San Diego Former Swiss banker Paul Erdman, an all-time great financial writer, died April 23 at age 74, in Sonoma County, north of San Francisco. Not far away in Marin County, at last report, is former San Diego business/political wire-puller and jailbird Richard T. Silberman. In attempting to penetrate the murky offshore banking world, Silberman tapped Erdman's expertise several times and was involved peripherally in Erdman's becoming a writer.
Just before being arrested in an FBI money-laundering sting in 1989, Silberman boasted to a disguised agent that he had companies in offshore havens in Panama, Hong Kong, and Switzerland. Silberman was convicted the following year and served 37 months in prison. But he had been dabbling in offshore tax and secrecy havens for three decades. In 1960, Silberman and former San Diegan Charles E. Salik peddled stock in tax-protected, Bermuda-based Electronics International Capital, whose mission was to invest in European electronics companies. But not understanding the code words, Silberman and Salik bought into some doggy companies. Enter Erdman, a Ph.D. from the University of Basel, who was hired to help. Silberman "was a little out of his depth," Erdman said in 1989. Losses mounted. Finally, Silberman and Salik were ousted in a coup engineered by Jerome Kohlberg, who was later a founder of the legendary leveraged buyout firm Kohlberg Kravis & Roberts. Kohlberg's lawyer was Joe Flom, who went on to become Wall Street's premier takeover lawyer.
Salik then launched a Swiss bank and hired Erdman as boss. The bank got involved in a currency-speculation scandal and failed ignominiously. Swiss authorities charged Erdman with "unfaithful management." He was detained for a year in a Swiss jail -- well, sort of. His meals were sent in by his favorite restaurants. In this so-called confinement, he started penning novels. He went on to write some superb books: The Silver Bears, The Crash of '79, and The Panic of '89, among many.
In 1967, Silberman and Robert O. Peterson, who had made a bundle selling Jack in the Box to Ralston Purina, bought more than 20 percent of Southern California First National Bank. Under them, the once-staid bank loaned money to 1960s go-go humbuggers such as Detroit banker Donald Parsons, Colorado's King Resources, and San Diego's U.S. Financial. Silberman and Peterson wanted to buy into a Swiss bank and again sought out Erdman. Banking authorities wouldn't permit Southern California First to do it, so Silberman and Peterson bought a position themselves. "They were attracted by the romance of Swiss banking," Erdman said. The next time Erdman saw Silberman was in 1980 when Jerry Brown was running for president. Erdman chatted with Silberman at a New York soiree attended by Jackie Onassis, Gore Vidal, and Norman Mailer. Silberman, then Brown's chief financial aide, "thought he was going to wind up being Secretary of the Treasury," chuckled Erdman. Silberman didn't make it.