The beauty of the world is the mouth of a labyrinth.... [I]f [the individual] does not lose courage, if he goes on walking, it is absolutely certain that he will finally arrive at the center of the labyrinth.--Simone Weil,
Part 9 - Whistleblower [Draft 1]
Introduction
In August, the case against Duncan was being prepared in anticipation of his trial in late September. Daddy, the surprise witness for the prosecution, was no doubt preparing to testify. Booner and Gwyn Bowers were afraid of what he might tell the FBI. They did not know that he was the surprise witness, but they did know that he would not lie for them and were trying to pressure him into silence. The stresses on both sides must have been enormous. As they waited and prepared, they endured this month charged with heavy news stories.
(Photo: Winston-Salem Journal, 1 Aug 1977, 10.) Much of the US, and most of North Carolina, was suffering from drought through the summer of 1977. In Wilkes County, rain did not fall until September 7, the first substantial rains in six months (A). On the following day, Edwin Duncan, Jr., was indicted for bugging the FBI. It was an unusually hot summer, especially in July. Many high temperature records set then still stand. “[T]emperatures soared above 100 degrees across most of the Carolinas during July of 1977. Darlington, SC recorded 12 consecutive days with high temperatures at or above 100 degrees from July 5th to July 16th followed by 108 degrees on July 21st, the second hottest recorded in Darlington’s history…. Yadkinville, NC [adjacent to Wilkes County] … recorded [its] all-time record high of 105 degrees” on 9 July. The heat killed “tens of thousands of chickens and turkeys ….” Drought and the high temperatures “led to large fish kill on the Neuse River in eastern North Carolina.” (B) Despite the drought, in July beekeepers reported that bees were producing substantial amounts of pure sourwood honey for the first time in several years. The price per quart was about $6 - $8, roughly $30 - $41 in today's money. (B1) *****
(Headline: The Sentinel, Thu, Aug 11, 1977, 1.) David Berkowitz was arrested on August 10. On the day before, Edwin Duncan, Jr., was fired from all the positions he held at Northwestern Financial Corp., but he was not informed for a week, possibly because he could not be located. On the day after the arrest of Berkowitz, Edwin Duncan, Gwyn Bowers, and Jerry Duncan were indicted for bugging the IRS. The lead FBI agent in the Edwin Duncan cases, Thomas J. Brereton, was a native of the Bronx. In a novel or screen treatment, it would be tempting to depict Brereton as being troubled by the Son of Sam’s murders as he investigated Duncan. It was in the Bronx, in July 1976, that Berkowitz committed his first two murders, and in April 1977 he committed two more murders there. In May 1977, he wrote a letter to Jimmy Breslin signed “Son of Sam,” naming one of the women he murdered in the Bronx in 1976. (B2) Brereton specialized in white collar crime and bank fraud cases, but in 1979 he volunteered to lead the FBI investigation of the Greensboro Massacre. After retiring, he established his own private investigations firm. He consulted on the case of North Carolina State student Chris Pritchard who was eventually convicted of murdering his stepfather. Brereton figures prominently in a book on the case, Cruel Doubt, by Joe McGinnis. In the movie based on the book, he is played by Dennis Farina. (C). Brereton was an aggressive agent and investigator. Benjamin White, “an assistant U.S. attorney and longtime colleague” of Brereton, said “he didn't like white collar criminals; he didn't like con men…. He didn't hate them—he just took great pleasure in bringing these people to justice.” McGinnis describes him as tough and blunt. Brereton never lost his New York accent, despite his twenty years in the South. (C)
*****
(Headline: Winston-Salem Journal, 17 Aug 1977, 1.) The Journal was the morning paper; the evening paper had a better headline: “The King Has Left Us—All Alone on Lonely Street” (D). On the following day, the state banking commissioner “Jesse L. Yeargan was suspended from his job with pay” because of Yeargan’s ‘ties’ to Northwestern Bank,” that is, illegal gifts/gratuities he received from the bank. The “ties” were reported by the FBI. (E) Two days later, Duncan’s lawyers “asked the court … to force the U.S. attorneys to disclose a ‘confidential informant’ whose evidence was used to indict Duncan,” but the judge denied their motion. (F)
Meanwhile, in early August, the family celebrated three events—the birth of Mom’s mother, who turned 80 on August 8; the birth of my little brother, who turned 13 a couple of days earlier; and the third anniversary of my first marriage, on August 9. I don’t remember the drought or the arrest of the Son of Sam. I remember vaguely the report of Elvis’s death. The memory is not tied to any particular place and time, but floats in its own space. I don’t remember the family events.
Changing Culture: Management Factions In the period 1971 – 1977, the culture of the bank was changing. The one-bank holding company, Northwestern Financial Corp., had been established in 1969, with Edwin Duncan, Sr., as president of the bank (continuing a position he’d held since 1958) and of the holding company. In January 1971, Edwin Duncan, Jr., became president of the bank, while Edwin Duncan, Sr., kept his position as president of the holding company. As we saw in Part 6, in February 1971 Booner was profiled at length as a confident and worthy successor to his father (1). The older Duncan died in October 1973, just before I returned from my mission. By early 1974 Booner had become head of Northwestern Financial Corp., and by May 1975 George Collins was president of the bank. By the fall of 1976, they still held their positions, but much seems to have changed; I think the changes provide clues as to the atmosphere and relationships that Daddy had to negotiate as the illegal and questionable practices at Northwestern began to come to light.
