THE FRANKLIN COVER-UP -- CHILD ABUSE, SATANISM, AND MURDER IN NEBRASKA
CHAPTER 12: THE OMAHA BUSINESS COMMUNITY
Senator Schmit warned the Franklin committee at the outset, not to expect to breeze through an investigation like this. "No one person," he told the Executive Board session of December 12, 1988, "could have masterminded this without the compliance and the acquiescence and cooperation of a number of people, some of whom had to be in official positions. ... I do not want anyone to say I want to be on this committee, then all of a sudden say, wait a minute, I don't want to walk through that mine field with you, because that is what it will very likely prove to be."
Senator Chambers, who represented the black district of north Omaha where Franklin was headquartered, agreed: "What Larry King is doing is the tip of an iceberg and he's not in it by himself. One thing I told the Attorney General ... is that I don't want Larry King to commit suicide and I don't want any accidents that will take him out. What he's doing he has not done by himself and couldn't do by himself."
With over forty years in the Legislature between them, Schmit and Chambers knew whereof they spoke. Behind Larry King's rise to fame and riches stood some of the most powerful figures in Nebraska politics and finance.
Larry King himself bragged about his connections. "I felt that I could call anyone in this city," he told the TV interviewer who questioned him about favors from Chief Wadman. In a September 7, 1988 interview with the Omaha weekly Metropolitan, before the Franklin Credit Union scandal broke, King was more expansive about his friends:
They were the key to my success. I had really great, great people who were counselors and teachers, who were over some of the major companies in the city. And I would go to them and ask them what they thought I should do and sometimes they would come and sit down or send someone out to talk with us. Harold Andersen of the World-Herald was one of the great people who came out. Bill Fitzgerald at Commercial Federal Savings and Loan. I called him once years ago when we were in a crisis and he said, "I'll be there at 7:30 tomorrow morning." And so he was. So I have to say the Omaha power structure has some of the best people to work with. They'll help you if they're convinced you want to help Omaha. They don't turn their backs; they have never done it to me. And I appreciate it because I like being a part of what makes this city grow, and this country.
Had the "Omaha power structure" merely extended a liberal hand to a young black man trying to get ahead? For some of the city's elite, perhaps that's all there was to it.
Days and even weeks after the raid, some of Franklin's backers were still defending King. The World-Herald of November 9, 1988 quoted its own publisher, Harold Andersen, Ken Power of US West Communications, and Lyn Wallin Ziegenbein of the Kiewit Foundation, in praise of King. "Until the day it closed, Franklin was performing a useful purpose," Harold Andersen said on November 30, 1988.
Yet someone making even a casual inquiry -- such as a businessman might be expected to do before he contributed or deposited hundreds of thousands of dollars in a credit union -- would quickly hear the kind of warning Boys Town social worker Julie Walters did, when she asked around about King. They would have heard he was a dangerous man, and they would have heard about pornography, drugs, and pedophilia. Some, at least, of these "great people" from the major companies, had to know precisely what they were doing when they sponsored Larry King.
In Gary Caradori's files is the transcript of a February 12, 1989 phone conversation with Sheila McGuire, aka Sheila Calder, former manager of the French Cafe, who had moved to the West Coast. This night spot, partly owned by Larry King, was named by victim-witnesses as a center of sexual abuse. Alisha Owen told Caradori that "Sheila Calder would arrange parties at the French Cafe during the afternoon when the cafe was closed."
Here is what the hostess had to say:
We had parties in my apartment above the French Cafe. Larry King would wine and dine potential investors downstairs at the Cafe. When the French Cafe closed about 1 AM, King and his man called Parking Lot Bob -- who worked for him (and was our coke connection) -- would bring people upstairs to my place. If Larry King investors wanted drugs, booze, children or hookers (male or female) we'd get them. While these guests of Kings took their pleasures -- with the kids or whoever -- King would sit and watch -- while he drank, did coke and played with his young boys. ...
One time, when this guy Irv from NYC wanted Sandra -- who was about 12 or 13 years old and getting her 1st period, Larry intervened when Sandra refused. King pulled out a roll of $100.00 bills and gave Sandra 5 of them. King then pulled out a small gram of coke and gave that to Sandra. Sandra finally agreed and went off to bed with Irv.
King took good care of the local and out of town high rollers. If you had the money to invest at Franklin, King would cater to your most deranged perversion. And, let me tell you another thing. The boys in the board rooms around Omaha are s---ing in their Brogans. If this case gets cracked open the list of involved will read like Who's Who. King and his crew have ruined a lot of childrens' lives.
Two years after the raid on King's credit union, as the legislative Franklin committee's original term drew to a close, an old hand in Nebraska politics reflected on the events of the past 24 months. "The Omaha business community," he said, "the Ak-Sar-Ben crowd, has really closed ranks behind Alan Baer, Andersen and the rest of them. The word has gone out: layoff the Franklin investigation. Most of the Senators are terrified. These guys make and break political careers. They give a lot of campaign money, and many of the Senators get what are generously called 'consulting fees,' or sometimes positions -- no-show jobs, really -- with the big firms up there. That's the way it's done. It's not uncommon for a big company to have more than one Senator on a $50,000 retainer."
Who were "these guys," the Ak-Sar-Ben crowd?
Visit the Omaha Public Library to look up the boards of directors of big Omaha companies, and you will find names that are listed on board after board. Take a few of those -- say, Walter Scott, Jr., chairman and CEO of the construction giant, Peter Kiewit and Sons Corporation; Charles "Mike" Harper, chairman and CEO of the $20 billion per year food conglomerate ConAgra; Michael H. Walsh, CEO of Union Pacific Railroad, a major force in Nebraska for over a hundred years -- and ask the librarian to help find information on these men. The reply will likely be something like what one library staffer told a friend of mine in 1991: "These are businessmen all right, but they are intensely secretive. We have very little on them."
