Tuesday, January 31, 2012

Sandusky the Tip of an Iceberg

Nick Bryant - The Franklin Scandal, Child Abuse and Cover-up

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Originally published in USA Today magazine, January 2012, pps 46-47.

"The reality is that many perpetrators are not shady men in dirty, threadbare trench coats living in seedy hotels, but are, in fact, pillars of our community."

THE RECENT scandals at Penn State and Syracuse universities, Brooklyn's Poly Prep Country Day School, Fenway Park, and now the Amateur Athletic Union, along with the intimations of possible cover-ups of child sexual abuse, have citizens shocked and outraged. However, these recent allegations only are the latest variations on a theme of abuse by churches and respected organizations like the Boy Scouts.
Sandusky Arrested for sexual child abuse
   Pedophilia seems to exist in a distant parallel universe that is antithetical to the universe of Little League, Disneyland, and the other hallmarks of wholesome, youthful Americana, but the current allegations of pedophilia and the possibility of its cover-up just may be waking up Americans to the reality that this universe may not be as distant as they once thought.
    I have shared the outrage at the reports of sexual abuse but, unlike most people, I have not been shocked, because of my research over the last decade. Prior to 2002, I had written extensively on children's issues, and then I stumbled across a 1987 U.S. Customs report on a "child abuse investigation" that that the agency was conducting, and it described child abuse of the most horrific nature.
Mugshot of Terrell, arrested in Florida
On February 7th of 1987, the Washington Post ran an interesting story that did not at first seem to have any particularly national significance. The article concerned a case of possible kidnapping and child abuse, and material discovered in the Washington area that they say points to a 1960s style commune called the Finders, described in a court document as a "cult" that conducted "brainwashing" and used children "in rituals." DC police who searched the Northeast Washington warehouse linked to the group removed large plastic bags filled with color slides, photographs and photographic contact sheets. Some showed naked children involved in what appeared to be "cult rituals," bloodletting ceremonies of animals and one photograph of a child in chains.


    Two men connected to the investigation had been arrested and charged with multiple counts of child abuse, and six children, whose ages ranged from two to six years old, had been placed in Florida's child protective services. The investigation ultimately was quashed by Federal authorities (who should not have had jurisdiction in this situation), and the two men were released from jail and the charges dropped. I was stunned by the report, and it triggered my prolonged odyssey into the depths of child trafficking in America.
    Although witch-hunt hysteria is to be avoided when these accusations come to light, it is important to consider that the cover-up of child abuse may be rife in our society. Sexual-abuse victims often are very reluctant to come forward because they frequently are branded as liars, opportunists, and gold diggers. Such denunciations already have been leveled against the alleged victims of Penn State's Jerry Sandusky and Syracuse University's Bernie Fine.
    Many specialists in the field of child sexual abuse have concluded that it is rare for individuals to fabricate accusations of these crimes. In 2002, The New York Tunes interviewed Patrick Schiltz, former associate dean of the University of St Thomas law school in Minnesota and now a Federal judge, who had defended Catholic dioceses against sexual-abuse lawsuits in more than 500 cases. Judge Schiltz expressed the belief that "fewer than 10” of those cases were based on false accusations.
    Likewise, I have spoken with scores of men and women who claim to have been sexually abused. I also have concluded that the overwhelming majority are telling the truth and, of all the victims I have interviewed, I am not aware of a single abuser who has been indicted for his or her alleged abuse.
    After determining the authenticity of that Customs report, I started to investigate a second pedophile network that reportedly had been sheltered by entities within Federal law enforcement. It was then that I truly entered a parallel universe that encompasses the refined destruction of children along with its cover-up by the very state and Federal authorities who have pledged to protect them from the depravity of evil men – a universe where lies masquerade as truth, shadows reflect light, and innocence is condemned.
    I spent the next seven years researching and writing a book documenting a nationwide pedophile ring that pandered children to a cabal of men with power and prestige. 

The ring's pimps were a pair of political powerbrokers who used a distinguished orphanage as a pedophilic reservoir. 

With access to thousands of documents that were sealed by two grand juries, as well as the sealed testimony of one, I demonstrated that state and Federal grand jury processes in Nebraska played an integral role in the cover-up.
    Instead of indicting the alleged perpetrators, these grand juries indicted the victims who would not recant their accounts of abuse on charges of perjury. In one case, a 21-year-old who bad been abused since adolescence was indicted on eight counts of perjury by both state and Federal grand juries. Facing more than 300 years in prison, she still refused to recant. Her travesty of a trial resulted in a prison sentence of nine to 15 years. She spent nearly two years in solitary confinement.
    This individual was released from prison in 2000, and she has become a model citizen: she is happily married and gainfully employed. Conversely, one of the ring's pedophilic pimps, who was not charged with a single count of child abuse, moved halfway across the country. By 2009, he had enmeshed himself among a new brood of economically disadvantaged children.
Larry King
    Before the book came into print, I attempted to publish an article on the subject matter. After I felt I had collected clear proof of the child abuse and its cover-up, I distilled the information into an article and submitted it to numerous mainstream magazines, but none would go with it. The magazine editors rejected it without even looking at the thousands of pages of corroborating law enforcement and social services documentation I had collected. Although I was put off by the editors' apparent callousness or perhaps fear for their careers, I thought the main problem may have been that I shoehorned such a sprawling story into an article.
    Undeterred, I wrote a rather lengthy book proposal and gave it to the major literary agency representing me. Within weeks, I was dumped as a client. Still determined, I found a second agent who tried to sell the book proposal, but he found no takers. I did meet with one publisher, however; his primary concern was any potential libel action, not the destruction of numerous children. Finally, I found a small publisher on the West Coast who had the fortitude to publish my book, which, in addition to more than 500 pages of narrative, provides 100 pages of documentation, but no one in the mainstream media would review or even mention it I managed to get copies to the producers for television personalities who are child-welfare advocates, and they would not touch the story, either.
    Possibly, most media were scared off by the fact that two grand juries declared that the perpetrators had not abused a single child and a jury had found the young woman guilty of fabricating her story and convicted her of perjury. Juries, after all, are the finders of fact in our system, but it also is true that her charges and those of the other victims implicated some very powerful figures. I also believe that many editors looking at the summary concluded that my tale could not possibly be true, and there was no reason to even look at the book.
    These circumstances, though, are quite different from what we know of the situation at Penn State. If the Sandusky allegations are true, I would guess that his leverage there was the potential besmirching of the reputations of Penn State and his coaching associates. Penn State has prestige, and rightly so. It has done a lot of good. Institutions, however well-intentioned, are made up of individuals. Pedophilic predators are attracted to environments full of prey: schools, churches, youth groups, etc. The mandate of these institutions must be to protect the children in their charge, and to put that imperative ahead of the protection of their own reputations.
    Indeed, Penn State has refused to release records from its 1998 inquiry involving Sandusky, and the state's Office of Open Records recently upheld its decision. The school's refusal to release these records certainly suggests it still is putting its reputation ahead of the alleged victims when common decency demands transparency at this point.
    Another factor that dooms many investigations, and abets corrupt ones, is that victims frequently are from disadvantaged backgrounds, and the adult luring the child frequently introduces the underage individual to drugs or alcohol, further eroding that victim's credibility. Moreover, the abuser often has powerful allies in law enforcement, government, and the media, who decide that the sordid details are too hot to handle. Add into the mix the public's understandable squeamishness toward the entire subject of pedophilia, and we arrive at the perfect recipe for cover-up.
    The reality is that many perpetrators are not shady men in dirty, threadbare trench coats living in seedy hotels, but are, in fact, pillars of our community. Until our society addresses these facts and its institutions are willing to face embarrassment, instead of heaping more abuse upon victims, our national shame of rampant child abuse and its cover-up are unlikely to end.

Nick Bryant interview 21709 : The Franklin Scandal part1of4 MP3 Download

Monday, January 30, 2012

Is There a Houston Nexus to Newt's Sugar Daddy?

Does anyone besides me remember the rise and fall of Michael Milken--that epitome of Wall Street greed during the 1980s, the King of Junk Bonds? You can learn at Wikipedia, if so inclined, that 
"Milken was largely involved with kick-starting investments in Nevada, which for many years was the fastest-growing state in the United States. Milken funded the gaming industry, newspapers and homebuilders, and among the companies he financed were MGM Mirage, Mandalay Resorts, Harrah's Entertainment and Park Place."
Milken was busy cheating death by overcoming advanced prostate cancer at about the same time his friend and bond client, Sheldon Adelson, was creating the old Sands Exposition Center -- a venue in Las Vegas for Bill Gates to promote the idea of personal computers. More about that later. First we need to understand how money works in this type of business deal.

