Underground

The Book of the Week is “Underground, My Life With SDS and the Weathermen” by Mark Rudd, published in 2009.

March 1969 saw the start of Nixon’s secret bombing campaign against Cambodia. The author wrote, “I was so sure I knew better than my parents; after all, their generation had brought the world to this state of affairs, if only by their acquiescence.”

Rudd became the poster boy for the media as a protest leader at Columbia University during its period of violent unrest in the spring of 1968. He started his degree there in the autumn of 1965. At the time, the school employed African American female maids to clean the dorm bathrooms, a service included with the boarding fee.

Rudd joined the Students for a Democratic Society (SDS) in March 1966. He had grown up in a suburban Jewish family. His father had fought in the Second World War, during which Hitler was perceived as “Absolute Evil.” The United States used its powers for good to defeat the latter. However, twenty years later, when Lyndon Johnson’s war crimes began to be revealed, Rudd became disillusioned with his own country.

Rudd and his contemporaries didn’t support any presidential candidate in 1968 because “Electoral politics was beneath our concern.” He and his fellow political activists were concerned, however, about the deleterious effects of a senseless war perpetrated by the federal government, along with the university’s related and other nefarious activities.

For at least the last half century, hypocritical liberals have sought to “… co-opt the energy of radical young people into working for meaningless reforms…” However, with Vietnam, some would say the protests were justified. For, the American president started a needless war that resulted in tens of thousands of deaths and ruined lives– recruiting cannon fodder against their will. The stubborn, arrogant president didn’t take a lesson from the stubborn, arrogant French, who epically failed in clinging to their fast-fading colonialism in mid-1950’s Indochina.

Columbia University had secret contracts with the U.S. government– researching both war weaponry for the Pentagon and war policy for the execution of the war. In spring 1968, this accounted for 46% (!) of the nation’s budget. The university was also abusing eminent domain in planning both to construct a segregated sports complex in Morningside Park, and more dormitories on West 114th Street off of Broadway near its campus. For years, it had quashed the formation of a union of black and Latino cafeteria workers.

Rudd and his fellow activists held rallies and went on protest marches. He wrote to school publications. The protesting led to occupations of campus buildings by, eventually, thousands of activists in the last week of April 1968.

Although Rudd’s became the most recognized name and face associated with the historical event (possibly because he was a white male), there were plenty of other activist organizations of different ethnicities whose members were arrested and got beaten up by law enforcement sent in by New York City Mayor John Lindsay; those fighting for civil rights, black-power, and peace.

The New York Times propagandized that the destructive and immature hooligans provoked the police; the police were the good guys. It should have come as no surprise to the cynical that the university was in bed with the newspaper. The school’s board of trustees claimed the newspaper’s publisher as one of their own. He was also an alumnus. The Times’ employees were alumni of the Columbia School of Journalism. Nevertheless, the university actually met about half of the six-odd demands of the activists.

After he was expelled from Columbia, Rudd became a recruiter for SDS, visiting various chapters and speaking at universities around the nation. The two major issues were always Vietnam and racism. Various groups within and without SDS, including the Weathermen (a spinoff of SDS), the Maoist Progressive Labor Party, the Black Panthers and the Revolutionary Youth Movement began arguing among themselves and with each other at conferences they jointly held in the next few years.

Rudd was in the Weathermen. He believed that the way to rebel against “the man” was through armed struggle. According to his FBI dossier, he urged college kids to kill cops. But his group was anti-racist, pro-Communist and anti-reactionary.

In the summer of 1969 in New York City, he and his fellow revolutionaries came across as so violent, they turned people off when they spoke at a Central Park rally. The other SDS factions thought the Weathermen (or, as they had renamed themselves, the Weather Bureau) were anarchistic, chauvinistic, masochistic and Custeristic.

In Chicago, there were clashes between sadistic cops and radical protestors. “Cook County Jail was overflowing with the addition of almost three hundred Weathermen, the total number arrested over the three days. The period was named ‘Days of Rage.’ ” After that, Rudd’s group went underground and broke off from SDS.

Rudd’s group’s heroes continued to be: Fidel Castro, Che Guevara, Ho Chi Minh, Vladimir Lenin, Malcolm X and Eldridge Cleaver of the Black Panthers.

By the mid-1970’s, Rudd’s group had claimed responsibility for more than twenty-four bombings, which were intended to destroy only property. There occurred three accidental deaths of its own radicals from a botched bomb-making operation in Greenwich Village in spring 1970.

Read the book to learn a wealth of other details of the tenor of the times, the mentalities of Rudd’s contemporaries, and how Rudd fared after his Chicago arrest.

Inventing Al Gore – BONUS POST

The Bonus Book of the Week is “Inventing Al Gore, A Biography” by Bill Turque, published in 2000.

