CMKM greybeard co-chairman has intriguing history
2005-03-01 16:55 ET - Street Wire
by Lee M. Webb
CMKM Diamonds Inc.'s recently appointed co-chairman, 87-year-old Robert A. Maheu, brings a colourful history to Urban Casavant's stalled and massively diluted pink sheet mining promotion.
Some of Mr. Maheu's intriguing history, including tales of his undercover derring-do and exploits as a private gumshoe enroute to a stint as Howard Hughes's "alter ego," is served up in a 1992 novel, Next to Hughes, he co-authored with Richard Hack.
Snow jobs
Mr. Maheu was born in Waterville, Me., in 1917 to "full-blooded French-Canadians" Ephrem and Christine Maheu and "grew up speaking as much French as English."
The caption to a photograph of a very young Mr. Maheu wearing snowshoes in a pastoral winter scene offers some retrospective humour. "At age two-and-a-half; my parents were preparing me for 'snow jobs,'" the caption reads.
In a reflection upon his personal "Rosebud," a wooden sign from his father's carbonated beverage company operated out of a barn behind the family's grocery store, Mr. Maheu remarks that had anyone told him back then half the things he would do in his life, he would have considered the person to be out of his mind.
"Or, as we say in Waterville, 'Il est plein de merde,' if you'll pardon my French," Mr. Maheu writes more bluntly.
Mr. Maheu's account of his bucolic childhood is mercifully brief. Growing up with a "canoe oar" in his hand, which may be a Waterville version of a paddle, Mr. Maheu cannot remember a time when he was not "traveling around the Maine backwaters in an old bark canoe."
"In fact, the first job I ever had was delivering newspapers by canoe when I was only nine years old," Mr. Maheu recalls.
Skipping ahead to his late teens, Mr. Maheu recounts how he turned down a scholarship to Holy Cross College in order to allow his father, whose schooling had ended at the age of 11, the satisfaction of paying for his college education. While touching, that was perhaps not a very astute financial decision for someone whose ambition was to become a lawyer.
Four years at Holy Cross chewed through his father's financial resources, leaving the young Mr. Maheu to take a fulltime day job while briefly pursuing a Georgetown University law degree through night school.
Special agent
The attempt to obtain a law degree did not last long. In 1940, 23-year-old Mr. Maheu took a Federal Bureau of Investigation exam and, to his surprise, was offered a job as a special agent.
After a six-week training course, Mr. Maheu was assigned to Phoenix, Ariz., where his first "case" involved running a background check on a woman who had applied for a stenographer position with the FBI.
Mr. Maheu set about canvassing the woman's neighbours, stopping first at the house next door, which happened to be occupied by "an FBI nut" who had never met a real agent. After enduring an hour of excited questions about the FBI, Mr. Maheu learned that the man had never met the woman next door, either, and knew nothing about her.
As the story goes, Mr. Maheu then quickly made his excuses and, admirer in tow, headed back to his car, only to realize that he had locked himself out of the vehicle. The man slipped back into his house to get a paper clip, evidently convinced that a G-man could easily pick the lock, and returned to find Mr. Maheu smashing the driver's window with his gun butt.
Soon after that episode, Mr. Maheu was partnered with an older FBI agent, Marvin Pash, who taught him "a thing or two about police work" and evidently provided some lessons on resourcefulness at least a bit more sophisticated than using a revolver to open a car door.
In another entertaining anecdote, Mr. Maheu recounts how he and his partner transported a prisoner from the Mexican border town of Nogales back into Arizona.
As that story goes, the Mexican police chief, who could not speak English, would not surrender the prisoner without official documentation, something that Mr. Maheu feared would take weeks to obtain. His resourceful partner Mr. Pash, however, was not concerned.
The FBI agents crossed back into U.S. portion of Nogales where Mr. Pash bought a five-and-dime store copy of the Declaration of Independence, a box of crayons and some ribbon. He wrote the prisoner's name on the Declaration of Independence with a black crayon, melted a red crayon to create the semblance of an official seal and tied the document with a ribbon.
Crossing back into Mexico, Mr. Pash presented the police chief with the doctored Declaration of Independence.
"The chief looked at it in grateful approval, gave us the prisoner, and U.S.-Mexican relations remained serene," Mr. Maheu writes.
The big bust
With about a year of experience under his belt, Mr. Maheu was transferred to Seattle, Wash., in 1941. Deciding that he was earning enough money to support a family, he sent for his Waterville childhood sweetheart, Yvette Doyon, and they were married in Seattle that summer.