Kuffernan and Freedman
The Sands hotel was a rather small casino started by Jakie Freedman of Houston, Texas; his partner was Mack Kufferman. According to Marguerite Johnston, when he lived in Houston, Jakie Freedman--a professional gambler who had a huge casino on South Main near where the Astrodome would be built--was the largest depositor at Houston's City National Bank, founded by James E. Elkins, an attorney who was one of the named partners in Vinson and Elkins. Freedman was known to accompany Elkins and his friends, members of the Suite 8-F Crowd, to the Kentucky Derby every year.  Governor James Allred once said:  "Judge Elkins doesn't practice law, he practices 
influence." As proof of that, the Elkins firm would take influence peddler John Connally as a partner of the firm upon his exit from the Governor's mansion in Austin in 1969. Elkins died in 1972.

Quoting from Chapter 69 of Marguerite Johnston, Houston: The Unknown City, 1836-1946:

“By the 1930s, Judge James A. Elkins was a quiet power in Houston.  One of his admirers once said, ‘Judge doesn’t practice law, he practices influence.’…LBJ sometimes lamented the fact that he was often called a ‘tool of the oil industry’ outside of Texas and ‘a wild-eyed liberal’ when he sought campaign funds in some quarters of his own state.  The 8-F endorsement would help him, both in votes and in contributions.
Johnson ran for the Senate with full 8-F backing. ‘One of his best fund-raising sessions was held on the top floor of the Kentucky Hotel in Louisville, as the group gathered for their traditional weekend at the Kentucky Derby,’ Dr. [Patrick James] Nicholson wrote.
“Judge Elkins was famous for putting a bet on every starter. He had just come out ahead after severe losses in the traditional crap game. When Jet Pilot won, Judge Elkins was so pleased that he gave all his winnings to Herman Brown for the LBJ war chest and promised a substantial contribution as well. Everyone else followed suit. Congressman Johnson became Senator Johnson in the famous eighty-seven-vote win over Coke Stevenson.
“ ‘Every year 8-F went to the Kentucky Derby,’ Posh Oltorf said, ‘Jim Abercrombie, Judge Elkins, Jesse Jones, Gus Wortham, Jakie Freedman, George and Herman Brown, Milo Abercrombie, Naurice Cummings, William Smith.  They would stay two or three days, and LBJ and Senator Russell and maybe one or two other senators would fly over and join them.’ "

When George and Herman Brown decided to buy the Big-Inch and Little-Inch pipelines from the government after the war, the plan was hatched in Suite 8-F, and all the members were in on it. The legal work was handled by Charles I. Francis of the Vinson and Elkins firm. 

Augie in later years
Financing was arranged by August Belmont IV of Dillon Read—no doubt working through contacts with N.M. Rothschild of London to sell the securities. It could have been at the same time that Rothschild's Five Arrows Group acquired an interest in Elkins’ bank, according to the 1976 Report issued by the House of Representatives Committee on Banking and Currency, which was investigating connection in of United States chartered banks to International Banking networks.

Now the connection between some of the owners of the Sands Hotel with bankers in Houston, Texas is fascinating, to say the least, especially given the fact that in the mid-1960s, Howard Hughes purchased the hotel and added a 500-room circular tower (pictured below) in 1967.

The Sands, as modified by Howard Hughes
K.J. EVANS in a Las Vegas Review-Journal article, using the CIA-connected Robert Maheu as his primary source, writes:

In 1966, the Desert Inn rented Hughes its entire top floor of high-roller suites, and the floor below it, for 10 days only. Check-out time came and went, and Hughes didn't move. Moe Dalitz and Ruby Kolod, co-owners of the Desert Inn, were furious. New Year's, one of Las Vegas' busiest holidays, was looming, and the suites had been promised to high rollers. The squeeze was on Maheu. 
      "Get the hell out of here or we'll throw your butt out," growled Kolod. 
      "It's your problem," Hughes told Maheu. "You work it out." 
      Maheu called in a favor from Teamsters Union President Jimmy Hoffa, who phoned the DI boys and asked them to leave "my friends" alone. The reprieve lasted into the new year of 1967, when Maheu told the boss he had played out his options with the DI guys. 
      "If you want a place to sleep, you'd damned well better buy the hotel," Maheu told Hughes. 
      To most investors, negotiating a purchase is the means to an end. To Howard Hughes, it was recreation. After months of arduous log-rolling, Hughes and Dalitz agreed on a price of $13.25 million....
      The next purchase was the Sands, then a Strip showplace. Dalitz was consulted, and allowed that it "would be a good acquisition." Hughes paid $14.6 million for the Sands, which included 183 acres of prime real estate that would become the Howard Hughes Center. That was followed by two smaller places, the Castaways and the Silver Slipper, then the Frontier. All three had one thing in common, they came with enormous parcels of empty land. He made a deal to buy the Stardust for $30.5 million, but was prevented from closing by the U.S. Securities and Exchange Commission, which was worried about Hughes holding a monopoly on Las Vegas lodging....
      "Once he was in both (the gaming and hotel business) he didn't want anyone bigger than he," said Maheu. "That's why he tried to stop Kirk (Kerkorian) from building the big place. But he was not willing to do it at the expense of himself continuing to build, or expanding the ground that he had. It doesn't make sense, but it happens to be the truth. He wanted to be the biggest; he didn't want Del Webb to ever be as big. When he bought a piece of land, he wanted all the land around it. He wanted to control. He would have been very happy to be the biggest if no one got bigger than that." 
      Kerkorian's International Hotel (now the Las Vegas Hilton) began to rise in early 1968. So did Hughes' anxiety. He announced plans for a $100 million "Super Sands," hoping Kerkorian would flee into the desert at the news. He didn't. 
      Hughes saw the solution to "the Kerkorian problem" in the Landmark. The tower, a fat concrete cylinder topped with an oversized saucer, rose in the early 1960s, but sat dark most of the decade. Its problem was its design. It had too few rooms, too little casino space. But at 31 stories, it was slightly taller than the International. For that reason, Hughes wanted it. 
      "A lot of people have given me credit for paying 100 cents on the dollar ($17.3 million) for it." said Maheu. "It wasn't my idea, it was his. He was on a public relations kick at the time." Hughes said he would personally direct planning for the grand opening. 
      "I knew from that point on that I was in trouble," said Maheu. "He was completely incapable of making decisions." 
      Kerkorian's camp had announced that the International would open July 2, 1969....
      But no one could quell his fear of disease and germs, perhaps his mother's most profound phobia. If Howard sniffled or coughed, he was rushed to a doctor, lavished with attention and sympathy. Allene Gano Hughes saw every playmate as a disease carrier, and discouraged her only son from socializing....
      During all his years as a recluse, there were only a handful of people who saw him personally each day. This was the so-called "Mormon Mafia," which took orders from Bill Gay, chief of Hughes' Los Angeles office. Its mission consisted of feeding Hughes occasionally and drugging him regularly. 
      On Nov. 5, 1970, Hughes was carried from the Desert Inn and put on a jet for the Bahamas. It was, according to Maheu, a coup. 
      "The reason I know, is that that they tried to get me to join on two occasions," said Maheu. 
      In April 1976, Hughes died at age 70 aboard a plane en route to Houston, ostensibly of kidney failure. However, his dehydration, malnutrition and the shards of broken hypodermic needles buried in his thin arms suggested other factors. 
      "If sheer neglect qualifies as a weapon," said Maheu, "they killed him." 
      Because no Hughes' will was ruled legitimate, his empire was divided among his many cousins. The company, now renamed Summa Corp., finally began to show a profit.

Mrs. Howard Hughes, Sr. before her marriage was Allene Gano, and her closest relative was a  sister, Annette, who married Dr. Fred Lummis. Dr. Lummis' mother had been born Minnie Rice, daughter of Frederick A. Rice, from an old established family in Houston closedly related to William S. Farish, one of the most important founders of Humble Oil Company, which eventually became Exxon. Howard Hughes, Jr.'s "cousins" mentioned above--who inherited his properties and control of his foundation when he was officially declared dead in 1976--were these Texans related to the Rice family, and primarily consisted of Annette's son, William Rice Lummis, an attorney and partner at Andrews, Kurth, the law firm which controlled the Hughes Tool drill bit patent. Lummis became chairman of Summa Corporation and moved to Las Vegas where he supervised the operation of the Hughes companies, including the medical research foundation he had set up for his cousin before his death.
All this brings us back to Newt Gingrich and Sheldon Adelson.

Thanks to Michael Milken's junk bonds, Kirk Kerkorian (MGM) had the funds to buy the Sands in 1988, transferring these funds to the beneficiaries of Hughes' estate. Then, only seven months later in 1989 the old hotel was purchased from Kerkorian by Sheldon Adelson's holding company, the Interface Group. According to Jeff Burbank in License to Steal: Nevada's Gaming Control System in the Megaresort Age, Adelson had a 58.8% interest in the holding company, and five other men involved in his businesses each had less than 15%.

The Milken Connection to Sheldon Adelson and The Sands


Adelson bet on conventions just as that market exploded in Vegas. If the same happens in Macau, there's a pile to be made away from the tables there as well.

By Rik Kirkland
Fortune, 10/17/2005, Vol. 152, Issue 8

Sheldon Adelson, the shrewdest investor in Las Vegas, has a new bet: turning Macau into the biggest, glitziest gambling mecca the world has ever seen.