Gore was born in 1948 in Washington, D.C. into a family of economic royalists originally from Tennessee. He had a decade-older sister, and built a political career like his senator-father. After graduating from Harvard in spring 1969 during a raging Vietnam War, he enlisted in the U.S. Army, where he was assigned to be a journalist. Stationed in Alabama, his job was to spread war propaganda on alleged war heroes.

There was a good chance he wouldn’t have seen combat, but there was anecdotal evidence that he had General William Westmoreland pull strings for him to stay safe anyway. Draft-dodging would have hurt his anti-war father’s chances for reelection to the U.S. Senate in 1970. His father lost, regardless.

In early 1971, finally having been granted his request to go to Vietnam to dispel vicious rumors, Gore served less than five months there in a non-combat capacity. He had post-traumatic stress disorder when he came back. He turned toward religion– traditional Baptism and New Age spiritualism, and environmentalism.

The author’s account was murky on exactly how Gore could possibly attend classes in a special one-year divinity school program, be a full-time reporter (working long hours) for the “Tennessean” newspaper, assist his father with a home-building business on the weekends, and socialize with family and friends– all simultaneously for a year and a half (!)

In mid-April 1987, Gore jumped into the race for president. It may be recalled that in the following month, candidate Gary Hart was forced out of the race after busybodies exposed his marital infidelity. That was the election season when the New York Times‘ nosiness reached new heights with all the presidential candidates.

From 1993 to 1994, Gore was an active participant in president Bill Clinton’s “… solid accomplishments like deficit reduction, NAFTA, FMLA, and the Earned Income Tax Credit…” However, other controversial issues reared their ugly heads, such as “… gays in the military, the leviathan health care package…” Of course, political enemies constantly needled Clinton with his every professional and personal misstep.

Nevertheless, during his presidency, Clinton attacked major issues. It appears that the U.S. government has yet to take major, major action in connection with decades-old, explosive issues– such as illegal immigration and gun control– for economic and/or political reasons. Yet it has taken major, major action on, say, abortion (with Roe. v. Wade), civil rights, women’s suffrage, and Prohibition– for ideological and/or religious reasons; it hasn’t been for the money. Healthcare and education are too broad, fragmented and complex to generalize about one way or the other.

Nonetheless, read the book to learn additional tabloidy details about Gore’s life and times.

Killers of the Flower Moon / Heist

The First Book of the Week is “Killers of the Flower Moon, The Osage Murders and the Birth of the FBI” by David Grann, published in 2017. This volume described in suspenseful anecdotes– a political, social and cultural system suffused with evil– and it highlighted what happened to just one of countless families whose members were victims of the conspiracy.

In 1870, the Osage Native Americans were forced by light-skinned Americans to flee from their homeland in Kansas, to wasteland in northeastern Oklahoma. In 1893, the United States government’s Indian Affairs Department ordered that all children on the Osage reservation attend school. One consequence was that the young people in the area adopted the ways of the “white man.”

On September 16, 1893, the U.S. government shot a gun to kick off a land-grab. The Cherokee Outlet, territory bordering on the Osage’s that was bought by the U.S. government, was handed over to the Cherokees on a first-claimed via physical presence, first-owned basis.

About 42,000 members of the Cherokee nation waited on the border for days until the appointed time of the free-for-all. The fight for land ended in a massacre galore. The government didn’t bother to repeat the above process with the Osage reservation.

Yet, by the very early 1900’s, oil was discovered on the Osage’s land; this opened a Pandora’s box. In 1912, the Department of the Interior auctioned off the then-super-valuable parcels, to which the Osage had mineral rights. The Osage became millionaires overnight, paid royalties by the oil barons.

The local (white) politicians of the oil-rich lands stuck like leeches to the Osage residents, under the guise of regulating commerce. They deemed that (white) guardians of the property be appointed for full-blooded Osage people, as the Native Americans weren’t sufficiently educated or competent to manage their own money. Unsurprisingly, the guardians were thieves and worse.

Read the book to learn about a statistics-defying (but not uncommon among the Osage) rash of deaths (by poisonings, shootings and explosives) that occurred in one Osage family due to the “system” and the growing-pains the Wild West experienced as it evolved into a civilized, law-abiding society with the help of a national law enforcement organization now known as the FBI.

A more recent example of exploitation of Native Americans was described in the Second Book of the Week, “Heist, Superlobbyist Jack Abramoff, His Republican Allies, and the Buying of Washington” by Peter H. Stone, published in 2006. Yet again, the hypothetical board game “Survival Roulette” could be applied to this scandal: Native American Exploitation Edition (See “Highly Confident” post).

There have been countless ultimate winners of this game through the centuries: all the people never caught for committing crimes against Native Americans. The vast majority have gone unpunished, including several people mentioned in the book, whose names have already faded from the public’s memory.

