Blog For Marketing By Michael Senoff

Glenn W. Turner Talks About How He Became His Own Santa In This Famous Speech.

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I’m a Jew and I want to share with you a short story about luck.

As a Jew, my family celebrates Chanukah.

( The Festival of Light ).

On the 4th night of Chanukah, my wife made, Latke’s
( Potato Pancakes ) for dinner.

And my two Nephews, Ben and Sam came over for dinner.

And as a tradition we light the candles, say the blessing, eat, and
play a little game of dreydl.

Dreydl is a gambling game of luck and chance.

Not too different from playing roulette, craps, or spinning the big
wheel in Las Vegas.

A dreydl has four sides.

Before each spin you ante up a quarter into the pot.

You spin this top and if it lands on the Nun ( N ), you get nothing.

If it lands on the Shin ( S ), you put a quarter into the pot.

If you get Hey ( H ), you get half of the pot.

And if you get gimel, you win all of the money.

And each player puts another quarter in.

So, Joe, Alan, Ben and Sam pick their favorite “lucky” dreydls.

And they start to play.

Joe was out of money first.

20 minutes later, Ben was out of quarters..

And Alan, he was killing it.

He was sitting on a pile of quarters a mile high.

Ben was complaining that Alan’s dreydl was always landing on the
Gimel.

And sure enough he was right.

Alan’s little wood dreydl was landing on the Gimel over and over again ..

Ben claims that Alan dreydl is rigged.

He said “Alan was cheating!”

So in all fairness, I agreed to test Alan’s dreydl.

I spun Alan’s dreydl 20 times and tracked the results of each spin.

The test was conclusive.

It landed on the winning gimel 16 out of 20 spins.

So, I determined Alan’s dreydl to be faulty.

And I made Alan give back his winnings.

The next morning, I was thinking about this dreydl game and the meaning of Chanukah.

I wanted to repeat my 20 spin test.

What if I was wrong?

What if Alan’s dreydl was just lucky?

So I spun Alan’s same wooden dreydl 20 more times.

I spun it in the exact same corner of the table.

I spun it in the same manner and direction as before.

And all four letters landed evenly.

The luck had left the building.

PS. I was wrong to doubt the luck of this dreydl.

Luck, miracle, or whatever you want to call it IS real.

And like the weather, it comes in waves.

Just remember the acronym for each one of the hebrew letters on Alan’s dreydl.
(Nes Gadol Haya Po). It means “A great miracle happened here”

I wish you good luck this holiday season.

Michael Senoff

About the Author

Michael Senoff is the CEO and publisher of
http://www.hardtofindseminars.com

The world’s leading free digital audio business library.

Michael is an experienced Internet marketer and talk show host and
a popular professional interviewer. Michael has taught 100% online
around the country & around the world to more than 50,000 students.

His over-the-top online audio interview web site
http://www.hardtofindseminars.com is listed in the top 1% of most
visited web sites in the world.

Michael has also worked as a coach and adviser to other famous
marketing consultants.

Michael is a husband and father of two young boys in Southern
California. He has a successful audio publishing business. Michael
is originally from Atlanta Georgia and is now based in San Diego,
California. Michael works with small to medium sized companies on
four different continents.

He is the author of the book: “TALK YOURSELF RICH”: (86 of the most
revealing, proprietary secrets on the subject of how to make more
money with audio interviews and the soon to be released sequel:
AUDIO MARKETING SECRETS.

How To Make Your Own Information Product Using Audio Interviews. 

Michael may be contacted at Michael@michaelsenoff.com  or at (858) 274-7851

Got this yesterday from Trevor and it reminded me about something

From: Trevor Chilton
Sent: Monday, December 14, 2009 3:47 PM
To: Michael Senoff
Subject: Bill Bartman interview

Michael,

I have been in your list now for about a year and have enjoyed many
of your interviews.

However just yesterday I took the time to listen to the one you did
with Bill. (  The Billionaire Bubba )

Now I had heard of Bill before and listened to one or two other
interviews with him however I had to write you and comment on your
interview.

Your interview was far superior to the others I had listened to as
you got into the real depth of his story rather than just skimming
over as the other interviews had done.

When one gets the chance to either interview or listen to what a
BILLIONAIRE has to say the last thing one should be concerned with
is brevity as without the details that you gave the story had about
20% of the impact.

So I just wanted to pass on a thank you and congratulations for
doing a bang up job on your research of Bill and hence the depth
you went to.

Much appreciated it was one of the best and most interesting
business interviews I have ever listened to.

Keep up the good work.

All the best to you and your family in 2010.

Highest Regards,

Trevor Chilton
Costa Rica
For more details on Bill go to

http://www.billionairebubba.com

here’s the link and transcripts to my interview with a billionaire.

http://www.hardtofindseminars.com/Bill_Bartmann_Interview.htm

It’s called . . .

Failure Lessons from a billionaire

I do not want you to loose out on this information.

With bill-dollhair ups and mill-dollhair downs, Bill Bartmann
has one of the best rags-to-riches stories around. And he has more
than his fair share of lessons to show for it. In fact, he’s become
somewhat of a failure-to-success expert and says one of his goals
is to do for failure what Betty Ford has done for alcoholism. And
after you listen to this interview, you’ll know exactly what he
means by that.

As one of eight children, Bill started out with nothing. His father
was a janitor and his mother a housecleaner. After spending time in
a carnival and a gang, Bill realized he needed a better plan for
his life. So he put himself through college and law school and
started investing in real estate. After having a good deal go bad,
Bill found himself a mill dollhairs in debt with creditors
harassing him at all hours.

Oddly enough, Bill ended up making his bills in the debt
resolution business. He credits part of his success to being at the
right place at the right time. The rest, he says, was recognizing
the opportunity. This interview is all about Bill’s amazing life
journey and all the many lessons he’s learned along the way.

Some of what you’ll hear in this interview…
*The top five mistakes that businesses should never make
* How stopping the negative talk can make all the difference in
your world
* Ways to keep your money safe before disaster strikes
* How to spot when a business is headed for trouble and ways to
minimize that damage
* How to pick yourself up from failure and actually learn from it
* And much, much more

Bill is proof that no matter how far down you get, you’ll always be
able to pick yourself up if you believe in yourself. So whether
you’ve suffered a failure or you just want to make sure you don’t,
this is the interview for you. It’s a two-hour, two-part audio
that’s full of inspiration and guidance that everyone, not just
entrepreneurs, will be able to benefit from.

For more details on Bill The ( Billionaire Bubba ) go to

http://www.billionairebubba.com

START

Michael: Do you have five big mistakes that businesses should
definitely not make?

Bill: I certainly do Michael, and you have some familiarity with
me. I tell my audiences that these five things cost me $700 mill
a piece, each of them, so it’s a $3.5 bill loss.

Rule number one, or less number one is never let your company pay
your personal expenses. Most of us in the business world when we
are the proprietor or general partner or we own the corporation,
whatever vehicle you happen to use for your entity, it’s really our
money as we think about it, but it’s like we don’t think it’s much
matters whether it’s the right hand or the left hand, the right
pocket or the left pocket, but in the reality of the world, it can
make a great big difference, and it made a great big difference in
my life.

I had a Sub-Chapter S corporation that I allowed to pay my taxes,
and though that is perfectly legal, perfectly copasetic, well
documented, well notified to the whole of the world, at the end of
the day is when my company got in trouble. The trustee in
bankruptcy was able to set aside the very contract that authorized
that transaction, which made it an unauthorized transaction. That
allowed him then to sue me to recover all the money my company had
paid on my behalf, which is the sum of $20 mill. It was
important in the liquidity that I had available, and it literally
caused Kathy and I to go into bankruptcy.

Rule number one is never let your company pay your personal
expenses. I don’t care if it’s credit card receipts or parking
tickets or lunch or otherwise. Keep your bookkeeping separate.

Rule number two, never ever expect your high priced management to
stay along side of you during a moment of crisis. Now, I’m speaking
to all the people, and I’m not throwing stones or trying to suggest
that mankind is bad. It’s quite the opposite.

I’m a strong believer and very, very strong proponent in believing
that people are good. People are inherently good, but no matter how
good they are, never expect somebody to be consistent and congruent
with their basic nature. The basic nature of a person – you and me
and every other person – is to take care of their own family before
they’ll take care of somebody else’s family.

So, when a calamity occurs inside an organization and the CEO
expects all of his senior managers and seniors executives to stand
along side of him, each and every one of them have to answer their
own question. Will standing along side of my CEO, maybe my former
CEO, will that put my own family in jeopardy? If it won’t, then of
course, I’ll stand next to him. He’s my friend. He’s my mentor, and
he’s a person who has been with me all these years and has guided
me and rewarded me and paid me and they have a thousand reasons to
like you.

But, if the answer comes back different from the very first
question, of will this put my own family in jeopardy, then all
those other things pale on comparison. They no longer matter, and
that employee will not do anything, nor should they ever do
anything inconsistent with protecting their family before they
protect your family.

Now, the value for that to you and whoever is listening to this is
that if you know that, if you recognize that and you’re aware of
that, that doesn’t mean you have to think ill of your employees.
You just have to be cognizant that if the stuff ever hits the fan,
they will probably protect themselves and their family before
they’ll protect you and your family.

Knowing that, knowing that little difference, that allows you to
react accordingly.