Sheldon Adelson has made billions of dollars by seeing things others do not. But even he was stumped three years ago [2002] when he first laid eyes on the real estate that Chinese officials were offering him to build a new casino in Macau. "It's very nice, very picturesque," he thought. "But it's underwater! They've relegated me to the boonies!"

Like every other bigtime casino developer, he was well aware of Macau's potential: The former Portuguese colony south of Hong Kong is the only place in the Chinese-speaking world where betting is legal. It's located a short drive or plane ride away from a billion-plus Chinese--who, by the way, are the world's most ferocious gamblers. But out here? On a future landfill project several miles from the crowded downtown peninsula where the action had always been?

Still, the more Adelson thought about it, the more he became convinced that he had spotted something glittering beneath the blue water of the South China Sea. More than glittering: a gold mine. A bustling gambling boomtown. "What I saw was as plain as the nose on my face," he says.

And so he dove in. To grab a beachhead, learn the ropes, and--not the least of it--make some money, Adelson first cut a deal with the Chinese government to erect his "temporary casino." The $265 million Sands, a gleaming Vegas-style palace, opened downtown near the ferry terminal in May 2004. The traffic is so high--40% of the 16 million people who visited Macau in 2004 passed through here, according to the research firm CLSA--and the action so intense that Adelson recouped his initial investment in 12 months.

In the year ahead the gambling operation at the Sands is on track to generate north of $320 million in pretax cash flow. That's more than Adelson made last year from the 4,000 hotel rooms and the restaurants, showrooms, shops, gaming tables, and slots at his highly profitable Las Vegas flagship, the Venetian.

But the real money spinner, Adelson believes, will be on that lonely expanse of freshly poured landfill. It's the only spot in Macau--the most densely populated place on earth--with enough room for what Adelson has in mind: a brand-new Chinese Vegas, complete with a long boulevard of casinos, hotels, shops, deluxe theaters, the works. The first big development on the Cotai Strip (the name was concocted from Coloane and Taipa, the two former islands that border it) is Adelson's $2 billion Venetian Macau, now under construction. It will boast the world's biggest casino (some 600,000 square feet of gambling space, about five times the size of your state-of-the-art Vegas gaming floor), 3,000 hotel rooms, acres of pools, 850,000 square feet of shopping, a 15,000-seat showroom, and a 1.2-million-square-foot convention center. Beyond that, Adelson intends to invest another $2 billion or so to put up hotel-mall-casino complexes that will open alongside the Venetian around the end of 2007 and be run by leading hotel operators, such as Four Seasons and Shangri-La. (He will retain control of their showrooms and casinos.) And although it took at least 30 years for Vegas to become Vegas, he figures it'll take about five for Cotai to become Asia's--and thus the world's--biggest gambling and entertainment mecca.

ODDS ARE you've never heard of Sheldon Adelson, 72, chairman and CEO of Las Vegas Sands Corp. (You may not even be too sure about Macau--except maybe as one of the locales in the James Bond movie The Man With the Golden Gun.) In the creation myth of modern Las Vegas, mobsters Meyer Lansky and Bugsy Siegel get credit for building it. Then comes Steve Wynn, 63, the dashing dream merchant who reinvented Vegas as an adult Disneyland by developing the casino-as-destination--places like the Mirage, Treasure Island, and the Bellagio. A low-profile newcomer, Adelson didn't even own a casino until 1989. But within the industry, he's known as the man who, more than anyone, made Vegas boom as a destination for conventioneers and business travelers--a less sexy but even more lucrative market. He's right up there in the pantheon alongside Wynn. But unlike Wynn, the pugnacious Adelson isn't trying out for the role of industry statesman.

"I was never part of the old-boy network," he says. "I wasn't swaddled in green felt cloth."

And there are a few other things Sheldon Adelson would like you to know. First, this whole recreating-the-Vegas-Strip-in-Macau thing is going to be far bigger than anything he's ever done before. "I've never been involved in something like this," he says. "I don't know of any entrepreneur who has."

It was his idea: "It was my dream. My vision. When I laid it out for [Macau's chief executive] Edmund Ho, he said, 'If you do this, you will put us ahead 20 years.' "

And it cannot fail: "This is the best bet I've ever made in my life--the best. It's a no-risk, no-brainer bet."

COMMAND CENTRAL of Adelson's empire is a sunlit, spacious, but sparely furnished office on the third floor of the Venetian hotel, right on the Vegas Strip. Part of one long wall holds blow-up pictures of his family: his second wife, Miriam, an Israeli internist whom he married in 1991 (her specialty is treating drug addicts), and their two young sons.

Closer to his oval-shaped working table hangs his gallery of fame--some 25 magazine covers, mostly from the likes of Computer Reseller News, Casino Journal, Travel Agent, Meeting & Conventions, Expo, and other trade publications. They capture the decidedly non-glitzy career that propelled him into the celebrity- and power-laden world he now occupies, a world reflected in the photos on the wall across the room: Sheldon (and Miriam) with George Bushes 41 and 43, with Ariel and Bibi, with Rudy and Arnold, and with other notables.

We're lunching at his table, and I'm wrestling with first impressions. Pale, balding, a barrel-chested 5-foot-7, Adelson has been plagued for the past four years by plexitis, a rare nerve inflammation that has temporarily left him unable to walk. (He gets around in a motorized chair and uses a walker for short distances.) Taking two unaided steps, he observes, "That's the most I've done in a long time," but then insists that through daily physical therapy he's going to lick this thing. He dotes on Miriam and her two grown daughters by a first marriage; they wander in and out of our meetings. He tells some touching stories about his father and a fascinating tale about going bust in his late 30s and getting depressed. Contemplating people jumping out of buildings, he looked out the window of his Boston estate, imagined himself "lying scratched in the shrubbery," laughed at his self-pity, and got back to work. The force of his personality has long since dispelled any notion of frailty.

As lunch wraps up, Adelson is getting increasingly frustrated. He wants to show me what he's doing in Cotai, and no one can find the right map. Aides rush in and out. Are we about to witness an explosion? No. An assistant walks in with a cup of forbidden ice cream. (Miriam has been getting him to improve his diet.) He smiles, says thanks, and lifting his spoon, looks over at me with a smile: "Like the little boy said, 'I can resist anything except temptation.' "

I've heard too many stories about Adelson the over-the-top battler to doubt that reality. But the truth, as usual, is more complicated. Is he a tough, demanding boss with a healthy ego? Yes, but he's not driven by Trump-like self-absorption so much as by a desire to get things done yesterday. "My objective," he says, "is singular: Win." He has had a loyal team around him for years. He can be funny and charming. (Accused of being a micromanager, he replies, "My job now is producing strategy. They lock me in a room at nine in the morning, give me a Ouija board and a crystal ball, feed me lunch through the mail slot--I insist on a hot lunch!--and at five o'clock they unlock the door and say, 'Okay, where's your vision for the day?'")

Most of all, what I'm struck by is the truth of something real estate investor Tom Barrack of Colony Capital told me before I flew out to Vegas: "This company runs above all else on the stupendous size of one man's gut."

LIKE MANY golden guts, this one started out hungry. Adelson grew up in a poor Jewish neighborhood near Boston, where his Lithuanian immigrant father drove a cab and his mother (her parents were from Ukraine) ran a knitting shop in the living room. He got beaten up as a kid by the Irish from South Boston; sold newspapers and ran his own business, the Vend-a-Bar candy company, while still in high school; skipped college to learn a trade (court reporting) before serving in the Army; moved rapidly through a series of jobs as an executive assistant, ad salesman, investment advisor; and finally emerged in his late 30s as a low-tech venture capitalist with a $5 million net worth. Still, there was little to suggest that Adelson would ever become anything more than another successful, small-time multimillionaire.

But five decades of hard-knock entrepreneurship taught him a couple of key lessons. Unlike a certain type of company founder who feels he is born to launch only a biotech or a publishing or a software firm, Adelson early on figured out that for him the bottom line on building a company was, well, the bottom line. On a road show in the mid-1990s to raise money to build his first hotel, an analyst asked what the theme of his new place would be. "How about 'making money'?" Adelson replied. "Where does it say in the Bible 'Thou shalt have a theme' when you build a Vegas hotel?" (Later, at Miriam's suggestion, he settled on Venice, where they had gone on their honeymoon.) "I've started more than 50 businesses," Adelson says. "For me, businesses are like buses. You stand on a corner and you don't like where the first bus is going? Wait ten minutes and take another. Don't like that one? They'll just keep coming. There's no end to buses or businesses."

By the late 1970s Adelson had developed a clear vision of what all successful businesses have in common--and more important, a growing belief in his own knack for spotting such opportunities. Call them Adelson's Rules: "It isn't enough to have a good product. The most important thing is to understand the direction of the industry." And "Study any industry, and you inevitably hear two things: 'I've always done it this way,' or 'Everybody does it this way.' When you hear that, know there's an opportunity to do something different and add value."

