By the time of DHL’s board meeting in 1975, Marge Dalsey and her sharpened pencil could no longer keep up. It was then that Marilyn Corral received a long-distance phone call from the Dalseys’ dining room; it was Hillblom, telling her that she had been appointed to replace Marge as treasurer because the company’s headquarters were being moved to Honolulu. “What does a treasurer do?” Corral blurted. She was thirty-one years old and had no financial background. “You know,” Larry replied, “you’ve got to set up an accounting office and do the books.” Of course, Corral would have to get them first, and a few days later, a visibly distraught Marge Dalsey handed stacks of handwritten ledgers over in the middle of her dining room office, where she had spent the past six years holding DHL together on maxed-out credit cards and a second mortgage. “They got Adrian,” Marge told one of the company’s longtime vendors a few days later. She knew that power had shifted to her husband’s socially inept young partner; the company she’d nurtured with such devotion and love had been spirited away to an island paradise halfway across the Pacific Ocean. She was bitter, and her husband had just returned home with a pregnant young Filipina. But she still, somehow, cared for Larry.
Now that Hillblom was in control, he expected total devotion to the cause. “Our families had to come to the office in order to see us,” Marilyn Corral, who had a husband and young daughter at the time, recalls. Because Hillblom arrived at the office a little after 6:00 a.m. and the last batch of couriers didn’t depart Honolulu until midnight, the office was dark for less than seven hours a day—seven days a week. The distribution center, where pouches were sorted, ran twenty-four hours a day, every day. On Friday night, Hillblom insisted that every package in the warehouse had to be either delivered or accounted for before anyone could leave.
Corral was expected to be available anytime Larry needed her. When she took a weekend beach day with her husband, Hillblom was furious and sent Grant Anderson to track her down. Working conditions were no less stressful than the hours. Hillblom prohibited signs in the office, making it nearly impossible for suppliers and new employees to find DHL. Advertising was also forbidden. So too were cameras. Paranoia sometimes seemed to be the only fuel that Hillblom—or DHL—ran on. Returning to the office from dinner with Carla and Marilyn, Larry saw a man holding a couple of garbage bags; he slammed on the brakes, jumped out of the driver’s seat, and chased the guy down the alley until he dropped them. It wasn’t the first time Larry had exploded over nothing. “He’s doing it again,” Marilyn whispered to Carla.
On the early side of 1975, two auditors from the CAB suddenly appeared at DHL’s headquarters. “They just showed up,” Marilyn recalls. “They were wearing suits. They walked into the warehouse area of this customs place where we were all working. The operations manager came and said, There’s two guys from the CAB. Larry and Carla happened to be at the law library. When I got him on the phone over there, Larry freaked out: ‘What are they there for?’ ‘I haven’t even met them yet,’ I said. ‘I’m just alerting you that they’re here.’”
Hillblom drove back to the office immediately, but he was too nervous to go in, so he sent Carla. He knew what the feds were after—they wanted to take a hatchet to DHL’s “compliance disposition.” But also he knew that they would not leave until they spoke to him, so, after Marilyn had taken them on a tour of the facility and Carla had chatted them up, Hillblom finally emerged from his hiding place and introduced himself. But he was so nervous that he pulled out the wrong business card, the international business card with his name imprinted over the title Vice President. He realized his mistake immediately. Turning white, Hillblom suddenly walked out as quickly as he’d walked in. Corral was close enough to see the card. But there was nothing anyone could do. Hillblom himself had just handed the CAB evidence that he had not divested the international company as promised—that he had not only misled the agency but, more important, that he was not behaving.
He drove to the airport that night without a good-bye. He boarded the flight to Guam, leaving his girlfriend and his number one employee to deal with the fallout from his monumental screw-up. “Carla felt threatened,” Corral recalled. “And, of course, I felt threatened from the standpoint that they were trying to find us doing something wrong.” When a hysterical Hillblom dialed in from Guam and, later, Hong Kong, demanding to be told what the auditors were up to, Corral told him to come back and see for himself.
