To the gray twilight world of offshore banks and transatlantic stock exchanges, John Zachary DeLorean had always brought dash and color and some hint of higher purpose. Even the FBI agents who put the handcuffs on him in a fancy hotel suite could not resist seeing him as a great man brought low by good motives.
Two hours later, reporters were besieging tall, severe Richard T. Bretzing, the bureau's special agent in charge, demanding to know why one of the best-known men in American business would have wanted to sell cocaine. "His company was in severe financial problems. He feared the possibility of his company being closed down," Bretzing said, anointing DeLorean in his worst hour as a latter-day Robin Hood, stealing from the rich hedonists of Hollywood to give to the poor workers of Northern Ireland.
Seventeen months and several bizarre turns of legal fortune later, no one yet knows the real DeLorean. This Tuesday jury selection in his much-delayed trial on nine counts of drug conspiracy is finally scheduled to begin, and more of his strange, solitary life may unfold publicly. But most of the 59-year-old millionaire's secrets probably will remain with him.
On the day he flew to Los Angeles to meet the undercover agents who arrested him, even his wife says she had not known what he was doing. During two lie detector tests, he insisted he was an innocent victim of a government trap, convincing one polygraph expert he was telling the truth and another that he was lying. How can the millions of amateur DeLorean watchers be expected to figure him out?
All they have to go on are gray images from a set of purloined government videotapes and a nearly inaudible voice recording made available by born-again, erstwhile presidential candidate Larry Flynt. In the transcripts of the videotaped conversations with the federal agents who helped him go astray, and in the remembrances of men who dealt with him in his high-flying deals, DeLorean always moved fast, weighing and shifting his options in jokes, cryptic asides and vague promises with a voice as deep and resonant as the bottom of a well.
"Oh, sure," he tells a phony banker in San Carlos, Calif., the FBI television camera hidden under a table so all you can see are DeLorean's expensive shoes and pant legs. "And this being completely my private deal, I can construct the record so we can go back to 1978 or 1979 and have him participate all the way up the line . . . As I said, I have probably one of the finest tax guys in the United States who can handle . . . it."
Or in the darkened Washington hotel room, another camera catches him addressing a fat man on a couch. This is a drug trafficker (and government informer) James Timothy Hoffman, whom DeLorean does not wholly trust. "Obviously at this stage, I'm getting the money through another person," DeLorean says. "It's really an organization. They are very, very tough guys. I'll tell you. They're Irish, and you've heard of them."
Before his four-month odyssey to outfox the government's best foxes -- the make-believe crooked banker James Benedict, the make-believe Mafia kingpin Mr. Vicenza -- DeLorean may have matched wits with other sharp operators. Millionaire Phoenix inventor Pete Avrea says DeLorean cheated him out of several hundred thousand dollars in royalty settlements. Idaho farmer Carl Higley says the automaker snatched away a good cattle ranch. Wichita entrepreneur Jerry Dahlinger says DeLorean shot his automobile business out from under him and took his favorite vintage Mercedes.
DeLorean, his friends and attorneys say this is all nonsense, the carping of unlucky business partners who did not like his fancy life or his blazing success. Could the same jealousies and corporate intrigue from his old days at General Motors, as some friends have suggested, have led someone to frame him in a drug deal he never intended to consummate?
From Robert M. Takasugi, the owlish trial judge who spent World War II imprisoned in a California relocation camp, to the thousands of potential jurors who have watched him on television, all want to know: Did he jump or was he pushed? Was DeLorean an idealist so blinded by his need to save his innovative car company and the jobs of its Irish workers that he became prey for an illegal government trap? Or was he an irresistible self-promoter with very expensive tastes, looking for just one more score and self-confident enough to think he could swindle the underworld?
To Avrea, like DeLorean, a 59-year-old self-made man, there is not much doubt. "I always thought he'd end up in jail," the inventor said, "I just never thought it would be for dope." After several chats with DeLorean about their boyhoods, Avrea became convinced of the central motive of DeLorean's life: "He'd been poor and he'd been rich and he decided he liked rich better."
Those who no longer see him as the shining knight of American industry -- the drug indictment lost him many friends -- think the greed and daring that led to Benedict, Vicenza and Hoffman may have come from his basic narcissism and bad memories of his childhood. He was the tall, bright, endlessly ambitious son of an alcoholic foundry worker, always certain he was worth more than the meager opportunities he had.
