ISLAND FEVER

In Memory of “Bo” Page

I had two meetings with the late George Page Jr. when I was writing this book about Heritage Bank. The first meeting was in 2000. We met in his restaurant in the late afternoon. It was fashionably dark, and no one was there yet except the two of us and the bartender, busy polishing glasses behind the bar.

Bo was a strong shortish tough-looking man in his fifties who works in close, a humorous blunt-speaking man with many successful hotel and restaurant ventures behind him. He was candid about the Heritage-funded real estate ventures. He didn’t understand Northampton’s love affair with Dick Covell. In l988 or l989, Pat Goggins approached him and invited him up to see Cummington Farms and consider becoming a partner. He looked around, looked at the books, and told Pat that the complex was esssentially valueless: its twenty-two rooms couldn't generate the revenue needed by its extensive infrastructure and debtload.

"It was too big and it was too small" said Page. Later on when it was in bankruptcy, he was approached by Attorney Fred Fierst, who wanted to know if he was interested in buying it. He told him no. Later on Fierst told him that Peter Laird was going to buy it. He said that's nice, good luck or something to that effect.

He told me that in 1987 Charlie Lyons approached Mike Smith to see if Heritage Bank would be interested in financing Wharfside, a collection of shops, restaurants and apartments that Bo Page, Charlie Lyons and a local couple,Maurice and Beverly Poulin, were building in Cruz Bay in St. Johns in the Virgin Islands. Read the full article here.

The Fall Guys

Northampton in the eighties

click on titles to read

1. The Beginning

Heritage Bank was our regional bank, and while the boom-time of the nineteen eighties lasted, it was the financial center of our town. If you couldn’t get a loan elsewhere, you came to Heritage Bank. They came from Providence and Maine, from Ohio and Miami Beach.

2. The Plotters

One night developer Mike Sissman saw the three men who ended up being key players in the secret partnerships that did so much to ruin the bank having dinner one night at the Inn at Northampton. He realized right away that something was terribly wrong at Heritage Bank.

3. The Great Wazoo

While I hid in the corner waiting for the receptionist to notice me, I read one of their brochures. I wondered how many people who attended these seminars in Boston and elsewhere knew that their resource person who was advising people on how to deal with banks calling in their loans was a convicted felon. I find that Donald Todrin is not in.

4. The Great Cummington Farms Disaster

In the ski business we call projects like Cummington Farms 'monuments.’ To make money, you can't spend too much on the building. All the floors and windows at Cummington Farms had to be replaced. If the Rockefellers or Donald Trump were funding the place, the work would have been perfect.

5. Mike Smith, check my warning lights!

According to the Gazette, Mike Smith was now managing an auto shop, earning about $250 a week and living up over the garage. An innocent juror at the Labovitz trial might think that this reflected credit on Smith. Bank executive starts life anew. A trip to New Hampshire revealed that the business was just another favor from his Heritage borrowers.

6. The Dutchman

When the banks lawyers came up here in l989 trying to check out these persistent rumors at the bank that Mike owned a condo in the Lake Sunapee area, they found nothing. There was no Mike Smith in the index at the courthouse but he had a condo. The title was held by The Dutchman, Inc. a New York Corporation having a usual place of business at 8910 Third Avenue, Brooklyn New York.

7. Looking for Danny Constance

I called Danny Constance in 1999, but he didn’t want to talk to me. “Do you want to talk about the 80s, Danny?” I asked, and there was a long pause. He was thinking seriously about it. “No,” he finally said in this gravelly voice, “I don’t think I do.” He was polite, but firm. I never met the man. There were all kinds of tantalizing references in federal records to the man that ran Beardsleys, the French restaurant on Main Street that become the symbol of Northampton in the eighties. A FBI tape recording that disappeared. It was intriguing that the area’s leading bank was financing someone who was a kingpin in the Valley’s numbers racket, someone who had links to organized crime, someone who was eventually arrested for money laundering and sentenced to federal prison.

7. The Roof Falls In on Heritage Bank

Heritage moved to their ultra-modern, boat-shaped tower in Holyoke in June of l989, at long last consolidating their offices in one place. Dick Covell wrote a preface to the 1989 annual report comparing the creation of his new bank to the founding of the United States. He compared the amalgamation of the seven banks to the more "perfect union" of the 13 original states.

8. The Fall of Manuel Duarte

In April Fridlington hired Alfred Dean, a former banker, to review the portfolio of the senior Heritage bank officer in Worcester. Going through his desk, Dean discovered this whole bundle of checkbooks with a rubber band around them. The names on the checkbooks were relatives and friends of many of Manny’s biggest clients; the signature cards at the banks all had Manuel Duarte’s name as signing for these people.

9. Mike Smith wears a wire

During the FDIC audit in August, there had been a slight falloff in the number of delinquencies, but then Fridlington told Gonzales about Duarte’s checkbooks and the massive losses that had just cropped up in the Worcester branch. Concerned that that they might have another Smith on their hands, Louis Gonzales thought that enough was enough. He told a discouraged Dick Covell that the bank was in apparent violation of minimum capital requirements and that, by definition, the bank was deemed to be engaged in an unsafe or unsound practice.

