No One Rides For Free - Larry Beinhart (13 page)

He had given his word that if I showed him mine, he
would show me his, so I told him what Hencio deVega told me. My
personal opinion was that what Goreman had done was more admirable
than actionable, but I'm a law-school dropout, and while Mel was
hardly ecstatic he thought he had something to chew on. . .

"Coffee is on," he told me. "I made a
whole pot. If you get sleepy, the couch opens up."

"What are you mumbling about?"

"I said you could read the transcripts. I did
not say you could take them out. You can make notes, but you can't
make copies. You read them here."

"Oh shit," I said.

"You can stay every night, for as long as it
takes," he offered generously.

"Oh shit," I said.

He and Priscilla went upstairs to bed. I poured a cup
of coffee. It was good. Fresh ground, 100 percent Colombian. There
was a pretty little porcelain pitcher and sugar bowl all laid out for
me. The pitcher held real cream--100 percent Cow. It was good.

The testimony was not. It was in its raw form,
rambling, angry, vindictive, steeped in envy.

It started in 1954. Charles Goreman was a hot young
commodities trader, ex-shoe salesman, college dropout, ex-brokerage
gofer, with his English still moving from broken to just heavily
accented. Edgar Wood was already his attorney.

Samson Construction was a family-owned business in
Suffolk County, the eastern end of Long Island. During the war they
had grown fat on military contracts. In the postwar years the action
shifted to the state and county levels, where their hooks were not as
good. They did have one big contract, to refurbish and expand an army
air force facility. They had invested heavily in the project,
including buying the real estate around the base with the intent of
selling part to the government for expansion and developing the rest
as housing for the off-base personnel.

Congress cut the project out of the '55
appropriations, a victim of interservice rivalry. Samson was in big
trouble.  Like one of the sharks that cruise off Montauk Point,
Goreman scented blood. Samson was looking to sell before they went
belly-up. They were asking $6 million. Goreman felt the true
valuation was closer to $8 million if someone were willing to gut the
compmy for its assets instead of running it. He offered $5 million.

Not that he had that kind of money, or anything
remotely like it. He had about $200,000. Barely enough for attorney's
fees, closing costs and the like.

He had what was then a radical idea. The collateral
for the loan would be the company he was borrowing the money to buy.

It made sense if the new owner was willing to gut the
company. The real estate alone was worth the asking price; if all the
assets were sold, at least a minimum profit was assured. Goreman
pointed out that while the current management might be willing to run
the thing into bankruptcy, selling and mortgaging the assets bit by
bit in an effort to keep afloat, he would, if necessary, quickly and
cleanly bleed the company dry for the cash value of its assets. The
banks that Samson was into liked the idea.

But the logic of bureaucracy is to not do anything
new. And by and large banks would far prefer to make bad loans to
established companies than good loans to an unknown. Particularly
when the loan applicant has no background in construction, real
estate or running any sort of company whatsoever. `

The official version is that Charlie convinced them
of his good intentions and converted them with dollars-and-cents
arguments. The Edgar Wood version is that Goreman offered options on
Samson property to two senior bank officers. The estimated value of
the land under option was $50,000. The option price was $1,000
against a purchase of $25,000. Goreman, according to Wood, even
advanced the $2,000. Later, when the deal did go through, Samson
Construction, now owned by Goreman, bought back the land at $50K. The
only money that actually changed hands was $25K to each officer.

It was not yet Over & East. But Charles Goreman
had his first company. The pattern was set. The saga of pillage and
loot, raid, takeover and eat, had begun.

Goreman bought the abandoned army facility for
another $400,000 from the government. He packaged it with the land
around it and offered the whole thing to Bussman Aircraft, which was
looking for a test field for its new generation of jet aircraft.
Bussman paid $1,720,000 for the package. The net, after Samson's
pre-Goreman costs were included, was about $300,000. But the gravy
was the contract to do the expansion and building work for Bussman.