For over a century, the Omaha business community has been organized around the Knights of Ak-Sar-Ben, a quasi-freemasonic social organization, centered on a racetrack and fairgrounds in Omaha. Spell "Nebraska" backwards and you get its name. Founded in 1895, Ak-Sar-Ben functions as a sort of central committee of the corporate elite, and a self-perceived oligarchy for the city.
Every year Ak-Sar-Ben celebrates a ritual coronation of the "King of Ak-Sar-Ben," generally an older corporate executive, and his Queen, generally the younger wife or daughter of another man in the club. The king for 1990 was Mike Harper of ConAgra. Here, and at debutante balls and other affairs organized for the younger generation, the lords and ladies of Ak-Sar-Ben establish their social pecking order. The rituals and "den shows" mimic ceremonies from different lands, real and invented, and always pagan. Past Ak-Sar-Ben festivity themes included: "The Roman Hippodrome," "King Arthur's Wild Goats," "Trouble in the Tropics," and "Hi-Jinx in Hades." Sometimes the men and boys of Ak-Sar-Ben paraded in women's clothing, or dressed as Egyptian goddesses.
Ak-Sar-Ben's clout is so legendary, that Omaha Mayor P.J. Morgan, himself a member of the Ak-Sar-Ben social set, could make political hay by a demagogic attack on it. In 1990, during a squabble with Ak-Sar-Ben over where a new stadium would be constructed, Morgan blustered, "Frankly, I'm just sick and tired of a small handful of people who think that they can control this city and county without regard to feelings, sentiments and desires of the honest, hard-working people who are the real foundation of this city."
Sensitive to this widespread perception, ConAgra's Harper, speaking as chairman of Ak-Sar-Ben's Board of Governors, replied in a special World-Herald column on December 9, 1990, "Ak Knights Don't Control City." Just because the individuals and corporations on Ak-Sar-Ben's board had given over $50 million to various causes over the past 20 years, wrote Harper, ticking off a list of most of the public facilities in Omaha, that did not mean they had clout. I am at a loss to see how contributions to reputable charities can be associated with political power."
Harper's own company flaunted its political power over the city and the state, just a few years ago. According to "Omaha Held Hostage," a May 1989 article in Progressive magazine, ConAgra threatened in 1987, to pull out of Omaha, unless the city granted it a choice piece of free land, sewage, paving and a host of other benefits, which will ultimately total as much as $60 million, for a new corporate headquarters. The city acquiesced. Later the same year, when the Nebraska Legislature was on the verge of removing personal property tax exemptions on purchases of jet airplanes and mainframe computers, Harper put out the word to the legislature: Change the tax bill, or ConAgra leaves Nebraska. The bill was changed.
Ak-Sar-Ben has been ruled for decades by its Board of Governors, a roster of sixteen influentials (increased to twenty, in 1990, "to better represent the entire community," according to Mike Harper), most of whom are chief executives of major corporations. In the late 1980s, the board included:
Charles "Mike" Harper, President and CEO, ConAgra
These corporations poured millions into the Franklin Credit Union, in the form of deposits and outright contributions. Their executives supported King, in arrangements both informal and formal.
Bill Fitzgerald, Knight of Ak-Sar-Ben and president of Commercial Federal Savings and Loan, helped his friend Larry King with advice. When the jig was up for Franklin and the Consumer Services Organization, King's close associate CSO director Barbara Moore could find employment with Walter Scott's wife, Sue.
Mutual of Omaha placed funds in the credit union, while Thomas Skutt, chief executive of this insurance giant, co-chaired a $1.3 million fundraising drive for Franklin, with Harold Andersen.
The Franklin Credit Union had two boards. The small, governing board included Larry King, Jarrett Webb and James C. Hart, Jr., the secretary, who were named as child abusers by victim-witnesses before the Legislature's Franklin committee. The firms run by the Knights of Ak-Sar-Ben, along with other prestigious Omaha corporations and law firms, showed up on the larger, "Advisory Board."
On the Franklin Community Federal Credit Union Advisory Board were:
Chairman Harold Andersen, publisher, World-Herald
L.B. "Red" Thomas headed up finances for ConAgra, which put funds into Franklin certificates of deposit. Union Pacific, and its executives acting as individuals, poured in money, while Union Pacific officer Arnold Nesbitt sat on the board.
Ak-Sar-Ben interfaced with the Franklin credit union proper, but also with individuals in the orbit of Larry King. One of its biggest financial contributors in recent years was the department store heir and child abuser, Alan Baer. Catering for Ak-Sar-Ben was Gary West, bartender from the Max gay bar.
As the Legislature geared up to investigate the credit union, its lofty advisors began to jump ship. At the Legislature's Executive Board meeting of December 12, 1988, Senator Chambers captured the picture:
This situation will be like the Nazi regime after it failed, nobody saw Hitler, nobody knew who Hitler was, but one kid once saw an old man who one time knew a guy who talked to a guy who saw a car drive by with curtains on it and somebody said Hitler was in that car. That's the way this is going to be, nobody knows anything, nobody has seen anything, nobody knows why investigations in the past, by the federal government, were terminated.
Sure enough, over the next months one board member after another would appear on the pages of the World-Herald, to deny he had really had anything to do with Franklin. Virtually nobody from the powerful firms that channeled funds to Franklin and advisers to its board, was ever questioned by the Franklin committee about his relations with the credit union. Once again, according to one veteran politician, the whiff of a ConAgra payoff was in the air: Those who helped cut short the Franklin investigation would receive campaign funding from ConAgra, and those who pursued it would not.
For some of the Franklin board members, the ties to Larry King were too close to hide. Gary Caradori questioned one of them, Joseph Barker III of Massachusetts Mutual Insurance Co., on March I, 1990. He wrote up their exchange:
At 1400 this writer arrived at the Massachusetts Mutual Insurance Company located at 90th and Dodge, Omaha, Nebraska, and contacted Mr. Joe Barker. Mr. Barker then did admit to writing policies for Larry King and his family. He stated that as far as he knew, he handled all of Larry King's life insurance. Mr. Barker stated that he had known Larry King for many years. He was not certain how they met, however, they did share some duties on church committees and possibly several other boards. ... When my questioning started to center around social gatherings, Mr. Barker indicated with a nervous gesture that yes, he had been to some social events with Larry King, but that everything was always "on the up and up." He stated that throughout his friendship with Larry, everything was always "straight" and that he had never seen anything out of the ordinary.
