MARCH 2020

MARCH   2020
The Lawyers Carve Up the Golden Goose


Friday, May 25, 2012


I think I may have stumbled upon an historical explanation as to why people would believe in a government conspiracy to seize private guns while at the same time demand that same government stop spending so much time protecting the rights of alleged criminals. And this explanation begins with the sudden death of the Governor of the Colony of Virginia, Samuel Mathews, Jr, in January of 1660. He had been born in America, and there were high hopes he would be a brave new leader of a brave new world. Instead, on March 13, 1660 the Burgess, members of the Virginia colonial assembly, decided to take a step back to the future by appointing “the honorable Sir William Berkeley” as their Governor, again.

Eight years before “Will” as his friends called him, had been a popular Governor. Now, at the age of 55, Berkeley again accepted the responsibility of leading the 35,000 English settlers in the “Old Dominion”. Will was a playwright and a fighter, a Cyrano, who Mary Newton Standard has described as, “Every inch a gallant soldier, every inch a gentleman, yet haughty, unsympathetic and unlovable; narrow in mind and in heart.” (The Story of Bacon's Rebellion, Neale – 1907 ©, Jeffrey C. Weaver, 2000) She might have added he was also a drama queen. 
His supporters were the FFV, the First Families of Virginia, including the bloodlines of Lee, Spencer, Washington, Randolph, Fitzhugh, Harrison, Custis, and others. And in 1674, there landed in the midst of this fraternity, Will’s nephew, the impatient and ambitious 24 year old Nathaniel Bacon. 
Will welcomed his nephew warmly, giving him property and a trading concession with the Indians. Being a politician, Will also took the opportunity to shore up his own political support by naming his nephew to the Colonial Council - assuming he could count on the support of a member of his own family.  However, Will did not appoint his nephew as a commander of the local militia, and it was the appointment he did not receive which Nathaniel took note of. 
But why had this young man traveled to America? Well, Nathaniel had recently married and his new in-laws had quickly realized he was a pretentious pompous fraud. They promptly disinherited their daughter. And that was why Nathaniel had come to America. He needed cash.  Unfortunately, Nathaniel had picked a bad time to make a new start in the new world.
Beginning in 1670 Virginia had suffered from a string of hailstorms, floods, and droughts. Years of bad harvests were followed by the ‘bitter winter’ of 1672-73 when half the colonies’ livestock starved to death. By the spring 1676 wheat and corn or so scarce that Will had to ban their exportation even to neighboring colonies. 
In cash-poor Virginia colony, where debts and salaries were often paid in crop futures, this created a credit crunch which hit the newer settlers, like young Nathaniel Bacon, much harder than their bankers, who were usually members of the FFV, and close friends of William Berkeley. 
The newer settlers were known as ‘freeholders’, and these men, such as William Drummond, wanted more cash in the colony, and they did not like paying taxes, and they wanted a war against the Indians, which, of course, would have required more taxes. 
Like their in-laws before them, the freeholders took quick measure of Nathaniel Bacon. But these men were not judging him as a new member of the family. They figured the boy did not know enough about Virginia (or Indians) to argue with them if they made him a general. So they did, without the Governor’s approval. Nathaniel immediately marched his little army off to butcher some local Indians. As the freeholders intended, that put the Governor in a bind, because the dead Indians had signed a peace treaty. Other tribes now had reason to doubt the deals they had signed with Governor Berkeley. It looked like the entire frontier would erupt in an Indian war, which would have cost everybody money. Will demanded an apology from his nephew, who proudly refused. 
Then in June of 1676 Nathaniel arrived in Jamestown for the opening of the House of Burgess and Will took the opportunity to arrest the little snot. Nathaniel was dragged in front of the council and required to apologize. Then Will magnanimously pardoned him. It was great theatre, but if the Governor thought he was directing this little melodrama he was mistaken. He was now facing an actor just as capable of histrionics as himself. 
Overnight, Nathaniel slipped out of town and returned the next morning in front of an ad hoc audience, er, army, of 300 freeholder militiamen - his army. They marched into town, with flags flying and drums pounding. The members of the house hung out the windows of their Parliament building, mesmerized by the performance. 
