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Aug 21, 2008 - Printable Version Conversations with Robert A. Maheu
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by Mark Faulk
Mark Faulk’s first book, entitled The Naked Truth: Investing in the Stock Play of a Lifetime, is now available at www.thenakedtruthbook.com.
Conversations with Robert A. Maheu
March 8, 2007; March 11, 2007; June 12, 2007; January 18, 2008
AUTHOR’S NOTE: Because of the significance that shareholders attached to Bob Maheu’s involvement in the CMKX saga, I decided, with Bob’s permission, to release the entire portion of my interviews with him pertaining to CMKX. That way, the shareholders of the company and the readers of The Naked Truth: Investing in the Stock Play of a Lifetime can decide for themselves the extent of Maheu’s involvement with the company, or any so-called “sting operation.”
On a personal note, I have to say that my conversations with Bob Maheu were a highlight of this project. As I told him during my conversations with him, I have the utmost respect for Bob Maheu, both as a person of integrity, and for his countless accomplishments over a long and productive life.
After first insisting that I call him “Bob” instead of Mr. Maheu, he led me down a fascinating path through some of his many achievements, including his involvement in the attempt to overthrow Fidel Castro, his years as the alter-ego of Howard Hughes, and his role in aborting a contract between Aristotle Onassis and the King of Saudi Arabia that would have given much of the control of the world’s oil to Onassis. At the time of our conversations, Maheu was involved in extensive interviews covering his entire life, which will eventually be turned into a documentary on the Bay of Pigs and a movie script based on Maheu’s life.
This entire written transcript has been viewed and approved for accuracy by Bob Maheu.
MARCH 8, 2007 INTERVIEW:
BOB MAHEU: Hello.
MARK FAULK: Hello, this is Mark Faulk. How are you doing?
MAHEU: Fine, thank you, how are you?
FAULK: I’m doing well, back working on the book after delays waiting for everything to play out. I know you said you’d tell me the entire story of your involvement with CMKX, and I was hoping to take a few minutes of your time and hear your story.
MAHEU: Well, you know, it’s well over a year now since I’ve been out of it.
FAULK: So you haven’t had any involvement in the past year?
MAHEU: No, no. I stayed on the task force until we came up with the recommendation that they get an attorney, a trial attorney, and go to court… and I’ve not had anything else to do with it, and as I’ve told you, when I resigned over…about a year and a half ago now, I forfeited all my back salary and everything.
Unfortunately…or fortunately, I started handling impossible assignments when I was eleven years old, and I’ve always been challenged. And as you know… you can’t make them all.
FAULK: And once you make one, you’re expected to do it every time.
MAHEU: Exactly.
FAULK: And you’ve done it several times, so you have a good track record in that regard.
MAHEU: Well, at age eleven, Mark, I came home and told my Mom that I had just met the little girl that I was going to marry. True story. And after she said it was impossible for the third time, I said “Mom, I love you very dearly, but I’m going to prove you wrong.” And I married that little girl not once, but four times. We were remarried on our 25th, on our 50th, and on our 60th without telling the kids we eloped to Seattle, just the two of us, and we were remarried in the same little church where we had first been married sixty years earlier. And all through my life… when I was in school, if someone said we have to drop this program, I’d say “Why?” In college it was the same thing.
But this one…this one was a mistake. It was an impossible deal.
FAULK: Everyone I’ve talked to about this, they all have one thing in common; they had no idea how complicated it was. I had no idea how complicated it was when I was first contracted to write this story. You have no idea what you’re getting into when you get into the middle of CMKX.
MAHEU: That’s right. I was not sure what we could do about the past, but I felt certain that somewhere they had to have numbers enabling us to conform.
(At this point, Maheu asked to consult his attorney first before we did the full interview, and I agreed. We set up a date to tell the full story, which Maheu said would be “very simple.”)
MARCH 11, 2007 INTERVIEW:
FAULK: Hello Bob, this is Mark Faulk. I hope I’m not calling too early.
MAHEU: Well, you’re disturbing my lunch, but that’s okay. Not really…but I’ve always said that if you go to bed with a clear conscience you don’t need much sleep.
(I have omitted a preliminary conversation about Bob Maheu’s background and history unrelated to CMKX. Maheu intro'd his comments about CMKX with an explanation of "forced communication".)
MAHEU: A good example of forced communication is the Apollo 12. The mission was to walk to Surveyor II on the moon, Surveyor II was a Hughes aircraft, it was a soft landing vehicle, which upon instructions from Earth would send back information to Earth. The mission was, they were going to walk to the Surveyor and at the last minute Hughes decided he wanted his name connected to the mission. So we knew the astronauts, we were very close to them. My son would take them fishing, they came here to break the ribbon for one of our projects… And came here also for a cancer society fundraiser that my son was chairman of. They brought things that had been on the moon, moon rocks. We had a great relationship with the astronauts. So I sent Peter this tape and he calls me back and says “Dad, it’s not negotiable. NASA will not allow any name of a manufacturer to be identified with the mission.” I said “Peter, that’s not our assignment.”
Ok, so what did we do? We ordered 20 miniature gold modules of the Surveyor; we ordered 4,000 badges, great big white badges, with black letters “Hello Halo”. I got a yacht out of Ft. Lauderdale, my wife and I flew down there to the suite of the hotel and had one of the best chef’s available out of Miami aboard the yacht. Now I’m having lunch with Walter Cronkite and Hugh Downs and on the way out I give them a couple of these little miniatures. And they say “What’s this?” I said “this is where the guys are going to go on the moon; it’s a module of the Surveyor II.” All of a sudden there are 3 or 4 thousand people at the gate walking around the gate with badges and the miniatures and people are beginning to ask, "What’s Halo? "Halo is Hughes Aircraft Lunar Observer." By that time NASA couldn’t stop it, and not only that they finally joined us.
That’s forced communications.
FAULK: You put people in a position where they did what you wanted; they obviously didn’t know what they were doing for you when they are carrying these things around.
MAHEU: Exactly, sooner or later it’s obvious what we’re doing… they’re getting these things for free and they don’t look too bad…
Anyway, I’m glad we’re on this vein of conversation because I think you’ll understand better why I became involved why I became involved in what may be the biggest mistake I’ve ever made in business.
FAULK: I think maybe we’ll begin by just letting you tell how you got involved in CMKX. I’ve heard so many different things and obviously you know that too, this thing lives on rumors.
MAHEU: And they can’t seem to be convinced that I’m not still involved.
FAULK: Exactly. It wouldn’t matter if we put out an actual word for word interview with you, there will still be people who will say “but yeah, he can’t tell you…” I’ve always said, “If Bob Maheu can’t tell you something, he’s just going to say ‘I can’t tell you.’ He won’t lie, he’ll just say ‘I can’t tell you.’”
MAHEU: yes, exactly.
FAULK: That’s why I have been very confident in that whatever you tell me, you’ll say what you can and otherwise you’re not gonna say “I’ll go out and deceive everybody.” You’ll just say “well, I can’t talk about that.”
MAHEU: That’s right. Fortuitously, when I told the attorneys that you were willing to give us an advance copy they said “go ahead.”
Anyway, for the sake of being repetitious, I told you that I have always been intrigued with impossible assignments. I think I told you the story about coming home at age 11 and telling my mom I’d met the girl I was going to marry. When Mom mentioned the word impossible for the third time I said “Mom, I love you dearly, but I’m going to prove you wrong.” I didn’t marry Evette to prove my mom wrong but it happened.
FAULK: I think there are things in your life that you would call defining moments, and I’ve heard you bring that up two or three times. Do you think that’s one of the moments where your resolve was set, where you said “ok, if you tell me I can’t do something, then I’m gonna go do it”?