“It was really scary,” Carla says. “I was locked in the room with one of the auditors the entire time. The auditors kept me and Marilyn in different rooms and they made us explain the same things over and over again.”
For two weeks, the CAB auditors tried to make sense of a hodgepodge of records and computer printouts, to no avail. Eventually, they summoned Corral into an office, declared DHL “unauditable,” and left.
By the time Larry reappeared, Carla had moved into Corral’s house. The woman he had wooed by painting DHL as a movement, who had become DHL’s most devoted acolyte, had finally begun to question the man she was working for. When he asked Carla to marry him, she said no—twice. Though she would move back into the house at Kaneohe and continue to work for the company in various capacities for another decade, the intimate relationship was over—even if, for months after their breakup, Larry would sleep on the little couch in her bedroom. He claimed that he was unable to sleep without her nearby.
“Larry hated to be with himself,” Carla would reminisce years later. “He was very lost.”
Seven
The Fighter
“In the course of your research, has anyone ever mentioned Larry being autistic? No? I was just curious.”
L. Patrick Lupo, DHL’s third general counsel (after Steven Kroll and Hillblom himself), perches on the edge of a comfy chair in a solarium overlooking his estate one hour north of London—lush hills once home to the Beatles and now peppered, he says, with Russian billionaires. Lupo is a tall, confident man with thick hair and a groomed mustache. A native of Montana, he has lived in Europe for the past twenty-five years, most of that time as chairman and chief executive officer of DHL, International. More than anyone besides Hillblom himself, Lupo is responsible for DHL’s $4 billion-plus in annual revenues. A dossier of press clippings on his coffee table attests to his stature among the leaders of global businesses; more than a few make note of his razor-sharp wit.
Lupo was a star pupil at the University of San Francisco School of Law when his constitutional law professor, Peter Donnici, asked him to work on an antitrust case he had just filed in federal court in Honolulu. Lupo had never heard of either DHL or Loomis Corp., but he was interested in regulatory law, and the prospect of frequent trips to Hawaii sold him. What he did not know at the time was that DHL was basically broke, so he would be flying back and forth as a courier, which meant always taking the red-eye, loitering around the Pan Am ticket counter near midnight, and receiving his ticket at the last moment—often with twenty-odd bag tags attached. “You’d really feel like you were doing something illegal!” he howls. Which, of course, is exactly what the CAB and Loomis were alleging—and what Lupo had been hired to disprove.
Meeting Hillblom did not inspire confidence. Although Lupo assures me that Peter Donnici would have warned him about the DHL founder’s lack of social grace, their first meeting was a disaster. “He and I were going to Seattle to take depositions in the Loomis case,” Lupo recalls. “And he went through this whole spiel about how Loomis had just about destroyed DHL and how it was populated with bad people and all that, immediately. He had a tendency to get intense right off the bat and you’d really feel like he was in your face.”
Lupo decided to assume the role of objective observer—the role he’d been taught in law school. As such, he did not necessarily believe Hillblom’s sob story. Settling into a chair in the plush conference room of Loomis’s downtown Seattle offices the next morning, however, the young law school graduate, who had yet to pass the bar, found that keeping a lawyerly demeanor w
ould be extraordinarily difficult in the presence of Larry Hillblom. With Donnici preoccupied researching the appeal of the San Francisco judge’s cease and desist, and with whatever money DHL had for lawyers being spent in Washington, Hillblom had decided to conduct the depositions himself. First up was Charles Loomis, the company’s chairman and the grandson of its founder. (“It was pretty clear that he would most likely have not gotten where he was if not for his surname,” Lupo says sheepishly.) As Hillblom worked his way through a stack of Loomis’s internal memos, the chairman’s memory suddenly went blank. Hillblom produced a memo to which Loomis had signed his initials, but the older man shrugged his shoulders and denied any recollection of it. “I used to just write my initials on things,” he explained. “Otherwise they’d just keep coming back to me.”
