Vince Foster /Forbes Mag Letter
sam.teel at SFWMD.GOV
Mon Apr 1 08:51:39 MST 1996
I've had quite a few folks ask me for the article that was associated with
the Forbes magazine letter, so here it is. Sorry if I built it up more than
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Allegations Regarding Vince Foster, the NSA, and
Banking Transactions Spying, Part XXXI
by J. Orlin Grabbe
There is something about the explosive smell of money in Little
Rock's Ozark air that turns a young man's thoughts to suicide.
But one might have believed John Markle, a PhD economist and son of the
actress Mercedes McCambridge, was sitting on top of the world in 1987. He had
left Salomon Brothers eight years earlier to become the one-man futures trading
operation for Stephens Inc. on East Capitol Street.
Markle had a lot of money to play with. He had no position limits, at
least none that he knew about. "They're at least $800 million, because I once
had that much at risk and nobody stopped me," he told *Forbes* on March 31,
He traded exclusively for the house account--essentially for the
personal profit of the two brothers Wilton R. "Witt" and Jackson T. "Jack"
Stephens, the only stockholders in Stephens Group, which controlled an
empire that included the investment bank Stephens Inc., the multibank
holding company Worthen Banking Corp., the Capital Hotel of Little Rock, the
software firm Systematics, the nursing home operator Beverly Enterprises, the
insurance holding company ICH Corp., and (the crown jewel) the natural gas
company Stephens Production Co.
Witt Stephens, a former Bible saleman, had long controlled Arkansas
politics through a simple mechanism: those local candidates he didn't support
saw all their funding cut off. Naturally no local candidate could afford to be
seen taking out-of-state money, assuming it was available.
But like many of the super-rich, the Stephens brothers were neither
Republican nor Democrat. Jackson Stephens, who was a major fund-raiser for
Jimmy Carter in 1976 and 1980, would also become one of George Bush's "Team 100"
through $100,000 political donations in 1988 and 1992. The latter was the year
that a Stephens-controlled bank would supply a $3.5 million line of credit to
the campaign of Bill Clinton.
No, these boys weren't hard-core Democratics. It was Witt Stephens
who started the rumor that Geraldine Ferraro was Benito Mussolini's
grandniece, a stunt he found so entertaining that he repeated it four years
later with a story that Michael Dukakis was Aristotle Onassis' nephew.
Such international wit was curious for a man who retired weekends to the
family homestead in Prattsville, and boasted that he had left the state of
Arkansas only once in fifteen years. Witt's brother Jack, on the other hand,
could more likely be found on the 6,000-acre plantation that Jack owned in
Chittlin Switch, Georgia, where he might be joined for a weekend of hunting by
Wal-Mart founder Sam Walton, Oklahoma Govenor Henry Bellmon, or Joseph Williams,
the chairman of Williams Cos., of pipeline and telecommunications fame.
Markle, perched in front of his data screens trading futures,
probably didn't know about the monetary flows generated by Operation Black
Eagle and siphoned through the Stephens' financial institutions. He just knew
that the different parts of the Stephens empire--legally administered by the
Rose Law Firm trio of Webster Hubbell, Vince Foster, and Hillary Rodham
Clinton--generated a lot of cash. ("They have so much money it scares you," a
Merrill Lynch vice president would tell *Time* magazine a few years later.)
First, there was Beverly Enterprises, the nation's largest nursing
home operator. As explained by Stephens' executive Jon Jacoby, "In 1968
the Great Society started the nursing home business, and all you had to do
was open the doors and they filled up." That same year Jack bought into a
chain of nursing homes called Leisure Lodges, and took them over in 1975.
Then, after helping Beverly Enterprises avoid a takeover they didn't want,
he sold Leisure Lodges to Beverly in 1978.
The Stephens brothers then acquired control of Beverly and turned it
into a cash cow. In 1980 the Stephens sold most of their Beverly stock at a
handsome profit, but retained the real estate from Leisure Lodges, which was
rented to Beverly, and also contracted to provide data processing services to
Beverly through Jack's software firm Systematics. The Stephens also remained one
of Beverly's primary bankers.