However, the most famous hypothetical losers of the game in this book were lobbyists Jack Abramoff and Michael Scanlon, and Congressman Tom DeLay. Instead of a Monopoly board, in keeping with the casino theme, the central structure of the game could be an actual roulette wheel, whose ball could land on spaces that describe the financial crimes of: bribery, money laundering, fraud, disclosure failures and influence peddling. Plus tax evasion. Just for good measure.

In short, with Abramoff as the ringleader, during the course of three years, the gang milked six Native American tribes for $82 million– that paid for political bribes, funding for a school, lavish gifts, and entertainment and recreation expenses– disguised as lobbying and public relations services on behalf of the tribes.

In this slim volume, the author dispensed with suspense by revealing up front that, when they got caught, Abramoff and his sidekick Scanlon accepted plea deals for their unethical opportunism, unconscionable greed and unmitigated hubris. The author then failed to explain why the Texas state government closed a casino run by the Tigua Indians in February 2002, but did explain later on.

Nevertheless, the story thereafter unfolded in more or less chronological order, starting with backstory from the 1990’s. The Tigua casino actually stayed closed, despite Abramoff’s fat fee, part of which he circuitously funneled through nonprofit organizations that ended up as political donations, and paid for a luxurious golf vacation in the United Kingdom for himself and his cronies.

Abramoff’s shamelessness knew no bounds. He had his friends, in order to service one of his tribal clients, marshal support from the likes of the Christian Coalition to convince the U.S. government that gambling was against their religion, and a reason to close the Tigua casino. At the same, he was lobbying on behalf of the Tiguas through illegal means, to reopen the casino (!) For that, he made megabucks from both sides.

Abramoff also helped to quash legislation that would have taxed his Choctaw client, and would have imposed tougher labor laws on his offshore client that manufactured clothing in the Marianas.

Kevin Sickey, who represented an Indian tribe that hired Abramoff, described the lobbyist’s propaganda thusly: “They exaggerated political threats and they exaggerated economic threats. Then they exaggerated their ability to deal with threats.”

Read the book to learn what led to the start of investigations by the Senate Indian Affairs Committee and the Justice Department; Abramoff’s and Scanlon’s early-career adventures; and details of their and others’ punishments, among other nothing-new-under-the-sun type political opportunism, greed and hubris.

As an aside, the dollar value of political wrongdoing has reached dizzying heights in the past few decades, and it has been the same kind of wrongdoing, over and over again– committed mostly by alpha males. People who have an insatiable need for power and money apparently never learn from others whose stories have been well-publicized!


Whittaker Chambers

The Book of the Week is “Whittaker Chambers” by Sam Tanenhaus, published in 1997. This large volume described a situation that lends itself to the hypothetical board game “Survival Roulette: Alleged Commie Edition” (See “Blind Ambition” post).

Alger Hiss and Whittaker Chambers were just two of thousands of people starting in the late 1940’s who were losers of this game. The winners actually won only temporarily: Joe McCarthy, Richard Nixon and other bullies.

The board’s spaces could describe wiretapped conversations of such evil Commie fronts as the Boy Scouts, and dossiers acquired through the Freedom of Information Act in which every word of every page has been redacted (blacked out) except the names of the 205 guilty State Department officials.

Of course, there could be spaces such as “Go to the Electric Chair” and “IRS Audit.” A “Commie Chest” (rather than Community Chest) card, for instance, could say “Collect $1 in a libel suit while your attorneys collect $50,000.” By the way, any player wearing a red necktie is a Commie.

Chambers, born in 1901 in Brooklyn, was accepted to Columbia University in 1920 through, at that time, simply passing an intelligence test rather than taking entrance examinations. He was fluent in several languages and was a skilled writer. As a commuter from Lynbrook in Long Island, New York, he paid only the school’s annual tuition of $256. The following year, living on campus, he also paid room and board of $400.

As a sophomore and rebellious intellectual, Chambers penned an offensive, blasphemous piece for one of a few campus publications for which he wrote. Fierce critics forced him to take a leave of absence from the school.

In the next several years, he traveled around Europe, came home, held short-term odd jobs he obtained through friends, returned to school, rode the rails out West, etc. in an effort to find himself; also in an attempt to escape his dysfunctional family. According to the author, Chambers suppressed his homosexual urges by having affairs with women.

In the course of his voracious reading– a lifelong passion– Chambers discovered a speech of Vladimir Lenin called The Soviets at Work. In it, Lenin advocated violent authoritarianism. Curious factoid: a line in the speech is reminiscent of a line in the Elton John song “Yellow Brick Road” paraphrased: “… where the dogs of society howl… I’m going back to my plow…”

Anyway, in February 1925, Chambers joined the Workers Party of America, a then-illegal political party that espoused Communist ideals. Its American members numbered about sixteen thousand. He also joined the International Workers of the World.

In the spring of 1927, Chambers was found to have stolen tens of books from Columbia University’s libraries and various other libraries. He was proud rather than ashamed. He wrote articles for The Daily Worker and other Communist publications, got a short story published in The New Masses, that was turned into a play performed internationally.

