Donald Sterling’s Secret History

Since his highly injudicious comments about Asian girlfriends, Magic Johnson and race almost a month ago, the name Donald T. Sterling, casual racist, parasitic landlord, and thoroughly-disgraced owner of the NBA’s L. A. Clippers, has been much in the news.

The more salacious elements are on the record. He ran newspaper ads for “hostesses” interested in meeting “celebrities and sports stars.” He hired a former model to be an assistant GM for the Clippers.

Yet only now are more serious questions beginning to be asked about some of the more improbable aspects of what might be called “The Donald Sterling Story.”

He’s the son of immigrant Jews from Russia, born in the same West-Side Chicago neighborhood that a generation earlier spawned Jacob Rubinstein, AKA Jack Ruby. He grew up in Southern California’s Boyle Heights in the 1940s,  attending grade school, middle school, and high school in the same town lived in and controlled by notorious mobster Mickey Cohen.

His brother-in-law, a Beverly Hills attorney, was once involved in a heated Mob vs. Mob-type war over who “owned” a famous prize fighter. with boxing promoter (and convicted felon) Don King.

He’s a former “personal injury” attorney—often called “ambulance chasers”—who somehow parleyed a lifetime of “slip and falls” into a real estate empire worth an estimated $1.9 billion dollars.

Getting rich in the dark?

But he’s a funny kind of real estate mogul. His sister demands tenants pay their rent in untraceable cash. Some of his properties are still today registered in the name of a woman— his grandmother—who’s been dead for more than 30 years.

And despite being filthy rich, Sterling  is nobody’s idea of a financial genius. When Sports Illustrated profiled him in 2000, they labeled him “a dismal failure” as a team owner. The low-budget Clippers regularly finished near the bottom of the league.

Perhaps more importantly, the magazine even calls his real estate acumen into question, devoting considerable space to describing the eerie silence inside the Louis B. Mayer Building, a seven-story, gilded and marble-lined LA landmark from Hollywood’s golden age built by the founder of MGM that Sterling uses as his headquarters. Except for Sterling’s own offices, the building was empty, the magazine reported.

Los Angeles magazine quotes the conventional wisdom: “He built his fortune by buying apartment  buildings when the market was low, back in the ’60s and early ’70s, and then not selling them.”

Buy low. Sell high. Make $1.9 billion. Really?

Donald Sterling’s Secret History

Still, his enormous wealth remains essentially unquestioned.  But that may be changing, however. A headline in USA TODAY issued a not-so-veiled threat: Go Now or Face Scrutiny.

“Reporters across the country have been combing through Sterling’s life and business,” the paper reported. “What else might they find? And who else could be caught up in it?”

The overwhelming question on everyone lips which is not yet being asked out loud— especially given the Sterling’s highly-litigious history —is this:  If Donald Sterling isn’t a financial genius, how did he get so rich? 

Is it really all his money? Or is Sterling  “fronting” for some larger, unnamed organization? In a nutshell:Does Donald Sterling have ties to organized crime?

It may already too late for Donald Sterling to just slink away. Because the answer is “yes.”

The evidence in a moment. First, a little background:  As Kennedy assassination researchers became only too well aware, when the Warren Commission dismissed Jack Ruby as a Mob “hanger-on” and “wannabe,” it prevented his true role as the Chicago Outfit’s representative in Dallas from being widely understood  for almost 50 years later.

High Weirdness: America’s chief export

Donald Sterling’s rise to riches is at least a little reminiscent of the story once told about another personal injury attorney  that proved to be a fairy tale under close scrutiny.

Remember Allen Glick?  His story was partly fictionalized by Martin Scorsese in the movie Casino. Kevin Pollock played Glick, a lightly-regarded front man, to Robert DeNiro’s Lefty Rosenthal.

Back in the 1970’s, Allen Glick went from being an ambulance-chasing attorney in Kansas City to the grateful recipient of $87 million dollars worth of Teamster Pension Fund largesse, which he used to purchase four of Las Vegas’ biggest and most profitable casinos  in the blink of an eye.

His rise to prominence aroused extreme suspicion in federal law enforcement. When Glick, to no one’s real surprise,  was found to have been fronting for the Mob, the casinos real owners, who, adding insult to injury, were skimming at least $15 million off the take, Glick turned state’s evidence, and put some aging slabs of marbleized Kansas City beef in federal prison.

Today Allen Glick lives quietly in La Jolla, California, home of the legendary La Costa Resort, where Mobsters once rubbed elbows (and perhaps more?) with the FBI’s  J Edgar Hoover.  More recently La Jolla served as the headquarters of Argyll Equities and Argyll Biotechnology, two recent examples of the more buttoned-up Mob pump-and-dump-type enterprises which have in large measure supplanted the Mob’s old “run-and-shoot’ strategy.

And this is where the Donald Sterling story begins to partake of some of the High Weirdness that America has been known for since the days when Richard Nixon walked the Earth. Because, as it happens, Donald Sterling and Allen Glick have long been such good friends.