When the two sides recessed, a frustrated and angry Hillblom took Lupo aside and ridiculed the office’s pristine views of Seattle’s Puget Sound. No wonder they couldn’t compete with DHL on price, he sniffed. Charles Loomis and his cronies were manipulating the law to overcome an economic reality—that they were losing to a more efficient competitor. By the time he returned to the conference room, Hillblom was more agitated than ever.
Picking out a deposition from the pile of papers in front of him, Hillblom began to point it at Loomis, until William Swope, Loomis’s attorney, had had enough. Unlike Hillblom, Swope was a trained litigator who knew the rules. When Swope excoriated Hillblom for not entering the deposition into evidence first, Hillblom ignored him. The argument escalated as Hillblom insisted that Loomis respond and the silver-haired Swope retorted that it was impossible to know what he was even referring to. “Larry’s got all of these stupid stick ’em notes with all of his bloody questions on it,” Lupo remembers, “and Larry’s like, ‘I wanna know! I have a right to know this!’ And Swope says, ‘Let me see it!’ And Larry says, ‘I’m not going to let you see this!’ And Swope says, ‘Give it to me!’ And Larry goes, ‘No! I’m not going to give it to you!’ And they’re going back and forth. And finally, half of it rips, and Larry goes, ‘Let the record reflect that Mr. Swope ripped my deposition!’
“Larry,” Lupo says, grinning, “would get very vexed and very intense and loud in that context.”
He would also get destructive—maybe unwittingly. The month after taking Loomis’s deposition, Hillblom left the coffee machine on during a night session in Honolulu, flooding Swope’s law offices. The next week, he left a hot pot of coffee on the conference table of yet another law office during another round of depositions, causing $5,000 in damages. Donnici received the bill. (“Larry objected,” Lupo recalls.) A few days later, having witnessed a couple of secretaries carrying boxes of documents to the trash, Hillblom surreptitiously raided the Dumpster behind Loomis’s San Francisco offices; Lupo came in to work the next morning to find Hillblom knee deep in a mass of damp paper, half-eaten sandwiches, and rotten eggs, searching for a smoking gun, which he didn’t find. “I can just imagine him inside the bin, bent over, basically stealing all of their documents and running back to the DHL office,” Lupo roars. “It was hilarious. It was typical him.”
Lupo was still not convinced of a conspiracy. On the surface, Loomis v. DHL seemed like little more than legal hardball. But he was convinced several months later when the judge in DHL’s countersuit ordered the CAB to release its internal correspondence, which included a telling memo from the bureau’s chairman, a Nixon appointee named Robert Timm, to the head of his enforcement division. “Timm said, ‘I had a call from an old fraternity friend of mine, Charles Loomis, and he’s telling me about this unauthorized courier operating as a freight forwarder and blah-blah,’” Lupo recalls. “ ‘Will you investigate this company?’ I think he says something like, ‘If warranted, take action as appropriate.’ Well, when you get that mandate from the head guy—a political appointee and all-powerful at that time, with authority over all the airlines, all air freight forwarders, everything. He’s a seriously powerful individual.”
On August 7, 1975, the Ninth Circuit reversed Judge Conti’s cease and desist order. Loomis, the three-judge panel ruled, had had no standing as a “party of interest” to sue DHL in the first place. Furthermore, DHL was not required to have the certificate that the CAB claimed was needed to operate as a certified freight forwarder. The appellate court acknowledged that the CAB could exercise some authority over DHL and other indirect air carriers without stating exactly what that authority might be. DHL’s fate was therefore bounced back to the CAB, which promptly announced that it would conduct a final review of DHL’s application for a freight forwarder’s certificate—even though the court acknowledged that the certificate might not be needed. Convoluted as it was, the reversal was a clear victory for Peter Donnici and a stunning defeat for both Charles Loomis and his expensive attorneys.
