Evening's Empire

by Zachary Lazar

  He got a job selling undeveloped land outside Wickiup, in Mohave County, for a man named George Wickman at the Star Development Corporation. When they disagreed over sales practices, he got a job with Richard Frost at the Arizona Land Corporation, or ALCO. He used the reference from John Roeder for both jobs. From his car, he’d viewed the respective subdivisions—not the spectacular pink rock of the Grand Canyon, nor the Phoenix Valley, with its eerie ranks of saguaro rising on the mountainsides like abstracted human figures. The subdivisions were fenced off by rusted lengths of barbed wire. There was nothing to see but clumps of gray rock and sand, a dry bush here and there—cholla, ocotillo. You looked out the car window at it and you felt abandoned, futile. The nearest town had a gas station and the ruined barracks of a government boarding school where Apache children, taken from their homes, had been made to speak English.

  Thirty dollars an acre—sometimes less—retailed at whatever markup you dared to ask. There was something solid and immutable about the land that felt like a counterweight to all human foolishness. You cut it up into squares and laced barbed wire around the edges and the land did nothing, as if it knew that you and the barbed wire would go away. Its value was not just symbolic. It was not just gold, it was earth. You could call it “North Star Hills,” create a logo and a slogan, print fliers with an artist’s rendition of the golf course and trout pond planned for next year, and the barrenness of the land would seem to justify your deceit, for the barrenness was eternal.

  He had a criminal record, so he could not get a license to sell real estate in Arizona. When Richard Frost found out he’d been working without a license, he was fired again, but three days later he formed two corporations, Grace and Co. and Diamond Valley, so that he could carry on as a broker for Frost’s ALCO without the name “Ned Warren” appearing on its payroll. Richard Frost kept his ties to Warren because Warren could sell anything, including isolated, quarter-acre parcels of desert scrub. It didn’t matter if the buyers could even afford the payments on their lots. What mattered in the land business, as Warren saw immediately, was not the sale of land but the generation of contracts and mortgages, indebitures that could be sold to a third party—a bank or an investor—or used as collateral for a loan—abstraction upon abstraction, world without end.

  The term for the mortgages was paper. A bundle of mortgages was called a package. There was nothing illegal about selling paper to a third party. There was nothing illegal about paying $25 to set up a corporation with your mistress, Donna Stevens, as president, and yourself, the sole stockholder, unlisted as a company officer. It was simply a way to make money, a way a person with $800 and a criminal record could have a chance at becoming a millionaire.

  Making no little plans, Phoenix’ movers and shakers count on atomic energy to provide some day the vast power needed to bring salty Pacific seawater fresh into the desert.

  —Time, February 15, 1960

  It came out when Warren was still in prison, a four-page story in Time magazine about the economic boom in Phoenix. It described a spendthrift city of Cadillacs and golf courses and fashion boutiques in adjacent Scottsdale. It told of a cocktail party at which, on the spur of the moment, a group of drinkers had put together almost $1 million to create a new building downtown, the Guaranty Bank Building. Drinkers, fantasists—the money in Phoenix looked childlike, something out of a Hollywood farce. But all his life he had banked on the Hollywood farce. Only the naive thought that the Hollywood farce was not an accurate reflection of the way things worked.

  In the Time article, there was a profile of a young millionaire named Lee Ackerman, a land developer who was planning a run for governor that year. When Warren first met Ackerman, it was the fall of 1963, almost four years after the article in Time. They were in a room full of businessmen and their wives, gathered there to raise funds for Warren’s acquaintance, Ackerman’s friend, John Roeder, the state senator. Ackerman was a member of the Democratic National Committee. He had been a hero in World War II, a pilot in Africa. People in Phoenix thought of him the way they thought of JFK.

  “I see you were talking to my friend Dave Rich over there,” Ackerman said, shaking Warren’s hand.

  “Dave Rich from London,” Warren said.

  “A character. He couldn’t believe the sun when he first came here. London was still a ruin then—there was still rubble from the war. He came here on vacation and he never went back. He and I went in on some land deals and he made so much money that I sold him my summerhouse in San Diego.”

