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Follow the Yellow Brick Road: Harvard to Enron II by LINDA MINOR Why Did Pug Go Bananas? We learned from Part One that Pug Winokur began working in 1974 for David H. Murdock's companies based in Los Angeles, CA. We also looked at information indicating that during the time Pug was at Murdock's Pacific Holding Corp., that company acquired 100% of the stock in International Mining Company--the largest shareholder of Zapata common stock. Two directors of ITC were closely connected to AtlanticRichfield, one director a long-time employee of Shell Oil. There were also close connections to First City Bank of Houston, which a Congressional investigation in 1976 found to be heavily immersed in influence from the Rothschild Bank of London.(1) Between the years of 1966 (when George H.W. Bush resigned as chairman and CEO of Zapata Offshore) and 1974 (when Pug went to work for Murdock), Zapata, the management of which interlocked with that of AtlanticRichfield, (2) was attempting to acquire control of United Fruit Company. Understanding United Fruit's real history, and its financing apparatus through an international investment consortium that dates back at least 100 years, brings Pug's role in that takeover attempt into sharper focus. That history is set out more thoroughly in Part Two That history is set out more thoroughly in Part Two After Zapata lost its attempted takeover and accepted greenmail from United Fruit in 1969, Eli Black took charge of United Fruit. He expanded horizontally from tropical fruit into meat-packing and food packaging and distribution. This was a globalization model that was matched by Murdock's Pacific Holdings in the direction it took Zapata. Murdock Investment Co. acquired the food packaging company Continental Can in conjunction with Peter Kiewit & Sons (3) -- a road construction company in Omaha, Nebraska that built more miles of interstate highways than any other company. One of the Continental subsidiaries made bottle caps for beer cans--not dissimilar from Black's original company AMK, which made caps for milk bottles. Pacific Holdings, also acquired Iowa Beef Producers (IBP), which tracked Black's acquisition of John Morrell. By 1985 Murdock had acquired Castle & Cooke Corporation which in 1967 had acquired all stock in Standard Fruit and Steamship Company, another competitor in global food distribution. By mid-1975 Black was in debt and in the midst of a bribery scandal. Whether he jumped or was pushed from his 44th floor office in the PThat history is set out more thoroughly in Part Two After Zapata lost its attempted takeover and accepted greenmail from United Fruit in 1969, Eli Black took charge of United Fruit. He expanded horizontally from tropical fruit into meat-packing and food packaging and distribution. This was a globalization model that was matched by Murdock's Pacific Holdings in the direction it took Zapata. Murdock Investment Co. acquired the food packaging company Continental Can in conjunction with Peter Kiewit & Sons (3) -- a road construction company in Omaha, Nebraska that built more miles of interstate highways than any other company. One of the Continental subsidiaries made bottle caps for beer cans--not dissimilar from Black's original company AMK, which made caps for milk bottles. Pacific Holdings, also acquired Iowa Beef Producers (IBP), which tracked Black's acquisition of John Morrell. By 1985 Murdock had acquired Castle & Cooke Corporation which in 1967 had acquired all stock in Standard Fruit and Steamship Company, another competitor in global food distribution. By mid-1975 Black was in debt and in the midst of a bribery scandal. Whether he jumped or was pushed from his 44th floor office in the Pan American Building, no one can really say. But his death certainly made things easier for Murdock and the people he was fronting for. Within six months of Black's death, Carl Lindner, Jr. in early 1976 was named president and was elected to the board of United Brands. Lindner increased his buying of United Fruit stock in 1978 and had control by 1984. At the same time, Lindner took control of the Penn Central Co. for which both Palmieri and Pug would work in the 1970s and 80s. Lindner is thus the link between Pug's role at Murdock and his new job in 1980 with Palmieri. By the time Pug left L.A. in 1980 to return to his old stomping grounds in Philadelphia, Palmieri had been at Penn Central for over 10 years. It was almost as though he had been sent there by powerful men whose corporations had acquired valuable assets which they tried to hide within the railroad corporate structure, in order to siphon them off at a later date. Most of the assets, many in the form of undeveloped land, had connections back to California Born in West L.A. Palmieri's experience can be set out in the following order: 1. Associate attorney at O'Melveny & Myers, L.A., 1955-59. 