Trial Begins For Ex-Chief Of Hollinger
BYLINE: By RICHARD SIKLOS
SECTION: Section C; Column 5; Business/Financial Desk; Pg. 1
DATELINE: CHICAGO, March 20
Two wildly different portraits of Conrad M. Black were presented to the jury in opening arguments Tuesday at the criminal trial against the former newspaper baron and three colleagues.
In the version put forward by a prosecutor, Mr. Black is a thief who is different from a bank robber only in that his methods involve artfully worded memorandums and he wears suits and ties.
Jeffrey H. Cramer, an assistant United States attorney, began his opening statement to the jury by saying, ''You are sitting in a room with four men who stole $60 million.''
In the view of Mr. Black's defense lawyer, however, he is a law-abiding entrepreneur who has been smeared by the accusations that he and three former executives looted the newspaper company Mr. Black built and ran.
''This isn't a story about a theft by Conrad Black,'' Edward M. Genson told the jury. ''This is a story about theft from him.''
Mr. Black and the other defendants -- Jack A. Boultbee, Mark S. Kipnis and Peter Y. Atkinson -- are accused of helping themselves to unauthorized bonuses. Mr. Black is also individually facing charges of abusing company perquisites, racketeering and obstruction of justice.
In laying out its prosecution against Mr. Black, now a Briton who gave up citizenship in his native Canada to become Lord Black of Crossharbour, Mr. Cramer portrayed the defendant as someone who betrayed the trust of directors and the public shareholders. They owned the majority of the equity in Hollinger International, the company Mr. Black built over three decades.
During his 90-minute opening statement, Mr. Cramer sought to educate the jury about the global newspaper empire Mr. Black built. Mr. Cramer spoke of the web of companies Mr. Black controlled, and the way in which, Mr. Cramer said, Mr. Black misused so-called noncompete agreements to skim millions from the company as it sold more than $3 billion worth of newspapers in the United States and Canada from 1998 to 2001.
In one instance, he said, the executives received money for signing agreements that they would not compete with a subsidiary of Hollinger International -- in effect, agreeing not to compete with themselves.
Mr. Kipnis, a company lawyer who arranged many of the payments at the heart of the case, did not receive any of the payments but received $150,000 in bonuses.
''His price was just a little lower,'' Mr. Cramer said.
At one point, Mr. Cramer stood across from the table where Mr. Black was seated, stared at him, and angrily described Mr. Black as having ''decided how much of the shareholders' money he would take.''
Mr. Black's stern expression did not change but his face turned slightly red as he stared straight ahead.
It was clear from Mr. Cramer's statement that the case against Mr. Black would rely heavily on testimony from Hollinger's star-studded board -- which was hand-picked by Mr. Black -- as well as by Mr. Black's former partner, F. David Radler, who has pleaded guilty to fraud and agreed to testify for the prosecution.
In the last week, Mr. Radler has also agreed to pay more than $100 million to settle civil litigation with the Securities and Exchange Commission and the Sun-Times Media Group, as Hollinger International is now called, stemming from allegations of fraud.
In particular, Mr. Cramer said the former audit committee of the Chicago-based Hollinger International will offer critical testimony.
Its members included James R. Thompson, the former Illinois governor and United States attorney; Richard Burt, a former United States ambassador to Germany; and Marie-Josee Kravis, an economist who is the wife of the financier Henry Kravis.
''The audit committee members will tell you they were never given full and accurate disclosure,'' Mr. Cramer said.
Mr. Radler, he added, will give ''an inside look at how they went about stealing $60 million; Radler will tell you how it worked.''
The $60 million was lower than a figure of more than $80 million that had been used in the indictment against Mr. Black and the others, and seemed to reflect a decision by the government to no longer challenge one payment made to Mr. Black.
In his opening, Mr. Genson depicted Mr. Black as a tireless businessman and author who hobnobbed with the rich and famous and a man for whom there was no distinction between his personal life and his business interests.
Perhaps in an attempt to defuse at least the tone of some evidence, Mr. Genson described Mr. Black as being egotistical and arrogant and prone to oratorical flourishes.
In one e-mail message the jury was shown by the prosecution, Mr. Black described queries from shareholders about his pay as an ''epidemic of shareholder idiocy.''
Another e-mail message to Mr. Radler referred to the ''splendid conveyance of the noncompetition agreements from which you and I profited so well and deservedly.''
But Mr. Genson said that Mr. Black's florid style did not mean he was a criminal, and he noted that there was no accounting scandal or bankruptcy at Hollinger International the way there was at Enron.
''His life is different than ours -- it's not better, it's just different,'' Mr. Genson said of Mr. Black. ''You can't allow the sparkle of wealth to blind you as to the facts of this case.''
At one point, the lawyer joked that one goal over the course of the trial was to get Mr. Black -- who sat slouching and grim throughout much of the proceedings and during jury selection last week -- to sit straight in his chair.
Referring specifically to the idea that Mr. Black misled members of Hollinger's board, Mr. Genson said these are ''not people you could go in and trip and bully.''