  Warren nodded. He and I—the good grammar struck him. “I’m in the land business also,” he said. “Mostly north of here, in Navajo County. We should get together sometime for a drink.”

  The story of David Rich was a token, he realized, a cliché about the American dream that even Ackerman knew was corny, but it was the kind of cliché that everyone agreed with, that opened the door for relationships. He guessed what Ackerman was thinking: that Warren had arrived in Phoenix with a stake raised back East in machinery or electronics. He looked at Ackerman and saw a displaced Harvard graduate—he remembered Harvard from the Time article—still buying clothes from Brooks Brothers, a winning figure made lazy by a lack of competitors. Warren wore a gray suit and a dark tie and a no-nonsense silver wristwatch. He had the trim body of an athlete. He liked Ackerman immediately—they liked each other immediately. They talked about Cambridge and Boston, where Warren happened to have grown up—the Lawrence School, Worcester Academy, not Harvard in Warren’s case, but Penn. When Ackerman mentioned he was from St. Louis, Warren responded genially, not with the Cardinals but with talk about the Italian restaurants on The Hill—not with the obvious but with the specific. He showed Ackerman a picture of a Rolls-Royce he’d looked at on a recent trip to London, speaking of London. “Too expensive, but a beauty,” he said. He confided in Ackerman about the back pain he sometimes got, and Ackerman liked him for the comic way he bent over and rubbed his spine, his drink rattling in the other hand. He didn’t seem to be the kind of person who would ever get back pain.

  He saw the openings before other people did. He saw them and exploited them, not for the money—not entirely, or even primarily—but because the game fascinated him, its secrecy and complications. It was not money, it was the feeling of invisibility, of walking into a room and finding the weak points, working your way through the scenarios, thinking three steps ahead, effacing your own cunning so that nobody but you would ever have the chance to admire it.

  “I want you and the others to go over to the bars on Van Buren tomorrow night,” he told Tony Serra, a lot salesman at ALCO with skeptical, sleepy eyes. “Not a fancy bar, go to Van Buren, or the Ivanhoe, the dives. Offer everybody a hundred dollars, give them a name, get them to sign the name on a contract. Not ‘John Doe.’ Not ‘Joe Smith.’ Use a good name. Get the phone book and find some real names.”

  Serra looked down, drawing some lines on a notepad on his thigh. “A pretty easy sell,” he said. “The Ivanhoe on a Friday night.”

  “Make sure the address is a real address, the name is a real name. You’ve filled out enough credit reports by now to know how this is done.”

  The contracts he gave Serra were ALCO contracts, but the land was not ALCO’s land. In a way, it was nobody’s land. It was state land, mostly uninhabitable, a few compass points on a surveyor’s map.

  “What if someone actually calls the phone numbers on those sales?” Serra said.

  “They’re not going to call the phone numbers. They’re going to call the Diamond Valley Corporation if they ever have a problem, but they’re not going to have a problem.”

  “They’re not going to get paid.”

  “They’re going to get paid. Why wouldn’t they get paid?”

  Serra thought about it for a moment. In St. Louis, he had been in the insurance business for a while, another commission-based business, so he knew a little bit about how this was done: sell the policy, split the commission with the buyer, make a few paymen
ts to quell suspicion, then let the policy lapse. “You’re going to make the payments yourself,” he said.

  “Someone’s going to buy a mortgage from me for thirty-five hundred dollars,” Warren said. “ALCO’s going to pay me a seven-hundred-dollar commission for making this sale. It doesn’t cost me very much to keep up the payments for a few months to make it look right. I’ve already made forty-two hundred dollars.”

  Serra nodded. “Poor Dick Frost.”

  “You’re not bad. You see where this is going.”

  “I guess, what, eventually you assign them one of Dick’s mortgages. Switch it out for a good one. Give Dick the delinquents.”

  “Something like that. I may run it through a few corporations first, to make it more complicated. There’s a lot of different ways.”