Never one to let an audience go to waste, Will came stomping out of the hall and ripped open his shirt. Baring his chest, or at least his ruffles, Will declared to the spectators, “Here I am! Shoot me before God! (It’s a) fair mark, a fair mark! Shoot!” Nathaniel calmly said no, thank you. Instead he wanted the Governor to name him overall commander of the entire Indian war. Since the Governor did not want any Indian war, he exited at once, stage right. Nathaniel, with no actor to play against, went over the top. He started screaming. He ordered his men to surround the meeting house, and announced he would kill everyone inside if he were not given total command at once. For a few minutes it looked as if there would be a wholesale slaughter just for the sake of a theatrical effect. But a touch of reality was supplied by the supporting players. Reason eventually prevailed. Will was persuaded to sign his nephew’s commission.
The lesson here I would say is that people who bring matchlock black powder muskets to public meetings have a “flare” for the dramatic. They are looking to attract an audience, i.e. , in an appropriately dramatic fashion, twenty-five year old Nathaniel Bacon had just overthrown the royal governor of Virginia. Curtain on Act One.
The curtain now rises on Act Two. On July 30, 1676 the boy General published a “Declaration of the People”. “If virtue be sin, if piety be guilt, all the principles of morality, goodness, and justice be perverted.” It might be poetry but Nathaniel was now addressing a skeptical audience. The declaration went on to demand the arrest of Will and 19 other FFVers as “traitors to the people”. Nathaniel then announced a general war on the Indians and demanded an oath of allegiance from all government officials. It was signed, Nathanial Bacon, General, “By the Consent of ye People”, and was made without any of ye people present. The paperwork thus complete, Nathaniel marched off with 1,000 men to butcher the nearest Indians. 
About now it dawned on the more thoughtful freeholders that they had hitched their fortunes to a rather temperamental artist. But Drummond for one would listen to no such warnings. “I am in over (my)shoes?" He demanded when challenged by his fellow freeholders,. "I will be over (my) boots!”  He was soon in over his neck. The governor gathered his own supporters at Jamestown, and counter-proclaimed his nephew a traitor. 
Forgetting the Indians, Nathaniel marched his army back to Jamestown, and on September 19, 1676 Nathaniel burned the capital of Virginia to the ground. It was a sorry end for the “Old cradle of an infant world, In which a nestling empire lay” (Ode to Jamestown, James Kikke Paclding). But it was also the defining moment of Nathaniel Bacon’s performance. The very set he was preforming upon, the edifice painfully constructed over a century of bloody effort, at the cost of thousands of lives, had been put to the torch in one adolescent thespian outburst. Curtain on Act Two. There was no third act. Forty days later the great over-actor was dead.
Nathaniel Bacon died of the “bloody flux”, which is the old name for dysentery, on October 25th, 1676. With him died “Bacon’s Rebellion", leaving Will free to hunt down the freeholders. When William Drummond was brought before him, the governor greeted him by saying, “I am more glad to see you than any man in Virginia. Mr. Drummond, you shall be hanged in half an hour.” And he was. Twenty-four men in all were executed for their roles in the uprising. Charles II back in London would later observe, “That old fool (Berekely) has put to death more people in that naked country than I did here for the murder of my father.” A year later the final curtain dropped on William Berekeky. He died in England, having been recalled to explain himself. 
Historian Susan McCulley has noted, “Bacon's Rebellion does seem at first glance to be the beginnings of America's quest for Independence. But closer examination of the facts reveals what it really was: a power struggle between two very strong personalities.” Strong personalities? I would call them two of the biggest hams in American history, even before there was, officially, an America. 
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Wednesday, May 23, 2012


I want to be prepared to claim the greatest virtue of all - that I was a man who made money
Ayn Rand
I don't imagine any would have guessed it, opening their invitation that spring, that they were being invited to an event which would prove emblematic of the second American Gilded Age, a party which would mark the most vulgar odious excesses of the beginning of a decade when greed triumphed over any sense of decency. The note read, “Optima Festa. Optima Amici (best party. best friends). Our summer party is moving from Nantucket to Sardinia. Please join us in celebration of our friendship and Karen's 40th birthday in the scenic Costa Smerelda. Accommodations have been arraigned at the hotel Cala di Vope Resort. We look forward to seeing you there - the fun begins on the evening of June 10th. Buon viaggio e felice arrivo – a prestol (good journey and happy arrival– to the throne).” It was signed “Karen and Dennis” and carried the postscript - “The best present for my birthday is your company, so please, no presents.”