To the trained investigator, something didn't sit quite right. Caradori observed:
This investigator noted that Mr. Barker seemed extremely uneasy while this writer was present. Further investigation will be conducted reference this matter.
In other cases, Franklin Advisory Board members were one step removed from personal contact with King. One person from a company would sit on the board, while somebody else was more directly in touch. The law firm Byrne & Randall (credit union board member Carolyn Rothery) fit this pattern. Joseph Byrne handled much of King's legal business early in his career, and King used Byrne as a personal reference on credit applications, according to a February 17, 1989 report by Jerry Lowe. Byrne's partner, Gary Randall, was the lawyer who negotiated Jarrett and Barbara Webb's way out of trouble in 1986.
Erickson, Sederstrom, Leigh, Eisenstatt, Johnson, Kinnamon (credit union board member Leo Eisenstatt) was retained by King and the credit union for various matters. Quoted by James Traub in a December 1991 article in Gentlemen's Quarterly, Leo Eisenstatt recalled, "The Kings came to our house for dinner, and we went to their house. We were one big, happy family."
An employee of Erickson, Sederstrom, Leigh, Eisenstatt, et al., Jay Derr, came to the attention of Caradori and the Franklin committee, in connection with King's sexual escapades. Caradori received reports from at least two sources, that Derr had taken a private flight with King to the 1988 Republican National Convention, where King organized one of his sex parties. In his notes of March 29, 1990, Caradori reported a local law enforcement officer receiving "a call from the DEA in D.C. requesting help on Jay Derr." Then Paul Bonacci testified about him before the Franklin committee on June 12, 1990.
SENATOR LYNCH: Does the name Jay Derr mean anything
Among the backers and contacts of Larry King and the Franklin Credit Union, certain stand-outs deserve special attention. These are Harold Andersen and his World-Herald, former state Game and Parks Commissioner Eugene Mahoney, Omaha multibillionaire Warren Buffett, FirstTier Bank, Union Pacific Railroad, the famous Boys Town orphanage, and the Omaha Girls Club.
Harold Andersen was King's biggest backer in the Omaha business community. He chaired Franklin's Advisory Board and co-chaired its fundraising drive, starting in 1983. These money-raising efforts lost some of their luster in 1989, when it was revealed that the money was used to build an addition to the credit union, the most prominent feature of which was a bedroom. The retreat was equipped with "a brass bed, a fluffy white comforter, a stereo and a television," according to former Franklin employee Noel Seltzer, quoted in the March 5, 1989 Lincoln Journal. Others said King used it for afternoon trysts with his homosexual lovers.
Andersen claimed that he did not know there was a bedroom in the addition he raised the money for, but Seltzer had a specific recollection, reported in the Village Voice: "When the addition opened, credit union employees say, Andersen gave guided tours of the new building. 'He always walked by the door and it was open,' says Noel Seltzer, a former employee. 'He knew there was a bedroom in there, he had to see it. We did.'" Seltzer told the Lincoln Journal, that during Andersen's opening-day tour, "the door to the bedroom was open, ... although it was kept locked after that and the room was off limits to employees."
For years before the fall, Andersen's World-Herald chronicled the great works of Larry King and his associates. Its magazine, The Midlands, ran a feature article in 1983, full of praise for Franklin board member Jarrett Webb and his wife Barbara as model foster parents.
The paper's incessant PR work for King, before and after the collapse of Franklin, was bitterly resented by many in Omaha's black community, as Senator Chambers said at the Executive Board session of December l2, 1988:
This man that the World-Herald has pussy-footed around and tried to hold up as a role model for our children, a leader in our community, is a gross insult to us ... and I get tired of seeing World-Herald headlines about the leader of the credit union, things that try to indicate that he typifies what our community is. ... In the community there is outrage that the appearance seems to be to try to keep this man looking like a decent, upstanding citizen. One of the pictures you'll see is where he was catering something for one of the Christ Child centers in Omaha to make it look like he's a great guy. You'll see an article that talks about how generously he gave for AIDs research. If I'm stealing your money, it is easy for me to be generous with that money. In the black community $100 for the Boys Club, $100 for the Girls Club. For a gay outfit in Washington, D.C., $18,000 at a pop. ... So the reason I'm saying this is to indicate that I believe that the World-Herald tried to cover up.
When Franklin collapsed, the newspaper viciously attacked victim-witnesses, parents, senators, and anyone else who persisted in seeking an investigation of the child abuse charges.
It was company policy to protect the pedophiles, admitted World-Herald reporter Gabriella Stern in 1990. Asked why the World-Herald did not print information Stern herself had discovered about a young homosexual tied to Alan Baer, Stern shouted, in the presence of other reporters in the statehouse corridor, that "we have to protect the little fag because he would lead to the big fag," namely Baer. (When I mentioned Stern's exclamation, on a radio station KKAR program, World-Herald publisher Woody Howe called me to deny Stern said any such thing. But Stern herself confirmed to me that she had. Soon afterwards, she left the World-Herald to work for the Wall Street Journal.)
Harold Andersen volunteered his fund-raising talents also for the Nebraska Wildlife Federation, a private entity established in honor of his close friend, former State Game and Parks Commission head Eugene Mahoney. The latter was to figure many times during the Franklin investigation, including when Alisha Owen testified he was present at Larry King's sex parties.
Mahoney worked on the OPD vice squad before he entered politics and became known as the "godfather" of many a political career.
In fact, Gene Mahoney was the godfather of my own political career. I conducted my first successful election campaign, from Vietnam where I was an infantry captain, without ever setting foot in the United States. The publicity about that was important to my election, but there was another, secret powerful factor. Senator Gene Mahoney had become arch enemies with the senator I was running against, Bill Wylie. I chanced to fit perfectly into Mahoney's plans against Wylie.
