By Harry C. Alford
I have seen from time to time organized, polished scams that present themselves as a positive contribution to society via improved economics, safety or quality of life. Since we formed the National Black Chamber of Commerce ® in 1993, we have noticed two big scams that have taken our whole nation by storm. One is over and the other is in mid-session.
The scam that has been put to rest is the “dot.com era.” When high technology started to come of age, the general population had a fascination with the new gadgets, speed of communication, office disciplines being controlled by reasonably priced machines. IBM, Microsoft, Xerox, etc. were moving forward with innovation after innovation. Cell phones, email, websites started entering corporate America and would soon arrive into our sub-divisions and apartment buildings. Within five years, the hustlers would start to arrive.
People who could speak the next “tech-speak” would perpetrate that they were developing new technology that will save governments, companies and the general public billions of dollars. Therefore, their new technology was also worth billions. The smooth ones would start a company and do the necessary paperwork with the Security Exchange Commission (SEC) and eventually apply for an Initial Public Offering – IPO. They would become publicly owned and traded on Wall Street as stock. Some IPO’s would start off at an asking price less than a quarter. The possibilities were endless, depending on the public relations, marketing and hype (be it true or not). The buyers could drive the cost up and those who bought the stock for less than a quarter could soon be selling it for more than $30 a share.
One such company was PurchasePro.com. This was proclaimed as an e-commerce system that could help corporations and governments buy goods at the best possible price and with the highest quality. The CEO came by our office one day and asked us to show support for his company. Frankly, none of us understood it at all but figured it must be good since the government and stock brokerages were having a love affair with it.
The CEO later claimed that when they started their IPO he was going to give the NBCC a $2 million contribution. Their IPO started at an asking price of $14 and within a couple of weeks it was approaching $100. They split the stock and it still kept growing. I said to myself, this guy is making billions of dollars and nobody knows what the company can do. I called him one day and demanded the $2 million he publicly pledged. The phone call ended with a lot of curse words from both of us. However, he wired $500, 000 the next day. That shut me up.
In the end, the public found out that PurchasePro.com was actually nothing. The CEO, some of his partners and some executives from AOL went to prison. It sounds amazing that a Las Vegas gambler could run this scheme and fool thousands, including executives of AOL. This is a perfect example of what the dot.com hustle was about.
One of the principles in the beginning of the dot.com hustle was Al Gore. While vice president he pushed for the support and super funding for high technology, especially with the Internet. He has claimed to have invented the Internet from time to time. Al is just amazing. Because he didn’t rest on his laurels with the dot.com hustle, he went right to work on the next big hustle. He proclaimed the world was dying because of “global warming.” Yes, he said we were all going to die unless we start addressing the issue. This was taken from a similar hustle in the 1950s known as global cooling. Back then, they said we were returning to the Ice Age. That didn’t take, so it was reversed and the claims of us turning into a huge dry dessert starting popping up big time.
Blacks are being used in this Big Green Hustle. Terms such as “environmental racism,” and “environmental justice” are popping up with no substance or proof. Young activist groups are being recruited to stir up our communities. Sometimes we can get whipped up into hysteria. Let me make this perfectly clear: I believe that our global climate is unpredictable and, so far, beyond our understanding. The term climate change seems to be a much more accurate term. As I write this, our whole nation is going through one of the coldest winters, replete with snow, in history. Right now, global warming could be laughable to many common sense thinkers.
The similarities between the two hustles are striking. There are some big time hustlers, including Wall Street players, who are concocting their big schemes of fraud and deceit. They are doing it with the government’s blessing and right before our eyes. It’s time to call them out in next week’s column.