Number three, always, always diversify your financial assets, and
again in the private arena, the privately held arena, most people
don’t. They start from the back pocket to create our company and as
the company grows, we own it, and we run it and we’re the chief
cook and the bottle washer, and we tend to pour back to the profits
into the company.

While that’s a wonderful thing to do in order to help the company
grow and to take it to the next level, frequently, we have ended up
in a situation where everything we own is buried inside of that
company, where everything is in one jar so to speak, and if
anything bad were to happen to your company, then quite frankly,
you don’t just lose the company, you may lose everything,
everything in your personal life as well.

Point number four, never, never surrender the high ground. The
high ground is a moral ethical legal high ground, and those are
really three different places – the standards, the moral which we
all understand, the ethical which is slightly different than the
moral, and then there’s even the legal. The legal is kind of the
last mantra of a person who has suffered and learned some things.

Always hire a management consultant before the crisis. We hire
accountants and lawyer and other people to help us in our day to
day operations of a company, but rarely do we ever hire a crisis
manager or a crisis consultant until there’s actually a crisis on
hand. You say, “Well, you really don’t need one until there’s a
crisis.” No, I think some things could be prevented if you had one
of them early before there’s even something on the table. They
might have uncovered some things that you could’ve avoided in the
whole of the issue.

So, frequently, crisis management can be a wonderful preventive
technique rather than just a triage after the calamity.

Michael: So, all of these lessons, if you had these in place before
what happened to you, do you think you could avoided all of this
pain, I would say?

Bill: I really do. I think any one of the five would’ve avoided it.
It’s probably a scratch on number two, on the management, because
that wasn’t that controlling. In terms of the others, I think the
other four were so powerful in and of themselves if I had had just
maybe one of them, I think we could’ve avoided it.

Michael: After listening to what you went through, I don’t want to
get into this. I mean, you have amazing tenacity and resilience,
and I hope your stress level is a little lower now these days.

Bill: I am so at peace with myself, Michael, and it’s such a
wonderful thing. I think it’s that whole thing of adversity
introduces you to yourself. We will only know what we’re capable of
by the experiences we’ve had. We can’t imagine how we will react
under a stressful traumatic environment, at least we can’t imagine
it accurately, until it actually occurs.

Once it does, you then know what it is you’re capable of handling
it. It’s that whole thing, That which does not destroy me makes me
stronger. Having gone through some pretty significant things in the
course of my life over the course of my entire life, I have this
peace and comfort that there’s just not a lot of out there. It can
only hurt you if you have the right attitude.

Michael: That’s right. How old are you right now?

Bill: I’m 58.

Michael: You’re one of eight children.

Bill: That is correct.

Michael: What does your mom and dad do?

For more details on Bill go to

http://www.billionairebubba.com
Bill: I’m one of eight kids, and my mom cleaned other people’s
houses for a living. My dad is a janitor, and they both were really
honorable hard-working people that worked essentially every single
day of their life. The bad news is in the jobs that they had, they
didn’t make enough money to feed all ten of us, so we got by on
hand outs from Catholic charities, Salvation Army, Welfare and
things of that sort.

I remember almost every holiday the Salvation Army people would
show up at our doorstep with one of those food baskets. So, you
welcomed it, and wanted it, and really appreciated getting it.
There’s something that kind of sticks in your craw about living off
of charity.

Michael: When did you know you were poor?

Bill: I think we knew it all along. I mean, some people express it
differently, and I know some people say, “Gee, we didn’t know we
were poor because everybody in our neighborhood was poor.” I think
you know when you’re getting charity. We got charity.

When you knew that your parents couldn’t buy you the things that
other kids in the neighborhood had, or they couldn’t buy you things
you knew you needed. It wasn’t things you wanted. It wasn’t like
buying you a bicycle. I’m talking about clothing and food. When
they couldn’t afford to do that on a regular enough basis, please
don’t make it sound like Mom and Dad were bad people. They weren’t.

They were working as hard as they could to do what they could,
they just didn’t have very many tools to do it with.

Michael: And, they had eight kids. Did your parents stay together?

Bill: They did. They are now both deceased, but they stayed
together for 52 years.

Michael: Were you one of the youngest?

Bill: I was third from the bottom. There were five on top of me as
we said. I had five sisters and two brothers. Four of the girls
were older than me, and one of the brothers was older than me.

For more exclusive interviews on business, marketing, advertising
and copywriting, go to Michael Senoff’s HardToFindSeminars.com.

Michael: So, you moved around a lot.

Bill: We did. We moved in and out of five different rent houses by
the time I was fourteen years old. Again, bad economics said that
owning a house was not even within the realms of comprehension. So,
we moved in and out of rent houses and because we were relatively
poor, I think that’s probably an understatement, the rent houses we
lived in weren’t the nice rent houses. They were some of the
really, really not so nice ones.

Some of the rent houses we lived in didn’t have indoor plumbing.
Two of them we actually go evicted from by the city because the
city said they weren’t fit for human habitation, and when the city
comes and puts the red post-tag. I can still remember it, and I was
a child, but I can still remember when they put these red banners
on these door, notices that tell you and the rest of the world that
this building is unfit for human habitation.

In our neighborhood, we didn’t have a dog for a pet. In our
neighborhood, a dog was thought of as a survival tool because a
really good dog will keep rats off you at night. While that might
sound harsh and cold, that was the world we lived in.

Michael: Was it a loving environment or was it pretty chaotic with
the family?

Bill: Honestly, it was mostly dysfunctional – never abusive, never
mean and nasty, it wasn’t any of that mommy dearest with beatings
with the coat hangers. There was no sexual abuse or any of that
kind of stuff. I think mom and dad bless their hearts, just didn’t
know how to love, and I don’t think they knew how to, and they
never raised their hand or their voice at us. They did the best
they could with what they had. I don’t ever remember having a
birthday party.

Michael: So, growing up poor, you tell me, was this the seed for
that desire to really succeed, that struggle. Do you think that was
the seed in really giving you the drive to succeed?

Bill: I think it was the germ of the seed. There’s some more things
that happened to me in my youth after that even amplified the point
more.

Michael: How about high school?

Bill: When I was fourteen, I left home, and I went and lived on the
street. I lived under a bridge viaduct and I’ve eaten out of
dumpster, and I lived in a mission, but I even lived in a YMCA. So,
I know what all of that’s like, and when I was fourteen, I at then
loved the street life and I had joined a traveling carnival. I did
that for two years. I was fourteen and traveling the United States
alone, by myself, and literally I learned a lot of things a
fourteen year old boy shouldn’t have to learn.

Michael: I bet. Were you manning one of the carnival booths?

Bill: I had two jobs because as carnie job, you think of it is as -
they wouldn’t use the word bifurcated, but it really is a two prong
approach. There’s what happens when you first come to town, and
then there’s what happens thereafter. When you first come to town,
there’s the set up because you literally are traveling by truck.

So, you wheel into the area that you’re going to be setting up
your carnival, and you have to unload everything from the trucks
and you set up your rides. Well, everybody in the carnival has a
job. They have a task assigned to them and these guys are pretty
good at making sure they get things done well and efficiently.

Well, my job was to construct a ride called the bumper cars, and
the bumper cars are those great big cars that look like small
Volkswagens. They run on metal plates on the floor. That ride is
the heaviest and the dirtiest ride in the midway because the bumper
cars are actually heavier than the chairs on the Ferris wheel. They
are just massive, massive pieces of metal, and then the plate that
the cars ride on is just that – a steel plate.

There I am fourteen years old, I probably weight about 65 pounds,
and I’m having to lug and trudge these things out of the truck and
onto a location and assemble them, and like the new guy always gets
the worse job. Well, I was the new guy. So, I had the worse job
because no matter how you did it, you ended up with grease from one
end to the other. You looked like you’re doing black face in an old
vaudeville show.

You were nasty looking by the time you got down. Well, that was my
set up job, and then when the carnival was going full bore,
typically we’d be in town anywhere from three days to seven days,
my job was to guess people’s age and weight.

Do you remember the movie, The Jerk?

Michael: Absolutely, yes.

Bill: That was actually my job. I actually was the guy who would
try to guess their age and weight wrong, and they made a big deal
out of the movie, and I’m probably the only guy that laughed out
loud when all that happened because it was so classic with Steve
Martin saying, “Oh, it’s a profit field,” because it was a profit
deal.

We would try to guess their age and weight wrong because they were
paying then fifty cents for us to guess their age and weight, and
if we guessed it wrong, they won a prize. Well, the prize cost
about a nickel. We made 45 cents everytime we got it wrong, and
they walked away happy.

Michael: So, everytime, you wanted to guess it wrong, or maybe
you’d throw in one right.

Bill: If it’s a gig crowd, you have to get on every now and then
right so they wouldn’t know it was phony, but it really was from a
master marketing point of view is these townies, the people who won
a kewpie doll or teddy bear or god knows whatever you were giving
away at the event. They would then walk the midway of the county
fair with that proudly in their arms causing everybody else to see
that they had one, and then we’d have our little label where it
came from, which booth it was.

Everybody goes, “Well, wow, that’s an easy game to win. I’ll go up
there to win.” Everytime they showed up to win, we made 45 cents.

Michael: Do the carnies look at the townies as suckers when they
come to town?