In the Seattle area, Mr. Maheu was engaged in "rounding up Japanese-Americans and putting them into internment camps," something he thought made no sense and found distasteful. Nonetheless, Mr. Maheu acknowledges that there were potentially serious national security concerns in the Pacific Northwest at the time.
A highlight of Mr. Maheu's stint the area was his involvement in a series of raids he co-ordinated from the police headquarters in Port Angeles, a town located northwest of Seattle.
According to Mr. Maheu, the raids on 22 different residences spread over a huge area had to occur nearly simultaneously, but he had to be present to serve every search warrant.
"My solution was to create the most intricate series of busts I've ever witnessed," Mr. Maheu writes.
With 88 policemen, deputy sheriffs, military police and volunteers covering the targeted homes, Mr. Maheu raced from spot to spot serving the warrants.
It all went flawlessly, according to Mr. Maheu, "and generated an enormous amount of positive press for the Bureau."
The big bust also raised Mr. Maheu's status within the FBI. A year later, he was assigned to a New York-based undercover sting operation "against a pair of Nazi spies."
Napoleon of duplicity
In New York, Mr. Maheu reported to the legendary G-man, Assistant Director E. J. Connolly. He received some undercover training, developed a cover identity as a French-Canadian black marketeer and was briefed on the two spies, Dieudonne Costes and Jean-Paul Cavaillez.
Mr. Costes was a famous French flying ace in the First World War, but became an enemy spy when the Germans seized some of his relatives after occupying Paris.
According to Mr. Maheu's account, Mr. Costes had admitted to some contacts that he was being sent to the U.S. by the Germans and then offered his services to the U.S. as a double agent. However, the FBI suspected that Mr. Costes was the most dangerous type of spy of all, a triple agent.
"Where the triple agent differs from the double, however, is that this Napoleon of Duplicity is only acting as though he's been turned," Mr. Maheu explains.
As it turned out, the FBI decided that Mr. Costes was "untrustworthy enough to double-cross the Germans, but trustworthy enough to be true to us." He was just a double agent.
In the assessment of the then 26-year-old Mr. Maheu, however, Mr. Costes was no heroic double agent. He was just in it for the money, taking handsome payments from both sides.
The other spy, Mr. Cavaillez, was an expert in clandestine radio transmissions. Unlike the money-grubbing Mr. Costes, Mr. Cavaillez was a flat-out German patriot spying for the Nazis.
Mr. Cavaillez was also something of a ladies' man. While purportedly reluctant to leave his pregnant wife behind in Germany, the spy "went out with one woman after another, night after night" for weeks after arriving in New York before he was reined in.
Over the course of the undercover operation, Mr. Maheu came to both like and respect the skirt-chasing German patriot Mr. Cavaillez. However, he neither liked nor respected the duplicitous Mr. Costes.
Mr. Maheu's mission was evidently complex. On one hand, Mr. Costes, the mere double agent, knew that Mr. Maheu was an FBI agent. Indeed, they occasionally travelled to Washington together for debriefings.
Using mail drops and messages written in invisible ink, Mr. Costes and Mr. Maheu passed on to the Germans "verifiable but harmless communiques about Allied troop movements," establishing credibility without hurting the war effort.
On the other hand, it was imperative that Mr. Costes's radioman Mr. Cavaillez not know that Mr. Maheu was an FBI agent.
Mr. Maheu, posing as the black marketeer, set Mr. Cavaillez up in a Long Island mansion and began supplying him with radio parts, withholding some critical components until the FBI was ready to realize its objectives.
In late May of 1944, with D-Day approaching, Mr. Maheu received instructions to provide the final parts for the radio. Mr. Cavaillez made only one transmission before the FBI took over and began transmitting messages that the Allied invasion would take place in southern France, not Normandy.
"The Germans bought our story," Mr. Maheu writes, going on to note that it is impossible to tell how many German troops were diverted south because of the FBI transmissions.
Before Mr. Cavaillez's arrest, Mr. Maheu was assigned the task of taking the spy out and getting him as drunk as possible the night before the early morning bust so that he would not put up much resistance.
That mission was also successfully accomplished. Mr. Cavaillez was reeled in and eventually, with the help of Mr. Maheu, persuaded to talk.
The 18-month undercover operation evidently took its toll on young Mr. Maheu.
"The pressure was so bad, I literally lost my hair over it," he writes. "When I started the operation I had as thick a mop as anyone; but when it ended, I was as bald as I am today."
