OK, it’s supposed to be a happening place, so I thought I’d reconstruct a few of the more memorable incidents involving it, that are sloshing around in the flotsam and jetsam of my cerebral cortex. I spent a month there in the late 1970s trying a case in District Court. It was for a client GEMCOR – the “Geothermal Energy & Mineral Corporation” (or maybe it was the “Geothermal Energy and Mineral Corporation”). GEMCOR owned rights to harvest underground steam on about 5,000 acres at the north edge of the Salton Sea. It was said to be the hottest steam in the world, and could be used to drive turbines, that in turn would generate electricity. This was at a time when alternative energy sources just were getting started, so there was interest from utilities such as the Los Angeles Department of Water & Power, and San Diego Gas & Electric. There were cool, pre-TEFRA tax incentives, too.
The main problem with the steam is that it came up briny – that is, laced with calcium chloride, which scaled up the extraction equipment pretty fast. They devised a technology to divert the calcium chloride to a large holding pond, which probably still is there today – an environmental mess, if there ever was one!
The company, and its predecessors, had been beset with fraud from day one. An earlier holder of the lease, and promoter of the stock, was a guy named Owen Jackson. It variously is alleged he’d drive into a gas station, for example, but not have any money for gas, so he’d whip out his stock register, and issue a few shares as payment, instead. “There’s gold in the particles that come up with the steam,” he’d say, omitting the fact that the concentration of gold was minute, and no different than what you’d find in any kind of precipitate. There were a lot of claims against the company, based on these kinds of shenanigans. Essentially the resolution was to recapitalize the company, and issue shares to claimants, in proportion to the percentage their claim was, in relationship to the company’s capital structure.
The President of the company was this guy named Tom Denman. He was a colorful character – formerly a Methodist minister – a worthy successor to Jackson, if ever there was one. He was a curious amalgamation of a lot of different character traits. He could be benevolent and kind, but he also had a volatile temper. You’d be talking to him, explaining something to him, and then he’d erupt in a fusillade of anger. Once he actually got into a fist-fight at a board of director’s meeting with another director. Charges were filed, and I had to meet with the DA’s office to get it all resolved. He would call me at all times of the day or night — I still can hear his crackly voice, saying, “Dave, this is Tom Denman calling!” (as if I couldn’t have guessed). He recently passed away – I hadn’t seen him for at least 15 years — I hope he’s gone to a better place, though I’m afraid one of Dante’s higher-numbered circles may await.
Anyway, I think I stayed at a downtown hotel – maybe the Mint. This definitely was before the Disney-ization of Vegas, so it was appropriately dreary and seedy. Vegas was in a state of transition from the Howard Hughes-Elvis Presley era into les temps modernes. I liked the rough-and-tumble attitude, it was both run-down, and down-beat. I think Vegas’ strength is in its history. There’s no raison d’etre for it being there. It’s not a natural trade center, it’s not at the conflux of two rivers. It’s there only because Bugsy Siegel said so. Along came Hoover Dam, truly one of the wonders of the world – but that was built where it was because of geological characteristics of the Colorado River, it had nothing to do with Vegas, per se. If you’ve never been to Hoover Dam, it’s insanely wonderful; standing in the big room with the turbines is like being in a kind of art deco wonderland. Then came Frank Sinatra and the “rat pack,” in those cheesy hotels that now all have been demolished to make room for gargantuan multi-plexes.
The mob era gives Vegas panache, an aura of mystery, a touch of the forbidden. Elvis of course is an iconic American figure – not so much a man, as a metaphor – and the “Vegas Elvis” is one of his more potent iterations. I am a huge Howard Hughes fan, mainly because he was both successful (probably in spite of himself), and straight up crazy. I’ve read probably a dozen biographies, and even spoken with one of his old lawyers. Evidently, everything you read about him is true, and then some. All of this is most colorful; however, there’s no doubt in my mind but that today’s Vegas wants to forget about this stuff.
I was in-and-out of Vegas again for a case in the late 90s. This time it involved the Stratosphere Hotel-cum-landmark tower. It was the brain-child of a guy named Bob Stupak, another colorful character. Hmmm, all of these “colorful characters” seem to have something in common, that is, a penchant for securities fraud. Deploying the time-honored adage, “OPM” (as in, “other people’s money), Stupak enlisted a major casino company, Grand Casinos, as a partner. This lead to a lot of issues, like who was trying to freeze out whom. Even while the hotel still was under construction, they offered shares to the public. I represented the underwriter of the offering.
Naturally, lawsuits broke out like roses in springtime. IIRC the whole thing eventually went bankrupt, and Carl Icahn gained control of the company, by buying the outstanding bonds for pennies on the dollar (bonds have priority over stock in a bankruptcy reorganization). If you’ve ever seen the extraordinarily humorous movie “Mars Attacks,” by Tim Burton, there’s a scene in which a Texas investor (played by Rance Howard, Ron Howard’s father and Bryce Dallas Howard’s grandfather) plays a stock promoter, trying to lure Saudi Arabians into putting some money into a casino venture. The casino gets destroyed by the Martians, as he’s making a sales presentation, and about to close the deal. That perfectly encapsulates the memories I have of Stupak – in fact, he even looked a bit like Howard, come to think of it.
So those are my two primary memories of Vegas … I’ve also been there for a couple of conventions and stuff (not, however, those sponsored by the porn industry!). Like Jim Morrison sang, “Strange days, have tracked us down.”