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Chapter 27 Aspirin, Cokes and Coffee Book: The Indomitable Tin Goose Subtitle: The True Story of Preston Tucker and His Car Author: Charles T. Pearson Publisher: Abelard-Schuman Year: 1960 |
27 ASPIRIN, COKES AND COFFEE
DANIEL J. EHLENZ of White Bear Lake, Minnesota, was one of the stars Kerner had been saving for the finale, and he proved to be one of the defense's best witnesses. Having paid $28,000 for his Tucker distributorship in St. Paul, Ehlenz might reasonably have been expected to be somewhat bitter against Tucker for loss of his investment.
He was exceptionally well qualified as a witness, having visited the Tucker plant frequently since early in 1946 and having one of the finest collections of Tuckerana in the country, outside SEC. His statement in the report covered fifteen pages and reproduced verbatim most of the literature and correspondence from Tucker since the deal started.
Under direct examination Ehlenz testified he had been in the automobile business nineteen years and that he brought along his own lawyer when he bought his franchise. He told of attending meetings in Chicago and Minneapolis, and said he had visited the Tucker plant about once a month, sometimes oftener, up to the middle of 1948 when the last SEC investigation started.
It was his answers to questions about these visits which brought approving smiles from the jury box. Asked if he knew how long the conveyer system was, Ehlenz said he wouldn't know but it was “plenty long,” and questioned about what he saw on some of his visits he answered:
“Well, there were several cars in various stages of construction in the Number Four building.”
“Do you recall how many?”
“No, I don't, not at that time, but there were several of them.”
“Was it five, ten, twenty?”
“I wouldn't recall on that trip because on subsequent trips there were more cars each time.”
“When was the next visit you made there?”
“About another thirty days.”
“What did you see on that visit?”
“More cars,” said Ehlenz.
During this cross examination by Kirby the jury sat up and looked interested for the first time in weeks. Earlier they had demanded upholstered seats, reasoning that the least the government could do was make them comfortable. Kirby's questioning brought the jury out of a long trance, induced by the hard seats and the hypnotic repetition of the same exhibits and the same dull, endless testimony.
“Was there any act or statement of these defendants,” Kirby asked, “other than this question of the delivery of mass produced cars, that would lead you to believe that they were engaged in a conspiracy to defraud, contrary to federal law?”
“I don't know of any,” Ehlenz answered.
Asked if he had driven the Tucker car he bought he said yes, he had, that it had over 10,000 miles on it and he had driven it at least five or six thousand. On one trip from St. Paul to Edgerton, Minnesota, he said it did around twenty miles to the gallon.
“You have observed the performance of the car?” Kirby asked.
“Yes.”
“Did it have good acceleration, Mr. Ehlenz?”
“Yes, very good.”
“I was asking you about the speed you had driven the car upon the open road, Mr. Ehlenz. What about that?”
“I never had the throttle open.”
“About how fast have you gone in it?”
“Probably ninety-five miles an hour.”
"Does the car ride well, Mr. Ehlenz?"
“Yes, it rode well.”
“Does it perform, in general, well?”
“Very well.”
“When you say very well, what do you mean, Mr. Ehlenz?”
“Well, I had never driven another car that performed like that,” Ehlenz said.
It was likewise cross examination which deflated the astronomical figures used by Kerner and SEC to show that Tucker and his associates had received huge personal benefits at the expense of Tucker Corporation.
Tucker's net gain, said headlines early in January, was more than half a million dollars, while the other seven defendants had taken the corporation for another million. The witness was Joseph A. Turnbull, of SEC's Boston office, who described himself as an “accountant investigator,” a sort of financial super sleuth.
Turnbull was the prosecution's last witness, and for days had been referring to long columns of figures compiled by himself and five or six assistants over months of investigation in Chicago and Ypsilanti.
The SEC had placed Cerf's gain at $2,443,000 from handling the Tucker stock issue and it looked as if Cerf had become a millionaire overnight until his attorney, Floyd Thompson, started cross examination of Turnbull.