Bill: A bit of that, but more than anything, to sum it all up in
one word, there’s almost an adversarial attitude. It’s kind of like
carnies as class of people, and I hope not a lot of them are
listening to this and come and find out where I live. They start
out feeling like their second class citizens. So, they walk around
with a chip on a shoulder anticipating that the people in town are
not going to like them, or will disrespect them in some fashion.

We all know the law of self-fulfilling prophecy, you can get what
you expect. It tends to follow. So, there’s that, and then when you
have that, then the sucker thing is an easy one to get to next. If
you think that the guy doesn’t like you, then it’s okay to say take
advantage of them.

Michael: You can rationalize it.

Bill: You begin to rationalize it quickly. So, their theory was
very, very mercenary. This is what we do for a living. The more of
it we do, the better of a living we make. Let’s go do a lot of it.

Michael: What were you making at that time at fourteen?

Bill: I was getting sustenance. They were paying me enough that I
could eat.

Michael: Just enough to survive?

Bill: Yes, I mean I wasn’t one of them. I wasn’t one of the family.
Usually, those are family run operations, and I mean literally from
cousins to uncles to second and third generation. If you looked at
a sixty member carnival crew, I’d bet you forty of them would be
blood connected.

Michael: Really, okay. Did you ever consider going back home? Was
there a home for you to go back to with your brothers and sisters?

Bill: There was a home to go back to, but it wasn’t one I wanted to
go back to, and I never didn’t love my brothers and sisters, but
since we probably became as dysfunctional as our parents were, and
now I communicate with my brothers and sisters, but honestly not
near as much as other people I know. For us, it would be difficult
because it’d be something we’d have to manufacture.

Michael: What was the last straw that got you to leave the
carnival?

Bill: I joined a street gang, and I joined a street gang because I
got abused at the carnival. It’s one of the things that you don’t
talk about a lot, but it just happened. It’s one of those things
that I was in the wrong place at the wrong time with the wrong
people. I didn’t want that to happen anymore, and I could leave.

So, I left, and the only place for me to go, well it probably
wasn’t the only place, but the next easy place for me to go was
joining a street gang. I totally understand now in hindsight that
whole mentality of what’s going on with the youth today and gangs.

For me, it was probably the first time I belonged to something. It
was the first time I ever had any sense of affinity of comradeship
of kinship, maybe even love or protection, and protection is what I
was looking for mostly. Today, I’m 58 years old, and I’m in pretty
good shape. I’ve gone on to learn how to wrestle and box, and I’m a
black belt in karate and brown belt in judo. Physically, I’m okay,
but back then I was a scrawny little runt, and getting abused is
what happens to scrawny little runts.

So, my way of getting protection was to join a group of people who
would look out for me.

Michael: What was the name of the gang?

Bill: The name of the gang was the Manor Boys, and they’d taken the
name from an abandoned building that they lived in. There was like
forty of us all together. At sixteen, I was the youngest one of the
whole crew, and I was a Manor Boy for two years. I know that during
those two years, we broke all the commandments. I think we hit
every single one of them, literally every one of them. I just told
you more than most people would want to talk about.

Michael: Just tell me the story about how you’d go into the bar and
make a bet with the beer.

Bill: You have done some research on me, Michael.

Michael: Yes, I have.

Bill: Congratulations, most people don’t dig that deep. Since I was
the smallest one of the bunch, it was my job to go start the
fights. Every Friday night and Saturday night, we would fight. That
is what we did. We would drink beer and fight, and not necessarily
in that order. Sometimes, we’d get them out of order, but that was
the only two things we ever did. We fought and we drank.

Since I was the skinniest smallest kid of the group, it was my job
to always go start the fight with whomever we were going to start
the fight with, typically some rival gang across town or in some
other town or wherever we happened to be traveling to, and we would
travel quite a bit.

It would be my job to go palooking, and the methodology was always
the same because I was the littlest kid. They would send me in
first. It could be dance hall. It could be a skating rink. It could
be a drive-in theater, it didn’t make any difference. Wherever we
were going to start our fight at, they would send me in first, and
typically the way it would work is I would walk in with a long
necked beer bottle in my hand, as everyone carried a beer bottle,
mostly for weapon purposes as much as for drinking purposes.

I’d walk up to the biggest guy in the opposite group, opposite
gang, and I’d literally walk right up to him and stand in front of
him, hold the beer bottle out in front of me between me and him,
and before he could even say anything, I would start talking.

My script was pretty rote memory, “I’ll make you a bet. I’ll bet I
can drop this bottle and hit you and you hit the ground before the
bottle of beer does.” While he’s processing those words in his
brain, I let go of the bottle of beer. Now, when you let go of a
full bottle of beer held at shoulder height, your eyeballs will
follow the bottle of beer because you know that’s a glass bottle.
It’s going to break. Something bad is going to happen.

Whether you want to follow it or not, the eyeballs will follow it
every single time. That was my cue. As soon as his eyes went off of
me, and his brain is still processing what it is that I just said,
and began to follow the bottle of beer falling through the air,
that would be my cue to poke him in the nose. I’d hit him as hard
and as fast as I could, usually before the bottle actually hit the
ground, I had made contact with this guy’s face. I don’t think
anybody ever really hit the ground before the bottle did, but it
didn’t make any difference. I already got the first poke in.

If you get the first poke in in a fight, if you don’t win, shame
on you.

Michael: So, would they go sometimes?

For more details on Bill go to

http://www.billionairebubba.com

Bill: Oh, yeah, because when you hit them by surprise, you don’t
have to hit them with a lot, but when you can surprise people and
hit them square dab in the middle of the face with a clenched up
fist throwing it as hard as you possibly can. Boxers and people who
fight for a living, they’re ready for the punch. They’re ready to
resist it. They’re ready to flip it. They’re ready to bob. They’re
ready to weave. They ready to do something, but they also know the
likelihood of getting hit really high subconsciously if not
consciously, they’re ready to take a punch almost all the time.

When you’ve got some guy whose brain is processing some words he
didn’t quite understand, his eyeballs are watching something else
somewhere else, and all of a sudden he gets smacked out of nowhere,
in hindsight I look back and say, “Somebody whoever told me how to
do all this really through their way through it. This is good
stuff.”

Michael: Did you ever get your butt really beat up?

Bill: Oh, yeah. It happened immediately thereafter. If you didn’t
knock him down or even if you did knock him down, then all of his
friends would jump all over you, or he would jump all over you. My
job after throwing the first punch was to get the heck out of the
building as fast as I possibly could because I would always walk in
alone. They would think – many of the people that I was now
contesting with – that I was alone. So, they would then chase me
out of the building.

If I got out of the building, my gang would be waiting outside and
that’s when the fight would really start, and we had the element of
surprise. The people chasing me wouldn’t be expecting me to have a
group out front. So, we would almost always win because of the
element of surprise.

The bad news however would be if I didn’t make it outside of the
building. If they got me before I got outside the building, I
didn’t have any help in there. I was all alone, and the beatings
would be pretty impressible. Here you are. You just poked the
biggest guy in the other gang, smack dab in the nose, and if you
didn’t take him down or even if you did take him down, the other
group was going to be really, really irritated at you. So, they
would just pound on you.

By the time, I didn’t come running out of the building, then my
gang would come in, but that’d be a minute, two minutes, three
minutes. Now, that doesn’t sound like a very long time. Imagine
yourself lying on a floor and somebody kicking on you for a minute
or two or three. That’s like a really, really long time.

Michael: Wow.

Bill: Yes, there were times I got beat up pretty bad.

Michael: Now, were you drinking at that time?

Bill: Oh, yeah, that’s all we did. We drank and we fought, and by
the time I was sixteen, I was an alcoholic. I was drinking a case
of beer every night.

Michael: A case every night?

Bill: A case of beer every single night. I literally would drink 24
bottles of beer a night.

Michael: That’s a lot of beer.

Bill: It’s a lot of beer, and I look back at it in hindsight and
wonder where it all went. How do you consume that much liquid? In
those days, that’s all we did. We drank beer and we fought.

Michael: So, at what point did you realize, ‘Hey, I want to get out
of this gang. I’m drinking too much.’ Was the right before you
wanted to get into the marines?

Bill: It was about the same time, and I’m not sure which happened
first. I think me kind of getting a little older. By the time I was
seventeen, I realized that this wasn’t a career – getting beat up
and beating up, breaking in, doing all kinds of other things – but
it certainly has some excitement to it. It was a dead end deal, and
that was back in 1967, and the Vietnam War was still raging, and I
was pretty macho in those days because all I was doing for a living
was drinking and fighting.

So, I joined the US Marine Corps. It seemed like it would be a
really good idea. I could fight with the boys and do it for God and
glory. It made perfect sense to a stupid seventeen year old kid.

So, I enlisted only to find out I got rejected or I was going to
get rejected at the medical exam. I couldn’t hear in my left ear
and I was deaf in my right ear, so today I wear a hearing aid in
both. It turns out I was born with it.

Michael: Did you know earlier that you had a hearing problem?

Bill: No.

Michael: You really had no idea.

Bill: I thought everybody heard this little bit that I heard.

Michael: You couldn’t compare it to anything else.

Bill: I didn’t know. I thought everybody said what for like every
other word. That was a big piece of my vocabulary.

Michael: So, you’re rejected by the Marines. How does that affect
you?