You can call me Al…

In fact, it was while in Glick’s company, at a birthday party in Las Vegas for their mutual friend Al Davis, the now-deceased owner of the NFL’s Oakland Raiders, that Sterling met Alexandra Castro, who became Sterling’s mistress before the advent of the recent one,  who gleefully led him to ruin.

The N.F.L. was concerned about the decades-long business relationship between Davis, the Raiders’ managing general partner, and Glick, who newspapers coyly identified as “the former Las Vegas casino owner whom the Justice Department has identified as a ‘a straw party’’ for organized crime interests in Chicago.”

Davis and Glick were partners in an Oakland shopping center that they mortgaged through a loan from the International Brotherhood of Teamsters’ Central States pension fund.

Davis’ Mob ties, of course, had been the subject of conjecture for decades. But they were only investigated after he filed suit against the NFL to move his team from Oakland to Los Angeles, but the Federal judge in the anti-trust case ordered that there be no mention of Davis’ organized crime connections during the trial.

”The jury should not be asked to speculate on this highly prejudicial matter,” said United States District Court Judge Harry Pregerson.

Unusually, the Judge blamed the NFL for this state of affairs, implying the current situation was to the league’s benefit. “The evidence is clear that there has been a cabal among some past and present officials of the Justice Department’s Organized Crime and Racketeering Section, some of its Strike Force offices, and the NFL, which, through its long-term sweetheart relationship with a variety of law-enforcement agencies, has been a direct beneficiary of this situation,” said the Judge. “This raises serious questions about possible conflicts of interest as well as activities that border on sheer political corruption.”

This all happened back in 1983. Judges don’t talk like that anymore.

2-line headline with not a single grain of truth

It was as if Madonna were being given a Life-Time Achievement Award from Focus on the Family.

The press release began: “Donald T. Sterling and friends honored Ramy El-Batrawi as the humanitarian of the year for his support of the homeless people of Los Angeles.”

 A casual perusal of the headline turns up nothing that bears the faintest resemblance to the truth:

“Donald T. Sterling Homeless and Medical Center Honors Ramy El-Batrawi With Humanitarian of the Year Award for His Support of the Homeless People of Los Angeles.”

There was no “Donald T. Sterling Homeless and Medical Center,” back then, just for starters.  Nor is there one today. No institution. No employees. No Board of Directors to mull over who to choose for next year’s award.

The “Donald T. Sterling Homeless and Medical Center” is just a lie someone invented, and then delivered—not verbally, where it could later be denied—but in a press release, a form explicitly designed for maximum visibility.

Sterling must have been acting with the sure knowledge that no one would ever call him on it; and with a rock-solid confident expectation that he was operating with total impunity.

Donald Sterling, Adnan Khashoggi, and Ramy El Batrawi

Ramy El Batrawi is a Saudi national who has been Saudi arms merchant and CIA fixer Adnan Khashoggi’s chief lieutenant in America from more than 30 years. More than once in the past decade, the two men have gone “on the lam” and become fugitives from justice at the same time to avoid arrest.

Back in the days of Iran Contra, El-Batrawi fronted for Khashoggi and posed as the owner and president of an airline in Miami, Jetborne, that flew Oliver North’s TOW missiles to the mullahs in Iran. Court testimony revealed that Jetborne was a CIA proprietary airline, helping to explain how Khashoggi and El Batrawi manage to repeatedly commit financial crimes with impunity.

Khashoggi and El Batrawi also have well-documented links—El Batrawi, for example, “owned” SkyWay’s second DC-9—to the drug trafficking ring operating in St. Petersburg Florida that DEA officials say was being protected by federal agents in the Tampa ICE Office.

Just as the drug trafficking operation out of St Petersburg got underway, in July 2003, ownership of the operation’s second DC-9 (N12ONE) was transferred to El Batrawi.

The airliner came via Finova Corp., which, as was discovered while researching “Barry & ‘the boys,’” is a CIA finance company that was the true owner of Southern Air Transport, Richard Secord’s re-supply cargo airline supplying the Contras with weapons… and the U.S. with cocaine, a fact revealed only much later, when no one was looking, during Southern Air Transport’s bankruptcy proceedings.

El Batrawi and Khashoggi were the lead actors in massive financial fraud which accompanied the drug trafficking. They engineered and ran what came to be called the Stockwalk scandal, which cost investors and U.S. taxpayers hundreds of millions of dollars. It led to what was, at the time, the largest brokerage failure in American history, a record that has been eclipsed many times since.

“Just three months after the company’s Initial Public Offering (IPO), the nearly $17 million raised in the offering was gone,” read one wire service story.

“The creative dealings of defendant El-Batrawi partly explains how this money disappeared so quickly,” reported the AP.

He’s no one’s idea of a prototypical Mobster. He doesn’t sound like he comes from Brooklyn. Nor does he have a colorful nickname. But, like Mobsters of old, Ramy El Batrawi operates with his boss Adnan Khashoggi’s carefully-purchased impunity. In that, he probably something of a poster boy for transnational organized crime in the 21st Century.

So, why was Donald Sterling honoring him as “Humanitarian of the Year?”