He sold off two major parcels elsewhere to
competitors of Levitt who were building imitation Levittowns. But
while those deals were being put in place, they were desperate for
cash flow. The solution, according to Wood, was Wood's. Instead of
selling the inventory wholesale, they threw up a couple of brightly
painted sheds, rented some colored flags and streamers, and went
retail at discount prices. The move coincided with the second wave of
the great postwar flight from the cities and the boom in home
improvement. It was a cash machine. In the short run, it was cash
flow; in the long run, it became Samson Home Improvements &
Hardware, the number-three chain of its kind in the country. By the
time Samson Construction was renamed Over & East, it had two
operating divisions, construction and retail sales, and $4 million in
cash.

The cash was not going to stay around very long. It
was as if Goreman hated the stuff, except as leverage. His theory was
to borrow, borrow, borrow, that since inflation would outstrip
interest—which it did through the seventies—the more you owed,
the richer you were. It's an idea that apparently works only with
sums over $10 million, not with real money. Also, since companies
that kept cash around always were targets for him, he assumed that if
he kept cash around, he would be a target for someone else.

It was, in a funny way, exciting reading. Like
finding out how Napoleon got to be a general in the first place. But
the crime, commercial bribery, was thirty years old, beyond proof,
and beyond caring.

Mel urged Wood to get current. Wood replied, "Goreman
was rotten from the start. Before I'm done it'll be a decaying
fucking corpse, and everyone will see how rotten and reeking it is. I
want you to see him for what he is. The American Dream, kiss my ass."

"Edgar," Mel said, and I imagined the
patience in his voice, "the point is to get something I can
prosecute with." According to Wood, Goreman's relations with the
banks continued to be improper. Certainly they supported him
generously and completely all the way down the line. Also they made
personal loans, below prime, to the inner circle of Over & East.
Including Wood.

Mel kept pushing for names and dates and numbers.
Wood came through with them, slowly. Still, Over & East was a
good customer. They borrowed a lot, in huge chunks; they always paid,
mostly on time. If a bank wanted to treat the officers right, the
smell was no worse than fertilizer around roses. They were a better
risk than Brazil, Poland or Cleveland.

Then the name Michele Sindona came up.

A name synonymous with corporate corruption, the
banks, the government, the Church, the Malia, all tied in one big
sloppy web.

How rotten was he really? So rotten that when Maurice
Stans was seeking cash contributions for C.R.E.E.P., he turned down a
million dollars from Sindona. Even Richard Nixon did not want to be
associated with him.

Famous as "The Vatican Banker," he came to
the U.S. and bought the Franklin National just in time to oversee the
biggest bank failure in U.S. history.

What probably killed the Franklin was a law,
sponsored by Nelson Rockefeller, then govemor of New York, that
allowed big banks, like the Chase owned by his brother David, to
expand geographically. Suddenly the neighborhood bank had a branch of
a giant as a competitor, often across the street.

While it was true that the Franklin might have sunk
with anyone at the helm, it is unlikely that many others would have
embezzled $45 million and committed quite as many acts of bank fraud
on the way down. Nor would most bank presidents have the imagination
to kidnap themselves to avoid testifying.

Goreman had done business with Sindona. Even after
the collapse of the Franklin, even after the indictments.

The strangest thing about the story that Wood told
Brodsky was that it made Sindona—corrupter of governments, a man
who conned popes, connected to both American and Sicilian crime
organizations--look like a sucker. There was a very complicated swap.
I had to re-read the testimony three times, backward and forward,
before I got the sense of what happeued.

Over & East owned Arco-Rich, a brokerage firm
that was failing rapidly. It had cost $12 million. On the open
market, at the time of the swap, it would have brought $5 million,
tops. Goreman gave it to Sindona in return for shares in Societa
Generale Irnmobiliare worth $5.9 million at par and a Greek resort.
It was no secret that Sindona's S.G.I., the largest real estate and
construction company in Italy, was a gasp and a half from bankruptcy
and that market value was much lower than par. The Greek resort was
also on the verge of bankruptcy. On the face of it it was trash for
trash.