He spent much of his presentation trying to distance Mr. Black from Mr. Radler, whom he characterized as a liar who had turned against his longtime partner to assure himself a more lenient prison sentence that he could be able to serve in Canada.
One of the biggest questions in the case is whether the jury will accept that portrayal or will instead accept the prosecution's view that even though Mr. Radler was his hatchet man, Mr. Black knew exactly what he was doing.
Mr. Genson also pointed out that Mr. Black oversaw the company's newspaper interests in Britain and Canada, while Mr. Radler oversaw the company's ownership of The Jerusalem Post and its United States papers, which at one point included 400 community newspapers and The Chicago Sun-Times.
While Mr. Cramer told the jury that the buyers of several groups of small-town newspapers would be testifying that they did not ask for the agreements that funneled millions to the defendants, Mr. Genson argued that those same newspaper buyers would also testify that they never knew Mr. Black and dealt only with Mr. Radler.
Similarly, Mr. Genson said, it was Mr. Radler's responsibility to obtain the approval for the noncompete payments from the audit committee.
The trial will also include accusations that Mr. Black abused perquisites. These include charges that Mr. Black stole money from the company by using the company jet to fly to Bora Bora for a vacation with his wife and refused to pay for it and that he defrauded the company on the purchase of a Park Avenue apartment. Mr. Genson said he would disprove all the accusations.
SUBJECT: ORGANIZED CRIME (92%); JUSTICE DEPARTMENTS (90%); LAWYERS (89%); COVENANTS NOT TO COMPETE (89%); FRAUD & FINANCIAL CRIME (78%); ETHICS (74%); ROBBERY (72%); SHAREHOLDERS (69%); JURY TRIALS (90%) Accounting and Accountants; Ethics; Securities and Commodities Violations; Racketeering and Racketeers ; Frauds and Swindling; Bonuses
COMPANY:SUN-TIMES MEDIA GROUP INC (54%)
ORGANIZATION: Hollinger International Inc; Hollinger International Inc
TICKER: SVN (NYSE) (54%)
PERSON:Conrad M Black; Richard Siklos; Jack Boultbee; Mark Kipnis; Peter Atkinson; Jeffrey H Cramer; Edward M Genson
GEOGRAPHIC:UNITED STATES (93%); CANADA (90%); NORTH AMERICA (79%)
LOAD-DATE:March 21, 2007
Copyright 2007 The New York Times Company
1002 of 1258 DOCUMENTS
The New York Times
March 21, 2007 Wednesday
Late Edition - Final
Add a Dash of Green and the Dish Is Done
BYLINE: By Florence Fabricant
SECTION: Section F; Column 2; Dining, Dining Out/Cultural Desk; FOOD STUFF; Pg. 2
LENGTH: 198 words
A finishing touch on a dish in a restaurant is often a scattering of tiny leaves, or microgreens, packing intense flavor.
Now home cooks can add this same professional grace note with fresh snippets of baby plants direct from the refrigerator. Lauri Roberts, an entrepreneur in Warwick, R.I., has started a company called Farming Turtles (''I wanted a name that was funny and memorable,'' she said) to grow nine kinds of microgreens.
They are sold in plastic tubs, growing in soil. Tuck them into the refrigerator and cut with scissors to use on all sorts of dishes.
They are called salad toppers, but they have other uses, like garnishing fillets of fish, dressing up sandwiches and wraps, floating on soups and showering on pasta and risotto.
Basil and cilantro are deeply flavorful. Arugula and a blend called Firecracker Zest pack plenty of spice. The onion, with its tiny black seeds, tastes richly oniony.
Amaranth, carrot, baby red cabbage and an Asian blend are the other varieties, all $4.99 each and available at D'Agostino supermarkets in New York City and Westchester County. Dave's Marketplace stores in Rhode Island and Eastside Marketplace in Providence also sell them.
SUBJECT: GROCERY STORES & SUPERMARKETS (85%); RESTAURANTS (78%) Cooking and Cookbooks
COMPANY: D'AGOSTINO SUPERMARKETS INC (55%)
ORGANIZATION: Farming Turtles (Co)
PERSON: Florence Fabricant
GEOGRAPHIC: PROVIDENCE, RI, USA (57%); NEW YORK, NY, USA (65%) RHODE ISLAND, USA (93%); NEW YORK, USA (79%) UNITED STATES (93%)
LOAD-DATE: March 21, 2007
GRAPHIC: Photo (Photo by Tony Cenicola/The New York Times)
Copyright 2007 The New York Times Company
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The New York Times
March 20, 2007 Tuesday
Late Edition - Final
National Briefing West: California: Man Indicted In Fire At Wine Warehouse
SECTION: Section A; Column 1; National Desk; Pg. 15
LENGTH: 162 words
Federal prosecutors announced a 19-count indictment against a San Francisco Bay Area wine entrepreneur in an October 2005 fire that destroyed a warehouse and millions of dollars' worth of bottled wine. The charges against the businessman, Mark Anderson, include arson, tax evasion, mail fraud, using a fake name and interstate transportation of fraudulently obtained property. They are the first stemming from the fire, which burned the Wines Central warehouse on Mare Island, a former naval base in Vallejo, about 30 miles northeast of San Francisco. It destroyed the inventories of more than 80 vintners, worth about $100 million. Mr. Anderson had stored wine at the warehouse but had removed most of it after being asked to do so by business managers several months before the fire. He had been under investigation partly because he was at the warehouse when the fire erupted. The federal public defender in Sacramento, Matthew C. Bockmon, declined to comment on the case.