2. Executive vice president, Janss Investment Corp., L.A., 1959-63. 3. President, Janss Investment Corp., L.A., 1963-68. While president at Janss, developed Snowmass in Aspen, Colo., and refurbished Sun Valley, Idaho Deputy executive director, National Advisory Commission on Civil Disorders (Kerner Commission), 1967-68 4. Chairman of the board, Palmieri Co., N.Y.C., 1969. 5. Chairman, Pennsylvania Co. and its subsidiary, Great S.W. Corp., 1969-77. Ambassador-at-large, U.S. coordinator of Refugee Affairs, Dept. State, 1979-81 Trustee of Rockefeller Foundation, 1979-89 Palmieri has stated that he was "president of the Janss Investment Corporation when it developed Snowmass in Aspen, Colo., and refurbished Sun Valley, Idaho." The latter ski resort was built from 1931 to 1936 on Union Pacific Railroad land by Averell Harriman's family, who hired Janss in 1964. It was this development project which Victor Palmieri credits with making his fortune (The New York Times, May 9, 1982). (4) The Harriman family were, of course, the partners or employers of Prescott Bush, George H.W. Bush's father in the Brown Brothers, Harriman investment bank, which was the venture capital source for Bush's oil companies. It is therefore extremely likely that the BBH capital remained in Zapata after Bush's exit. It is also possible that Bush may have continued his connection to Zapata through an undisclosed nominee. Without full disclosure of the corporate records, long since shredded or otherwise made invisible, we can never know for sure. At the conclusion of Part One we posed certain questions: What really did happen at Zapata Offshore after George Bush went to Congress in 1967? Who owned Pacific Holdings when David Murdock took it over? And what was Pug Winokur's role in transforming David Murdock's operations from a company that made tiles to one that was involved in secret control of a most mysterious corporation? Exploring Pug's next employer more closely may help to answer those questions. We know that David Murdock moved to Los Angeles from Arizona in 1964 to the same area, Westwood and the area around UCLA, developed by Janss Investment since the 1920's. The architecture was in the Mediterranean style and required a large amount of tiles for use in roofing the buildings. It is likely that Murdock's tile-making company had connections with the Janss developers, i.e. Victor Palmieri. Interestingly, in 1907 the Janss company had started development of Yorba Linda, the city where Richard Nixon was born and reared, on land owned by Jacob Stern, which had been a system of experimental farms very similar to those in Texas described in Part Two-B. Pug had a senior executive position with Pacific Holdings, at 10889 Wilshire Blvd. in Westwood, just across the street from the Occidental Petroleum company and a few blocks south of UCLA. Intriguingly, Palmieri’s career had also begun in this same area of Los Angeles, first at O’Melveny & Myers (Warren Christopher became senior partner there in 1958) and then at Janss Investment in Century City, across the street from the Twentieth Century Fox Theatre. In 1956-57 the area between Westwood and Los Angeles proper, now called Century City, was owned by Twentieth Century Fox; it was the Tom Mix ranch and the backlot. But the studio needed cash and decided to sell off this 260 acres of real estate. William Zeckendorf, a Rockefeller-connected developer in New York (who hired Disney's engineer, Charles Wood, to build Freedomland park and who was a partner with Toddie Lee and Angus Wynne in developing the Great Southwest project in Texas), was contacted. He agreed to buy the land and lease back a portion to the studio for one and a half million dollars a year. Zeckendorf eventually sold out his interest to the Mellon family's Alcoa. He states in his autobiography that he became great friends with "General Richard Mellon," whose family has long been connected to O.S.S. and C.I.A. activities, as well as with Gulf Oil, which was an investor brought into the Zapata Corporation by the Liedtke brothers.