Citizen Hughes - Michael Drosnin [190]
Not long afterward, Peloquin flew to Los Angeles to confer with Chester Davis. The gruff lawyer took the plot a big step further. He asked the man from Intertel to draw up a detailed plan “for a change of management in Nevada.”
Meanwhile, Raymond Holliday was feeding Hughes’s growing fears of financial ruin and suggesting that Maheu was largely to blame.
There were indeed real problems, and Hughes himself had presented the grim picture to Maheu months earlier: “I can boil it down to one fact—three years ago there was 650 million dollars in cash in the till. Now, after three years, this year is scheduled to finish with a hundred million dollars shortage of funds which have to be borrowed.”
Now the problems were even worse. Hughes had been hit with a final default judgment of $145 million on TWA. His disastrous helicopter enterprise was headed for a loss of $90 million. He was not yet even aware that John Meier had swindled him out of $20 million for phony mining claims. And his two-hundred-million-dollar Nevada investment had, against all odds, lost money every year.
But most of all, Hughes was worried about his image.
“At the present time when I am having a little trouble making both ends meet,” he wrote, “I am sure there is a large army of people waiting in expectant, hushed silence for the first indication of a slide backward in my financial resources.
“There is only one thing worse than being broke, and that is to have everybody know that you are broke.
“In most cases, and at normal times, I am quite content to be referred to merely as an industrialist without a price tag,” continued Hughes, upset by a local newspaper story that had referred to him as a “millionaire,” a story based on a press release issued by his own p.r. firm.
“However, at present, in my highly critical situation, I think it is a bad time for us to put out publicity referring to me as a mere millionaire. There are several hundred millionaires on the horizon now, and since I have been referred to as a Billionaire ever since we became established in Las Vegas, I am fearful that some enemy of mine will pick up this small deviation and make a story about it—you know, something like: ‘Well, well, has he finally gotten to the bottom of his bankroll? Etc., etc.’
“I think that kind of a report with attendant jokes could be very bad right now.”
Playing on those fears, Holliday now sent Hughes a bleak accounting of financial conditions in his crumbling empire. It was no laughing matter. He had $111 million cash on hand, of which $75 million had to be kept as a bond on the TWA judgment, with another $16.5 million pledged as collateral on a bank loan. That left only $19.5 million for operating funds, in a year that would require at least $30 million.
Holliday followed the cold figures with a slashing attack on Maheu: “You will note that no provision is made for a dividend to you, and you will certainly require at least $2 million by year-end,” he wrote Hughes. “However, provision is made for payment to Maheu of his $10,000 per week basic compensation, but without provision for his expenses that will surely be considerable. In other words, no provision is made for the purchase or use of a right-hand or left-hand ass-wiping machine that he may require.
“The long and short of our position,” added Holliday, “is that we are in trouble, and very serious trouble.”
Hughes needed no persuading. He had long been convinced that Maheu was profligate, worse yet that he spent Hughes’s money without Hughes’s permission.
“I have given up all hope of controlling unauthorized expenditures at this end of the line,” Hughes morosely informed Holliday. “Since Bob is not inclined toward economy measures, I want you to take the steps necessary to prevent expenses I have not approved.”
Holliday