  No buyer, no land. Out of nowhere, a $3,500 mortgage with an address and a phone number and a credit history. The buyer and the land were ciphers anyway. No one ever came to see their lots—their lots were too far away to go and see. It would be years before they had enough equity to claim title to their lots. They put 10 percent down, signed a mortgage for the rest, and you sold the mortgage for cash. There was no real reason not to sell the same lot over and over again—no one ever owned it or even knew if it was there. It got him thinking about the possibility of using no land at all.

  Dear ______,

  It has come to our attention that the purchaser of lot X in the Arizona Land Corporation subdivision Y is no longer current with payments on mortgage Z, as administered for us by the Minnesota Title Company. As per our contractual agreement, Diamond Valley Corp. is hereby reassigning you Arizona Land Corporation mortgage A on lot B in the same subdivision, of equivalent value. Your monthly disbursement will remain the same. We hope that our prompt attention to this matter will inspire your continued confidence in your investment program with Diamond Valley.

  Insects, creosote, mesquite. Dry land under sunlight, dry land under darkness—the silence of rocks, the silence of sand in wind, the dark sky, the stars. The stillness of scrubland, dry washes, box canyons, gulches. The barbed wire sagging and rusting on posts.

  Before you could even put in a road or a water line, you first had to find investors to buy the land as it was. Or if you could not find them, you could invent them. No need then for the slide presentation to a room full of sixty-year-olds in a hotel restaurant in Buffalo. No need for the boiler room, the ten salesmen claiming that the Gallo Wine Company was moving three thousand jobs to Navajo County and land prices were about to soar.

  Build up a company on paper, inflating its value with a flood of sales, a flood of cash flow. After compromising its assets, taking as much as you could, sell the company to someone else. He would find, over time, that the process usually took about eighteen months. He sold Lee Ackerman Diamond Valley in early 1965, more or less on this schedule.

  They went to the police department on Washington Street—business partners now—to register Warren as an out-of-state convict. This was on February 18, 1965. Afterward, Ackerman drove Warren uptown to North 44th Street to speak to the real estate commissioner, J. Fred Talley, about finally getting a license. In his briefcase, Warren had an envelope containing $200, a measly figure he had picked himself, but having seen Talley a few times before, he knew he had not underestimated him.

  He had “spent some time with Uncle Sam,” he’d told Ackerman, implying that it was for tax evasion, something that could have happened to anyone with the wrong accountant. “Lots of hassles and lots of ways around the hassles—that’s what my year in Danbury was like. Probably not so different from the air force,” he’d said. It somehow sealed their relationship, the casual way he spoke of his time in prison. Ackerman happened to belong to a group called Heart, Inc., which helped find employment for rehabilitated convicts. Warren’s past made him feel like a friend, not just a business partner. His rehabilitation was an indication of things they had in common: resilience, grit, an instinct that the world was manageable if you had half a brain.

  “This is Uncle Fred,” Ackerman said, standing behind the commissioner, leaning forward with his hands on Talley’s shoulders. “Uncle Fred is a tough old sumbuck.”

  Talley was still seated at his desk, looking dyspeptically at Warren with small eyes behind large, dark-framed glasses. He was a fat man with a sunken chin and protruding ears and a pinched, inverted mouth—a slumping octopus of a man in a brown suit and a bolo tie.

  “Nice to see you, Fred,” said Warren drily.

  “Don’t get me all greased up. It’s too early in the day to get fucked,” Talley said.

  “All this barnyard talk. I’m not used to it.”

  Talley put a fist to his mouth and coughed. “Lee’s an old friend of mine,” he said. “That’s why you’re here. You know how many people I have working under me?”

  “I have no idea.”

  “Three. Three investigators for the state of Arizona. All I can do is make your life a little harder or easier. Just like you can make mine harder or easier.”

  Ackerman patted Talley’s shoulders and indicated that Warren should sit down in one of the chairs in front of the commissioner’s desk. “I hear you got top scores on the exam,” Ackerman said, looking at Warren.

  Warren didn’t answer. He saw that Talley had the license already prepared, saw it sitting on top of a pile of documents. Talley slid it across his desk and Warren looked at the commissioner’s signature and the state seal and then at his own name, Nathan J. Warren, typed in beside the words Western Growth Capital, Inc., the name of the land company he had just started with Ackerman after selling him Diamond Valley.

