My Sojourn In What Was The Sorriest City In America

Nov 15, 2019

When I finally do hang it up and retire from covering politics (there are those who wish I had done so long ago), I will be grateful for many things.

Among them will be the chance that writing about politics has given me to see this great, big country over the better part of the past five decades, from sea to shining sea.

The job has taken me to some unforgettably beautiful American cities – Portland, Oregon; San Antonio, Texas; San Diego; Denver. Every single town in New Hampshire – all 9,350-square miles of it.

For every garden spot, though, there has been a clunker on my travel itinerary.

Being one mile underground in a dank, damp and cold coal mine, somewhere underneath the less-than-booming metropolis of Wilkesville, Ohio (population 144). Riding around at break-neck speed in a Jeep with an Army officer at the old proving grounds in Madison, Ind., silently praying that there was no unexploded ordnance still buried in the ground beneath us.

And then there was my April 1985 trip to poor old Beaumont, Texas, about 85 miles northeast of Houston. The boom-and-bust oil town was the most God-forsaken city I had ever seen. I hope and pray it has gotten better over the years, but it was an awful, smelly mess in those days.

It made Steubenville, Ohio – a rather dank place – look as beautiful as the Hanging Gardens of Babylon.

And, worse yet, in April 1985, Beaumont's city government was in dire financial straits because city officials had gotten snookered into a Ponzi scheme by an unscrupulous investment firm.

That's what brought me there.

It was not long after the disastrous collapse of the Ohio savings and loan system. The collapse was caused by the fact that Cincinnati's own uber-mogul, Marvin Warner, took nearly all of the money deposited in his Home State Savings and Loan company here and gave it to a shady firm in Ft. Lauderdale called ESM Securities.

ESM went around the country selling government securities to city treasurers and the financial officers of other institutions on the promise that they would produce overnight dividends for the buyers.

An "independent" auditor was bribed by ESM to produce glowing reports that ESM used to sell its securities to gullible government entities and others.

Well, it worked for a little while, but, being a Ponzi scheme, it was bound to run out of money to pay off the investors. ESM collapsed, and it took Home State with it.

Bailing out Home State wiped out the entire state insurance fund for savings and loans and caused a panic, with customers of all the state's other savings and loans rushing to their banks to withdraw their money. Ohio Gov. Richard F. Celeste was forced to declare a temporary bank holiday.

Meanwhile, a raft of American city and county governments were left holding the bag; they had lost millions and had no practical way of getting it back. Among the victims were Toledo, Ohio; Clark County, Nevada; Pompano Beach, Fla.; Clallam County, Washington; Tempe, Arizona; and, of course, Beaumont.

When ESM collapsed on March 4, it took $20 million of Beaumont's tax dollars with it.

Residents of Beaumont were furious with local officials who had invested 40% of the city's investment portfolio in Treasury bills with ESM – and didn't bother to take possession of the securities.

Immediately, Beaumont had to shelve plans for extending sewer lines in the city and much-needed street repairs. Neighborhoods that had expected to have paved sidewalks for the first time were just plain out of luck.

I had been a reporter at the Cincinnati Enquirer for nearly three years at that point. Shortly after the Home State/ESM collapse, Enquirer's metro editor formed a team to cover the mess, and I was drafted.

Little did I know I would be covering Marvin Warner-related stories for the next five years.

My good friend and colleague, Karen Garloch (who went on to a great career at the Charlotte Observer) and I were sent out on the road – Karen to Ft. Lauderdale, the home of ESM; and me to two cities that had lost big time money in the ESM scheme – Tempe and Beaumont.

The trip to Tempe was notable for only one thing – the day before my flight to Arizona, I had been to the Reds Opening Day game against the Montreal Expos. I remember it as a bitterly cold day, but one with a good ending – a 1-0 win by the Reds.

Early the next morning, I flew to the Phoenix airport. I picked up my bags and went outside to the cab stand and it hit me like I had just fallen into a bake oven – it was 106 degrees in Phoenix. I nearly passed out.

I spent about 36 hours in Tempe, talking to city officials and residents. It didn't turn out to be much of a story – this suburban community had a cushion to protect itself from financial disaster.

Then I went on to a city with no such cushion – Beaumont.

I took a full-sized jet from Phoenix to Houston, where I was to change planes.

The plane I ended up with was a tiny, 12-passenger prop plane that seemed like it could barely get above ground.