SUBJECT: FIRES (90%); ARSON (90%); JUSTICE DEPARTMENTS (88%); GENERAL WAREHOUSING (88%); WAREHOUSING & STORAGE (88%); INVESTIGATIONS (87%); TAX FRAUD (73%); ALCOHOLIC BEVERAGES (72%); PUBLIC DEFENDERS (50%); INDICTMENTS (91%) Fires and Firefighters; Arson
PERSON: Mark Anderson
GEOGRAPHIC: SAN FRANCISCO, CA, USA (91%); SAN FRANCISCO BAY AREA, CA, USA (92%); SACRAMENTO, CA, USA (79%) CALIFORNIA, USA (93%) UNITED STATES (93%) San Francisco (Calif)
LOAD-DATE: March 20, 2007
Copyright 2007 The New York Times Company
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The New York Times
March 18, 2007 Sunday
Late Edition - Final
BYLINE: By BOB SHACOCHIS.
Bob Shacochis' next novel, ''The Woman Who Lost Her Soul,'' will be published in 2008.
SECTION: Section 7; Column 1; Book Review Desk; Pg. 16
LENGTH: 1314 words
By Jonathan Raban.
258 pp. Pantheon Books. $24.
To whom shall we entrust the rendering of this moment and its attendant verities -- the artist or the correspondent, the purveyors of fictions or the gatherers of facts? And who gets to play gatekeeper in this game? The question, both plot device and intellectual premise, animates ''Surveillance,'' the gripping new novel by Jonathan Raban, a British writer who for years has embedded himself in America, earning acclaim for his fresh-eyed travelogues and journalism.
Once upon a time the question could be swatted away -- you're talking apples and oranges -- but not anymore. Boundaries have corroded, shapes blurred, genres intermarried. Fabrications are as efficacious as facts.
When we read the Times Op-Ed columnist Bob Herbert on anger -- ''The anger quotient is much too low,'' he wrote recently, addressing the political mood in the country -- and then Raban's observations on the same subject, we find ourselves at the center of a murky debate about the current status of fiction versus nonfiction that occupies much of the thematic space in Raban's novel. ''Tad was angry,'' Raban writes. Tad Zachary is a 50ish, gay, H.I.V.-positive, professional actor in Seattle. ''He was angry with himself, angry with the presidency, angry with the nation, angry with the century. That much was rational, justifiable. ... Decent people now were angry people, and what America needed at this low moment in its history was more anger, not less.'' Tad, however, doesn't seek ''to rescue the administration from its folly: he wanted to see it blown to atomic dust or drowned in a sack.'' Here, at least, the anger quotient, considerably more heated than congressional oversight hearings on the Iraq war, is much too high. +
At the place where Herbert and Raban intersect, do their words complement or cancel one another out, enhance or diminish the force of Herbert's analysis or Raban's make-believe? This is precisely the sort of human algebra that Raban bends his characters around throughout the book, to fascinating yet irresolute effect. Opinions appear to converge on a single truth, but each character has read the thermometer differently, the disparity in this case perhaps explained by the fact that ''Surveillance'' leans out from today's headlines to sniff at a horizon that is within walking distance, a Seattle that might not be 2007 yet edges no further into the calendar than 2008. An overly familiar America, accurately portrayed and perforce underimagined. What's new? One hardly needs a crystal ball: national identity cards, stone-faced soldiers manning checkpoints, an economy in the pits, intensified global warming. Bush still seems to be president, the nation remains divided, Iraq is Iraq. There have been no new terrorist attacks upon the homeland, although extravagant stagings of emergency and disaster drills, spiffed up with actors like Tad, are disruptively common.
The drama at hand is mostly atmospheric, the texture of society itself, the quotidian pressures inflated by a ubiquitous sense of dread for what might one day wake us up -- not from the nightmare but into the nightmare. Yet the lives Raban zeroes in on are essentially stable, comfortable, urban middle-class or nouveau riche, their profiles instantly recognizable as our own in the cultural mirror.
Tad, the eternally aggrieved leftist, cherishes the one good, sane thing in his life -- the postmodern family he has created with the tenants across the hall, Lucy Bengstrom and her 11-year-old daughter, Alida, in their slightly seedy downtown apartment building. Over the years he has become Alida's surrogate father and Lucy's platonic lover and domestic task-sharer. Lucy, an overweight, boomer-aged single mom and a ''model bourgeois liberal'' who believes in neither evil nor certitude, is a freelance writer for A-list magazines (Tina Brown kept her on a monthly retainer in the '90s) although the assignments have dwindled sufficiently of late for her to be grateful when she gets a timely call from GQ asking her to track down the reclusive literary sensation of the season, a retired history professor named August Vanags, who lives on an island in Puget Sound. Vanags, who claims to have been born in Latvia on the eve of World War II, has written a best-selling memoir (yes, Spielberg's making the movie) about his childhood, which included time in both Hitler's and Stalin's camps. He is one of two immigrants who bookend ''Surveillance'' -- the second is a ruthlessly ambitious Chinese landlord -- and their true identities remain uncertain throughout the narrative.