10. The Northwood Affair

I ran into a guy on the street one day that talked to Mike Smith at the YMCA one day and three days later got a check in the mail for a plane he wanted to buy. A couple weeks later he got a somewhat embarrassed phone call from a woman at the bank saying that she couldn’t find any paperwork on this plane purchase. Could he please come in and sign a note.

"Oh," he said, being a kidder, "That money?. I thought that was some kind of promotional offer from the bank. You know, buy me a plane and I’ll tell all my friends I got my money from Heritage. "

A long silence ensued, and somewhat chastened, he came in and signed the note.

11. The FBI Enters the Case

During the FDIC audit in August, there had been a slight falloff in the number of delinquencies, but then Fridlington told Gonzales about Duarte’s checkbooks and the massive losses that had just cropped up in the Worcester branch. Louis Gonzales thought that enough was enough. He told a discouraged Dick Covell that the bank was in apparent violation of minimum capital requirements and that, by definition, the bank was deemed to be engaged in an unsafe or unsound practice. Covell was particularly apprehensive about the possibility of the FDIC filing a cease and desist order and the required public disclosure that would ensue. Gonzales also filed a report of an apparent crime against Michael Smith, and that brought in the FBI. Read the full story here

12. Island Fever

"Wharfside was a mistake," said "Bo" Page. "You can't run a development from long distance, and you can't really trust anyone when it comes to big developments and millions of dollars in money. Unfortunately I became the lead man in the Cruz Bay deal, and so I had to sit down with the bookkeeper and I found all these shortages. I came back and reported to Charlie Lyons that we were in trouble and would have to go to court and get rid of Poulin. So we filed a court case in the Virgin Islands and we ended up getting out.”

Part Ten of "The Fall Guys": The Northwood Affair

"Board members must have no connections

with business enterprises that would affect

their judgment as directors"

Article in Consumers Reports

looking for new members for

their board of directors

I ran into a guy on the street one day that talked to Mike Smith at the YMCA one day and three days later got a check in the mail for a plane he wanted to buy. A couple weeks later he got a somewhat embarrassed phone call from a woman at the bank saying that she couldn’t find any paperwork on this plane purchase. Could he please come in and sign a note?.

"Oh," he said, being a kidder, "That money?. I thought that was some kind of promotional offer from the bank. You know, buy me a plane and I’ll tell all my friends I got my money from Heritage. "

A long silence ensued, and somewhat chastened, he came in and signed the note.

If Mike Smith was looking to his boss Dick Covell to be the role model, there’s no doubt how he got into trouble. Read the full article here

Part Nine of the "Fall Guys" Mike Smith gets to wear a wire

In March of l991 a young FBI agent named T. J. Roberts came out from Boston and started probing into the bank failure. The bank was on its last legs and he threw himself in subpoenaing everything relevant from the bank. During the 1991 and 1992 period, there was a lot of apprehension that some of Northampton’s leading lights would go to jail from being involved in this mess. The FBI came to Northampton in force, spending many hours following the paper trails out from the County Registry of Deeds into the offices of the leading players in the Northampton area. Lawyers, doctors, politicians, developers, leading members of the friends of Mike Smith club. The FBI and FDIC investigators were armed with information from the 1989 FDIC audit and an internal investigation done by the bank in 1988, the so-called Hoar report, that found hundreds of violations of State and federal laws and banking regulations. In l989, the FDIC threatened to fine Covell for his violation of insider trading practices. A lot of people were scared, and it was thought that up to twenty people might be indicted. Read about Mike Smith's dinner date at the Putney Inn and the missing FBI tape recorder.

Goodbye

The sun is blazing outside, high tide is about one pm, and I am sitting here in our winter quarters near San Diego wondering what to do about kirbyontheloose. My higher power tells me that I have had a good run over the last three years, reporting on Northampton issues that no one else wants to cover, spotlighting failures in city government, and whatnot. I am not getting any younger, and stories like the last one, about Opal Development, take their toll. And my other writing seems to sit around and go nowhere because I am out chasing some local story. I guess it is time to retire. Just before we left town, I happened to go into the Gazette office on an unrelated matter. I looked around at the great expanse of desks, mostly empty. The daily deadline had come and gone, and another paper was out on the stands.
I didn't like where the Opal story had lead me, and I wondered, why me? Why are all these people who are paid to report the news not doing it, and why is this old guy taking it upon himself to step into this particular meat-grinder? It's not doing my blood pressure any good. And yes, I am getting a mite bad-tempered in my old age. So, I am calling it a day. And yes, I have done this work up til now because I enjoy it and I think it is useful. Kirbyontheloose will stay up on the web, and will get reorganized a bit, so that older stories are easier to access, and I may post new chapters of my book about the fall of Heritage Bank.
Local journalism has changed profoundly over the last century, and it is only once in a blue moon that we get stories in the Gazette that go beyond what is in the press releases. I guess I am old fashioned. I believe that community newspapers should be a watchdog, they should bark once in a while, and their reporters should not be rewriting press releases and anointing development groups like Opal Development with their good housekeeping seal of approval. How far we have fallen can be seen by the Picknelly family choosing who they did to head up a major real estate venture in Northampton. They must have assumed that no one at the Republican or the Gazette would ask questions and look into his background. I hope Clarke School will change its mind, rebid its acreage, and pick a group with a proven track record.