These changes are apparent in a between-the-lines reading of a 1976 profile of the bank (2). Booner appears at the beginning of the article, and is mentioned in the body, but his father and George Collins dominate it: the older Duncan implicitly represents the past—a past described in some detail—while Collins symbolizes its present and future. Although “Northwestern has grown beyond the point where one man can epitomize its style, its essential philosophy,” the article states, “Collins comes close…. He has been part and parcel of one of the most ambitious expansion programs undertaken by any bank in the state,” at one time “adding new branches at the rate of 24 a year (3). This sentence implied that Collins was largely responsible for growth that was nominally under the purview of Booner. It is Collins who implicitly announces the end of the friends-and-family hiring system described in Part 6: “‘We’ve had to go outside to find some of the specialists we need…. That means going to the major metropolitan areas. But we’ve done well. We’ve hired some fine young men.” It’s also Collins who announces, at the end of the article, that “‘the expansion is over…. We may open a few satellite offices, but we’re going to concentrate on expanding our business in the areas we’ve already opened up in.’”
What I am reading into the 1976 story—implicit evidence of a rift between Booner and Collins—became explicit almost a year later. After being fired by the bank in October 1977, a bitter Gwyn Bowers commented, “‘There's a new management team at the bank.... They felt I could no longer contribute constructively to their new team. In other words, I didn't fit the new tune.’” He could have meant the management put in place after Booner's ouster, but I think he meant more: “‘Some of this new management team has been there less than five years.... I'm only five weeks short of 17 years.’” He was probably referring to the “fine young men” mentioned by Collins. (3a) A few weeks earlier, Duncan’s “attorneys [had] contended that [FBI agent] Brereton ‘consciously injected himself between two factions of management at the bank, those headed by George Collins, president of the bank, on the one hand,’ and Duncan" (4).
Articles in the summer and early fall of 1977 indicate that Collins was aware of the bugging of the IRS in 1972 (5), but he escaped any blame for knowing about it but not reporting it. The newspapers indicated that he later warned Booner against bugging the FBI (6); if true, like Daddy he suspected that the executive who bugs once will bug again, but so far as we know he did not come forward to the government with his suspicion. He apparently cooperated with the investigation once it began; he talked to the FBI in their Greensboro offices back in April (7). But, according to the local paper, Daddy in his role as confidential informant was the source of the information on Collins' knowledge of the bugging (7a). Daddy was quite friendly with Collins. By chance, the Collins family lived on a farm that was not far from ours but was a few miles closer to town, near the current intersection of NC 115 and US 421. I don’t know if the two men considered themselves allies, but if Collins led a faction opposed to Booner, it’s possible that Daddy’s friendship with him was suspect in the eyes of Booner and his cronies. It don't know shether Daddy witnessed Collins' warning to Booner or Collins told Daddy about it.
1976 Revelations Shortly after the glowing profile of the bank was published in October 1976, substantial articles began to appear with reports of serious legal and internal control issues at the bank (8). The key event making these stories possible was the death of Edwin Duncan, Sr., in October 1973. His business and financial acumen, his political influence, and his long history at the bank seem to have made him untouchable by the board. After his death, the younger Duncan may have taken his father’s position on the organizational chart, but he did not have the history or ability of the older man. Nor did he have the respect. As one of the banking executives told my mom, “Everything that Booner touches turns to shit” (9).
Once the older Duncan had died, the boards of the holding corporation and the bank were released from their charmed sleep and began to take more seriously their oversight responsibilities. But they were perhaps not fully awake until the summer of 1976, when the company received from the IRS “11 questions…. titled ‘Corporate Slush Funds’ in the [IRS] manual.” In responding to the questions, the company discovered “‘at least one savings account’ that may have been used to make political contributions,” and so it “authorized an investigation by independent counsel …. to determine whether there were any other such ‘questionable practices and/or questionable payments.’” The investigation was announced in mid-October 1976; two Charlotte lawyers, Jack T. Hamilton and William T. Monteith, were retained to conduct the investigation. It resulted in at least two reports to the Securities and Exchange Commission (SEC) and an admission on the May 1977 proxy statement (10). The first report to the SEC was provided to the FDIC and referred to the Department of Justice and the FBI for investigation (11).
I will note here a seeming inconsistency: in some stories, the lawyers’ investigation is called “independent,” presumably because they were not employed by the company; but in other stories, Hamilton is called the company’s general counsel. However, in late summer 1977, when the board dismissed Booner, Hamilton, and others, it announced its selection of the company’s first general counsel (12). This lack of clear responsibilities and controls seems characteristic of the bank and of its top management; Booner seemed to conflate his personal interests with those of the company. Although Hamilton may not have been the general counsel, his frequent representation of the company and his closeness with Booner suggest that he was not, in a meaningful sense, independent. (12a)
The timing and sourcing of these stories are interesting. In late November, when most of the stories were printed, Booner himself was hospitalized and “could not be reached for comment” (13). Some of the information came from the company’s “suit to recover back taxes, civil fraud penalties, and interest” (14), though it’s not clear whether the text of the lawsuit was publicly available. Some information was attributed to an unidentified businessman and other “informed sources” (15), some to unnamed “sources familiar with the [IRS] investigation” (16). I suspect it was not by accident that stories were published when Booner was in the hospital with a serious illness.