Back in Nebraska, while I was shooting at and being shot at by Viet Cong, Gene Mahoney was working for my election. He was to remind me later, that I never would have been a senator if not for him.
Mahoney made politicians, and he destroyed them. Ask former Omaha Mayor Mike Boyle, the only mayor of Omaha ever recalled from office. Mahoney engineered that recall.
He worked behind the scenes, so that no one was ever able to pin the tail on the donkey.
Gene Mahoney would demand that you be his "boy," once he put you in office. He might not call on you very often, but when he wanted your vote or your support on something, you had better deliver. I did not deliver, early on, because we disagreed on a major matter. As a result, I am supposed to spend the rest of my life doing "penance for Uncle Gene." It is a common joke among political folk in Nebraska, that if you cross "Uncle Gene," you will have to "do penance."
Almost any politician in the state will confirm, that Eugene Mahoney is probably the most powerful politician in Nebraska in recent history.
Gary Caradori's dossier on Mahoney filled up with incident reports of another nature. One of his confidential informants, in an interview on February 22, 1990, recalled how he once returned Mahoney's car to him at a camp where, lacking wife or family, Mahoney spent time.
Immediately west of the Louisville State Park is a little camp near there with a half a dozen cabins in it. And Mr. Mahoney's is the far west cabin in that group right up against the river. ... We took that car down there and went up with the keys to leave the, to identify the car, so here's the keys. And the door swung open and as I recall there was no screen or anything on it. And there stood a large, heavyset, fleshy, young black man absolutely in the buff with nothing but a big smile on his face.
In retrospect, the informant thought, it was likely that the heavyset young man had been Larry King. That would agree with a report by Jerry Lowe from June 18, 1989, of an interview with a former Franklin employee:
[Source] indicated that [Godfather's Pizza founder] Willie Thiesen's name had been linked with Larry King's as being homosexually involved ... and that King had also had similar relationships with Harold Andersen, Eugene Mahoney, and Bob Wadman.
Investigator Robert Hansel of Caracorp, Caradori's firm, filled out the picture on October 1, 1990:
Information was obtained that Mr. Mahoney has a cabin at the west end of Louisville Park. [The source] also stated that some sexual activities may have occurred there. He stated Harold Andersen was real close with Gene Mahoney and his name had come up on several occasions. The name, Nate Foley*, was mentioned. He stated he knew for a fact that Gene Mahoney had propositioned him in the past and showed him some photos. ... [He] informed this writer that Mr. Foley did get very upset at the time when he was propositioned by Mr. Mahoney. He also stated that possibly Mr. Foley did get a promotion to keep his mouth shut about the incident.
Mahoney was notorious, as Game and Parks Commissioner, for surrounding himself with good-looking young men. On March 16, 1990, Caradori recorded a description of Mahoney's travels, by a former pilot for the Game and Parks Commission, who used to fly him around:
During his time with the Commission, he stated that Eugene Mahoney always traveled with young individuals, i.e. late teens or early 20s. ... Whenever Mahoney would travel, especially with his aides, they always had to stay in the same room or cabin with Mahoney. He stated that on numerous occasions Harold Andersen had also traveled with Mahoney, which may have been to promote the State Games [sic] and Parks Commission, and also for fundraisers.
Said the February 22, 1990 confidential informant, about Mahoney's ongoing activities:
This park isn't quite done but it's got a major residence in there with an apartment above and below. Mr. Mahoney to this day, you know he's not affiliated with the Game Commission, lives in the upper half when he's around. The lower half, lo and behold, has a beautiful blond, blue-eyed young male there that Mr. Mahoney found at about 18 or 19 years of age. And he is kept there at state expense. He's the highest priced park superintendent in the state even though when he came in there he had absolutely no credentials. He'd never worked in a state park and didn't know anything about managing people or the wildlife or anything.
On March 16, 1990, Caradori reported the observations of another source:
He went on to state that Mr. Mahoney did like to cater to teenage boys and had participated in many outings with various groups of teenage kids, such as the Boy Scouts.
With the help of Harold Andersen and Lincoln Journal-Star publisher Joseph Seacrest, over a two-year period, Mahoney raised more than $10 million for the new Mahoney State Park. According to Caradori' s confidential informant, "There's an assumption that there's some Franklin Credit Union money that went into that place." To identify where the park money came from, he said,
the place to start quite simply in any state area is to drive through them and record the names off the cabins. Mr. Mahoney has this fetish about naming cabins and outhouses and pavillions and things after his friends. Everything is the Harold Andersen this, V.1. Skutt that. And obviously those are the people who probably helped funnel money for that particular project, or something in that park anyway.
Mahoney's political power and his role as a darling of the Ak-Sar-Ben crowd were captured in a December 7, 1989 article in the World-Herald:
Gov. Orr and Sen. J.J. Exon, who have been at odds politically for 20 years, were on the same side Wednesday in pushing the election of Eugene Mahoney to the Omaha Public Power District Board.
Mahoney, who was appointed Nebraska Game and Parks Commission director when Democrat Exon was governor and who was appointed by Republican Gov. Orr to the OPPD post, said he reluctantly would seek election to the post next year. "I really hate campaigning," said Mahoney, a former state senator from South Omaha.
He said he had planned to serve out his term and not seek election, but was talked into running by a group of prominent businessmen who were the hosts of a Wednesday reception.
Among those paying tribute to Mahoney at the $100-a-person fund-raiser at the Cloud Room at Kiewit Plaza were Walter Scott, Jr., chairman of Peter Kiewit Sons' Inc., Mike Yanney, president of America First Cos., Attorney General Robert Spire, and Mayor Morgan.
The crowd of more than 210 at the event, which raised more than $40,000, included corporate leaders, South Omaha businessmen, former Mayor Eugene Leahy and former Sen. Dave Kames, R-Neb.
