Wall Street Journal Describes Troubles, Flamboyance of King - Feb 8, 1989 - Omaha World-Herald
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Feb 8, 1989 Wall Street Journal Describes Troubles, Flamboyance of King; [Metro Edition] Omaha World - Herald. Omaha, Neb. pg. 21
Full Text (652 words)
(Copyright 1989 Omaha World-Herald Company)
Lawrence E. King Jr. is portrayed in a page-one story in Wednesday's Wall Street Journal as a man who once "bedazzled" Omaha with a "lavish life style" and the trappings of someone who had "managed to make it big."
"Now, it appears his success may have been a sham," the Journal says in the story, which is headlined: "A Credit Union Fails, And Omaha Wonders: Was It Bamboozled?" A secondary headline reads:"Fallen Hero."
In the aftermath of the Nov. 4 closing of King's Franklin Community Federal Credit Union, the Journal says, King has been accused by a federal agency of "plundering the institution (Franklin) to finance a flamboyant life style."
"The scandal has stunned Omaha. Most of the depositors have gotten their money back because a federal insurance fund for credit unions is picking up the tab. But local residents feel betrayed.
"For years, the burly credit-union manager (King) preached a bootstrap philosophy with much appeal among the business and civil elite . . . 'A hand up, not a handout,' was his prescription for success."
King was considered "a role model in the black community," the Journal says.
Now, the Journal says, it appears that "Mr. King was adept at spinning an engaging tale."
King's attorney, William E. Morrow, Jr., is quoted as saying that federal regulators "may be jumping to conclusions."
"Mr. King, he asserts, paid personal bills with checks drawn against credit-union accounts because the institution didn't offer personal checking. Mr. Morrow says that Mr. King, who earned about $20,000 a year as head of the credit union, reimbursed the institution for the expenditures.
"Mr. King 'did not steal anybody's money,' " Morrow is quoted as saying.
The article discusses at length King's rise from "a waiter for a hotel in downtown Omaha" to a man described by former banker Leon Evans as "a mover and shaker."
"Local business leaders were enthusiastic in their support of Franklin and Mr. King," the article says. Also, "well-meaning, nonprofit organizations were a big source of low-cost funds for the credit union."
Harold W. Andersen, publisher and chief executive officer of The World-Herald, is quoted in the story as saying, "It's a disheartening thing to have happen in a community."
The story says, "The Omaha World-Herald and a foundation and charity fund affiliated with the newspaper deposited more than $200,000 in the credit union, and Mr. Andersen solicited other firms to help.
"He also led a drive to expand and renovate the credit union's offices (he helped raise $675,000 in contributions) and even appeared in a television commercial plugging the institution."
The Peter Kiewit Foundation purchased a $100,000 certificate of deposit in Franklin, "thinking the investment was helping subsidize low-interest loans for needy homeowners and small-business owners," the Journal says.
Franklin "appeared to thrive, and so did Mr. King. Omaha civic groups showered him with honors. He was invited to join the elite Omaha Club, a business executives' club. He drove a white Mercedes and bought a soaring four-story, contemporary home in an exclusive neighborhood overlooking the Missouri River.
"He invested in several other businesses, including a landscaping company, a catering service, a lounge and two restaurants. One restaurant, the Cafe Carnavale, attracted the city's chic set and featured a 26-ounce slab of prime rib called Mr. King's cut."
King also became a "fund-raiser and contributor to the Republican Party," the Journal says. He "sang the national anthem during the opening ceremonies of the 1984 Republican National Convention," and threw parties at both the 1984 and 1988 GOP conventions, the article says.
At the 1988 party, in New Orleans, "the menu featured alligator meat."
The Journal says King's lifestyle "started to raise questions in Omaha. Still, no one seemed to want to ask any tough questions.""He (King) felt that by living well, he could serve as an example to others in the black community," the Journal quotes Andersen as saying.