King Larry

by James D. Scurlock

  Guerrero had good reason to ignore his friend’s advice. The feds had provoked an almost identical showdown at the Department of Finance two years before and the governor had quickly given in to the audit.

  But Guerrero followed Hillblom’s advice anyway and advised the clerk not to allow the Inspector General’s auditor access. So the man returned to his hotel, notified his superiors, and found himself leaving Saipan almost as soon as he’d arrived, empty-handed. Hillblom quickly filed a lawsuit on behalf of two locals that demanded an injunction denying the Inspector General access to their tax returns. When the CNMI Superior Court sent the lawsuit to federal court—the proper jurisdiction of any action in which a federal agency is an indispensable party—the litigants appealed to the CNMI Supreme Court. Coincidentally, one of the Court’s permanent justices happened to be off-island. His substitute was Larry Hillblom.

  Common sense made the conflict of interest obvious: a judge hearing a lawsuit that he himself had filed? But Hillblom did not recuse himself. And on Boxing Day, 1991, the CNMI Supreme Court rendered its decision: the Inspector General was not authorized to audit the tax returns of Commonwealth citizens. As usual, Hillblom crafted an opinion restating his interpretation of the Covenant as well as his opinion that the Territorial Clause did not apply to the CNMI.

  United States v. Guerrero was filed in Saipan’s federal court two months later. Unfortunately for Hillblom, the Commonwealth’s liberal federal judge, Carter appointee Alfred Laureta—the judge who had handed down the default judgments on Continental’s executives and allies and ordered the State Department to issue dozens of passports to clients of Hillblom & O’Connor—had recently been replaced by a Reagan appointee named Alex Munson. Munson, a large man with a thick gray mustache who patrolled the island in a giant Lincoln Town Car, did not think much of Hillblom or his legal theories. If Saipan was the Wild West, then Munson was the perfect sheriff sent to tame it—a tough California judge, appointed by a president whose Secret Service code name was Rawhide, in order to restore law and order. He was revered by most of the expats and feared by everyone else. Not surprisingly, Munson quickly and unequivocally sided with the feds. “If it’s good enough for Ronald Reagan then it’s good enough for me!” the big man declared, as though such logic was self- evident. Munson threatened the governor with huge fines and jail time for every day he refused the Inspector General access to the CNMI’s tax records. With no appetite for either, and no way to hide out—as Hillblom had from Judge Roberts’s contempt order seven years earlier, and from the CAB’s auditors before that—Guerrero folded. But I am told that by the time the auditor returned to Saipan, Hillblom’s tax returns had vanished.

  That did not prevent Saipan’s chief instigator from fighting on. In both of his two major legal victories—Loomis and Continental—he had started in a defensive position, lost the first round and, several years later, won on appeal. United States v. Guerrero was on the same trajectory. More important, it was a near-perfect test of the CNMI’s sovereignty—and the legal theories that Hillblom had espoused for ten years. Energized, Hillblom burrowed in his tiny den, among his law books and photocopies of the opinions he had written as a Supreme Court justice; he was cobbling together several core legal theories as a basis to fight for the CNMI’s internal sovereignty. He would present an exhaustive appeal of Guerrero to the Ninth Circuit in San Francisco, which he himself would argue. Hillblom was determined to remove the Territorial Clause from around the necks of his fellow Micronesians once and for all, to slay the threat of American imperialism. It would, of course, take months to write, to be heard, and, finally, to be adjudicated—maybe longer. In the meantime, he seemed oblivious to the cracks quietly spreading beneath his own feet.

  Twenty-Six

  Clash of the Titans

  A five-minute walk from the Nauru Building, across Beach Road from a narrow park where two young Chamorros are selling fresh yellowtail from a cooler perched on the tailgate of their Nissan pickup truck, lies the newish CNMI courts complex—a two-story white monolith that would look comfortable in just about any small county seat in the States. Under the courthouse’s porte cochere, several locals loiter with their cigarettes. One exhales and nods briefly as I approach. A stocky Yapese U.S. Marshal grins a mouthful of submerged red teeth and waves me through the metal detector, which appears to be either broken or unplugged. To the left, behind two glass doors, sits the Larry Lee Hillblom Law Library, announced in metallic Times Roman, but it is the clerk’s office that houses Hillblom’s legacy, and that is on the opposite side of the tiled two-story lobby.

