Business Update with Mark Lacter

Frank McCourt's sleight-of-hand

At last, someone takes a closer look at how the Dodgers owner has been able to bankroll his business operations and over-the-top lifestyle. Basically, he borrowed, then leveraged, then borrowed some more. The LA Weekly's Gene Maddaus sums it up this way: "For a very successful real estate developer, he has actually developed very little." Examples abound of McCourt's sleight-of-hand, going back to the 1970s with Boston real estate developer Jim Craig.

"The two fought over a piece of land that would become the cornerstone of McCourt's real estate empire, and the collateral for his purchase of the Dodgers. Their parting was not amicable. 'It's one of those sad cases,' Craig told the Weekly recently. 'You have people who are that ambitious and have the brains. It's just too bad they don't have the scruples to go along with it.' Craig went on to earn a degree in education when he was 65 and finished his career as a teacher in the Boston public schools. He is now 85, and has been legally blind for the last 15 years. One of the last times Craig saw McCourt was in a men's room, nearly 30 years ago. As they stood side by side at the urinals, Craig said, 'Frank, I really would never contemplate doing any business with you ever again.'"

Early on, the Weekly reports, McCourt came off as a guy who could not be fully trusted, someone who would gladly push his partners under a truck if it meant a better payday. What's amazing is that it's taken this long for the muck to be unearthed. (Notably absent from the current coverage are the local publications that showered him with credulous praise a few years back.) In reading the McCourt piece, I was reminded of a moment in the Oliver Stone movie "Wall Street" when the slithery Gordon Gekko reminds his young associate Bud Fox what the game is all about:

"Money itself isn't lost or made,it's simply transferred......from one perception to another, like magic. This painting here.I bought it ten years ago for $60,000. I could sell it today for six hundred.The illusion has become real. And the more real it becomes,the more desperate they want it. Capitalism at its finest."

"How much is enough, Gordon?"

"The richest 1% of this country owns halfour country's wealth. Five trillion dollars. One third comes from hard work,two thirds from inheritance... ...interest on interest accumulating to widows and idiot sons......and what I do:stock and real-estate speculation. It's bullshit. You got 90% of the American public with little or no net worth. I create nothing. I own."

 

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