Ponzi's Scheme (7 page)

To Edwin Grozier, Hurlbut wrote: “I believe that it would be best to put the boy at work.” After some pleasantries and sympathies, he reinforced his point: “Were he my son I should put him at work.”

The wrought-iron gates to Harvard were closing. But Edwin Grozier, for whom a relentless work ethic was a defining trait, was determined to keep them open. And, as editor and publisher of the
Post,
he undoubtedly knew that his voice would carry weight, even among the dons of Harvard. “I am much disappointed and grieved that my son Richard should continue to do so poorly in his college studies,” he wrote Hurlbut. “Without doubt your advice to put him to work is sound, but, while there is any chance remaining of his completing his college course, I hesitate to abandon the effort.” He sent Richard to Harvard's summer engineering camp, exiling the cosmopolitan young man to a world of trees and blackflies at Squam Lake, in New Hampshire. His orders were to return home with passing grades.

“Good work at camp will certainly be an important consideration with the Board,” Hurlbut wrote Edwin Grozier when he heard of the plan. Reluctant to shrug off the editor and publisher of the
Post,
he offered a glimmer of hope and a cautionary note. “I should like to have Richard get a degree; at the same time I question whether his being allowed so many chances would not in the long run be bad for him.”

“While the young man has not shown it in his studies,” Edwin Grozier answered, “I still cling to a father's fond confidence that he possesses rather unusual natural abilities, and I trust that he may have a final chance to demonstrate that in connection with his college work. . . . I will urge him to put his best foot forward this summer, and trust he may yet make a creditable record.”

Halfway through the summer, when Richard had earned a B in his first course, Edwin Grozier grew cautiously optimistic. He began seeking Richard's readmission from Hurlbut: “The young man has put in a lot of hard, earnest work this summer, evincing some of his natural capacity, and I trust that he may yet graduate and in after years prove to be a credit to his University.”

Hurlbut answered in kind, though with a hint of sarcasm: “I hope that he will keep up his good work in college. He certainly has allowed things to slide right along so far.”

After passing his second summer course, Richard was rewarded with a trip to Denver with his father. But with reinstatement still pending, Edwin Grozier was not ready to rest. Fearing they would miss an important deadline, he sent a Western Union telegram to Hurlbut: “Please wire me collect [at] Hotel Metropole just what date it is necessary for him to be in Cambridge.”

Two days later, September 29, 1908, Hurlbut told Richard he had been readmitted as a junior on probation, a condition that would remain in force at least through the middle of the term. “This is to insure that you do not again, as you have done in the past, work hard at first, and then slump.”

Despite the warnings, the cajoling, and the outrage caused by the three separations and reinstatements, Richard soon returned to form. He ignored his studies and seemed to be daring Harvard to ignore his father's campaign and finally be rid of him. Then fate and friendship intervened.

Richard's roommate, Joseph W. Ross, a baby-faced engineering student from Ipswich, Massachusetts, saw his friend heading for a fall. Privately, Ross approached Dean Hurlbut at a college event on November 10, 1908, and then followed up with a letter: “I am writing to the effect that I should like to have the case of Richard Grozier handed over to me in case that his hour exam marks do not warrant a continuance of his probation,” Ross wrote. “I want to make plain that I am doing this absolutely without his knowledge. . . . I am very sure that I can bring around the required attention to his duties.” He asked the Administrative Board to formally approve his standing as Richard's anonymous taskmaster.

With Ross's guarantee, the board voted a week later to give Richard yet another chance. Dean Hurlbut wrote to Ross explaining that this was done only after “accepting your offer that if he were put in your charge you promised to have him keep up his work.” Hurlbut added one more condition: The deal could not be kept secret; both Richard and his father would be informed of Ross's new role.

