Serpent on the Rock (13 page)

When Harrison turned thirteen, his parents sent him to Ponca Military Academy, in the hopes that smaller classes, more attention, and discipline might help him overcome his disabilities. While he was there, Harrison successfully learned to read and write. But his hold on the skill was thin— he always remained terrified of reading aloud. He grew to fear going to church, out of concern that the preacher might ask him to read a selection from the Bible.

His shaky grasp of literacy slowed Harrison down in college. The classes were very difficult for him; he excelled at nothing. He jumped from school to school, never clicking with one institution and never doing well enough to graduate.

With little going Harrison's way, an uncle got him a training-level job at the First National Bank in Dallas in February 1963. There Harrison found a talent. He did well analyzing loans and proved adept at selling himself. Harrison was selected to join the national accounts division, where he would be an assistant cashier in the bank's lending activities around the country.

For the first time in his life, the boy from west Texas began enjoying success. He became boisterous and glad-handing, with a taste for expensive clothes and fast cars. He wanted to be accepted among the wealthy elite of Dallas but did not have the income to travel in that circle. To accomplish what he wanted, he needed more money.

So he started stealing. The scheme began simply in 1964, when he falsely reported stock certificates he owned as missing. When he received the new certificates, he sold them. Then he pledged the worthless originals as collateral for loans from Wynewood State Bank & Central Finance Company. He did not intend to repay the debts.

In 1966, when he received lending authority at First National, his crimes worsened. He filled out all the necessary paperwork to support bogus loans. In some cases, he made up names for the supposed borrowers; in others, he used the names of famous people in Dallas. Then he took that money from the bogus loans and deposited it in his own bank account under the name B&J Investment Co.

Harrison was drunk on the thrills of money. He borrowed some money to pay other loans back. He bought stocks and bonds in the hopes that a rising market would pay off all his debts. Harrison did not see any harm in what he was doing; it was all just one big, giddy game.

Eventually, the senior officers at First National realized that their junior executive spent more money than he earned. They decided to investigate. Following up on their suspicions, Roy Lambert, an auditor for First National, confronted Harrison about his lavish spending. Harrison grew indignant, denying that he had done anything improper. But within days, Lambert had pieced together Harrison's scheme. The bank contacted federal prosecutors in Dallas. That weekend, Harrison traveled to Las Vegas for a few days of gambling. On Sunday afternoon, when he returned home, he was met at Love Field by agents of the Federal Bureau of Investigation and taken to jail.

On September 6, 1967, Harrison pleaded guilty to multiple counts of embezzlement, bank fraud, and mail fraud. The case was assigned to Federal District Judge W. M. Taylor Jr., which Harrison found almost amusing—one of the people whose names he improperly used for the bogus loans was that of the judge's nephew. Judge Taylor sent Harrison to a federal mental institution for three months of psychiatric evaluation. After being found sane, Harrison appeared again before Judge Taylor, who sentenced him to three years in prison in Texarkana, Texas.

For the first time in his life, Harrison was in an environment where he could read and write better than most of the people around him. He met big-time criminals, including members of the Mafia being held in protective custody. Some, impressed with Harrison, asked him to work with them when he got out. But the offers frightened Harrison, and he declined.

Prison life proved difficult for Harrison, who at times ran into the very circle of people he had tried to impress with his stolen money. Once he attended a speech at the prison that was being given by an executive with a local savings and loan. After he arrived, Harrison realized that he had done business with the executive while at the bank.

“Clifton!” the executive called out. “What are you doing here?”

Harrison was humiliated.

I have to educate myself
, he decided.
Education is the only way you can get
out of this ghetto.

Harrison pleaded with the prison officials in Texarkana and persuaded them to send him to a rehabilitation program. Eventually they agreed, and Harrison was transferred to a minimum security prison in Dallas. He applied and was accepted at Southern Methodist University. So, every day beginning the next semester, Harrison, wearing his prison-issue clothes, boarded a bus at the prison and headed to SMU. He arrived at 6:00 A.M. and spent his mornings in the cafeteria, waiting for classes to begin.