(5) By the time Palmieri went to work for Janss Investment, the Janss brothers had sold a half interest in the commercial properties, in 1955, to Arnold S. Kirkeby of Chicago, owner of a chain of hotels including the Beverly Wilshire at Wilshire and Rodeo Drive. Kirkeby changed the design of the village by bringing in highways and high-rises. The Arizona Project, a journalistic investigation into mob activities in Arizona, which found strong financial links between Arizona real estate development and construction of Las Vegas casinos, also noted: "For [Del] Webb, the Flamingo experience (6) led to a series of deals with other developers who had their own ties to the Mob-dominated Chicago political machine, including Henry Crown and Arnold S. Kirkeby of Los Angeles. " In those days the political machine in Chicago was controlled by Jake Arvey, with assistance from Cook County Finance Chairman Sidney Deutsch and Arthur X. Elrod. The Moe Annenberg wire service paid off the political machine and police, as concluded by findings of the Kefauver Hearings on organized crime. In Deep Politics and the Death of JFK, Peter Dale Scott cites several sources for his statement that Henry Crown had been involved in real estate deals in Cook County with Jake Arvey and Walter Annenberg, Moe's son. In 1963 Crown was also "the major stockholder (with 20 percent of the shares) of General Dynamics, the defense contractor whose controversial TFX created a major political scandal just before the Kennedy assassination." This contract had been awarded by Secretary of Defense Robert McNamara--Pug's employer in 1967. Kirkeby was an intimate associate of the same criminal underworld which moved to Hollywood and Beverly Hill to make movies and music. The Mob takes Penn Central Peter Dale Scott, who turned up dozens of links between the Mafia and the intelligence community while investigating the JFK assassination, discussed the Great Southwest Corporation (GSC) in Deep Politics--pointing out that the stock, owned by the Wynnes, individually and through their corporate entities, had been sold over a period of years to the Pennsylvania Company--merged in 1967 into the Penn Central Railroad--resulting in its bankruptcy when the value of the stock collapsed in 1969. The collapse was triggered when Penn Central Transportation Co. defaulted on $200 million of short-term commercial paper, issued by Goldman Sachs soon after the merger with the New York Central. Because of the sharp decline in stock value, coupled with the largest Teamsters’ pension fund loan ever made up to that time, Congress began an investigation in 1970. Sound familiar? According to Connie Bruck in her book Predators' Ball, the potential value of Penn Central bonds had been discovered soon after the bankruptcy filing. As she states: "The renowned trader Salim 'Cy' Lewis of Bear, Stearns had made a fortune buying the bonds of bankrupt railroads in the forties. [Michael] Milken would follow in Lewis' footsteps by buying Penn Central bonds, on which his clients made killings.... As default was thought to be near and bond holders panicked, Milken was there to pick up the distress-sale merchandise, often at ten and twenty and thirty cents on the dollar." (pp. 33-34). How did Milken know these bonds would make money? Milken's first customer at Drexel, Burnham in Philadelphia in about 1970 was Meshulam Riklis, an eastern European Jew with a mysterious past that included service in the British 8th Army, 1942-46, followed by work with the Israeli Haganah. Riklis completed his B.A. from Ohio State in 1950 and got an M.B.A. there in 1968. He first worked for Piper, Jaffray & Hopwood in Minneapolis--brokers of commercial paper securities--which focused on Minnesota's growing grain elevator and milling industries. In 1956 he set up his own conglomerate called Rapid-American Corporation by acquiring companies such as Playtex International, Lerner Shops and RKO movie theatres. In 1967 Riklis paid cash for Lewis Rosenstiel's stock in Schenley Industries, while giving the other shareholders bonds for their shares. Schenley was a distilling company with a shrouded past. During 1967-71 Schenley employed a consultant