An American Lion

This is a familiar story:

Question: When our sister died ten years ago, my brother became the trustee of her five-year-old daughter’s trust. Drew invested Mandy’s money in a business he was starting, and Mandy received stock in return. The business folded this year, and now the stock is worthless. Shouldn’t Drew repay our niece the money he lost? He says what happened is nobody’s fault.

Answer: That’s just the way the investment cookie crumbles, is it? Drew’s probably also thinking that if his company had been the next Google, he’d be a hero for making Mandy rich.

Well, he’s right that a good outcome can obscure bad judgment. But he’s wrong to imagine that what happened to Mandy’s inheritance is nobody’s fault. It’s his fault. Moreover, your brother wasn’t just foolish or unlucky, he was unethical. First, instead of handling your niece’s money responsibly, he poured all of it into a single, untried business. If Drew either didn’t know enough or didn’t care enough to invest more wisely than that, he had an obligation to turn the job over to someone who did.

Ouch!

Many of you know that Rogers Defence Industries, the company that Father founded after he left the Pinkertons to go manufacture riot control vehicles, foundered in the 1970s, due in some part to the ending of the Vietnam War and due in large part to Father’s decision to make riot control vehicles that fired potatoes and broken glass at rioters.

The value of RDI was once estimated at a billion and a half dollars, and this was in 1967. If you divide up the company, amongst my two brothers, my sister, and my horrible, horrible mother and my not so bad step-mothers, my weighted slice of that is a good $300 million dollars.

Instead, we deposed Father and put him into retirement in 1979 (New Year’s Day, if I remember correctly). Chetley, my brother, took the remaining Riot Control vehicle division and spun it off into a small company with offices, factories, and warehouses in California, Mexico, and Germany. Chase, my other brother, took the dangerous chemicals division and sold it to the Chinese in 1987 for eight hundred thousand dollars (it’s now valued at $348 million), and Dierdre, the baby of the family, took the charity and weapons procurement divisions and now makes a pretty good living remanufacturing old army rifles for poor people who want to supplement their diet with deer hunting. I took the finance division and created Norman Rogers Investments, and I did rather well with the investment banking portfolio that I built up until President Clinton ordered the Justice Department and the SEC to shut me down in 1994 and sent me to prison for a crime they could not possibly have known that I committed.

Now, thankfully, I’ve never been dirt poor. I’ve been down, and I’ve been depressed, but I’ve never been poor. Father owned a lot of property, and whenever anyone in the family has ever needed money, we just come together and sell something that Father bought when times were flush. I can remember Christmas 1982, and how we were all down because of the economy. Chetley and I needed to buy new homes, because we were both getting divorced at the time, and Dierdre needed to buy another Chagall. Chase suggested we sell the family home, and tell Father it had been repossessed, and so we did it, we sold it for a nice profit, and we tricked Father into living on the Admiral Hassenpfeffer for six years.

Father owns a strip mall in Cleveland, Ohio that we can’t get clear deed and ownership of, and that has been Mr. Peej’s special project for the last few months. Once we figure out who should be paying us rent, we’re going to collect it, bank it, and then burn the place to the ground if it’s more valuable to us in that form. Father’s labyrinthine financial schemes and ownership arrangements will take generations to sort out.