No to occupation

Over the last months I have been pushed gently by a number of my friends to become involved in the Occupy Northampton movement, but my response was tepid. I was out there in front of Thornes Market the first day, dutifully shouted out various slogans when prompted, and attended an organizational meeting of Occupy sympathizers at a private home. Most of us there were old and creaky and comfortably housed, and there was no one there from the movement itself. The first plan that was floated at that meeting was moving the protest from the park and the street to the senior center, which various people deemed "half-empty, overbuilt and underused." While I am all in favor of an option that would get the protesters off the cold streets, and also generally in favor of anything that would upset the existing order, when it came time for me to talk, I landed on the idea. Occupy Northampton marching down to the elderly center and throwing down sleeping bags would be a public relations disaster. Better to occupy Memorial Hall, which is downtown and half-empty. As time goes by the movement nationwide has dwindled. Carefully calculated non-violent repression has scattered the young people, and we have gone back to business as usual as our noble cruise ship SS. United States drifts onto the rocks.

For awhile the Occupy movement barked at us, we beeped our horns in support, but it had no bite, no long term strategy for change, and not much leadership here in Northampton except this one guy who is a poet and a monk. I have heard his poetry and it is bad; I have met the young woman who follows him about faithfully and does his laundry, and found this much submission detestable. When he asked me for help with his fight with Jon Hite who he says disrespects and discriminates against him, he told me that the only time he could talk to me was six in the morning. An acolyte I am not, and I sent him a note that I never left the house before 9:00. I am retired.

I rarely agree with the head of the Housing Authority, but when I heard that Jon Hite had lost his temper with him one day and intimated that he should go to work and free up a unit at MacDonald House I said "Here, here" like the Brits in the lower chamber do. It is a sin for a person with his talents and energy taking up an apartment in MacDonald House that a truly needy couple needs. The Occupy movement contrasts vividly with the vigorous talk and the action of a small group of Green Party people who I met at this party several months ago. They were doing conventionally reformist things, they had been out of the streets of Holyoke and Northampton talking to people, running for office and looking for delegates. A third party with a vigorous platform addressing the needs of the 99% is what we need to buck the existing order.

A managing director with a past: a 1999 arrest, a foreclosure and involvement in a Bermuda land scheme raises questions about Opal Development.

Due diligence, according to Wikipedia, is a term used for a number of concepts involving either an investigation of a business or person prior to signing a contract, or to depict an act done with a certain standard of care. It can be legally mandated, but more commonly applies to voluntary investigations where someone buying or selling a property evaluates the credentials and history of the other party. A relatively new development company owned by Peter Picknelly has made an offer to purchase the remaining acreage and buildings of the Clarke School. About two weeks ago I went to the meeting up on Round Hill that Robert Jonas hosted for the principals of Opal Development. An opportunity to meet the neighborhood. The Gazette came and took pictures, I sat there and took notes and observed the vibes. Some of us went with some apprehension, since the tone of the email that neighbor Lewis Popper had received from Opal’s managing director was pretty frosty.
” Read the full article by clicking here.

Why King Street languishes, why the Fire Station is where it is, when Roy Martin got almost 30% of the vote for mayor, and other mysteries solved

At a forum before last month’s election, a woman asked the candidates for councilor at large, "Why all the empty lots on King Street?"
None of the candidates seemed to have a take on what was wrong. Just some of the usual bromides. It’s clear, however, that the people that are building and expanding businesses are locating elsewhere. Look to our north, where new businesses are springing up all along along Routes 5 and 10 in Hatfield, just north of the town line.. Look at where the Valley Medical program money is going: Easthampton and Greenfield. Look at all the earth-moving equipment working in Easthampton. Easthampton Savings Bank is building a three-story building barely 100 yards from our town line. Look at all the construction along Rte. 9 in Hadley. Modern office space, modern industrial buildings. There are no new commercial or industrial buildings going up on Hospital Hill. Why?
And then look at King Street, bracketed on the south by that huge empty parking lot that once held Lia Honda, and then the empty Kollmorgen buildings that Pat Goggins called "useless" this year. And behind the railroad, you will find increasing numbers of vacancies at the Industrial Park. It had zero vacancies in 1999, now there are four or five buildings vacant. The other day I saw signs outside Tiger Press telling us they are moving to East Longmeadow. Read the full story here.