Joseph Drexel, who formed a connection with J.P.
Morgan, as well as one in Paris with Harjes & Co.
According to Ron Chernow in his book The House of
Morgan, in 1895, Morgan took over all the offices,
including Philadelphia, even though the name Drexel
remained. In 1940 Morgan's link with Drexel ended, and
Morgan sold the name to “some Philadelphia partners.”
The names of those partners is not known at this time, but
it is suspected that the new owners had some connection
to the Pennsylvania Railroad. Subsequently, the name
was changed to Drexel, Harriman & Ripley, before
becoming Drexel Firestone. Burnham & Company acquired
the assets of Drexel Firestone in 1973, while owner, I.
W. (Tubby) Burnham II, sat on the board of overseers of the
Wharton School of the University of Pennsylvania. During
the 1970s the board's chairman was Donald T. Regan (who
in 1981 became Ronald Reagan's Secretary of the
Treasury--a Harvard graduate who served as a Lt. Colonel
in the Marine Corps, then spent his career with Merrill
Lynch). Also on the Penn University board were
Pennsylvania Railroad shareholders Howard Butcher III
and McBee Butcher. Burnham sold his Philadelphia
investment bank to Baron Pierre Lambert, the Belgian cousin
of the Rothschild family and manager of the Banque
Bruxelles-Lambert and family mining interests. Family
member Jean Lambert married Phyllis Bronfman (while
Minda Bronfman married another Rothschild cousin, Baron
Alain de Gunzberg). (Click.
pdf)
Howard Butcher's partner, Sherrerd, was John J.F. Sherrerd,
formerly CFA of Sherrerd & Co., who had previously spent
13 years with Drexel Harriman Ripley, and was a 1952
graduate of Princeton with an M.B.A. from Wharton School
of the University of Pennsylvania, 1956. He was also a
director of the Brown Investment Advisory-- formed in
1993 as an affiliate of Alex. Brown & Sons--the
investment banking company in Baltimore--which merged
recently with Deutsche Bank in which the A. Brown subsidiary
is now known as “Deutsche Bank Securities Inc.” A.
Brown had become a part of Bankers Trust in 1997.
(11)
The role of the
Drexel firm's involvement in the Penn Central fiasco is not
surprising, since in the summer of 1969 Drexel, Harriman &
Ripley--with legal assistance from Wall Street law firm
Shearman & Sterling--had prepared the first prospectus
for Investors Overseas Services (IOS), as the lead
underwriter with Banque Rothschild; Guinness Mahon & Co.,
Ltd.; Hill, Samuel & Co., Ltd.; Pierson, Heldring &
Pierson; Smith, Barney & Co., Inc. The IOS public
offering related to the transformation of Bernard Cornfeld's
Fund of Funds from a Panamanian company to a Canadian
corporation to be listed on the Toronto and Amsterdam
Exchanges. (12) It is clear that Cornfeld had
discovered a way to launder dirty money through
offshore, confidential, bank accounts, and it is clear that
some of those accounts must have had an interest in
developing the Bahamas as a gambling resort. Whoever
ultimately owned the funds that were being laundered,
they had ties to banks in Canada, Boston, and the
Caribbean.
Richard King
Mellon
Mellon had been a director of the PRR since 1934, succeeding
his father Richard B. Mellon. Mellons had held a seat
on the PRR board since 1856. R.K. Mellon was the
senior member of the Penn Central Board at the time of
the merger in 1968. He died in June 1970. The Mellon
family is very powerful in America. At the time of
the Penn Central merger, their major holdings were in
Aluminum Corp. of America (Alcoa)--33.85% of common stock
individually owned and 25% preferred stock through
individuals and foundation; Gulf Oil--70.24% of common
owned by Mellons and their companies; Allis Chalmers;
Bethlehem Steel; Jones & Laughlin Steel; Koppers
United--52.42% of common; Lone Star Gas; Niagara Hudson
Power; Pittsburgh Coal; Pittsburgh Plate Glass;
Westinghouse. They also owned Mellon National Bank of
Pittsburgh and other banks. They controlled numerous
foundations, such as A.W. Mellon Trust, Avalon Foundation
(Ailsa Mellon Bruce), Sarah Mellon Scaife Foundation,
Old Dominion Foundation (Paul Mellon), The Richard K.
Mellon Foundation and the Matthew T. Mellon
Foundation. Richard King Mellon was the son of Richard
Beatty Mellon and nephew of Andrew Mellon; Andrew and
Richard B. were sons of William Larimer Mellon. Sarah
Mellon Scaife was Richard K.'s sister, and the mother
of Richard Mellon Scaife. William (Billy) Mellon Hitchcock
was the grandson of William Larimer Mellon, founder of
Gulf Oil, and nephew of banker Andrew Mellon.
(13) The Mellon family had close
ties with the O.S.S. London station chief David K.E.
Bruce was married to Andrew Mellon’s daughter. Also, the
Mellon uncles were social friends of CIA director
Richard Helms during the late 60s and early 70s. Bobby
Lehman, who gave Billy Mellon Hitchcock a job at Lehman
Brothers in 1961 also had participated with W.A. Harriman &
Co. in aviation issues (Lehman, Billy's father Tommy
Hitchcock and Averell Harriman were on the same polo
team). Lehman Brothers also financed David Sarnoff’s Radio
Corporation of America, which served as Sir William
“Intrepid” Stephenson’s headquarters in New York until
the O.S.S. was established. Like Drexel & Co., Lehman
Brothers would also be bought out by European old-money
families. It first merged with Kuhn Loeb and later with the
company formed by the merger between Shearson Hayden
Stone and Loeb Rhoades--forming Shearson Lehman American
Express, which in 1992 was controlled by Edmund Safra
and Carl Lindner (each with about 4%). This leads us to
wonder who Lindner was fronting for. Could it have been
the same old-world aristocrats, heavily involved in the
global drug trade? Richard King Mellon had engaged in some
real estate development with William Zeckendorf, who not
only assisted the Rockefellers in many developments, but
who had formed a corporation called Trizec with a capital
syndicate which included a branch of the Canadian Bronfman
family, the Boston investment bank of Hill, Erlanger and
a British group called English Property which was
controlled by Eagle Star Insurance--a company said to be
very closely connected to the British Crown, the Rank
Organisation and to MI-6. (14) Mellon had a close
relationship with David Bevan, president of PRR, who
like Mellon was extremely secretive. He had been on the War
Production Board during World War II and a member of
the U.S. Lend Lease Mission to Australia, as well as
deputy chief of the Economic Mission in London in
1945. Bevan operated a highly confidential investment fund
organized in 1962 called Penphil which had 15
shareholders, including Bevan and four senior officers
in the PRR Financial Department. Among these officers was
Charles J. Hodge, partner in and chairman of the executive
committee of Glore, Forgan, Wm. R. Staats, Inc.--the
investment bank founded by OSS agent Russell Forgan,
in which Maurice Stans was a partner. After the Penn
Central merger, the Glore bank would merge with Francis I.
DuPont's brokerage company.
