Robert Vesco: Fugitive from US justice for 35 years

The Independent
Wednesday, 7 May 2008

The 20th century has seen its share of fraudsters, scam artists and
financial thugs, but few with the swagger of Robert Vesco. By the time he
was 30 he was a multi-millionaire, before he was 37 he had looted a global
mutual fund and tried to bribe an incumbent American president with a
suitcase stuffed with $100 bills. True, this rogue capitalist spent the last
three and a half decades of his life on the run, before dying in seedy
obscurity in one of the last remaining Communist states on earth. Somehow
though, the glamour and the mystery never quite rubbed off.

Robert Vesco was a hustler born. The son of a Detroit car industry worker,
his ambition from his earliest years was to become rich. After dropping out
of high school, he set out on his own in a variety of jobs. A voracious
reader and very quick learner, he was a natural self-promoter and
self-aggrandiser, with the hustler's ability to size up human weakness and
human venality in an instant.

In 1965 came the transition from small operator on the make into a
businessman of substance. Vesco borrowed money to buy interests in a variety
of machine tool firms, which he merged into a company called International
Controls Corporation, the vehicle for many of his subsequent adventures.
Leveraging his ICC investment to the hilt, Vesco became a presence on Wall
Street and a seriously wealthy man. But his ambitions were not confined to
the United States.

By 1970 his eye had lighted on Investors Overseas Services (IOS), the
Swiss-based offshore mutual fund group created by another flamboyant
scamster called Bernie Cornfeld, with the slogan of "Do You Sincerely Want
To Be Rich?" By early 1970, Cornfeld was experiencing his own acute problems
of liquidity. Initially he resisted Vesco's attentions, but eventually
succumbed. By February 1971 Vesco was elected IOS chairman. "I knew I was in
the presence of one of the greatest financial geniuses of the 20th century,"
a starstruck Cornfeld assistant gushed of her new boss, according to Vesco,
a 1987 biography by Arthur Herzog.

The conquest of IOS turned out to be summit of Vesco's career. A month
later, in March 1971, the Securities and Exchange Commission, the US stock
market watchdog agency, opened an investigation into the wheelings and
dealings of ICC. The probe grew acrimonious and relentless ­ but by this
time Richard Nixon was plotting his 1972 campaign for a second White House
term, and Vesco saw a way of bringing what he regarded as spiteful
persecution by the SEC to an end.

Through intermediaries, he came to know John Mitchell and Maurice Stans,
former Cabinet members and close Nixon confidants who now headed the
notorious CREEP, the Committee to RE-Elect the President. Eventually Vesco
sent an aide with a briefcase containing $200,000 to Stans. In return for
this (illegal) anonymous cash donation, he thought he had a deal, whereby in
return the administration would shut down the SEC probe.

If so, he was however sorely mistaken. If anything the federal investigation
intensified further. Vesco was charged with fraud and perjury, and of using
his flagship company to loot IOS of over $220m. Vesco had little choice but
to flee the country, either in late 1972 or early 1973, never to return. In
his first port of call, the Bahamas, he raged against the protectors who had
failed him. "Those bastards sold me out," he cursed, according to a
forthcoming biography of Mitchell. "They're no fucking good ­ every one of
them ­ from Nixon on down the line."

Thus began a long involuntary odyssey around the Caribbean. His first
prolonged stop (and perhaps his happiest) was in Costa Rica, where the then
President José Figueres passed what became known as the "Vesco Law",
stipulating that the financier could not be extradited. In return, Vesco
reportedly donated millions of dollars to a farm company owned by Figueres.

After four years in Costa Rica, he moved to the Bahamas in 1978, then to
Antigua (where he tried to buy an outlying island and establish it as an
independent country), and then Nicaragua. At one point in the late 1970s he
attempted to bribe the Carter administration to allow the sale of US
transport aircraft to Libya. Everywhere, the pattern was the same. Vesco was
granted refuge in the belief that his supposedly vast fortune would be used
to the benefit of his host.

And why not? In a decade of antiheroes like the 1970s, Vesco achieved
something approaching cult status. He might have been part of the damnation
of Richard Nixon. But he was also widely seen as a Scarlet Pimpernel, the
prototypical "fugitive financier" who was always one step ahead of his
pursuers at the SEC, the FBI and the CIA. He looked the part too ­ tall,
sleek and handsome, seemingly cocking a permanent snook at the US
authorities as he dispensed interviews to network television and peered out
from the photos on newspaper front pages, with his sideburns and glossy dark
hair, his pencil moustache and trademark sunglasses. Rounding out the myth
was his personal plane, the Silver Phyllis, a custom-fitted Boeing 707,
equipped with its own discothèque and whirlpool bath.

But enforced exile is an expensive business, for one who lived and spent as
Vesco did. By 1982, most of his money appeared to have gone, and Cuba,
sealed off from the US by a trade and political embargo, was the one place
that would have him: "If he wants to live, let him live here," Fidel Castro
once told an interviewer. "We don't care what he did in the United States."

Quite what Vesco did in Cuba is unclear. He is variously said to have been
involved in drugs trafficking, and to have helped the régime set up trading
companies to circumvent the US embargo. Eventually however he fell out of
favour with Castro too. In 1995 he was accused of being "a provocateur and
agent of foreign special services", before being charged with fraud and
"illicit economic activities". These latter are believed to have included
the marketing of a fake wonder drug, advertised as a cure for Aids and other
diseases.

The following year Vesco was sentenced to 13 years in jail. At some point he
appears to have been released ­ perhaps because of failing health ­ and
consigned to informal house arrest. He eventually appears to have died of
lung cancer in November last year, and was buried in a Havana cemetery in a
tomb that bore another family's name.

No official announcement was ever made. A Cuban official told the New York
Times, which carried the first report of his death in its edition of 2 May,
that the matter was "a non-issue". By then he was an embarrassment to
everyone, the man who knew too much. But however much the outcast, and
however reduced his circumstances, Robert Vesco kept his allure of myth and
mystery to the end.

Rupert Cornwell

Robert Lee Vesco, businessman and financier: born Detroit, Michigan 4
December 1935; died Havana c23 November 2007.

http://www.independent.co.uk/news/obituaries/robert-vesco-fugitive-from-us-j
ustice-for-35-years-822084.html