What happens then among these five is a replay of the polarized polemics any sentient citizen has been exposed to throughout the past six years. Vanags, a former Kissinger aide during the Nixon administration, is a charming but unrepentant neocon who seems to be channeling Charles Krauthammer; Tad is to the diatribe born. The savantish 11-year-old interjects naive, untested idealism; the landlord provides the rapacious entrepreneurial spirit that vacuums capitalism clean of conscience. Agnostic, skeptical Lucy listens and referees. She is a watcher who, like the author himself, has placed us all under benign surveillance and, given the conflicting evidence, is understandably reluctant to draw conclusions.
Which returns us to the tricky question ''Surveillance'' forces upon its readers: In the courtroom of history, who gets to testify as a credible witness? Bush is the author of his own legacy, certainly, but how do we sort out his narrative from the one we ourselves create as a nation, especially in light of those among us who falsify, spin or otherwise revise to suit agendas that spawn parallel realities?
There's plenty of talk in ''Surveillance'' about who reads what and why. Vanags distrusts The New York Times and favors The Wall Street Journal. Tad listens to Al-Jazeera and scours the European press for the ''real'' story. Alida hates fantasies but loves Agatha Christie. The Chinese landlord, contemptuous of novels, gulps down books about Sam Walton. For Lucy, the writer, the more alien the world she reads about, the happier she is.
We might assume then that she'd be unhappy reading ''Surveillance,'' which is a bit like reality TV, both authentic and artificial. One begins to wonder, as I believe the author intends us to, if the contemporary moment is not ''better'' delivered by the news cycle and the unceasing slosh of cyberflotsam and citizen-journalists with videophones than by literature. The very relevance of ''Surveillance'' to the present moment, in a culture where nearly every surface is hyper-reflective, threatens to amplify the noise and weariness of the day and, paradoxically, actually drown the novel's own relevance out.
To his credit, Raban seems to understand the gamble and make the most of it, though not without an occasional misstep -- most noticeably the tendency of characters to stagger beneath the metaphorical load. What the book offers in its auditing of the national dialogue contains no surprises. The talking heads talk. The characters also bloom into their bodies, lives and loves. The insufferable weather turns nostalgically clement. We look in the mirror -- here we are -- and look away, puzzled or embittered or cocksure.
It's during the denouement of the deceptively modest plot that the big message is delivered, the long-awaited apocalyptic swipe brought to us by ... well, the Other Player in the mix. The novel unmasks itself as an elaborate, ingenious frame for a discourse on the nature of writing, and a platform from which to administer a strong kick of cosmic reality to the backside of mankind's roiling affairs. We're tossed onto the stage of a profound truth, where literature outperforms anything else.
Good morning, Seattle. Welcome to New Orleans.
SUBJECT: BOOK REVIEWS (92%); NOVELS & SHORT STORIES (90%); EDITORIALS & OPINIONS (90%); LITERATURE GENRES (78%); NON FICTION LITERATURE (78%); MARRIAGE (54%); GLOBAL WARMING (50%); NATIONAL IDENTITY CARDS (50%); JOURNALISM (76%); LITERATURE (78%); WRITERS & WRITING (77%); IRAQ WAR (62%) Books and Literature; Reviews
PERSON: MICHAEL MCMAHON (57%) Bob Shacochis; Jonathan Raban
GEOGRAPHIC: SEATTLE, WA, USA (92%) WASHINGTON, USA (92%) UNITED STATES (93%); IRAQ (79%)
LOAD-DATE: March 18, 2007
GRAPHIC: Photo (Photo by Andy Martin)
Copyright 2007 The New York Times Company
1005 of 1258 DOCUMENTS
The New York Times
March 18, 2007 Sunday
Late Edition - Final
Russ Whitney Wants You to Be Rich
BYLINE: By RANDALL PATTERSON.
Randall Patterson, who lives in Asheville, N.C., has written for The New York Times Magazine, New York and Mother Jones.
SECTION: Section 6; Column 1; Key; Pg. 104
LENGTH: 4129 words
Among the promises made after midnight to people who want to believe them, amid ads for the cream that will make you look young again and the ''motionless exercise'' system that will melt away your fat comes the voice from the television that asks, ''Are you among the thousands living paycheck to paycheck, just getting by, making payments on debts and credit cards?''
And ''Have you ever wondered how it would feel being rich?''
Visions of wine-sipping then fill the screen, of golf-playing, of sailboats sailing into the sunset. Strolling down a dock, a smart-looking fellow in a bright polo shirt and khaki shorts turns to the camera and says, ''With real estate, there's no question you can amass the most amount of money in the least amount of time.''