Some Americans became Communists because they felt that capitalism was the cause of the Great Depression— with its breadlines, labor unrest, suicides, protests, etc. In spring 1932, Chambers joined the OGPU– the Soviet agency that eliminated anyone who expressed the least negative thoughts about Comrade Stalin or his ilk.

Chambers was a valuable addition, as he had experience in bureaucracy, was fluent in German and Russian and literate in the Classics. The American chapter of the Party forced him to become a secret agent man.

But it was fun to play adolescent-boy spy games. And the pay was really good. He played well with others. He and his comrades got secret messages in invisible ink and microfilm from the Germans in their safe house on Gay Street in Greenwich Village. They spied on businesses and the military. He helped steal blueprints for weapons to be built by military contractors, and sent them to the Soviets.

In summer 1934, Chambers was relocated by the Soviets to Washington, D.C. to become a New-Deal advocate for sharecroppers and tenant farmers, who were opposing landowners and big growers in the agricultural industry.

Then Chambers started assisting with generating false passports to be used by his comrades. The initial step was to comprehensively extract information (such as birth dates and names) from the archives of obituaries of babies, in the research branch of the New York Public Library (yes, the one with the lion statues in front).

A birth certificate was then the only proof of citizenship that was required to obtain an American passport, which allowed the easiest travel. The above information (reflecting the then-age and gender of the agent who traveled internationally) would be used to apply for a fraudulent birth certificate, which could then be used to obtain a fraudulent passport.

The Party headquarters was in the U.S.S.R., though, and was the ultimate boss. It could shut down a cell if it saw little productivity. For example, an agent was reassigned to Riga (equivalent to Siberia). But before the transfer, the agent did win the handball championship at a YMCA in the closed Tokyo cell.

Across the United States, there were plenty of organizations posing as Communist fronts, such as a literary agency in San Francisco, the Unemployed Council in Queens county in New York State, and the Federation of Architects, Engineers, Chemists and Technicians. Chambers used a series of aliases for himself, his wife and daughter with each new assignment.

Changes were always afoot. In the mid-1930’s, the OGPU became the NKVD. Chambers’ boss was purged by Stalin. His highly-strung new boss reflected the Soviet mentality of proactively engaging in an act of generosity to butter up his new office in Washington, D.C. He therefore gave it a large cash gift that was used to purchase Oriental rugs to be given to the top operatives there.

In December 1936, the Soviets considered Germany, Italy and Japan their fascist enemies. The United States, France and England were passively standing on the sidelines. Chambers’ new mission was to, with the help of comrades, procure stolen original State Department documents, take photos of them, and return them, turn the photos into microfilm, and send it to Moscow. Although the documents usually didn’t contain anything world-shaking.

Nevertheless, circumstances were getting dangerous for Chambers. He was considering withdrawing from the Party, but then he and his family would have to disappear. He didn’t want to end up like Ignace Reiss, a “…well dressed corpse, perforated with bullet holes.” In spring 1938, he took the plunge and went into hiding. About a year later, he was able to get a job through a friend at Time, Inc.

Chambers knew the NKVD could kill him or harm his family at any time. Besides that, he could be convicted and imprisoned for treason, and he couldn’t afford to flee. So in September 1939, he turned state’s evidence instead. He named names of Treasury Department and State Department members and discussed the U.S. military’s Communist spy ring.

Into the 1940’s, Chambers continued to work around the clock at Time, Inc., where he received an obscenely high salary for his new rabidly anti-Communist editorial bent. His intuitions were correct, however. He knew that the Soviets had designs on world domination.

In August 1948, Chambers was subpoenaed to appear before the House Un-American Activities Committee (HUAC). Reputable officials and journalists were angry that in a public hearing, Chambers claimed that Alger Hiss, a high-level State Department official had been a Communist in the 1930’s. Hiss’s integrity had been irreproachable up to that point. The then-freshman Congressman Richard Nixon (R., CA) was the only member of the Committee who insisted on continuing the case against Hiss.

Initially, Chambers couldn’t name anything Hiss had done that was illegal. For, Party membership hadn’t been illegal in the previous decade. Neither had paying Party dues, nor meeting with other Communists.

However, with circumstantial evidence that Chambers produced in his own sweet time, he was able to convince the authorities that Hiss had lied under oath. Another crime that Hiss might have been punished for, was espionage. Fortunately for Hiss and Chambers, the three year statute of limitations on that had expired.

Political accusers always seem to scream about risks to national security!!! But it has become a cliche that more often than not, documents have been labeled top-secret, not to become declassified for decades– in order to cover up government’s bad, embarrassing behavior, NOT because American lives are at risk.

For approximately the last seventy years, on and off, vicious political vengeance has been the norm– best interests of the country be damned. However, the punishments haven’t fit the crimes. The most guilty and least punished perpetrators have acted in ways that have resulted in needless deaths and ruined lives.

