Wednesday, May 30, 2012

The Seekers


Reprinted with permission of the DC Public Library, Star Collection, © Washington Post.
January 31, 1981.  Loot recovered from Welch's Duluth, Minn., home was displayed at the Blue Plains Police Training Academy in Washington, D.C.  Robbery victims from the District of Columbia, Maryland and Virginia were invited to view and claim their property. 

A month after the arrest of Bernard Welch, law enforcement learned how he had turned his stolen loot into cash.  Precious metals were melted and sent to refineries, the gems removed and sold separately;  coin collections were broken up and peddled to different dealers; antiques and collectibles went to auction houses to be resold; and fur coats were disposed of individually. In effect, stolen property had been spread across the country like strewing confetti in the wind.  The police advised the victims that, unless their homes were broken into from September to December of 1980, there was almost no hope of finding their stolen property.  Still they came; victims from as far back as five years ago arrived seeking their property.
Much of the property that Welch stole held more than monetary value.  When he invaded homes, he took irreplaceable family heirlooms: silver baby spoons with a child’s tooth marks; precious paintings of ancestors;  flintlock rifles used by relatives generations ago;  grandmother’s wedding ring brought from the old country; and prized collections that had taken years to accumulate. These victims hoped to find what no amount of insurance money could compensate for.
Reprinted with permission of the DC
Public Library, Star Collection,
© Washington Post.
The line of victims started on the sidewalk outside the police building. They patiently waited for hours, clutching copies of police reports as their tickets of admission.  The victims were mostly well dressed and grey haired. They were the owners of the large homes in the good neighborhoods that Bernard Welch preyed upon.  They had worked a lifetime to accumulate the things that Welch took.  Had he only taken money, they would not be here, because money can be replaced.  But the Ghost Burglar had also stolen things of sentiment and memory.
The dozens of police inside escorted each victim past the tables filled with thousands tagged items recovered from Bernard Welch’s homes in Duluth, Minn., and Great Falls, Va. The police officers understood why the seekers came and were patient.  Each victim had paid a heavy price for entry.
The majority found nothing and left to bury the last hope of rediscovering their lost memories, memories that could not now be passed on to their children.
                                                               ― James King


Tuesday, May 22, 2012

Silverbugs II: The Hunt Brothers and the 'Silver Express'

Herbert and Bunker Hunt testifying before the U.S. Congress, 1981.
Silver prices peaked from 1979-1980, thanks to the Hunt brothers.
Bernard Welch, the Ghost Burglar, concentrated his efforts on stealing
and smelting Sterling silver during this time.
 In late 1977, with a stagnant silver market draining their resources, the Hunt brothers tried attract the attention of various wealthy Arabs to interest them in getting onboard their “silver express.” Herbert and Bunker Hunt knew the sheiks and royal families of the Middle East had immense disposable income from their oil holdings. If the brothers could influence these super-rich to join the noble cause and purchase a few million ounces of silver bullion, the price would surely be pressed upward. The greed factor can affect even these wealthy people, and many were persuaded by the easy assurances from Bunker Hunt that their money would be doubled in a short period of time.

In early 1979, the International Metals Investment Company (IMIC) was chartered in Bermuda. This outfit was backed by Arab money and also by Bunker and Herbert Hunt. The Hunt brothers proceeded to purchase contracts that called for the delivery 50 million ounces of silver in February and March of 1980. This added to the brothers' prior holdings of futures contracts for 75 million ounces, putting the value of their position at $1.2 billion dollars.     

By September of 1979 the price of silver had surged to $12.54 per ounce.

In mid-October, silver was at $17.50 and the Commodities Futures Trading Commission was hearing rumors that the Saudi government was acting in concert with the Hunt brothers to corner the silver market. At the end of December 1979, the commissioners figured that, at the rate the Hunt Brothers and Saudi investors were buying, they would own the entire world’s supply of deliverable silver by early 1982. On December 31st 1979, the price had surged to $32.00 per ounce. The Commodities Futures Trading Commission concluded that their only option was to enforce silver futures contract limits, and soon.