MAHEU: Exactly! It was there and everywhere in high school, there were things in high school that would happen and people would say “It’s impossible, give it to Bob.” It’s always been the same way.
The only time that my love was really in great jeopardy, even before we were married, I was a freshman in college and they tell me that they are going to stop having the monthly dance.
And I said “why?”
And they said “we can’t get dates.”
“Let me handle that.”
“What are you going to do?”
“I’m going to start a dating bureau.” Which I did. Evette would come to the dances and that’s when she found out about the dating bureau.
Some guy walked up and said “Great date, Bob, how the hell did you fix me up with this girl?”
FAULK: I think that’s what’s known as creative problem solving.
MAHEU: Everyone…well not everyone because some guys didn’t… but most guys liked their dates, but Evette didn’t like that at all.
It was the same thing in the FBI, when I got in the bureau, one of the first assignments I had I created myself. I ended up getting a meritorious raise. That’s been my story, give me an assignment… Anyway, I took this one (CMKX) on with the same enthusiasm; I should’ve checked it out a hell of a lot more carefully before I did.
FAULK: Now originally, was it Stoecklein that came to you with this?
MAHEU: No. I was the one who brought Stoecklein in.
FAULK: Oh really? So where did you first hear of this?
MAHEU: I got a phone call from a guy…I can’t remember his name; he wanted to know if he could stop by the house with Urban Casavant.
FAULK: It wasn’t Mike Williams, was it?
MAHEU: Yes… yes, I had forgotten his last name.
FAULK: So….you knew Urban then?
MAHEU: No, I did not.
FAULK: You did not, but you knew Mike Williams?
MAHEU: Yes.
FAULK: And where did you know him from?
MAHEU: He kept popping up now and then with ideas and we never ended up doing anything of the business sort. He kept popping up with ideas, but nothing ever came to fruition that I can think of except this one.
FAULK: Does it make you glad that you didn’t do other deals with him?
MAHEU: Well, yes.
FAULK: What did you know about Williams?
MAHEU: Not anything really.
FAULK: How did you meet him?
MAHEU: That I cannot remember. So many of these things, a lot of them go back to the Hughes days. I get so damn many of those, Mark. People come up with ideas and very seldom are they worth following.
FAULK: And because of your name and reputation obviously anybody who has an idea goes “ok, I’ve got something, let’s go pitch it to Bob Maheu.” I’m sure you’ve been in great demand your whole life because of your reputation and your ability to make things happen. So, Mike Williams brought Urban over to your house, or your office…
MAHEU: To my house, I operate out of my house, although all my email goes to my son Peter’s office.
FAULK: Okay… Do you remember when that was approximately?
MAHEU: Quite a while ago and then I didn’t hear from him for a long time. Then they showed up again and I said ok, providing you let me bring in the attorneys. And they agreed, so I brought in Don.
FAULK: What were they telling you when they were coming over?
MAHEU: They had all this stuff and they needed someone to…they had not… well, I’m trying to think of exactly how they said it … they needed someone to put all of these problems together. They’d had some problems, they did have some regulatory problems, they wanted to know if I would help them take care of the past, and also, I made it very clear that I couldn’t guarantee what I could do about the past. But I would insist that from hence forward that they would be in compliance.
FAULK: Did they talk at all about the so called kind of bad guys that were in?
MAHEU: No
FAULK: So it was really just compliance issues and straightening up the regulatory mess.
MAHEU: Right. The deal that I have recollection of making is right along those same lines. I would do the best I could to rectify the past and that I would insist that everything had to be in the realm of compliance for the future.
FAULK: I was actually looking at a few of your quotes this morning and almost every one of them spoke of compliance and the regulatory agencies and how that’s what you appeared to brought in for, corporate compliance.
MAHEU: That’s right. Now, it didn’t take very long. First of all, Mark, when that hearing took place in Los Angeles I was so damned embarrassed because they ended up asking me the same questions that I’d been asking without getting any answers for about two plus months. Frankly, like Urban I was tempted to take the Fifth Amendment but that’s not my style. And for the sake of the stockholders I didn’t want to allow the only two directors to both take the Fifth Amendment.
FAULK: And obviously you had nothing to hide, you just didn’t have the knowledge that you wanted.
MAHEU: That’s right. I didn’t have the information, it was damned embarrassing. As I say, some of the questions were repetitious of what I’d been asking and then I realized that there were decisions made, or non-decisions made, with which I was not contacted or appraised. Anyway, then I really started putting the heat on the law firm. And you know “crunch out the numbers that I need here.” I kept getting reports that they could not crunch the numbers. Finally I told Don, “Don, when and if you are absolutely convinced that we cannot crunch the numbers enabling us to be compliant, I want you to tell me.” And when he did is when I submitted my resignation.
FAULK: Did he tell you why?
MAHEU: They kept trying to get the numbers; that I know. They’d get the accounting group, and then their own people and they’d asked for numbers, and there was always some kind of delay. They just flat could not come up with the numbers.
FAULK: So really you think that they were trying to dig up past information and people weren’t providing it to them.
MAHEU: Not only that, but current enough to comply with… Take the two separately for a moment, take the past …. They could not seem to put them together. But they couldn’t not keep the numbers that we needed from our entry into the organization up until the moment that I’m talking about. When Don said to me categorically, he said “Bob, there’s no doubt about it, we’re not going to be able to get the numbers together enabling us to comply.” That’s the day I submitted my resignation.
FAULK: Obviously the are so many stories that came out of this, that they brought you in to catch the bad guys, to orchestrate this big sting, and I guess the rumors, I can understand them because of your background.
MAHEU: Right.
FAULK: But that really wasn’t it at all.
MAHEU: Not at all. I made it very clear that …. And I testified before the judge at the same hearing, he said “is it possible they brought you in because of…” and I said “yes, that’s very possible.”
FAULK: That they brought you in because of your name.
MAHEU: That’s right.
FAULK: And that’s something that obviously you can only speculate on the reasons for that. Is it possible… and I guess this maybe goes into Urban, which we’ll get into that in a little bit anyway, but what are your feelings about him…Do you really believe he had the best interests of the shareholders at heart in this?
MAHEU: As strange as it may seem, I do. I think he’s very naïve and shoots from the hip. And truly… many times I feel sorry for him.
FAULK: I’ve heard that same thing from other people that have been involved with him that they believe that maybe he obviously made some mistakes along the way, and I have records that show that he made a lot of mistakes along the way. But that because of his own issues, whatever they may be, that maybe he wasn’t equipped to deal with a lot of things that happened.
MAHEU: Mark, how many people in your life have you seen, who without even realizing, live in a world of wishful thinking?
FAULK: A lot. There are a lot of shareholders in CMKX who are like that.
MAHEU: Reality does not exist in their world. I have been kinda weaned in that world because when Hughes… I was his alter ego for 15 years. When he went to the point of isolation I saw what lack of reality can do; it causes a lot of problems. It gets to the point where if they remove themselves from reality, unfortunately from that aspect reality exists in their minds… luckily, reality still exists outside. That happens, unfortunately.
FAULK: Do you think that happened with Urban to a degree then too?
MAHEU: Exactly.
FAULK: Honestly, unfortunately, I’ve known a lot of people in my life that I would describe as good hearts and bad habits. And from what I’ve learned about Urban it’s possible that he’s in that category.
MAHEU: Very much so.
FAULK: I know he dealt with, whether it’s gambling issues or drinking issues, I don’t even know what all… But the stories kinda point to that a little bit and that begins to cloud your judgment after a while to a large degree.
MAHEU: That’s right.
