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Chapter 27 “Let's Get Down to the Meat” Book: The Indomitable Tin Goose Subtitle: The True Story of Preston Tucker and His Car Author: Charles T. Pearson Publisher: Abelard-Schuman Year: 1960 |
26 “LET'S GET DOWN TO THE MEAT”
THE SAME HEADLINES which announced opening of the Tucker fraud trial October 5, 1949, in Federal Court also revealed that, as far as the corporation was concerned, the trial was over before it started. “TUCKER LOSES AUTO PLANT; TRIAL OPENS,” said a red streamer in the Chicago Herald American. And in the Detroit Free Press: "TUCKER LOSES PLANT; TRIAL ON."
With variations, headlines around the world told the story to Tucker stockholders and dealers: that the company was out of business before the first witness had been called.
The enemies were winning. The nightmare had started. Tucker saw it outlined in the newspapers:
“Preston Tucker lost his huge war-surplus plant as he and seven associates went on trial for alleged fraud in the $28,000,000 financing of his rear-engined automobile.
“Federal Judge Michael L. Igoe signed an order returning the sprawling $172,000,000 structure on Chicago's South Side to the War Assets Administration.
“The order gives the court-appointed trustees sixty days to try to sell the ten-year lease on the plant, Tucker's option to buy it for $30,000,000, and the machinery inside the building.”
Igoe's order was curtains for Tucker because there wasn't a chance anyone would put up money while the promoters were on trial, and even less chance that the trial would be over in sixty days. Writers predicted it would be longest criminal trial since M. L. Annenberg was tried for eleven months in 1939 and 1940 for tax evasion. The whole situation had been rigged so Tucker could not win.
Even if Tucker and his associates were found innocent, the company had already, in effect, been tried and convicted, and the government itself had pronounced sentence: without a plant no Tucker cars would be built. Tucker also had been tried and convicted in print. A condensation of the Collier's article appeared in the September issue of Reader's Digest and the November Coronet carried what looked like a toned-down rewrite of the News and Collier's stories.
It could hardly be expected that these would not affect the judgment of jurors in the trial, because there would be plenty of time to read them before a panel had been selected.
To Tucker investors the trial would be a farce, but the stage was set, the actors were ready and the show would go on as scheduled. For the government there was Otto Kerner, Jr., 41, soft-spoken and intense, and two assistant attorneys, Lawrence J. Miller, 43, and Robert J. Downing, 34. Also on Kerner's staff were two men from SEC.
Heading the defense battery were William T. Kirby and Frank J. (Spike) McAdams, attorneys for Tucker. The right sleeve of MAdams coat hung loose, souvenir of the invasion of Leyte when he had been a lieutenant commander in the Navy. Floyd E. Thompson, former Chief Justice of the Illinois Supreme Court, was attorney for Cerf, and defending Pierce was Albert W. Dilling.
There was even a prologue and some comedy relief. When the indictment was returned Kerner sent three deputy U.S. marshals to Tucker's apartment while photographers waited to get pictures of him in leg irons, which the deputies had ready in their car. Tucker had been tipped off and at the time was enjoying the seclusion of the Adler Planetarium. He stayed out of sight until the trial opened, then drove to the Federal building in a blue Tucker, went to the courtroom with McAdams and posted his $25,000 bond.
For comedy relief there was one government witness, formerly on Tucker's payroll, who stayed in a Loop hotel at government expense throughout the trial. Early in the proceedings he decided Tucker was getting a bum deal and he didn't want any part of it, so he solved the problem in his own way. Every day thereafter he showed up at the courtroom drunk, sure that Kerner wouldn't want him on the stand in that condition. He would weave into the courtroom, put an arm around Miller's shoulder and say:
“How 'bout it, pal, you wanna put me on today?”
Miller would pull away.
“No, no. You come back tomorrow.”
It is highly unlikely anybody could have stayed drunk through the four-months trial without getting killed going across the Loop, so the reluctant witness probably at least part of the time just sloshed whiskey around in his mouth in the morning to make a good strong smell. However the witness worked it, he was never called.
On the bench was U.S. District Judge Walter J. La Buy.
Off in a corner near a window in the big courtroom, silent and grim, sat Regional SEC Chief Thomas B. Hart, who three years earlier, almost to the day, had started the series of investigations which already had ended the Tucker automobile. Along La Salle Street brokers said:
“Tom Hart knows more about the Tucker Corporation than any person except Tucker.”