Who knows what else Hiss did– making love to an intern in the Old Executive Office Building? He did get caught lying under oath.

Based on lies, the most guilty perpetrators have led the United States to attack other countries and smeared their political opponents for their own selfish political and financial ends. At least they didn’t get caught lying under oath.

Anyway, as is common with these kinds of situations, different government agencies are fighting to grab glory for bringing the perpetrators to justice. In the Hiss case, it was the Justice Department, the U.S. Attorney’s Office for the Southern District of New York, and HUAC.

Individuals such as Nixon and Robert Stripling, the chief investigator of HUAC, were also jockeying for power and bragging rights. Then-Supreme Court justice Felix Frankfurter testified on behalf of Hiss, an unprecedented move, and possible conflict.

Read the book to learn why Chambers wasn’t also tried for lying under oath, even though he was the biggest liar in the world; every ugly detail of the Hiss case, and much more about Chambers’ life.

Lewis Carroll – BONUS POST

The Bonus Book of the Week is “Lewis Carroll, A Biography” by Morton N. Cohen, published in 1995.

Born into a family whose children eventually numbered eleven, in January 1832 in Cheshire (England), Carroll was given the name Charles Lutwidge Dodge. His father was curate of the local parish.

The headmaster of “Rugby”– the boarding school Carroll attended (which gave rise to the eponymous sports game), couldn’t “… rid the school of drunkenness. The boys were served beer with their meals– water was unsafe– and from beer to strong libations is not a long leap.” Rugby was considered England’s best public school (in America this means an elitist private school) at the time.

Carroll endured the usual abusive hierarchy (frat boy behavior) that occurred at such a place for nearly four years. Later, he was accepted to Christ Church, at Oxford University. Students from wealthy families brought their hunting dogs to school, and continued their shooting and riding, as they had at home. Academics were way overrated.

Carroll, however, majored in and got high grades in mathematics. After graduating, he became a math tutor and lecturer. But he got upset when he saw freshmen who were ignorant of material he thought they should have already learned.

In an attempt to cover up this embarrassing truth, in April 1864, the school administration proposed lowering its standards, and finally succeeded in doing so in February 1865. In protest, Carroll resigned as Mathematics Examiner.

On another topic, of course, Carroll became best known for Alice’s Adventures in Wonderland. It started in July 1862, as an extemporaneous story he made up about Alice Liddell, one of the middle daughters (about twenty years his junior) in a large family full of them. He became quite close with the girls socially, accompanying them on walks, picnics, boating outings, in playing croquet, etc.

Nearly a year later, he rode a train alone with the girls– who were without their usual adult supervision. Shortly thereafter, their mother forbid Carroll to see them. Wild rumors swirled around the mysterious incident; the page on which Carroll wrote about this in his diary was removed– lost to history– by his niece.

As an amateur photographer, Carroll had been taking photos of his aforementioned unnaturally close friends, as well as daughters of other families in his community. In spring 1867, he began taking photos of girls in the nude.

Read the book to learn of all of the details about the above, other highlights of his life, and how the “Alice” stories evolved into an enduring piece of work.

ENDNOTE: Curiously, the author of Peter Pan, J.M. Barrie, befriended a family of sons. He took an especial liking to a middle son, Peter, about which he made up stories at the dawn of the twentieth century. Both Alice and Peter Pan have been enjoyed in various incarnations internationally for decades and decades. Parallels can be drawn between their authors. The stories must therefore delve into the deepest, truest universal aspects of human nature. That must be why they are still classics.

Highly Confident

The Book of the Week is “Highly Confident, The Crime and Punishment of Michael Milken” by Jesse Kornbluth, published in 1992. This volume described a situation that lends itself to the hypothetical board game “Survival Roulette: Wall Street Edition” (See “Blind Ambition” post).

There have been countless ultimate winners of this game through the decades: all the people never caught for securities-industry crimes. A million lawbreakers a day go unpunished. That doesn’t mean the crimes didn’t happen.

However, the most famous hypothetical losers of the game in this book were Ivan Boesky (an independent bond trader in New York) and Michael Milken (bond-trading executive at Drexel Burnham Lambert in Los Angeles). Other losers could include Dennis Kozlowski, Bernie Ebbers, Kenneth Lay, Steve Jobs and Richard Scrushy.

The board spaces could include Go To Jail (of course), and describe the financial crimes of: insider trading, Free Parking (or “stock parking”), disclosure failures, material misstatements, accounting irregularities, re-pricing stock options, and fraudulent conveyance, but also specific actions of conscience-salving philanthropy in which Milken engaged– such as throwing money at cancer research, and volunteering to teach math to nine and ten year-olds.