Civilization is the process of setting man free from men.
Ayn Rand, The Fountainhead
The emerald coast was the creation of Prince Karim Aga Khan. In 1962, fresh out of Harvard, this revered Muslim sect leader put together a group of industrialists and financiers to buy 14 square miles of empty coastal Sardinia. There they constructed a resort for the very rich and beautiful people; an airport, two five-star luxury hotels, Disney-esque quaint villages filled with upscale shops, polo fields, golf courses and pink granite bolder lined coves framing picturesque pristine white sand beaches. The Aga Khan insisted only the finest building materials were used, that all power lines be buried, and outfitted the fire brigade and the resort's private security guards. But time and the inevitable logic of laissez faire economics would eventually force the Prince off the Smerelda's controlling board and lead to an orgy of flaunted excess. The logical outcome of that excess was the Tyco Roman Orgy.
Money is the barometer of a society's virtue.
Ayn Rand
Tyco was incorporated the same year as Costa Smerelda. Its modest goal was to build and sell semiconductors and, as a sideline, to invest in other companies' stock. Ten years later, when Tyco was listed on the NYSE, those roles had been reversed. Tyco was now a holding company, holding $140 million in other companies' stock, and had even started buying entire other companies. Then in 1992, Dennis Kozlowski (above), who had started out at Tyco 27 years earlier as a lowly accountant, was named the companies' CEO. Over the next ten years “Deal-a-Day Dennis” acquired 1,000 companies, raising corporate revenues to $38 billion in 2001 with a quarter of a million employees worldwide. The SEC had already grown suspicious of “Big Koz's” free wheeling business practices. In 1998 the company had forgiven a $19 million loan to Dennis, and his 1999 compensation package including $170 million in salary and $430 million in company stock. He described the salary as "a way of keeping score", which put him on everybodies' list of Wall Street Masters-of-the-Universe, executives who were about to lead the world off an economic cliff.
So you think that money is the root of all evil. Have you ever asked what is the root of all money?
Ayn Rand
The 75 guests began arriving at the rented Chateau at 7:15 pm. Half were employees of Tyco and half were personal friends of Dennis Kozlowski and his wife of one year, Karen Mayo All the guests had been provided with free air fare to and from Sardinia and free accommodations for four days and five nights. Most did not realize that, for accounting purposes, officially they were attending a stockholder's meeting. As the “stockholders” stepped from their chauffeured vans they were greeted by two male models wearing togas. Inside, they found a caged tiger (for “shock value”). They passed between a line of body builders dressed as gladiators, before exiting around the chateau’s pool, in which floated flowers and candles. The centerpiece was a 8' tall ice sculpture of Michelangelo's David, with Stolichnaya vodka pouring from its penis into crystal goblets. Waiters and waitress' dressed in togas carried the Stoli to each table so that, by the time Dennis arose to greet his guests, the party was well liquidated. Dennis explained this evening was intended to highlight Tyco's core competency, “the ability to party hard”.
If it's worth doing, it's worth overdoing.”
Ayn Rand
After finishing dinner an Elvis impersonator sang “Happy Birthday” as Karen's birthday cake- shaped as an anatomically correct female with sparklers exploding from the breasts - was wheeled out. This was followed by a concert by Jimmie Buffet and his band, and the evening was topped off by a fireworks and laser light show, featuring Dennis' face painted on a mountain. Allan Westler for CNN described it as “Bourgeoisie Gone Wild”. And this was just the opening act for a four day long all expenses paid party in one of the most expensive vacations locations in the world. The travel expenses for the entire trip ran to a quarter of a million. In total, the “Roman Orgy” had cost $2 million, half of which had been paid for by the unsuspecting and largely uninvited Tyco shareholders.
The world is perishing from an orgy of self-sacrificing.
Ayn Rand, The Fountainhead
In fact there was nothing unusual about the orgy. “Deal-a-Day Dennis” had convinced Tyco to buy him a $19 million condo in Manhattan, which he decorated with $11 million worth of kitsch, including a $15,000 umbrella stand, a $17,000 traveling toilette box and a $6,000 human shower curtain. Tyco helped him shell out another $11 million for a Renoir and a Monet. Then there was a $30 million mansion in Boca Raton, Florida, vacation houses on Nantucket Island and in Colorado and a $16 million yacht, all bought at least in part with cash from Tyco. This profligate excess might have gone on forever, had the Big Koz not refused to pay his sales taxes on the paintings.
