Catastrophe - Dick Morris [77]
A few years after the purchase, Downe told Dodd he was under federal investigation for insider trading. Once he learned that, Dodd claims, he terminated the financial relationship. He told the Hartford Courant:
“Having a relationship financially—it was obviously not something that I thought was appropriate,” Dodd said. “So we severed the relationship financially; did not sever the friendship.” Downe also continued to contribute to Dodd’s political campaigns.291
Dodd claims that in 1990, he took out a new mortgage for $180,000 and paid Downe $41,000 for his share of the expenses.292 End of story.
His salary in 1986, when he purchased half of the D.C. apartment valued at $180,000, was only $75,000. He also had $194,000 in mortgages on his home in charming East Haddam, Connecticut (which weren’t subject to disclosure either).293 That’s $284,000 in mortgage debt. Assuming that Dodd was making a take-home salary of $50,000, he couldn’t have had much left after paying the mortgages, condo fees, insurance, and taxes.
Downe, of course, made nothing on the four-year investment. Dodd, on the other hand, later sold the property for a substantial profit—but doesn’t seem to have shared it with Downe.
But Dodd gave as good as he got, maybe even better. Years later, he managed to save Downe from the consequences of what turned out to be major crimes. That was worth a lot more than anything Downe could have given Dodd.
* * *
DEED FOR DODD AND DOWNE PURCHASE OF D.C. APT.
General Information
Document #: 8600017618
Filing Date: 5/2/1986
Instrument Type: DEED
Roll: 164
Comment:
# of Pages: 4
Book Type: LAND
Filing Time:
Consideration Amt: $0.00
Frame: 725
Grantor
CALIFORNIA HOUSE PARTNER
Grantee
DODD CHRISTOPHER J
DOWNE, EDWARD R JR
CONVEYANCE TO DODD BY DOWNE
Document #: 9000008756
Filing Date: 2/13/1990
Instrument Type: DEED
Roll: 513
Comment:
# of Pages: 2
Book Type: LAND
Filing Time:
Consideration Amt: $0.00
Frame: 192
Grantor
DOWNE, CHARLOTTE
DOWNE, EDWARD R JR
Grantee
DODD, CHRISTOPHER J
Legal Description(s)
Land Record:
Square
2528
Lot
2187
0308
Source: D.C. Property Records
* * *
DODD GETS DOWNE A PRESIDENTIAL PARDON
After Downe pleaded guilty to wire fraud and tax evasion related to his insider trading, he was sentenced to 3,000 hours of community service. After reaching a settlement with the SEC on the insider trading charges, he was fined $11 million. He was forced to sell his Southampton home, his Florida condominium, and his art collection. Although he was permitted to keep his apartment in Manhattan, it will revert to the government on his death.
The charges against him were serious: according to the SEC, Downe “had exploited insider trading information and set up offshore bank accounts to hide millions of dollars of illegal profits for himself and members of his wealthy social circle.”294 Apparently, the information Downe picked up at his board of directors meetings was passed on to family and friends over drinks at his Southampton home and clubs, during poker games, and at other social events. The SEC estimated that Downe and his pals made in the neighborhood of $23 million in profit from the scam.
Downe could have been subject to serious jail time for his crimes. But Chris Dodd personally wrote to the sentencing judge in defense of his friend—and eight years later he also sent a personal letter to President Clinton seeking a pardon for his insider trading crimes. On January 19, 2001, the day before he left office, Clinton issued the pardon.
Dodd emphasized Downe’s remorse and good character: “The example[s] of Ed’s private goodness [are] extensive,” Dodd said, “but they all share one thing in common—they were all done quietly to help people, average people in need.”295
Did Dodd consider himself one of those average people in need who had benefited from Downe’s goodness? Whether he did or not, he certainly managed