(15)
As mentioned in Parts One and Two of this
series, William Zeckendorf stated in his autobiography
that he had been asked to develop Century City in
California in the early 1960's but backed out of the deal
because of his involvement with the Great Southwest
Corp. He sold out his interest in the California
joint venture to Richard King Mellon of Alcoa. Alcoa's
chairman for many years was Arthur Vining Davis, who created
Arvida--another land development company with vast
holdings in Florida. Prior to the merger, thousands
of acres of land had been sold by the owners of Arvida,
the Great Southwest Corp. in Texas and Macco Realty in
California, as well as other properties ready to be
developed--all near urban areas. This preparation for
massive suburban development followed closely on the heels
of the Kerner Commission Report and the attempt to
de-segregate by forced busing, which merely increased
white flight out of the inner city. Strangely
enough, Arvida remained a part of Penn Central and was
managed by it until 1983--at least three years after
Pug Winokur went to work for Victor Palmieri, who
headed Penn Central and its subsidiaries. According
to John Taylor in Storming the Magic Kingdom: Wall
Street, the Raiders and the Battle for Disney
(Alfred A. Knopf, 1987), Penn Central emerged from
Chapter 11 bankruptcy in 1978 “with what to many
seemed an excessively bureaucratic management.” One of
Arvida's executives, Chuck Cobb, joined with Richard
Rainwater in a leveraged buyout on behalf of the Bass
Brothers. With an investment totaling $20
million, they arranged financing of $183.6 million, secured
by Arvida's assets. Six months later they marketed
the company to Disney, a corporation which already
owned 17,000 acres of land in Florida. The eventual
deal with Disney would result in giving Bass Brothers a big
block of Disney stock. The land package which Disney
had bought in around Orlando, Florida, in the 1950s
had been put together for him by Paul Helliwell,
former OSS chief of the Far East Division, who was
recommended to Disney by William J. Donovan. Disney's
investment banker for many years was J.P. Morgan, a
firm which worked with Donovan. Helliwell also set up
the Castle Bank in the Bahamas to launder money flowing from
the sale of drugs from Burma and Thailand used to
finance Chennault's airline. Castle Bank would
eventually be connected to Billy Mellon Hitchcock's
profits from selling LSD to California college students.
Robert R. Young
During the long
history of the New York Central Railroad, its owners had
included the Astor family and the Vanderbilts. When
Cornelius Vanderbilt died in 1877, he owned 87% of
the stock, which he left to his son William H.
Vanderbilt. In 1879 five-eighths of the stock was sold
with the help of a syndicate controlled by J.P. Morgan, who
then became a board member of the railroad.
According to Ron Chernow, in his book The House
of Morgan, the “Morgan-led syndicate” had the job of
liquidating 250,000 shares without collapsing the price of
the stock. J.P. Morgan bought 1/5 of the shares
available. “The syndicate allotted 20,000 shares to
Jay Gould, 15,000 to Russell Sage, and 10,000 to Cyrus
Field.” Apparently the remainder of the shares were sold
“abroad,” primarily in London. Morgan obtained
proxies to vote these foreign-owned shares. The
Morgans retained control of the railroad until a new
assault occurred in 1916 with passage of anti-trust
legislation. The Central had sold off one line called the
Nickel Plate Railroad to the Van Sweringen brothers
from Cleveland, Ohio. With financing arranged by
the House of Morgan and Guaranty Trust the Van
Sweringens made one purchase after another by using existing
holdings as collateral for new acquisitions, with
loans from Morgan. Thus, like the Murchisons, who
would come later, the acquisitions were all with
borrowed funds. This is extremely important in
understanding ownership of an asset. Even if title
is in my name, if a corresponding debt is
outstanding, I do not own the asset; the creditor does. The
purpose of this type of transaction is purely and simply a
subterfuge to disguise the actual owner. It is no
different from having a hidden trust agreement which
contractually allows one person to secretly hold
title in his name for the benefit of another. The legal
documents may look different, but the result is the
same. In January 1929 the Morgan Bank issued new
stock for the Alleghany Corporation as a holding
company for the railroad lines it owned, foremost of
which was the Chesapeake & Ohio, but also the Erie and the
Missouri Pacific. (16)
When Alleghany stock led the crash the following
October, Morgan and Guaranty Trust led a syndicate
that furnished a $40 million rescue loan that
secretly replaced the Van Swerigens. Default in the first
loan payment resulted in foreclosure the following year,
which officially put the Morgan banks in control of the
equity. But, of course, we don't know the source of
the funds Morgan was using for this purpose.
According to Charles Higham [Wallis: Secret Lives of the
Duchess of Windsor. London, 1989], J.P. Morgan was “a
chief investor for [Queen Elizabeth's father and
mother] King George VI and Queen Elizabeth” long
before he became king after his brother abdicated.
Morgan had issued shares of Alleghany preferred stock, “in a
storm of controversy,” which were acquired by Solomon
Warfield for his niece Wallis Simpson, who would
later marry King Edward VIII, the brother of King
George. Wallis inherited these shares when her uncle
died in 1927. In fact, they had been her favorite
investment because they were one of the few stocks
that did not suffer during the 1929 stock market
crash. Charges were made beginning in 1935
when the Morgans held an auction in which the Van
Sweringens were allowed to bid on their former empire and
obtain it for a mere $3 million, with borrowed funds of
course. Within a short time both brothers had died,
and the team of Robert Ralph Young and Cyrus Eaton
(allegedly a tool of John D. Rockefeller) were able to
acquire the largest block of shares of Alleghany. However,
the other shares, voting together, kept Young from
gaining a seat on the board. Ron Chernow refers to
Young as “certifiably America's most rabid
Morgan-hater.” He says he “smarted after being rebuked by
Tom Lamont for his testimony at the Wheeler railroad
hearings in the late 1930s.” Burton K. Wheeler, the
Senator in charge of the hearings, was a friend of
Young's, according to Charles Higham. He was opposed to the
Lend-Lease program and to America's entry in World War II,
and was a founder with Charles Lindbergh and Norman
Thomas of the America First Committee. (17) At the
time of the hearings, Young was chairman of the Chesapeake &
Ohio Railroad--parent of the Baltimore & Ohio, which
eventually merged with the Seaboard Airline running
from Baltimore to Florida. (18)
By 1941, Young had gained
support of Allan Price Kirby, who joined with him in
acquiring even more shares, with the same result; they were
still locked off the board. Kirby's father, Fred
Morgan Kirby, from Wilkes-Barre, Pa., had been the
partner of F.W. Woolworth in creating the
five-and-dime corporate empire. Although Kirby did not
travel in the same jet set lifestyle in Palm Beach,
Florida with Robert Young, it is clear that the
heirs to F.W. Woolworth's fortune did. One of the
heirs was Barbara Hutton, niece of E.F. Hutton, referred to
as the “poor little rich girl.” Her first cousin
was Jimmy Donahue, the flagrant homosexual companion
of the Duchess of Windsor for a three-year period in
the early 1950s. Other wealthy Palm Beach socialites
included the Dodge family, who had married into the
William Rockefeller family. Like Kirby, the
Rockefeller companies were based in Morristown, N.J.
William Rockefeller and his partner James Stillman
had founded the National City Bank, which has a long
history of laundering “dirty money.” Whether it is a coincidence or
not, it was also in 1879--the year J.P. Morgan
liquidated 5/8 of the Vanderbilt shares-- that Robert R.
