The Corruption Diaries is a journey through the eyes of anti-corruption veterans. Unique perspectives on combating one of the most compelling ethical challenges of our time.
Jack Blum is one of the United States’ leading white-collar crime lawyers. He’s specialised in investigating money laundering, financial crime and international tax abuse. We follow Jack Blum’s career from a small town in the United States to Senate staff attorney, the United Nations, and the frontline of the battle against tax abuse and corruption.
Music is by Blue Dot Sessions under a Creative Commons CC BY-NC licence.
Naomi: This is Jack Blum: The Corruption Diaries from the Tax Justice Network. I’m Naomi Fowler.
We’re now in the 1960s, and the political landscape in the United States is once again shifting as the civil rights movement picks up steam. While Jack was still studying, first at Bard, and then at Columbia, he began working as a journalist and took his first steps as an investigator.
Jack: It was a very important part of my understanding things because I began to understand how local communities worked.
I had gotten, believe it or not, a scholarship from the Wall Street Journal, which was at that time encouraging young people to go into journalism by offering them, in my case it was 500 dollars, which at that time was serious money, if they would take a summer job with the newspaper, and I did, and I wound up editing the newspaper because the then editor quit. This was at a weekly newspaper in Red Hook, New York, the Red Hook Advertiser, which was right next to Bard. But then, then I also became a reporter as a summer job for a radio station in Kingston, New York. And that was an experience out of a sitcom. The radio station was a 5,000 watt day timer. It had the perfect position for its antenna, which was on top of a mountain in a swamp. Apparently, when you put your towers in a swamp, it produces a wonderful signal, so, that was, that was WGHQ.
The first time I had to do a newscast in the station, they did a whole performance in the control room designed to force me to laugh. You know, we’ll, we’ll do a chicken sacrifice in the control room while he’s trying to read the news! And, and you know, hey kid, that’s your inauguration.
But my first step working for that station was working as the leg man for a man who had been considered the Dean of Hudson Valley Newscasters. And this guy had been a veteran of World War I. He was a paraplegic. He did his broadcast from a hotel room in Kingston. And he sat me down when we first met, and he said, now, you really have to understand that in radio news, we’re really in the entertainment business. I said, well, what do you mean by that? He said, well, what I aim to do in every newscast is take people through the full range of emotion. Outrage, involvement, nostalgia. All kinds of emotions and, and then end with an upbeat story that makes everybody want to come back for more the next time I’m on the air, right?! A formula which, in fact, I detected was being used almost universally and he said the other important thing to remember is whatever you put on the air, no one’s going to remember 20 minutes after you’re finished. Right! Well, that, that, that was pretty close to the truth too. You know, you’d say, did you hear the broadcast? Yeah, I, I heard the broadcast. Well, what did I say? You know, a kind of blank.
I remember doing a story, I’d figured out that a local car dealer had been financing cars more than once. he borrowed money for the same car multiple times. Now, that is obviously a federal crime. Later, I was laughing like hell the first time I saw that wonderful movie, oh, it’s the absolute classic Midwestern scandal movie, the car dealer who winds up trying to figure out how to get around things and it all runs amok and one after another.
The basic theme of Fargo is exactly what I discovered in Red Hook and I exposed it. People were really angry at me and I’m trying to figure out, wait a minute, I just exposed this felon and people are very upset. Well, they liked the guy! And he was part of the community and, you know, everything was going along, why did you have to upset the apple cart? And the interlocking interests and how everybody relates to everybody else and the ability to, you know, really bring about change on a local level is pretty limited. You, you’ve got to figure out how to manoeuver through all those things. This whole experience was a big part of my education.
Eventually I decided in my junior year of college to set up a weekly newspaper in a town near the college we started in Wappingers Falls, New York and it later was also in the town of Poughkeepsie – town not city, town of Poughkeepsie. I discovered under New York law that legal notices had to be printed in a newspaper published in the town that those notices pertain to. And I got all the legal notices for the town of Poughkeepsie, which were significant, and took it away from the Poughkeepsie Journal, which was the daily newspaper owned by a, an incredibly right wing chain of newspapers across the country. They began to try to put me out of business, and that was giving special breaks to my advertisers, trashing the paper on the newsstands, and so on. I then tried to come back, you know, what are, what’s my recourse, and the answer was antitrust law. So, after experiencing real struggles to try to keep the paper afloat, I sold it to a guy who took it over. He turned out to be an alcoholic, it went out of business something like six months later, but that’s the way things go. That was what pointed me toward I better figure out how these things work and whether there is recourse and where to go for it. And that pointed me toward law school.
When I was applying to law school, I had an offer from Duke University and they, they said they would give me a full free ride, tuition, room and board, extras, God knows what, if only I would come to the Duke Law School. So I flew down to Raleigh Durham, take a bus into the terminal in town. I walk into a waiting room where I thought I’d meet somebody who was supposed to pick me up, blah, blah, blah. And I look around, there’s nobody I can see. There are a couple of black folks in the room, but, you know, what the hell, and a kindly old man says, sir, you’ve come into the wrong room, the waiting room for white folks is around the other side. Hmmm. I quickly figured out this was not going to be the place for me to spend three years. But this is 1965. And people forget how recent desegregation has been. This was, just as things were beginning to warm up in the whole civil rights area. I graduated from Bard in 1962, and one of the honorary degrees in 1962 went to a young preacher named Martin Luther King Jr., and that was before Selma.
Law school is, if you make the most of it, an education in how the society works. It’s less a question of the manoeuvering in the Perry Mason business than examining where the major conflicts of society are resolved and how that resolution operates. Again, I was very fortunate in having superb professors at law school.
My professor for antitrust law was a man named Harlan Morse Blake. And he and I got along very, very famously and we co-authored a law school law review article on the abuse of advertising discounts to drive people out of business. So the idea was that newspapers and television particularly were giving massive volume discounts to big guys, and little guys would pay twice as much to get the same ad because they weren’t buying the volume. And that this was having a real effect, forcing people to merge, sell out, and changing the economic structure. So, I had proposed that and we co-authored an article that was published in the Yale Law Journal. For starters, the Yale people didn’t know that I was a student at Columbia. It also should be said that Columbia people fought tooth and nail to be on the Law Review, to be able to write footnotes for somebody else’s article, which would make them eligible to become God knows what. And here I was with a signed article in the Yale Law Journal.
That whole business led to the Senate Antitrust Subcommittee, which was then chaired by Phil Hart, who had taken over from Estes Kefauver. They were looking at the very issue of mergers and acquisitions and the causes, and this article came to their attention.
Naomi: The Corruption Diaries is a production of The Tax Justice Network, made by me Naomi Fowler and Jo Barratt. Interviews with Jack Blum were recorded over several days at Jack’s home in Maryland by Zoe Sullivan.
Jack: And now we get back to what I was doing immediately after law school and what the, the plans were.
Naomi: That’s next time on the Corruption Diaries.