FAULK: Ok so, as you’re dealing with these people who did you come into contact along the way?
MAHEU: Not very many…that’s the uh… not every many. I was left out of a lot of things, like the decision to… I kept saying “When are you going to get an office?” Decisions were made without consulting with me.
FAULK: Did that lead you to believe that maybe they were kinda using you in name only to lend credibility to the company?
MAHEU: I had to have that feeling. I answered affirmatively when the judge asked me that question at the hearing. That was at the inception at this whole deal. I was what? Two plus months aboard at the time of the hearing, and not a hell of a lot longer.
FAULK: You’d been asking these same questions that the judge asked and not getting answers.
MAHEU: Right…
FAULK: And Stoecklein too then I assume was asking those questions.
MAHEU: Right.
FAULK: Ok, along the way, I’m trying to see what else we have here. There are a few other things that I could go over that were rumors but I could pretty much write them off. One was that there was a lot of talk about your son Peter being involved in Operation Bermuda Short.
MAHEU: Peter was not involved at all.
FAULK: I saw where that came from, there’s a Google search where he appeared at a convention and spoke with a guy who was involved in that. So somehow in that Google search they distorted the fact that Peter spoke at the same convention with a guy who was sheriff from Florida who was involved. And then they went “oh, Peter was involved in it.” But that’s the way the Google search showed up.
MAHEU: Peter does a lot of speeches on the Russian Mafia, and also on law enforcement as it applies to gaming.
FAULK: That’s exactly what this was; he was speaking on law enforcement and gaming at that one.
MAHEU: It’s a long distance to connect those two though.
FAULK: Yeah, exactly. They made some pretty good leaps on some of this stuff.
(Maheu and Faulk exchanged other contact numbers, etc.)
FAULK: Did you ever hear about John Edwards?
MAHEU: Yes
FAULK: What have you heard about him?
MAHEU: I may even have met him once, I’m not sure. Just that he was involved… he was buying stock or selling stock… Again, a lot of these things were never passed by me.
FAULK: Right. Well, as it turns out he was obviously selling stock and a lot of it. I don’t know if you’ve followed any of this since this. The NASD filed charges against a company called NevWest Securities, where John Edwards ran 250 billion shares of stock through NevWest.
MAHEU: Is that all?
FAULK: In that one that’s all, he may have even more than that somewhere else. And he did it through about 30 different companies too. In other words he had separate accounts so it didn’t appear that he was running that much and he would run a little bit through each account, it was just a mess. The good news out of all of that is that I know for a fact that the FBI and the DOJ are doing major investigations into all of these people. And I hope that they just come haul Edwards off and a few other people with him in the end. So, there could still be some justice here, it would be good, the shareholders do deserve that.
MAHEU: I’m still hoping that somehow… when I tell you that I resigned and forfeited all the back pay that they owed me, frankly, I just wanted the hell out. But I did stay on the task force.
FAULK: What made you decide to stay on the task force?
MAHEU: Because of the darn stuff that we needed to up with the best way to protect the stockholders. It was for them to recommend a law firm to bring in the authorities and to file with the federal court. By the way, I understand it has not taken place yet and I don’t know why.
FAULK: It has not, and between you and me Bill Frizzell is still behind the scenes doing everything he can. Bill is somebody who I just have the utmost respect for.
MAHEU: I do too, I do too.
FAULK: I think he has done a phenomenal job on that. Now, will that happen? We will see. I will say this; he has stayed involved enough that if it doesn’t happen he will do something to force the issue. He’ll do what you were talking about earlier; there will be some forced communications with people because of Bill Frizzell, he very much has been involved.
MAHEU: Oh good.
FAULK: I assume you probably know that Kevin West was brought on board at one stage?
MAHEU: Yes, right.
FAULK: I think he is in that same position, I don’t know if you have spoken to him since he became the interim CEO, but I think he’s in the same position where he’s in there maybe like you were and he’s just trying to find out what’s really going on. And then he’ll base his decisions more or less on what he can do to help the shareholders.
MAHEU: I hope they have to report before the court because that is needed.
FAULK: I agree with that completely. I think in the end that will be the only way that the truth comes out is for them to push it into the courts and the judge to step up and say enough is enough now let’s get it all out there. What about the SEC? What was your involvement with them? What are your feelings on how they’ve dealt with this?
MAHEU: Well, I don’t quite get this question.
FAULK: I’ve covered the issue of stock market fraud and naked short selling and stock counterfeiting over the last three years quite a bit and I’ve always had the impression that many times the SEC would just as soon kinda bury the companies and make it go away and I very much had that feeling in this particular issue but again from your viewpoint, do you feel like they were operating in the best interest of the shareholders?
MAHEU: I kept saying at that same hearing that I felt that they and we, and by we I mean those that were at the so-called management level at the time, had an obligation to protect the stockholders, and I was inferring that sometimes I get the impression that that was not what they were doing. I hope that answers your question.
FAULK: Yeah, it does. Sometimes it’s hard to tell if they are doing it maliciously or are they just kind of following the letter of the law. That’s a gray area where I obviously have my own opinions about how, not just in this case but how they’ve dealt with…
MAHEU: Why was the SEC put in place in the first place? I thought the first obligation they had was to protect the stockholders.
FAULK: Exactly. And theoretically that is true. I haven’t always seen it play out way and not just in this instance but in hundreds of companies. Very many times I’ve had them just say the easiest approach is to just make it go away.
MAHEU: I don’t know if you have the same feeling as I do, but my youngest son is the number 2 man on the police force in San Diego. He and I and Peter, who of course runs the Global Intelligence Network, we talk about certain things, about how things were handled in the past and how we feel that there is a tendency today to handle it differently. We feel that there are too many people in law enforcement or regulatory bodies today who begin with a conclusion. They do not logically arrive at one.
FAULK: So in other words you think they have a conclusion and then they try to find the facts to back up their preconceived…
MAHEU: They’ve got to rationalize their fallacious conclusion, and when you do that, Mark, and I don’t give a damn, you may be the smartest thing since 7-up, but you’re on a collision course.
FAULK: You’ve already clouded your objectivity, basically.
MAHEU: Exactly.
FAULK: That makes perfect sense. So, you got talked into staying on for the task force, at that phase who were you dealing with mainly? Was it Urban?
MAHEU: Oh, no.
FAULK: Was it Bill Frizzell?
MAHEU: It was Bill Frizzell and John Martin and Don. As I say, I concur with you, I trust Bill with anything. There’s never been a doubt in my mind that his whole participation was to protect the stockholders.
FAULK: I agree with that. And the same thing with John…
MAHEU: Exactly...and West too.
FAULK: I agree with that. I think that despite the bashing that everybody takes at one time or another, I don’t know why that people can’t understand that there are certain people you can trust and those are the three people that I go “I know I can trust them, I know I can trust you, everybody else I’m not so sure about.” But there are certain people that you can say “these people are on your side. At least acknowledge that.” Whether everybody agrees with their actions is another story.
MAHEU: That’s right. I have never claimed to pass the test of perfection, you know.
FAULK: Yeah, once you do that then you’re in big trouble. So really, you were involved with the task force, a little bit or a lot?
MAHEU: A little bit. Compared to what Bill was doing, if you compare it to that, and what John was doing, mine would’ve been a real little bit. I concurred with everything they were doing… but they were doing it. Bill has worked damn hard, as you know.
FAULK: He has and he still is. It if it makes you feel any better, I’m hoping that in the end you can look back at this and go “well at least something good came out of it”. Maybe you can say “maybe it wasn’t the biggest mistake I ever made.”
MAHEU: You don’t know how much I pray for that.