If some information was leaked, we have several suspects.
One is my father. As I have mentioned, he told me about many of the issues reported at this time. I knew that the fleet of airplanes was concealed from the board, but I don’t believe I knew how they were financed, that is, by funneling insurance commission money to Certified Check and Title. I knew that payments had been made to officials of banks acquired by Northwestern, but I may not have heard that until after it was revealed in the papers—not that I read it in the newspapers, but the publication of the articles may have loosened lips. Daddy had told me that bank accounts for vending machines had been used as a political slush fund. I didn’t know how this worked from an accounting perspective, but the newspaper reports in the fall of 1976 mentioned accounts that were never closed out at the end of the year so never came to the attention of the board or regulators. I didn’t know anything about the Asheville building or how the Duncans had used companies they controlled or wholly owned—Northwestern Finance Co., controlled by the older Duncan, and Certified Check and Title, owned by the younger Duncan—to bypass legal requirements and board oversight.
Daddy might have provided more details that I’ve simply forgotten. I don’t know his sources—possibly George Collins, with whom he was friendly, or controller William Woollen, whom he admired for his integrity and persistence in raising important issues, as I will discuss below. Though he probably maintained contact with bank officials, by now he was no longer on the payroll and in no mental or emotional state to be pulling wires and moving levers behind the scenes. So far as I know, that kind of manipulation was not one of his skills.
Another suspect is George Collins, president of the bank. As we have seen, he appears to have led a faction of management opposed to Booner. Given the nature of corporate governance, I suspect he had allies on the board; given his evident ability to separate himself from suspicion of wrongdoing, he strikes me as a capable corporate politician and a possible candidate for the leaks.
Another candidate is William Woollen, the bank’s controller. A longtime employee of First Atlantic Corp., a Northwestern subsidiary in Charlotte, he “was promoted to controller and brought to the home office in 1974.” He was recruited to this position by Booner and “Jack Hamilton, a Charlotte lawyer who is general counsel to the board of directors of the bank’s holding company.” (As noted above, later it will appear that Hamilton was not officially the general counsel to the company, but at various times he did represent the company and Booner (17).) When he was recruited, Woollen was asked to “straighten out Northwestern’s accounting procedures after an IRS investigation in 1972-73 led to Northwestern’s being order[ed] to pay nearly $10 million in back taxes and penalties” (18). He seems to have relished this assignment, but it was not an easy job.
Woollen resigned from his post in mid-June 1977, and in July delivered to the board a scathing report on the company’s controls and practices. Despite his apparent mandate, he “told Northwestern’s directors that …. he met resistance almost from the very beginning… He … did not feel as though he got the support from top management that he was promised.” He “resigned several times in disgust,” but then would return to the job. Described as “a blunt-talking, hard worker who does not like to leave a job unfinished,” he also seems to have been obsessed with the bank’s issues. (19) As I recall, Daddy admired his refusal to be intimidated by Booner and regarded him as playing a hero’s role in the exposure of bank misdeeds. I don’t know if he was an ally of George Collins, but, like him, Woollen probably had access to important documents, as well as his work product and professional observations. He also knew things outside his sphere; for example, in the summer of 1977, he informed the FBI of tapes in possession of Duncan’s attorneys that recorded conversations of the IRS agents in 1971-1972 (20). Unlike Daddy, he did not testify at trial.
Other possible leakers include the IRS agents on the case. The timing of the stories, during Booner’s illness, suggests an inside job, but is hardly dipositive: some of the agents must have known of his hospitalization. Months later, in the legal wrangling leading up to Booner’s trial for bugging the IRS, his lawyers accused the Feds of leaking information harmful to the defense (21). As with the suppositious leaks in the late fall of 1976, I have no way to verify the accusation; it was hardly disinterested, but it may have been true.
Hillbilly Omerta In 1971, the scope of the IRS investigation included an audit of the bank and a criminal investigation of Certified Check & Title (CC&T). The agents intended to conceal the scope of their work from the bank, but their conversation about CC&T was captured by the bugging rig and Jerry Duncan’s tapes and eventually played for the court, in 1977. We know that Booner was convinced the IRS was out to get him, and even without the evidence of the tape, he must have realized that a possible line of attack was CC&T, wholly owned by him in trust for his children. As I explained in Part 5, Daddy was a key player in CC&T’s business of buying and selling heavy construction equipment. The business was financed by loans ostensibly issued to Julius Womble but actually made for the benefit of CC&T—a scheme apparently designed to bypass regulatory limits on the amount of loans that Duncan could receive from his own bank. Daddy was the intermediary who took the loan papers to Womble for his signature, and as an official of CC&T he was also a beneficiary of the loans. In addition, Daddy knew at least in part how the bank’s small fleet of aircraft was surreptitiously leased and maintained via the diversion of insurance commissions to CC&T through Gwyn Bowers. As one of Booner’s cronies, he probably knew pretty much everything about CC&T.