  The irony of Larry Hillblom is that he was an intensely private man whose life is chronicled in millions of pages of very public court filings around the world. Most of those pages reside here, filed under In the Matter of the Estate of Larry Lee Hillblom, aka Civil Case #95-626, which seems like as good a place as any to begin an investigation of the second half of Hillblom’s life. I have spoken to a few of the workers here by phone already, but none is apparently expecting me or recognizes my name. The very polite young islander in pressed slacks and a perfectly ironed blue polo shirt—Dexter is the unlikely name—seems a bit incredulous that I have flown here from Los Angeles. Certainly I must have more exciting things to do on the mainland, his eyes say. The look is familiar by now; every young islander wishes they were in Los Angeles. Or New York. Or Cleveland. When I ask “Dex” to have a look at the Hillblom case his eyes widen a little more. “That’s a very big case,” he says. “It has its own wall in the archives room.”

  “Well,” I reply, “can I just start at the beginning? I’d really like to see the original probate filing and the will at least.”

  “Hold on,” he says, before disappearing into a side office for several minutes. He marches out a little sheepishly.

  “My boss wants to know who you are,” Dex says.

  “I’m a writer,” is my reply. “I’m writing a book about Larry Hillblom.”

  “I see,” he says. And then he disappears for another five minutes. “I’m very sorry,” Dex tells me as soon as he returns to the counter, “but we’re understaffed at the moment. Do you mind coming back later?”

  “How much later?”

  “We close at four thirty. I’ll try to pull the first folder for you before then.”

  “Done.” I smile. “But I’d still love a copy of the original filing—and the will, if you don’t mind.”

  “Copies are twenty-five cents apiece. You pay next door.”

  “I know.” The time difference has made me a little testy. “I read it on the website.”

  As I stroll back past the Hillblom Law Library and the broken metal detector, it occurs to me that I have absolutely no idea how to fill the rest of the day—no inkling of which friends of Larry’s still live here (if any) or what history I could possibly uncover from the documents that will apparently be doled out in small quantities at the whim of an invisible woman in the clerk’s office. I spend the next eight hours moving into the Hyatt, walking a long bike path that hugs the western coast, eating Korean barbecue in an empty restaurant, and (finally) exploring the huge DFS mall—several acres of Prada and Hermès and Louis Vuitton, plus a Hard Rock Cafe and a tourist shop that sells “Chamorro Chip” cookies and plush teddy bears with carrot noses called “Saipan-das”—as a polished player piano bangs out Schubert. I visit a tiny museum—the former prison during the Japanese occupation—where photos of skinny Chamorro children wrapped in traditional sumo mawashi sit before their glum Japanese teachers/occupiers. Curled up behind the wheel of my impossibly small Toyota, I scour the island for visible evidence of Hillblom’s legacy, only to arrive at a disconcerting conclusion: Maybe I’m too late; maybe he has disappeared. But later that afternoon, Dex will prove as good as his word; he will hand me copies of the first two dozen pages of CNMI Civil Case #95-626, the closest thing to a biography of the man as has yet been written. A cursory glance of the case’s early filings will yield something that I had not
known existed: a local nemesis.

  Like most enemies, Theodore “Ted” Mitchell began as a friend. “When he arrived on the island,” the attorney Mike Dotts tells me over lunch at a beachside café not far from the courthouse, “Mitchell was probably the most prominent attorney on Saipan, and he was Larry’s favorite.” Dotts is a junior partner in Bob O’Connor’s law firm. During the several years before Hillblom’s presumed death, he was Larry’s personal attorney and a board member of the Bank of Saipan and UMDA, where Mitchell had been general counsel during the Continental Airlines war. “None of us liked him,” Dotts continues, “but Larry always stood by him. He’d say, ‘If you were accused of murder, who would you want representing you? Some pinstriped lawyer or Ted?’”

  Dotts rolls his eyes as he takes a bite of his mahimahi burger. He’s a slight man who, like O’Connor, moved here from California seeking a more adventurous life. He had originally interviewed for a position at the CNMI Legislature until being told of an eccentric multimillionaire who needed help suing the federal government. Dotts was game, though initially he was more of a personal assistant—picking up the morning pastries and coffee, overseeing Hillblom’s failed rodeo-brothel-turned-drive-in-movie-theater, paying Josephine her monthly stipend, and fending off bill collectors, of whom there were many, since Hillblom cleared both his mail and messages by dumping them into the trash bin, unread. Another attorney who worked for Larry tells me that Hillblom referred to Dotts as “the gerbil,” but he was eventually entrusted with Hillblom’s personal checkbooks as well as some of his thorniest problems, the thorniest of which was Ted Mitchell.