"I've never seen anything like it in my life," said Yanney, a frequent sponsor of political fundraisers. "The great thing about Gene is he crosses all party lines and he does it with dignity. Gene Mahoney is one of the great men in this community and this state."
Scott said, "Gene is a good hunter, a good fisherman, and a good sportsman. I'm grateful to have a man like that take on a specific post like OPPD."
In September 1991, Eugene Mahoney was crowned King of Ak-Sar-Ben.
As essential to Franklin as Andersen's fundraising and publicity were, the credit union could not have functioned for a single day without the complicity of Nebraska's largest bank, FirsTier. Before coming to Franklin, Larry King had been a management trainee at Omaha National Corporation, one of the institutions that merged into FirsTier in 1984.
Every dollar that went into Franklin Credit Union -- the missing $40 million was no exception -- went into its account #153 7-353 at FirsTier.
"There would sometimes be a million dollars coming in in the morning and a million leaving in the afternoon," said one person familiar with the investigation. "The amounts were astounding, and remember this is a $2.6 million credit union. There is no conceivable way in the world that FirsTier was not fully aware of what was happening, as far as gross irregularities."
FirsTier would cover for Franklin when the credit union overdrew, as one disgruntled FirsTier official told former Franklin employee Noel Seltzer. Senator Chambers charged in early June of 1989, that the large volumes of Franklin transactions, occurring in such short periods of time, should have raised suspicions about the nature of its business.
This was just business as usual, protested the officers of FirsTier. Bank Vice President Donald Petersen told the Lincoln Journal on June 5, 1989, "Franklin Credit Union had a commercial account with FirsTier Bank Omaha that was no different from our standpoint than other commercial accounts. We clear incoming and outgoing items for our customers, but the customer is ultimately responsible for each transfer in their account."
During Franklin's heyday, the board of FirsTier Bank and FirsTier Financial Services was a who's who of the Omaha business community. On it were pedophile Alan Baer and Knight of Ak-Sar-Ben Walter Scott, Jr., the Kiewit Construction chairman who was known in the business community as "one of the real powers" in FirsTier.
Donations to Franklin through the Union Pacific Foundation made the Union Pacific Railroad one of Larry King's biggest corporate backers. Its individual leaders, like former Union Pacific Chairman John Kenefick, deposited funds at Franklin.
According to reports out of Omaha's homosexual community, the old Harriman family railroad overlaps other areas with King. "The company is well-known for two things at the top: homosexuality and freemasonry," said one knowledgeable person.
Is there a tradition or obligation of homosexuality among top Union Pacific executives?
The Legislature's Franklin committee heard testimony from a former Franklin employee, implicating two Union Pacific executives in the recruitment of "young kids for Larry King's friends." Robert Andresen, the pedophile whose brutality was so heavy-handed that even the Douglas County jury mentioned (but did not indict) him, worked for Union Pacific.
So did the foreman of the grand jury! The Douglas County panel was headed by citizen Michael Flanagan, an employee of Union Pacific Railroad for 27 years. Given that Union Pacific personnel were implicated in the matters under consideration, there would have been a conflict of interest for any UP employee sitting on the grand jury. In the case of Flanagan, there was more to it than that.
In the summer of 1990, while the Douglas County grand jury was sitting, I received a call from a person who identified himself as an executive at Union Pacific headquarters in Omaha. He declined to give his name, saying, "I am too old to start over. I have too much vested in a good salary, position and pension. But I do not feel I can sit idly by."
He defended Union Pacific as a company that was good to its employees and, he thought, good for the country. But it had been taken over by a homosexual element, which tolerated, condoned and encouraged a code of sexual conduct he felt was abhorrent. Even this would be no one's business, he said, unless it was being imposed on people, using the power of UP in Omaha and Nebraska.
At first, I thought the man might be trying to make an issue of some minor homosexual relationship, and I told him I was not interested in "bashing" homosexuals. I said that I didn't care what adult men did with their sex lives, so long as they do not abuse and hurt children. I could have told him, but I didn't, that my own brother had died of AIDS in California just the year before. My brother was a homosexual; he was also one of the best human beings on the planet.
My caller's carefully chosen words quickly dispelled the notion that he meant insignificant incidents, and led me to ask, "Are you talking about the head of Union Pacific, Mr. Walsh?" While the information he provided satisfied me that my concern about Walsh might well be valid, the caller made it clear that this was not the immediate point of his contacting me.
What he had to say, was that the foreman of the grand jury had committed impropriety of such a nature and degree, that Union Pacific had to reach a private financial settlement to protect him.
"I believe if you will check out a former very young male Union Pacific employee named Pike*," said my caller, "you will discover that Mr. Flanagan made improper sexual advances upon him, and he complained to Union Pacific officials. A financial settlement was reached by Union Pacific and the young male individual was paid a substantial sum of money by Union Pacific to keep quiet, go about his business, and find other employment."
I began to investigate, and found the facts accurate. Here is how they were summarized in a lawsuit, filed by me on behalf of Paul Bonacci:
The Grand Jury Foreman, Michael Flanagan, should not have been allowed to be Grand Jury Foreman because he himself, Michael Flanagan, had been recently involved in an incident in which he, Flanagan, was accused of pandering and in which he, Flanagan, and his Company, Union Pacific, had reached a civil settlement to suppress such incident and satisfy the demands of the individual making the complaint against him. Thus, the Grand Jury Foreman was being literally asked to indict other individuals whom Bonacci was identifying for the very things that he, Flanagan, had been accused of and reached civil settlement to avoid like indictment and prosecution.
Through Flanagan, the suit also charged, Union Pacific was directing the grand jury:
Further, Flanagan himself violated his Grand Jury duties by sharing Grand Jury information with other individuals, including lawyers and others he met with on a regular basis almost every day following Grand Jury proceedings at Union Pacific Headquarters in Omaha, and receiving advice and guidance from them on how to proceed in the Grand Jury proceedings and providing them information on the supposedly secret Grand Jury proceedings themselves.