At some point Booner and his pals began to worry that Daddy would not have their back and they began putting pressure on him. This could have been as early as 1972, when (as I just noted) at least one IRS conversation about CC&T was recorded. Many of the stories in late November 1976 touched on CC&T, so by then the possibilities of a federal investigation were becoming obvious. My sister was living at home during part of this period, and she recalls the pressure that was being exerted on Daddy. I can’t place a date on it, but certainly the suspicion was in play by the summer of 1977. Booner did not know the identity of the government’s mysterious surprise witness, but he knew he was vulnerable to Daddy’s knowledge. (Of course, Booner may have feared that Daddy would inform the Feds of their bugging of the IRS, but all evidence suggests that he did not take that action very seriously and did not try to conceal it.) According to my sister, Daddy repeatedly told Booner and his cronies that he would not lie for them. Gwyn Bowers, and perhaps other executives, came by the house to keep an eye on Daddy and to keep the pressure on. The content and consequences of these visits will be discussed later.
Inside Knowledge Daddy told me about many of the questionable practices the bank engaged in. I don’t remember when we had our conversations, but one would have been in the summer or fall of 1976, when my then wife and I moved to Durham, North Carolina, so that I could attend graduate school at Duke University. The bank had recently opened a new building in downtown Durham, an attractive glass and steel modern building. As we drove by it, he told me that the bid had been awarded based on kickbacks from the contractor. Until April of that year, when he was no longer on the bank’s payroll, he worked in the real estate department, so he had access to inside information. My impression is that he had opposed awarding the contract to the builder. He further told me—and this was mindboggling to me—that when the building was first completed, the heating and cooling system did not work: they had been built without returns. Daddy discovered this and reported it to management, no doubt savoring the vindication of his opposition to the contractor. The building had to be reengineered and rebuilt in part, delaying the opening and increasing the cost (though I don’t know who was on the hook for the extra cost). Daddy’s already low reputation at the company fell further. Sometimes the worst thing you can do is to be proved right.
The issues with the building in Durham never made it to the newspapers, at least none I’ve seen.
Source: Martin Kaiser’s photo of company headquarters where he bugged the FBI, downloaded from his website many years ago. “FBI Vendetta—Part 3: Bugging the FBI... Updated 1/05.”
Bugging the FBI Prompted by the report filed by the bank with the SEC, the FDIC asked “the U.S. attorney for the Middle District of North Carolina” to conduct an investigation of the bank. In mid-March the FBI arrived in North Wilkesboro to begin their investigation. Additional scope was added to the investigation by a second report from Northwestern, sent to the SEC in April, revealing illegal political donations made by the bank in the years 1968-1972 (22). Although the IRS agents who investigated the bank in 1971-1972 had suspected they were being bugged (23), they had found no evidence of it; illegal surveillance was not yet in scope of the FBI’s investigation.
According to Martin Kaiser, Gwyn Bowers called him “on behalf of Duncan” in January 1977. Bowers told Kaiser that FBI agents were “‘terrorizing employees and managers with daily interrogations. They’re using the divide-and-conquer route to demoralize and frighten the staff.’” Bowers requested “‘three long-play recorders… and a bunch of pocket tape recorders for each manager to record the conversations they have with the FBI agents’” (24).
I suppose it possible that the FBI investigation began that early, but Kaiser’s account is the only evidence for it, and against it we have the testimony of FBI agent Thomas Brereton that the investigation began in mid-March (25). But even if Kaiser got the date wrong (an error he is not immune from), the event may have happened as he tells it. So far as I can tell from newspaper reports, these recorders and the type of surveillance Duncan proposed were not included in the court case or in news stories during the investigation and trial.
A few weeks later, according to Kaiser, “Bowers called again and said there was one scenario they weren’t prepared for. The FBI had commandeered an office in the bank where they were conducting interviews.” Duncan and Bowers wanted to know the FBI’s questions and the bank employees’ answers; Bowers requested Kaiser to “‘put a bug in the room where the FBI is conducting those interviews.’” Kaiser was reluctant: “I had already sold the bank plenty of positive electronic surveillance equipment in the past and had trained their tech guy, Jerry Starr, about how to use it.” But Bowers insisted, so three weeks later, on April 23, Kaiser flew to North Carolina on the bank’s jet and he planted the bug on the following day, Sunday April 24. (26)
Bowers managed to get Kaiser into the FBI’s interview room without being noticed by the bank’s security guard. Kaiser planted “the microphone and the preamplifier inside that telephone jack cover connected to the red-yellow and green-yellow wires in the cable bundle…. I then went to the nearest frame room (the closet where all telephone lines are connected together) and found the cable coming from the telephone block I had just wired. I placed my 1050 amplifier across the red-yellow and green-yellow wires” and successfully conducted a sound test. Then he ran the wires “to a frame room near Bowers’s office and then to Bowers’s office itself. I drilled a hole through the credenza where the wires were connected to a tape recorder,” and again successfully checked the sound. (27) When the FBI found the bug, just before mid-July, they described as being “the size of a push button on a ball point pen, and it was so sophisticated that it could pick up any sound in the room, including a whisper.” They traced the wires from the first-floor interview room to the second-floor office of Gwyn Bowers. (28)
Brereton later testified that “on one of the tapes that the FBI had gained possession of were the voices of another FBI agent and himself…. [A]lso on the tape was … a conversation he had with another FBI agent about the FBI’s investigation of Certified Check and Title,” the very issue on which, as I have discussed, Booner feared that my father might divulge incriminating evidence (29). On the reasonable assumption that bank employees heard this recording, we can conclude that Booner and Bowers had even more reason to worry about Daddy’s loyalty.