He began studying real estate, and did well. After his first year at SMU, Harrison was paroled. He received his bachelor's degree, then went on to earn an MBA with a concentration in real estate. But Harrison's hope for a job in the business seemed limited. Not too many people in the real estate business wanted to take on an ex-convict.

With the help of an admiring professor, Harrison found a job selling limited partnerships for Irving Klein, a scrappy local real estate investor. Soon Harrison was rubbing elbows with the Dallas elite he admired, selling them Klein's successful deals. Harrison bragged that even Stanley Marcus, whose Neiman-Marcus department stores were legend, was one of his satisfied customers.

When Klein died in the early 1970s, Harrison already had a fat Rolodex and a good reputation. He persuaded two of his investors, Raymond Freedman and Herman Ulevitch, to back him in a new company, Harrison Freedman Associates. Through his connections, he started doing business with the Strauss family of Dallas, who were related to Bob Strauss, a politically prominent lawyer who was in line to be the next chairman of the Democratic Party. Harrison even hired Strauss's law firm, Akin, Gump, Strauss, Hauer & Feld, to handle some of his business dealings.

Bolstered by his success, Harrison launched a drive to win a presidential pardon. A number of his high-profile investors wrote recommendations to the Justice Department. In later years, Harrison would brag to friends that Bob Strauss himself helped lobby for the pardon. With such high-profile support, Harrison pulled it off. President Gerald R. Ford signed Harrison's pardon on October 9, 1974, one month after his pardon of Richard Nixon. Everything was finally in place for Clifton Harrison to start his life over.

But by 1980, as Bache began knocking on Harrison's door, troubles started emerging in his real estate empire. His investors, Freedman and Ulevitch, felt that Harrison had become carried away with money. There was a feeling of being lavish—extra lavish. There were too many fancy cars, too much expensive jewelry, too many unpaid bills. Freedman thought it was obvious that Harrison spent more money than he made. He just had no idea how Harrison did it.

Worse, some of the deals Harrison put together were collapsing, and in some instances, he was leaving his partners on the hook for the mess. An office park in Dallas was foreclosed on, and shopping centers in Bowie and Lewisville, Texas, defaulted. Harrison failed to pay $434,000 owed on a note he arranged and signed; Freedman and Ulevitch paid the debt. Finally Freedman decided that Harrison's claims of rehabilitation were bunk. Something about the way Harrison did business just didn't seem kosher. He wanted out. Harrison agreed to buy Freedman's shares in Harrison Freedman and signed an IOU for $100,000. More than fifteen years later, that debt would remain unpaid.

When Bache started looking into doing business with Harrison, nobody asked Freedman's opinion of his partner. But years later, when asked what he would have said if asked, Freedman's response was blunt: “Hell no. Do not invest with this man.”

D'ELISA FIGURED the deal was dead the minute he and Darr heard about Harrison's criminal record. As soon as Henry told them about it, Darr went ballistic.

“What are we doing?” Darr demanded. “D'Elisa, why are we talking to this guy?”

Well, that's that
, D'Elisa thought. Darr took the matter to the security department, asking that Harrison's background be investigated. But soon, before D'Elisa knew what was happening, Darr started changing his tune about Harrison. Maybe, he said, the criminal record wasn't an impossible problem. The man did have a presidential pardon, after all.

“This is something we should take up with counsel,” Darr said, “to see whether we can do business with this guy.”

D'Elisa couldn't understand why they were even trying. There was no actual deal on the launching pad, just the idea of doing one. They could cut their losses now and walk away clean. Even E. F. Hutton, with its aggressive push into market share, had taken a look at Harrison just a few months earlier and turned up its nose. Why did Bache have to chase this business?

The biggest problem, of course, would be disclosure. Under the federal securities laws, material information about a general partner had to be told to investors. D'Elisa could not imagine what investors would think after finding out that the man Bache recommended to look out for their savings had stolen money from a bank.