Hailed as the genius behind the hot-selling Pontiac GTO, DeLorean became general manager for General Motors' Pontiac division in 1965 and, began traveling frequently to California and had a facelift. He divorced his first wife and married 20-year-old Kelly Harmon (who starred in NBC's now-canceled "Bay City Blues"). He began driving a $19,000 Maserati Ghibi instead of a General Motors car.
His fondness for famous men and women grew. One leading New York public relations executive said he once had to refuse a DeLorean request to have a date arranged with Charlotte Ford. A woman who dated him after his divorce from Harmon reported receiving an unusual Christmas present, a leather-bound portfolio full of pictures of himself.
He left General Motors in 1973, but that seemed only to whet his appetite for the good life as he started his own sports car company. DeLorean acquired a spectacular New York apartment, his new company gave him the use of three Mercedes-Benzes, and he purchased estates in New Jersey and California. For a $3.5 million property in Bedminster, N.J., which included a 25-room mansion, DeLorean hired landscape architect John Smith to design swimming pools, a tennis court, fountains, gazebos and a stone boat house. But DeLorean failed to pay Smith and the architect sued.
Although DeLorean's third wife, model Cristina Ferrare, also enjoyed the far-flung DeLorean properties, friends say it was he and not she who seemed obsessed with them. Avrea called Ferrare "one of the nicest poeple I have ever met," a warm and friendly woman who enjoyed cooking Italian meals in the kitchen of her apartment. "She would be happy with that guy no matter what," Avrea said.
In an interview with Barbara Walters, Ferrare defended her husband vociferously, saying that from the moment she saw him led into a courtroom a year ago "something snapped inside of me" and she vowed to give him the same strength he had always given her. "I choose to believe that our system of justice works in this country," she told Walters, "and there's no way that he will ever be found guilty."
Despite the dozens of video and audio tape recordings the government has ready for trial, a not guilty verdict is not out of the question. Even if he is convicted, years of appeals seem certain. "You start thinking in terms of priorities," DeLorean told Aaron Latham in March 17, 1983, Rolling Stone magazine, the only lengthy interview granted since his arrest. "What's important, to you? You'd like one more summer with your kids."
A review of the thousands of court papers in the case, several minutes of black-and-white videotape shown on CBS" Los Angeles affiliate KNXT and the Rolling Stone interview reveal how ambiguous -- and how important -- is the context of DeLorean's repeated negotiations with undercover agents. They caught him in a classic "sting" operation. They set up a criminal enterprise and asked him to join in, similar to the scheme that netted several members of Congress in the FBI's Abscam operation. The baited hook was James Timothy Hoffman, 43, a convicted drug smuggler-turned-informer who made the first contact with DeLorean, and whose credibility with a jury may decide DeLorean's fate.
DeLorean told Latham that when Hoffman called his New York office in the summer of 1982, he returned the call because he remembered meeting the man in San Diego four years before. They were neighbors in the Pauma Valley asection of northern San Diego county. Twelve-year-old Tom Hoffman had befriended 7-year-old Zachary DeLorean. When Hoffman dropped Zachary off after taking the boys to a junior motorcross event, the two fathers chatted. "Parts of the conversation were quite memorable because he told me he was in the used airplane business," DeLorean told Latham. "And then he related some story about repossessing a plane from some banana republic and having the soldiers shooting at him."
Hoffman also told Cristina Ferrare he knew an old acquaintance of hers -- William Morgan Hetrick. Hetrick had been a pilot for computer magnate Fletcher Jones, who dated Cristina until he died in a plane crash. When Hoffman called DeLorean four years later, he was in the midst of an federal scheme to lure Hetrick, a known drug smuggler, into an incriminating deal. DeLorean said Hoffman told him nothing about Hetrick and only mentioned he knew some people who might want to invest in DeLorean's automobile company.
The two men met at the Marriott Hotel in Newport Beach, Calif., on July 11, 1982. An investigation report from the Drug Enforcement Administration says Hoffman later told agents DeLorean "wanted to invest up to $2 million in "China white,"" a form of heroin, to raise money for his faltering company. John M. Valestra, the DEA agent who later played the drug financier "Mr. Vicenza," said in the report that this first meeting was not recorded "because at this time DeLorean was not a DEA target."
