I was born in Chicago in 1936. I just turned 69. Went through high school in a suburb of Chicago and went to the University of Wisconsin. I got two degrees at Wisconsin. My bachelor’s was in business, and my master’s was in journalism.
The only reason that I got a master’s in journalism — in many respects, I think how lucky this was — was that I had become editor in chief of the campus newspaper at Wisconsin, and so then after I served my six months in the Army, I found I could get into journalism school without taking all the journalism courses, because they said, “Well, you’ve had experience as editor in chief of the campus newspaper.” I realized that I really loved writing. The writing was where my real interest lay. And so I went back and got a master’s in journalism.
At that time, I actually was thinking of public relations or advertising. Possibly because my father was a stockbroker; my brother was in advertising. I don’t know.
I did go into advertising and public relations for four years in Chicago and then got the chance to go with Business Week. It’s really unusual for somebody who’s in advertising and public relations to get with the media, but I was able to do it. Then, after less than two years in Chicago, I was promoted to bureau chief in Cleveland. And then we moved to Cleveland in 1966.
It actually was in Cleveland that I got an interest both in financial fraud and in offshore monkey business, off-shore banks. The case in Cleveland, it was a Swiss bank. That case was about a group of organized-crime-connected swindlers who had pulled off a series of IPOs — they didn’t call them IPOs in those days; they called ’em new issues — in which they would get either founders’ stock or first- or second-level offerings in the stocks, and the stocks would miraculously get run up and they’d dump ’em off. These guys were also connected with the Cleveland mob.
The Cleveland mob dates way back to the days of Prohibition — you know, Moe Dalitz and all those characters. They later went out to Las Vegas and incidentally came to San Diego in the construction of La Costa. Of course, one of the key guys was Jackie Presser. I’m sure you remember Jackie Presser, who was the head of the Teamsters and, of course, mob-connected.
Anyway, this brokerage house had put out several new issues of stock, and they all had a pattern of zooming, and the insiders who had gotten themselves shares for almost nothing would bail out as they were on the way up, and then the stocks would collapse.
The story I wrote on that bunch of gangsters and swindlers in Cleveland did not run satisfactorily in Business Week, and that’s one of the main reasons I left. They ran something, but they really watered it down and didn’t put in key things, such as the fact that the Cosmos Bank, a tiny Swiss bank, had sold off something like 75 percent of its stock in a hot new issue before it collapsed. And guess who stashed $30-some million in the Cosmos Bank? Richard Nixon!
[Laughs.] At least, that’s according to the book called Interference.
So anyway, I had an interest in fraud.
I didn’t leave right away. There were complications. We had built a house, and, you know, there were a whole bunch of problems. And then Business Week also had finally come around to realize that I was right, ’cause these guys pulled another swindle and it got Business Week to write up that swindle. They realized that I wasn’t crazy.
But, you know, they didn’t do anything to tell me that they had recognized that, so, you know, bye-bye.
I came to San Diego in ’73. Naturally, in summer of ’73. We packed up the kids, who were then six — well, five and a half — and the other one was three, and we went to Seattle and rented a car and went all the way down the coast interviewing newspapers, and San Diego Union really wanted a financial editor.
And I had interviewed papers for both financial writer and investigative reporter, whatever they needed. Union really wanted a financial editor.
So I came out in mid-’73 as financial editor of the Union.
I started in mid-1973 for $18,500, the exact sum I was making at Business Week when I left. My final salary after 30 years at the U-T was $100,000.
When I arrived in San Diego I was right in the middle of U.S. National and, of course, Arnholt Smith. John Alessio was already in prison, as I recall.
The C. Arnholt Smith case was going on and really occupied a tremendous amount of our time.
He was being pursued by banking officials and by the Securities and Exchange Commission.
They were after him. I mean, he was in a lot of trouble. The SEC and the banking officials were both after him, the SEC for accounting irregularities at the conglomerate, Westgate-California; and the banking officials were after him for the fact that the bank — U.S. National Bank — had loaned way too much money out to Smith’s cronies. Of course, that included La Costa
and all of that stuff. Smith was the kingpin of the community. Of course, I was distressed to find out that he was so close to the whole Copley organization, and here I was working for them. I came into a situation where I was really walking on eggs. We all were, actually.
So it was a very difficult situation. We force- fully argued that the guy was a crook and that, you know, you had to be pretty strong, but we were up against it, because, you know, he was so close with everybody there.
You gotta remember Smith ran San Diego in the ’50s and ’60s. Smith and Alessio ran San Diego. This is the distressing thing about San Diego today, is that it’s going right back to the days of Smith and Alessio, if it isn’t there already. The strong-mayor situation is going to be even possibly worse than it was under Smith and Alessio. They didn’t have a strong-mayor situation then, but they might as well have had.