Ross answered with a “promise that my part of the agreement, meaning Richard's part, will be faithfully lived up to.” He tacitly accepted that Richard would be informed, but begged Hurlbut not to tell Richard's father. Ross must have known from Richard how angry Edwin Grozier had become about the situation. Learning that another student had been made caretaker for his son would only have enraged him further, making life harder on his friend Richard. Hurlbut briefly protested, but there was no indication that Edwin Grozier ever learned of the guardian angel on his son's shoulder.

Hurlbut kept tabs on Richard the rest of the year. With Ross's help, Richard fulfilled all his requirements and passed all his classes, including English comp, in which he got a C.

At the Class Day exercises near the end of June, one of Richard's classmates may have unwittingly explained why the heir to a newspaper fortune had so much trouble with that particular class. That is, aside from his own halfhearted effort. Delivering an address entitled “The College and the Press,” Richard's classmate told the crowd, “One of our teachers of English composition here at Harvard concludes his classroom work each year with a little advice to his young friends with regard to journalism. The gist of it is that newspaper work, like some medicines, is beneficial only when the dose is small.”

Official word that Richard would graduate with his class came at the very last minute on June 29, 1909, a day before commencement. It was too late for his photograph to appear in the treasured
Class Album.
Richard had made it through Harvard, but he would not make it down the aisle. He and Vera Rumery broke off their engagement and went their separate ways.

After graduation, Richard's friend and savior Joseph Ross found an engineering job and moved home to Ipswich for what he later called “a very routine life, interrupted by a few Caribbean cruises.” In 1912, three years after graduating from Harvard, Ross received his reward for rescuing his roommate: He married Vera Rumery.

A
fter college, Richard packed his belongings and moved from his private dormitory to his parents' new house, less than a mile from Harvard Square, in the most prestigious part of Cambridge. Flush with profits from the
Post
's success, in October 1907 Edwin and Alice Grozier bought the enormous Queen Anne–style home at 168 Brattle Street. Alice had found the house by scouring the classified ads in the
Post
before the paper was printed; she furnished it much the same way, finding ads for estate sales and offering to buy items before the rest of the city knew they were available. Built two decades earlier, the house befit a powerful publisher, with gleaming woodwork, a teak-paneled ballroom designed to hold two hundred people, and a grand staircase. Christened “Riverview” by its original owner, the house allowed the son and grandson of sailing captains to look out over a sweeping lawn to the green-gray waters of the Charles River.

After scraping through college, Richard was uninterested in the routine of a job. He enrolled in Harvard Law School, but he wilted under the rigors of legal scholarship. Within a year he was finished with school and working at the
Post.
For the next decade, Richard followed the well-worn path of the newspaper heir, working his way through the various departments—reporter, editorial writer, print-shop apprentice—to learn the business he would someday own. For some months he even served as a pressman, laboring amid the clatter of the largest printing plant in New England, which Edwin Grozier had built with much fanfare on five floors directly beneath the
Post
offices on Washington Street. It was an ideal fit: Richard was a man of mechanical bent, unimpressed by the fancy scrollwork on the face of a watch but awed by its metal intestines, the screws and gears and springs that made the thing tick.

By 1920, Richard was the
Post
's general manager, assistant publisher, and assistant editor. But the paper was still firmly in his father's control, and the titles carried little power. Richard devoted himself to his work, but his performance at Harvard lingered in Edwin Grozier's mind. Richard was given few chances to prove himself, and nothing he had done during the past decade seemed to win his father's confidence or approval.

Yet during those years, Richard Grozier had quietly studied his father's stunts—the elephants, the headless photos, the primitive man, the free cars, the canes. He understood them for what they were: flashes of fireworks that caught the eye and relieved the reader of his two cents before he knew what hit him. Richard also recognized that the gimmicks were a means to an end, a way to foot the bills for solid journalism. Now if only he had some way to prove how much he had learned.

Photograph of an oil portrait of a teenage Rose Gnecco.