The Decision I was living away from home at the time, and though we often went home for weekends, I do recall the internal family dynamics at this time. (I will discuss my forgetfulness later.) The arrival of the FBI in North Wilkesboro in March would have heightened tension and worry. Possibly the trigger for Daddy to step forward as an informant was the news that the FBI was conducting interviews using a conference room at bank headquarters. At Mom’s insistence, Daddy decided to offer his information to the government. He reached out to Charles Harrington, a prominent lawyer in Marion, Virginia, who practiced in both Virginia and federal courts (30). Daddy would have known him from the ten years we lived in Marion, circa 1952 – 1962. Harrington offered to represent Daddy without charge if he would tell the entire truth, including information incriminating himself, a stipulation to which Daddy agreed.
Mom doesn’t remember when he approached the government, but testimony by FBI agent Thomas Brereton places it in June or July. In July, Brereton testified at a hearing that “an informant, whom he did not name, told him in June that electronic monitoring equipment had been used at Northwestern since 1972” (31). However, around the time that Duncan was sentenced, Brereton said Daddy met with the FBI in early July (32).
Whenever it happened, Daddy and Mom took state route 16 to somewhere between North Wilkesboro and Marion (the route has the same designation in both North Carolina and Virginia). They met Harrington and two government agents in a cabin in the woods somewhere off route 16. Mom remained outside while for hours Daddy and lawyer Harrington talked to the agents. (33) Mom does not remember if they were from the IRS or FBI. I recall Daddy’s telling me that he first approached an IRS agent he liked and trusted, Philip Johnson. Perhaps Johnson was at this meeting, but I suspect the government was represented by Brereton and another FBI agent or perhaps an assistant district attorney.
Daddy may have discussed many issues with the agents—Duncan’s (and his own) history of using listening devices, the identity of those who were involved in monitoring the IRS, and possibly his own role in Certified Check and Title—but the only information we know he shared was (1) his eyewitness account of working with Booner to bug the office used by the IRS and (2) George Collins' warning to Booner not to bug the FBI (7a). His briefing of the agents regarding the IRS bugging was so thorough that, when they interviewed Jerry Duncan, he said they already knew everything he had to tell them (34). Daddy apparently suggested that Booner would not hesitate to bug the interview room being used by the FBI at the bank headquarters. His information led to the FBI’s sweep of the office on July 12 and the discovery of the listening device planted by Martin Kaiser.
The discovery prompted by Daddy’s information immediately changed the dynamics of the situation. Up to this time, the board seems to have been prepared to stick with Booner as head of the holding company, in part I think because some of the most suspect practices had been done at the instance of Edwin Duncan, Sr., now deceased, in part because other practices—like the diversion of commissions to Certified Check and Title—had already ceased. Such remained the case even after July 7, when the boards of the bank and the holding company were shaken by the presentation delivered by ex-controller Woollen. Woollen gave members of both boards “an in-depth account of the inner workings of Northwestern.” Woollen “revealed … details of an FBI investigation of its top officials. The former official also explained that he had been frustrated in his efforts to improve the running of the bank and the holding company, Northwestern Financial Corp.”
We don’t know what Woollen discussed, but we know that “he talked for three hours and then answered questions for another hour. He singled out officials by name and gave details of specific transactions and other activities he considered questionable.” Possibly it was the details he provided that disturbed the directors. Whatever the case may be, “the revelations about the FBI investigation were an eye-opener for many directors. The bank appeared on the verge of a major crisis. But before directors could fully grasp the issues, they were faced with even more startling news”: based on suspicions aroused by Daddy, the FBI raided the bank just five days later. “In a late night search [on July 12], FBI agents discovered that a room agents occupied at Northwestern’s corporate headquarters in Wilkesboro was bugged with a sophisticated electronic listening device.” (35).
However startling Woollen’s presentation had been, directors were still reluctant to criticize Booner, and he was confident enough of his position to leave for a vacation in Costa Rica, home of his second wife and her three children from an earlier marriage. However, on hearing about the bugging of the FBI, the directors’ attitudes changed dramatically. On Saturday, July 16, they held their second joint board meeting in nine days. That same day, federal arrest warrants were issued for Duncan, Gwyn Bowers, and Jerry Starr. Duncan had returned from Costa Rica, but he did not attend the board meeting and, although FBI agents scoured the area for him, for several hours his whereabouts were unknown. Finally, his daughter and one of his lawyers “helped arrange for Duncan’s arrest.” (36) The board suspended Booner from his position by July 27 and fired him on August 9 (37).
Intimidation At some point Gwyn Bowers began visiting the house. Mom doesn’t recall it now, but several years later she told me that she was frightened by Bowers and hated it when he came by. Daddy figured that the house had been bugged, or so I recall. It was a reasonable assumption, given Booner’s and the bank’s history, but I don’t remember who told me. Booner and Bowers thought that Mom was the source of Daddy’s disloyalty to them. My sister remembers Bowers’ remarking that Mom could be killed for $20,000. Daddy took the threat seriously and began starting Mom’s car every morning in case it had been rigged with a bomb.