The commission’s decision on silver futures contracts limits meant that the Hunts, and the other investors acting in concert with them, would be forced to reduce their contract holdings from 90 million ounces to 20 million by mid-February. By January 16, 1980 silver was at $48 an ounce. At this point, the Saudis, the Hunt Brothers, and various affiliated investors had futures contracts and actual physical silver holdings worth in excess of $10 billion.  On Friday January 18, the price of silver hit $50 an ounce for the first time in history. The following Monday, the Commodities Exchange in New York put into force a new rule that trading in silver could only be for liquidation. The bulls, the big buyers of silver like the Saudis, and the brothers Hunt were now placed in the position of only being allowed to sell. The only buyers left were those who had hedged and sold silver short or smaller new buyers of the contracts.

This situation forced the price of futures contracts and silver down rapidly. In early February, the downturn in silver prices forced many of the big silver buyers to pay money back into the brokerage houses for the first time. They had been buying more and more silver with margin accounts, mainly based on the increase in value on their current holdings. The Hunt brothers and the Saudi investors were now facing substantial margin calls for the first time. If you include the International Metals Investment Company’s $500,000,000 indebtedness, at this point, Bunker and Herbert Hunt had loans outstanding for almost $1.5 billion dollars.

The price of silver had slipped to the high teens by Wednesday, March 26th.  The next day at the commodities market was undoubtedly the worst in its history. At the end of the days’ trading, the price of silver dropped $3.65 per ounce to $16, a loss of 19 percent. Not only that, but just 20 days earlier, the price was $36 an ounce. This huge loss at the end of the unstoppable slide of silver prices earned this day of March 27, 1980, the dark title of “Silver Thursday.” The frantic manipulation, ending in the dumping of silver to pay off the margin calls, had a deleterious effect on all speculative markets, worldwide. The brokerage house handling the Hunt brothers’ activities was forced to liquidate large blocks of blue chip stocks the Hunts had placed with them as collateral. Unloading these stocks on the market at such a volatile time forced other stocks prices down, too.

The Hunt brothers had to put virtually all their vast holdings up as security to pay off margin calls on the silver futures they still held that were coming due. Held as collateral were natural gas properties in the North Atlantic off Holland, and more than 100 oil and gas properties in The U.S. and Canada, from Louisiana to British Columbia. Other collateral included coal reserves in North Dakota and stock held in 39 South African gold mines. The Hunt brothers were also forbidden to trade commodities or other futures positions for any speculative purpose. Basically, everything they owned was secured against loans to pay off their debts. The Hunts were not forced to divest themselves of their remaining silver holdings immediately because that glut of silver would have had a dramatically negative effect on the silver commodities market. In the end, the Hunt brothers had to list every possession they had, even personal property, such as watches, cars, houses, fur coats, livestock, and racehorses. To Bunker and Herbert's chagrin, these listings became part of the public record and hit the pages of numerous local and national publications.      

After all of the trials and lawsuits ended, Bunker Hunt’s comment about the self-inflicted financial misfortunes of the Hunt family was memorable, “A billion dollars isn’t what it used to be.”     
– Jack Burch


Wednesday, May 16, 2012

She Made Him Who He Was

While in prison, Bernard Welch attended the College of Criminal Knowledge.  From the old cons he learned that most of them had been tripped up by blabbing to others and these others had squealed to the cops.  After he escaped from the New York State prison, he never again confided his exploits to another person.  He operated alone and had no close friends; therefore, no one could betray him to the police.  He avoided criminal fences that might connect him to crimes and used only legitimate sources to sell his booty.  Unlike most career criminals, he seldom drank, did not smoke, use drugs or gamble.  In effect, Welch had limited his risk exposure to the few minutes he was in a home illegally.
Linda Hamilton in the 1970s.
But he still had a problem and it was a major one.  By the time he had figured everything out, he was on the run, a prison escapee and a wanted man. He used many aliases when selling his stolen goods to legitimate dealers and these dealers often asked for government issued identification.  In the modern world of paper trails, a valid ID was difficult to obtain.
Bernard found a solution to his problem – women, single, lonely, honest and trusting.  He would find a woman and become intimately connected.  He used a succession of women to help him in his business of crime. They did not know what his business was, as he was a master at fabricating stories to cover his real life, that of an escapee and thief.
Welch’s liaisons were temporary until he found Linda Hamilton.  Linda was perfect for his needs. She was a small town girl with secretarial skills, naive and trusting. She believed what Bernie told her. He was nice looking, intelligent and projected an air of intrigue that made him interesting, even exciting. She fell in love and Bernie had no mercy. He sucked her into his web until there was no escape.
Linda enabled Bernie to be a prolific thief. She was the honest citizen front that he required to get to the next level of his endeavors.  He stayed in the background, conducting his nightly “business” while she handled the paperwork.  She provided him with a legitimate name by using a relative’s birth certificate. She opened the bank accounts, bought the cars, got the insurance, kept the books, filed the taxes, opened the investment portfolios, bought the houses, sent the melted gold and silver to refineries, lied about being married, bore his children and did whatever else was needed to make their life comfortable, respectable and wealthy.
At some point, Linda must have suspected that her almost husband was a crook, but by then it was too late for her.  With three kids, her options were to continue to suspend reality and live day-to-day with Bernie, or return to Duluth with her children and live on welfare. She took what seemed the easy way out, continuing to be one-half of a criminal enterprise. 
Without Linda, Bernard Welch would have been just another small-time thief, as he had been in New York and West Virginia.  Instead, she enabled this man, whom she did not know was also a rapist and murder, to become the most successful burglar in American history.   I believe it can truly be said that she helped make him what he was.
– James King