“Mr. Turnbull,” said Thompson, “will you get the exhibit, the check that was paid to Floyd D. Cerf for $2,443,000 that you said he got from Tucker Corporation?”
“I didn't refer to any check,” said Turnbull.
“Will you get the satchel in which the money was carried over?”
Miller objected and the court sustained him.
“Did he ever get $2,443,000 from the Tucker Corporation?” persisted Thompson.
“Yes or no?”
“In effect, yes,” said Turnbull.
“I move to strike the answer as not responsible and I disclaim it,” said Thompson.
Over objection by Miller the judge said the question could stand, and Thompson again demanded of Turnbull:
“Did it pay out the money? Yes or no? Did the Tucker Corporation ever pay out $2,433,000 in relation to the stock transaction?”
After considerable sparring, in which Turnbull evaded answering either “yes” or “no,” Thompson asked:
“The $2,433,000 that you spoke about was never in the hands of the Tucker Corporation, was it?”
“Never,” said Turnbull.
“And it was never paid out by the Tucker Corporation?”
“Yes.”
“What do you mean by 'yes?” asked Thompson.
“I mean yes, it never was.”
Thompson asked the witness if he knew there were 632 securities dealers who marketed the stock, and if he knew that a commission of 70 cents a share was paid for selling it and that neither Cerf nor Tucker ever saw the money paid out in commissions. Turnbull said he didn't know how many dealers were involved. Thompson finally asked him:
“You don't mean to say that Floyd D. Cerf ever saw such money, or ever had it in his hands or in his bank account or it was in any way in his control?”
“No,” answered Turnbull.
Cutting down the figures SEC had used against Cerf made all SEC's figures suspect, and defense attorneys tore Turnbull's testimony to shreds under continued hammering cross examination.
Two minor examples were enough to show the jury how SEC's men estimated net profits and built up a staggering total of more than half a million dollars Tucker was alleged to have received as “benefits.” These examples were automobiles sold by Tucker to the corporation, the first a Cadillac for which he got $2,985.
“Did you check with the Cadillac Motor Car Company of Chicago to learn whether Mr. Tucker had, on or about March 24, 1947, paid them for a Cadillac automobile $3,394.78?” asked Kirby. “Did you check that with them?”
“No,” said Turnbull.
“So that as far as that item is concerned, how much money in pocket from that sale did Mr. Tucker make, do you know?”
“I don't know,” said Turnbull.
“He made none?”
“I don't know,” repeated Turnbull.
It was the same story with a 1947 Ford, bought for $1,763 and sold to the corporation for $1,763.
One of the big figures in Tucker's total was $100,000 he was allowed for expenses in early promotion of the deal, paid to him in “B” or founder's stock, much of which already had been allocated to Tucker's associates before the “A” stock was ever sold. This was described clearly and accurately in the prospectus.
Another item was a check for $75,000, deposited with an Oak Park bank by the corporation as security for a loan to Tucker, and covered by “B” stock and other collateral.
“Was this check ever cashed by Preston Tucker?” asked Kirby.
“No, it was just used,” Turbull said.
“But it was not cashed by him?”
“That is right.”
“Well,” said Kirby, “it stood there four days, then it came back to the corporation. Is that right?"
“That is right, yes.”
“And then it went back into corporation funds?”
“Yes, sir,” Turnbull said.
“Did the corporation lose any money on that transaction?”
“No.”
"They did not lose a cent on it, did they, the Tucker Corporation?" demanded Kirby.
“No,” Turnbull said.
Item after item, through page after page of testimony, Kirby and the witness went down the list of payments to Tucker, and the questioning finally ended up with an argument over cost of the twin-engine Beechcraft plane which Tucker bought and sold to the corporation. Turnbull at one time set the figure paid to Tucker at $57,288, and under questioning conceded that $2,238 was for insurance already paid on the plane.