Even Marty Kaiser was afraid of Bowers. His initial suspicions of Bowers were based on his own backstory. In 1975, Kaiser testified before Congress about the FBI’s procurement of electronic surveillance and detection devices. The FBI generally had to purchase equipment through a firm called U.S. Recording. U.S. Recording added no value but sold the devices to the FBI at a large markup, to the benefit of some senior managers at the FBI. Many in the FBI were angered by Kaiser’s testimony, his sales to intelligence agencies disappeared, his access to updated technical information was curtailed, and he was warned by a well-placed source “that the bureau would try to nail me through my customers” (38). Shady characters began trying to induce Kaiser to engage in illegal activities (39). Kaiser thought the FBI was trying to entrap him. He became wary and suspicious of new customers, and despite his friendship with Booner he feared that Bowers was part of a set-up.
As we have seen, Kaiser agreed to bug the FBI’s phone line, but his fear of Bowers was not allayed. He conveys his uneasiness with two stories:
“Bowers invited me to come to his house for a drink and I grudgingly agreed. I had a bad feeling about him. He said he needed some advice about why the base coil of the antenna on the citizen band radio in his car kept burning up. When he popped his trunk, I saw the problem…. a 1,000-watt linear amplifier that was way beyond the legal limits of five watts for CB radios. I suggested that his amplifier was way too powerful and that he should reduce the power to the legal wattage. When we got to his house, he offered me a mason jar of moonshine. I didn’t grab it, but merely put my palm out and he placed the jar on it. I handed it back to him without drinking it.” (40)
“Bowers [also] showed me his ham radio setup, which was also way above the legal power limits.… Adding the effective amplification of [his MoonRaker] antennas to the 2,000 watts he was running would have put his effective power well beyond 250,000 watts. I was surprised he didn’t toast his neighbor’s bread before it was put on the table. He handed me the microphone and asked if I wanted to talk on it. The last thing I wanted to do was lose my amateur radio license. ‘No thanks,’ I told him.” (41)
Bowers was tall, with an outsized head and leonine gray hair. His face was red, probably reflecting his drinking problem. My sister told me that on several occasions Booner wanted to fire him for drunkenness, but each time Daddy intervened to save his job (42). My sister and mother told me that, when Bowers dropped by, Daddy turned on a concealed tape recorder and, feigning distress and forgetfulness, asked questions in an attempt to elicit and record incriminating answers. After his death, Mom took the tapes to lawyer Harrington in Marion, in hope of being able to bring a lawsuit. Nothing came of it; the location of the tapes is unknown. Harrington died in 2021 at the age of 94 (42a)
Source: Winston-Salem Journal, 17 Jul 1977, 1. Gwyn Bowers is on the far left, Jerry Starr on the far right.
Daddy Testifies Six years after bugging the IRS, on September 27, 1977, Daddy testified regarding his role in the bugging. For much of that summer, Daddy’s role as witness for the prosecution was concealed from the defense, despite numerous motions before the court to identify him. My brother wrote: “On the night before Dad was to testify, he asked Jim [a family friend and fellow church member] to drive him to Winston-Salem to meet his FBI handlers at the Holiday Inn on the north side of town. Dad rode with Jim because he was not in any condition to drive. I followed in Dad’s car so he could drive back to N. Wilkesboro after he gave his testimony…. I was 17. I met the agents and they were kind to me, complimenting me on taking care of the old man. I don’t remember much about the drive home with Jim, only that he was also kind to me.” (43)
On the day of the trial, an FBI agent led Daddy by hand into the courtroom. A reporter wrote, “Absher was obviously disoriented … and his gait was unsteady as he approached the witness stand” (44). My brother remembers “watching WXII local news the next day, and seeing it reported that Dad had testified against Mr. Duncan. Thank goodness there was no footage of him. What was worse was reading the account of Dad's testimony in the Winston-Salem paper. The reporter pretty much nailed it as he described how Dad walked and talked haltingly, like a man on a lot of medication. What is amazing is that no one at school, either student or teacher, ever brought it up to me, or asked me any questions about it.” (45)
I have already recounted Daddy’s testimony regarding the planting of the bug (see Part 8). He also testified as to his mental state afterwards: “Absher … testified that he soon suffered ‘mental anguish’ because of ‘the fact that I had violated the law.’ He said that ‘as soon as I realized what I had done, I started to see my doctor’ [Doctor Taylor]…. “Absher … said under cross-examination that he had a history of emotional illness and psychiatric treatment since 1961. He said that he had been admitted to hospitals eight times since the early 1960s and at one time ‘found myself in Denver, Colo., without knowing how I arrived there.’ Absher said he is now taking six different medicines, including four 10-milligram doses of Valium and a 200-milligram dose of another tranquilizer daily.” The defense “moved for a mistrial on the basis that the government had called Absher to testify only about his mental anguish because of what he had done and not for the purpose of giving new evidence”; the motion was denied. (46)
I was wrapped up in my own world in graduate school in Durham, I did not read the Winston-Salem paper, and so far as I can remember I was not particularly aware of all this as it happened, though I knew that Daddy was mentally and emotionally falling apart. I did not read the account of his entrance into the courtroom until years later, but someone mentioned it to me shortly after Daddy’s death, at Mom’s house or at the burial, I think. The image evoked by that person’s words—“they had to lead your dad into the court,” or something as brief and simple—affected me deeply and has remained one of my deepest memories of that time.