FAULK: I fully understand that and I know you really don’t pray for it for you own reputation but that …
MAHEU: Not at all. Mark, I’m old enough to know that you can’t go where I’ve been without leaving noses out of joint. But I’m not in the nose reparation business. You can’t go where I’ve been without being controversial.
FAULK: I totally agree with that. When was your last involvement with the company?
MAHEU: Boy… I think we may have been on a phone conversation months ago, just about the time we recommended that they go hire another law firm and try to get this matter into court.
FAULK: These are a couple of other rumors and I kinda probably know the answers to these already… One was --- there was someone who claimed that there was a nephew of yours involved in CMKX in some way and I don’t know where that rumor came from…
MAHEU: It was worse than that, it was a grandson wasn’t it? Whatever. No, there is not.
FAULK: Either way the answer is no...
MAHEU: Unless it’s someone that goes back twenty years down the road…
FAULK: Nobody you know of then?
MAHEU: No.
FAULK: Another was that there was a Casavant in your family tree...
MAHEU: That is absolutely true. My mother’s maiden name was Casavant.
FAULK: But you don’t know that she was related?
MAHEU: No.
FAULK: It has no connection to this story?
MAHEU: Not to my knowledge. My mother was born in Maine and her name was Casavant.
FAULK: That’s one of those trivia questions that’ll end up on a game.
MAHEU: That’s an odd name, they could be related.
FAULK: I think we’ve pretty much answered everything in there. Another one was…. I assume you have a tie-in with Steve Wynn. This vague rumor came out that you were brought in by Steve Wynn…but you’ve already answered that.
MAHEU: That I was brought in by Steve Wynn? No, he was never connected to my knowledge.
FAULK: I think that rumor came about because Steve Wynn had a little bit of a running feud going with a guy named Gary Walters, which is true. I’ve seen it on record, they were both fighting over a piece of land and Walters had some involvement with CMKX and people painted it as Steve Wynn getting even with Walters…who knows… all you need is two vague facts..
MAHEU: Steve is a good friend but… no.
FAULK: Some of these questions may sound stupid but I’m just pulling….I’m just trying to clear up some of the things that I hear.
MAHEU: I know how these things evolve…
FAULK: I know, I know.
MAHEU: The unfortunate thing about it, I was telling someone just the other day, the repetition of a lie becomes the truth, if it’s repeated often enough.
FAULK: Exactly, and with enough sincerity.
MAHEU: Exactly.
FAULK: That’s very true. I think you’ve pretty much answered everything.
MAHEU: Mark, you have my numbers. I invented 24/7, I’ve lived in that world all my life, so don’t hesitate to call me anytime.
FAULK: I appreciate that. And what I’ll do is put this together as I’m gonna use it in there and I’ll send you your whole little section of it. And again… you know how I’m gonna deal with it. I think you read people well enough. I don’t get the idea that you make mistakes of character very often.
MAHEU: No, I don’t. It’s a nice time to say that…and at the completion of this one.
(Both laughing)
FAULK: I appreciate all of your help on this and I know that the shareholders appreciate what you tried to do for them too. Last question—what are your hopes that will happen with this? What would you ideally love to see happen?
MAHEU: I’d love to see them get whole plus. I decided early on that I did not want any more salary and I continued on because…there is nothing that would please me more than to see them come out whole plus.
FAULK: I assume you know that there are some really bad guys involved with this thing, and I think Bill’s in a position where he wants to see some justice. He wants to see these people brought to justice. And I’m hoping that in the end you’ll be able to say well, I got involved in something that as you’ve said was maybe the biggest mistake you’ve ever made in business. But I hope that you can say something good came out of it in the end.
MAHEU: I really, really hope so. I don’t want a dime…
FAULK: That says a lot about your character. Well, I appreciate it, I don’t want to take any more of your time as of today. And if I come up with a random question I’ll call you back.
MAHEU: Don’t hesitate.
FAULK: I think you’ve covered everything and I really do appreciate it. And if you ever just get really bored and want to talk…you’re a pleasure to talk to. Thank you… I appreciate it.
INTERVIEWER’S NOTE: Bob contacted me a few days later, and after we missed each other on the phone a couple of times, we finally connected on the morning of June 12th. First, Maheu okayed the use of all of the part of the interview that related to CMKX, we talked for a bit about things that were unrelated to the book or CMKX, and then I asked him a couple of additional questions, one about Crystalix, the company that Urban invested three million dollars of CMKX shareholders’ money into, and whose CEO is Global Intelligence co-founder Kevin Ryan. I also rephrased the questions about his involvement (or, in this case, his lack of involvement) in any sting operations or negotiated settlements or payouts for CMKX shareholders, just to make it perfectly clear.
JUNE 12, 2007 INTERVIEW
MARK: Did you at any time have any involvement, directly or behind the scenes, with any Federal enforcement agencies orchestrating any type of sting operation, or trapping naked short sellers?
MAHEU: Absolutely not.
FAULK: No involvement with naked short selling or negotiating any type of cash settlement for CMKX shareholders, or any type of settlement?
MAHEU: Absolutely not.
FAULK: And no current involvement?
MAHEU: No.
FAULK: I have one question for you. I had stumbled onto some information about Crystalix, do you know anything about that company at all?
MAHEU: Why does that name register?
FAULK: Kevin Ryan has some involvement with Crystalix.
MAHEU: Of course, yes.
FAULK: The only reason I stumbled upon it was because Urban had invested some money into Crystalix at one time, and I didn’t know if you knew anything about that when it happened, or heard anything about it later.
MAHEU: No.
FAULK: You didn’t know anything about it?
MAHEU: No, but Kevin is a dear friend of mine, and he’s one of the founders of Global Intelligence.
Author’s note: After rumors surfaced that mobster Louie Ippolito was the person who set up the original meetings with Michael Williams preceding Maheu’s involvement with CMKM Diamonds, I contacted Bob once more to clarify that information. This is a short excerpt from our conversation, which mostly was just an informal chat about topics that had nothing to do with The Naked Truth: Investing in the Stock Play of a Lifetime, or with CMKM Diamonds.
FOLLOW-UP INTERVIEW, JANUARY 18, 2008:
Faulk: I have heard that someone named Louie Ippolito – are you familiar with him at all?
Maheu: Yeah
Faulk: There is someone who claims that Ippolito is the one who introduced you to Michael Williams originally. Is there any tie-in to that at all?
Maheu: No, I don’t have that recollection at all. My recollection is that Donald Stoecklein had done some work for Michael Williams and that’s how I was introduced…that’s my recollection.
Faulk: But you do know Ippolito?
Maheu: Yes, that’s correct.
And that was that. Bob and I promised to get together sometime if either of us was ever in our respective cities, but unfortunately, I never had the honor of meeting him face-to-face. I regret that. At some point, I’ll likely go back and transcribe the rest of the Maheu tapes. He told me several fascinating stories about his past (unrelated to CMKX or the book), and we talked for hours off the record about life in general, and his life in particular. I found him to be extremely likable and a very engaging storyteller. He was, in my opinion, a man who was true to his word. I don’t believe that he in any way intentionally deceived the shareholders of CMKX, but unfortunately, he was not the savior of the company that many hoped for either. On the other hand, looking back at these interviews, I find that my opinion of Urban Casavant very much changed over time as more and more evidence was uncovered.
I’ll close with a to-the-point quote that I believe sums up Maheu’s brief involvement in the “Stock Play of a Lifetime”.
“I prided myself on being able to solve problems, but this...this one one was unsolvable.”
~Bob Maheu, January 18, 2008
Robert Aime Maheu passed away on August 4, 2008. He was eighty years old. Maheu is survived by three sons, 10 grandchildren, and 10 great-grandchildren.