Bill: It devastated me because I had made up my mind that I was
going to go do this. I was going to get in. I was going to go, and
I don’t know what else was going through my head at that moment,
but I knew that it was something I really wanted to do.

So, when they told me I had flunked the medial exam, I went back
and took the hearing test three separate times. I went to three
different doctors and retook the exam three different times because
I was convinced that they were wrong. I was convinced that my
hearing was just fine, thank you very much, and if I could get a
doctor to say so, then they would have to let me in.

Well, I never could get a doctor to say so, and they never did let
me in.

Michael: Speed me forward. When did you meet your wife?

Bill: Well, Kathy and I actually met earlier. We met when I was
fourteen and she was eleven. During this period of time from my
carnie days to some of my gang days to all my high school drop out
days, Kathy was in the circle that would fold around me. It would
be like two spaceships in orbit. We would only pass each other
every so often, but we began dating not terribly serious at
fourteen and eleven, but we actually went on our first date when we
were fourteen and eleven.

We ultimately dated for ten years before we finally got around to
getting married, and we have now been married for 33 years.

Michael: That’s wonderful.

Bill: Michael, I will tell you, I’ve had some great successes in my
life. I really have. I had have some wonderful, wonderful
successes. None of them, none of them measure up to the success
I’ve had with Kathy. This woman is so powerful and so wonderful.
She’s not in the room with me as we’re talking, so I don’t have to
say this to suck up to her.

This lady transformed from that which we just talked about – a
high school drop out, that drunk, that member of a street gang, the
carnie, that loser. She transformed me by finding value in me and
demonstrating that she thought there was value in me. Because I
loved her so much even at a young age, I believed her.

For the very first time in my whole life, I didn’t have to wonder
whether I really had value in me, because before I always knew that
I did not have value. All of a sudden, I’ve got the positive side
of the question, what if I did do that? What if I tried to do that?
What if I want to go do that?

Michael: You had someone that finally loved you and that believed
in you. Sometimes a force like that, there’s no stopping a man and
what he can do.

Bill: That’s why when you asked a question earlier, Kathy was the
epiphany. Kathy was the thing that happened. It is not forty plus
years later, and I can tell you exactly where I was and exactly
what the event was that caused all this to begin to change. It
wasn’t one of those things that transformed me over night, and
you’re a different person the next morning.

It wasn’t like that at all. It was one of these very slow
evolutionary processes. I remember it. I was seventeen years old,
and she was fourteen. So, this was three years after we had
initially met. I was driving her to work. She was a girl scout
counselor, and the way to me driving her to work, I was talking as
I always do.

She just screams out, “Stop the car! I want out.” With that, she
slaps the dash board as hard as she can. Now, Kathy is real quiet
diminutive person, and this things are so out of character for her
that it’s startling. It was stark raving startling that this lady
is doing something weird.

So, I immediately pulled the car over onto the gravel side of the
road. She gets out. She slams the door. She sticks her head back in
through the passenger window and says, “I never want to see you
again.” I’m looking like the deer in the headlights going, “My god,
what’s going on? What does this woman even talking about?”

She continues. She says, “I love you, and I want to spend the rest
of my life with you, but I can’t stand being around you when you
put yourself down.” I looked at her with that dumb look on my face,
and it finally dawned on me that everytime I described myself,
everytime I talked about me, everytime I prefaced a sentence, it
would be somewhere – we didn’t know the word negative affirmation -
it would be a negative affirmation of what do you expect from a guy
like me, or what do you expect from a guy from the wrong side of
the railroad tracks, or what do you expect from a drop out, or what
do you expect from an alcoholic, what do you expect from a drunk,
or blah, blah, blah.

Everytime I opened my mouth, I was implicitly and explicitly
putting me down. She didn’t know the word negative affirmation
either, but she knew I was speaking ill of someone she thought
value of, and because I loved her and wanted her even at seventeen,
I listened to her and thought, “God if this woman things I have
some value, maybe I do.” What an epiphany that was, what a wake up
call, just to begin to suspect that maybe you had some value.

Michael: So, when you suspected you did have some value, were you
able to stop the negative talk, and were you able to stop drinking?
Is that when it started when you started to believe that you had
some value?

Bill: All of this happened in a synchronized fashion thereafter, it
wasn’t like, “Oh my god, this is all going to happen by tomorrow
morning,” but it began to happen in this order where I quit talking
negative about myself because she just got back in the car under
the condition that I would never do it again, and made me promise
that I would not speak negative again.

I’m sure I broke that promise once or twice by mistake and then
only be reminded of it, and then not do it again, but once you quit
talking negative, the opposite starts happening. The lack of a
negative is a positive, and so the fact that I was no longer saying
negative things about me, I began to actually feel better about me,
and that created an environment where Kathy then suggested that
maybe I should take the GED test.

Now, the General Equivalency Diploma, that’s for high school
dropouts, and I had been offered to take it before, but I was
afraid to take it. I was afraid I’d fail, but here’s this lady
telling me that I should take it and I have had this new confidence
that maybe I could pass it, and I went and I passed it. I think it
was probably the first test I ever passed in my whole life. I don’t
think that made me a smart guy, but at least gave me a bit of
confidence.

With that, I was able to get into college, albeit on probation. I
stayed on probation for four years. I graduated with a straight C
average, 2.000 GPA.

Michael: What were you majoring in in college?

Bill: I majored in sociology and psychology. I ended up with a
double major, believe it or not, and now later in life, I can’t
believe how smart that was to pick two social sciences because that
made all my money in the social arena.

Michael: How were you supporting yourself during college?

Bill: I worked at a meat packing plant in Dubuque, Iowa and there
was a company called the Dubuque Packing Plant that at the time was
the largest independent packing plant in the world, and there was a
hog slaughtering operation where they literally went and
slaughtered hogs and turn them into bacon and ham and sausage and
etc.

Michael: Weren’t you born next to a hog slaughtering plant?

Bill: The very same one.

Michael: Isn’t that ironic?

Bill: Yes, it’s so amazing Michael that I grew up two and a half
blocks away from the place I was going to work when I was eighteen
years old.

Michael: So, how long did you work there? You were able to finance
your college?

Bill: I did. I was able to finance my college by working there, and
being the steward for the AFL-CIO while I was working there. So, I
may be the only union steward that ever became a billaire.

Michael: What’s a union steward?

Bill: A union steward is a representative of the union. So, I was a
full card carrying member of the AFL-CIO, and our union was local
150 amalgamated beef cutters and butcher workman of North America.
As a union steward, I was in charge of all of the employees in my
department. I was the union representative.

So, we had 600 employees in the hog slaughtering piece of the
company, and those 600 people were then under my stewardship.

Michael: So, this is probably foundational stuff for understanding
corporate structure and employees and those numbers.

Bill: Michael, you couldn’t have given me a better extension. I
mean I was nineteen years old, and I had 600 people under me, and I
was having to deal with issues with grown men on the other side,
company presidents and labor union leaders and in fact, when I was
20, I called a strike because we had 600 people. We were all
college kids, and we were essentially part time workers at this
meat plant, and the union – though we were all union members -
wasn’t given us full time benefits. In fact, it wasn’t giving us
any benefits at all.

We didn’t get vacation. We didn’t get medical. We didn’t get any
retirement. We didn’t get any of that stuff. All that stuff was
being reserved for the “full-time” employees.

Well, I thought that was unfair. We’re working twenty hours a week
while we’re going to college, and we’re paying full union dues,
we’ve got to be able to get half representation or 50/50
representation. We ought to be able to get some of what full time
workers are getting, and that was just inescapable logic.

They didn’t care how inescapable my logic was, they told me not
only where to go, but what horse to ride out on. So, I called a
strike.

Michael: Was it successful?

Bill: Yes, I called a strike against the company and the union. I
was the only union steward who has ever done that, and it was a
four day walk out strike, and we got beat up everyday for four
days.

We would be outside picketing, and the full time guys would come
through, and they would just kick the living dickens out of us.
Where’d we be the next day? Doing it again.

Michael: What lesson did you learn from that?

Bill: The lesson that I learned is that when you’re right, you
don’t give up. You should never give up now matter how bad they’re
beating on you, no matter how much – they threatened to fire my
dad. My dad was the janitor of a local school, and the people who
owned the meat packing plant were the largest philanthropist in
town. I didn’t know what that word was then, but I do now. The
threatened to get my dad fired from a school job. Kathy’s dad was
part of the paper company that did a lot of business with the
packing company. They threatened to terminate the relationship with
him.

Michael: Did either of those happen?

Bill: No, but death threats literally called into the house and to
the local news stations and things of that sort, plus we got beat
up four nights in a row, but when you’re right, you’re right.

Michael: So, you stand your ground.

Bill: You have to.

Michael: So, how much longer were you with the meat packing plant
and how did you transition into real estate?

Bill: Well, I went to law school first. I left the meat packing
plant to go to law school after I graduated from college. I got
into law school.

Michael: Why did you want to go to law school?

Bill: Probably for a lot of psychological reasons. First, there was
always psychologically the money. When you grew up a poor kid,
having money would be cool. Then, secondly, I grew up in a
neighborhood where there was just a whole bunch of people being
disadvantaged by the system, and that was back when Ralph Nader was
still Ralph Nader.