Original headline in Winston-Salem Journal, 28 September 1977, 1.
Later editions of the same story. I'm stunned by the cynicism of the headline.
Eating Applies, Father and Son
The thing I need is last year’s apple—brown with liver spots, soft like a newborn’s head-- from a dark corner of the apple house. When I was 9, Daddy gave me one, vinegary sweet, earthy as a potato.
In June that year, in a basket on Aunt Beth’s lustrous dark table, I saw—while everyone else was mesmerized by the new bought color of the TV—an apple’s maroon deepen into purples I’d never seen
on any other. I tried it with my teeth-- they skidded across the wax. Any good? asked Daddy, before I could put it back. That night, Beth fought Aunt Dinah over the fruit in their baskets. My tumor, said Beth,
was the size of a ripe grapefruit.Well, said Dinah, spreading her fingers to shape a sphere, Mine is bigger than a cantaloupe. In August Uncle Bird took Dinah down Topia Road to a tar-paper shack, in its yard a spindly
old tree she liked the flavor of. He backed his pickup against the trunk, and gearing back and forth rocked and shook the tree till it rained Virginia Beauties. It’ll ruin half, said Dinah. Don’t eat that half, said Bird.
Years later I’d watch Daddy eating the hardest apples Mama could buy—Stamens, Limbertwigs, which keep all winter, and once a mottled yellow Gloria Mundi. The crunch of the white flesh against his teeth muted
the voices turning his head to sauce. His eyes were dead with drugs or the depression-- I wondered if it made a difference-- but his mouth, opening wide to take enormous bites, was wet and pink as a baby’s. --Mouth Work (St Andrews University Press, 2016)
Posted 29 April 2024, updated 6 May 2024. Send comments, critiques, and questions to jsabsherphd@gmail.com.
NOTES Note A: “‘And the Rains Came,’” Journal-Patriot, 8 Sep 1977, A1. Note B: https://www.weather.gov/ilm/heatwaves#1977. Note B1: "Sourwood Honey Makes Comeback," Journal-Patriot, 21 July 1977, A13. Note B2: Colin Bertram, “The Son of Sam: A Timeline of the Killings that Terrorized New York City,” Biography (https://www.biography.com/crime/son-of-sam-murder-timeline). Note C: “Former FBI Agent Brereton Dies,” News and Record, 11 Feb 1993 (https://greensboro.com/former-fbi-agent-brereton-dies/article_c9814a10-fe4e-5460-ad46-c6815e419be4.html); “Cruel Doubt,” IMDB (https://www.imdb.com/title/tt0104031/). Note D: Sentinel, 17 Aug 1977, 23. Note E: “Examiners Aware of Duncan Checking Account,” Sentinel, 18 Aug 1977, 1, 2. Note F: “Duncan Pleads Not Guilty,” Winston-Salem Journal, 20 Aug 1977, 1, 2. Note 1: Conrad Paysour, “‘Country Bank’ Makes It in the Cities,” Greensboro News and Record, 21 Feb 1971, 65. Note 2: W. H. Scarborough, “Northwestern Bank: Our Basic Business Is Still the Little Man,” Winston-Salem Journal, 3 Oct 1976, 13. Note 3: Scarborough, “Northwestern Bank…” Note 3a: Guy Williams, "Another Official Is Dismissed at Northwestern,” Winston-Salem Journal, 18 Oct 1977, 11. Note 4: Mark Wright, “U.S. Wanted to ‘Get’ Duncan, Lawyers Say,” Sentinel, 8 Sep 1977, 11, 12. Note 5: Mark Wright, “Four Witnesses Tell of Bugging in Duncan Case,” Sentinel, 28 Sep 1977, 2. Note 6: “Attorneys to Quiz FBI Agents Wednesday: Northwestern Bank Chairman Jailed in Lieu of $800,000 Bond,” Sentinel, 18 July 1977, 1, 2. Note 7: Wright, “Four Witnesses…” Note 7a: "Probable Cause Found in Wire Tap," Journal-Patriot, 21 July 1977, A1, A11. Note 8: “N.C. Bank Probes Possible Illegal Campaign Funds,” News and Record, 16 Oct 1976, 15; David Bailey, “Complex Suit Entangles Northwestern Financial Corp.,” Winston-Salem Journal, 24 Oct 1976, 1, 2; “Proposal Could End Tangled Merger Suit,” Greensboro News and Record, 28 Oct 1976, 23; “Controlled by Duncan: Company Got Commissions,” Winston-Salem Journal, 28 Nov 1976, 1, 2; “IRS Urged Indictment of Northwestern Bank,” Winston-Salem Journal, 28 Nov 1976, 1, 2; “Northwestern Acknowledges Shortcomings,” Winston-Salem Journal, 28 Nov 1976, 1, 2; “Bank Suit Answers Allegations,” Asheville Times, 30 Nov 1976, 1, 3; “Northwestern Banks Seeks IRS Refund of $9.36 Million,” Durham Sun, 30 Nov 1976, 16. Note 9: Email from Phillip Absher, 26 March 2024. Note 