Wednesday, May 9, 2012

Silverbugs I: The Lure of Gold and Silver

The stock market crash of 1929, and the resultant Great Depression, caused financial panic and infectious distrust of paper currency. This led to widespread withdrawals of cash from banks, rampant bank failures, and feverish and incessant purchases of gold and silver bullion and coinage – hard currencies. In 1933, President Franklin Delano Roosevelt signed an executive order that made the ownership and possession of investment gold – including gold bars, ingots, or gold by the ounce – illegal for American citizens.

Two Texas oilmen, the Hunt brothers, had become immensely rich from oil exploration and drilling worldwide in the 1950s and 1960s. The oldest brother, Nelson Bunker Hunt, was considered the richest man in the world as the 1970s approached. He was making nearly $40 million a year from his Libyan oil leases alone, at a time when a barrel of oil went for $3.50. (Yes, that's three dollars and fifty cents!) William Herbert Hunt and Nelson Bunker Hunt thought the world was a very financially unstable place in the early 1970s, made worse by turmoil in the Middle East, runaway inflation, and the Vietnam War. Since gold was still illegal as hard currency storage, the Hunts went after the next best thing, silver.

The brothers began purchasing silver in 1970 as a hedge against inflation or more severe economic calamities. They were paying $1.50 an ounce, and from 1970 through 1973, amassed eight tons of the precious metal. The Hunt brothers' buying pressure doubled the price of silver, and their investment rose to $3 per ounce. Near the end of 1973, Bunker and Herbert Hunt decided to ramp up their purchases, and soon these two men possessed 55 million ounces of silver. This was about 10 percent of the world's supply, weighing in at 1,964 tons.   

Bernard Welch ID photo from the Adirondack Correctional
Treatment and Evaluation Center in New York
Convicted burglar Bernard Welch was shipped out of Attica Prison in New York on November 13, 1973. He had survived the worst prison riot in the history of the United States a little more than two years earlier. Prison officials felt he was ready for a less severe environment at the Adirondack Correctional Treatment and Evaluation Center (ACTEC) in Dannemora, New York. Welch was due for a parole hearing in 1975. 

By spring 1974, the price of silver rose to $6 per ounce. This increase was caused mainly by the persistent attempts of the Hunt brothers to corner the silver market. On August 14, President Gerald Ford signed a bill (Pub.L. 93-373) that ended the ban on gold ownership. Gold started a steady climb to $200 per ounce over the next two years.

Bernard Welch had read newspaper accounts of the flood of buyers of gold coins and bullion in the prison library. Welch couldn't wait for a parole hearing in 1975 when he knew there were small fortunes of gold and silver in the hands of private owners right now, just waiting for the taking. On September 14, 1974, Bernard Welch, along with ACTEC prisoner Paul Marturano, broke out of the state prison at Dannemora. They soon stole some cash, a gun, and a car, then crashed through a police roadblock. This was the first escape ever from Dannemora, and Bernard Welch would not be back in police custody for more than six years.
– Jack Burch