One of King's earliest boosters was the wife of a man with an unrivaled reputation for shrewd investments -- Warren E. Buffett, chairman of Berkshire Hathaway. Based in Omaha, Buffett is the second biggest stockholder in the Washington Post and a controlling power in ABC TV. In 1991, he acquired large blocks of stock in American Express and Wells Fargo Bank. When Salomon Brothers faltered in August 1991, the owner of 13% of its stock -- Buffett -- stepped in as interim chairman. With $4.4 billion to his name, Buffett is ranked by Fortune magazine as the 24th richest man in the world, and in the United States is among the top five. In Omaha, the Buffett mystique gains from the fact that there are two hundredsome "Buffett millionaires," who made their fortunes by investing through Buffett's Berkshire Hathaway.
Buffett favors the multiplication of money, but not people. He contributes to groups advocating radical population reduction. His Warren Buffett Foundation lists hundreds of thousands of dollars in grants to Negative Population Growth, the Association for Voluntary Sterilization, Planned Parenthood, the Population Council and Population Institute, the Sex Information and Education Council, and Federal American Immigration Reform. Negative Population Growth members, according to the group's literature, "believe that a drastic reduction in total population size represents the only viable option consistent with human survival." NPG wants the United States, and then every country, to enact programs to drop the U.S. and world population to one-half its present levels within 90 to 100 years. Buffett contributes approximately 7% of NPG's total budget.
Language about Buffett, and his own, abounds with references to his "cult." A 1991 Washington Post write-up of his annual shareholders' meeting quoted guests along those lines: "It's like worshipping at the altar of the high priest of finance. ..."; "He has a very large, cultish following." Buffett himself has called his management staff "magicians." Said Steve Forbes of Forbes magazine, talking to National Public Radio about Buffett, "He's not Moses, but they read what he says as if it were written on tablets. ... Buffett's economic forecasts are more listened to, than Papal Encyclicals or the State of the Union message." In 1974, when stocks were at a low, Buffett told Forbes he felt "like a sex maniac in a harem," wanting to buy.
On November 8, 1991, the Wall Street Journal trumpeted in a two-page spread on Buffett as "the Oracle of Omaha," that his "folksy image belies a killer instinct."
Backing from Buffett's socialite wife, Susie, came early in the rise of Larry King. Susie Buffett was a volunteer at the credit union in its early days. According to the Lincoln Journal-Star of March 19, 1989, King "liked to tell the story of a woman coming to the credit union to see him and being told to return at 7:00 the next morning because he was so busy. The woman was Susie Buffett, wife of billionaire Warren Buffett, and she did come back to offer her help at the credit union."
For years, it has been part of Larry King lore in Omaha, that the Buffetts hosted a tenth wedding anniversary party for him and Alice. James Traub's December 1991 Gentlemen's Quarterly article served as a platform for Warren Buffett to deny he had a role in that affair, and to insinuate that perhaps the party never happened: "In 1978, King asked Susan Buffett if she would be willing to host his and Alice's tenth-anniversary party at her house. ... Susan said yes, but her husband said no."
Paula Albert, a close researcher of the Franklin scandal who has interviewed several people who attended the anniversary party, commented that the Buffett/Traub account was carefully worded. Buffett avoided an outright assertion that the party didn't take place, but "you'd be left with the thought that it never happened, if you didn't know anything."
Buffett told Traub, "I knew that King was a phony. ... It was like he had a big sign on his head that said, 'PHONY, PHONY, PHONY.'" These protestations prompt the question, why, if Buffett saw so clearly that Larry King was a fraud, he did not alert his friends at FirsTier, or the World-Herald. Buffett is a director emeritus of one of the institutions that merged to become FirsTier, and he served on the World-Herald board.
Larry King returned favors, by hosting a fundraiser for Buffett's son Howard, when Howard ran for Douglas County commissioner. Warren Buffett may have done some more private socializing with Larry King, if a former Omaha city employee is correct in his report, that when Larry King was crowned "Queen" at The Max gay bar, Warren Buffett was his escort. "This is what his cousin Barbara Webb told me," said the source. "She said the people, they were mad, because Larry brought his son and his wife there."
The Wall Street Journal feature reported that Warren and Susan Buffett have lived apart for thirteen years, although they attend official functions together. Buffett shares his home with a companion named Astrid Menks, "alternating his time between the two women." According to the Journal, Buffett met Menks in 1977, when Susie brought her home from the nightclub where Menks was a waitress -- the French Cafe.
Buffett and King shared an interest in Boys Town, which to many Americans evokes the 1938 movie starring Spencer Tracy as Father Flanagan, the priest with the heart of gold whose orphanage, Father Flanagan's Home for Boys, straightened out many an errant youngster. Known today as Boys Town, it is an incorporated village on the west side of Omaha, with extensive land and plush facilities, and an endowment of $460 million. The orphanage is therefore a major power in the Omaha financial world. It has begun a $25 million nationwide expansion program, and will have youth care facilities in seventeen cities by 1992. The chairman of its finance committee is Union Pacific's Michael Walsh.
In 1972, Warren Buffett executed a maneuver around Boys Town, which is not fully understood to this day. His own Sun newspaper ran a series of articles, that targeted Boys Town for having too large an endowment. The Sun wrote, "members of the board of directors of Father Flanagan's Boys' Home generally seem little concerned that the institution has amassed a net worth of more than $200 million while going to the public twice a year with a plea of poverty." Of the cited $200 million, $175 million was the "liquid endowment."
Editor and Publisher magazine reported on March 30, 1985, "The Sun papers in 1973 became the first weeklies to win the Pulitzer Prize for an expose of Boys Town. The story idea originated with Buffett, who also participated in its development and wrote a section of it."