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by Mark Faulk
Mark Faulk’s first book, entitled The Naked Truth: Investing in the Stock Play of a Lifetime, is now available at www.thenakedtruthbook.com.
Conversations with Robert A. Maheu
March 8, 2007; March 11, 2007; June 12, 2007; January 18, 2008
AUTHOR’S NOTE: Because of the significance that shareholders attached to Bob Maheu’s involvement in the CMKX saga, I decided, with Bob’s permission, to release the entire portion of my interviews with him pertaining to CMKX. That way, the shareholders of the company and the readers of The Naked Truth: Investing in the Stock Play of a Lifetime can decide for themselves the extent of Maheu’s involvement with the company, or any so-called “sting operation.”
On a personal note, I have to say that my conversations with Bob Maheu were a highlight of this project. As I told him during my conversations with him, I have the utmost respect for Bob Maheu, both as a person of integrity, and for his countless accomplishments over a long and productive life.
After first insisting that I call him “Bob” instead of Mr. Maheu, he led me down a fascinating path through some of his many achievements, including his involvement in the attempt to overthrow Fidel Castro, his years as the alter-ego of Howard Hughes, and his role in aborting a contract between Aristotle Onassis and the King of Saudi Arabia that would have given much of the control of the world’s oil to Onassis. At the time of our conversations, Maheu was involved in extensive interviews covering his entire life, which will eventually be turned into a documentary on the Bay of Pigs and a movie script based on Maheu’s life.
This entire written transcript has been viewed and approved for accuracy by Bob Maheu.
MARCH 8, 2007 INTERVIEW:
BOB MAHEU: Hello.
MARK FAULK: Hello, this is Mark Faulk. How are you doing?
MAHEU: Fine, thank you, how are you?
FAULK: I’m doing well, back working on the book after delays waiting for everything to play out. I know you said you’d tell me the entire story of your involvement with CMKX, and I was hoping to take a few minutes of your time and hear your story.
MAHEU: Well, you know, it’s well over a year now since I’ve been out of it.
FAULK: So you haven’t had any involvement in the past year?
MAHEU: No, no. I stayed on the task force until we came up with the recommendation that they get an attorney, a trial attorney, and go to court… and I’ve not had anything else to do with it, and as I’ve told you, when I resigned over…about a year and a half ago now, I forfeited all my back salary and everything.
Unfortunately…or fortunately, I started handling impossible assignments when I was eleven years old, and I’ve always been challenged. And as you know… you can’t make them all.
FAULK: And once you make one, you’re expected to do it every time.
MAHEU: Exactly.
FAULK: And you’ve done it several times, so you have a good track record in that regard.
MAHEU: Well, at age eleven, Mark, I came home and told my Mom that I had just met the little girl that I was going to marry. True story. And after she said it was impossible for the third time, I said “Mom, I love you very dearly, but I’m going to prove you wrong.” And I married that little girl not once, but four times. We were remarried on our 25th, on our 50th, and on our 60th without telling the kids we eloped to Seattle, just the two of us, and we were remarried in the same little church where we had first been married sixty years earlier. And all through my life… when I was in school, if someone said we have to drop this program, I’d say “Why?” In college it was the same thing.
But this one…this one was a mistake. It was an impossible deal.
FAULK: Everyone I’ve talked to about this, they all have one thing in common; they had no idea how complicated it was. I had no idea how complicated it was when I was first contracted to write this story. You have no idea what you’re getting into when you get into the middle of CMKX.
MAHEU: That’s right. I was not sure what we could do about the past, but I felt certain that somewhere they had to have numbers enabling us to conform.
(At this point, Maheu asked to consult his attorney first before we did the full interview, and I agreed. We set up a date to tell the full story, which Maheu said would be “very simple.”)
MARCH 11, 2007 INTERVIEW:
FAULK: Hello Bob, this is Mark Faulk. I hope I’m not calling too early.
MAHEU: Well, you’re disturbing my lunch, but that’s okay. Not really…but I’ve always said that if you go to bed with a clear conscience you don’t need much sleep.
(I have omitted a preliminary conversation about Bob Maheu’s background and history unrelated to CMKX. Maheu intro'd his comments about CMKX with an explanation of "forced communication".)
MAHEU: A good example of forced communication is the Apollo 12. The mission was to walk to Surveyor II on the moon, Surveyor II was a Hughes aircraft, it was a soft landing vehicle, which upon instructions from Earth would send back information to Earth. The mission was, they were going to walk to the Surveyor and at the last minute Hughes decided he wanted his name connected to the mission. So we knew the astronauts, we were very close to them. My son would take them fishing, they came here to break the ribbon for one of our projects… And came here also for a cancer society fundraiser that my son was chairman of. They brought things that had been on the moon, moon rocks. We had a great relationship with the astronauts. So I sent Peter this tape and he calls me back and says “Dad, it’s not negotiable. NASA will not allow any name of a manufacturer to be identified with the mission.” I said “Peter, that’s not our assignment.”
Ok, so what did we do? We ordered 20 miniature gold modules of the Surveyor; we ordered 4,000 badges, great big white badges, with black letters “Hello Halo”. I got a yacht out of Ft. Lauderdale, my wife and I flew down there to the suite of the hotel and had one of the best chef’s available out of Miami aboard the yacht. Now I’m having lunch with Walter Cronkite and Hugh Downs and on the way out I give them a couple of these little miniatures. And they say “What’s this?” I said “this is where the guys are going to go on the moon; it’s a module of the Surveyor II.” All of a sudden there are 3 or 4 thousand people at the gate walking around the gate with badges and the miniatures and people are beginning to ask, "What’s Halo? "Halo is Hughes Aircraft Lunar Observer." By that time NASA couldn’t stop it, and not only that they finally joined us.
That’s forced communications.
FAULK: You put people in a position where they did what you wanted; they obviously didn’t know what they were doing for you when they are carrying these things around.
MAHEU: Exactly, sooner or later it’s obvious what we’re doing… they’re getting these things for free and they don’t look too bad…
Anyway, I’m glad we’re on this vein of conversation because I think you’ll understand better why I became involved why I became involved in what may be the biggest mistake I’ve ever made in business.
FAULK: I think maybe we’ll begin by just letting you tell how you got involved in CMKX. I’ve heard so many different things and obviously you know that too, this thing lives on rumors.
MAHEU: And they can’t seem to be convinced that I’m not still involved.
FAULK: Exactly. It wouldn’t matter if we put out an actual word for word interview with you, there will still be people who will say “but yeah, he can’t tell you…” I’ve always said, “If Bob Maheu can’t tell you something, he’s just going to say ‘I can’t tell you.’ He won’t lie, he’ll just say ‘I can’t tell you.’”
MAHEU: yes, exactly.
FAULK: That’s why I have been very confident in that whatever you tell me, you’ll say what you can and otherwise you’re not gonna say “I’ll go out and deceive everybody.” You’ll just say “well, I can’t talk about that.”
MAHEU: That’s right. Fortuitously, when I told the attorneys that you were willing to give us an advance copy they said “go ahead.”
Anyway, for the sake of being repetitious, I told you that I have always been intrigued with impossible assignments. I think I told you the story about coming home at age 11 and telling my mom I’d met the girl I was going to marry. When Mom mentioned the word impossible for the third time I said “Mom, I love you dearly, but I’m going to prove you wrong.” I didn’t marry Evette to prove my mom wrong but it happened.
FAULK: I think there are things in your life that you would call defining moments, and I’ve heard you bring that up two or three times. Do you think that’s one of the moments where your resolve was set, where you said “ok, if you tell me I can’t do something, then I’m gonna go do it”?
