Power, Money and Greed: A Washington bedtime story

Bill Regardie Founder, Regardie's Magazine
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“Zayde, can you tell me a bedtime story about where you grew up?” The request came from my blue-eyed granddaughter. I knew she wanted a tale of Freddy Bear in Washington, but I decided she finally was ready to learn about the real city. After all, she was 3.

“Once upon a time the Justice Department announced Operation Broken Trust,” I began. “It was a two-year investigation of Ponzi schemes, foreign currency frauds, investment crimes and other market cons. Altogether, 500 people were convicted in criminal and civil cases involving more than $8.3 billion in investor losses and 120,000 victims.”

She looked glassy eyed, but I had to go on.

“Two days after the legal proceedings ended, the lead attorneys on Operation Broken Trust opened their own shop. The firm of Steinberg, Corleone, Bonkers & King put out their shingle at 8 a.m. on Tuesday. Seventeen seconds later, Steinberg’s cell phone rang.”

“Was it Freddy Bear,” my granddaughter asked?

“Better,” I replied. “It was Charlie Blutovsky, a scumbag — excuse me, a meany Boston investment banker who handled several billion of investors’ money.

“‘I want to retain your firm,’ Blutovsky blurted before Steinberg even said hello. ‘You’re on the cutting edge and I may need you some day.’

“Steinberg responded, ‘I believe we can help you. After all, we did rewrite the book, so to speak.’”

“Blutovsky cut to the chase, asking Steinberg, ‘What’s it gonna cost me?’

“Steinberg told him they only work on retainer, and it would cost Blutovsky $100,000 a month, three months minimum, paid in advance. When Blutovsky didn’t object, he knew the hook had been set.”

“Where’s Freddy Bear,” my granddaughter asked? I was too wrapped up in the story to answer.

“The phone was ringing in Frank Corleone’s office at the same time,” I told her. “Sally Salvatore needed representation for his chain of 143 nursing homes throughout the South. Corleone closed him at 125 grand a month. Amazingly, the check arrived before the phone call ended.

“By lunch, the founding partners had picked up l5 clients and some $25 million in yearly retainers. Now, the hard work started. They needed to assemble a brilliant staff, which wouldn’t be hard considering all the legal layoffs in DC. Then there were the furnishings, computers and, most importantly, a private jet.”

“Was Freddy Bear on the jet?” she asked. I saw my opportunity.

“No, but Freddy Bear would write the story in Vanity Fair that detailed how everything went to hell — excuse me, turned icky. Steinberg and Bonkers wanted a Citation X. Corleone and King demanded nothing less than a Gulfstream IV. They compromised by signing for both.

“From there, it was all downhill. Though the business poured in, the expenses rolled out even faster.

Conflicts became battles and battles became wars. The partners used the jets like taxis, and practically overnight the magic carpet ride was over.

“Steinberg, Corleone, Bonkers & King were forced to declare bankruptcy. There were more lawsuits against them than Patton Boggs had lobbyists. They all lived unhappily ever after”

My granddaughter looked confused. “Is that a true story,” she asked?

“Yes my dear,” I said, and bent down to give her a kiss on the forehead. “In fact, there are stories just like this every day in Washington.

“The end.”

Bill Regardie was the founder and publisher of Regardie Magazine.