Adelson's first big score came as he approached 50. He had gotten a whiff in the late 1970s of an industry changing direction: 

Computers were starting to go personal, and sales were shifting from direct salesforces to new third-party channels. "It was a very, very strong fragrance," he says. "It smelled to me like the early auto industry, where no company had the scale to set up national distribution, so they invented a distribution system called dealers." 
His idea for breaking the industry pattern: Start an independent trade show to bring together buyers and sellers at a time when only industry trade associations ran such things. He launched Comdex (for Computer Dealers Exposition) in Vegas in December 1979. Comdex exploded from 157 exhibitors and 4,000 attendees that year to 2,200 exhibitors and 225,000 attendees by the mid-1990s.

Bringing Comdex to Las Vegas generated another big contrarian insight: The town's establishment, by focusing mainly on drawing high rollers and Middle Americans out for a few nights on the wild side, was missing a huge opportunity. Why not lure even more conventions and corporate meetings to Fun City? The suits would fill the hotels and casinos from Sunday to Thursday, while leisure travelers would pile in on weekends.

In 1989, Adelson paid $128 million for the old Sands hotel, the only place in town with enough room to build what he was really after--America's largest private exhibition center. This approach is now conventional wisdom in Vegas, which welcomed fewer than 300 conventions in 1970 and today hosts more than 4,000 a year. But when he first built his 1.2-million-square-foot Sands Exposition Center, it was revolutionary. "What Sheldon did by seeing what the convention center could do for the hotel was unique in my 30 years of doing business in Vegas," says Michael Milken, who raised junk bonds to finance the deal.

A few years later Adelson concluded that he could use his rising tide of business travelers to fill a far larger, all-suites resort. So once again he rolled the dice.

He blew up the Sands, sold Comdex in 1995 to Japan's Masayoshi Son for $862 million, borrowed up to his eyeballs, and at age 66 opened his first luxury hotel, the $1.5 billion Venetian, across the Strip from Steve Wynn's Bellagio.

"People didn't just think I was nuts--they knew I was nuts!" Adelson recalls. Today the Venetian is consistently the first- or second-most-profitable hotel in Vegas, with the first- or second-highest occupancy rate--alongside the Bellagio.

Even as he built his fortune, Adelson's combativeness--especially when he feels wronged--maintained his outsider status. The man can hold a grudge the way Dean Martin held liquor, and he's got tenacity to match. He engaged in a bitter fight with the Culinary Workers to win the right to open the Venetian in 1999 as a non-union shop, which didn't go down well in this strong union town. Later he battled the construction company Bovis for half a decade over costs at the Venetian. Most of all, he has fought with Steve Wynn--his next-door rival in Vegas and the other foreigner with casino rights in Macau.

In those verbal duels, Wynn deploys a rapier; it's sharp but so smooth you barely feel it going in. "I took the long-term view and decided not to compromise the brand by confusing people," says Wynn, whose $1.1 billion copper-sheathed twin of his new $2.7 billion Wynn Las Vegas won't open in downtown Macau until mid-2006. "It was costly in the sense that you could've done something like the Sands and made $300 million or $400 million more. But I'm not there for that kind of money. By having the discipline to wait and make sure we expand, enrich, and deepen the market by delivering a higher-quality building, a higher quality of service, we'll be rewarded with a better reputation."

That kind of talk exasperates Adelson, who wields the rhetorical equivalent of a lead pipe. "Wynn is very good at creating mystique," he says. "He's in it for fun and design gratification. My creativity extends to matching my tie to my suit. But I'm very good at making money, and that's what an economic enterprise is all about. I'm simply a much better businessman."

On this, the points on the scoreboard back up Adelson. Based on his 86% ownership of the Las Vegas Sands, which he finally took public last December in one of the year's hottest IPOs, Adelson today has a net worth of more than $10 billion, which makes him much richer than Wynn (whose estimated fortune is just under $2 billion). His company also plays in a different league. With only two casino properties and one expo center, some 11,000 employees, and projected annual revenues of roughly $2 billion next year, Las Vegas Sands enjoys an $11 billion market capitalization, which is more than twice as big as Wynn's and just behind that of the two much larger, merger-fattened industry giants: Harrah's and MGM Mirage.
Which brings us back to Macau, where, if Adelson is right, the biggest bus of his career is about to barrel into his stop.

IT'S A SAFE BET THAT Broken Tooth Koi isn't reading Austrian economists these days. Koi, a notorious Macau mobster, helped lead a 1930s-style gangland war during the run-up to Macau's handover by Portugal in 1999. More than 30 people were killed in the fighting among the triads, criminal secret societies with deep roots in China. (One of the great moments in PR: A police official reassured wary tourists by noting that the city had "professional killers who don't miss their targets.") The arrest of Koi, a notorious triad kingpin who was sent to prison for 15 years, signaled that Beijing was in charge and that Macau's Dodge City phase was over.

But if Koi wants to grasp why Macau will look so radically different when he gets sprung a decade from now, then Joseph Schumpeter's famous concept of "creative destruction" provides the answer. That's the process the Communist Party has repeatedly unleashed in recent years by inviting foreign capitalists to spur innovation--and inspire local champions--in industries ranging from semiconductors to autos to big-box retailing.

Now it's gambling's turn.

Until the Americans appeared, the standard in Macau had been set by Stanley Ho Hung-sun, an 83-year-old homegrown multibillionaire who for 40 years held the local monopoly on gambling--and who also owns the ferry, the largest department store, a bank, luxury hotels, acres of real estate, and stakes in the local airline, airport, racetrack, and TV station. That empire, which generates two-thirds of Macau's tax revenue, explains why no one was shocked that the old lion landed one of the government's three new gaming concessions.

At Ho's flagship Lisboa, low-ceilinged VIP rooms that cater exclusively to "whales" (high rollers) are sprinkled along winding hallways that vibrate with enough glass, jade, colored tiles, pink and black marble, and twinkling lights to make St. Vitus jitterbug. The place hasn't changed in years. In many of these rooms and others like them, triads still extend--and collect--credit, an important function, since the legal limit for bringing in currency from the mainland, $5,000, is about the minimum bet in such spots.

But to meet the new competition, even Ho has been forced to play a new game. Across the Avenida da Amizade, near where Wynn's place is rising, MGM Mirage has begun building a 600-room, $1 billion resort-casino in a joint venture with Ho's daughter Pansy. Behind the Lisboa is a hole in the ground where Ho is erecting a more lavish whale catcher, the Lisboa Grand. Down by the Sands, construction is well along on his new Fisherman's Wharf joint venture--a mass- market attraction that will feature replicas of the Forbidden City, a Portuguese fort, a Colosseum, a giant volcano ride, and of course lots of gaming tables and slots.
How big can the market get? This year Macau will surpass the Vegas Strip and generate more than $6 billion in gambling revenue. That's with 1,400 gaming tables and just under 10,000 hotel rooms (vs. 2,600 tables and 135,000 hotel rooms in all of Las Vegas). Aaron Fischer, an analyst at CLSA, projects Macau's gambling revenue could top $12 billion by 2010, as the number of tables rises to 4,000 and hotel rooms roughly triple. By then Macau could be attracting 37 million visitors a year (up from ten million in 2003)--about the traffic Vegas draws today. If all goes as planned, this mostly Chinese crowd will also be sticking around longer (the average overnight stay in Macau today is barely one night, vs. nearly four in Vegas) and spending a lot more on shopping, eating, and shows. To grease this red-hot engine, the government is spending billions on infrastructure, including a second ferry terminal and a new light-rail system. Later this fall should come the biggest announcement yet: a $4 billion, 18-mile bridge that will link Macau, the mainland, and Hong Kong's Lantau Island, where the new Disneyland just opened to overflow crowds.

The bedrock of this market's bright future, everyone agrees, is the Chinese passion for gambling. Last year, with just 4% of the slot machines in Vegas and 40% of the gaming tables, Macau generated roughly the same gambling revenue. (That also reflects the difference in risk-taking propensity between a market currently reliant on high-rolling whales and one dominated by blue-haired ladies pulling slots.) What explains this intensity? You hear the same answers again and again--luck is a central concept in Chinese culture; look at all the ways they try to shape and discern fate through lucky numbers, feng shui, I Ching, and the like. (Navigating a street near the Lisboa, I'd nearly tripped over a woman who had arranged a roast pig, a raw chicken, flowers, and an urn of burning incense outside a new jewelry store--offerings for a truly grand opening?) But until you walk into a place like the Sands, you can't fully grasp what one Asia hand told me: "The difference between Westerners and the Chinese is that for Westerners gambling is about entertainment and calculating probabilities. For the Chinese it's a battle with destiny."

THE SANDS BUZZES with a good vibe on a Saturday night. Its cavernous main floor is stuffed with baccarat tables, the game the Chinese favor. Here the typical minimum is just $40. The goal in baccarat is to see who gets closest to nine (face cards and tens count as zero) with a maximum of three cards. At the first table, I watch what I assume is one player's unique style. While the dealer waits, he's slowly peeling back the corner of one card until…ahhh, the eight of clubs. He then repeats this ritual with his second card. Hardly anyone drinks anything stronger than the tea served up in highball glasses from carts pushed by ladies in brown and gold Mao jackets. But you could cut the cigarette smoke with a bent Jack of diamonds. I watch for a few minutes. Suddenly I look up and realize the exact same battle with destiny, including the card-bending routine, is going on at every table. There's nothing like this in Vegas.