MAHEU: Exactly! It was there and everywhere in high school, there were things in high school that would happen and people would say “It’s impossible, give it to Bob.” It’s always been the same way.
The only time that my love was really in great jeopardy, even before we were married, I was a freshman in college and they tell me that they are going to stop having the monthly dance.
And I said “why?”
And they said “we can’t get dates.”
“Let me handle that.”
“What are you going to do?”
“I’m going to start a dating bureau.” Which I did. Evette would come to the dances and that’s when she found out about the dating bureau.
Some guy walked up and said “Great date, Bob, how the hell did you fix me up with this girl?”
FAULK: I think that’s what’s known as creative problem solving.
MAHEU: Everyone…well not everyone because some guys didn’t… but most guys liked their dates, but Evette didn’t like that at all.
It was the same thing in the FBI, when I got in the bureau, one of the first assignments I had I created myself. I ended up getting a meritorious raise. That’s been my story, give me an assignment… Anyway, I took this one (CMKX) on with the same enthusiasm; I should’ve checked it out a hell of a lot more carefully before I did.
FAULK: Now originally, was it Stoecklein that came to you with this?
MAHEU: No. I was the one who brought Stoecklein in.
FAULK: Oh really? So where did you first hear of this?
MAHEU: I got a phone call from a guy…I can’t remember his name; he wanted to know if he could stop by the house with Urban Casavant.
FAULK: It wasn’t Mike Williams, was it?
MAHEU: Yes… yes, I had forgotten his last name.
FAULK: So….you knew Urban then?
MAHEU: No, I did not.
FAULK: You did not, but you knew Mike Williams?
MAHEU: Yes.
FAULK: And where did you know him from?
MAHEU: He kept popping up now and then with ideas and we never ended up doing anything of the business sort. He kept popping up with ideas, but nothing ever came to fruition that I can think of except this one.
FAULK: Does it make you glad that you didn’t do other deals with him?
MAHEU: Well, yes.
FAULK: What did you know about Williams?
MAHEU: Not anything really.
FAULK: How did you meet him?
MAHEU: That I cannot remember. So many of these things, a lot of them go back to the Hughes days. I get so damn many of those, Mark. People come up with ideas and very seldom are they worth following.
FAULK: And because of your name and reputation obviously anybody who has an idea goes “ok, I’ve got something, let’s go pitch it to Bob Maheu.” I’m sure you’ve been in great demand your whole life because of your reputation and your ability to make things happen. So, Mike Williams brought Urban over to your house, or your office…
MAHEU: To my house, I operate out of my house, although all my email goes to my son Peter’s office.
FAULK: Okay… Do you remember when that was approximately?
MAHEU: Quite a while ago and then I didn’t hear from him for a long time. Then they showed up again and I said ok, providing you let me bring in the attorneys. And they agreed, so I brought in Don.
FAULK: What were they telling you when they were coming over?
MAHEU: They had all this stuff and they needed someone to…they had not… well, I’m trying to think of exactly how they said it … they needed someone to put all of these problems together. They’d had some problems, they did have some regulatory problems, they wanted to know if I would help them take care of the past, and also, I made it very clear that I couldn’t guarantee what I could do about the past. But I would insist that from hence forward that they would be in compliance.
FAULK: Did they talk at all about the so called kind of bad guys that were in?
MAHEU: No
FAULK: So it was really just compliance issues and straightening up the regulatory mess.
MAHEU: Right. The deal that I have recollection of making is right along those same lines. I would do the best I could to rectify the past and that I would insist that everything had to be in the realm of compliance for the future.
FAULK: I was actually looking at a few of your quotes this morning and almost every one of them spoke of compliance and the regulatory agencies and how that’s what you appeared to brought in for, corporate compliance.
MAHEU: That’s right. Now, it didn’t take very long. First of all, Mark, when that hearing took place in Los Angeles I was so damned embarrassed because they ended up asking me the same questions that I’d been asking without getting any answers for about two plus months. Frankly, like Urban I was tempted to take the Fifth Amendment but that’s not my style. And for the sake of the stockholders I didn’t want to allow the only two directors to both take the Fifth Amendment.
FAULK: And obviously you had nothing to hide, you just didn’t have the knowledge that you wanted.
MAHEU: That’s right. I didn’t have the information, it was damned embarrassing. As I say, some of the questions were repetitious of what I’d been asking and then I realized that there were decisions made, or non-decisions made, with which I was not contacted or appraised. Anyway, then I really started putting the heat on the law firm. And you know “crunch out the numbers that I need here.” I kept getting reports that they could not crunch the numbers. Finally I told Don, “Don, when and if you are absolutely convinced that we cannot crunch the numbers enabling us to be compliant, I want you to tell me.” And when he did is when I submitted my resignation.
FAULK: Did he tell you why?
MAHEU: They kept trying to get the numbers; that I know. They’d get the accounting group, and then their own people and they’d asked for numbers, and there was always some kind of delay. They just flat could not come up with the numbers.
FAULK: So really you think that they were trying to dig up past information and people weren’t providing it to them.
MAHEU: Not only that, but current enough to comply with… Take the two separately for a moment, take the past …. They could not seem to put them together. But they couldn’t not keep the numbers that we needed from our entry into the organization up until the moment that I’m talking about. When Don said to me categorically, he said “Bob, there’s no doubt about it, we’re not going to be able to get the numbers together enabling us to comply.” That’s the day I submitted my resignation.
FAULK: Obviously the are so many stories that came out of this, that they brought you in to catch the bad guys, to orchestrate this big sting, and I guess the rumors, I can understand them because of your background.
MAHEU: Right.
FAULK: But that really wasn’t it at all.
MAHEU: Not at all. I made it very clear that …. And I testified before the judge at the same hearing, he said “is it possible they brought you in because of…” and I said “yes, that’s very possible.”
FAULK: That they brought you in because of your name.
MAHEU: That’s right.
FAULK: And that’s something that obviously you can only speculate on the reasons for that. Is it possible… and I guess this maybe goes into Urban, which we’ll get into that in a little bit anyway, but what are your feelings about him…Do you really believe he had the best interests of the shareholders at heart in this?
MAHEU: As strange as it may seem, I do. I think he’s very naïve and shoots from the hip. And truly… many times I feel sorry for him.
FAULK: I’ve heard that same thing from other people that have been involved with him that they believe that maybe he obviously made some mistakes along the way, and I have records that show that he made a lot of mistakes along the way. But that because of his own issues, whatever they may be, that maybe he wasn’t equipped to deal with a lot of things that happened.
MAHEU: Mark, how many people in your life have you seen, who without even realizing, live in a world of wishful thinking?
FAULK: A lot. There are a lot of shareholders in CMKX who are like that.
MAHEU: Reality does not exist in their world. I have been kinda weaned in that world because when Hughes… I was his alter ego for 15 years. When he went to the point of isolation I saw what lack of reality can do; it causes a lot of problems. It gets to the point where if they remove themselves from reality, unfortunately from that aspect reality exists in their minds… luckily, reality still exists outside. That happens, unfortunately.
FAULK: Do you think that happened with Urban to a degree then too?
MAHEU: Exactly.
FAULK: Honestly, unfortunately, I’ve known a lot of people in my life that I would describe as good hearts and bad habits. And from what I’ve learned about Urban it’s possible that he’s in that category.
MAHEU: Very much so.
FAULK: I know he dealt with, whether it’s gambling issues or drinking issues, I don’t even know what all… But the stories kinda point to that a little bit and that begins to cloud your judgment after a while to a large degree.
MAHEU: That’s right.
FAULK: Ok so, as you’re dealing with these people who did you come into contact along the way?