named Charles Sydney Miner, a man who had been a journalist during WWII in the China-Burma-India theater assigned to the Quartermaster General (unit responsible for supply, distribution and transportation--including petroleum supply and logistics--for the Army) and then worked as "China manager" for American International Companies in Shanghai in 1948-56 where he would become "investment counsel" to C.V. Starr & Co., Inc. in New York until 1962. Miner's Who's Who is silent about his activities from 1962 to 1967, the year he became a consultant for Schenley and Rosenstiel. Schenley was a member of the syndicate formed at the end of the war between organized crime and military intelligence. Riklis served as a front to convert this liquor distributor from Rosenstiel's control. Today Starr International Company (SICO), owns 13.62% of the stock of the giant American Insurance Group (AIG), which is headquartered in the Bahamas. (7) Stephen Birmingham, in his book about the rise of the Eastern European Jews in America, called "The Rest of Us," states that Rosenstiel had been a bootlegger during Prohibition and caught the eye of Canadian Sam Bronfman. "Lew Rosenstiel had spent the Prohibition years boldly transshipping contraband liquor from England, Europe, and Canada via Saint Pierre and then, by truck, right into Cincinnati, Rosenstiel's hometown and center of operations. In the process, he was building what would become his giant Schenley Distillers Corporations. Bronfman and Rosenstiel had met often, during the latter's trips to Canada and had become gin-rummy-playing friends." (pp. 245-46) They worked out a 50-50 partnership deal in 1933 which required the Seagram's Co. to buy half of Rosenstiel's stock. The proposed merger soon fell apart, and the two became fierce competitors if not outright enemies, at least in business. They still maintained social closeness, according to Birmingham. Rosenstiel's second wife, Leonore Cohn--raised by her uncle Harry Cohn, the head of Columbia Pictures in California--was previously married to a Las Vegas businessman named Belden Kattleman. She left Rosenstiel to marry Walter Annenberg, whom President Nixon would name to be Ambassador to the Court of St. James. (8) Riklis financed stock purchases by issuing high-interest bonds payable by the new company to the former shareholders. He began teaching Milken in 1970 that bonds (debt) increased cash flow because the payments were deductible, whereas dividends paid on equity holdings were not. Milken would, however, remind Riklis years later, after buying $100 million of the debt of Riklis' Rapid-American: "You own a lot of the equity in your companies, but I own your debt. And your equity is not worth the paper it's printed on unless your bonds are valuable. Riklis is working for Milken." (Bruck, p. 39) Another of Milken's first customers, dating to around 1974, was Carl Lindner, Jr., who was also a major shareholder of Rapid-American. Prior to that he had acquired Cincinnati's Provident Bank in 1966 after starting out with milk retail stores. He quickly began buying Penn Central bonds. Victor Palmieri had gone to the Pennsylvania Company, and its subsidiary Great Southwest Corp. in 1969 as soon as the Penn Central bankruptcy was filed. He had just released the Kerner Commission's report stating that America was composed of two societies--one white and one black--and that the cities were going to smolder. This was the same time Pug left Defense and started the Inner City Fund. Penn Central was the first job Palmieri ever had other than land development. Why was he chosen? According to the Pittsburgh Post Gazette Monday June 22, 1970, the Penn Central had assets of more than $6.5 billion. Its stock after the merger climbed to $86 per share, but closed a year later at eleven and 1/8 cents. Many of the 23 million shares were held by the 94,000 employees of the railroad, who would soon lose their jobs. The price of the stock had soared in spite of the company's reported $121.6 million loss in 1969 and another $80 million in the first two quarters of 1970. The stock began to tumble after an appeal for a government guaranteed loan came on the heels of a failure in May to float a $100 million debenture at over 10 per cent interest. Nixon's Defense Department had also sought to push through a $200 million loan guarantee. ( http://www.trainweb.org/pt/pc.html ). Penn Central may have defaulted on the short-term debt, but that doesn't mean it didn't own a tremendous amount of illiquid assets. These were set out in the report issued by the Congressional Committee following its investigation. The primary asset was land, and lots of it. There was land in California, in Texas and in Florida. Penn Central Vice President William R. Gerstnecker boasted in 1968 before the crash: "We are ... large owners of undeveloped land in the center of big cities." The total value of Penn Central's nonrailroad land was estimated by Forbes at certainly over $1 billion. ("The U.S.'s Greatest Realtor," Forbes, 15 February 1968.) After Zapata lost its attempted takeover and accepted greenmail from United Fruit in 1969, Eli Black took charge of United Fruit. He expanded horizontally from tropical fruit into meat-packing and food packaging and distribution. This was a globalization model that was matched by Murdock's Pacific Holdings in the direction it took Zapata. Murdock Investment Co. acquired the food packaging company Continental Can in conjunction with Peter Kiewit & Sons (3) -- a road construction company in Omaha, Nebraska that built more miles of interstate highways than any other company. One of the Continental subsidiaries made bottle caps for beer cans--not dissimilar from Black's original company AMK, which made caps for milk bottles. Pacific Holdings, also acquired Iowa Beef Producers (IBP), which tracked Black's acquisition of John Morrell. By 1985 Murdock had acquired Castle & Cooke Corporation which in 1967 had acquired all stock in Standard Fruit and Steamship Company, another competitor in global food distribution. By mid-1975 Black was in debt and in the midst of a bribery scandal. Whether he jumped or was pushed from his 44th floor office in the Pan American Building, no one can really say. But his death certainly made things easier for Murdock and the people he was fronting for. Within six months of Black's death, Carl Lindner, Jr. in early 1976 was named president and was elected to the board of United Brands. Lindner increased his buying of United Fruit stock in 1978 and had control by 1984. At the same time, Lindner took control of the Penn Central Co. for which both Palmieri and Pug would work in the 1970s and 80s. Lindner is thus the link between Pug's role at Murdock and his new job in 1980 with Palmieri. By the time Pug left L.A. in 1980 to return to his old stomping grounds in Philadelphia, Palmieri had been at Penn Central for over 10 years. It was almost as though he had been sent there by powerful men whose corporations had acquired valuable assets which they tried to hide within the railroad corporate structure, in order to siphon them off at a later date. Most of the assets, many in the form of undeveloped land, had connections back to California Born in West L.A. Palmieri's experience can be set out in the following order: 1. Associate attorney at O'Melveny & Myers, L.A., 1955-59. 2. Executive vice president, Janss Investment Corp., L.A., 1959-63. 3. President, Janss Investment Corp., L.A., 1963-68. While president at Janss, developed Snowmass in Aspen, Colo., and refurbished Sun Valley, Idaho Deputy executive director, National Advisory Commission on Civil Disorders (Kerner Commission), 1967-68 4. Chairman of the board, Palmieri Co., N.Y.C., 1969. 5. Chairman, Pennsylvania Co. and its subsidiary, Great S.W. Corp., 1969-77. Ambassador-at-large, U.S. coordinator of Refugee Affairs, Dept. State, 1979-81 Trustee of Rockefeller Foundation, 1979-89 Palmieri has stated that he was "president of the Janss Investment Corporation when it developed Snowmass in Aspen, Colo., and refurbished Sun Valley, Idaho." The latter ski resort was built from 1931 to 1936 on Union Pacific Railroad land by Averell Harriman's family, who hired Janss in 1964. It was this development project which Victor Palmieri credits with making his fortune (The New York Times, May 9, 1982). (4) The Harriman family were, of course, the partners or employers of Prescott Bush, George H.W. Bush's father in the Brown Brothers, Harriman investment bank, which was the venture capital source for Bush's oil companies. It is therefore extremely likely that the BBH capital remained in Zapata after Bush's exit. It is also possible that Bush may have continued his connection to Zapata through an undisclosed nominee. Without full