Albin O. Kuhn Library & Gallery, University of Maryland, Baltimore County

C
HAPTER
S
IX

“A
N AMERICAN BEAUTY
”

I
n 1915, two years before Ponzi's return to Boston, construction began on a mansion that came to symbolize the spoils within the reach of poor men who were bursting with ambition, gifted with charisma, and unburdened by scruples.

The Georgian Revival manor would be the home of Boston's mayor, James Michael Curley, an up-from-the-slums force of nature who viewed politics as a sure path to wealth and power. Clad in brick and roofed in slate, the house sat on a two-acre lot facing a park that was part of Frederick Law Olmsted's “emerald necklace” around Boston. Past the park was Jamaica Pond, where hand-holding couples and raucous families skated in winter and picnicked in summer. The location was within the borders of Boston yet seemed light-years from the inner city.

Even more magnificent than the site was the house itself: more than twenty-one rooms, including an oval dining room paneled in mahogany, fireplaces framed in white Italian marble, fixtures plated with gold, and a curving staircase lit by a two-story chandelier bought from the Austro-Hungarian embassy in Washington. The only signs of the owner's humble beginnings were the festive shamrock cutouts in all thirty of the white shutters, placed there as much to annoy the Yankee neighbors as to display Hibernian pride.

Curley was born in 1874 in Boston's poor Roxbury section. Fatherless by age ten, imbued with resentment of the Brahmins, and blessed with prodigious energy, Curley devoted himself to the punch-in-the-nose, pat-on-the-back world of Boston Irish politics. At twenty-six he won election to the Boston Common Council, a raucous body that was the stepping-stone for every young would-be Democratic politico in the city. He soon became boss of Roxbury's Ward 17, which along with his council seat gave him the power to barter jobs and other goodies for loyalty and votes. He launched a political organization called the Tammany Club, defiantly named for the New York machine. Curley insisted it was a tribute not to the New Yorkers' corruption but to their commitment to constituents in the absence of government aid programs. But the Boston Tammany Club soon emulated its New York cousin in graft and scandal, with Curley larding the public payroll and dipping his fingers in every slice of municipal pie. The club's mascot was a crouching tiger. The public treasury was its prey.

To raise money for its activities, the Tammany Club sponsored all sorts of promotions at its summer festivals, known as “powwows.” Men would struggle to catch greased pigs for a prize, vie for the title of “ugliest man,” and pay ten cents to take an ax to a piano, with a five-dollar reward to the man with the mightiest swing. Only a few years had passed since Massachusetts was atwitter over the trial of Fall River's Lizzie Borden, so the ax-swinging spectacle was certain to send shivers down spines. Speakers at the powwows included local celebrities, including Curley's pal John L. Sullivan, the former heavyweight champion known as “the Boston Strong Boy.” In spirit, Curley borrowed Sullivan's familiar cry, “I can lick any man!”

From the Common Council, Curley rose to a seat in the Massachusetts legislature. But in 1903 his rise was nearly derailed when he became the first member of that body arrested for a crime. He and a fellow leader of the Tammany Club had taken civil service exams for two Irish immigrants who wanted jobs as letter carriers. Curley and his cohort were charged with “combining, conspiring, confederating and agreeing together to defraud the United States.” The maximum penalty for each was two years in prison and a ten-thousand-dollar fine. Curley admitted to the scheme in the face of overwhelming evidence. He was convicted of the charges and sentenced to two months in jail.

Refusing to slink away quietly, he appealed the conviction and sought a seat on the Boston Board of Aldermen, a step up from the state legislature in the pecking order of Massachusetts politics. Incredibly, he won. The state supreme court ultimately declined to hear his appeal, and Curley was sent to the Charles Street Jail, where his friend the warden made sure he had an extra-large cell, good food, salt baths, a steady stream of visitors, and a ready supply of books.