But it did, and before long, it flew into the most ferocious thunderstorm I had ever seen – a Texas-sized storm – which buffeted the little plane around like a pinball.

Yes, I was in fear for my life.

We only flew about 85 miles but it seemed like it had taken all night to land at the tiny little airport outside of Beaumont, an airport that looked more like a Greyhound bus station than an airport.

It was late at night; the airport was nearly empty; but I did find a cab that could take me to the motel near downtown where I had booked a room.

It was a crappy little joint, one step up from the Bates Motel. But it had clean sheets on the bed and a TV that worked. The motel sat directly beneath a highway overpass and within a stone's throw of a working railroad track that had freight trains blaring their horns and barreling past all night long.

And the smell – the incessant, annoying, almost sickening smell of the town's oil refineries.

When I would point it out to locals, they'd give me a quizzical look.

What smell?

Thankfully, I was so tired at that point, I slept through it all.

Bright and early the next morning, I went out and met with two well-known Beaumont men (Beaumontians?) at a downtown doughnut shop.

Former Mayor Maury Meyers and Bill DeMore, a local advertising executive, had decided to fight back by creating a "Kitty for the City" fund, where area businesses would turn in a portion of their retail sales.

Meyers and DeMore hoped to raise $2.3 million by June 4. It wouldn't come anywhere near covering the loss, but it would be enough to allow city officials to leverage it against the city's 1986 estimated income.

Meyers was clearly teed off by the negative national attention Beaumont had been getting.

"I'm getting a little weary of the national press coming in here and making us out to be some Hicksville, where folks sit around waiting to buy a pig-in-a-poke,'' said Meyers, who ran a business machine company in Beaumont.

"That's not us,'' Meyers said. "We weren't born yesterday. It's become apparent to me that we are taking a shellacking for this worse than what we deserve."

After a federal court closed ESM and Beaumont found out the extent of its loss, the city's finance director resigned. Citizens and some council members were putting the heat on the city manager to do the same.

Ever since Beaumont's famous Spindletop oil wells began gushing black gold in 1901, the city has depended on the oil refinery industry for its prosperity.

But, back in the mid-1980s, the region was going through a "bust" period, with massive layoffs at a huge Texaco plant and other refineries pushed unemployment to up about 20%.

"There's no question about it; this town has had nothing but trouble lately," Frank Dover, a local real estate man told me.

Dover's cluttered office was in an ancient-looking building downtown, where the economic hardships were evident in the boarded up storefronts and streets that were nearly deserted, even at high noon.

"But we’ve got some good things going for us, too,'' Dover said. "We've got one of the biggest ports in Texas; we’ve got Lamar University. It's not all bad.

"It’s just that people see that we live in a city where the water bills are higher than just about any city in Texas; the sewer bills are high; and government is just plain expensive.

"We'd been griping about that for a long time, but when this $20 million thing came along, it was the last straw," Dover said. "This town has serious problems.

He just shook his head in disgust.

I came away with a good story about a town on the ropes. It was a town I knew next to nothing about before I landed there in a Texas thunderstorm. The one thing I did know was that my boyhood hero, former Reds slugger Frank Robinson, was a Beaumont native.

And little did I know that, in about two years after my visit, a baby named Jay Bruce would be born in Beaumont and grow up to be one of my favorite Reds sluggers of all-time.

Back at the motel early that evening, I was bored stiff and was flipping through that day's edition of the town's newspaper, The Beaumont Enterprise.

In the sports section, I read that the Class AA Texas League baseball team, the Beaumont Golden Gators, had a home game that night at their ball park on the Lamar University campus.

Why sit around here when I can go see a ball game?

I hopped in my rental car and drove to the ball game. Not many fans in the stands that night, so I could buy a ticket right behind home plate.

I looked over at the Golden Gators dugout and saw a familiar face.

I flipped through my program and read that the manager of the Beaumont team was Bobby Tolan. Bobby Tolan, former Cincinnati Reds outfielder from 1969 through 1973.

Wow, Bobby Tolan winds up in this place, I thought. It's a long way from Riverfront Stadium in Cincinnati to Vincent-Beck Stadium in Beaumont.

And, at that moment, I realized it was a long way for me, too. But, unlike Bobby, I could leave whenever I wanted.

Credit Jim Nolan / WVXU

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