The only real debate about Macau's future is over how quickly the market evolves. Skeptics think the new boys are getting way ahead of themselves. "This is not Las Vegas; Asians want to gamble, not go shopping or see Celine Dion shows," insists Anthony Carter, a Brit who's spent 35 years in the region and is CEO of Hong Kong's Galaxy casino group, itself a recent arrival in Macau. "That will come in due course. But right now I just don't see that the demand for these new facilities the Americans are building will meet the cost."

To which both Adelson and Wynn--and here we finally discover a point they can agree on--reply, Nonsense. "To look at the high level of shopping and consumer taste in Shanghai and Hong Kong and still suggest that the Chinese won't care about luxury is a ridiculous denial of reality," says Wynn. "The transformation of Macau in the next 60 months will be the most remarkable metamorphosis in modern history." Told that Galaxy's Carter believes the correct "Asian price point" for a hotel room is under $100, Adelson snorts, "I'm going to have five price points in Cotai! I want the mass market and the high-roller market. My target is to maximize every opportunity." That includes MICE--as in meetings, incentives, conventions, exhibitions (a.k.a., the group-travel business). "My guy just came back from ten days on the mainland checking out the MICE market," Adelson continues. "The words he kept using were 'mind-blowing' and 'blown away.' It's like a firecracker. They've lit the fuse, and it's ready to explode."

What's also certain to explode is the Cotai Strip, whose virtues Adelson has championed louder and longer than anyone. Among the prominent recent converts: Stanley Ho. Ho's youngest son, Lawrence, heads a new family joint venture with Australia's richest man, Kerry Packer. Ho and Packer's project in Cotai, the $1 billion City of Dreams, will be designed very much with Adelson in mind. Rather than go "head to head" with the neighboring Venetian, Lawrence has dropped a convention center and large retail complex from his original master plan to focus on building "a special casino" that will sit beneath a giant aquarium.

"In conventions, Sheldon Adelson is the master," Lawrence Ho says.
"Why would we want to compete with him?" Wynn told me he too will soon be announcing plans to add to his Macau stake with some major new projects in Cotai.

Might there be something a bit bubbleicious about this stampede--which is driving property prices into the stratosphere and causing labor shortages and infrastructure bottlenecks? Maybe. There's also the "anchovy theory" espoused by a top American financier with China experience. "In a Caesar salad," he warned me right before I flew out to Macau, "the anchovy is the first thing to get chopped up. That's what we foreigners are in China: the anchovy." The major blow would come if gambling, which was everywhere in China until the Communists took over in 1949 and promptly banned it (along with prostitution, private property, and other capitalist vices), were suddenly made legal on the mainland. But that strikes most analysts as a bridge too far for the current leadership, who seem happy for now with a dynamic, growing, cleaned-up Macau. The more pressing problem is the kind of regulatory confusion that has swirled up in a recent dispute between Adelson and one erstwhile partner, Hong Kong's Regal Hotels group. Regal is now petitioning the government to develop a site that Adelson claims as his own. He says he's "completely certain" he will prevail.

At our final dinner Adelson waves a hand to dismiss once and for all the "naysayers" I keep bringing up who question his vision. He then mentions he'd just that day seen a June 1955 Life magazine cover. Over a photo of showgirls ran this headline: "Las Vegas: Is the Boom Overextended?" Point taken. We're not talking, after all, about the late, great Internet boom, where a Pets.com or Webvan spent billions to meet needs no one had. We're talking about investing multiples of that to soak up travel dollars and leisure spending in the middle of the richest region in the fastest-growing part of the world. Barring catastrophe--war in the Taiwan Straits, some horrific new plague--how can it not work?

IN THE YEARS AHEAD, Adelson expects to put a lot of miles on his personal Boeing 767. (He upgraded earlier this year from a 737, and now that he's public, only charges the Las Vegas Sands for the cost of a first-class ticket.) Beyond Macau, gambling seems set to go global--just as it exploded out of Nevada and across the U.S. Singapore, Thailand, Britain, and Korea are among the countries that once banned casinos and are now either taking bids on new concessions or considering doing so. Like his rivals, Adelson is chasing hard after every opening.

What drives a guy entering his eighth decade to place the biggest bet of his career? Adelson's old friend Mike Milken answers by putting him in context with other aging megamoguls he's known. "I didn't even meet Dr. Armand Hammer until he was 80," says Milken, "and we raised more capital for him after that than we did for anyone in the world. John Kluge was 70 when we did the biggest financing ever up until then so he could take his firm private. Kirk Kerkorian just did the biggest deal of his life at 87." That's the kind of eternally energetic, entrepreneurial company Adelson has bulled his way into.

One last thing: Despite his congenital focus on the bottom-line, Adelson is playing for more than just the bucks. What he's really burning for is a little credit. Does he feel he doesn't get enough acknowledgment, certainly compared to Wynn, for his role in reinventing the business model in Vegas? "Absolutely." Does he worry the same thing could happen again in Macau? Damn right. "Nobody had ever thought of recreating Las Vegas in Cotai," he says. "Nobody. They all decried it. Ho and Wynn dismissed it. Now they're all coming out of the woodwork to be part of it." So take a note, you future historians: Mr. Sheldon Adelson respectfully requests that you put this caption next to his photo: The Man Who Built the Las Vegas Strip--in China. If he delivers on all or even most of what he's promised, he deserves it.

Wednesday, January 25, 2012

Darrell Issa Should Represent His Real Constituents!

Congressman Darrell Issa (R-CA) is chairman of the House Committee for Oversight and Reform, which has the responsibility of conducting open hearings into the release of documents concerning past political assassinations. 

Please share the following note from William Kelly and do all you can to demand that Issa do his job:
I ask those with an interest in open government and political assassinations to devote that effort towards helping to release the government assassination records, including those of the MLK House Select Committee on Assassinations and the remaining JFK Assassination records. To do this we need Congress to do their duty and hold JFK Act oversight hearings, which can only be scheduled by House Oversight Committee chairman Darrell Issa (R. Calf.). Towards that end we have requested that people write to Issa (fax him at 202-225-3974) and sign a petition requesting the hearings. Please ask five or more of your friends who are sympathetic to this cause, and ask them to please sign on and join this effort. Thanks,

"Injustice anywhere is a threat to justice everywhere. We are caught in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly, affects all indirectly."
Quote from Martin Luther King, Jr.
while he OCCUPIED the Birmingham, AL Jail

Dems. support OCCUPY DC
By Brett Redmayne-Titley 

Brett Redmayne Titley

The plan, by Darrell Issa (R-CA), to remove the face of the Occupy camp at McPherson Park did not go as he planned. In an effort to embarrass the National Park Service for their decisions in allowing the Occupy protests to flourish in Washington DC, Issa, Rep Trey Gowdy (R-SC), and Rep. Joe Walsh (R-IL) called for a hearing of the House Committee for Oversight and Reform. The hearing was titled "Who Made the Decision to Allow Indefinite Camping?" 

The cards, however, quickly turned on these three GOP champions.

Instead of eliciting responses helpful to their quest for new legislation requiring the National Park Service to ban all camping Director Jonathan Jarvis offered articulate First Amendment obligations of his position. He noted that the National Park Police handle more protests than in any place in the country and they take a "measured" and "reasoned approach." Regarding the McPherson Park Occupation Jarvis concluded that this free speech is "unique," Continuing, he said that Occupy is, "unprecedented in that the core of their First Amendment activity is that they occupy the site. We have developed a rapport at the site with demonstrators," he added, explaining that Occupiers have come to work with the agency to assist in maintaining the site's safety.

During the hearing, Jarvis remarked there had been two previous instances where there had been long-term protests in DC. In 1979, six thousand family farmers drove to DC to protest farm policy and were on the National Mall for seven weeks. In 1968, the Poor People's Campaign set up a shantytown for a month called "Resurrection City."

At the end of the exchange, Jarvis noted that the Supreme Court has afforded the National Park Service a great deal of discretion as to how to enforce this rule on camping. This is unprecedented, and we're working through it," he said.

Eleanor Holmes Norton, whose district McPherson Park lays within, was vehement in her praise of the director and the Occupiers. In refering to the Arab Spring this past year, she declared that " our Nation's Capitol is the place nations look to for their example of the First Amendment rights." This praise came as a stinging rebuke to the intentions of Issa and company who were to repeatedly receive a reminder of the historical precedent of civil disobedience in America. As a career civil rights leader Eleanor Holmes Norton was adamant in her criticism noting that no one from McPherson Park was allowed to testify despite some 75 occupiers being in attendance. Norton pointed out that there is money that can be used to pay for the cost law enforcement is incurring from monitoring the Occupiers. It is in an annual appropriations bill for federal government and has been for the past ten years.

Additionally, she pressed Deputy Mayor for Public Safety and Justice Paul Quander on whether Occupiers had been escalating tactics, as he suggested they could do. Quander could give no examples of escalation, outside of maybe the construction of the wooden structure that the Park Police had removed. To this, Norton suggested the Occupiers be commended for "self-policing."