They probably were right, because SEC had spent more time investigating Tucker than Tucker had spent trying to build automobiles.
For the first time since the weathered stone Federal building had been opened, the courtroom was wired for sound. The acoustics were so bad, and people directly connected with the trial numbered so many, that they had to have a PA system to hear each other. Microphones were placed by the chair for witnesses, on the judge's bench and on the podium, where attorneys would rant and argue.
As the trial opened, the Reconstruction Finance Corporation was considering Kaiser-Frazer's application for a loan to develop and tool 1951 models, and to finance dealers who couldn't get money to floor plan new automobiles. Before the trial was well under way, RFC had approved loans to Kaiser totaling some $40,000,000.
Kerner's opening statement made the government's case clear—perhaps too clear for Kerner's own good—in that it was patently untenable. He told the jury:
“It is not for us to determine whether the promised automobile was to be five years ahead of its time, whether it was to be the safest automobile in the world or whether it would deliver thirty-five miles per gallon of gasoline. With these things we are not concerned. But this is a criminal case; the matter to be determined by you is whether or not a fraud was perpetrated by these defendants.”
Kerner's first moves put him in a position that was going to be hard to defend. While insisting that the government had no interest whatever in merits of the Tucker car, witness after witness was called to testify how the Tin Goose broke down before the World Premiere—how the torque converters to both rear wheels were abandoned, and the Tucker 48 didn't have disc brakes or fuel injection. It looked like Kerner's entire case was riding on the helpless Tin Goose.
I was one of the first witnesses, and when I got back to Chicago to take the stand and saw Tucker again, I could see that he had taken a terrific beating since I had last seen him a few months before. His nerves were on edge and he was depressed, and bitter against the forces and men who had put him out of business before the trial even started. Yet he was at the same time confident that he would be vindicated. No matter how events went against him, nothing could shake his confidence in himself.
I was only on the stand about ten minutes. I testified that I wrote the Pic story about Tucker and that so far as I knew it was true. That seemed to satisfy the government and there was no cross examination.
After I was dismissed I went to Philadelphia. A week or so later I saw a paragraph on an inside page saying that the judge had stopped the trial October 11, allowing a defense motion for a mistrial. For a moment my spirits picked up, but I soon discovered it was only a temporary delay and that Tucker would have to stand a new trial. When I returned to Chicago friends filled me in on what had happened.
Mark Mourne of Denver, an attorney, Tucker's cousin and former secretary of the corporation, was testifying about the part played by Karsten, one of the defendants, in early promotion of the deal. Mourne was telling about a conversation with Tucker about Karsten (then known as Karatz), and in answer to a question by Miller, he started:
“I told Tucker that Karatz had a criminal record, and that he ...”
Whatever Mourne was going to say was drowned out as defense attorneys jumped up objecting, and when Judge La Buy finally got them quieted down McAdams moved for a mistrial, asserting that Mourne's testimony would prejudice the jury.
Judge La Buy dismissed Miller's argument that such evidence was necessary to the government, to prove that the defendants had evil intentions when they associated with a man who had a record. The judge said the law had two requirements for admitting such evidence: that there must be similarity of offense and relevancy in point of time, and that this evidence failed to meet either requirement. He likewise overruled instructing the jury to “erase” Mourne's testimony from its mind, to just pretend it hadn't heard him at all, and warned the prosecution not to let it happen again.
One of the first witnesses after the trial resumed was Robert B. Walder, who had worked for Tucker about two months after the stock was sold. Walder said he thought the car was in a “relatively early stage of development,” and that he “questioned the fuel economy with that size of power plant.”
Under cross examination he explained that he was talking about the Tin Goose, and not the final Tucker engine at all. It was also established that he brought an engine with him to Chicago which he tried to sell to Tucker, and that he left shortly after Tucker told him he wasn't interested.
“So before you came to Chicago you had an idea that maybe you could sell him that engine?” asked Kirby.
“Yes, I suggested it to Mr. Tucker.”
“You came to Chicago and you brought that engine with you?”
“Yes sir,” answered Walder.
The witness also identified a letted dated in August of 1947 in which he wrote: “Now, Preston, I will never forget the help back there in New York before the war started. I was pretty well down when you introduced me to that party at Brewsters, through which I have made a deal at Dresser Industries. In fact, I remember that you drove me over to the La Guardia Airport at 1:30 in the morning so I could make the plane and be in Buffalo where I signed up a contract that was highly important to me.”