DeLorean, however, thinks the conversation was recorded. "It was pretty dark, so I started to go to a table that had a little light on it," he told Latham. But Hoffman insisted they sit in a booth where "you couldn't see your hand in front of your face. Well, I'm absolutely positive the thing was wired."
According to DeLorean, Hoffman said he could raise $15 million from "offshore" investors if DeLorean would give him a $1.5 million commission plus $300,000 for expenses. DeLorean said Hoffman eventually took the view that the $1.8 million was money that Hoffman was going to invest in the drug business for DeLorean, not simply a commission for finding legitimate investors. Hoffman had persuaded the government to reduce earlier drug trafficking charges against him in return for his undercover work. DeLorean told Latham he though Hoffman lied to his DEA supervisors, telling them the automaker had asked for the drug deal, just as he lied to DeLorean about who his investors were.
Hoffman told him the money would be channeled through the Eureka Federal Savings and Loan, a real bank in San Carlos, Calif. The real source of the funds "could be organized crime. It could be drugs. It could be anything," DeLorean told Latham. "But as long as it came to us through a recognized financial institution, I really don't give a , to be very candid."
The men met next on Sept. 4, 1982, in the L'Enfante Plaza Hotel in Washington, the first meeting to be videotaped. DeLorean's long-legged figure in a chair and Hoffman's round form in a couch are obscured by dark shadows on the tape, but Hoffman can be clearly heard discussing a drug trafficking flow chart. DeLorean told Latham he was surprised to find Hoffman "all of a sudden . . . talking about taking his $1.8 million commission and sticking it into a narcotics transaction."
"Here we have 50 kilos," Hoffman says while DeLorean examines the chart. "Normally we go to the first step here, $200,000 a kilo . . . but we're going to go further." The two men began a conversational dance, Hoffman apprently trying to give DeLorean the choice of good or evil that his federal supervisors insisted on, DeLorean trying to counter what he later said was a threat of bodily harm.
Court papers filed by the prosecution quoted parts of the dialogue to show the automaker's intent to commit a crime:
"I'm relying on you saying that there's no way of connecting me to this thing," DeLorean said.
"You're not going to be handling product," Hoffman replied.
"I'm going to be a long way away," DeLorean said.
Hoffman told him: "I think this is very important that you know we don't want to have you a part of any program that you're not comfortable with. I mean if you don't want to do it. If you want to stop . . . you're not compelled to, I won't be mad. I won't be hurt."
DeLorean replied, "I know and I appreciate. I want to proceed." But DeLorean's attorney, Howard Weitzman, said Hoffman's offer of an easy exit for the automaker followed a statement by Hoffman that "any type of noncompliance . . . had better have an excellent reason," which DeLorean considered a threat.
Weitzman said DeLorean's boasting at this meeting about a close relationship with the Irish Republican Army (which IRA spokesmen have vigorously denied) was an "impromptu" attempt to discourage Hoffman from any rough stuff. DeLorean told Latham: "He scared the right out of me."
DeLorean flew to San Carlos, Calif., four days later to see banker James Benedict, actually FBI undercover agent Benedict Tisa. DeLorean told Latham the bank's real board chairman, Kenneth Kidwell, greeted him and gave Tisa a few instructions to make it seem authentic. Unknown to DeLorean, Kidwell has approved FBI use of his bank. Prosecutors say DeLorean and Tisa talked of making drug smuggler Hetrick a business partner and exchanged ideas for laundering Hetrick's illicit profits.
"I don't think we can do that in our public [company] but I can do that in my private company," DeLorean said on the videotape. Tisa replied, "Would it be possible to allow . . . say some stock options?" "Oh, sure," DeLorean said. "We could pay him [Hetrick] about 300 or 400 [apparently thousand] plus accommodations and I think we could even work out some, you know, special commissions and those kinds of things."
On Sept. 15, DeLorean and his attorneys insist, he decided he did not want to go through with any of these arrangements. He called Tisa to tell him he did not have $2 million to put into any arrangement. Tisa, according to DeLorean, seemed distressed and said he was "letting down" an unnamed man who was "willing to carry the ball."