With the sting operation wrapped up, the balding young agent spent the rest of the war years in New York as a special assistant to Mr. Connolly.
Mr. Maheu was settling in for a long career with the FBI, but health concerns for his wife, who developed tuberculosis, led to a move back to Waterville.
According to Mr. Maheu, J. Edgar Hoover himself helped out by opening an FBI office in Waterville to accommodate him. With only an occasional draft dodger to nab, however, life was pretty dull; so Mr. Maheu left the FBI to try his hand at private enterprise.
Dairy Dream debacle
Mr. Maheu's business debut under the banner of Dairy Dream Farms Inc. quickly soured, both figuratively and literally.
"My plan was to start up a canned-cream business with a new technology that I felt would revolutionize the industry," Mr. Maheu writes.
Alas, the revolutionary technology was not quite what Mr. Maheu hoped it would be.
"A foul-up in the canning process caused the spoilage of nearly all our cream, ruining us overnight," he explains.
Mr. Maheu lost his home, his life savings "and another hundred thou or so in loans."
"Simply put, Dairy Dream was a disaster," Mr. Maheu notes.
Dismissing advice to declare bankruptcy to get out from under his debts, Mr. Maheu was determined "to pay everyone back."
With a recommendation from Hoover, Mr. Maheu got a job as director of security and compliance at the Small Defense Plants Administration, which subsequently became the Small Business Administration.
For five years, Mr. Maheu and his wife "lived very frugally" in an effort to repay the Dairy Dream debts, something they thought might be accomplished by the time they were in their 70s.
Rolling the dice
In 1954, Mr. Maheu's luck changed. At a Washington party for ex-FBI agents, Mr. Maheu got into a game of craps and, try as he might, he simply could not lose.
When the game finally came to an end in the wee hours of the following morning, the lucky Mr. Maheu was up $800 in cash and held a $2,800 marker from the party's biggest loser, Jim McInerny, the assistant attorney general in charge of the criminal division for the Department of Justice. (All amounts are in U.S. dollars.)
Mr. Maheu offered to accept 10 cents on the dollar as payment for the marker, but Mr. McInerny insisted on paying the full amount the next day.
With his sudden windfall, Mr. Maheu decided to start a private consulting firm "geared toward the solving of what might be termed 'sensitive' problems."
"And so, with $2,800 won in an illegal craps game from the nation's chief criminal prosecutor, Robert A. Maheu Associates was born," Mr. Maheu writes.
One of Mr. Maheu's first clients was the Central Intelligence Agency, which put him on a retainer of $500 per month. However, Mr. Maheu's first job for the CIA, and his next notable adventure, came from a matter that he brought to the U.S. spy agency.
Foiling Onassis
Shortly after opening a Washington office for his fledgling firm in 1954, Mr. Maheu was contacted by an English lawyer representing a client later identified as Stavros Niarchos.
Mr. Niarchos was the brother-in-law and rival of Aristotle Onassis, a name unknown to most Americans at the time and only vaguely familiar to Mr. Maheu.
Onassis had managed to secure a contract with Saudi Arabia that gave him exclusive rights to ship all the oil exported from the country. For some reason that is far from clear, Mr. Niarchos wanted the deal scrapped.
Mr. Maheu brought the story to the CIA. The CIA expressed an interest in the project, but suggested first bringing in the National Security Council.
A month or so and $26,000 in fees later, Mr. Maheu and an associate, John Gerrity, made the pitch to one of the main players on the National Security Council, then vice-president Richard Nixon.
Mr. Maheu was impressed with how quickly Nixon grasped the significance of the deal Onassis had negotiated with the Saudis.
"The importance of oil is self-evident today; in those days, when oil was taken for granted, you had to have a degree of foresight to see it," Mr. Maheu writes. "Nixon had plenty."
The vice-president pledged his support in getting the deal between Onassis and the Saudis scrapped.
"If it turns out we have to kill the bastard, just don't do it on American soil," Nixon reportedly remarked as he escorted Mr. Maheu and Mr. Gerrity out of his office, evidently shocking both men.
With the National Security Council onside, the CIA agreed to become clandestinely involved, with Mr. Maheu operating as the "cut-out" in order to allow U.S. government deniability.
According to Mr. Maheu, it was learned that a Saudi official had received a bribe of $1-million from Onassis in exchange for securing the contract. The bribe money was then deposited in a Swiss bank account.
