Published October 12, 2012
Brewery scion Joe Coors gave millions in 2002 to con artists who promised him a 75% weekly return.
That is not a typo. Mr. Coors was pitched a 75% WEEKLY return, and he bought it. Now he's running for Congress, touting credentials as a "common sense" businessman.
"It's time to stop Washington's reckless borrowing and spending," he says in TV commercials. "We need to send commonsense businesspeople to Congress. .. My name is Joe Coors. I am not a beer. And I approve this message."
Touting boilerplate Republican arguments against big government in a largely self-funded campaign, Mr. Coors frequently ridicules President Barack Obama for the Solyndra LLC debacle. And when the 70-year-old candidate is not bragging about what a great businessman he is, he is complaining about what a great businessman his incumbent opponent is not.
"I don't think he could manage a lemonade stand without a federal grant or some subsidies," Mr. Coors quipped in a recent debate with Colorado Democratic U.S. Rep. Ed Perlmutter.
Mr. Coors is either an ingrate or he has been drinking way too much of the Mike's Hard Lemonade his family brews. Mr. Perlmutter was a partner in a growing law firm that specializes in commercial litigation. He once hired Mr. Coors's own daughter as an attorney. So Mr. Coors's opponent has not only created jobs, he's created them for Mr. Coors's own family.
For all his business acumen, Mr. Perlmutter is still trying to fathom the size of a 75% weekly return compounded over time. "It's astronomical," he said in a telephone interview. "You've got to do scientific notation to even get close. .. The distance is like from here to the farthest reaches of the universe."
As an attorney, he has represented Ponzi scheme victims who were promised only 12% a year. "The courts were saying even that was too good to be true," he said. "This thing was 75% a week."
I wrote a column for the Denver Post about the unbelievable fleecing of Mr. Coors in 2004. (Read it on my blog at http://tinyurl.com/9j8gpzm.) The liberal group ProgressNow has been quoting from it liberally on its websites since January. So I thought maybe Mr. Coors would like to sit down with me and put this bizarre chapter in his business career into a more positive perspective.
I would have let him tell the story in his own words, instead of the words in a trail of federal court documents, old news reports, and his adversaries. But his communications director, Michelle Yi, responded to my request in an email, saying that Mr. Coors was too busy with his campaign to give me an interview. "We can and will try to arrange something most definitely after the election," she wrote.
Ms. Yi's response goes down in my annals of public relations strategies as "nice try." Mr. Coors wants to campaign on his record as a great businessman, but like a Las Vegas gambling addict, he only wants to talk about the deals he won.
Mr. Coors is the great-grandson of brewery founder Adolph Coors. Joe Coors reportedly receives about $2 million a year from various Coors family trusts. He was chairman and chief executive of CoorsTek Inc., a spinoff of the beer company, when he retired in 2000. His brother Pete Coors ran an unsuccessful race for U.S. Senate in 2004 and is vice chairman of the Molson Coors Brewing Co. (TAP, TAPA).
In 2002, Joe Coors ran across a couple of seemingly obvious crooks who were offering one heck of a deal--75% weekly returns for investors big enough to put down at least $10 million. Mr. Coors and a partner put $40 million into a Merrill Lynch account with the potential to borrow another $20 million on the margin. They then gave the crooks access to the account.
This is all according to documents filed in U.S. District Court in Denver in some civil and criminal cases, as well as a complaint filed by the U.S. Securities and Exchange Commission against the perpetrators.
Instead of investing Mr. Coors's money in that amazing 75%-a-week deal they had promised, the crooks started doing all the things that crooks like to do: running up enormous tabs at hotels and jewelry stores, buying expensive cars and antiques, paying for cosmetic surgery, binge shopping at Louis Vuitton and Saks Fifth Avenue, and such.
After the crooks withdrew more than $4 million, someone at Merrill Lynch started asking questions. Merrill Lynch then reported the matter to the SEC and froze the account, according to court documents.
Instead of thanking Merrill Lynch for protecting most of his loot and ratting out these predators, Mr. Coors filed a federal lawsuit against the firm, complaining it did not do enough. Mr. Coors also alleged his Merrill Lynch broker in The Woodlands, Texas, had vouched for the crooks.
Merrill Lynch countersued Mr. Coors. Nasty accusations flew back and forth. And the episode became one of those embarrassing and expensive legal debacles that sometimes inspire Republicans to scream about how all the lawyers are destroying business.
Mr. Coors's perpetrators ultimately received their just deserts, thanks to Merrill Lynch's vigilance and some big-government regulators. Claude Lefebvre, 69, is in a federal prison in Elkton, Ohio, until Jan. 31, 2020. Dennis Herula, 65, is in a federal prison in Edgefield, S.C., until Jan. 18, 2017.
"He was gullible enough to get into a get-rich-quick scheme," Mr. Perlmutter said. "If he can't manage his own money, why would you want him managing the country's?"
The only conclusion I could ever come to was that Mr. Coors was as steeped in greed as the men who ripped him off. U.S. District Judge Robert Blackburn said as much when he sentenced Mr. Lefebvre in Denver in July 2005.
"There's much that could be said about the defendants and victims," the judge said. "But make no mistake, this was a contest that pitted greed against greed, and greed prevailed, but to the detriment of all the greedy."
All that said, I think Mr. Coors could fit right into Washington.
(Al's Emporium, written by Dow Jones Newswires columnist Al Lewis, offers commentary and analysis on a wide range of business subjects through an unconventional perspective. The column is published each Tuesday and Thursday at 9 a.m. ET. Contact Al at email@example.com or tellittoal.com)