This is Russ Whitney, ''who started out working in a slaughterhouse for $5 an hour,'' the announcer tells us, ''and turned $1,000 in borrowed money into a personal wealth of $4.7 million -- in only 18 months!'' He has since devoted himself to helping others, the spot continues, and ''on this important television special,'' Whitney will show you how to build wealth -- ''even with only a part-time effort!''
He is displayed standing before a rather plain-looking house. What would he do if he had ''no money and no credit''? Why, he'd go out and find a ''horrible''-looking house like this one and buy it ''with literally no money ... no banks involved.'' Then ''we do a little paint and clean-up, and we turn this right over for a $15,000 profit.''
If you happen to doubt any of this, there is testimony from a woman who recently collected seven ugly houses in six months, thus replacing her yearly income, and from a man who says Russ Whitney ''changed my life.'' And, too, there is the former slaughterhouse worker himself, telling you again, amid swells of elevator music, that real estate is the fastest way to wealth for ''folks like you and me.''
By this time, however, Whitney has switched into the future tense, and it becomes clear he is not actually going to reveal any of his wealth-building techniques until you attend one of his ''truly unique'' workshops. Not only is admission to this ''special, limited-seating event'' free, but Whitney will also give you, ''absolutely free,'' his special Russ Whitney's Building Wealth Entrepreneur Start-Up Kit -- ''a $199 value.'' In other words, he will pay you to attend, so how could you not? ''You have everything to gain by attending!'' ''Call now!'' ''Operators are standing by.'' And so on.
In this way, a sorting process begins. Most people are not awake after midnight to avail themselves of such opportunities. Of those who are, a smaller number shop for answers in infomercials. Fewer still reach for the phone. Those who do call and who attend the first Whitney workshop find that it is mainly a sales event for another workshop. The fraction that agree to pay a few hundred dollars proceed to the second hotel workshop, where they discover yet another sales event, or what sounds from the description of participants like a Holy Ghost revival. A powerful speaker stokes passions until, one by one, about 20 percent of the audience rise from their seats -- the number is reliable, according to the company -- and consent to pay thousands of dollars each to learn how to get rich through real estate.
In staging some 4,700 free events a year, Whitney Information Network attracts some 280,000 people, of whom 22,000 go on to enroll as students in advanced courses. Last November at the Clarion Hotel in Louisville, Pat Yarbrough, a 56-year-old custodian at the University of Louisville, became one of them. ''Fast money,'' she explained later, ''that's all I'm interested in.'' At the front of the conference room, a nice man had taught her how to raise her credit-card debt limit, she said, and when she made her way with a cane to the back, a nice clerk showed her what she could buy: three-day courses with names like Rehabbing for Profit and Keys to Creative Real Estate Financing. The courses cost $4,995 each, but less if you bought more. Yarbrough chose four, including the Millionaire U Real Estate Training. She had $130,000 in debt, some of it on her seven credit cards, and the clerk helped her to add $18,000 to it.
A month later, the custodian from Louisville joined an electrician from Baltimore, an unemployed longshoreman from Delaware, a roofing contractor from New Jersey and an elderly doctor from Sebastian, Fla., at Russ Whitney's Wealth Intelligence Academy, where they were welcomed as ''advanced students,'' ''the creme de la creme,'' and promised that all would be revealed.
Cape Coral, Fla., is bright sun, a jungle of strip malls -- the sort of town where a wealth intelligence academy fits right in. ''Good morning, everybody!'' Whitney called out to his sales staff on a bright day in December. ''Are we having fun yet?'' He was tanned and moussed; at 51, he looked like a million bucks. ''Good morning,'' he greeted a secretary. ''How are you?'' When she began complaining of cold symptoms, Whitney cut her off: ''You don't have cancer, do you? You're doing great!'' After lunch, he played basketball in the lobby, pushing down one of his executives and driving to the hoop. Late afternoon found Whitney in his office, chatting on the phone with Robert Kiyosaki, the author of ''Rich Dad, Poor Dad,'' about whether to go on safari together -- or as Whitney put it, ''whether I should go out and kill things with you.''
To look at Whitney now, you don't have to wonder how it feels to be rich. He has been all over television talking about it. He's spoken of it to countless audiences, written about it in several books, including ''Millionaire Real Estate Mentor,'' a BusinessWeek best seller. (Last fall, Whitney also appeared in New York City as a panelist at a New York Times-sponsored event, the Great Read in the Park.) His rags-to-riches tale has been worn smooth, but he knows it's a good story, and nothing else quite conveys his exceptional pluck.
After a ''very miserable'' childhood, he begins again, he developed an association with some shady characters. ''I pretty much became a car thief,'' he says. ''I was damn good at it, too -- steal a car in 15 seconds.'' But Whitney wasn't too good at crime to avoid getting caught for second-degree robbery, and it was only after a year and a half in prison that he wound up, in 1976, at the slaughterhouse in Albany.