People whoa re living today don’t know the Ralph Nader of thirty
years ago. Ralph Nader of thirty years ago was the champion for the
underdog. He was the first guy to really stand up and try to make
it right for the poor people.  Since then, he’s gone off and gone
green.

Whether you like him or don’t, his mission is certainly different
than it used to be. Back in those days, it wasn’t like somebody
joined the Peace Corps. It was idealistic.

Well, I wanted to go be a lawyer to join as they then called it
Nader Raiders. I wanted to be one of Ralph Nader’s people helping
poor people, and that’s what got me into law school, and the said
news is I flunked out the first semester for summer school, and
then I had to spend a whole year figuring out how to get back in so
I could ultimately graduate.

Michael: Tell me about the history of law school never let someone
back in after they’d been kicked out.

Bill: I didn’t get back in until my senior of college. That’s when
I decided I wanted to go to law school. Now, most smart guys decide
that in their freshman year of college and take four years to
prepare for it in courses.

I’m deciding my last semester of my senior year. Well, it’s a day
late and a load short to join with my grade point average, and my
grade point average was a 2.00. Well, that year to get admitted,
you need a 3.5. So, I’m woefully inadequate. Then, I take the LSAT,
the law school admissions test and I got a 530. That year, the
admissions was 750.

I am absolutely zero qualified to get into law school, and I send
out 43 applications. I apply to 43 different law schools, and I got
43 rejections. I then found Drake University in Des Moines, Iowa,
because Drake had a unique program.

Drake had a thing called the summer conditional program, and what
it was was an opportunity for kids like me who might have some
capacity to be a good lawyer but didn’t have the academics.
Remember this was back in the Vietnam era, so there’s military
people coming home, veterans coming back with really learned a lot
of life experiences, but didn’t have the academic.

So, Drake University had a very enlightened program called the
summer conditional program. They would let a hundred kids register
for two summer school courses, and then at the end of that summer
school session, they would take the top fifty and let them enter
the next fall.

This is wonderful for me. I’m getting an opportunity to prove I
can do it. I signed up, and I couldn’t wait to get to Des Moines,
Iowa and take it. I went and went to summer school.

That summer, I got two Bs in the two courses that are required
that we all take this, the hundred of us, and I got two Bs. I never
had a B in high school. I never had a B in college.

Michael: So you were excited.

Bill: Oh, man, I got two Bs in law school. I don’t think I’m
Einstein, but all of a sudden, I’m feeling pretty darn smart
thinking, “Wow, maybe I’m a late bloomer.”

Michael: Getting a little confidence under your belt.

Bill: Yes, and then I get a letter for Drake University telling me
I was number 51, and then only let the top fifty in. So,
essentially flunked out. So, I went back to the dean. His name was
Robert Hayes, and I said, “Dean Hayes, you’ve got to let me back
in. I’m number 51. I was so close I could smell it. I said I got
two Bs and I never got a B. I told him my whole life story trying
to get him to feel sorry for me, and he didn’t.

He said, “Hey, in our history of Drake University, we never let
anybody in the second time, and we’re not going to start now.” Some
people thought that was impossible to get back in, but it wasn’t. I
figured out a way to kind of work the system so to speak, and I was
able to get back in the following summer, and managed to stay in.

Michael: How’d you do it? What was your idea?

Bill: It was one of those fluke things. You couldn’t conspired
this. You couldn’t sit down and say, “Okay, let me see how I’m
going to do this.” Being a street kid I think was my advantage. As
a street kid, you learn to see opportunity quickly because you need
to see things always on a very quick fashion. You need to see
positives or negatives real quick and know the difference because
if you don’t you’re going to get run over with something.

I found out that there was a fellow in my neighborhood, my not
very good neighborhood Dubuque, Iowa, who was about to run for
congress as a republican. Well, Dubuque, Iowa is 90% Catholic, and
a hundred percent Democrat. It’s never elected a republic ever. So,
this guy is fresh meat. He is not going to win. He knows it, but
he’s a token candidate, if you would use that expression.

I didn’t know the guy. His name was Ted Ellsworth, but I found out
that he had a daughter, and his daughter’s name was Kitty. Kitty
was dating a fellow by the name of Tom Stoner.

Tom Stoner happened to be the campaign chairman for then the
governor of Iowa, a fellow by the name of Robert G Ryan, and Robert
Ryan was a graduate of Drake University. So, he had, he and his
wife Billie were on the board of trustees of the law school.

So, I connected all those dots, and said, “Wow, here’s guy that’s
going to run for office, and is going to get his butt kicked.
Here’s a guy that’s got a daughter that is dating a guy that’s
connected to the governor, and the governor is connected to the
school I want to get back into. Gee, I think I need to go talk to
this guy.”

So, I went and found him out, and introduced myself to him. I
never met him before in my life. I walked in, and said, “Hi, this
is who I am, and here’s my story.”  I told him about flunking out
of law school, and said, “Here’s what I’ll do. Mr. Ellsworth, if
you’ll let me work for you for the next five and a half months, I
need $60 a week, and I will give you my heart and my soul, and I’ll
work 24 hours a day, seven days  a week and I’ll do any job you
want me to do, anytime, anyplace, anywhere. I’ll do anything,
period, but I need $60 a week to live on and I want one favor.”

“When the election’s over, win, lose or draw, I want you to
introduce me to Tom Stoner under the conditions that I get a five
minute meeting with him. That’s all I want, a five minute meeting.
You give me a five minute meeting, and I’ll give you the next five
months of my life.”

Well, he laughed because what a stupid deal this was for me, and
what a great deal it was for him. Naturally, he said yes. So, we
worked our rump off in the next five months, and it turned out he
lost, but the morning after the election he introduced me to Tom
Stoner via telephone. I set up a meeting to go up and meet with Mr.
Stoner, and the meeting was set up for the following week, and
before that meeting could even transpire, I received a letter from
Drake University allowing me to come back into the summer
conditional program the next summer.

Michael: Good job, you took care of it. Sometimes, it is who you
know.

Bill; It can be, but it’s also recognizing opportunities. The whole
thing of not what you know but who you know, sometimes who knows
you and what they know about you.

Michael: You acted on an opportunity. Most people would’ve quit and
just taken that letter as face value and never tried anything
different because they didn’t have the confidence. They would’ve
never tried and made an effort, and they would’ve lost right there,
but you went one step ahead.

Bill: I think that is so much the only difference between me and
probably everybody else. I don’t mean it that way. I know it’s
egotistical, but it is why I got to nine zeros. That’s why I have a
permanent place in the Smithsonian. That’s why I won all of the
awards I’ve ever won.

It’s why everything has happened. I believe I can. I absolutely
believe I can. I have enough confidence in me that no matter what
the challenge, no matter what the obstacle, no matter what the
odds, no matter what the statistics are, no matter who is telling
me no, that doesn’t matter if I believe I can. When I believe I
can, that’s the only tool I need in my toolbox to get me from where
I’m at to where I want to go, and it works every single swinging
time.

Michael: That’s great. Okay, so did you graduate law school?

Bill: Yes, I graduate in 1975.

Michael: Did you become a lawyer?

Bill: I did. I practiced law for five years, and made a lot of
money. I was very successful as a lawyer.

Michael: What kind of attorney were you?

Bill: Mostly, I did criminal work. That, again, was part of my
background. Growing up on the streets, you live on the seemly side
of life. I recognized it well and understood it perfectly and could
relate to those people completely, and knew that not all of them
were guilty. Most of them were obviously.

Michael: So, you were a criminal defense attorney.

Bill: Yes, and I just really, really did well financially. I made a
ton of money, but the bad news is I got to a point in my life
because I was hanging around so many “seedy” people, but less than
good people, that I got to where I didn’t like me. I didn’t like
Kathy. I didn’t like my kids. I didn’t like anything. That old
adage of you become the five people you hang out with.

Michael: How old were your kids at that time?

Bill: My kids were children, literally, three and five.

Michael: So, you’re making money, but you just weren’t happy.

Bill: Absolutely. I was making a lot of money, but becoming
unhappier by the moment, and I looked at Kathy one day and I said,
I want to quit. I want to turn my shingle around backwards, and I
don’t want to practice law anymore.

So, we marked a date, and the date we picked was our fifth
anniversary on the day I started practicing. January 20th, 1980
which was the fifth anniversary from January 20th, 1975, and we
turned the shingle around backwards and we moved to Oklahoma.

Michael: Then, you went into real estate?

Bill: Actually, I had been in real estate for the last year when I
knew I was going to retire. We started investing heavy in real
estate. Then, we got very heavy in real estate, and started buying
a lot of commercial buildings, a lot of apartments, a lot of single
family houses, duplexes, four-plexes and just about anything that
had real estate in it.

We would experiment with it because this is back in the early
’80s. If you can remember, the real estate market went to hell in a
hand basket in the late ’70s, and in the early ’80s, it was still
on its romp. What a great time to buy.

Michael: So, were you a millaire at that time?

Bill: Yes. I retired from law as a millaire.

Michael: A few times over?

Bill: A couple times over.

Michael: So, how do we get to Hawkeye Pipe Services? Describe what
that business is, what service did you provide?

Bill: It was an oil company tubular goods business. In other words,
we manufactured pipe. We created the pipe that goes inside an oil
well, so when you drill a hole in the ground, you’re literally
boring a hole through the earth, and then you have to put a pipe
inside that hole to keep the rock and the dirt from filling the
hole back up.