Hillblom, however, had no time to relax or to celebrate. After months of surveillance, the Hong Kong Postal Department had invaded DHL’s Asia headquarters on a muggy afternoon. Pushing past a modest green door* in Hong Kong’s rancorous Wan Chai District, uniformed officers had detained the station manager as postal inspectors swarmed the warehouse, impounding hundreds of DHL pouches, tearing them open, and combing their contents for evidence that DHL was violating the postal monopoly. By the time Hillblom spread his lanky frame across four seats in the back of a Hong Kong–bound Pan Am 747, DHL had been indicted for the criminal offense of transporting letters, a violation of the Postal Department’s monopoly on carrying mail. If the magistracy court agreed with the Postmaster General’s definition of a letter, he knew, the entire express courier business would be a criminal enterprise—and so, of course, would DHL.
Steve Kroll would follow Hillblom across the Pacific a few days later, but the stakes were too high for them to even consider writing DHL’s response themselves. What they needed was an advocate who exuded a quality that Hillblom terminally lacked—gravitas—but who could also be relentless as hell.
Eight
Hong Kong
“He was charming, endearing,” purrs the elegant Eurasian man in the tailored suit sitting across from me. “Always in blue jeans. He felt that the day he wore a suit would be the day he quit the business.”
In 1975, Sir Henry Litton was one of the youngest members of the British Empire to have attained the title Queen’s Counsel, a sovereign appointment reserved for solicitors of a certain experience and reputation. Like barristers, the English equivalent of attorneys, QCs are allowed within the bar that separates practitioners of the law from the public, and sometimes wear distinctive silk gowns and powdered wigs, but QCs do not typically interact with clients directly. Instructed by the clients’ solicitors instead, QCs focus exclusively on the law itself, practicing the law as scholars more than as advocates.
I had wanted to meet Litton from the moment that Steven Kroll told me how proud Hillblom had been of his QC—prouder, in fact, than of anything else he’d accomplished up to that point. And Litton is famous himself—not only as a jurist but as a survivor. In 1973, the high-rise in which Litton and his girlfriend lived buckled during a typhoon. Litton’s legs were trapped by wreckage. As the rains poured and the water level began rising up the side of the hill where his building had once stood, he sang Beatles songs so that rescuers could find him. Which they did, but by then his girlfriend, who had been trapped just below him, had already drowned. Litton refused to allow them to amputate his legs, enduring hours of pain before being set free.
So, on a very hot and very humid day in late July, having endured a fifteen-hour flight from Los Angeles, I find myself walking up a short path through the narrow park in downtown Hong Kong that leads to the island’s Court of Final Appeal, where I have an appointment to meet with the court’s eminent chief justice.
Sir Henry’s office is absurdly large and quiet for a city as hectic as Hong Kong, yet spare enough to remind you that the only thing of real value here is the man sitting behind the desk. Regal is an adjective that immediately comes t
o mind. “Larry really did not need a Queen’s Counsel,” Litton says with a hint of annoyance. And Sir Henry was then involved in something far more prestigious—the historic negotiations for China’s repossession of Hong Kong. But Litton had been charmed enough by Hillblom’s unique brand of charisma to argue his case. How could one resist an ambitious young man who crisscrossed Asia dressed like a hippie? Even the Beatles had worn suits when they’d come to Hong Kong!
DHL’s problems were “huge,” Litton recalls. After all, the Royal Mail, of which the Hong Kong Postal Department was part, was not only more established than Loomis, it was more than twice as old as the United States itself, having been founded by Henry VIII in 1516. The mail had first been made available to the public 120 years later by Charles I, and the postal monopoly had been invented by Charles’s overthrower, Oliver Cromwell, in 1654. Cromwell, who ruled England for five years as Lord Protector, literally stole the mail out of the hands of the private sector, mainly London coffeehouses that had formed a network to deliver letters. He then installed his spymaster as overseer of the mail.
King Larry Page 7