Darr checked with Peter Fass, who served as one of the department's outside lawyers. Word started coming back to the department that Darr was pushing the lawyers to get Harrison approved. At one meeting on another topic, Fass took D'Elisa aside to talk to him about what was happening.

“What do you need this for?” he asked. “Darr is putting a lot of pressure on me to get a resolution on this guy.”

Later, D'Elisa spoke to Derek Wittner, a lawyer who worked under Fass. He was appalled. “What, are you guys fucking crazy?” he asked. “We don't need this.”

Finally Fass approached the attorney general for the state of New York for an opinion. If a general partner was convicted of a felony but received a presidential pardon, did the partnership have to disclose the criminal record to investors? After some review, the attorney general decided that the answer was no. Investors could be kept in the dark.

Harrison was delighted with the outcome. To celebrate, on October 31, he went to Schumer's Wine & Liquors at 59 East Fifty-fourth Street and ordered three magnums of Dom Perignon for $388.04. He sent the expensive champagne to the lawyers who had played so critical a role in getting him approved to sell tax shelters through Bache.

About that time, Darr called Curtis Henry to talk to him about Harrison. Henry was stunned. He thought that the deal had been killed during their earlier telephone call.

“I'm going to have Clifton come and see you,” Darr said. “We need to talk about his previous life. We're proceeding to do some due diligence on him.”

Henry could not imagine that a Harrison deal would get done. Bache would be the laughingstock of the business if it used a convicted felon as a general partner. With so many possible real estate promoters available, he could not think of any reason why the firm should waste its time on Harrison.

He also had another concern. At that point, the Bache investigation of Darr was secretly in full swing. The whole thing could become a horrible scandal. Harrison already seemed to be trying to get close to Darr. With his record, Harrison might get unfairly tarred by the association, once the whole story came out. It would be best for everybody, Henry thought, to tell Harrison to stay away.

Harrison came to Bache's Dallas branch a few days later, nattily dressed in an expensive suit and tie. He told Henry the whole story, circling again and again back to President Ford. “I have a full presidential pardon,” he drawled repeatedly.

Henry wanted none of it. “I don't know how we can do anything with you,” he said. “I don't know how people will react to it. The fact that you have a pardon from Gerald Ford doesn't mean that you haven't been in prison and these events didn't occur.”

“But the president of the United States . . .” Harrison began.

“Look, Clifton, let me tell you something,” Henry said. “I know you have become associated with Darr in the last few months, and he is your new maven here.”

Henry leaned closer and lowered his voice. “But if I were you, I would take a low profile right now. I will tell you right now, Darr is under investigation for some things he did at his last firm, and there is a pretty strong belief that he will not be here soon. With all your problems, I really think you should get yourself some distance from him.”

Harrison looked at Henry, his poker face not registering the slightest surprise. He bantered halfheartedly with Henry for a few seconds and then stood up. The meeting was over. “Well, thank you very much, sir,” Harrison said, shaking Henry's hand. “Hope to see you soon.”

Henry watched Harrison walk toward the branch office door. He was sure that after his blunt honesty, this would be the last time he would have to speak to Clifton Harrison. He was right, but for reasons far different from what he imagined.

None of the Futon Five could believe it: Somehow, some way, Darr found out about the Bache investigation. Somebody must have told him. Besides Jones and Gosule, no one outside the department was supposed to know. And they knew that none of them had an interest in giving Darr a chance to protect himself.

But there was no doubt Darr had found out. His terror was palpable. His cocksure attitude vanished; now he walked around the department like a zombie. His face seemed heavily lined, and he stopped talking to his staff. Even executives who knew nothing about the investigation could tell something was wrong with their boss. Whenever Darr left a meeting, the gossip flowed.
Jim looks worried. What's the matter? Is he getting fired?
The Futon Five listened to their colleagues in silence. Too many people knew what was happening already.

Soon, though, the word spread everywhere. Bill Pittman, whom Darr had promoted from administrative manager to marketer, became Darr's biggest defender.