Michael: How’d you get into it?

Bill: The bank came to me. I was living then in Oklahoma, and my
bank came to me and said they had a business that was in the pipe
business that they had financed that was doing poorly. They asked
me if I would go in and spend 30 days, just walking it over to
advise them on how to liquidate it because they were going to have
to do a foreclosure against the individual who was the present
owner.

So, it wasn’t a good duty, but it was a duty that they asked me to
do, and I like doing favors for banks. So, I said, “Sure.” I went
in and I spent 30 days, and I came back and gave them my report. My
report was quite opposite of what they thought it was going to be.

I said, “Really, you shouldn’t be liquidating it. You should be
putting more money into it. There’s a good business here. There’s a
great business here. There’s a business here that can really make
enough money to retire all the debt it’s ever had, and make
somebody a small fortune, if you’ll do things remarkably different
than the individual who is presently running the company.”

They then sat down with the person who was running the company,
and set up a foreclosure that works out a buy-out agreement. The
bank actually bought him out of the business he was in, and then
they just literally transferred it over to me and let me sign on
the note so I actually end up buying it from the bank. Then, the
refinanced the additional capital that it was going to take to get
the business up and running the way it should get up and running.

Within the first year, we got up to a mill dollhairs a month
revenue business.

You’re listening to an interview on Michael Senoff’s
HardToFindSeminars.com.

Michael: What was the one key that the business wasn’t doing? Where
was the opportunity that you spotted during those thirty days?

Bill: There were two things, and they’re so basic – customers and
employees. This guy was really good at manufacturing. He knew
manufacturing in and out, up and down, back and forth, and he knew
everything there was about how to make pipe. He didn’t know come
here from second about his employees, and therefore he had bad
employees. He had lousy employees. He had terrible employees
because  you get what you give, and he was being bad to them and
they were being bad right back.

They were stealing stuff right and left. They were breaking things
on purpose. They were not showing up on time, and leaving early.
Well, how do you run a railroad if that’s the kind of employees you
have?

Then, his customers, he didn’t appreciate a customer. He thought
it was a transaction based business where he sells them something.
They write a check and end of program.

In sales, it’s never transactional. It’s relationship. You need to
- I don’t say suck up in a bad way, but you need to curry favor
with your customers. You need to follow up after the sale. You need
to stay in a relationship with them. Even if they never buy another
product from you, and some of them are not going to ever buy
another product because they only needed one, they will tell
people. They were in the industry. They’d have lunch with other
perspective customers. They had breakfast with other perspective
customers. They played golf with other perspective customers.

The way you treat them is the way they will tell other people
about you. So, he did two things terribly, terribly wrong. He
didn’t take care of his employees. He didn’t take care of his
customers.

Michael: You were able to turn it around, and got it doing, what a
mill a month?

Bill: A mill a month, yes. It had been doing about $40,000 a
month. They had been just struggling to pay the rent.

Michael: How long did it take to get it up to a mill a month?

Bill: One year.

Michael: One year. So, how long did you stay with that business
until the lights went out?

Bill: We stayed there for three years, continued to run that
business and grow it, and we’re in the middle of actually doing a
major acquisition, a Wall Street acquisition. General Electric
Capital Corporation had just agreed to lend me $25 mill to go
buy an upline pipe manufacturers, somebody whom we were buying a
lot of materials from, and that’s when – if you’ll remember a thing
called Oil Tech. Today, when we hear the price of oil, we cringe.
Well, back then the price of oil was going in the other direction.

Oil then in the late ’80s, ’86, was $40 a barrel, and literally
within one afternoon, it went from $40 a barrel down to $14 a
barrel.

Michael: Wow!

Bill: Well, when oil drops that quick, everybody who was drilling
an oil well stops because there’s no point, and if they’re not
going to finish drilling the well or not start drilling a new one,
they don’t need what I’m selling.

Michael: Did you know it was over that day?

Bill: We knew it was over that day, and thirty days later, we
became fait de complait.

Michael: Had you done any planning anticipating something like
this?

Bill: I don’t know in hindsight that we could. Now, when I talk to
my students and I give a lot of business lesson, I talk to them
about political risk. I don’t know what I could’ve done to stop
somebody from OPEC from turning the valve the other direction, but
I didn’t even know there was a political risk involved. I didn’t
even know that was one of the possibilities.

Had I at least known there was a possibility, then I might have
gone to rule number three that I talked about earlier where always
diversify your financial holdings. I had not. All of my eggs were
in one basket.

Michael: Give the listeners one or two ideas for where you could’ve
had some of your other money that could’ve kept it save from the
failure of the business.

Bill: Absolutely, and it’s so obvious in hindsight. For me, I’m a
guy that made a lot of money in real estate, but when I got into
the oil and gas side of life, I liquidated all of my real estate
holdings, and moved all that money into my oil and gas business
because that’s where I was paying all my attention. That’s where I
was spending my eight hours a day, actually more like a twelve hour
day life.

If I had been smarter, I would’ve diversified and kept some of the
money in something else I knew something about, which in my case
would’ve been real estate. So, even though I would’ve gone broke in
the oil and gas business, and that oil and gas business might have
gone belly up and quit and not continued operations and as bad as
that might have been, I personally still would’ve had some money
left over, would’ve had some assets left over that weren’t included
in the collapse of the oil and gas company.

Michael: When you took over that business, you personally signed
for the liability of that company?

Bill: Yes, and when you’re starting a new business and you’re
unproven in an industry, that’s relatively the norm. That’s
relatively common, and if you can talk your way out of it and
negotiate your way out of it, that’s great, but most people can’t
early in their life.

Now, later in my life, I was able to negotiate, 3.1 bill
dollhairs worth of loans, all of them non-recourse, not just not
personally guaranteed, non-recourse.

Michael: Okay, so thirty days later, basically the company was
gone.

Bill: Yes, thirty days later, in other words, the company had
imploded. We did it peacefully and voluntarily with the bank, the
very bank that helped me get in the business was still my banker,
and I went into them, and when I saw the prices going from $40 to
$14, I said, “Guys, we’re in trouble. Let’s do this gracefully and
diplomatically, and with respect, and we’ll try to make this work
as good as we possibly can for both of us. You need to get repaid,
and I certainly want to have a life when I’m done.”

We worked together, the bank and I for the next 30 days, and we
liquidated everything. We liquidated the building, the facilities,
the furniture, the fixtures, the equipment, all of the stuff, and
when they were done doing the tally, I was a mill dollhairs in
the
whole.

Michael: You talk about in Inc Magazine your friends abandoned you,
your so called friends.

Bill: Yes, when you’re rich and famous and you’re riding high and
life is good and your billfold is fat and you can buy everybody
dinner and take them to nice places, it’s amazing how many people
you have around you who call themselves your friend, and quite
frankly, who naively, we think of as our friend.

Again, I’m not a bitter person. If I say this in a harsh or unkind
way, but mostly that’s a misperception by us that this people are
nice people and they’re good people and they’re kind people, and we
should love them, but we should never confuse them with who they
really are at the end of the day.

At the end of the day, they’re people who need and want to be able
to deal with their own concerns, not your concerns, which goes to
rule number two. So, as I said, when the crap hit the fan, all
these people who I thought were my friends vanished. They were like
smoke on a windy day. It still metaphysically still smoke, and it’s
metaphysically still there. You just can’t see it anymore because
poof.

Michael: Was it hard for you and Kathy?

Bill: The hardest thing we had then ever suffered because we
naively believed that these people really were our friends, and
that they would stick with us through as the saying goes thick and
thin, not just the thick part, and there were people whom we had
spent a lot of time with, had great relationships with, and thought
again, naively we really had a wonderful relationship, only to find
out they would cross the street to avoid running into us if they
were to se us coming down the street.

Michael: So, you had an opportunity to go bankrupt, but you choose
not to, why?

Bill: It was more than an opportunity not to. One of our creditors
was the very company that I mentioned previously that were trying
to do an acquisition, one of the companies that were trying to do
the acquisition on was in fact one of our creditors because it was
somebody we had been doing business with.

They then sued for an involuntary bankruptcy. They sued to put me
in bankruptcy.

Michael: What was the advantage of them doing that?

Bill: So, that I couldn’t acquire them. They were afraid that even
though that they didn’t want me to do the acquisition by the way
because they were afraid they were going to lose their job if I
acquired them, management would get replaced by management team,
and quite frankly, they’re probably right.

Michael: Would you have acquired them still if you did not file
bankruptcy?

Bill: Yes, if the bankruptcy cloud hadn’t been on me, but they were
smart. They really were. You’ve always got to respect a good
adversary, and these people were good adversary.

By suing me into involuntary bankruptcy, even though I ultimately
won and was not declared bankrupt, it took me three years to do
that. I had to go all the way the 10th Circuit Court of Appeals in
Denver to prove that I wasn’t a person that should be declared
bankrupt.

Well, that took me three years and essentially all of my finances
that I had left, which wasn’t that many, and all of my effort, my
energy, well, I didn’t have any time or money to go acquire
anybody.

Michael: Were you handling all of the legal stuff yourself?

Bill: No, I had a lawyer who was actually doing the courtroom side.
I did all the research. I did all the preparation. I did all the
brief writing. I did all of the material handling. I did 99% of it.
The only thing I didn’t do was stand up in a courtroom because I
shouldn’t.