Issa continued to get nothing useful from Jarvis who maintained throughout the questioning that he had the " Broad Discretion" of his duties in balancing civil rights with GOP concerns. Jarvis refused to admit that new legislation is needed to prohibit camping and "24 hour vigils." Jarvis continued to be a cool customer under pressure leaving Issa so flustered he left the hearing under the pretense of a vote in another committee chamber. Rep.Gowdy attempted to march on, but was assailed by representative Elijah Cummings (D-MD).

Cummings, who also has a good memory of the need for civil disobedience, delivered his left-handed swipe at the two remaining antagonists of free speech, Rep. Gowdy and Rep. Walsh. Every comment by Norton and Cummings served to highlight the divisiveness of these men's intentions. Rep. Cummings condemned the "tone and tenure of this hearing" and called it "rather disturbing."

In a direct rebuke to Issa, who sits on the House Finance Committee, Cummings admonished "I wish we had as much concern about the people who have lost their houses," adding that there had now been 118 hearings with 342 witnesses and, when a banker is asked to come testify on robo-signing, the committee cannot get them because Chairman Issa doesn't want them to "come in to explain why they have illegally put people out of their houses." As the committee's ranking Democratic member, Rep. Cummings of Maryland, praised Jarvis for his 35 years of service.

"You really understand what it means to have freedom of speech," Cummings said. 

Issa returned and, again, made plain his desire to change existing legislation in order to stop further and future protests in Washington DC. Visibly agitated Rep. Gowdy gaveled the hearing to a close after one last ominous exchange:
Rep. Gowdy asked Jarvis to name the most famous protest letter in US history to which Jarvis responded, Martin Luther King's "Birmingham Jail."
"That's right," said Rep. Gowdy. "That's where all protests that violate the law should be held. From jail."

The author spent his formative years growing up in Australia, Ghana, the Bahamas and Alaska.He also traveled extensively through out the developing world in the era before globalization.His experiences have shaped him into a World Citizen who sees.... [See more about Brett Redmayne Titley.]

Saturday, January 7, 2012

Gene Tunney's Schick/Eversharp and Yale Connections


Previously in this blog, we have researched a man named Patrick Joseph Frawley, long-time chairman of the Schick and Eversharp corporations, who, more than any other individual, was the primary bankroller of INCA (Information Council of the Americas).  At this point it becomes necessary to examine other persons involved in the same corporations Frawley controlled for a time to determine who other major (but hidden) shareholders may have been. 
The overriding PURPOSE of this exercise is the determination of who was the primary supporter of Dr. Alton Ochsner in New Orleans, the surgeon who was training doctors to go to countries in the southern hemisphere of the Americas and provide medical care to dictators beholden to their wealthy neighbors in the United States. 

After pieces of this puzzle are collected, this blog will have more to say about what it all means in terms of American history. Readers' thoughts and comments are appreciated and welcomed if relevant in achieving this purpose.

Lawrence Cowen, Former Schick Chairman

This blog first noted a connection between Schick, Inc. and the family of Robert Kennedy's nemesis, Roy Cohn. Roy Cohn's mother, Dora Marcus Cohn, was the daughter of Joseph S. Marcus, a man of Russian ancestry, but born in Germany. He had married Rachel Celia Cohen, a sister of Joseph Lionel Cowen (who had changed his name from Cohen). His sister, Rachel Cohen, was born in England before her marriage to Joseph S. Marcus. Their daughter, Dora Marcus Cohn, mother of Roy Marcus Cohn, was thus the niece of Joshua Lionel Cowen and first cousin of his son Lawrence Cowen. 

Lawrence Cowen was involved with the Schick company before Cohn took over the Lionel train empire in 1960, as previously noted:
Lawrence Cowen, 52, president of Lionel Corp. from 1946 until last fall, was named chairman and chief executive officer of Schick Inc., makers of electric shavers. Cowen, who bought a seat on the New York Stock Exchange at the age of 21, was ousted from Lionel when a new group led by Lawyer Roy M. Cohn took control of the company founded by Cowen's father (who gave his middle name, Lionel, to the toy electric trains he created).

Gene Tunney of Connecticut
A Tool of British Intelligence?

Gene and Polly Lauder Tunney
Before discussing what role boxer Gene Tunney had in the corporations, it is first mandatory that we understand how important Tunney was during the decades from the late 1920's until well into World War II. Anthony Summers, in his book Official and Confidential: The Secret Life of J. Edgar Hoover reveals the following information about Tunney's involvement as liaison between British and American intelligence in pre-CIA days:
For Edgar [Hoover], the war really began nearly two years before Pearl Harbor, with a letter from a retired boxer. Gene Tunney, the undefeated world heavyweight champion of the twenties, had often met Edgar and Clyde [Tolson] on their frequent visits to Yankee Stadium. Now, in early 1940, he found himself passing on a discreet message from a man he had first met at military boxing events in his youth, a man who had since become a top-level British secret agent.

Head of "BSC Cabal,' Code Name Intrepid
This was William Stephenson, known to millions today as the protagonist of A Man Called Intrepid, the best-selling book about his achievements in World War II. Stephenson, a Canadian the same age as Edgar, was an extraordinary figure...[whose] mission, when he asked Tunney to make contact with Edgar, was under the personal command of Winston Churchill ... [then the] First Lord of the Admiralty, [who] had been engaged in secret correspondence with President Roosevelt for months. 
So it seems that, leading up to WWII, Tunney was being used by British Intelligence to make contact with the man who then headed FDR's primary medium of civilian intelligence--both foreign and domestic--with regard to either getting help with Britain's need for weapons to fight the Nazis or with regard to getting the Americans into the war. The question is whether Tunney was interested for patriotic or financial reasons. To answer this questions requires more insight into his personal as well as business relationships. 

Sam Pryor's Role

The British were--at that time when Tunney was being used (1940) to carry messages to J. Edgar Hoover--fighting for their life, hoping to draw the United States into the war against Germany.

The excerpt which follows appeared in an article entitled "The 'miracle man' of 1940: a look at the behind-the-scenes intrigue that catapulted unknown Wendell Willkie to head the Republican ticket in 1940--and guaranteed FDR an unprecedented third term," published by The New American, a bi-weekly magazine associated with the John Birch Society, one of the first purveyors of what is now commonly known as "conspiracy theories". It serves to clarify how the British saw their role in the war vis a vis the United States government:
British agent Bickham Escott, who said that when he was recruited he was told: "If you join us, you mustn't be afraid of forgery, and you mustn't be afraid of murder." In light of these admissions, is it outlandish to ask if some of the unexplained and "convenient" deaths of the period may have been "assisted" by the BSC's [British Security Coordination] operatives? In the context of the Willkie nomination, the sudden death of convention manager Ralph Williams (a Taft man) and his replacement by Sam Pryor (a Willkie-Rockefeller-FDR-BSC man) [also Tunney's best friend] now looks suspiciously propitious. Wild speculation? Perhaps. But, perhaps not.

"Clearly," writes Prof. Mahl, in Desperate Deception, "the major purpose of BSC was to conduct aggressive offensive operations against those it saw as enemies of Britain." However, he notes, this "included not only Hitler's agents in the United States, but those who simply wished to remain uninvolved in the European war." That included American citizens, especially prominent politicians, who were tagged with the pejorative label of "isolationist."

This false label grotesquely implied that Americans who adhered to the traditional view of our Founding Fathers against foreign intervention and entanglement were somehow trying to retreat into a fantasy world in which our country would be sealed off from all intercourse with foreign nations. Even worse, the BSC cabal did everything possible to associate the isolationist tag with Naziism and fascism.

James Joseph ("Gene") Tunney is a New York City boy who became one of the great celebrities of the years between the wars.... Gene Tunney made several million dollars in the ring, and after he quit, he put it [the money$] to work for him. He is a director of such companies as the Schick Safety Razor Company, Independent Bank of Commerce, Quaker City Life Insurance, Technicolor, and Eversharp, Inc., as well as others. Gene commutes to his New York office from his Stamford, Connecticut, home daily. [Source: "My Fights With Jack Dempsey," a chapter in The Aspirin Age 1919-1941, (1949).]
Tunney's office, like Candy Jones', in Yale Club
Tunney's New York office was mentioned in a book written by Donald Bain (hardback published by Playboy Press in 1976) called The Control of Candy Jones. Candy, a beautiful model for the Conover Agency (where Gerald Ford, incidentally, had worked as a male model after his days as a football hero), married Harry Conover and then took over as owner of the agency after their divorce in 1959.
Located on the 8th floor at 52 Vanderbilt Avenue in Manhattan, the office was directly opposite Tunney's. The address was a 22-story office building located at the southwest corner of 45th Street and Vanderbilt Avenue, opposite Grand Central Terminal, and in the same building as the Yale Club, which gave its address as 50 Vanderbilt. It's an old trick used by FBI spy types, including former FBI man Guy Banister, who helped to set up Lee Harvey Oswald as a "Communist" patsy, to use alternative addresses for the same location.
According to Candy Jones, "Tunney was a very private man, and all the years they spent across the hall from each other resulted in little more than casual pleasantries. Tunney did not seem to be conducting a business from the office, and Candy surmised that he used it as a convenient location from which to handle his personal investments." [page 55] It would not be a surprise to find that Tunney had links to the Yale Club, since he had played golf in Palm Beach with Prof. William Lyon Phelps in January 1928 and addressed his Yale lit class one month later.