''I was a piece of dung,'' he remembered. Many people live with that feeling, but Whitney wasn't about to, and he reached for the first of several texts that changed him -- a Zig Ziglar volume on positive thinking. The book told him that happiness basically depends on a denial of reality, that ''if you're going to be a positive guy, have a good attitude,'' he said, ''you've got to say things like 'super!' and 'fantastic!' '' Whitney had just gotten out of prison and thought this was the stupidest thing he'd ever heard. He wanted to be happy, though, and so tried to believe it and was soon wandering the slaughterhouse saying ''super'' and ''fantastic.'' The longer he tried to see the bright side, the more he thought he actually did.
Within three months of arriving at the slaughterhouse, Whitney had convinced a woman there to marry him for richer, for poorer. Within a year, he'd decided he was far too smart to go on killing hogs for life and was meant instead for ''something big.'' Whitney began shopping among the get-rich-quick schemes advertised in the backs of magazines. He had spent hundreds of dollars on such offers before he came upon another book that changed him: William Nickerson's ''How I Turned $1,000 Into $3 Million in Real Estate in My Spare Time.''
''Everything clicked,'' Whitney said. He saw that real estate was an investment he could control. Its value over the long term generally rose, and could in fact be forced up. If he combined ''a sensible, mathematical approach with the proper exit strategy,'' Whitney said, he would know in advance of a deal whether he would profit. ''And the book said you can be a millionaire in time,'' he recalled, ''and I thought, Shoot, I can do that. I mean, I got it! I understood that concept. And from that point on, my sole focus was to become a millionaire.''
His first deal in Schenectady was a ''steal.'' In another, he extracted ''exceptional terms'' from a 65-year-old widow. After making the purchase, Whitney would rise early and take his baby daughter with him to the property, while his wife worked at the slaughterhouse. All day he would paint and clean, not returning until night for his own slaughterhouse shift. This schedule went on for years. ''Hustle is heaven if you're a hustler,'' he wrote in his first book, but Whitney's life was difficult enough that eventually he felt the need for stronger medicine than Zig Ziglar or William Nickerson could offer.
A third book that changed him was the Bible. Whitney says he reads it ''for wisdom and forgiveness'' for 15 minutes every morning after his workout. Without the Bible, he asked me, ''how would you know not to steal?'' Without the Bible, he said, ''I'd be doing a whole lot of not looking in the mirror.'' He seems to have hesitated in his faith only once, when he read in Matthew, Mark and Luke that ''it is easier for a camel to go through the eye of a needle than for a rich man to enter into the kingdom of God.'' Whitney could understand the words only as they appeared: it seemed the Bible frowned on wealth-building almost as much as upon stealing. ''I was trying to figure that out,'' he remembered, when his Baptist preacher intervened to explain, no, no -- certain passages of the Bible must not be taken literally. A rich man must try harder to get into heaven, it's true, but the preacher told him, ''God wants you to be successful.''
Whitney says he has gone on to hundreds of real estate deals, contributing to his Baptist church all the while. He had been investing in real estate for seven years when, ''by the age of 27,'' according to the official bio, ''he was one of America's youngest self-made millionaires.'' Whitney moved his family from New York to Cape Coral, a ''very positive, beautiful place,'' he says. Now he seems to have what rich people are supposed to -- a Ferrari, a company plane, ''probably close to the biggest house in town,'' he says -- and he happily puts his net worth at ''oh, I would say in excess of $100 million for sure.'' All Whitney really wants is more. ''I'm an opportunist,'' he explains. ''I'm a businessman.''
The one regret he mentions is that he ever put faith in get-rich-quick schemes. So many were just ''a lot of hype and baloney,'' Whitney says, and it was to tell the truth about what real estate had done for him that he wrote his first book. Whitney Information Network is now a public company that employs roughly 475 people and that took in about $160 million in revenue in 2005, according to its annual report, all on the promise that anyone might become rich like Whitney, if he will only do as Whitney has done. The difference, though, between Whitney and those who come to WIN is that he bought his first real estate book for just $10, and they pay up to $54,000 a head for the full course package. When I asked if he would have enrolled in his school when he was starting out, Whitney said no. Then he added, ''I shouldn't say that,'' and began trying to take it back.
Millionaire U is the three-day real estate training course designed to ''put you on the fast track to success.'' The conference room at Whitney headquarters gradually filled in mid-December with blacks, whites, Hispanics, Asians, Haitians and Jamaicans. As Whitney said later: ''We had America in there. We had America at Millionaire University.''
The students sat without talking beneath fluorescent lights, about 40 midnight loners waiting as though for a test. ''Real estate is a people-person business,'' the instructor told them, so get introduced. Gladstone from Fort Lauderdale stood to say he was a physician's assistant ''tired, very tired'' of 16 years of 16-hour days; for this and other courses, he had paid Whitney $14,000 and hoped to increase his cash flow. Terrin from Delaware was a single parent and unemployed longshoreman whose car had recently been repossessed; he had paid Whitney $20,000 to teach him ''how to not make mistakes.'' Before coming here, Pat Yarbrough, the custodian from Louisville, had given a different get-rich guru $24,000; that plan didn't work, but she was convinced this would be different. Probably the most educated man in the room was Havelock Thompson, the elderly doctor from Sebastian, Fla. He had spent his career caring for indigents -- ''doing more good than making money.'' After buying a $53,000 package from Whitney, he expected to gross $1 million in the next two years, which no one there seemed to think unrealistic. They were all hoping to make a change in their lives.