The question isn't who is going to let me; it's who is going to stop me.
Ayn Rand
The Manhattan District Attorney had noticed that those two $11 million paintings had been delivered to New Hampshire, which does not have a sales tax, but does have Tyco offices. Yet those paintings had spent very little time in the Granite State before Tyco had shipped them back to the Kozlowski condo on Fifth Avenue. This maneuver had saved Dennis and Karen a measly $1 million - chump change when compared to the $100 million in company stock Dennis had sold in 2001 – all the while assuring everybody he was not dumping Tyco shares.  In January of 2002, The New York Times broke the story about the stock sales. Tyco stock took a nose dive, which finally prompted the Tyco board to start asking questions. On June 3, 2002, just short of the year anniversary of the Roman orgy, Dennis Kozlowski resigned from Tyco. But it was too late. In September he was indicted for stealing $600 million from his own company. His indictment for not paying sales taxes on the paintings soon followed.
We are all brothers under the skin - and I, for one, would be willing to skin humanity to prove it.
Ayn Rand
Thanks to a lunatic juror, it took two trials, but on June 17, 2005, Dennis Kozlowski was convicted of
22 counts of grand larceny, conspiracy and securities fraud and sentenced to 8 ½ to 25 years in Federal prison. Tyco paid almost $3 billion to the defrauded stockholders.  Donald Trump, of all people, called the entire affair “tacky”, and as Dennis observed, “...he would know." And corporate observer Dan Ackerman could only pause and wonder “how did this plump, bald, graceless red-faced working-class accountant become the head of one of America's largest industrial conglomerates?” That was the problem, I guess - no that Dennis was a thief, but that he was a working-class thief. That year, Tyco reported net revenues of $39 billion. One year later, while Dennis was recovering from a heart attack in the prison hospital, Karen Mayo Kozlowski filed for divorce.
A man's ego is the fountainhead of human progress.
Ayn Rand
In 2010 another Tyco accountant, Jeffery Weist, filed suit in Federal court, claiming he had been fired after refusing to sign off on a $300,000 corporate party in the Bahamas, including such expenses as $3,000 for “Mermaid Greeters” and “Costumed Pirates and Wenches”. The accuracy of the charges were never disputed, but a Federal District Judge dismissed the suit in 2011. But whatever the legal outcome of his appeal, it seems obvious that the essential truth about Tyco, capitalism and corporate America has been proven once again; greed makes you stupid.
Evil requires the sanction of the victim.
Ayn Rand
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Sunday, May 20, 2012


I suppose the luckiest moment in the history of Phoenix, Arizona came when the first settlers decided to reject the suggestion of its founder Jack Swilling that they should name the new town “Stonewall”, after the Confederate General.  Instead they listened to the more educated voice of Swilling's friend, Phillip Darrell Duppa, an Englishman who had been versed in the classics. He liked to call himself “Lord Duppa”, delivered with a self depreciating grin, and he had the romantic idea that the ugly little adobe town founded between the White Tank Mountains and the Salt River was a place of rebirth, a spot where new life could rise from the ashes of the old, like the Phoenix Bird. And that appealed to the survivors of the Civil War, from both sides. On the other hand it was bad luck in May of 1880 that James Reavis stepped off the stagecoach from California in Phoenix, to raise his claim of the Peralta Land Grant from its ashes.
It wasn't legally a town yet when Reavis arrived . That would happen in February of the next year. But already the town had almost 2,500 citizens, a couple of churches, a school on Center Street, 16 saloons, four dance halls, a bank and a telegraph connection to the outside world. And Huntington's railroad was already reaching out from San Diego. But James Reavis showed no interest in any of that. He told people he was a subscription agent for the San Francisco Examiner, but he he sold very few subscriptions. He read the local paper, he listened when people talked , and he gauged the spirit of the place. He even traveled the 15 miles out to where the seasonal Salt River and the perennial Gila Rivers met, and stumbled about the hills for an hour or so. On his return to town, he boarded the stagecoach for the terrible one hundred mile journey north, into the mountains, to the territorial capital of Prescott.