Young's grandfather, an Englishman named Robert
Moody, arrived in Canadian, Texas and began ranching
and banking operations. The Moody ranch was located
in the northeast section of the Texas Panhandle and was
surrounded by ranches like the LIT and the LX, which were
owned by syndicate investors from England and
Scotland
Young and
his wife Anita were introduced to the Duke and Duchess of
Windsor in Palm Beach, Florida by their mutual friend Walter
Foskett, who acted as the Duke's American attorney
while he was governor of the Bahamas. Foskett was
also the attorney for Sir Harry Oakes (who owned the
second largest mining company in Canada) and Harold Christie
(former bootlegger), members of a consortium (called
Tesden Corporation) suspected of “shady dealings” in
the U.S. and Caribbean. Foskett was also a director
of Alleghany Corporation. Walter W. Foskett grew up in
Logansport, Indiana and was the son of an engineer on the
Pennsylvania Railroad. He began law school at
Indiana University but after two years was forced to
drop out for financial reasons. After working for a year
as a railroad clerk earning $65 a month, he was able to
return to school and graduated in 1907. He accepted
a position in a Logansport law firm after a brief
period in Seattle. Later he established his own practice
and served one term as the Logansport city attorney and
moved to Miami Beach, Florida in 1922. There he
established the law firm of Winter Foskett with a
long-time friend, Bert Winter. Foskett died in 1973.
It soon becomes obvious what the
relationship was between the Windsors and Foskett.
Reading between the lines, we may surmise that
between 1907 and 1922 the Logansport economy was very
dependent on the railroad which ran through the
town. It is difficult to sort out all the small
rail lines during these years, which would eventually be
consolidated into larger lines; however, it appears that the
main rail line through Logansport was owned by a
Kentucky chartered company--the Louisville &
Nashville Railroad (L&N)--a competitor in the area with
the Pennsylvania and the New York Central. L&N had
connections into the port areas of New Orleans area,
Virginia and Georgia, which primarily were destinations of
the interior connections primarily in the coal
producing areas of Kentucky, Indiana, and
Illinois. Through acquisitions in Indiana and
Illinois in 1969 it became an important Midwestern
rail
For many years 35% of
the stock of L&N was owned by the Seaboard
Coastline Railroad--controlled until his death in 1927 by
Solomon Warfield, the uncle of Wallis Simpson. In
1969 the Seaboard bought the remainder of the
outstanding shares, and the L&N became the
wholly-owned subsidiary of Seaboard Coast Line Industries.
In 1976 the Toledo, Peoria & Western (TP&W) -- a
bridge line jointly owned by the PRR and ATSF --
bought the L&N unit line from Penn Central
trustees. On
The
Duke met repeatedly with American businessmen such as
Irish-American, James Mooney of General Motors, European
division, whose factories in Berlin manufactured
tanks for Hitler's use. As it turns out, Robert
Young had a great deal in common with Mooney. Most
of Young's professional background was connected to the
DuPont financial empire. He worked for Pierre S.
du Pont at the same time John J. Raskob was the
company's treasurer, and later moved to General
Motors after Raskob, who was secretary treasurer of the
Christiana Securities Company, convinced Du Pont
to invest in General Motors in 1914. Raskob, from
1918 to 1928, was vice president and chairman of
the Finance Committee of General Motors, as well as vice
president in charge of finances at DuPont. By
1920 GM comprised half the earnings of DuPont, but
the company, as a result of a federal antitrust
investigation, disposed of its stock in 1961. It was not until 1954 that Young
gained complete control of the Alleghany with
the assistance of two fellow Texans, Clint Murchison,
Sr. and Sid Richardson [uncle to the notorious Bass Brother
of Fort Worth--his heirs], who bought Alleghany
stock with loans from the corporation and voted
the shares in favor of Young. Along with various
railroad segments that were consolidated to create the line
were numerous pieces of real estate that were owned as part
of the property of the railroad. Such real
estate included the Grand Central Terminal, the
Waldorf Astoria Hotel and the Bank of New York
Building. It also included what was then called the Pan Am
Building, but later changed to the Met Life Building at 200
Park Avenue. This building was built just north
of the terminal's main concourse by the New
York, New Haven and Hartford Railroad, which
owned an interest in the land as a subsidiary of the New
York Central. The company which built it
received one-fourth of the financing ($25
million) from Jock “King” Cotton, an English investor
who was a member of the syndicate group that typically was
involved in projects with William Zeckendorf.
The building was named “Pan Am” because the new
airline company was the major tenant at the
time. In 1981 Grand Central Buildings, Inc. sold its
interest to Metropolitan Life Insurance Co. It
is currently the address for the Home Loan Bank
of New York. When it opened in 1963, 200 Park Avenue
was the largest privately owned office building in the
world. For some reason, this building was
the headquarters of the United Fruit Company
at the time Eli Black jumped from his office on the
44th floor. (20)
The plan to develop The Bahamas proceeded in Freeport under
the direction of Wallace Groves, who had been
convicted in 1941 of mail fraud, but who appeared in
the Bahamas shortly after that. In 1955 Groves
obtained a concession from the government granting 50,000
acres of land to Grand Bahama Port Authority Ltd.,
with an option of adding an additional 50,000. The
Port Authority, which Groves headed, was relieved
from paying taxes on income, capital gains, real estate and
private property until 1985 - a provision that has since
been extended to the year 2054. Groves convinced
the shipping tycoon D.K. Ludwig to construct a
harbor, and in 1962 he brought in Canadian mobster Louis
Chesler to develop the tourist center of Lucaya. Groves
also operated Intercontinental Diversified
Corporation, using as his attorney Paul Helliwell, former O.S.S. Chief of
Intelligence in China, where he had met numerous
times with Ho Chi Minh in 1945.
(21) After the O.S.S. was disbanded
Helliwell worked within the War Department Far East
intelligence division before opening a law firm in
Miami where he worked for the CIA, handling corporate legal
matters. Helliwell represented Claire Chennault in
financing his airline with drug smuggling, and
contracting with the CIA's sister agency, Office of
Policy Coordination, headed by Frank Wisner, before the two
agencies were merged in the 1950s. (22) Sea
Supply Corporation was set up in Miami in 1949 with its main
office in Bangkok, Thailand. Helliwell in 1952 was
attorney for Sea Supply, as well as general counsel
for the Royal Consulate of Thailand, the address of
which was Helliwell's law office. Sea Supply was a cover
for Chennault's Civil Air Transport (CAT), while
also channeling assistance to Thailand's police
chief who was involved in the opium trade. Once the
Far East money stream was set up, Helliwell focused on
Guatemala and helped Frank Wisner and Tommy
Corcoran--lobbyist for the airlines and for the
United Fruit Co. --orchestrate the coup which forced
President Arbenz into exile. Helliwell acted as
“paymaster,” the man who made the off-the-books
payments with cash that did not appear on government
budgets. Helliwell also headed the Republican Party in
Florida, bringing him into contact with Bebe Rebozo,
one of Richard Nixon's biggest financial
supporters. Helliwell's law partner
Mary Jane Melrose, moved to Freeport, The Bahamas,
in 1969 serving as an officer and director of the Port
Authority and also of Intercontinental Diversified. Payoffs
were made to the Prime Minister from the
corporation's accounts, which had been laundered
through the Castle Bank & Trust, set up by Helliwell's law
firm. The year before Melrose began handling operations
personally from the island, the Port Authority had
considered transferring shares to a Philippine
mining company named Benquet, founded in 1903. The group
Helliwell represented was involved in a consortium with a
group represented by Allen & Co.--a merchant bank in
New York composed of Charles and Herbert Allen, who
held the largest block of Benquet stock. According
to J. Bryan III and Charles J.V. Murphy in The Windsor
Story (Dell 1979), Charles Allen of Allen & Co. was
one of the Duke of Windsor's most respected advisers
(p. 609). Bryan and Murphy also indicate that Clint
Murchison sold to both Robert Young and the Duke
shares in his Canadian Delhi, from which the Duke made a
profit of more than half a million pounds. While
the three of them were in Mexico, Young attempted to
sell used rolling stock there, while Murchison
attempted to buy mineral rights to offshore properties.