Instead of destroying his career, the jail term invigorated it. He was renominated as the Democratic candidate for alderman while still behind bars, then boasted of his criminal record in a campaign slogan that appealed to the us-against-authority culture of the famine Irish: “He did it for a friend!” Soon he was back to his old tricks—a few months after his release Curley was accused of selling his aldermanic vote to a shipping company that wanted to build a rail line through the streets of East Boston. A grand jury refused to issue indictments, but that luck would not hold. In 1907 Curley was indicted for pressuring New England Telephone and Telegraph to hire phantom workers as an apparent cover for the payment of bribes. Fearing that his ambitions would not survive a second conviction, Curley hired lawyer Daniel Coakley, a thoroughly unscrupulous ex-reporter and boxing referee who relied more heavily on blackmail than legal briefs. Coakley worked his magic, and the indictments were dropped.

In 1909 Curley rose to the newly formed Boston City Council, which replaced the Board of Aldermen as well as the Common Council. From that perch he won a seat in the U.S. Congress in 1910, was reelected two years later, and set his sights on the plum job of Boston mayor. His main obstacle was a fellow Irish-American: John “Honey Fitz” Fitzgerald, who was enjoying his second term as mayor and considering running for a third. Fitzgerald had come up in a fashion similar to Curley's, from ward politics to the Boston Common Council to the Massachusetts senate to Congress, where he'd served three terms and won a reputation as a staunch supporter of immigrants. His nickname was a tribute to his honeyed rendition of “Sweet Adeline” at every public event save wakes. Fitzgerald's diminutive stature and acquisitive nature earned him another sobriquet, “the Little Napoleon.”

By 1913, Curley was eager to become mayor—the job paid better than being a congressman, and there were more opportunities for pocket lining. But he loathed the idea of having to face a sitting incumbent Democrat with a similar following. Once again the lawyer Dan Coakley proved useful. Coakley shared with Curley a scandalous piece of information about Fitzgerald: The mayor had made a spectacle of himself with a buxom roadhouse gal named Elizabeth “Toodles” Ryan. Curley had just what he needed to squeeze the family man Fitzgerald from the race. A letter soon arrived at Fitzgerald's house threatening exposure of his public flirtation with Toodles. Fearing for his reputation, Fitzgerald ended his candidacy, giving Curley the opening he needed to take control of Boston City Hall. The episode was eventually memorialized in a classic bit of Boston doggerel: “A whisky glass and Toodles' ass made a horse's ass out of Honey Fitz.” Fitzgerald's only consolation was the wedding soon after of his beloved eldest daughter, Rose, to Joseph P. Kennedy, the son of an Irish politico-cum-saloon-keeper-cum-rumrunner. Rose would pay special tribute to her father by naming her second son after him: John Fitzgerald Kennedy.

Curley claimed the mayor's office in the name of honest government, ironically suggesting that he was just the man to clean up the mess of graft, patronage, and incompetence that Fitzgerald had left behind. At first, he seemed true to his word, but soon he returned to form: ethnic warfare, intimidation, and a level of graft unparalleled in Boston history. The nadir was the palace he was building on the parkway.

The big question was how he could possibly afford such a mansion. Curley had no declared savings, yet he had also recently purchased a seaside summer home in Hull. His mayoral salary of ten thousand dollars was not enough to pay for the land, much less the building and its sumptuous furnishings.

An investigation by the city Finance Commission led to a recommendation that Curley face prosecution for an array of criminal charges. But action depended on the local district attorney, Joseph C. Pelletier, a political ally of Curley's who, years earlier, had rejected calls to prosecute him for the New England Telephone and Telegraph bribe allegations. Beyond their political ties, Curley shared with Pelletier a link to Dan Coakley: Coakley had served as Pelletier's campaign manager, and Pelletier and Coakley were in league on a sexual blackmail game. At Coakley's urging, Pelletier rejected the call for prosecution. That was how it worked. Once again Curley had caught a break.