The answer was surprisingly simple. El-Batrawi and Khashoggi had just been charged by the SEC with massive financial fraud, and accused of basically stealing more than $100 million. (The figure would later double.)

And Donald Sterling was using his considerable public relations clout—he regularly bought full-page and double-truck spreads in the Los Angeles Times—to stem the tide of bad publicity swamping Khashoggi and El Batrawi’s efforts to move on to the next scam.

Asking if Sterling was doing it as a favor for an unnamed organization to which both he and the two Saudi men belonged is just speculation.

But what isn’t speculation is that Sterling clearly thought no one would notice. And until his recent difficulties thrust him into the harsh glare of a media spotlight, no one did.

The “Humanitarian of the Year Award” headline was a complete misnomer. It implied that the non-existent “Homeless and Medical Center” has given out “Humanitarian of the Year Awards” previously. They had not.

 The Legendary Raw Deal

After Sterling announced his “homeless initiative” in a press release in full-page newspaper ads in the L.A. Times, it received widespread and skeptical coverage in the media in Los Angeles.

At the City Planning Department, no one had filed plans for the property. The Building and Safety Department said there were no demolition requests or building permits requested in conjunction with the project.

“Aside from these ads, no one has seen anything,” said Estela Lopez, the head of the Central City East Assn., a business advocacy group representing an area of downtown that includes skid row. “What’s the plan? Where’s the proposal?”

The real estate agent for the project said the Sterling family trust was in escrow on the property, purchasing it for a “significant discount” from the $12-million asking price. He would not elaborate.

Sterling’s strategy for real estate investment was to buy properties, hold on to them until the market moves into a hot cycle, then refinance and pour the equity into new acquisitions. Some downtown watchers wondered whether he wasn’t doing the same with the skid row property, waiting out a surge in property prices as downtown gentrifies.

Donald Sterling was exploiting homeless people—who do exist—to aggrandize himself and a select few of his cronies. The homeless got nothing. Not even a reach-around. It was the legendary raw deal.

Thoughts of the Humanitarian of the Year

Apparently no one was more surprised than Ramy El-Batrawi himself to have been chosen Humanitarian of the Year.

The Times dutifully sent out a reporter to ask some questions of the newly-minted Humanitarian of the Year. How had he demonstrated support for the homeless?

El Batrawi freely admitted he’d made no contribution of money or time to helping the homeless.

Another celebrity who seemed more than a little vague about the deal was singer Natalie Cole . She appeared with Ramy El Batrawi  in one of Sterling’s full-page ads, where she was identified as a “leader” providing support for the homeless, and as a “special guest” at the dinner.

The event’s producer, Tami Bennett, said Cole was a big supporter of Sterling’s project, in part because she herself was once homeless. The next day, Cole’s publicist, sounding miffed, contacted the Times to say the singer was never homeless, was only “a recent acquaintance” of Sterling’s, and had merely told him she would attend his event.

The next day, the publicist phoned the Times reporter again, saying the singer was on “voice rest” and would not be attending the event at all.

A $270 million dollar blemish

The Times also coolly noted the current blemish on El-Batrawi’s record.  “El-Batrawi was sued earlier this year by the Securities and Exchange Commission, which alleged that he and a partner, Saudi arms dealer Adnan Khashoggi, orchestrated a $130-million scheme to manipulate the stock of a Van Nuys-based company,” reported the story.

“The manipulation, the SEC alleges, resulted in the largest bailout in the history of the Securities Investor Protection Corp.”

“In an interview with the Times, El-Batrawi said the federal charges were untrue and have nothing to do with his interest in helping Sterling launch his homeless center. The businessman said he has not donated money to the cause but has introduced Sterling to other potential donors.”

“I’m devoting a lot of my time, my efforts, in being available,” El Batrawi said. “I’m making introductions … trying to figure out the things he needs.”

It all sounded more than a little vague. What wasn’t vague, not at all, was the massive financial wreckage caused by the swindling Saudi financial fraudsters Khashoggi and El Batrawi, as a news account announcing the huge settlement one of the companies involved signed with the SEC in lieu of going to trial made clear.

“Deutsche Bank, the German financial services giant, will pay as much as $270 million to settle charges stemming in part from the fraud-induced failure of a Twin Cities brokerage subsidiary in 2001.”

“The complicated case involves a trade-clearing subsidiary of Minneapolis-based Stockwalk Group, and several other brokerages that became ensnarled in one of the securities industry’s biggest swindles in history, by a group that included fugitive Saudi arms dealer Adnan Khashoggi.”

Paying $270 million to settle charges is a rough indication of how much real pain and human suffering the scam caused real people.

Whatever Ramy El Batrawi found to say in his acceptance speech at the semi-star-studded dinner at Wolfgang Puck’s Spago in West Hollywood is now lost to history, which is some consolation.

But there’s no consolation at all in the discovery of a tweet Ramy El Batrawi  sent just two weeks ago to homegrown American financial pirate Carl Icahn,an icon of 1980’s greed as well as one of the original “barbarians at the gate.”

Tweeted El Batrawi @Carl_C_Icahn “hi Carl how are you its been a long time.”