That afternoon, DeLorean said. Hoffman called him and issued a threat certain to become a pivotal point in the automaker's case. Prosecutors say they have no tape of the telephone call and doubt DeLorean's story. In the Rolling Stone article, DeLorean quotes Hoffman saying, "Lookit, , you're in this too far now. You know all the players. You know the bank. You know this and that. You around, your kinds are going to get killed. It's going to be a bloody mess."
Larry Flynt later released an audio tape and transcript he said appeared to be of this same telephone conversation. DeLorean's attorneys, although calling the tape consistent with their client's story, have not claimed it to be authentic and federal prosecutors have labeled it a fake.
According to a government document, DeLorean called Tisa two days later to discuss a planned meeting with Hetrick. "I'm available," he said. "I think that's great. I'm -- I'll be there." On the government videotape of the Sept. 20 meeting in the Bel Air Sands hotel here, DeLorean asks Hetrick, "Is there an opportunity for some part of the $15 million in a 10-day period . . . say five [apparently million]? Is that pretty stiff?"
Hetrick, who later agreed to plead guilty to several federal drug counts and cooperate with the prosecutors, says on the tape, "I'll have to make a few phone calls . . ." Later he says, "If you're running around in the jungle down there somewhere in Peru, you don't just call and place your order for 200 of them because they don't come when you whistle, you see. Somebody's gotta go find it. If you're really lucky they've been stockpiling for a couple of months and no boat has gone out and you call and you want 100 monkeys [kilograms] . . . and the guy says, "Hey, why don't you take 200?""
At the next meeting, Sept. 28 at the Bonaventure Hotel here, tall, bearded DEA agent Valestra enters the scene as the mysterious Mafai drug distributor "Mr. Vicenza." The government videotape shows him talking to DeLorean as Hoffman listens and munches on some food: "From that particular cocaine purchase you can look at within 48 hours the initial payback . . . probably of . . . and I'm including my share in this . . . We're looking at a figure of $10 million."
According to documents filed by the prosecution, DeLorean proposed that instead of putting up $2 million in cash, which he did not have, he would give Valestra a part ownership in the DeLorean Motor Co. Inc. and Valestra would pay for the cocaine. During the meeting, the government videotape shows, DeLorean telephones Hetrick: "Morgan. John DeLorean. Listen, I . . . I . . . hear a rumor that you are overeating, so I've been asked to call you and tell you not to order too much food. [Laughs] Oh, I'm fine . . . sitting here with a couple of people and they'd like to go ahead with those monkeys you had up in San Francisco . . . They're ready to get the cash and they want to go ahead and bring them."
In the Rolling Stone interview, DeLorean said the stock he had delivered to Tisa to hold for Valestra was for DeLorean Motor Cars Inc., "a brand new shell company that had no assets." "When they woke up," he said, "they would be very pissed. But I figured my goose was already cooked anyhow, so it didn't matter . . . I thought they had me trapped. And so my idea was, okay, I'm anyhow . . . then! If they're gonna kill me, let them kill me. Because I'm dead anyhow."
On Oct. 18, 1982, Hetrick and his assistant, Stephen Lee Arrington, arrived in Los Angeles with more than 60 pounds of cocaine, valued at $24 million. They were arrested by federal agents. Hoffman called DeLorean in New York, and the automaker took a morning flight Oct. 19 to meet with the investors he thought were ready to formalize the agreement that might save his company.
In the final minutes before his arrest, DeLorean raised champagne glasses with Tisa and Hoffman and watched as Valestra opened a briefcase stuffed with cocaine packets. "It's better than gold," DeLorean says on the videotape, with a chuckle. "Gold weighs more than that, for God's sake."
It is a line that government lawyers will repeat again and again in front of a jury, to weaken Weitzman's insistence that DeLorean "was there for the same reason he was always there -- to obtain a legitimate investment through a bank." Much of the conversation on the videotape supports this claim, giving the moments before the arrest the ambiguity that sticks to every piece of evidence in the case against a man who thrived on ambiguities.
"We are right at the end of the line with the guys in Ireland," he says on the tape. "They sent me a telex tonight saying . . . they were going to let people go Friday. Unless I show them between now and Friday, they're going to do it." Valestra says, "Then we're not too late." "No," says DeLorean, "You're right on time . . . This is what I call in the nick of time."
Only when Valestra displayed the open briefcase, DeLorean said later, did he believe "they might honest to God be in the narcotics business. Of course, eight seconds later they arrest you."