In August 1986, the U.S. Attorney’s Office of the Southern District of New York began an investigation into Securities and Exchange Commission (SEC) violations in the bond industry. By October 1986, the head federal prosecutor there, Rudolph Giuliani, was taping phone calls between Boesky and Milken. This, because Boesky had immediately accepted a plea deal to turn state’s evidence in exchange for a slap-on-the-wrist, country-club jail sentence. Boesky was one of the game’s lesser losers, to be sure. He was the king of lying, cheating and stealing.

Milken was a creative workaholic math genius whose meteoric career-rise allowed him to head an entire bond-research department in his mid-twenties. But he had zero ability for honest introspection.

Milken was a master at controlling his environment and other people, but he deceived himself about his “breaking the rules of the game” in his industry. He thought he was helping people all the time, but didn’t see how others were indirectly hurt by his actions. This kind of hubris syndrome is not uncommon in alpha males.

In 1978, Milken initiated the push to have Drexel underwrite junk-bond deals that financed hostile corporate takeovers. This wasn’t illegal in itself, but Boesky persistently badgered Milken until, by the early 1980’s, the latter was eventually manipulated into breaking the law.

Milken had a history of selfless philanthropy, yet his business actions gave rise to obscenely high fees made by his employer, an obscenely high income for himself, and crushing debt load for his clients. This led to extremely adverse financial and social consequences for thousands upon thousands of laid-off American employees of merged companies, subjected to disrupted lives and untold stresses.

The mood of the securities industry could be described thusly: “… with the election of Ronald Reagan… All that mattered was an ability to make money — without concern for risk, without regard for regulation.”

The investigation and resulting plea deals had the law enforcement agencies patting themselves on the back for convincing the perpetrators (other than Milken and Boesky) to implicate others, but the immunity deals the perpetrators got were a joke, considering that they themselves had serious credibility problems, and serious violations. It was a kangaroo court.

Nonetheless, the following parties launched investigations: Drexel and its attorneys, Milken and his attorneys, the U.S. Attorney’s Office, and the SEC. Those last two, of course, engaged in fierce rivalry. By September 1991, there was an orgy of litigation against Milken. The roll call involved fifty-eight lawyers (!)

Around the same time, Wedtech was another 1980’s scandal borne of out-of-control greed. In that case, a personal injury attorney generated billing documents that purported to show charges for legal services, that were actually for lobbying. Wedtech’s executives bribed politicians for the purpose of influence peddling, and swindled shareholders. This kind of crime is not uncommon.

Along these lines, if, for instance, a real-estate mogul declared business bankruptcy repeatedly throughout his business career, why did investors trust him with their money again and again and again and again and again?? Perhaps there was influence peddling. The politicians were his puppets who eventually passed legislation favorable to them all. It was worth it to them to risk losing all their chump-change investment to get access to future (much more) profitable contacts and politicians who did their will.

Anyway, Milken hired a team of lawyers who were the cream of the crop of Northeastern elitists. Yet, unfortunately for him, the media and law enforcement made him the poster-boy / scapegoat for the greed of the 1980’s.

Ben Stein, a wannabe Hollywood writer, was, according to the author, an individual who fueled public outrage against Milken. He was unwisely hired to write articles for Barron’s (a major Wall Street publication) after Milken was indicted. The nature of his utterances in print were “Shocking, unsubstantiated, never-proven assertions made with absolute certainty.” Stein claimed his taking of the drug Halcion caused him to produce such libelous garbage.

Strangely enough, insider trading wasn’t what Milken was jailed for, but rather, a minor disclosure failure. The judge in his case was ridiculously misguided, considering that the court calculated the dollar value of damages Milken caused was a mere $318,000. But the court saw that the revenues generated by him and his firm were in the hundreds of millions of dollars. So the court fined him $600,000,000.

Read the book to learn of Milken’s prison sentence and numerous other details of the whole tabloid-crazy affair.

King of the Club

The Book of the Week is “King of the Club” by Charles Gasparino, published in 2007.

The subject of this book “… was suffering from the downside of loyalty; he spent so much time surrounding himself with people he could trust that he forgot he also needed smart people who could get a job done in times of crisis, and he was now facing… the greatest crisis of his career.”

Sounds familiar. It was actually “Richard Grasso and the Survival of the New York Stock Exchange.” When he was fifteen years old, Grasso began trading stocks in an account held in his mother’s name, getting stock tips from his drug-store-owner-employer.

The author was rather vague about Grasso’s two years of military service which allegedly began in the mid 1960’s, spent: “…in Fort Meade, Maryland, though he did make periodic trips to Vietnam.” Apparently, Grasso’s eyesight was good enough to get him drafted by the U.S. Army, but not good enough to get him hired by the New York City Police Department, his first-choice employer after the military.

Grasso therefore began work as a back-office Wall-Street clerk at the New York Stock Exchange (NYSE) in early 1968. The author failed to mention whether Grasso was told to put his stocks in a blind trust, or whether his new employer had a “don’t ask, don’t tell” policy.