The parent company for
Castle Bank was Freeport's first bank, Mercantile
Bank & Trust (founded in 1962), which owned one of the five
shares of Castle. Mercantile had itself been formed
by a syndicate which included the Cayship Investment
Co. of Panama and other entities owned by Daniel K.
Ludwig. Legal documents revealed that Mercantile had been
set up by Inge Gordon Mosvold, a Norwegian shipbuilder. By
1965 Paul Helliwell was a director of Mercantile
Bank. Documents also showed a close connection
between Helliwell and the Chicago law firm of Burton Kanter,
who was a tax attorney for members of organized crime in
Chicago, whose primary means of laundering money was
into hotel chains.
Surprisingly, this
Bahamian finance scheme coincided with much of the
political background of Richard Nixon, whose first
government job was in 1943 at the Office of Price
Administration, where he met Cuban American Bebe
Rebozo and future-Senator George Smathers. Nixon's job was
to regulate the prices of rubber goods, which were
rationed during the war. Smathers was an attorney for
crime figures smuggling tires from Cuba, while Rebozo
owned a gas station from which he sold the tires on the
black-market. A few years later when Nixon ran his first
campaign for Congress, he was assisted by mobsters
working for Mickey Cohen, who sold heroin in Los
Angeles. Through Rebozo, Nixon also met other organized
crime figures, many who had been involved in Cuban casinos
before Castro threw them out. Some of these men set
up businesses in The Bahamas, once it was developed.
Nixon was an attorney for National Bulk Carriers, which
had contracts with General Development Corp., run by Wallace
Groves and Lou Chesler, to build the harbor. In his
presidential campaigns, Nixon was the first Republican
to have union support--from the Teamsters, headed by
James Hoffa, who loaned hundreds of millions of dollars from
the Central States Pension Fund for construction of
casinos in Las Vegas. [Source: Gary W. Potter,
Professor, Criminal Justice and Police Studies, and
sources cited therein.]
Once Young gained control of NYC, he
appointed Alfred Perlman to be president. Working
with Perlman for many years was Wayne Hoffman, who
left the railroad one year before the merger took place.
Hoffman became chairman of the Flying Tiger Airlines
in Los Angeles. This is the airline mentioned in a
previous part of the series which was set up in
California by pilots in Claire Chennault's squadron in
China, who had flown opium for Chiang Kai-Shek.
While the Flying Tiger group were making deals with
Edwin Pauley and his friends in Mexico, Claire
Chennault was letting Paul Helliwell set up a system to
finance his airline by laundering drug money from
Burma and Thailand. Hoffman serves as a link
between these airlines and the Penn Central. One
attorney in California for the Flying Tiger Line was Herbert
Kalmbach, who was on President Nixon's staff. Nixon
was also connected to the Penn Central by virtue of
his own legal work, prior to his election, for
Investors Diversified Services (IDS). In 1954,
Robert Young had sold Clint Murchison, Sr. a 24 percent
interest in IDS, whose three subsidiaries sold savings
certificates and other securities. This $5 million
investment increased in value to $7 million in three
months. Incredibly, when Kirby and Young bought IDS in
1949, they paid less than $2 million, though by 1959 it grew
to control assets worth $3.4 billion. Accusations
of insider trading were made, and in 1959, after
Robert Young's suicide, Allan Kirby convinced
Murchison to give back his voting shares of IDS in exchange
for non-voting shares. Kirby controlled Alleghany,
and, after the exchange, Kirby controlled 48% of the
voting shares of IDS, allowing Kirby to squeeze out
Murchison and his two sons, to whom he transferred his
stock--at about the same time all the Texans were kicked off
the board. At that point the Murchison brothers
decided to wage a proxy fight against Kirby, which
lasted two and a half years. The brothers also sued
Kirby for $100 million for conspiracy and fraud, losing in
the U.S. Supreme Court. Alleghany Corp.
owned almost a million shares of New York Central
stock. But by far the most valuable asset was IDS. By the
end of 1962, a year and a half after winning the
proxy fight, the Murchisons decided to sell their
interest in Alleghany to Bertin C. Gamble, from whom Young
had acquired it in 1949. By this time, the stock was worth
$300 million. There can be no question but that
this was a money-laundering operation. Gamble
quickly sold the stock to Allen Kirby and two
associates. It would have been around this time that
Richard Nixon moved to New York and began
representing IDS. Two years later, the Pennsylvania
Railroad, while working toward a merger with the New York
Central, began a buying spree. The board bought land in
California, in Texas and in Florida. It bought a
company called Executive Jet Aviation, with David
Bevan spending $21 million without board approval,
without requesting CAB approval for the railroad to
operation an air carrier. Penphil, the secretive
investment group operated by David Bevan, also
purchased 10,000 shares of Tropical Gas Co., Inc. in 1963,
and continued buying through 1968. After the Penn Central
merger Tropical exchanged shares with U.S. Freight
Co. when the two corporations merged in October
1969. In 1969 most of the board members of Tropical
had connections to Glore Forgan. Tropical had borrow from
one director's bank in Miami, a bank which also made
construction loans to Arvida and loans to PRR to buy
Arvida stock. Penphil also had loans from Chemical
Bank of New York to finance various investments.
The question is whether the looting was planned all along,
or whether it just got out of hand. What arrogance
led these men to believe that they could spend so
much money and accumulate so much debt without the entire
structure collapsing around them? Unless of course, the
plan all along was to use the land to launder drug
money; the value of the stock hit bottom before they
could fulfill the plan. Then Richard Nixon failed to
push through the bailout loans from the government when
Congress objected. Bankruptcy was filed in 1970,
and Victor Palmieri was called in to protect the
assets. And the system was still operating during the
1972 election. Remember the Dahlberg check? Dahlberg lived
in Minnesota (home of IDS) and made a contribution
there to the Committee to Re-Elect Nixon. This
check went to Maurice Stans, apparently, and then
out to Houston, Texas where Bill Liedtke bundled it with
cash and another check drawn on a bank account in
Mexico from a subsidiary of a Houston
corporation.... But isn't this where we came in? Watch for
Part Five, which will make this connection even more
apparent. ++++++
Notes:
(1)
Colombia's petroleum production today rivals Kuwait's on the
eve of the Gulf War. The United States imports more
oil from Colombia and its neighbors Venezuela and
Ecuador than from all Persian Gulf countries
combined. Stan Goff, a former U.S. Special Forces
intelligence sergeant, retired in 1996 from the unit
that trains Colombian anti-narcotics battalions.
Plan Colombia's purpose is “defending the operations of
Occidental, British Petroleum and Texas Petroleum and
securing control of future Colombian fields,” said
Goff, quoted in October by the Bogotá daily El
Espectador. “The main interest of the United States is
oil.” Colombia's known oil reserves amount to 2.6 billion
barrels, far fewer than those of the world's major
oil powers. But only about 20 percent of the
country's potential oil regions have been explored, due
to the violence. Colombia's biggest foreign investor is BP
Amoco, formed when British Petroleum merged with
Chicago-based Amoco in 1998. The London-based giant
controls Colombia's largest oilfield, a
1.5-billion-barrel trove called Cusiana-Cupiagua in the
northeastern province of Casanare. A 444-mile
pipeline called Ocensa carries BP Amoco oil to the
Caribbean port of Coveñas for export. Los Angeles-based
Occidental Petroleum helps operate the nation's
second-largest oilfield, Caño Limón, holding 1
billion barrels in Arauca, a province just north of
Casanare. Occidental pumps away its share through a 485-mile
duct to Coveñas. The June announcement confirmed a
deposit about 55 miles southwest of Bogotá. An
international consortium led by Canadian Occidental
Petroleum expects as much as 300 million barrels from the
oilfield, called Boquerón, making it the nation's
third-largest deposit. Many of these companies have
led the fight for U.S. military aid to Colombia, the
world's third-largest recipient of U.S. security
assistance. In 1996, BP Amoco and Occidental joined Enron
Corporation, a Houston-based energy firm, and other
corporations to form the U.S.-Colombia Business
Partnership. Since then, backed by hefty
oil-industry donations to political candidates, the
partnership has lobbied hard for increased aid. Oil
will remain a U.S. military priority under President
George W. Bush if his campaign donors and cabinet
appointees have any influence. The top source of cash for
his presidential and Texas gubernatorial bids was
Enron and its employees, including CEO Kenneth L.