  In July 1991 a victorious Mitchell walked out of the CNMI Supreme Court grasping a momentous ruling. Citing a paragraph of the Commonwealth’s Constitution that prohibits nonnatives from owning land, the court on which Larry Hillblom sometimes sat had just invalidated any real estate sales to companies that had been formed by nonnative investors, even if they technically met the 51 percent native ownership requirement. The ruling was a watershed for Mitchell, who had sued Japan Airlines, the owner of Saipan’s largest and newest resort, the Nikko, on behalf of the islanders who had originally owned the property underneath the hotel. The islanders technically had sold the property to an entity called Realty Trust Corporation, but Mitchell alleged that RTC was a fraud—a “resultant trust”—that was secretly controlled by nonnatives, i.e., people with less than 25 percent native blood. Under Article XII, the paragraph of the CNMI Constitution that prevented nonnatives from owning real estate, Mitchell argued, resultant trusts like RTC were unconstitutional.

  For months, Mitchell had fought virtually alone against a huge Japanese corporation and its large law firm—Carlsmith Ball—and now he had won. And, as everyone knew, the outlawing of “resultant trusts” would transform the island. Virtually all of Saipan’s prime beachfront real estate was controlled by foreign or American investors, including Mitchell’s old boss, Hillblom. By turning Article XII into an absolute, the Supreme Court had just opened the way for any islanders who had sold or leased their property before Saipan’s real estate boom to get their land back—perhaps even with a shiny new hotel and lagoon pool on top. Mitchell gleefully predicted a massive calamity: “The Japanese firms will lose huge chunks of money,” he told a reporter from Guam Business Magazine. “They will sue Carlsmith and all the lawyers that told them these transactions were legal. It will throw all the lawyers in bankruptcy. It’ll be great!”

  The one landowner Mitchell refused to take on was Larry Hillblom, even though Hillblom owned several prime properties through his San Roque Beach Development Corporation, including the land underneath his home and a large tract next to the Nikko Hotel. (Most of SRBD’s shares were owned by a Chamorro friend, and Hillblom’s onetime secretary, Debra Diaz, but neither had invested any money, and Diaz did not even know that she was a shareholder until it was brought to her attention in a deposition.) Dotts tells me that Mitchell was scared of Hillblom’s relentless and very personal litigation style. And while it is certainly true that Mitchell knew Hillblom as someone who relished a fight, there was more to Mitchell’s avoidance of Hillblom than fear. Both men possessed brilliant legal minds, and they had both supported the establishment of the CNMI Supreme Court and fought the federalization of the islands. The difference, of course, was that Hillblom had made a fortune doing it while Mitchell had not. The disparity was not lost on Mitchell, who had accused Hillblom of being driven by nothing but his own financial and political self-interest. Mitchell, in fact, not so secretly suspected that Hillblom owned a majority of UMDA, which would have been illegal under both its charter, and now, under the “resultant trust” ruling, because of UMDA’s large landholdings throughout Micronesia.

  Yet they had coexisted, with offices on opposite sides of the same floor in the Nauru Building (now Marianas Business Plaza), for years. After Mitchell had left UMDA, Hillblom had continued to barge into his office for an impromptu legal debate or two. “He always bursts in without warning,” Mitchell would complain, “barges into my office and proceeds, depending upon his mood and his subject of the moment, to harangue or pontificate immediately. Sometimes, there is a gem of truth or useful information in the torrent of otherwise confused and confusing rhetoric. Often, he merely repeats his speech of the day or the week before. . . . He talks fast, he moves fast, he jumps from one subject to another in the space of a few minutes.” Mitchell ridiculed Hillblom’s brains as “scrambled.”

  But now it was Mitchell’s success that inspired his adversary’s wrath. Standing in the doorway of Mitchell’s modest office, Hillblom shredded the legal reasoning behind the Supreme Court victory, particularly the “resultant trust” idea. “It takes two to tango,” Hillblom admonished his former employee, promising that if the opinion was upheld and landowners were forced to give up their holdings, then Mitchell’s clients would never see any benefit because they were equally guilty. Echoing a chorus of his friends in the Legislature, he accused Mitchell of trying to enrich himself while destroying the island’s economy.