Grasso meteorically moved up through the ranks. He was innovative in executing new marketing initiatives for the exchange. He also poached companies that were listed on either the American Stock Exchange or the NASDAQ– that provided fierce competition to the NYSE. All three were stock markets of corporate entities that wanted to sell their shares far and wide. But the companies could be listed in only one place. Grasso convinced them that the NYSE was the best place to list.

By 1980, Grasso controlled NYSE listings, its trading floor and almost all its trading operations. In the mid-1980’s, the chair of NASDAQ, Bernie Madoff, claimed his market’s trading was more fair for investors because it executed trades electronically, thus multiple players were interacting continuously while setting impartial prices. The argument went that electronic trading made the market more “efficient”– as no buyers or sellers had significantly better pricing information than others on which to trade, theoretically.

In 1990, Grasso stepped up to the second-most powerful position at the NYSE. He was in charge of the exchange listees and, at the same time, in charge of regulating them. He did the legwork of bringing new business to the exchange. His boss, the chairman, did the public relations work of delivering speeches globally and persuading the federal government to keep conditions favorable for the exchange.

Several of the NYSE’s board of directors were Wall Street executives who passively continued to keep the status quo– lavishly rewarding Grasso monetarily for his undivided attention to lavishly lining their pockets year after year when times were good.

There was honor among thieves, as Grasso’s henchmen turned a blind eye to the various forms of illegal activity that allowed them to make obscene amounts of money on the trading floor. Until there wasn’t honor among thieves– as conditions changed.

From a not-for-profit-organization-legal-standpoint, most of the parties and individuals involved were engaging in various highly unethical activities, at best; conflicts of interest abounded as participants in the exchange network cooperated in a way that maximized profits for everyone until, as usual, some individuals got too greedy.

Being head of the New York Stock Exchange is not unlike leading the U.S. government. The marriage of politics and commerce is always fraught with conflicts of interest. Some are avoidable. It’s a shame that politics in particular tends to attract dishonest attention whores with hubris syndrome whose ethics are in the basement. Of course, they usually use the “everybody does it” excuse and change the subject if they can.

But there ought to be equal justice under the law for any of the accused– after an investigation of where the evidence leads— with NO jumping to conclusions, assumptions or biases prior to a thorough review of all evidence, if any. Along these lines, one would do well to ignore the superlative-laden, repetitive, sensationalist drivel emanating from the teleprompter box, um, er– idiot box.

Anyway, starting in the late 1990’s, unbridled greed led to a bunch of scandals. There was Long Term Capital Management, Enron, WorldCom, the dot-com crash, various major SEC violations committed by big-name brokerages; not to mention 9/11’s impact on the financial markets. All on Grasso’s watch. Yet, his pay kept soaring, anyway. It wasn’t pay-for-performance anymore.

Finally, Grasso got the same treatment, figuratively speaking, as other major historical figures. One week he was flying high and the next, kicked to the curb. Grasso was suffering from a bad case of hubris syndrome. In early September 2003, herd mentality / groupthink seized the board; jealousy (possibly subconscious) of his pay package reached critical mass.

Read the book to learn of the usual occurrences in such a situation (investigation, litigation, political machination and myth propagation) that led to the changing of more things, and more of same.

Financier

The Book of the Week is “Financier, The Biography of Andre Meyer, a Story of Money, Power, and the Reshaping of American Business” by Cary Reich, published in 1983.

In the 1950’s and 1960’s, Meyer was a pioneer of the mergers and acquisitions craze in corporate America. He was the head honcho at the investment banking firm of Lazard Freres.

The firm exploited the trend, switching from supplying venture capital to advising its clients which were institutional, to form conglomerates, because it was thought that bigger was better. Other firms spent big bucks on research analysts, whose pronouncements were sometimes wrong. Lazard specialized in numerous, diverse, creatively structured deals.

Beginning in August 1951, for instance, for the purpose of minimizing the tax on the purchase and sale of an eight hundred thousand acre cattle ranch in Texas, over what turned out to be the course of a decade– Lazard split up the real property into sixteen different parcels, each owned by a different corporate entity. This way, the eventual 80% profit on the approximately $18 million investment was classified as capital gains (taxed at 25%) rather than real-estate income (taxed at 90% in those days; that’s not a typo).

The absolutely most valuable investment in the 1950’s and 1960’s was real estate because inflation was only 1%, and real estate ventures were easy to form. This was shown by Bill Zeckendorf, who (after obtaining loans with usurious terms on various occasions from Lazard), in August 1968, with assets of $1.8 million and debt of $79 million, rose from the ashes of bankruptcy to form General Property Corporation, and continued doing real estate business.

In early 1977, Meyer “… was convinced that the world was heading for economic apocalypse, that capitalism was dying, that government deficits and inflation were out of hand, and that nothing was a safe investment any longer… Should you buy gold? Stocks? Art? Bonds? And he didn’t want to buy anything.”

