Listening to the news this morning about the fraud at Wells Fargo bank reminded me of a similar incident that took place 35 years ago. I had just arrived in the US and was working at Hood Sailmakers. We had chosen Hood to be the sailmaker for our Whitbread Round the World campaign. This was early 1981 and my friend Skip Novak and I had found a German banker to fund the build of a brand new Frers maxi for the race. The boat was being built at Palmer Johnson in Wisconsin and Skip was there overseeing things while I was in Marblehead overseeing the build of the sails. It was all good; until it wasn’t.
The boat was a sister-ship to Flyer, the boat that eventually won the Whitbread that year. It was 80-feet long and we planned to paint it black and call it World Navigator (long story where the name came from – probably best saved for another blog). I spent some time at the yard and could visualize this massive boat careening through the Southern Ocean and it was a thrilling thought. Back in Marblehead 22 new sails were being built. Yup that’s how it was back then, a sailmakers dream.
We were about a month from launching when Skip called. “Not sure what’s going on,” he told me. “But see if you can slow things down a bit there. We might not be needing the sails just yet.” Apparently the accountants at Palmer Johnson were not getting any response from the owner when looking for the final payment on the boat and there was panic in the land. I was told later that it was a substantial amount of money but in the end they never got paid and neither did Hood Sails. For that matter neither did Skip and neither did I.
Here is the story. The German banker was an executive at Deutsche Bank in Frankfurt, very high up, in fact if I remember correctly he was one or two levels below Chairman. It seems that our German banker benefactor was issuing loans to customers of the bank who had not requested them and who had no idea that they had loans in their name. The banker was issuing new loans to pay off the old ones and the scheme had been going on for a number of years. Then one day someone that worked at the bank noticed that their mother had taken out a substantial loan and innocently asked her why she had not come to him as he could have helped get a better interest rate. Of course the mother denied having taken out any loan which puzzled the son who could see on the banks books that her name was on the loan and that she had been paying it back for a number of years. At first the banker thought that his mother was just embarrassed to have taken on such debt and was keeping it a secret from him. That was until the son noticed that his brother also had a substantial loan from the bank and he too denied taking out the loan. Both loans had been issued by the same banker and yes you guessed it, the same banker that was the person that was funding our Whitbread campaign.
The banker was such a respected person within the bank that instead of confronting him about the loans, Deutsche Bank executives called a Board Meeting to discuss how things might have gone wrong. The story I was told was this. Our banker benefactor was on the Board and he was told the reason for the meeting, but he was no fool. He knew that the gig was up and before lunch, and before anyone could ask him a direct question, he and his family were on to their new life in Brazil. They hit the runway in Rio before anyone at the bank knew that he was gone and as far as I know he lived out the rest of his life listening to samba music and spending those millions that he had been squirreling away there for decades.
World Navigator was eventually sold to a Greek tycoon and the sails that Hood had put on hold were finished and delivered. Skip and I joined an American Whitbread effort and raced one of the slowest boats around the world. The boat was called Alaska Eagle but it was dubbed Alaska Beagle by the rest of the fleet because it was a dog. Such is life…
-Brian Hancock. (take a look at how Brian can help you with new sails of your own – ed)