Michael: So, for three years, what were you doing? If the company
wasn’t making money, what was going on for those three years?

Bill: Those three years, I was in my law firm’s law library doing
nothing but research. I was making sure that I didn’t lose because
it was the most important thing to me at that moment in my life. I
did not want to be in bankruptcy. I was just a kid growing up on
the wrong side of the railroad tracks, after a while you get a
little bit of pride of you. It’s real hard to get that pride back
out of you.

You’re listening to an exclusive interview found on Michael
Senoff’s HardToFindSeminars.com.

Bill: I was just a kid growing up on the wrong side of the rail
road tracks, after a while, you get a little bit of pride in you.
It’s real hard to get that pride back out of you.

Michael: Tell me about how when you’d walk around town and you’d
run into previous employees.

Bill: It was really heart breaking because I loved my employees,
and they loved me, and I mean that honestly and openly and in a
very manly way. It was that kind of relationship. We truly
respected each other. We may have had different pay grades, and we
may have had different duties, we may have had different titles and
maybe even driven different cars and lived in different sides of
the street or different sides of town, but we loved each other and
respected each other for who and what we were while we were at
work.

I had that bond with my employees that I respected them for what
they did for me, for what they brought, for what they contributed,
and I made sure they knew that. I made sure they didn’t have guess
it. I made sure that they knew it every single day, every single
way that I respected them and appreciated them. That doesn’t mean I
was going to suck up. That doesn’t mean I was going to let them get
away with murder. It doesn’t mean I was going to make their job
terribly easy. It just meant I was going to respect them.

When you respect people, that resonates with people. They get
that. They really, really get it, and the bond they will have to,
with and for you is supreme, and so I would meet former employees,
people who had lost their job at my company, who had hugged me on
the street, and there would be times, and it sounds really silly,
and any man that I had ever met would cry, would hug each other and
cry because we both missed what was missing, but really still loved
and respected each other.

Michael: Who was Jay Jones?

Bill: Jay Jones was a fellow I met during the pipe company days. He
had another business across town that was being liquidated, and he
showed up on my door step one day and needed a place to wind down
his business. We had been introduced informally by a third party.

I gave him a spare office. I gave him a spare telephone, and I
admired him for wanting to liquidate his business in a forthright
manner instead of just filing bankruptcy and skipping out of town.

So, he came to me literally twenty years ago, and just stayed. He
just proved his value, proved his worth and started contributing.
Pretty soon, he ended up on payroll, and pretty soon, he ended up a
significant part of my company.

For more interviews like this, go to HardToFindSeminars.com.

Michael: What was the transition between the pipe company and the
beginnings of you looking for new opportunities?

Bill: The transition really didn’t take the full three years that
it took me to go the 10Th Circuit Court of Appeals because you
can’t wait without working during a three year period.  You have to
go find something to do to pay the rent.

Since Jay Jones had been my associate, not a business partner, not
an economic interest holder of the pipe company, but a very good
and loyal employee, and he stayed with me during the downtimes. We
just talked a minute ago about how your friends vanish like smoke
on a windy day. Well, Jay Jones didn’t vanish. Jay Jones stood
right there along side of me.

Maybe because he was the only one that made him even more special
for me, so he became my best friend. He became my compadre so to
speak. So, he and I were both broke. We were both out of a job.
Neither one of us had any money. We didn’t have a pot or a window,
but we really kind of felt that we wanted to go do something
together, so we explored hundreds of ideas, literally hundreds of
ideas of how can we go make a living? What can we do? What skills
and attributes do we have that translate into a need in the
marketplace?

Everything from getting a string of hot dog vendor carts, and we
actuallydebated that one, and thank god we voted no on it, but
that was one of the ideas.

For more details on Bill go to

http://www.billionairebubba.com

Michael: Now, were you getting harassed by creditors?

Bill: Indeed because we had gone broke and although I had now
successfully proven I should not be bankrupt, the net result of
that was I wasn’t in bankruptcy. It didn’t mean I didn’t owe
anybody. I wasn’t officially bankrupt, which means I get to go to
the 10th Circuit Court of Appeals to prove I should not be in
bankruptcy, and the award, or the prize for winning that contest
was I get to be a mill dollhairs in debt.

You thought you were a smart guy. Why didn’t you just roll over
and make that mill dollhairs go away? That’s not the way I
operate. That’s not the way I think, and so I was a mill
dollhairs
in the hole, and because I refused to file bankruptcy and owed some
people money I couldn’t afford to pay, I was getting collection
calls all hours of the night from – it might be an exaggeration -
from every collection agency in America. It wasn’t quite that many,
but it seemed like it.

So, Kathy and I learned a lot about the debt collection industry.
Mostly, we learned what not to do.

Michael: How did the creditors treat you?

Bill: Well, it was so bad. They would yell and scream and threaten
and harass and harangue, and use profanity. Even our young
daughters would answer the telephone, they would say things like,
“Tell your deadbeat dad if he doesn’t pay up, we’re coming there.
We know where he lives,” and things like that. That macho bravo
bologna crap.

We would shake our heads and say, “Don’t they get it. Even if we
had money, we wouldn’t pay them now. They’re making us mad.” We
wouldn’t carry the logical conversation to the next one saying,
“Why doesn’t somebody do this right? Why doesn’t somebody do this
with dignity and respect?” You don’t have to be Pollyanna. You
don’t have to roll over and forget they owe you money. You can
collect from them.

Why can’t you collect from people using dignity and respect? With
the way  I talk about my employees, you don’t have to let them come
in late. You don’t have to let them leave early. You don’t have to
let them wear their hair long or wear stupid clothes to work. You
have the right enforce all the rules, but why can’t you do that
with dignity and respect? We asked the question aloud, and
essentially, the lightbulb went on.

Michael: What was the nature of the collection industry in the
United States at that time? Was it small shops? Was there any kind
of systemization to it? Anything good? Any success?

Bill: There would be marginal successes, very few. There were 6,000
collection agencies in America in 1986 when we started our company.
Most of them were Mom and Pop. Most of them were local operations
collecting bills for the local dentist or dry cleaner or grocery
store, or gas station who gave personal credit, and they were
essentially all small Mom and Pop kind of operations.

There were a couple, two, publicly held companies, but they were
very big, and they weren’t doing very well, and they weren’t being
run very well either. So, mostly the collection industry was kind
of – I wouldn’t say Stone Age, but it was really very backward.

Michael: Tell me about when you and Jay saw that ad in the
newspaper and what did it say?

Bill: A bank phenomenon occurred in the mid ’80s, and it was when
the Federal Deposit Trust Corporation started shutting down banks
that were becoming insolvent, which is part of what happened when
the oil boom went bust. Banks went right behind it.

The FDIC, the Federal Deposit Insurance Corporation, was in charge
of liquidating all of these “failed banks.” Well, when the bank
failure rate first started, the FDIC had enough employees to take
all the bad loans into his own house and sell off the good loans to
a new acquiring bank. The new acquiring bank didn’t want the bad
loans. They just wanted the good ones.

After a while, there were so many bank failure rates, the FDIC
could no longer take into inventory the bad loans because they were
bursting at the seams. With that, for the very first time in the
history of the United States, in Tulsa, Oklahoma in 1986, the FDIC
decided to advertise in the newspaper to sell some bad loans.

So, right at the beginning of an industry, the big bang theory,
it’s when you can still hear the noise going on. The FDIC put an ad
in the newspaper, and it was a typical government ad. I mean, they
were the same people paying $700 for a toilet seat so you don’t
expect too much out of them.

Michael: Was it in the classified section?

Bill: No, it was in the business section. It was a little block ad
probably a three by three, and it said, “Bad loans for sale,
contact FDIC.”

Michael: They wanted to sell it off to like the smaller collection
agencies to raise cash. What was their purpose of selling?

Bill: They wanted to sell them to liquidate them to raise cash.
They didn’t care who bought them. They just wanted to sell them.

Michael: So, you saw the ad. The first time you saw it, you didn’t
think much of it, and you threw it out.

Bill: Michael, the first time I saw it, bad loans for sale? You
don’t have to be real smart. It’s like a classic oxymoron. Why
would anybody in the right mind spend good money to buy bad loans?
It just was one of those non-starters. I laughed at it. I thought,
“That’s the stupidest thing I’ve ever heard in my whole life. Why
would anybody spend good money to buy bad loans?” It just didn’t
make sense.

I threw the newspaper away with a laugh. The next day, thank god,
they ran the same ad again, and I saw it the second day. I thought,
“No, it’s still stupid,” but I didn’t think it was quite so stupid
as I did the first day and threw the paper away anyhow.

The third day, I saw the ad again. Now, I’ve got three days to
think about, and the lightbulb went on. I said, “You know, if you
can buy them cheap enough, maybe there’d be an economic deal here
because maybe these people who are the bad loans, the ones who
aren’t paying, maybe they’re just like me and Kathy. Maybe they’re
honorable people, I mean honorable all the way up the 10Th Circuit
Court of Appeals to be not in bankruptcy, but still couldn’t pay my
bills.” Maybe they’re like us, and maybe they just need somebody to
work with them.