Pacing before them was Tracie Taylor, a sleek African-American woman in red lipstick and dark business suit. ''How many of you want to be millionaires?'' she called out. When every hand shot up, Taylor told them she hoped they would raise their goals; millionaires have become passe. Getting rich, as she explained it, seemed mainly a matter of positive thinking. ''Our challenge is not real estate investing,'' the broker said, ''but changing your belief systems.'' Immediately she got to work.
She told the students that they were solutions-oriented individuals and that the solution they were oriented toward was money. The economy is divided, Taylor said, between the rich and the poor, ''and you can choose which side you want to be on.''
She advised the students to cease identifying with the poor. There are more people making a little than there are making a lot, and those people, she said, need places to live. Expect to become landlords, she told the class. The neighborhoods they should expect to work in -- ''good cash-flow areas'' -- are indicated by the presence of laundromats, pawn shops and any boulevard bearing the name Martin Luther King, she told them on a tour of one such neighborhood. To find deals, she recommended keeping an ear out for death, divorce, job loss, any kind of despair. ''Situations,'' she whispered with a grin; they tend to create motivated sellers. One must approach them gently. It's important to be positive, to look as though you care about someone's situation -- and it's absolutely essential that you not care. When you make your lowball offer, you'll have to stand firm; when tenants don't pay the rent, you'll have to evict. ''The cardinal rule of real estate is don't get emotionally attached,'' Taylor instructed. ''Here's what you get attached to: ROI.'' Return on investment.
The students solemnly wrote her instructions down. Much of what was said clashed with the instincts of Dr. Thompson, who said he couldn't imagine himself as a landlord, ''screwing in light bulbs for people less fortunate'' or, in any case, making money without doing good. ''My conscience wouldn't allow it,'' he added, but he seemed one of only a few with that problem. As the course went on, the challenge for most students appeared not to be changing their belief systems but learning the rudiments of real estate.
Taylor knew early that her class of advanced students was strictly remedial. Assessing them, she found that only 8 of 40 had invested in real estate before. The infomercial had talked of buying and quickly selling houses, and those who enrolled seemed largely unaware of the real estate slump.
Taylor introduced a hard-charging mortgage broker who began moving rapid-fire through nonconforming NINAs and no docs, PITI reserves and the 28/36 rule. At last, she looked up: ''Everyone's shaking their heads like they know this,'' she said. And she rolled right on.
''The second calculation is the same as the first ... the balance is divided by ... the rate is 12 percent so ... and that's how you get a blended rate ... and what if it's an adjustable rate ... negative amortization, but I prefer not to be negative so let's say deferred interest ... and ... we're done. Any questions?''
There wasn't a one. ''You guys are too quiet!'' the broker said.
Then came another banker. He was talking carefully about regulations, financing, exotic mortgages when a voice rang out: ''We want to know how to find the deal when you drive around!'' It was a Haitian man from Brooklyn. ''Talk to the real estate guy,'' the banker said. ''I'm the banker.'' But the man only replied, ''We want to know how to find the deal when you drive around!''
They were eager to be good students, but blurted out terrible answers. ''Where did you guys study math?'' Taylor asked. Later, she realized that not one student could even name the world's richest man. ''People with goals are the ones who succeed,'' she lectured, and she assigned her class the homework of compiling a hundred goals. The next day, when she asked all who had completed the homework to stand, the doctor rose, stunned to find himself alone. ''Why are you surprised?'' Taylor asked him.
Yarbrough the custodian, meanwhile, sat fanning herself with her notebook, asking for words to be defined, concepts repeated. She said she wasn't getting much out of the presentations. She was mainly waiting, she admitted, for that lesson on how to buy houses without money.
Taylor at last felt obliged to tell the class that ''real estate investing is not a get-rich-quick scheme.'' They would have to work hard, and they would have to get informed. ''All the data's yours for the taking,'' she said. And that must surely have been the most confusing lesson, because it was exactly contrary to what the students had been told at the sales event. Information was supposed to be hard to come by, available only at high cost. What had they paid for, after all? Why had they come all this way to the Wealth Intelligence Academy?
In his official company biography, Whitney says that ''his greatest achievement is the success of his students.'' The immediate effect of becoming a Whitney student, though, is not to get rich, but poorer. The infomercial addresses people who are ''just getting by, making payments on debts and credit cards.'' Among the first lessons Whitney instructors teach is how to raise the limits on their credit cards, and then how to plunge deeper into debt buying Whitney courses.