Prof. W. L. Phelps
Since Candy always kept her office door open when she was there, on several occasions she noticed activity across the hall which she reported to Tunney--and later the FBI man ("Ted") who questioned her--as suspicious. Thus began a relationship with the FBI which included lending "Ted" her state-of-the-art microphone recorder as well as allowing the FBI to use her address as a mail drop. At about that time, Tunney relocated his office to 200 Park Avenue, and within a few months (in November 1960), Candy was recruited in  by the CIA. The real subject of the book concerns her work as a covert operative in the Far East. According to author Bain: "What she didn't bargain for, however, was becoming a human guinea pig in a secret CIA scientific project in which mind control was the goal," involving a "Dr. Gilbert Jensen" of Oakland, California. But that's another story best told by reading The Control of Candy Jones.
"A Comparison by One Who Knew Him - Now and Then"

by Paul Gallico, Sports Editor and Sports Columnist 
of The News (New York)
Feb 18, 1931

Best Buddy with Sam F. Pryor, Jr.
...He lives with [Josephine] Polly Lauder Tunney in a wandering white Colonial farmhouse perched on a glacial ridge in the woods many miles back of Stamford. The road runs back country, scenic-railway style, over the giant furrows plowed by the last visit of the great ice cap, through wild stretches where, if you go quietly, you will suddenly come upon a white signal tail raised in alarm and then see its owner, a young buck or fawn, bound stiff-legged away. If you have no one to show you the way you won't find it.
The road runs past lovely old houses and glimpses of hidden waters; it is companion to a brook for a mile or so and then leaves it to begin a climb that carries it along the face of a crest, and here, a little back from the narrow path, sits the old farmhouse. It is a temporary residence. Behind it the ridge still rises, thickly wooded, and there, deep, sequestered, and high, the Tunneys will some day build their permanent home. From it they will look over the wood as it falls away to the blue Sound, and the Sound itself, and on clear days to a distant haze that will be Long Island.
The present dwelling is in the delightful haphazard manner of the early American farmer, who built himself and his family a white house in which to live, and then as the family grew and prospered thrust out a wing here, added a room there, another upstairs, another offshooting from the second story, until treading the aging floors many years later you may almost trace the arrival of the first- and second-born, the advent of the hired man, the strong rooting and spreading of the American family.
And, as in old houses near the sea, you will find in Tunney's home, scattered here and there among the plain, lovely lines of the austere Colonial furniture, rich and clashing objects brought from the other side of the world by wooden ships.
The living room is in two wings that fold themselves around a double fireplace. Over the fire mantel are lustrous pewter dishes and candlesticks. The fireplace is made of three single slabs of stone, likely enough quarried out of the ridgeside by the original builder. 
The wallpaper is the Anne Hathaway design, gentle scenes about Stratford-on-Avon -- Polly picked it. And one of the fireside seats is a monstrous red-leather marshmallow of a cushion from Morocco. It is so big you could perch on it with your legs curled up under you. Upstairs, too, in the library -- you see, it is just that quaint, rambling type of house where the library could be put upstairs. 
Oriental trophies mingle with Colonial pieces, and there are a lovely reclining porcelain hunting dog and a large, powerful sculptured head suggestive, but not replica, of Tunney. There are more enormous cushions from Morocco and two Berber guns, their gas-pipe barrels richly chased with silver, and silver to the end of the stock, silver inlaid curved daggers, a rich red rug, and the whole long side of the wall lined from floor to ceiling with books, books with fine, exhilarating titles, books that I wished greedily and enviously that I owned. On the walls are fine hunting prints in red, white, and black, and pictures of ships in full sail. Too, there is a curious dark statue, a slim figure rising four feet high from lotus petals, strange and disproportionate. 
"It doesn't mean anything to me," says Polly. 
"It does to me," says Gene. "I . . . I . . . can see what the fellow meant when he made it. . . ."
The dining room is tiny and dark and made to reflect candlelight and old silver. There is a fireplace in it, and a fireplace in the huge bathroom built next to the bedroom that faces the northeast and the rising sun. Did you ever soak in a warm tub with a good book and an open fire crackling and blazing in the room? Or rub down after a cold shower with the heat licking out at you, and the smell of burning pine mingling with the steam? Then you have never lived as Gene Tunney does now -- and as I mean to some day.
It is a house through which you can hear an outside storm, the rain rushing against the roof and down the eaves, and the wind down the chimney, and that is something most people deny themselves in their dwellings of brick, stone, steel, and concrete. They shut out the weather and miss the sense of peace and contentment that comes when the elements are wild outside the window and the rain sluices over the panes, fragrant smoke from the fireplace blows into the room, and inside all is snug and sheltered and warm and dry, and the logs burn brightly and throw off yellow and blue shoots of flame.
Here dwells the grown Tunney. Freshman and sophomore years are past. He has entered upon the junior's estate, still unsettled, but calmer, better educated, ready for the final assault upon life....
For the first time in his life, I suspect, he is enjoying himself. 
Fine days are given over to tramping the countryside, the woods and the farm country, with Polly. Both love to hike, to walk, nowhere in particular, finding strange and unused paths, scrambling over the low stone walls of New England from beneath which the chipmunks scurry - well, one could write a book about the delights of such aimless, friendly wanderings.
Too, there are his friends,
  • the Gimbels,
  • the Pryors,
  • the Dick Byrds [Adm. Richard Byrd],
  • the Jim Bushes, 
pleasant, cultured people, men like William Lyon Phelps [the Yale professor Tunney met in 1928, whose genealogy dates back many generations in New Haven] to stimulate him, to develop his mind. Who can now in good faith criticize him for preferring this company to the frowsy crew from which he tore himself? Life is too short to spend a second of it with unpleasant people, the rewards for such sacrifice too uncertain. Years and advancing discretion have taught me to admire Gene Tunney very much for the people he avoids and the thoroughness with which he does the job of avoiding them.
Tunney's mind and education have leaped ahead since his groping days of the training camps. He no longer fumbles for words, he no longer lets fly a gem from the dictionary in the manner of Little Jack Horner producing the plum from the Christmas pie, he no longer as a matter of fact speaks written English, which is the more formal and stilted language that one reserves for letter paper or the thesis. His gesture with a cocktail shaker is facile and natural, and he has the inborn gentleman's instinct against the wearing of the sly expression that has become habitual with this normal function in American circles.
  • Charles V. Bob was, according to an online biography of DEAN IVAN LAMB, an aircraft promotion entrepreneur and stock market financier, involved in a fraudulent stock market and mining scam that fleeced members of New York society and also many small investors of their money. Bob had been one of the biggest contributors to Admiral Richard Byrd's expedition to Antarctica.
  • James Irving Bush was vice president of the Equitable Trust Company and lived in the penthouse at 885 Park Avenue in New York City when he gave Tunney an engagement party for members of the Madison Square Garden Sporting Club.
  • Bernard F. Gimbel was largest shareholder and chairman of Gimbel Bros. Inc. department stores. He and his wife, Alva, lived in a mansion on 96 acres in Greenwich, Connecticut. The Wilton, Conn. Bulletin of April 21, 1954 informs us that there was a Garden Tour to be held in May of that year and that:
The gardens to be shown will be those of [Sam Pryor's sister and brother-in-law, who was in the Yale class of 1926] Mr. and Mrs. Joseph Verner Reed, Quaker Ridge Road, Greenwich; Mr. and Mrs. Edward J. Beinecke, Ciff Dale Road, Greenwich; Mr. and Mrs. Bernard Gimbel, King Street and Sherwood Avenue, Greenwich; Mr. and Mrs. Whitelaw Reid, Mr. and Mrs. Horace C. Flanigan, and Mrs. Arthur Lehman, all on Anderson Hill Road, Purchase.
"Boxing and Wrestling" magazine article
"Gene Tunney-the fighter who quit with a million"

Sept. 1956 or 57

by Oscar Fraley


The handsome, six foot plus ex-champion is a director of many successful companies, perhaps more than he can recall off-hand. Among other things, he is chairman of the board of the Denham Tire and Rubber Company of New York. He is a director in the famous Eversharp, Inc., the Clinchfield Coal Company and the Brown Paper Company. Gene also is president of the Stamford, Connecticut, Building Company and has holdings in various other concerns.

Tunney's career is a complete Horatio Alger story. It's a tale of a poor boy born in New York's Greenwich Village section who rose to become heavyweight champion of the world, retired undefeated with two million dollars and married a beautiful heiress.