However, the Greek properties could be carried on the
books at a valuation of $12 million. The actual worth was difficult
to determine and impossible to verify. The Greek government, at that
time under the Colonels, was in the midst of a drive for foreign
investment. They were more than happy to overvalue the property and,
in addition, offered Over & East various tax breaks. Over &
East used the corporation formed to handle the Greek properties to
sell its shares of S.G.I., which they did immediately. It was a
tax-avoidance scheme; an overseas subsidiary selling overseas assets
overseas. That was only necessary because what was an actual loss was
disguised as a better than break-even operation by the inflated
valuation of the Greek properties.

It was with pride that I realized I had figured that
out at 5:08 in the morning. But it was hubris to stretch out on the
couch to read the next segment, and I awoke to the vicious clatter of
merry children. My head hurt, my feet stank and the homey smell of
frying bacon brought acid from my stomach to my throat.

I begged Mel to let me take the transcripts and read
them on a normal human's schedule. He was adamant, which was
forgivable. He was cheerful about it, which I was not. At the motel,
I showered and shaved. I called Detective Sergeant Bill Tillman to
tell him what I had found and to see if he had come up with anything.

"Tony, we have trouble," he said as soon as
he heard my voice. That sounded interesting, so I responded with a
grunt of inquiry.

"That reporter you sent out here."
Reporter? I sent? “I don't know if she's the right person for this.
That psychic gave her a reading and told her she was gonna win the
Pulitizer because her mind was more open than most and could see the
value in things that most people rejected out of hand. I think she's
falling for it."

While he spoke, my brain pretended to think. It came
to me that I had spoken to Gene about it. He must have done something
about it. Which meant he was going to bill me for it. And how was
that going to go into the expense report: $250 (nothing Gene did ever
seemed to cost less) to con a reporter into doing story on psychic?

"Did you go up to the farmhouse, Bill?"

"Do you think she could be just acting like
she's been conned so those nuts will be more open with her?"

"
And the microphone, did you check it out?"

"
Of course I did. Hey, you will not believe who
it belongs to. Or belonged to, because they claim they lost it."

"OK, Bill, who?"

"The DEA!" he announced. It made sense. Why
should the Colombians buy the equipment when there was so much of it
around them from the Drug Enforcement Agency? With a gun pressed to
his groin, Hencio deVega could probably delineate the equipment
transier in detail. I explained all that to Tillman.

"Thanks for telling me," he said. "How
do you think I should handle this reporter of yours?"

"Handling the media is a delicate thing, Bill."

"I know, Tony, I know."

"Just stick to the facts, dates, man-hours,
manpower assignments, and hope for the best. Hang tough."

"I'm gonna do that. Thanks," he said.

I very much wanted to sleep. 'I'd trade day for
night. I did hated calisthenics and swam in the motel pool, but when
I lay down I kept mixing thoughts and dreams. Edgar Wood in prison,
and me there too, watching the rape of a young boy. The boy tried to
scream, but every time he did, they punched his face and kept banging
away from behind. Then they came after Edgar. When they grabbed him
and pulled him down he turned to look at me. He cried for help. When
they tore his pants off his mask came off too, and it was Christina.

I didn't want to dream that. I made myself awaken.
She was pretty, but if it was pretty I wanted all I had to do was
stand on the corner, Fifty-seventh and Fifth, or look in on the
aerobics class at the club, or go back to Clara Barton High in
Brooklyn and watch the Puerto Rican girls flash by. I had too much to
lose to trade it in on a tastier orgasm. Lear jets were zipping down
to the islands. Over & East executives node down with
mistress-secretaries to hotels the corporation owned. Everyone
flying, eating, drinking, screwing at company expense. Wood went on
at length about who did how much on Over & East money. The
stockholders' money, he pointed out virtuously. And who they did it
with, and even specifically noted preferred sexual practices. There
was one vice-president who was convinced that anal sex did not
constitute infidelity. Later, apparently, his wife's attorney
invalidated that conceptual model.
 
Even
skimming, it took another night to get the gist of that hunk of
gossip, and I resented the triviality of it all. There was no scale
to Wood's indignation and no perspective in his accusations. He
sounded the same talking about sex in the office as he did when he
spoke about political corruption, which he finally got to in his
third week of testimony and my third night of reading.