Documents his company submits to the Securities and Exchange Commission show that as chief executive, Whitney took home $1.6 million in salary and bonus in 2005. Minutes after telling me that he would not, when starting out, have enrolled in his school, he tried to explain that he would ''probably have progressed a whole lot faster'' if he had. He would have bought the $24,000 ''platinum package,'' he said, adding, ''Would have took a platinum for sure.'' Perhaps it would have meant going into debt, but that makes sense to him. He was unabashed that his instructors help students put the cost of those courses on credit cards. Don't most colleges help to arrange student loans? ''Of course they do,'' he said. Compared with the cost of college, his school is ''a bargain,'' Whitney added, and ''when you think about it, too, the business we're in, that money comes back very fast.''
In his book ''Millionaire Real Estate Mentor,'' Whitney claims to have ''helped thousands of people become wealthy.'' On Whitney's Web site, the volume of ''success stories'' appears to support the claim -- but when you read the stories, many are nothing more than testimonials of good will. I asked the company for examples of students who became wealthy thanks to what they learned. After many weeks, the company gave me a list of seven people, three whose success had prompted Whitney to hire them as mentors for new students and two others who were doing business with Whitney. Six of the seven returned calls; three claimed they had become millionaires. The impression they left is that some Whitney students do indeed become wealthy, but that they are the exceptions.
The company recently reported that it was under investigation by the S.E.C. and the United States attorney for the Eastern District of Virginia. The Florida and Kansas attorneys general are looking into Whitney's company for deceptive advertising, and they are not the first to have done so. Perhaps the most revealing case was brought by the state of Tennessee and settled in 1997. Promoting a seminar, Whitney had placed newspaper ads, according to court records, that read, ''Millionaire Swears Under Oath He Can Show Any Nashville Area Resident How to Get Rich in a Year.'' The attorney general objected that Whitney had ''not in fact made any such statement under oath'' and seems to have been astonished when Whitney ''informed the state that this claim is simply 'advertising language.' '' ''In fact,'' the attorney general wrote in the complaint, ''Mr. Whitney has informed the state that in making his claim that he can show any Nashvillian how to become 'rich' in a year, he did not necessarily mean that anyone would become 'rich' financially, but 'rich' in a spiritual sense.''
The state dropped the case after Whitney agreed never again to advertise unlikely results from use of a Whitney product in Tennessee without disclosing that such results would be ''rare, highly unusual, exceptional or atypical and not to be expected by the average person.'' If Whitney still wished to advertise that he could help people get rich, he would also have to disclose that his ''use of the term 'rich' does not refer to financial success but is intended to refer to other standards.''
Whitney says now that while he consented to pay costs and fees of $9,500 in Tennessee, he admitted no wrongdoing -- and that the Tennessee attorney general quoted him out of context. In an e-mail he wrote that ''every claim in our ads can be documented'' and that with altered ads, the company continues to do business in Tennessee and would be shown to be in full compliance with all laws in Florida and Kansas.
His work is ''God-driven,'' Whitney insists. How many of his students become materially wealthy, he claimed not to know. But even for those who don't, he said, the training still has value. Spiritual value, in other words. ''We help people build self-confidence,'' Whitney explained. ''We help them believe in themselves again.'' The students who come to him, ''some of them, you know, couldn't work,'' he said, and then they start ''thinking on their own,'' and Whitney watches as they ''break out from more conventional America'' and recognize, ''Holy cow, I can be somebody!'' He added, ''That doesn't necessarily mean be somebody wealth-wise.''
Toward the end of the class, Taylor told her students that most of them would become financially independent. ''Many of you will become multimillionaires,'' she said. Hoping to become somebody wealth-wise, Yarbrough signed up for yet more classes. Her purchases added another $11,500 to her debt, but she reasoned, ''If I make the money they say I will, it won't make any difference.''
On the last day of the course Taylor rather grandly introduced ''my mentor, my friend, Mr. Russ Whitney!'' Whitney came bounding in carrying a water bottle, as though fresh from his workout. As a teacher, he told me, his reward is the gratification he feels when greeting students who are learning how to change their lives. The students quickly surrounded Whitney and proceeded to gratify him with hugs and handshakes and photos. Dr. Thompson patted him on the back. Yarbrough got his autograph. A nurse from New Jersey said she was ''so touched'' to learn that Whitney's a Christian, and Whitney answered, ''Let me tell you, I've been blessed to handle God's money.''
He was soon strutting before them, saying again that real estate is ''the simplest way to make a lot of money'' but warning them to be careful out there, because ''people don't always have your best interests in mind.'' In fact, he said ''in 9 out of 10 cases they don't.'' And that's why they needed more education -- to learn what they could expect.
''We've got a lot of classes,'' he went on. ''You probably think they're expensive.''
''They are expensive!'' Yarbrough called out from the front of the class.
Whitney turned to regard her. Yarbrough stared back at him. He began to insist that his profit margins were reasonable, that he wasn't gouging anyone, but Yarbrough quickly stopped him. ''Let me say,'' she replied, ''that if we didn't want to be here, we wouldn't be here. Nobody twisted our arms.''
Whitney couldn't help but snort. He said he'd fire the salesman who didn't twist arms, and everybody had a good laugh.