The Stephens brothers were thus nicely positioned to make out like a
bandit if they could convince some politician to push through a system of
National Health Care, which would provide a built-in government demand for both
health and software services. The Stephens brothers had always favored the
notion of private enterprise supplemented by government subsidies.
The Systematics contracts were overseen by Vince Foster and Hillary
Rodham Clinton of the Rose Law Firm. Systematics provided data processing
services and software to track the flows of money through banks, and the flows
of people and money through the nursing home industry. Vince and Hillary
represented Systematics in the Jackson Stephens-Bert Lance-BCCI attempted
takeover of First American Bank in 1978. Hillary also became self-taught in
intellectual property law, important for a software company. Stephens had even
picked up some neat software from Earl "Cash" Brian who had once been
influential at Beverly Enterprises at its Pasadena, California, headquarters.
Jack Stephens had purchased 49 percent of Systematics for $400,000 in
1968, and it had since become one of the largest suppliers of retail banking
software. Banking customers could purchase Systematics software to do their back
office data processing (i.e. to transfer money between accounts and between
banks), or they could contract with Systematics to do all their data processing
for them (this was called "outsourcing")--either on the premises, or at remote
locations using telecommunication links.
The investment bank Stephens Inc. had, with White Weld (now part of
Morgan Stanley) underwritten the initial public offering of Wal-Mart in 1970.
Other public offerings included Tyson Foods (which made about one-half
McDonald's Chicken McNuggets), Beverly Enterprises, and Systematics. Jack
Stephens had joined the firm in 1946, and was now its Chairman, while his son
Warren was President.
In 1983 the Stephens brothers had acquired controlling interest in
Arkansas' largest bank holding company, Worthen Banking Corp. Another major
shareholder in Worthen would be Mochtar Riady, an Indonesian banker closely
connected to President Suharto. Jackson Stephens met Riady in 1976, when Riady
wanted to buy into an American bank. Two years later Riady and Stephens Inc.
set up a joint venture, Stephens Finance Ltd., in Hong Kong to write letters of
credit. Later, in 1983, Stephens and Riady bought Seng Heng Bank in Macao, and
in 1984 they bought the Hong Kong Chinese Bank. Riady also controlled the Bank
of Trade in San Francisco.
Hong Kong was then the banking center for the heroin trade, just as
Panama was the banking center for the cocaine trade.
Stephens Link, a customized computer network designed for commercial
banks, was launched in 1986. It tied together bank branches to Stephens Inc.
trading and clearing operations. There were computer terminals in eight states
and Panama. The good citizens of Panama, the home of the Stephens' friends
Gabriel Lewis and Manuel Noriega, could purchase a variety of Stephens financial
services and products without ever having to leave home.
Finally, there was Stephens Production Co., based in Ft. Smith,
which owned perhaps a trillion cubic feet of natural gas in the Arkoma Basin.
The property, purchased in 1953 for $5.4 million, was now worth at least a
billion dollars. But the Stephens brothers valued the property at cost, which
led to an understatement of their ranking among the world's wealthiest
And Markle, the futures trader, could put much of this wealth at
risk, could bet it on the rolls of the market dice. Markle liked to think he
could predict the future. He would quote from Michael Talbot's *Beyond the
Quantum*: "The human biological organism possesses the ability to leap into the
future, to actively tap into information about future events and process that
information in the present."
Luckily, as is often the case, he was spared the vision of his own
demise. He was fired on Friday the 13th (Nov. 1987). He had been asked, they
said, about an unidentified, out-of-state brokerage account he controlled, and
its relationship to a Stephens corporate account. Rumors would circulate saying
maybe he was putting profitable trades in the secret account, and sticking
Stephens with the unprofitable ones. But that's all they were, rumors. For
Markle himself wasn't talking.