disclosure of the corporate records, long since shredded or otherwise made invisible, we can never know for sure. At the conclusion of Part One we posed certain questions: What really did happen at Zapata Offshore after George Bush went to Congress in 1967? Who owned Pacific Holdings when David Murdock took it over? And what was Pug Winokur's role in transforming David Murdock's operations from a company that made tiles to one that was involved in secret control of a most mysterious corporation? Exploring Pug's next employer more closely may help to answer those questions. We know that David Murdock moved to Los Angeles from Arizona in 1964 to the same area, Westwood and the area around UCLA, developed by Janss Investment since the 1920's. The architecture was in the Mediterranean style and required a large amount of tiles for use in roofing the buildings. It is likely that Murdock's tile-making company had connections with the Janss developers, i.e. Victor Palmieri. Interestingly, in 1907 the Janss company had started development of Yorba Linda, the city where Richard Nixon was born and reared, on land owned by Jacob Stern, which had been a system of experimental farms very similar to those in Texas described in Part Two-B. Pug had a senior executive position with Pacific Holdings, at 10889 Wilshire Blvd. in Westwood, just across the street from the Occidental Petroleum company and a few blocks south of UCLA. Intriguingly, Palmieri’s career had also begun in this same area of Los Angeles, first at O’Melveny & Myers (Warren Christopher became senior partner there in 1958) and then at Janss Investment in Century City, across the street from the Twentieth Century Fox Theatre. In 1956-57 the area between Westwood and Los Angeles proper, now called Century City, was owned by Twentieth Century Fox; it was the Tom Mix ranch and the backlot. But the studio needed cash and decided to sell off this 260 acres of real estate. William Zeckendorf, a Rockefeller-connected developer in New York (who hired Disney's engineer, Charles Wood, to build Freedomland park and who was a partner with Toddie Lee and Angus Wynne in developing the Great Southwest project in Texas), was contacted. He agreed to buy the land and lease back a portion to the studio for one and a half million dollars a year. Zeckendorf eventually sold out his interest to the Mellon family's Alcoa. He states in his autobiography that he became great friends with "General Richard Mellon," whose family has long been connected to O.S.S. and C.I.A. activities, as well as with Gulf Oil, which was an investor brought into the Zapata Corporation by the Liedtke brothers.(5) By the time Palmieri went to work for Janss Investment, the Janss brothers had sold a half interest in the commercial properties, in 1955, to Arnold S. Kirkeby of Chicago, owner of a chain of hotels including the Beverly Wilshire at Wilshire and Rodeo Drive. Kirkeby changed the design of the village by bringing in highways and high-rises. The Arizona Project, a journalistic investigation into mob activities in Arizona, which found strong financial links between Arizona real estate development and construction of Las Vegas casinos, also noted: "For [Del] Webb, the Flamingo experience (6) led to a series of deals with other developers who had their own ties to the Mob-dominated Chicago political machine, including Henry Crown and Arnold S. Kirkeby of Los Angeles. " In those days the political machine in Chicago was controlled by Jake Arvey, with assistance from Cook County Finance Chairman Sidney Deutsch and Arthur X. Elrod. The Moe Annenberg wire service paid off the political machine and police, as concluded by findings of the Kefauver Hearings on organized crime. In Deep Politics and the Death of JFK, Peter Dale Scott cites several sources for his statement that Henry Crown had been involved in real estate deals in Cook County with Jake Arvey and Walter Annenberg, Moe's son. In 1963 Crown was also "the major stockholder (with 20 percent of the shares) of General Dynamics, the defense contractor whose controversial TFX created a major political scandal just before the Kennedy assassination." This contract had been awarded by Secretary of Defense Robert McNamara--Pug's employer in 1967. Kirkeby was an intimate associate of the same criminal underworld which moved to Hollywood and Beverly Hill to make movies and music. |