The payoff trail led to Ali Alireza, the brother of the Saudi minister of commerce and a close friend of the finance minister. According to Mr. Maheu, all three men were implicated in the scheme.
With much of the critical information about the bribe ferreted out by Mr. Niarchos and his contacts, Mr. Maheu was pegged as the messenger to take the incriminating information to the Saudis.
Just getting to Saudi Arabia proved to be no small task. Mr. Maheu first tried to make his way into the country from Greece, but was unsuccessful.
With his dwindling cash topped up by Mr. Niarchos to the tune of $10,000 in $100 bills that the resourceful Mr. Maheu rolled up and hid in a tube of shaving cream, another impressive feat, he made his way to Lebanon.
In Beirut, a serendipitous introduction to a Saudi prince paved the way for Mr. Maheu to obtain a visa to travel to the desert kingdom. Mr. Maheu's arrival in Saudi Arabia turned into a bit of an adventure in itself.
"Air France had given me a gift on an earlier flight that I thought was perfume," Mr. Maheu writes. "It turned out to be a package of miniature bottles of booze. At the sight of the bottles, all hell broke loose.
"The weather isn't the only thing that's dry in Saudi Arabia. Possessing liquor is not only illegal, it's a mortal sin -- absolutely forbidden by Islamic law."
Fortunately, Mr. Maheu's contact arrived to smooth things over before he was tossed into jail.
Mr. Maheu's contact tried to arrange an audience with King Saud, but the meeting was shunted off to the finance minister, one of the very men Mr. Maheu believed was involved in the payoff.
Mr. Maheu laid out his story for the finance minister, who stared at him "with eyes full of venom." However, Mr. Maheu was convinced that another pair of ears heard the story, too.
"Though I couldn't prove it, I was certain that the king was in another room eavesdropping," Mr. Maheu writes.
The following day, Mr. Maheu received the Saudi response. He was thanked for his visit and informed that the Saudis would be pleased if the story about the payoff made its way into the world press through a country neutral to both the U.S. and Saudi Arabia.
As it turned out, getting a newspaper to break the story presented yet another challenge. According to Mr. Maheu, nobody in the media wanted to take the chance of crossing Onassis.
Once again, Mr. Niarchos stepped in to solve the problem. He gave a $75,000 loan to the publishers of an Athens newspaper on the condition that they print the story.
"Once the bribe was made known, King Saud got out of the contract with Onassis without losing face," Mr. Maheu writes. "Onassis's dreams of an oil monopoly were dashed forever.
"Niarchos breathed a sigh of relief -- as did ARAMCO, the U.S. government, and dozens of other countries reliant on Saudi oil."
Heady stuff
Some time after saving the U.S. and much of the industrialized world from falling under the thumb of Onassis, Mr. Maheu and Mr. Niarchos met in Washington for a victory dinner.
Reportedly loosened up by "a lot of Dom Perignon champagne," Mr. Niarchos decided to teach Mr. Maheu a lesson.
"Bob, you're one of the most imaginative, gutsiest guys I know," Mr. Niarchos remarked. "But you're also the worst businessman I've ever met."
Mr. Niarchos explained that he had been prepared to offer Mr. Maheu as much as $1-million to take the information about Onassis to the Saudis.
Mr. Maheu suggested that perhaps it was not too late, but Mr. Niarchos countered that if he gave him the money now, he would never learn.
Nonetheless, Mr. Niarchos did give Mr. Maheu a $50,000 bonus, doled out at $1,500 per month, on the condition that he buy a new house and a Cadillac. Mr. Maheu did just that.
"Working with Niarchos, I had been introduced to a whole new world, where wealth is measured in millions and where power is judged not by the people, but by the countries you can influence," Mr. Maheu writes. "As rarefied as the air seemed with Niarchos, it was about to get even headier, as I started work for the man who would change my life forever ... Howard Hughes."
Stockwatch's review of Mr. Maheu's colourful history will continue in future articles, including a look at his first bungled gumshoe job for Mr. Hughes and more spookish exploits involving heads of state.
Meanwhile, with billions of shares changing hands daily, CMKM continues to bounce from one-100th of a penny to two-100ths of a penny.
Comments regarding this article may be sent to lwebb@stockwatch.com.
(More information regarding CMKM Diamonds and associated companies can be found in Stockwatch articles dated Oct. 21, 2003; June 22; Sept. 16 and 24; Oct. 1, 15 and 20, 2004; and Feb. 11, 14, 18, 22 and 23, 2005.)
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