Born James Joseph Tunney on May 25, 1898, Tunney was a spindly youth but began sparring while attending various public and parochial schools. He boxed at neighborhood clubs up to the time he enlisted in the U. S. Marines at the outbreak of World War I. The war gave Gene his big push into the prize ring.

Tunney proved so successful boxing his fellow marines he was put forward to fight for the A.E.F. light heavyweight championship, which he won in Colmbes Stadium at Paris. After the war, jobs of the right type were scarce and he elected to make boxing his business with cold-blooded approach never equalled before or since.Gene still was unimpressive, physically. Yet he realized he had to build both his body and temperament to succeed. By driving himself, Tunney developed into a beautiful fighting machine and often he has said that during these times he even discovered that courage is a force that can be learned.

In 1922, Tunney won his first title, winning the American light heavyweight crown from Battling Levinsky. Four months later, Harry Greb lifted it in the only fight Tunney ever lost but Gene won it right back in 1923....

Thereafter, Tunney picked up just one more big purse by flattening Heeney a year later and called it quits. For his last three fights, twice with Dempsey and then Heeney, Tunney collected a sum said to have been $1,700,000!

Once out of the ring, Gene turned to the finer things he had been pursuing all through his career -- books, art, travel. He set out on a walking trip through Europe with author Thornton Wilder and visited such literary lights as George Bernard Shaw and H. G. Wells. In Rome, the tour came to an end on October 3, 1928, when he married Miss Polly Lauder of Greenwich, Connecticut, one of the heirs to Carnegie steel millions.

The Tunney's now have four children, three strapping sons and the youngest child a daughter, Joan, aged 12. Gene, the oldest son, is in the army. The others are Varick and Jonathon. Although Tunney had little success in certain public crusades. he prospered in business. He became an executive of the American Distilling company and the Morris Plan bank, connections he later relinquished. His ventures spread to many fields and still do.

Alcohol Corporation (American Distilling Company) - 1928

The company became American Distilling Company in 1942. This certificate was printed in the 1928 and has the names William S. Kies, Richard H. Grimm and Philip Publicker imprinted on it. 1928 - American Commercial Alcohol Corporation is formed with the merger of American Distilling Co., David Berg Industrial Alcohol Co. (Founded 1911 in Philadelphia), and the S. M. Mayer Alcohol Co. (founded 1926 in Gretna, Louisiana).


 "Was Gene Tunney the finest boxer who ever lived?"

in "The Complete Book of World Heavyweight Champions
From John L. Sullivan to Larry Holmes"
Clay Communications Group: Spring, 1981

*** On August 1, 1928 Tunney announced his retirement at New York's Biltmore Hotel, quickly sailed off to Europe, where he was to meet his fiancee Polly Lauder, grandniece of billionaire Andrew Carnegie. They were married in October.
In many ways, Tunney didn't fit into the boxing world. He was a handsome, clean-living man, self educated, who could write poetry, read Shakespeare, pontificate on all worldly subjects -- didn't even curse.

"Let's have fighters with more wallop and less Shakespeare," laughed humorist Will Rogers, echoing the sentiment of fight people who labelled Gene as "uppity", "a snob". They found it unsettling that a prominent fighter would carry a book of poetry in his equipment bag along with his jockstrap and gloves. Neither did they like the fact that Tunney used "front men" as managers.

"The state says I need to have a manager," Tunney scoffed. "Otherwise, I wouldn't use one."

But Tunney won their grudging respect through the years with his slashing fists and giant fighting heart. Some experts feel he was the best pure boxer in heavyweight history. Gene was a successful businessman -- and a close friend of Jack Dempsey's -- till he died....


Polly Lauder Tunney, 100, Fighter’s Widow, Dies

Published: April 15, 2008
The New York Times
Polly Lauder Tunney, a Connecticut socialite and Carnegie heiress whose secret romance and subsequent marriage to the former heavyweight champion Gene Tunney was one of the most sensational love stories of the 1920s, died Saturday at her home in Stamford, Conn. She was 100.

Her death was confirmed Monday by her son John V. Tunney, the former United States Senator from California. His mother had had several strokes in recent years, including one about a week ago, he said.

For Mrs. Tunney, who had grown up in a world of wealth and privilege reaching from Greenwich, Conn., to Versailles, meeting and falling in love with a prizefighter, even a famous one, seemed unlikely. But Gene Tunney was no ordinary prizefighter.

Though he had grown up relatively poor in Greenwich Village as the son of Irish immigrants — his father was a longshoreman — Tunney, a high school dropout, had developed an insatiable appetite for classical literature, especially the works of Shakespeare. Handsome and articulate, he lectured on Shakespeare at Yale and befriended George Bernard Shaw, Thornton Wilder and other writers, earning the scorn of the boxing establishment and many boxing fans.

Polly Lauder, a striking beauty, met Tunney shortly before he won the heavyweight title from Jack Dempsey in one of the most stunning upsets in boxing history on Sept. 23, 1926. Tunney had originally been introduced to Miss Lauder’s older sister, Katherine Dewing, by a longtime friend, Samuel Pryor Jr., who also lived in Greenwich.

Katherine Dewing in turn arranged for Tunney and her sister to meet at a dinner party that Mrs. Dewing and her husband gave at their Manhattan apartment. Over the next two years, a romance blossomed, though only a few close friends and relatives knew about it.
In August 1928 — less than a month after the last fight of Tunney’s career, a technical knockout of the New Zealander Tom Heeney — Polly’s mother, Katherine Lauder, announced from the family’s summer home on Johns Island, off the coast of Maine, that Polly and Tunney had become engaged. (Tunney had promised Miss Lauder that he would quit boxing after fulfilling his contractual obligations, which included the Heeney fight and, earlier, a rematch with Dempsey, a fight that became memorable as Tunney’s “long-count” victory.)

The engagement was front-page news across the country and touched off a frenzy by reporters and photographers eager to interview the couple. “Wedding Gong Calls Gene,” declared a headline in The Los Angeles Times. But the couple remained out of public view.
In September they went to Europe, separately, and were married in a small ceremony in a hotel in Rome on Oct. 3, 1928. She was 21 when they wed. The New York Times said the scene after the wedding “looked mighty like a riot” as clothes were torn and cameras smashed in a melee of photographers jostling to capture images of the couple.

After spending 14 months traveling in Europe, the Tunneys returned to the United States and moved into a house in North Stamford built in 1742 and began restoring it. Known as Star Meadow Farm, the house sits on 200 acres, where the Tunneys raised Hereford cattle and sheep.

Tunney, who had little to do with boxing after he retired as the undefeated heavyweight champion July 31, 1928, became a successful businessman in New York. He died in 1978 at 81.

Born Mary Josephine Lauder in Greenwich on April 24, 1907, and known since childhood as Polly, Mrs. Tunney was the granddaughter of George Lauder, a first cousin of Andrew Carnegie, with whom he had grown up in Scotland. An engineer, Lauder became, in his 30s, a confidential adviser to Carnegie and a director and shareholder of the Carnegie Steel Company in Pittsburgh shortly after Carnegie founded it in the 1870s.

Lauder’s son, George Jr., inherited much of his father’s fortune and became a well-known yachtsman, owning a 136-foot two-masted schooner. He was a director of Presbyterian Hospital and the Manhattan Ear and Eye Hospital in New York and died of influenza at 37, leaving a fortune estimated at $50 million to his wife and to his children, Polly, Katherine and George III.

After attending private schools in Greenwich, Polly Lauder graduated from the Lenox School in New York and the Finch School in New York and Versailles. She was an accomplished equestrian, sailor and swimmer and remained vigorous into her 90s, driving a car until age 93. A patron of the arts, she was a former vice president of the Metropolitan Opera Guild and a major benefactor of the Audubon Society and the Wildlife Federation.

In addition to her son John, of New York, Mrs. Tunney is survived by two other sons, Gene, of Hawaii, and Jonathan, of New York and Roxbury, Conn.; a daughter, Joan Tunney Cook, of Omaha, Ark.; 10 grandchildren and 9 great-grandchildren.
Greenwich, Conn., July 28, 1928.—(AP)—Gene Tunney, who successfully defended his heavyweight title against Tom Heeney at the Yankee stadium in New York on Thursday night, will make announcement "of the greatest importance" next week, according to Sam F. Pryor, Jr., one of the champion's closest friends. Although Tunney is known to be in Greenwich and is undoubtedly staying at his friend's home, Pryor declared today that the champion preferred to remain in seclusion until such time as he makes his announcement. Pryor intimated that Tunney's announcement will be to the effect that he has retired from the ring and will not again defend the title which he won from Jack Dempsey on Sept. 23, 1926, at Philadelphia. Pryor said that the champion was fully aware of the rumors and reports that he would retire and leave the heavyweight title open, and that his announcement of next week will answer these reports. The champion recently purchased a farmhouse and several acres of land in Stamford and will take occupancy when alterations which he ordered are completed. It is reported that he will open a gymnasium on his property for the training of boxers and will give his personal attention to it. Tunney's immediate plans call for a tour of Europe with Thorton Wilder, the novelist, after which he will probably go south for the winter, and then return to his Stamford place which he intends to make his permanent home .