MAHEU: Not very many…that’s the uh… not every many. I was left out of a lot of things, like the decision to… I kept saying “When are you going to get an office?” Decisions were made without consulting with me.
FAULK: Did that lead you to believe that maybe they were kinda using you in name only to lend credibility to the company?
MAHEU: I had to have that feeling. I answered affirmatively when the judge asked me that question at the hearing. That was at the inception at this whole deal. I was what? Two plus months aboard at the time of the hearing, and not a hell of a lot longer.
FAULK: You’d been asking these same questions that the judge asked and not getting answers.
MAHEU: Right…
FAULK: And Stoecklein too then I assume was asking those questions.
MAHEU: Right.
FAULK: Ok, along the way, I’m trying to see what else we have here. There are a few other things that I could go over that were rumors but I could pretty much write them off. One was that there was a lot of talk about your son Peter being involved in Operation Bermuda Short.
MAHEU: Peter was not involved at all.
FAULK: I saw where that came from, there’s a Google search where he appeared at a convention and spoke with a guy who was involved in that. So somehow in that Google search they distorted the fact that Peter spoke at the same convention with a guy who was sheriff from Florida who was involved. And then they went “oh, Peter was involved in it.” But that’s the way the Google search showed up.
MAHEU: Peter does a lot of speeches on the Russian Mafia, and also on law enforcement as it applies to gaming.
FAULK: That’s exactly what this was; he was speaking on law enforcement and gaming at that one.
MAHEU: It’s a long distance to connect those two though.
FAULK: Yeah, exactly. They made some pretty good leaps on some of this stuff.
(Maheu and Faulk exchanged other contact numbers, etc.)
FAULK: Did you ever hear about John Edwards?
MAHEU: Yes
FAULK: What have you heard about him?
MAHEU: I may even have met him once, I’m not sure. Just that he was involved… he was buying stock or selling stock… Again, a lot of these things were never passed by me.
FAULK: Right. Well, as it turns out he was obviously selling stock and a lot of it. I don’t know if you’ve followed any of this since this. The NASD filed charges against a company called NevWest Securities, where John Edwards ran 250 billion shares of stock through NevWest.
MAHEU: Is that all?
FAULK: In that one that’s all, he may have even more than that somewhere else. And he did it through about 30 different companies too. In other words he had separate accounts so it didn’t appear that he was running that much and he would run a little bit through each account, it was just a mess. The good news out of all of that is that I know for a fact that the FBI and the DOJ are doing major investigations into all of these people. And I hope that they just come haul Edwards off and a few other people with him in the end. So, there could still be some justice here, it would be good, the shareholders do deserve that.
MAHEU: I’m still hoping that somehow… when I tell you that I resigned and forfeited all the back pay that they owed me, frankly, I just wanted the hell out. But I did stay on the task force.
FAULK: What made you decide to stay on the task force?
MAHEU: Because of the darn stuff that we needed to up with the best way to protect the stockholders. It was for them to recommend a law firm to bring in the authorities and to file with the federal court. By the way, I understand it has not taken place yet and I don’t know why.
FAULK: It has not, and between you and me Bill Frizzell is still behind the scenes doing everything he can. Bill is somebody who I just have the utmost respect for.
MAHEU: I do too, I do too.
FAULK: I think he has done a phenomenal job on that. Now, will that happen? We will see. I will say this; he has stayed involved enough that if it doesn’t happen he will do something to force the issue. He’ll do what you were talking about earlier; there will be some forced communications with people because of Bill Frizzell, he very much has been involved.
MAHEU: Oh good.
FAULK: I assume you probably know that Kevin West was brought on board at one stage?
MAHEU: Yes, right.
FAULK: I think he is in that same position, I don’t know if you have spoken to him since he became the interim CEO, but I think he’s in the same position where he’s in there maybe like you were and he’s just trying to find out what’s really going on. And then he’ll base his decisions more or less on what he can do to help the shareholders.
MAHEU: I hope they have to report before the court because that is needed.
FAULK: I agree with that completely. I think in the end that will be the only way that the truth comes out is for them to push it into the courts and the judge to step up and say enough is enough now let’s get it all out there. What about the SEC? What was your involvement with them? What are your feelings on how they’ve dealt with this?
MAHEU: Well, I don’t quite get this question.
FAULK: I’ve covered the issue of stock market fraud and naked short selling and stock counterfeiting over the last three years quite a bit and I’ve always had the impression that many times the SEC would just as soon kinda bury the companies and make it go away and I very much had that feeling in this particular issue but again from your viewpoint, do you feel like they were operating in the best interest of the shareholders?
MAHEU: I kept saying at that same hearing that I felt that they and we, and by we I mean those that were at the so-called management level at the time, had an obligation to protect the stockholders, and I was inferring that sometimes I get the impression that that was not what they were doing. I hope that answers your question.
FAULK: Yeah, it does. Sometimes it’s hard to tell if they are doing it maliciously or are they just kind of following the letter of the law. That’s a gray area where I obviously have my own opinions about how, not just in this case but how they’ve dealt with…
MAHEU: Why was the SEC put in place in the first place? I thought the first obligation they had was to protect the stockholders.
FAULK: Exactly. And theoretically that is true. I haven’t always seen it play out way and not just in this instance but in hundreds of companies. Very many times I’ve had them just say the easiest approach is to just make it go away.
MAHEU: I don’t know if you have the same feeling as I do, but my youngest son is the number 2 man on the police force in San Diego. He and I and Peter, who of course runs the Global Intelligence Network, we talk about certain things, about how things were handled in the past and how we feel that there is a tendency today to handle it differently. We feel that there are too many people in law enforcement or regulatory bodies today who begin with a conclusion. They do not logically arrive at one.
FAULK: So in other words you think they have a conclusion and then they try to find the facts to back up their preconceived…
MAHEU: They’ve got to rationalize their fallacious conclusion, and when you do that, Mark, and I don’t give a damn, you may be the smartest thing since 7-up, but you’re on a collision course.
FAULK: You’ve already clouded your objectivity, basically.
MAHEU: Exactly.
FAULK: That makes perfect sense. So, you got talked into staying on for the task force, at that phase who were you dealing with mainly? Was it Urban?
MAHEU: Oh, no.
FAULK: Was it Bill Frizzell?
MAHEU: It was Bill Frizzell and John Martin and Don. As I say, I concur with you, I trust Bill with anything. There’s never been a doubt in my mind that his whole participation was to protect the stockholders.
FAULK: I agree with that. And the same thing with John…
MAHEU: Exactly...and West too.
FAULK: I agree with that. I think that despite the bashing that everybody takes at one time or another, I don’t know why that people can’t understand that there are certain people you can trust and those are the three people that I go “I know I can trust them, I know I can trust you, everybody else I’m not so sure about.” But there are certain people that you can say “these people are on your side. At least acknowledge that.” Whether everybody agrees with their actions is another story.
MAHEU: That’s right. I have never claimed to pass the test of perfection, you know.
FAULK: Yeah, once you do that then you’re in big trouble. So really, you were involved with the task force, a little bit or a lot?
MAHEU: A little bit. Compared to what Bill was doing, if you compare it to that, and what John was doing, mine would’ve been a real little bit. I concurred with everything they were doing… but they were doing it. Bill has worked damn hard, as you know.
FAULK: He has and he still is. It if it makes you feel any better, I’m hoping that in the end you can look back at this and go “well at least something good came out of it”. Maybe you can say “maybe it wasn’t the biggest mistake I ever made.”
MAHEU: You don’t know how much I pray for that.