Still, Curley had to answer to voters if he wanted to win a second term in 1917. When graft was doled out in small doses or tucked in secret bank accounts, it could be hidden, denied, or downplayed. It surprised no one in Boston when a man with a hand on the tiller of government had his other hand in the government till. But the mansion was too much, a ten-thousand-square-foot gorilla climbing to the roof of Curley's City Hall with his future in its grasp.

The newspapers had a field day. Edwin Grozier's
Post
was especially disgusted with Curley, despite the paper's Democratic leanings and the fact that Grozier actually agreed with the mayor on a number of key issues. In his race for reelection, Curley ran not only against his opponents but against the
Post,
at one point holding a rally on Washington Street across from the offices of “that foul sheet.” Pretending to be a David among Goliaths, he shouted, “With every corrupt boss and rotten newspaper against me, with all of these powers of rottenness and corruption against me, they can't beat Jim Curley.”

Awash in scandal and distrust, and with old enemies like Honey Fitz working behind the scenes against him, Curley persevered in his bid for a second mayoral term. The
Post
endorsed Congressman James A. Gallivan of South Boston for mayor, enabling Gallivan to take a big enough chunk of Curley's core constituency to deny him reelection. With Gallivan and Curley splitting the Irish vote, the winner was Andrew J. Peters, a thoroughly forgettable Yankee. Peters's only lasting mark on the city would be a dark one: his debauchery with an eleven-year-old girl who had been placed in his care.

From the moment Curley lost the 1917 election, no one doubted he would engineer a return to the political stage. But the lesson was clear, and it applied to every ambitious man in the city: Boston would tolerate, even celebrate, a rogue who made his own rules and lined his own pockets, as long as he knew the limits. If he grew too bold or too flashy, or if his spoils became too big to ignore, he would be made to pay.

P
onzi arrived in Boston just in time to watch the Curley house scandal play itself out in the newspapers and the streets. Ponzi found himself rooting for Curley, whom he admired for his moxie and sense of style, and whom he considered a “likeable chap.”

While the mayor was fighting for his political life, Ponzi went dutifully to work as a clerk and stenographer at the J. R. Poole Company, named for its owner, John R. Poole. Ponzi's workplace was on South Market Street, in the shadow of the new Custom House Tower, a thirty-story, peaked-roof wonder of Italian renaissance architecture that was Boston's first skyscraper. All around the area were bright colors and the wafting smells from the stalls of produce vendors, dairy merchants, and fishmongers. On his way to work Ponzi could hear the screams of gulls and see the masts of ships along Central and Long Wharfs. If he listened hard enough, he might hear his mother tongue carried on the wind from T Wharf, where the Italian fishermen congregated. A few steps away was Faneuil Hall, the Revolutionary War meeting place where Sam Adams had inflamed his compatriots upstairs and merchants sold their wares in a marketplace downstairs.

For months Ponzi toiled to keep track of Poole's extensive foreign businesses, only to be disappointed by his pay of sixteen dollars a week. At first, Ponzi considered the job a gamble in the futures market—the company was doing well and lavished its employees with promises of eventual rewards. He won a raise to twenty-five dollars a week, but still he struggled. “By starving one day and eating a little less the next one,” he complained, “we employees always managed, more or less, to keep handsomely in debt.”

His only consolation was his certainty that he had established a firm foothold on the ladder up from manual labor. He had painted his last sign, washed his last dish, begged his last bowl of macaroni. Never again would he seek a menial job. But he was far from satisfied. It remained a long, unsteady climb to the top rung, and at thirty-five Ponzi was impatient about getting there. His impatience grew exponentially at the end of May 1917.

On Memorial Day weekend, Ponzi accompanied his landlady, Myrtle Lombard, to a Boston Pops concert. Ponzi played mandolin and considered himself an aficionado of fine music, and Mrs. Lombard taught piano to neighborhood children. Afterward, music still in their ears, they made their way to the Boylston Street station to catch an electric streetcar to Mrs. Lombard's house on Highland Avenue in nearby Somerville, home to a growing colony of Italian immigrants.