Repeated conflagrations had forced the mining town of less than 2,000 to begin building in brick, including a new court house (above).  It was in that building in May of 1880 that James Reavis located George Willing's “original” scrap of paper purporting to be the bill of sale for the Peralta Land Grant. He presented a letter from George’s widow, granting him authority to act in her name. And once he had this scrap paper bill of sale in his hand, James caught the next coach for back to San Francisco.
Reavis had stumbled over a serious problem in Black Canyon, 50 miles north of Phoenix, His stage must have stopped there overnight on his journey to Prescott, and he found the ground crowded with people who still remembered how a man named King “Sam” Woolsey had lead 93 vigilantes into Black Canyon, chasing Apaches in 1864, just a few months before George Willing claimed he had bought the grant from Miguel Peralta,  while both were working claims there. Sam Woolsey had established a ranch nearby, and had died in Phoenix just two years before Reavis' visit, and locals could question the presence of either Willing or Peralta in that area in 1864. James had been wise enough not to ask any questions about the place, because, whatever the answers might be, they would just draw attention to himself, and he was not ready for that just yet. It was something he would have to eventually fix.
But he now he also had a printed English translation of the grant, the Royal Credula -  “The King's Debt”. After discussions with Huntington and Crocker, James decided to expand the size of the grant, placing its very center at the confluence of the Salt and Gila.which he had visited on his day trip. Contained within the grant now were the towns of Phoenix, Tempe and Casa Granda. Fifty miles east, and still covered by the grant, was the richest claim in the territory, the Silver King Mine, producing $10,000 out of every ton of ore pried from its tunnels. Reavis added a helpful note from the powerful Inquisition of New Spain, dated 1757, assuring the Viceroy there was no impediment to the grant, and a statement from the lucky recipient, Don Miguel de Peralta, himself, dated 1758, which defined the western boundary so as to reach all the way to Silver City, New Mexico territory, and the silver deposits under Chloride Flats north of there. Preparing this paperwork took the entire winter of 1880-81.
In July of 1881 Reavis finally made it to Sacramento, to repay Florin Massaol and get his hands on the mineral rights George Willing had pawned back in 1874.  In the end, however, Massaol was so impressed by the people backing Reavis, the forger got what he wanted for only the cost of a railroad ticket. All he had to do was sign yet another promissory note, agreeing to pay Massol $3,000 if and when the Peralta grant was confirmed by an American court. In exchange Massaol signed over power of attorney on the mineral rights to Reavis  That's all Reavis wanted, anyway. It as not as if he had any intention of ever digging for himself.
Immediately, Reavis boarded a train for Washington, D.C., seeking the record book of the Mission San Xavier del Bac, located just south of Phoenix, Arizona, and a benchmark used for the grant. The book had been the territories' contribution to the Centennial Exposition in Philadelphia in 1876. After the Exhibition had closed, the book along with other exhibits, had been moved to Washington. It was still there, and Reavis was permitted access to the book because of his contacts with wealthy Californians. Had the book still been in Arizona such “friends” might have been a source of suspicion, but in far off Washington the other rule about museum curators came into play - they never miss an opportunity to impress a potential wealthy patron. Reavis was allowed to spend several days in private,  going over the book. In September he continued his odyssey in Mexico City, and then on to Guadalajara..
In both cities James Reavis bonded with the archivists, the librarians and probate clerks in charge of the documents and records he needed, and probably paid them for small “favors” he received. He did not bribe them. Even an offer of a bribe could have destroyed his plan. But payments for meals, running errands, even advice, would have subtly shaded their attitude toward and perception of him. He told them he was a correspondent for San Francisco newspapers, looking for stories about the roots of California families. And when he left Mexico in late November of 1881, he had photographs of the documents, as well as typed translations and certified copies, all paid for by his wealthy investors. Six months later he was in Lexington, Kentucky, agreeing to pay George Willings widow, May Ann, $30,000 over time for the free and clear ownership of the Peralta grant – 50% more than George had paid for it in 1863 – a transaction which, in reality, had probably never taken place.

This proves again the central rule of capitalism, which is that everything has a value, defined as what people are willing to pay for what they want. And in most capitalist endeavors, the first step is to create the want. And that is what James Reavis was about to begin doing.
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