FAULK: I fully understand that and I know you really don’t pray for it for you own reputation but that …
MAHEU: Not at all. Mark, I’m old enough to know that you can’t go where I’ve been without leaving noses out of joint. But I’m not in the nose reparation business. You can’t go where I’ve been without being controversial.
FAULK: I totally agree with that. When was your last involvement with the company?
MAHEU: Boy… I think we may have been on a phone conversation months ago, just about the time we recommended that they go hire another law firm and try to get this matter into court.
FAULK: These are a couple of other rumors and I kinda probably know the answers to these already… One was --- there was someone who claimed that there was a nephew of yours involved in CMKX in some way and I don’t know where that rumor came from…
MAHEU: It was worse than that, it was a grandson wasn’t it? Whatever. No, there is not.
FAULK: Either way the answer is no...
MAHEU: Unless it’s someone that goes back twenty years down the road…
FAULK: Nobody you know of then?
MAHEU: No.
FAULK: Another was that there was a Casavant in your family tree...
MAHEU: That is absolutely true. My mother’s maiden name was Casavant.
FAULK: But you don’t know that she was related?
MAHEU: No.
FAULK: It has no connection to this story?
MAHEU: Not to my knowledge. My mother was born in Maine and her name was Casavant.
FAULK: That’s one of those trivia questions that’ll end up on a game.
MAHEU: That’s an odd name, they could be related.
FAULK: I think we’ve pretty much answered everything in there. Another one was…. I assume you have a tie-in with Steve Wynn. This vague rumor came out that you were brought in by Steve Wynn…but you’ve already answered that.
MAHEU: That I was brought in by Steve Wynn? No, he was never connected to my knowledge.
FAULK: I think that rumor came about because Steve Wynn had a little bit of a running feud going with a guy named Gary Walters, which is true. I’ve seen it on record, they were both fighting over a piece of land and Walters had some involvement with CMKX and people painted it as Steve Wynn getting even with Walters…who knows… all you need is two vague facts..
MAHEU: Steve is a good friend but… no.
FAULK: Some of these questions may sound stupid but I’m just pulling….I’m just trying to clear up some of the things that I hear.
MAHEU: I know how these things evolve…
FAULK: I know, I know.
MAHEU: The unfortunate thing about it, I was telling someone just the other day, the repetition of a lie becomes the truth, if it’s repeated often enough.
FAULK: Exactly, and with enough sincerity.
MAHEU: Exactly.
FAULK: That’s very true. I think you’ve pretty much answered everything.
MAHEU: Mark, you have my numbers. I invented 24/7, I’ve lived in that world all my life, so don’t hesitate to call me anytime.
FAULK: I appreciate that. And what I’ll do is put this together as I’m gonna use it in there and I’ll send you your whole little section of it. And again… you know how I’m gonna deal with it. I think you read people well enough. I don’t get the idea that you make mistakes of character very often.
MAHEU: No, I don’t. It’s a nice time to say that…and at the completion of this one.
(Both laughing)
FAULK: I appreciate all of your help on this and I know that the shareholders appreciate what you tried to do for them too. Last question—what are your hopes that will happen with this? What would you ideally love to see happen?
MAHEU: I’d love to see them get whole plus. I decided early on that I did not want any more salary and I continued on because…there is nothing that would please me more than to see them come out whole plus.
FAULK: I assume you know that there are some really bad guys involved with this thing, and I think Bill’s in a position where he wants to see some justice. He wants to see these people brought to justice. And I’m hoping that in the end you’ll be able to say well, I got involved in something that as you’ve said was maybe the biggest mistake you’ve ever made in business. But I hope that you can say something good came out of it in the end.
MAHEU: I really, really hope so. I don’t want a dime…
FAULK: That says a lot about your character. Well, I appreciate it, I don’t want to take any more of your time as of today. And if I come up with a random question I’ll call you back.
MAHEU: Don’t hesitate.
FAULK: I think you’ve covered everything and I really do appreciate it. And if you ever just get really bored and want to talk…you’re a pleasure to talk to. Thank you… I appreciate it.
INTERVIEWER’S NOTE: Bob contacted me a few days later, and after we missed each other on the phone a couple of times, we finally connected on the morning of June 12th. First, Maheu okayed the use of all of the part of the interview that related to CMKX, we talked for a bit about things that were unrelated to the book or CMKX, and then I asked him a couple of additional questions, one about Crystalix, the company that Urban invested three million dollars of CMKX shareholders’ money into, and whose CEO is Global Intelligence co-founder Kevin Ryan. I also rephrased the questions about his involvement (or, in this case, his lack of involvement) in any sting operations or negotiated settlements or payouts for CMKX shareholders, just to make it perfectly clear.
JUNE 12, 2007 INTERVIEW
MARK: Did you at any time have any involvement, directly or behind the scenes, with any Federal enforcement agencies orchestrating any type of sting operation, or trapping naked short sellers?
MAHEU: Absolutely not.
FAULK: No involvement with naked short selling or negotiating any type of cash settlement for CMKX shareholders, or any type of settlement?
MAHEU: Absolutely not.
FAULK: And no current involvement?
MAHEU: No.
FAULK: I have one question for you. I had stumbled onto some information about Crystalix, do you know anything about that company at all?
MAHEU: Why does that name register?
FAULK: Kevin Ryan has some involvement with Crystalix.
MAHEU: Of course, yes.
FAULK: The only reason I stumbled upon it was because Urban had invested some money into Crystalix at one time, and I didn’t know if you knew anything about that when it happened, or heard anything about it later.
MAHEU: No.
FAULK: You didn’t know anything about it?
MAHEU: No, but Kevin is a dear friend of mine, and he’s one of the founders of Global Intelligence.
Author’s note: After rumors surfaced that mobster Louie Ippolito was the person who set up the original meetings with Michael Williams preceding Maheu’s involvement with CMKM Diamonds, I contacted Bob once more to clarify that information. This is a short excerpt from our conversation, which mostly was just an informal chat about topics that had nothing to do with The Naked Truth: Investing in the Stock Play of a Lifetime, or with CMKM Diamonds.
FOLLOW-UP INTERVIEW, JANUARY 18, 2008:
Faulk: I have heard that someone named Louie Ippolito – are you familiar with him at all?
Maheu: Yeah
Faulk: There is someone who claims that Ippolito is the one who introduced you to Michael Williams originally. Is there any tie-in to that at all?
Maheu: No, I don’t have that recollection at all. My recollection is that Donald Stoecklein had done some work for Michael Williams and that’s how I was introduced…that’s my recollection.
Faulk: But you do know Ippolito?
Maheu: Yes, that’s correct.
And that was that. Bob and I promised to get together sometime if either of us was ever in our respective cities, but unfortunately, I never had the honor of meeting him face-to-face. I regret that. At some point, I’ll likely go back and transcribe the rest of the Maheu tapes. He told me several fascinating stories about his past (unrelated to CMKX or the book), and we talked for hours off the record about life in general, and his life in particular. I found him to be extremely likable and a very engaging storyteller. He was, in my opinion, a man who was true to his word. I don’t believe that he in any way intentionally deceived the shareholders of CMKX, but unfortunately, he was not the savior of the company that many hoped for either. On the other hand, looking back at these interviews, I find that my opinion of Urban Casavant very much changed over time as more and more evidence was uncovered.
I’ll close with a to-the-point quote that I believe sums up Maheu’s brief involvement in the “Stock Play of a Lifetime”.
“I prided myself on being able to solve problems, but this...this one one was unsolvable.”
~Bob Maheu, January 18, 2008
Robert Aime Maheu passed away on August 4, 2008. He was eighty years old. Maheu is survived by three sons, 10 grandchildren, and 10 great-grandchildren.
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