  “If I’m greedy,” Mitchell shot back, “I’m insane, because the odds are about ten trillion to one that I’m ever going to make a dime off any of this.”

  Not everyone agreed. As the months wore on, executives at Japan Airlines became concerned enough of Mitchell’s possible success that they ordered their engineers to draw up demolition plans for the 400-room Nikko Hotel, which their attorneys at Carlsmith Ball forwarded to every member of the CNMI Legislature. The normally poker-faced Hillblom became increasingly nervous; he knew that Mitchell was smarter than all of the attorneys at Carlsmith combined and that if they lost the Nikko, the other hotel-resorts along Saipan’s west coast would crumble like dominoes. Then his own house. Then UMDA. But there was nothing that he could do. Without Mitchell’s suing him personally, Hillblom had no way to advance his own legal arguments about Article XII in court. He was reduced to sitting back and watching Carlsmith milk JAL and fuck up everything.

  “Larry was dying to get a dog in the fight,” Dotts recalls. And he did, eventually, using a familiar tactic: he filed bankruptcy on San Roque. Of course, neither he nor his real estate company was really broke, but it had worked for People of Micronesia, hadn’t it? Hillblom once again argued that the mere threat of litigation—and the Carlsmith firm’s assumedly incompetent response to it—would inevitably bankrupt his real estate development company. Whether the new federal judge on Saipan would agree was questionable, so Hillblom went a step further. He threatened Carlsmith with a massive malpractice suit. If Saipan’s largest law firm did not do his bidding, Hillblom would ruin them himself.

  Dotts smiles. “That ruse worked.”

  Twenty-Seven

  SMART

  The year 1992–93 was one that most [Saipan] residents would probably like to forget. There were setbacks for the government, a serious blow to private enterprise, and social problems such as illegal drugs began to have a very serious impact on society. Little that coul
d be considered positive occurred.

  —The Contemporary Pacific

  “You’re looking at the luckiest guy in the world!” Hillblom shouted from the center of his resort-style swimming pool, where he was relaxing at his swim-up bar under the shade of a terra-cotta gazebo. He had just turned fifty years old—a milestone, he told his friend Bob O’Connor, that guaranteed he would live much longer. After twenty-four years of struggle and constant worrying, 1993 was to be a new beginning. Hillblom had accomplished nearly everything in life that he had set out to. He had both shrunk the world and expanded his empire. The hard work now was protecting it. The previous summer, Hillblom had entered a congressional hearing room for the first time in fifteen years to deliver a confident defense of his island, which the World Health Organization and two U.S. senators had called out as a hotbed of corruption, human trafficking, and prostitution. (Hillblom argued convincingly that the CNMI’s human rights record was far superior to that of its former occupier.) Meanwhile, DHL soaring on the wings of its new owners; Lufthansa and JAL’s jumbo jets were literally propelling Hillblom’s brainchild to record sales and profits. Budweiser in hand, and with Josephine at his side in a microscopic bikini, the second chapter of his life spread out before him as infinite as the view from the edge of his swimming pool.

  Larry Hillblom should have been the luckiest guy in the world that day, but the photocopies that Dex has just handed me suggest that his luck had begun to run out by then, that even the barstool upon which he sat was under siege.

  Hillblom was served in his office on April 7. Mitchell’s complaint, which I have the guilty pleasure of reading fifteen years later, might have been written by Hillblom himself for its hyperbole and the almost frantic tone of its accusations. First, Mitchell calls out Hillblom’s real estate development company as a “mere sham” and demands that he return his mansion to its rightful owner, who happens to be Mitchell’s client. Hillblom, the complaint asserts, had always known that buying real estate on Saipan violated the CNMI Constitution, but rather than bow to local law, Hillblom had chosen to embark on a conspiratorial end run around it, going so far as to fund the lawsuits of several taxpayers demanding that any land recovered should not go to Mitchell’s clients but to the CNMI government. Once Hillblom’s scheme is exposed, Mitchell promises to have him impeached of his special judge status. But that’s just the beginning. The main assault is not on Hillblom’s constitutional theories or legislative escapades; it is on the Hillblom mythos. DHL’s success, Mitchell argues, is almost all due to Peter Donnici, not Larry Hillblom. In fact, he says, DHL has succeeded despite Hillblom’s “erratic, unpredictable and unprofitable” behavior. Its founder is, in fact, one of the worst businessmen that Mitchell has met in his entire life!