Lay, according to the Center for Public Integrity.
Enron, one of the companies that led lobbying for Plan
Colombia, owns Centragas, a 357-mile natural gas
distribution system in northern Colombia. http://www.globalexchange.org/colombia/021501.html
(2) In
1985 the largely unknown Fayed brothers paid $689 million in
cash for the House of Fraser retail chain (whose
flagship was Harrods). Two years later, the
Department of Trade and Industry--at the instigation of al
Fayed's chief rival for control of Harrods--began
investigating the family. Its report, published in
1990, concluded that the brothers did not hail, as
they had claimed, from “an old Egyptian family” with a
100-year history of landownership and shipbuilding. “The
image created...of their wealthy Egyptian ancestry
was completely bogus,” the report said. The
government further concluded that the money al Fayed
used to purchase Harrods could not have come from an
inherited fortune, as he claimed, but was probably
put up for al Fayed by his associate, the Sultan of
Brunei, the world's wealthiest man. Al Fayed was not
accused of breaking any law, and he and the Sultan denied
the charges. Al Fayed bitterly attacked the report
as a smear. “They could not accept that an Egyptian
could own Harrods, so they threw mud at me,” he once
said. But acquaintances of his in Alexandria also describe
the Fayeds as a modest family: al Fayed's father was
a language teacher, and al Fayed grew up on the
rougher side of town. He started as a small-time trader
there, selling Singer sewing machines and Coca-Cola. In the
early 1950s the future Saudi billionaire Adnan
Khashoggi offered al Fayed a share in a Khashoggi
business that exported Egyptian-made furniture to
Saudi Arabia. The company took off, and not long after, al
Fayed married Khashoggi's sister Samira, who gave
birth to Dodi in 1955. He divorced her after two
years and went into the construction business in the
United Arab Emirates. After befriending Dubai's ruler, al
Fayed won big development contracts for British
firms prowling the Persian Gulf. “Of course,” says
Khashoggi, “there were fees and commissions.” This
brokering was the foundation of the Fayed family fortune.
http://www.time.com/time/magazine/1997/dom/970915/princess.outside_lokin.html
and
http://www.guardian.co.uk/hamilton/article/0,2763,195658,00.html
and
http://www.porters.uk.com/covent/movers/default.asp?ID=12
For more on Khashoggi's dealings, see
http://www.redherring.com/mag/issue107/627.html
(3) The
following is an excerpt from a 1988 article written by
John Summa called “ANGLO-AMERICAN
CORPORATION: A PILLAR OF APARTHEID”: Anglo owns 39
percent of Minorco's stock and De Beers another 21 percent.
Minorco has a 30 percent stake in Engelhard, an
international producer of platinum with sales of
over $18 million annually. Through the company's New
York headquarters, Engelhard buys gold, silver and platinum
from South African mines and refines them at plants
in the United States and abroad. Power appears to be
shared with U.S.-based Philipp Brothers, a
multinational trading firm that possesses a CIA-like
communications and intelligence network, and is
involved heavily in South African metals. [Note: In
Part Two of this series Engelhard was identified as a client
of Russell Forgan, investment banker at Glore Forgan and
former O.S.S. agent who became closely connected to
European companies like Italian SuperPower.
Forgan's investment bank, which later merged with F.I.
DuPont, was at the center of Penn Central purchase of land
and other assets that led to its
bankruptcy.] Anglo also has a presence in the United
States, which extends to minerals such as copper,
zinc, gold, silver, nickel and coal, by way of the
Inspiration Resources Company, in which it has a 59 percent
share. Minorco previously had a 14 percent stake in
Salomon Brothers, Inc., a U.S. investment bank,
which it sold in 1987. Minorco has offered $4.9
billion to acquire Britain's Consolidated Gold Fields Plc.,
the world's second largest gold producer. Purchasing
Consolidated Gold would greatly expand
Anglo-American's mineral holdings, particularly in the
United States. Consolidated Gold owns 30.7 percent
of Peabody Holding, the United State's biggest coal
producer, and 49 percent of the U.S.-based Newmont
Mining Corp. Almost a third of Consolidated Gold's profits
are generated in North America. Anglo-American's
character is a reflection of the designs of South
Africa's Oppenheimer family. Sir Ernest Oppenheimer took
over the mining enterprise from late 19th century
English mining magnate Cecil Rhodes. He built a
diversified company out of initial investments in diamonds
and other gems, which he passed on to his son, Harry
Frederick Oppenheimer. When Anglo-American was set
up in 1917, half of the initial capital supplied
came from U.S. investors, with the condition that
Oppenheimer's first choice for the company's moniker,
“African-American,” be changed to Anglo-American, because
“African-American would suggest on this side our
dark-skinned fellow countrymen and possibly result
in ridicule,” a cable from the U.S. investors
stated. The company in 1929 bought De Beers from successors
of Cecil Rhodes. Through Anglo, the Oppenheimers
own shares in all of South Africa's mining houses.
In fact, the houses have cross-holdings with each other,
making the block of capital quite formidable. But the extent
of Oppenheimer wealth and power does not stop there.
They are owners of the nation's largest steel works,
travel agency, brick factory, discount house, auto
dealership and computer software firm. The Oppenheimers are
not afraid to employ their power to get what they want. On
the issue of apartheid they have ostensibly taken a
reformist position and have crafted an image for
themselves as defenders of the rights of black
workers by supporting abolition of the pass laws and the
Group Areas Act, the cornerstones of the apartheid
political structure.
http://multinationalmonitor.org/hyper/issues/1988/09/mm0988_08.html (4) http://www.corpwatch.org/bulletins/PBD.jsp?articleid=420
. According to Robert Lacey's book, The Kingdom:
Arabia and the House of Saud, Mohammed bin
Laden was a patient of Khashoggi's father, a
prominent Iranian physician. The young Khashoggi became a
middleman for the bin Laden conglomerate in the late
1950s, getting his start by negotiating a big truck
sale that earned the Iranian $25,000.
http://www.straightgoods.ca/ViewNote.cfm?REF=1173. “Of
all the bin Ladens, it was Saleem who had the close
relationship to the Bushes. The connection was a
Houston wheeler-dealer named James Bath, who haunted
the darker back corridors of the Bush-Reagan years, amid the
fragrance of scandals ranging from Iran/contra to
BCCI to the Silverado Savings and Loan debacle to
Iranian weapons mogul Adnan Khashoggi. ... In the
mid-1970s, Bath became vice-president of Atlantic Aviation,
one of the world's top business-aircraft sales
companies. At the time, Atlantic was owned by Edward
DuPont, of the DuPont chemical empire. DuPont's brother,
Richard, served on the board of Atlantic. According to
Gerard Colby's excellent book, DuPont
Dynasty, Richard's own company, Summit
Aviation, was a longtime CIA contractor. ...Through the bin
Ladens, Bath was also introduced to Sheik Khalid bin
Mahfouz, the CEO of the National Commercial Bank,
Saudi Arabia's biggest bank. The NC bank was a prime
lender for Khashoggi. In 1985, at a time when the arms
dealer was moving weapons to Afghanistan, Iran and
the contras, NCB loaned Khashoggi $35 million. Bath
would team with Khalid, and former Texas governor John
Connally, in buying the Main Bank in Houston, an institution
that helped finance the campaigns of many Texas
politicians through the late 1970s and 1980s.