  “Tell your son he can start work next month,” Warren said to Talley.

  “Give him till May. Let’s say May fifteenth.”

  “Fine. I’ve got something for you in a little envelope here.”

  “Tell your friend John Roeder it’s been a long time.”

  “I’ll do that. I’m sure we’ll all be seeing a lot of each other from now on.”

  The big fish answer to the small fish. That’s what Warren’s mentor, Nathan Voloshen, had liked to say. The small fish were the ones who would protect you from the big fish. The small fish—the party officers, the county and state bureaucrats—were the ones who enabled the big fish—the judges, the politicians—to live out their public lives.

  At Voloshen’s level, it was the New York Stock Exchange, it was building highways in Florida, it was doing favors for the Duvalier government in Haiti. Voloshen was an attorney and lobbyist who did his deals not on K Street but right inside the office of the U.S. Speaker of the House, John McCormack. He had brought Warren to Washington, D.C., just a few days after Warren’s parole in 1960, and had had him put his feet up on McCormack’s desk. He had asked him how it felt. It had felt like a veil of immunity. Some alchemy of odors and fabrics and dark mahogany had made the law seem a perfect abstraction, a power you partook of by desecration, by putting your feet up on a congressman’s desk and dialing a number on his phone.

  A year later, he was in Phoenix. Five years later, he was a millionaire.

  3

  David Rich was speaking to his accountant, Ed Lazar, the door closed on an office covered in framed citations for contributions to Israel and local charities. Rich was a small, neat man with an animated face and cheerfully mischievous eyes. His dark suit, and the solemnity of what they were discussing, were somehow lightened by his East London accent, which sounded almost Australian.

  “I watched Lee Ackerman turn into someone I didn’t recognize,” he said, leaning back in his chair. “I’ve known him for eighteen years. Most of that time we were in business together. He was handsome, he had a good head for numbers, you couldn’t help but like Lee. But then he came to me before Diamond Valley’s collapse and asked me to buy twenty-five thousand dollars of mortgages.”

  They were worthless—Ackerman had mortgaged the same piece of land two or three times, thinking, perhaps, that it didn’t matt
er, that since the time payments were so small, no one was ever going to take title anyway. But half of the mortgages weren’t even current. Rich had lost the whole $25,000.

  Ed ran his hand over his knee, looking down, assessing the story because it didn’t jibe with what he thought he knew. Dave Rich had been one of his clients for the past several years. It was only this week that he had learned of his connection to Ned Warren. He was trying to remember a series of newspaper stories from the year before—1967—about Warren and Ackerman, the kind of thing you skimmed if you read it at all, letting the photos and their captions do most of the work: “Lee J. Ackerman, Politician, Investor,” “Nathan J. Warren, Two Prison Terms.” It was the kind of story that left a strong but blunt impression, enough to muster an opinion about if it came up in conversation but not enough to support that opinion. He remembered there were some fraudulent deals. Selling land in a bar, phony sales. He remembered something about Warren’s prison record. He’d been in Sing Sing. Ed remembered that.

  “Ned was into all kinds of rackets,” Rich said, breathing out in disgust. “But this was years ago, fifteen years ago. I understand, I did some checking up on him, too. He’s in business with Richard Stenz now—Richard’s some sort of higher-up in the Republican Party, very straight. Before I made any loans, I talked to Richard and he told me that Ned was completely reformed. Now, I agree with him, but I also understand your concerns. It wasn’t Ned, though, it was Lee who came in here and sold me those twenty-five thousand dollars of bad mortgages.”

  “Where is Ackerman now?”

  “Lee? It’s a tragedy—the company’s in bankruptcy, he’s in personal bankruptcy. His house is on the market. The last I saw him, he wouldn’t sit down, he was so anxious. Lee was never anxious.”

  Ed nodded slowly, his eyes moving away from Rich to the pictures on his wall. “Warren’s books look fine,” he said. “The last audit was Arthur Andersen. They’re not exactly in the business of lying for people, not for people like Warren anyway.”