The articles prompted a major shake-up and purge of personnel at Boys Town. Buffett is believed to play some significant role with the orphanage today, perhaps in his specialty-investment advice. All inquiry with Boys Town was referred to the in-house attorney for the orphanage, who, in answer to the simple question, "What is Mr. Buffett's precise role with Boys Town?" spent 25 minutes in two phone calls, not quite denying, but also carefully never confirming, that Buffett had a role with the facility. At any rate, Buffett has not complained lately about the size of Boys Town's endowment, although it is much larger now than it was in 1973.
Larry King was intimately involved with Boys Town. The institution came up repeatedly during the Legislature's Franklin investigation, and even earlier.
Foster Care Review Board Executive Director Carol Stitt's July 1988 plea to Attorney General Robert Spire, for an investigation of child abuse, included that youth care worker Kirstin Hallberg "told me about three youth at Boys Town who all reported inappropriate activities with Larry King of Omaha." On March 29, 1989, her colleague Burrell Williams told investigator Jerry Lowe, "that on several occasions in the past he had heard of kids transported from Boys Town and the north Omaha Girls' Club to functions allegedly linked to King."
Boys Town youth care worker Julie Walters, when she interviewed the Patterson Webb girls in 1986, reported her findings about Larry King and Boys Town youth, to the orphanage's executive director, Father Val Peter. According to an FBI and Nebraska State Patrol interview with the girls' foster mother, Kathleen Sorenson, "Walters related Nelly's statements to Father Val Peter. ... Val Peter then stated that Boys' Town would conduct its own discreet investigation into Nelly's statements." Peter apparently did nothing, as Carol Stitt informed the legislature's Executive Board on December 19, 1988: "It has been brought to my attention that no such investigation ever took place."
The FBI/NSP brief on Sorenson's interview said:
Sorenson stated that an unspecified time in the summer of 1988, Julie Walters spoke to two prominent black males and one black female at Boys' Town confirming Nelly Webb's statements about Larry King. Sorenson could not recall the names of these individuals. The individuals were either employees or associates of Boys' Town. These individuals told Walters not to ask questions about King "because it could be dangerous."
King was highly visible on the Boys Town campus, because of his distinctive yellow Tojan car. On March 27, 1989, Jerry Lowe interviewed Julie Walters by phone:
Julie indicated that she subsequently had a conversation with Val Peter regarding the yellow Tojan including discussions that several Boys' Town teachers, including those as having the last names Barksdale, Wilson, and Gary, had been seen driving the automobile. Julie indicated that when she brought the matter of the Tojan up to Father Peter, that he had initially denied any knowledge of the automobile, however, later on indicated that it was his belief that Omaha people couldn't accept black male teachers at Boys' Town and blamed the information regarding the Boys' Town black male teachers driving the Tojan, on racism.
At least one reported driver of the Tojan, John Barksdale, was closely associated with Larry King. Barksdale worked at the credit union, as well as at Boys Town, and had been tapped by King to head up a planned nationwide expansion, known as Franklin, U.S.A.
In January 1988, Father Peter summoned Kirstin Hallberg. She submitted her notes on the discussion to Franklin investigator Jerry Lowe:
Father Peter called me (Hallberg) and expressed an interest in Loretta's case and said he felt that Boys' Town could offer her "a safe place to heal." When I commented that she probably wouldn't feel too safe if she saw "the yellow Tojan," he (Peter) said that he heard it had "been around" and then quickly changed the subject.
Under pressure, Peter once again promised an investigation. Julie Walters recalled, in her March 27, 1989 phone conversation with Lowe:
Julie indicated that she later learned that Val Peter had given an individual by the name of Dave Shanahan, who is the Director of Admissions at Boys' Town, the responsibility of conducting, what Julie described, as a staff practice investigation of the Tojan automobile and the accompanying references to Boys' Town personnel riding in it. Julie indicated that she was uncomfortable about Shanahan investigating this as she expressed the personal opinion that she does not trust Shanahan. Julie indicated that Shanahan was a white male in his early forties and a long time employee of Boys' Town and indicated if she had to describe Shanahan she would describe him as being an individual with a good ole boy mentality who was not interested in the truth as much as making sure that nothing of a negative nature involving Boys' Town came out of the investigation.
Walters was right -- honest investigations of Larry King at Boys Town were quashed, as Franklin investigator Karen Ormiston found out when she interviewed former policeman Alan Kupres, on August 14, 1990.
Mr. Kupres indicated that he had worked as a police officer for Boys Town for approximately three years. He stated that he had run the license plates on a vehicle which was registered to Larry King several times, but that his superiors had directed him to "leave it alone."
Alisha Owen, Paul Bonacci, and Nelly and Kimberly Webb all reported that King took boys from Boys Town for his pedophile activities.
Omaha author Steve Bowman, who is preparing a book on the Franklin Credit Union for release in 1992, discovered as he interviewed Boys Town grads, that King's activities there were scarcely anomalous. "You would keep hearing the same thing, over and over again," Bowman said of the graduates, many of whom were homosexually involved with Larry King. "They would invariably say, 'I first discovered my homosexuality during counseling at Boys Town.'"
The homosexual ambiance at the orphanage was featured in a novel, reported on in the August 27, 1989 World-Herald:
An Omaha native said his new novel describing a youth's painful upbringing in a boys' home, including many homosexual encounters, is based on his eight years at Boys Town. Jimmy Cheshire, 44, of Yellow Springs, Ohio, said in an interview that "Home Boy" accurately depicts life as he saw it at Boys Town from 1955 to 1963 when he graduated as class valedictorian. ... Cheshire said homosexuality was "rampant" at Boys Town while he was there. "Everybody I knew was involved in it. After graduation, no one talks about it," he said. "In my opinion, one third of the Boys Town counselors were pedophiles. The only reason they were there was because kids were there. A lot of kids were seduced". ... Cheshire said he did not find any adults at Boys Town who were "reliable." "There were some brutal people, some sick people," he said. "The children turned to each other for support."
Father Val Peter said of Cheshire's book, "Boys Town would never condone any activity like that, nor do we have knowledge of it. I think sex sells, like the National Enquirer."