Three days after Markle was fired, there was a furious thunderstorm in
Little Rock, during which, it is said, John Markle killed his wife, his two
young daughters, and then himself. And to do the job, he used three different
handguns. That's what they said.
Curious deaths, those. But this was Stephens country, and no one
wanted to ask very many questions. They found it much safer to talk about
the violent weather.
[to be continued]
If you'd like to know why Forbes Magazine sent this letter, there is a
long story available. (about 10 pages) I'll send it to anyone who
wants it or to the list if enough do.
Allegations Regarding Vince Foster, the NSA, and
Banking Transactions Spying, Part I
by J. Orlin Grabbe
On April 17, 1995, James R. Norman, Senior Editor at Forbes
Magazine, sent the following letter to Michael D. McCurry,
Press Secretary at the White house:
"Dear Mr. McCurry:
"Forbes Magazine is preparing an article for immediate publication.
We would like to offer the White House an opportunity to comment
on the following assertions.
"1.) That Vincent W. Foster, while White House Deputy Counsel,
maintained a Swiss bank account.
"2.) That funds were paid into that account by a foreign
government, specifically the State of Israel.
"3.) That shortly before his death and coincident with the
onset of severe and acute depression, Vincent Foster learned
he was under investigation by the CIA for espionage.
"4.) That this information was made available to him by
Hillary Rodham Clinton.
"5.) That while he was White House Deputy Counsel and for
many years prior, Vincent Foster had been a behind-the-
scenes control person on behalf of the National Security
Agency for Systematics, a bank data processing company
integrally involved in a highly secret intelligence effort
to monitor world bank transactions.
"6.) That Systematics was also involved in "laundering" funds
from covert operations, including drug and arms sales related
to activities in and around Mena, Ark.
"7.) That through Systematics' relationship with E-Systems,
Vincent Foster may have had access to highly sensitive code,
encryption and data security information of strategic
"8.) That both prior to and after his death, documents relating
to Systematics were removed from Vincent Foster's office in
the White House.
"9.) That the meeting at the Cardozo (Landau) estate on the
eastern shore of Maryland on the weekend before Vincent
Foster's death was attended by, among others, George
"10.) That Hillary Rodham Clinton was also a beneficiary of
funds from Foster's Swiss account.
"Thank you very much for your prompt attention to this matter.
Please fax your written response before end-of-business
Tuesday, April 18, to Forbes at 212-620-2417. If you have
questions, please call me at 212-620-2215.
"James R. Norman, Senior Editor"
The White House did not respond until April 25, 1995. However,
on April 20, 1995, a copy of this letter was leaked by White
House counsel to Mark H. Tuohey IV, an assistant to Kenneth
Starr, a prosecutor leading an "independent" investigation of
events related to Whitewater.
Why was the letter forwarded to a Starr assistant?
Did the White House have reason to believe that the death
of Vincent Foster was related to Whitewater?
Was the letter forwarded to Mark Tuohey so that he could
investigate and comment on the allegations in the letter?
Or was the letter leaked to Mark Tuohey by the White House
because Tuohey is the White House point man for spin control
with respect to any evidence "uncovered" by the investigation?
On April 25, 1995, Michael D. McCurry replied as follows:
"Dear Mr. Norman
"This letter responds to your April 17, 1995 request.
"The allegations contained in your request are outrageous.
Publication of these false allegations will discredit
*Forbes*, maliciously tarnish the reputation of Vincent
Foster, and cause great pain to Mr. Foster's wife and family.
"Should *Forbes* insist on publishing these baseless
allegations, we insist that the Editor of *Forbes* have a pre-
publication meeting with Jane Sherburne of the White House
Counsel's Office and the personal representative of the
President and First Lady, David E. Kendall of Williams &
Connolly. Ms. Sherburne can be reached at (202) 456-5116
and Mr. Kendall's number is (202) 434-5145.
"Michael D. McCurry
"cc: Mr. James W. Michaels
Mr. Lawrence Minard
Managing Editor, *Forbes*
Mr. William Baldwin
Executive Editor, *Forbes* "
[to be continued]
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