Khalid's banking empire would eventually extend to a stake
in the Bank of Credit and Commerce International,
the institution that catered to crooks and spooks.
Among other criminal enterprises, BCCI served as
Khashoggi's chief bank for his arms deals with Iran, a
depository for Oliver North's covert action funds and the
conduit for CIA money bound for the Muj in
Afghanistan. Khalid was indicted for fraud in
1992....The bin Laden family has also invested at least $2
million in the Carlyle Group's Partner's II Fund, which
specializes in the acquisition of aerospace
companies. “ (5) http://www.rancho-mirage.com/
and
http://www.whannenberg.org/fd.html and
http://www.oneworld.org/ni/issue137/affluence.htm and
http://csf.colorado.edu/authors/Gaffney.Mason/who-owns-so-calif.html
(6)
http://www.drugwar.com/propaganda.shtm
(7) In the
deposition he gave, Ruby was represented by four
attorneys: MELVIN BELLI, San Francisco;
JOE TONAHILL, Jasper, Texas ; SAM BRODY, Los
Angeles, California; and WILLIAM CHOULOS, San Francisco,
California. (Note: Brody was also attorney for Jayne
Mansfield, and was killed in a car accident with
her between Biloxi and New Orleans in 1967 http://www.reporter-news.com/1998/opinion/gree1028.html
and http://www.gravehunter.com/sam_brody.htm).
http://history-matters.com/archive/jfk/wc/wcvols/wh15/pdf/WH15_Kaufman.pdf
He said that in 1933 he, one AL DUNN, MAURY (last name not
recalled) and a third person, whose name
he-could not immediately recall, went to Los
Angeles, California, where they sold “Collier's Tip Sheet”,
which he described as a handicapper's tic sheet for horse
races . He said their arrival in the Los Angeles
area coincided, as he recalled, with the opening
of the Santa Anita Race Track . He related they
remained in the Los Angeles area for a few months only
and during the same year, 1933, went to the San Francisco
area, where he at first engaged in similar
activities at the Bay Meadows Race Track .
Subsequently, he sold subscriptions to Hearst
newspapers, the San Francisco Examiner and San Francisco
Call Bulletin, covering San Francisco and small
towns in the general area . He said he remained
in San Francisco until 1937 and returned to
Chicago and was unemployed for a considerable period . In
1941, he related, he, his brother EARL RUBY,
HARRY EPSTEIN, MARTY SHARGOL (Phonetic) and
MARTY GIMPLE “went on the road” selling punch boards
and small cedar chests in numerous Eastern and New England
states . He specifically mentioned the states of
New York, Connecticut and Pennsylvania . He said
he had no fixed address during this period, that
the group lived in various hotels .
RUBY related that in late 1941 he returned to Chicago and
continued his business of selling punch boards,
primarily through mail orders. He mentioned an
advertisement was run in Billboard magazine in this
regard . He mentioned that during this period he became very
closely associated with ARTY WAYNE, a musician.
RUBY stated he remained in Chicago until 1942.
RUBY said that in 1946, on being discharged from
military duty, he returned to Chicago and “prospered” in his
mail order business involving punch boards and miscellaneous
items . He said his sister EVA had for some time
been wanting to operate a night club in Dallas
and had moved to Dallas from California . He
said he in the meantime had had some friction with his
brothers and had sold his interest in their
mutual business of selling punch boards and
other items to the brothers. He said he sent money to his
sister EVA for a lease on a building in which to open a
club. ... He said that in the summer of 1963
he flew via American Air Lines to New York City,
where he remained for two or three days at the new
Hilton Hotel . He said his purpose was to see JOE GLASER, a
booking agent, and to see officials of American
Guild of Variety Artists in order to register
complaints relative to competitors in Dallas . He
said he traveled alone . On this trip, he recalls having run
into “DANTE”, a magician, in an automat and
having -visited or contacted BARNEY ROSS, former
well-known prize fighter whom he had known in
Chicago . He said on the return to Dallas he went via
Chicago and that members of his family joined
him briefly at O'Hare Field, the Chicago
airport. RUBY said he could recall no other travel outside
of Dallas during 1963.
With reference to Butcher's service to the university,
see
http://www.archives.upenn.edu/primdocs/trustees/90s/19910621tr.pdf
(9)
November 5, 1970 TO THE
TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA: We have been
asked as University Counsel, whether the
manner in which the investment banking firm of Butcher &
Sherrerd disposed of the University's holdings of stock of
the Penn Central Company in May of this
year violated any statutes or stock exchange
rules relating to the preferring of investment
advisory customers over the accounts of the advisory firm or
those closely associated with it. In addition
to our conversation with Mr. William L.
Day, Chairman of the Trustees, we have
talked briefly with representatives of Butcher &
Sherrerd, with various officers and
employees working in the Treasurer's Office
and Investment Office of the University, and with George
Connell, the officer of Drexel Harriman
Ripley, Incorporated, who is in
charge of that firm's activities in connection
with the University's account. We have seen some of the
underlying documentation relating to the brokerage
transactions in question, but we have not made
a thorough or exhaustive study of the various
sales slips and journal entries involved, nor have we
attempted to authenticate or supplement in detail the facts
as described to us in the brief meetings we
have had with the persons indicated above.
Under the Investment Advisers Act, to which
Butcher & Sherrerd is subject, the duties of the adviser to
its customers are broadly stated. ...The
Advisers Act was aimed at eliminating
conflicts of interest between an investment adviser
and his clients. Consequently, an investment adviser must
not effect transactions in which he has a
personal interest in a manner that could
result in preferring his own interest to that of
his advisory clients. Furthermore, Whenever trading by an
investment adviser raises the possibility of a potential
conflict with the interests of his advisory
clients, the investment adviser has an
affirmative obligation before engaging in such
activities to obtain the informed consent of his
clients on the basis of full and fair
disclosure of all material facts. Full
disclosure of such potential conflict must be made to
apprise the client of relevant facts so that the client is
able to give his informed consent to
transactions executed for the client, or to
reject such transactions if he so desires.
“We understand that in March 1970, the University in
accordance with a general determination made by its
Investment Committee, began a gradual
reduction of its Penn Central holdings.
Butcher & Sherrerd sold for the University's account
between March 5 and April 1, an aggregate of 18,500 shares.
It was not, however, until May 15 that a
definite selling program for the disposition
of its remaining 94,714 shares was decided upon and
undertaken. We have been advised that during the week of May
18, a substantial number of shares were sold
by Butcher & Sherrerd for its own account and
for the account of various partners and
members of their families, and that most of such shares were
sold toward the end of the week. The question,
therefore, is whether these sales violated the
rules stated above in the Kidder Peabody
proceeding. With respect to the sales by
the University on and after May 15, we
understand that as a result of a conversation between Mr.