Boys Town officials deny with equal vehemence, that Larry King was associated with their facility in any way. Evidence from Franklin Credit Union files contradicts them.
Working relations between the credit union and the orphanage were in order as of a December 13, 1979 letter from Franklin employee Joel Rogers, one of King's homosexual lovers, to Boys Town Deputy Director for Development William E. Ramsey: "Mr. King, Mr. Larson, and myself are appreciative of your visit yesterday, and look forward to working with you and the Father Flanagan Boys' Home." The extent of the planned collaboration is not known, but at one point Franklin was paid $15,000 to do a study on the relocation of people who lost their houses because of an expansion of Boys Town.
Boys Town boys could get jobs at Franklin. King hired Brandt Thomas*, a 1984 graduate, to work at the credit union, according to a July 5, 1983 report from Doyle and Carol Gillespie, Boys Town family teachers. They also noted that "Brandt has moved in with his employer, Mr. King." Thomas was still under care of the school, and his change of residence was sanctioned by the highest official at Boys Town, then-Executive Director Father Hupp. His March 26 1983 letter to Brandt's mother, Lila Thomas*, was summarized by legislative Franklin committee researcher Jose J. Soto: "This letter from Father Hupp advises Brandt's mother of steps to take before Brandt moves in with Larry King." Hupp even attended the party King threw for Thomas, after the boy moved in.
Two and a half years later, Nelly Webb was to tell Julie Walters, that King frequently took Thomas around with him to serve as a homosexual prostitute.
By the time Franklin Credit Union met its fate, Boys Town had deposited, or planned to deposit, one million dollars in the credit union!
If his liaison to Boys Town were insufficient for his purposes, Larry King had the Omaha Girls Club as a hunting ground. Victim-witnesses consistently said both institutions were tapped by King to find candidates for sexual abuse. In an April 14, 1989 report, Jerry Lowe summarized what he heard from Loretta Smith:
Loretta furthermore told Carmean that many of the people who were taking the [pornographic] photographs were leaders of the north Omaha Girls' Club and included prominent people who used code names. When I asked Loretta what the code names were she indicated simple names like Mary, Jane, etc. She had told Carmean that doctors and lawyers were involved and when I pressed her on this she indicated at one of the photographic sessions she saw some files and someone said something to her about one of the men working in chambers.
Lowe wrote up, on May 8, 1989, observations from Nelly Webb:
Relative to the North Omaha Girls' Club, Cornelia indicated that she had heard that a couple of girls had slept with men who were somehow connected with the Girls' Club. ...
A week later, he learned from Kathleen Sorenson, that Nelly and Kimberly
talked about being at many parties at King's house on River Road and at another location. They were often taken to these parties at a moments notice. They said the parties were for very important people.
Caradori's investigation showed that King's control of the Girls Club was a matter of public record, for anybody who bothered to look. Checking the incorporation papers at the Secretary of State's office, Caradori discovered that the Girls Club was incorporated in December 1973, with Larry King as its president, "to promote. .. the health, social, cultural, vocational and character development of girls. ..." One of the three incorporators was Franklin officer Mary Jane Harvey, indicted with King for embezzlement there, and named by children as one person who transported them for sexual abuse.
Had such research been done by law enforcement at the time of the children's complaints, more could have been learned, about the "very important people" the girls saw partying with King. The stakes in keeping their identity under wraps were obviously very high.
The Omaha corporations that bankrolled Larry King and Franklin are also the major sponsors of youth organizations in Nebraska, such as Boys Club, Girls Club, Boy Scouts, Boys Town, Uta Halee Home for Girls, and others. These corporations donate millions of dollars per year to these organizations, as the annual reports of the recipients show. Many executives of these firms sit on the boards of the youth care facilities.
The donation of so much money and time would seem to indicate a great concern for Nebraska's youth. Key members of the Omaha business community, however, did nothing to help and plenty to wreck the Franklin committee's investigation into the sexual abuse, ritual torture, and murder of children.
Is it possible that some of these corporate leaders sit on the youth boards, for the same reason that Larry King founded the North Omaha Girls Club? Why, for instance, did the notorious pedophile Alan Baer join the board of the Boys Club? And after the extraordinary publicity over his pedophilia in 1989 and 1990, and his indictment for pandering, how is it conceivable that in 1991 Baer was still on the board of Boy's Club ?
Assume most corporate board members are not involved in child abuse. But judging by the behavior of the Omaha business community during the Franklin investigation, the ones who are guilty of such behavior enjoy toleration, or even protection, by the others.
These are the 1987 and 1988 boards of directors of the two FirsTier institutions. FirsTier was the bank Larry King's pilfered $40 million passed through, without anybody batting an eye.
FirsTier Financial, Inc.
George P. Abel, Chairman of the Board, NEBCO, Inc.
Michael H. Walsh, Chairman of the Board, CEO, Union
FirsTier Bank, N.A., Omaha
Alan Baer, President, Alan Baer & Associates
Edd H. Bailey, Pres. (ret.), Union Pacific Railroad
Howard G. Buffett
In 1981, Warren E. Buffett was on the board of the Omaha National Corporation, which merged with First National Bank of Lincoln in 1984, to become FirsTier.
An undated report from Franklin's Development Office cited Harold Andersen's fundraising for the credit union.
A letter to Larry King from V./ J. Skutt, then chairman and CEO of Mutual of Omaha, referred to lobbying for Franklin by Harold "Andy" Andersen.
Larry King wrote this memo to his staff about funds forthcoming from the Kiewit Foundation, associated with the Peter Kiewit and Sons construction firm.
In 1980, the Union Pacific Foundation informed Larry King of its latest grant. A handwritten note at the top instructs a Franklin employee to expedite the transaction.
According to this 1981 memo from Franklin Credit Union files, Boys Town, the famous orphanage,. planned to deposit $1 million with Franklin. Boys Town officials maintained that they had no connections with Larry King or Franklin.
Memorandum of a phone call to Joel Rogers, Franklin staffer and a homosexual lover of King, from a Boys Town official.