A man with his life experience should have known better. As is well known, the economy recovered within a decade. Granted, it got worse before it got better, and of course, shortly after that, there occurred a stock market crash and recession. But one need only wait ten years or less to see major changes in the nation’s economics (and politics for that matter; not that there aren’t lingering scars).

Excuse the cliche, but this too, shall pass.

Read the book to learn about Meyer’s major deals, the corporate culture of Lazard Freres, and how its reputation was hurt when it became too creative with its complicated stock swaps in its underwriting activities.

American Governor

The Book of the Week is “American Governor, Chris Christie’s Bridge to Redemption” by Matt Katz, published in 2016. Christie was a two-term New Jersey governor known for skillful fund-raising, telling cute stories, and verbally attacking the media, hecklers and political opponents.

In September 1962 in Newark, New Jersey, Christie was born to be a politician. He was elected to leadership roles beginning in high school. He argued for civil rights as a student-officeholder in college. But his stands on most major issues prompted him to become a Republican.

Christie entered politics after practicing law as a commercial litigator with the help of his law partner’s contacts. He started to work in politics in the early 1990’s. After 9/11, he was appointed by George W. Bush to the patronage position of U.S. Attorney (chief prosecutor) for the state of New Jersey. He lacked the criminal-law experience for it, but learned on the job.

He drained the swamp of dirty New Jersey politicians of both parties. At the same time, he was collecting goodwill by doling out multi-million dollar legal contracts to big-money political donors.

After his election to the New Jersey governorship in 2009, out of necessity, Christie was forced to work with a Democrat-controlled legislature. Otherwise, he would have gotten nothing done.

To his credit, Christie “… was a big guy who knew how to get people to sit down and shut up and compromise– just what Washington needed.” He was so good at fundraising because his staffers identified community influencers at the most local levels, and invited them to town hall meetings.

However, “The reformers, led by [Newark mayor Cory] Booker and Christie, were shockingly naive about how closing schools with little public input would upend the daily lives of Newarkers.” Christie argued or voted in favor of a series of anti-liberal policies which hurt the poor in housing, wages, heating and cooling of homes, and food stamps.

Additionally, due to the purported reason of a fiscal crisis, he “… froze almost all construction funding for the state’s poorest school districts.” (It would have killed him to raise taxes; then he wouldn’t get reelected.) This led to the cancellation of the building of a new school in the neighborhood of Lanning Square in the city of Camden. Instead of a new school, Christie’s crony would get the opportunity to construct a building for his medical school on the site, plus five privately funded schools in Camden.

Christie gave tax breaks of tens of or millions of dollars to a diverse bunch of businesses to get them to stay in his state so that they “created jobs” (and bragging rights for politicians). Over the years, those tax breaks resulted in: the creation of tens of jobs, a net dollar value of hundreds of thousands in benefits’ going to the state, and incalculable billions of dollars in lost tax revenue; showing yet again that cronyism thrived in Christie’s New Jersey.

And now, as an aside, an interesting factoid: “Christie had met Bill and Hillary Clinton in January 2005 at Donald Trump’s wedding.” And another: In January 2014, he signed the Dream Act, which (conditionally) allows children of illegal immigrants to qualify for (greatly discounted) in-state college tuition.

However, the major incident for which former Governor Christie will be remembered is “Bridgegate.” His political enemies turned out to be sufficiently aggressive to turn it into a humungous scandal.

Deliberately-created traffic congestion by a handful of people in Christie’s organization caused hours-long delays in September 2013 for five days in a row during the morning rush hour on the George Washington Bridge (GWB)– that links New Jersey and New York City. This was done for the purpose of petty, political retaliation against the mayor of a New Jersey suburb in GWB territory. That mayor had declined to endorse Christie for gubernatorial reelection.

It is a shame that Christie’s political record of unethical behavior in so many areas that ended his political career negated the one good thing he did that had long-term positive results– eliminated a significant amount of corruption in New Jersey.

The same seems to be happening with New York City mayor Bill de Blasio: the one good thing he did was institute free pre-kindergarten across the city. There is ample evidence that this is a game-changer– it helps “even the playing field” for kids of all economic and social levels. The earlier the intervention in the lives of at-risk kids, the better. Preschool is not too soon.

Research has shown that the kids who have home environments with severe deprivations, are significantly less likely become career criminals when, in very early childhood, they are provided with a safe place that provides resources to assist them in learning, and learning how to interact with other children.

However, de Blasio’s alleged wrongs in recent years in fund-raising activities and housing, both steeped in patronage (like Chris Christie’s administration) — just to name two of many issues– have earned him numerous political enemies.

Anyway, read the book to learn more about the above GWB scandal, and Christie’s fights with New Jersey’s civil service unions – especially the teachers’; how he sold out environmentally; why his approval rating soared immediately following Hurricane Sandy; his actions on a range of other issues such as drugs, abortion and gun control, and much more.