10: Tom Sieg and Mark Wright, “SEC Data Fills Gaps In Northwestern Case,” Sentinel, 27 July 1977, 1, 11; “N.C. Bank Probes Possible Illegal Campaign Funds,” Greensboro News and Record, Oct 16, 1976, 15. Note 11: Sieg and Wright, “SEC Data Fills Gaps.” Note 12: Hamilton is called general counsel to the board of the holding company in Joe Pichirallo, “Mystery, Intrigue Mark FBI Probe of Northwestern,” Winston-Salem Journal, 24 July 1977, A12. But in a later story (Joe Pichirallo, “Jury Probing Bugging Charges at Bank,” Winston-Salem Journal, 2 Aug 1977, 10, 13), Hamilton told an interviewer “that although he has represented the Northwestern on many occasions, he was not formally its general counsel.” Note 12a: Hamilton was involved in some of the activities investigated by the FBI, including a fraudulent loan using as collateral land in the Great Smokey Mountain National Park owned by the federal government. See “Northwestern Acknowledges Shortcomings,” Winston-Salem Journal, 28 Nov 1976, 1, 2; Lenox Rawlings, Ken Friedlein, “Trial Records Imply Bank Violated Laws,” Winston-Salem Journal, 28 Aug 1977, 1, 12. Note 13: “Company Got Commissions,” Winston-Salem Journal, 28 Nov 1976, 1. Note 14: “Company Got Commissions.” Note 15: “Company Got Commissions.” Note 16: “IRS Urged Indictment of Northwestern Bank,” Winston-Salem Journal, 28 Nov 1976, 1, 2. Note 17: Pichirallo, “Jury Probing Bugging Charges.” Note 18: Pichirallo, “Mystery, Intrigue…” Note 19: Pichirallo, “Mystery, Intrigue...” Note 20: Mark Wright, “Witness: Premiums Taken,” Sentinel, 11 Nov 1977, 1, 2. Note 21: Wright, “U.S. Wanted to ‘Get’ Duncan.” Note 22: Sieg and Wright, “SEC Data Fills Gaps.” Note 23: Mark Wright, “Prosecution Completes Its Case, Sentinel, 30 Sep 1977, 1, 2. Note 24: Martin L. Kaiser III, Odyssey of an Eavesdropper (Carroll & Graff, 2005), 132-133. Note 25: David Bailey, “Duncan Given 3-Year Prison Term, Fine of $22,000,” Winston-Salem Journal, 12 Nov 1977, 1. Note 26: Odyssey, 133-136. Note 27: Odyssey, 136. Note 28: Pichirallo, “Mystery, Intrigue….” The original newspaper report stated that Jerry Starr conducted the bugging on April 10, the Easter Monday holiday in North Carolina (“Grand Jury Indicts Duncan, 2 Others,” Winston-Salem Journal, 13 Aug 1977, 1, 2), clearly an erroneous report. Agent Thomas Brereton later testified that Bowers “began monitoring the FBI’s conversations on April 25 and turned tapes over to Duncan about a week later.” This confirms Kaiser’s statement that he planted the bug on Sunday, the 24th. (David Bailey, “Duncan Given 3-Year Prison Term, Fine of $22,000,” Winston-Salem Journal, 12 Nov 1977, 1, 3). Note 29: David Bailey, “Duncan Given 3-Year Prison Term…” Note 30: “Marion Lawyer [Charles L. Harrington] Seeks Post as U.S. Attorney,” Roanoke Times, 1 Feb 1969, 20; “3 Counties Face Special Elections,” Roanoke Times, 3 Nov 1974, 18. Note 31: “FBI Man Testifies as Hearing Begins,” Sentinel, 20 July 1977, 1. Note 32: David Bailey, “Duncan Given 3-Year Prison Term…” Note 33: Conversation in March 2024. Note 34: David Bailey, “Duncan Gave Taping Order, Witness Says," Winston-Salem Journal, 27 Sept 1977, 1-2. Note 35: Pichirallo, “Mystery, Intrigue….” Note 36: Pichirallo, “Mystery, Intrigue….” Note 37: Sieg and Wright, “SEC Data Fills Gaps”; Stephen Hesse, “Duncan Is Fired by Bank,” Winston-Salem Journal, 18 Aug 1977, 1, 2. Note 38: Odyssey, 115-116. Note 39: Odyssey, 114. These shady characters included a “private detective” who tried to get Kaiser to demonstrate tapping a wire in the presence of a concealed FBI agent. Note 40: Odyssey, 135. Note 41: Odyssey, 136-137. Note 42: Conversation in April 2024. Note 42a: Conversations in April 2024. Find a Grave (https://www.findagrave.com/memorial/229231510/charles-lewis-harrington). Note 43: Email, 26 March 2024. Note 44: David Bailey, “Edwin Duncan Trial: Witness ‘Anguished’ by Bugging” (changed in a later edition to “Witness Says Bugging Bugged Him”), Winston-Salem Journal, 28 Sep 1977, 1-2) Note 45: Email, 26 March 2024 Note 46: David Bailey, “Edwin Duncan Trial: Witness ‘Anguished’ by Bugging”; Mark Wright, “Witness Says He helped Duncan Install Transmitter,” Sentinel, 27 Sep 1977, 1, 2