Butcher and Mr. Connell of Drexel Harriman Ripley,
Incorporated, on May 15, 1970, Drexel
Harriman Ripley, Incorporated has given
general instructions to sell an aggregate of 42,607 shares
of Penn Central. A specific order was marked for sales at
$15-3/8, approximately the prevailing market,
and 3,000 shares were sold at that price. On
May 18, the next trading day, Drexel Harriman
Ripley, Inc. sold an additional 2,000 shares at $15-5/8.
Butcher & Sherrerd came upon an opportunity to
sell an additional 3,000 at $15-l/2, and after
checking with Drexel, effected this transaction
as a part of the sale instruction for 42,607 shares given
Drexel as described above. The market price of
the stock declined below $15 on Tuesday and
Wednesday, May 19 and 20, and accordingly no
shares were sold in accordance with the sales orders at that
general level which remained in effect at Drexel Harriman
Ripley. In view of the decline in market price
and the failure to effect sales at the $15
level, Drexel Harriman Ripley reduced the sale
price on Thursday, May 21, to $13-l/4. 100 shares were sold
at that price, and an additional 10,000 shares
were sold later that day when the Drexel
trading department reduced the asking price to
$13 flat. On Friday, May 22, when the market price dropped
almost two points, Drexel Harriman Ripley
entered sale orders “at market” for the
remaining portion of its 42,607 sales order and sold all
of the University's remaining shares at prices ranging from
$11-l/4 to $11-7/8, except for 40,000 shares which Butcher &
Sherrerd, on receipt of an order on the Philadelphia
Exchange, and after checking with Mr. Connell,
sold at $12 per share. ...It can be seen from
the foregoing that if Butcher & Sherrerd, as the
University's investment adviser, should be considered
responsible for the manner and timing of all
sales for the University's account, and if the
rules enunciated in Kidder Peabody are carried
to their logical extreme, namely, that an investment adviser
may make no sales for his account until he has
completed all of the sales he has recommended
to all of his advisory clients, some or all of
the sales made by Butcher & Sherrerd during the week of May
18 for its own account and for the account of affiliates, as
referred to above, may be held to violate those rules.
Yours very truly, JAB:bh DRINKER BIDDLE &
REATH (See also
http://www.archives.upenn.edu/primdocs/trustees/70s/19711112a2.pdf
or
(11)
http://www.brownia.com/pro_b_sherrerd.html
(12) (See
Charles Ray, Bruce Page and Godfrey Hodgson,
“Do You Sincerely Want to Be Rich? The Full
Story of Bernard Cornfeld and I.O.S. ; New York:
Viking Press, 1971). Robert Vesco would later be accused by
the U.S. Government of looting a quarter billion
dollars (426 million in 1986) from Bernard
Cornfeld's Investors Overseas Services. (See Arthur
Herzog, VESCO copyright©1987 -- excerpts at
http://www.electronpress.com/default.asp?pl=http://www.electronpress.com/excerpts/vescoexc.htm)
Vesco was backed by Henry Buhl, who introduced Vesco to
investment bankers Lazard Frères; Salomon
Brothers; Allen & Co.; John Loeb, Sr. of Loeb &
Rhoades; Lehman Brothers; Smith Barney; and to his
accountant Arthur Andersen. Buhl had been an heir to the
Fisher Body company which made the chassis for GM
cars. On the board of directors of Vesco’s first
company sat Malcolm McAlpin, a brokerage company
executive who was also on the board of ITT. One of Vesco’s
original investors in International Controls
Corporation (ICC) was the Baron Edmond de
Rothschild, who introduced Vesco to Henry Buhl at IOS. In
1970 Buhl, who worked in Los Angeles, became aware that tens
of millions of dollars were missing from IOS as a
result of transfers of IOS accounts from Geneva to
the Bahamian branch in transactions benefiting
John McCandish King. He asked Vesco to help IOS by
assisting Commonwealth United, a California company which
owned Seeburg, the world’s largest manufacturer of
juke boxes and vending machines. Another officer
at IOS (Cowett) attempted to sell Commonwealth
stock to Bludhorn of Gulf + Western Industries, who,
according to Penny Lernoux (In Banks We Trust), was
its founder, chairman and CEO. Pete Brewton says
(The Mafia, the CIA and George Bush, p.
378) that one of the “original founders” of Gulf +
Western was John Duncan of Houston, whose brother, Charles
Duncan, was chairman of Rice University Board of Trustees
for many years, as well as being in Jimmy Carter's
Cabinet. Bludhorn was born in Vienna, Austria, in
1926 and arrived in the U.S. in 1942. In 1949 he
started an import-export business in Manhattan. In 1956 he
acquired a small auto-parts company in Grand
Rapids, Michigan that became Gulf + Western two
years later. So it appears that Bludhorn and Vesco were
both products of the same area as Max Fisher, who later
began investing in land around Houston, Texas
developed by Robert Mosbacher, who worked for
Socony Mobil, Amoco and Houston Natural Gas/Enron.
When Bernie Cornfeld was forced to step down, the
IOS board considered selling to John McCandish
King or Baron de Rothschild. King tried to outbid
Vesco for a takeover of IOS, but blamed the “Rockefeller
interests” for his inability to obtain financing. Vesco’s
financing of IOS came primarily from Bank of
America. He even claimed he was fronting for BA,
but the bank denied that allegation. According to
Arthur Herzog, “another potential purchaser of IOS was
Raymond Mason, president of Charter Corp., and
Edward Ball, chairman of St. Joe, a paper company
and trustee of the A.I. DuPont estate. Early in 1972,
the Charter/DuPont deal collapsed. Ball is supposed to have
told Vesco, ‘I had a dream. You and I slept
together on a cold night. In the morning, you had
all the blankets.’ “ Vesco also formed a holding
company called Property Resources, Ltd. (PRL) which issued
shares of stock in exchange for assets of other
IOS subsidiaries—Investment Properties
International and Global Natural Resources. The purpose
intended for PRL was to acquire Resorts International’s
Paradise Island casino, hotels and marina. Global
Natural Resources was a pre-Vesco spin-off of
Cornfeld’s IOS, and it owned the mineral interests in John
McCandish King’s Arctic permits. King had met Cornfeld in
Geneva, Switzerland in 1967; IOS’ Fund of Funds
invested more than $100 million in King’s oil
properties. They were greatly overvalued at that
time, however, because there was no way of removing the oil
and gas from that frozen region. [Source: Arthur
Herzog, Vesco: From Wall Street to Castro's
Cuba, Doubleday: New York, 1987]. This time
frame fits in well with the timing of the Duke of Windsor's
obsessive interest in exploring his Canadian land
for oil and gas. In the 1940's and 1950's he had
visited Clint Murchison at his isolated Mexican
ranch to discuss the matter, and in 1951 Murchison's
Canadian Delhi Co. began building Trans-Canada
Pipe Lines to transport natural gas from Alberta.
See
http://www.transcanada.com/company/our_history/where_it_all_began.htm
Murchison had helped Robert R. Young gain control of the New
York Central Railroad in 1954, and his two sons
would wage a long proxy fight to seize control of
the Alleghany Corporation from Allan Kirby in
1961. (13) In late 1964
Hitchcock met Sam Feranis Clapp, a Boston attorney and
chairman of the Fiduciary Trust Company in the
Bahamas, with whom he set up some offshore trusts.