Summarizing the totals testified to by Turnbull under direct examination, Kirby asked him:
“You are not here suggesting these figures are figures of monies fraudulently taken, are you?”
“Not exactly, no.”
“You have not indicated any fraud in them, have you?” Kirby asked.
“Well, that Beechcraft item is questionable,” said Turnbull. During hours of questioning, the figure for cost of the plane to the corporation wandered between $15,000 and $100,000, and Turnbull explained that it all depended on how you handled it from an accounting standpoint.
As Kirby ended his cross examination of Turnbull, over figures compiled through months of work by teams of SEC accountants, the argument boiled down to one indictment of Tucker: Turnbull didn't like the Beechcraft transaction, through which Tucker might or might not have made as much as $15,000.
The biggest surprise in the entire trial came after the closing arguments, after Miller told the jury:
“It doesn't make any difference what their intent was when they started out. They made misrepresentations of what they had. Read the pack of lies in their ads and remember what they had and what they didn't have in the way of an auto.”
Downing continued the charge:
“The only thing he (Tucker) designed was a tremendous scheme to defraud. He wanted the public's money for nothing and that's what the public got—nothing.”
Kerner himself summarized the prosecution's case:
“Did these defendants tell the truth or did they lie to the public? I trust you will find all are guilty.”
Defense attorneys didn't answer the tirades. Instead, Cerf's attorney, Floyd Thompson, told the court his client would rest without offering any defense testimony. The government had proved no offense, Thompson said, so there could be no defense. Other defense attorneys joined him and the last was Kirby, who said:
“Tucker rests.”
Judge La Buy's instructions to the jury stressed the importance of proof of intent, and he said the failure to mass produce automobiles was not in itself proof of intent to defraud—that good faith must be considered a “complete defense.” Later that same night the jury asked that the judge's instructions be read to them again. The eight defendants were hopeful as they left the courtroom to wait for the verdict in their homes, hotel rooms or in downtown bars. Tucker waited at home.
“I'm in a daze,” he said. “It seems like a nightmare. I've never gone through anything like this before.”
At 9:13 Saturday night there was a false alarm when a deputy U.S. marshal answered a knock on the door from inside the jury room. An arm reached out with an empty thermos and a voice asked him to get it filled with hot coffee, and please bring some aspirin and a dozen bottles of Coca-Cola.
At 3:07 Sunday afternoon, January 22, there was another knock from inside the jury room. The jury had been out twenty-eight hours and thirty-five minutes, and had deliberated seventeen hours and seven minutes. By this time the defendants had returned and the courtroom was jammed with spectators. Tension rose during a delay of several minutes while court attendants combed the corridors and the men's room looking for Pierce, who had wandered out of the courtroom a few minutes before. The jury filed into the courtroom at 3:30.
“Have you arrived at a verdict?” asked Judge La Buy.
“Yes, we have, Your Honor,” answered the foreman, handing a sealed envelope to the deputy clerk. For the first time since the trial opened there was complete silence. The clerk read the verdict:
“We, the jurors, find the defendants (he slowly read the eight names, beginning with Tucker) not guilty.”
Judge La Buy walked into his chambers without a word as clerks called for order. They were wasting their efforts.
Tucker was surrounded by his wife, his mother and three sons. Wives hugged and kissed their husbands and defendants pounded each other on the back. Anything that might have been said was drowned out by cheers from the crowded courtroom. The noise carried down to the first floor, where startled guards loosened their guns and rushed up to the sixth floor.
Each of the defendants shook hands with every member of the jury, and one woman juror was crying hysterically.
Several days after the trial Kirby got a call from one of the jurors, who said Kerner had called them into his office to explain their verdict. Kirby said the action was unethical, totally uncalled for and almost without precedent. The juror who called Kirby asked his advice.
“I told him,” said Kirby, “you don't have to explain your decision to anybody until the Last Judgment.”
Tucker was vindicated but the corporation was gone.