Kirby started to say something about casting bread on the waters, but didn't follow it up. Then Daniel D. Glasser, Karatz attorney, asked Walder if it was true that he had changed his name legally from Braun-Walder to Walder. He said it was true.
“When you were subpoenaed by the United States government in this case, did they refer to you in the subpoena as Robert Walder alias Robert Braun-Walder?” asked Glasser.
The prosecution objected, saying it wasn't important.
“I think it is important,” said Glasser. “They did that in this case to the defendant Karsten. They did it as deliberately as they could. There is no reason why I cannot do it here.”
The judge said it could stand, and Glasser repeated his question:
“Did they refer to you as alias Braun-Walder when they subpoenaed you?”
“No,” answered Walder.
“They didn't do that?”
“No, sir.”
“That is all,” said Glasser.
Paul G. Wellenkamp was another of the government's expert witnesses who also belittled the engine in the Tin Goose, saying it had a carburetor instead of a fuel injector. He worked for Tucker about the same time as Walder, and said the only automobile factory he ever worked in was Willys-Overland, where he spent part of two summers while he was still going to school. Wellenkamp proved to be one of Tucker's best witnesses against the conspiracy charge.
“Do you think it was an honest effort in good faith to produce that kind of an automobile?” he was asked.
“Yes, sir, I do,” Wellenkamp said.
Along with Walder and Wellenkamp was Carl H. Scheuermann, SEC's expert witness on transmissions, who had worked on the four-speed manual shift but not the automatic. Under cross examination he, too, fell apart, failing to prove that Tucker lied when he promised a fully automatic transmission.
Throughout the trial the argument came up at intervals over the SEC report, which the prosecution insisted was “secret and confidential.” and the defense attorneys said was clearly not confidential because the government had already given it to publications fighting Tucker. At one point during the argument, Judge La Buy said emphatically:
“To permit the SEC to expose the report to the public press and have the District Attorney deny the same right to the defendant shocks the Court's sense of justice, fairness and right.” But throughout the trial defense attorneys couldn't even read the report, much less get a copy for their own use.
After the prosecution went through the “supporting witnesses,” men who had worked for Tucker even if only for a short time, Kerner's staff went down SEC's list of dealers, who identified ads, literature and correspondence they had read or received before and after they bought franchises. The government insisted these exhibits were proof of fraud and conspiracy. But under cross examination witness after witness, even many who were hostile to Tucker personally, gave the same answer when asked if they believed Tucker was conspiring to defraud people who bought stock and franchises.
“Do you believe Mr. Tucker was making an honest effort to get automobiles into production?” they were asked.
One after another answered, “Yes.”
When defense attorneys protested that the prosecution was prolonging the trial unreasonably without showing proof of either fraud or conspiracy, they found the court in agreement with them. Early in the trial, reports said much of the government's evidence was admitted “with the reservation that the prosecutors must tie it up later with the general charges of conspiracy,” and that some of it might be ruled out later.
“I am just powerless,” said Judge La Buy following one protest. “I will have to let it go in. I am getting to be impatient too. I would like to see some concrete case on conspiracy established here.”
When the defense objected to the testimony of one witness as irrelevant, Judge La Buy told the prosecution:
“If you have facts, bring them out. I've been very liberal in admitting evidence and allowing you to tie it up later. Now let's get down to cases. If your witness can testify so as to tend to prove a fraud, all right, but let's get down to the meat.”
Things were beginning to look up for the defendants, but for the corporation the picture was getting darker daily. As the December winds off Lake Michigan grew colder, it was obvious the plant would need heat for even limited operation, and this was one of the reasons given by Igoe's trustees when they reported that they were “extremely doubtful” that the corporation as a whole could be reorganized.
According to Chicago papers, War Assets told the trustees it would cost $225,000 to winterize the plant and another $115,000 for coal and other cold weather necessities. While the trial droned on the rent piled up, with a quarter of a million back rent already due.
By the time the trial was recessed in December for the Christmas vacation, the prosecution had proved many charges: that there had been waste and extravagance, that mistakes had been made, that various mechanical features had been changed or abandoned, and that features publicized for the first Tucker “Torpedo” weren't present on the 48. But the prosecution hadn't proved either fraud or conspiracy, in the opinion of defense lawyers, who admitted at the same time that the trial wasn't over yet.
Kerner could be expected to save his star witnesses for the last, after the trial reopened in January.