Another of Clapp’s customers was Bernie Cornfeld, who
turned to Billy for brokerage services for the accounts of
his new mutual fund, Investors Overseas Services
at about the same time Billy began advising Swiss
banker Fred Paravicini in how to make money in the
U.S. stock market without paying taxes. In 1969 Cornfeld’s
IOS acquired Clapp’s Fiduciary Trust, and Billy
transferred his trust accounts into a Swiss
subsidiary of Capital National Bank of Houston
called ”Bank for Investment and Credit Berne” (BICB), in
which Billy had been offered a 6% interest. The
bank stock was owned by Capital National Bank and
Paravicini Bank, but investors included Seagrams,
Boeing, Minute Maid in Zurich, the London subsidiary of
Brown and Root and the Schlesinger Organization of London
and Johannesburg. Vice-chairman was L.F. McCollum,
Sr.—a long-time Humble Oil (Exxon) employee, who
headed Conoco and who had founded Capital National
Bank of Houston in 1965. The bank’s president was Baker
Lovett, cousin of James A. Baker III. In 1967 Hitchcock
left his job at Lehman Brothers to become a
partner in Delafield and Delafield, based on the
institutional account he brought in from IOS. It was the
Delafield bank which handled the stock for the conversion of
Mary Carter Paint to Resorts International. In
1969 Hitchcock left Delafield. By then he was
living in Sausalito, California and already
enmeshed in operations to spread the use of LSD among the
youth of California. To learn more about Billy
Mellon Hitchcock's role in bringing LSD to
America, see Chapter 2 of Acid Dreams, The Complete
Social History of LSD: The CIA, the Sixties, and
Beyond, New York: Grove Weidenfeld. ©1985 by
Lee & Shlain at http://www.druglibrary.org/schaffer/lsd/dreams2.htm.
(14)
Directors of Eagle Star Insurance have
included Sir Kenneth Strong, a Scotsman and
son of the Rector of Montrose Academy, who was
a Major General during World War II. Assigned to General
Eisenhower in 1943, Strong became a firm friend of both
Eisenhower and Walter Bedell-Smith,
Eisenhower's chief of staff and later the
Director of Central Intelligence. Strong was appointed
Director-General of Political Intelligence at the Foreign
Office and then became Director of the Joint
Intelligence Bureau. In 1964 he became
Director-General of Intelligence, Ministry of Defence,
retired in 1966, and died in 1982.
http://www.electricscotland.com/history/world/secret_service.htm
(15) The major
shareholders of the New York Central acted as a front for
DuPont and others. On May 20, 1971, Ross Perot,
encouraged by the Nixon administration, bought a
subsidiary of Dupont Glore Forgan, Inc.--Wall
Street Leasing--and invested $10 million in the firm; in
1984 Perot sold his computer company to duPont-owned
General Motors .
Allegations of fraud were later brought against
Perot in his creation of a joint venture with
another DuPont brokerage company.
http://www.paed.uscourts.gov/documents/opinions/01D0291P.HTM
(16)
http://www.buyandhold.com/bh/en/education/history/2002/van_bros.html
Historian Robert Sobel writes that at cocktail parties,
investment bankers would try to explain how
Nickel Plate Securities Co. worked, but
“usually with little success.” Though the facts seemed
to be public, so it HAD to be explainable.
Well, here's a description, as told by
Sobel:
“General Securities controlled Alleghany Corporation, which
controlled Chesapeake Corporation, which controlled the
Chesapeake & Ohio Railroad. The C. & O. in
turn held stock in other lines, together with
Vaness, General Securities, Alleghany, and the
Chesapeake Corporation. The Wheeling & Lake Erie, the Kansas
City Southern, the Chicago & Eastern Illinois,
the Missouri Pacific, and the Denver & Rio
Grande were also in the Van Sweringen web.”
[From Maury Klein, “Rainbow's
End.”]
(17) Can you tell me
who made up America First? It began actually in New Haven.
There was a kind of Chicago-Yale axis. And
Chicago became its greatest source of strength.
http://www.pbs.org/wgbh/amex/lindbergh/filmmore/reference/interview/schlesinger06.html
Article by Gore Vidal:
“There is now a myth that the isolationists were
pro-Hitler and anti-Semitic. This is nonsense. Practically
every socialist in the country, starting with Norman Thomas,
was an isolationist, while agrarian populists,
like Senators Wheeler and Nye, tended to be wary
of foreign wars and entanglements. Also, the
only foreign power that we were hostile to--and feared--was
Hitler's enemy, the Soviet Union, the exporter
of godless and atheistic communism. America
Firsters ranged from the historian Charles Beard
to the young Kingman Brewster, not to mention a brilliant
young football coach at Yale, Gerald R. Ford.
The pro-German anti-Semites were at home in the
German-American Bund, not in the America
First Committee. Hitler's infamous final solution was not
known as of 1940 and did not figure into the
debate. As it turned out, no American majority
ever favored American intervention in the European
war. Had the Japanese not been inspired--or, perhaps,
incited--to attack us, we might never have gone
to war at all.”
http://www.dce.harvard.edu/pubs/lowell/gvidal.html
(18) (Merger history
at
http://www.meyersdale.org/borailhistory.html). The
Seaboard had been controlled by the uncle of the
Duchess of Windsor for many years (genealogy
http://www.rootsweb.com/~mdannear/firstfam/warfield/d417.htm#P423
and
http://www.rootsweb.com/~mdannear/firstfam/warfield/d420.htm#P420).
(19) Groves
sold 3,000 acres of his Bahamas real estate to
a group of Florida investors in 1961, who in
turn sold the land to the Mary Carter Paint
Co. Mary Carter was a partner with Wallace Groves in the
operation of the Bahamian Club casino until 1967, when it
opened its Paradise Island casino, under the
direction of casino manager Edward Cellini,
whom the company inherited from its partnership
with Groves. Cellini, it turned out, was the brother of a
known associate of Meyer Lansky, the infamous
mob kingpin. The transition from paint to
gambling was a Lansky-inspired enterprise. It
was accomplished through the activities of a
General Development Corporation, run by two more Lansky
fronts, Wallace Groves and Lou Chesler. The
board of directors of the General Development
Corporation included Lansky's stockbroker, Max
Orovitz, and gangster “Trigger Mike” Coppola. General
Development bought up half of Grand Bahama
Island for later syndicate development and
contracts with Nixon's law client, National Bulk
Carriers, to build a harbor there.
http://www.shorecast.com/html/Features/Legends/legendresorts.html
and
http://www.policestudies.eku.edu/POTTER/Module8.htm
http://www.policestudies.eku.edu/POTTER/Module8.htm
“At the top of the Van Sweringen
pyramid were the General Securities
Corporation and the Vaness Co. The brothers owned 40
percent of G.S.C. and 80 percent of Vaness. Since Vaness
owned an additional 50 percent of General
Securities, control of both was assured.
“On January 29 the Van Sweringens sold
to (J.P.) Morgan $35 million in 5 percent
bonds for $32.75 million, $25 million in
preferred stock, and 1.25 million of the 3.5 million common
shares for $20 a share, or $25 million. In
addition, Morgan paid $375,000 to obtain
warrants for another 375,000 shares of common at $30 per
share. The Vans also took warrants for 375,000 shares at the
same price and bought 2.25 million shares of
common at $20 a share. For this stock they
paid not cash but 100,000 shares of Nickel Plate
common and 440,286 shares of Chesapeake Corporation common.
Then they sold to their own General Securities
Corporation the 2.25 million shares of
Alleghany and 1.725 million option warrants at
$1 per warrant. Since all the directors of Alleghany were
Van Sweringen associates, the deal amounted to
trading with themselves.” Or, as an official
said at the time, “The control of the parent's
directors over the subsidiaries' machinery is
absolute; even the information disclosed may be so blind as
to be unintelligible.”
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