So, now, it became economic of saying, “Okay, they’re not worth a
hundred cents on the dollhair. That’s for sure, but maybe they’re
worth one cent on the dollhair. The more you get to the bottom, the
more value you can create in it.”

So, we negotiated a transaction with the FDIC that we bought a box
of loans for essentially three cents on the dollhair.

Michael: Your plan was to call and try to collect this money
yourself personally.

Bill: Yes, absolutely. I went back to the bank that I owed a
mill dollhairs to and borrowed $13,000 that’s what it cost me
for
this very small package of loans. We drove to Tulsa, Oklahoma,
picked up the box of loans, drove them back to Muskaga, Oklahoma,
set them on the kitchen table and literally started pulling the
file folders out one at a time with me on the telephone calling
each of the individual customers up trying to persuade them into
paying.

Michael: How did you get that bank to loan you $13,000 when you
owed a mill? Did you really think they were going to lend that
to you?

Bill: See, it’s reverse psychology. They had a mill reasons to
lend it to me. Only when you think about it on the reverse. See,
everybody else is walking in saying, “Oh my god, I owe a mill
dollhairs. They won’t like me. They’ll be mad at me. They’re going
to
think I’m a failure. They’re going to think I screwed up. They’re
the last people in the world I should ever try and borrow money
from. I should change my name and go to the bank down the street.”

That’s what most people would think. I thought the other way
around and said, “I owe them a mill dollhairs. They know I owe
them a mill dollhairs, and if I never get another job, if I
never
get another business, if I never get ahead I can never pay them.
They need to help me get ahead.”

So, I went back to them with that pitch, “Hey, I want to pay you,
but I can’t afford to pay you unless I get a business going. I’m
never going to be able to pay you. Here’s an idea that I think
could work, and it’s going to cost you a little bit of money to
gamble on me. If you think I’m worth the gamble, $13,000, then go
ahead and put the money in the pot and we’ll gamble. If you don’t
think it is, fine. Thank you very much. I have now tried to repay
your one mill dollhairs, and you told me no.” Well, they told me
yes.

Michael: That’s great. So, you bought this box of loans home. Was
it literally paper?

Bill: Yes, this was back in 1986, and everything is still on paper.
The industry was still in it’s infancy. There was no electronic
files. At least, if there were, there were no electronic files in
the banking industry. So, we literally had a box of paper.

Michael: What kind of loans were they? They weren’t credit card
debt.

Bill: No, they were consumer loans. They were people who had
purchased automobiles or boats or recreational vehicles or things
of that sort, things you’d use in a consumer environment, but they
had also went into default. So, the personal property that was the
collateral for the note had now been repossessed, which meant that
all we were really buying were the deficiency balances.

Michael: Was this the worse of the worst type of paper you could
buy?

Bill: Yes, it was mud ugly. It was double ugly.

Michael: Did you know what the collection industry out there
typically could earn back on that debt?

Bill: I knew what the competitors were doing, and the competitors
were getting five to six cents on the dollhair of this kind of
paper.
We were going to pay three on it, and I was pretty sure I could do
a lot better than the average guy because I just thought I was
going to do it different than the average guy.

Number one, I had a dynamic line for me that they didn’t. The
standard of the industry was if you were a debt collection company,
you didn’t really own the debt. You were just servicing the debt
for somebody else. It was only in your custody for maybe 90-120
days. So, if you were going to effectuate any recovery, you had a
very brief time window.

Well, if I owned the debt, I could spend a year collecting from
you.

Michael: I see, so because this was the very first time the FDIC
sold the actual paper. So, before that happened, they would just
lease the paper to a collection agency for a period, and was ninety
days about the maximum?

Bill: Yes.

Michael: So, they were rushed. They used pressure tactics.

Bill: Absolutely.

Michael: That’s probably where it all came from.

Bill: The old chicken egg theory,  yes, was it bad people or bad
ideas, and sometimes you can’t tell the difference.

Michael: So, you had an advantage. You had all the time in the
world. How old was the paper?

Bill: Most of it was a year and a half to two years delinquent.

Michael: So, you’ve got this paper in your kitchen and you’ve got
your phone. Do you remember your very first call?

Bill: Absolutely, it’s one of those things where I can remember
where I was when Kathy final saw the value in me.

Michael: Tell me about it. Can you bring me back?

Bill: Yes, I know the guy’s name. I won’t say it over the radio,
but he lives in Garden City, Kansas. I remember calling him up and
the way the script went, it wasn’t much of a script at all. It was
Mr. Blank, my name is Bill Bartmann. I purchased your loan from the
FDIC of Tulsa, and it shows according to our records that you owe
$4,378. Mr. Smith, what can we do about that?” That’s when I would
shut up. My script was now over.

There’d be a very, very long pause, and a very quiet moment, and
then eventually, he would say something, and he would most likely,
most people generically would say, “Gee, I don’t have the money. I
can’t afford to pay. My wife left me, or my dog died, or I lost my
job, or my baby broke his leg.” They come up with whatever story
they would come up with, and I don’t say story in fabrication,
story can be real. It can be really what’s going on in their life.

No matter what it is they would say, I would say, “Oh man, that’s
too bad. That’s really a shame that that happened in your life. Mr.
Smith, I’ll tell you what. Your life is really kind of chaotic
right now. Why don’t you take the next three months and try and get
your life back together, just forget about me? Just forget about me
for the next three months, and just go take care of your other
obligations, and I’m going to leave you alone for the next ninety
days. I’m not going to call you back, but on the ninetieth day, Mr.
Smith, I am going to call you back, and I’d like to be able to work
something out with you then. Would that be okay?”

Any fool in his right mind would say yes to that question.

Michael: And, they all said yes.

Bill: They all said yes. I’d say, “Great. Thank you. Then, I’m
going to call you back in ninety days, Mr. Smith, and I’m going to
remind you that you said that it’d be okay. Now, is that okay that
I remind you?” Of course, they’d say yes again.

Well, guess what? Ninety days to the day I’d call them, I’d say,
“Mr. Smith, hi, it’s Bill Bartmann. Do you remember when you said I
could call you ninety days from now? Is this a good time for us to
talk?” Mostly, it would be, and so on occasion they’d say no, can
you call me later? Can you call me tomorrow? Can you call me next
week? I’d honor that.

But, once I got them on the phone later. I’d say, “We’ve got to do
something about this obligation. So, you tell me what it is you can
do. I’m not going to tell you what I want. You tell me what it is
you can do, and if you can make it make sense for me, I’ll say yes
to it.”

That’s the first time anybody on that end of the phone ever had
the right and the power to negotiate, and that’s a pretty good
power. They took advantage of it, and they would offer to pay ten,
twenty, thirty, forty cents on the dollhair.

Michael: To pay it all off?

Bill: To wipe out the whole liability.

Michael: Did a lot of people want to just wipe it all out?

Bill: Yes, that’s a negative blemish on their credit rating.

Michael: You didn’t want to put them on payments.

Bill: Well, we did if there was no alternative. We’d prefer to have
even thirty cents on the dollhair right now, if fifty, sixty,
seventy
cents on payment terms.

Michael: So, the real leverage in people paying this off, of
course, is to not have that negative on their credit report.

Bill: That’s the pragmatic one, but psychologically and this is
going to sound like Pollyanna, and forgive me, Michael, people
really wanted to do the right thing. They really do. People are
good. They really are. Now, we can find anecdotal exceptions to the
contrary. There are some people who will knock your wheels off
every day of the week. They’ll hold your head down until your nose
bleeds.

There are people who wake up in the morning trying to figure out
ways to take advantage of you, but mostly, I don’t know what the
percentage is. I like to think it’s 90/10. Ninety percent of the
people in the world are really decent honorable people, if you give
them a chance to be decent and honorable. Most people don’t believe
that. I do.

Michael: That $13,000 investment, what did you turn it into?

Bill: I turned it into a $63,000 recovery, which the deal I made at
the bank to help them recover a mill dollhairs was that I get
the
first $20 grand for my operating expenses. They get the $13,000 to
retire the initial loan to buy the box of loans, and then anything
else above and beyond that goes to retire my debt. So, they got
$13,000. I got $20. That’s $33, and there was $63. They got another
$30,000 applied onto a mill dollhair debt.

Michael: Did you know you were sitting on a gold mine?

Bill: Not yet. So, I asked to borrow $100,000, and I went back and
did it again. By the time, I had done my second or my third one, I
knew it wasn’t a business. I knew it was an industry that had not
yet been developed, had not yet been started, did not yet exist in
nature, but I was riding the head of a comet. I was going someplace
where nobody had gone before, and I don’t mean that in a kind of a
egotistical way because it wasn’t me doing it. I just happened to
be at the right place at the right time recognizing an opportunity.

Michael: On the second $100,000 of debt that you got, were you
still a one man operation?

Bill: I had probably hired one other person.

Michael: Were you refining your collection methods during that
time?

Bill: We refined them, and I won’t say every single day. That would
be an exaggeration. We were perpetually refining the program.

Michael: Let’s say there’s a small business person out there
listening to this, and they’ve got people who owe them money. Give
them one or two techniques that you learned, especially in the
early days that could increase your chances on getting that money.

Bill: Respect. Call them up and give them respect. You’re in the
manufacturing business and one of your suppliers owes you money,
then the normal thing is you’ll have your secretary or receptionist
or somebody from accounts receivable calling them up, and always
saying in a nasally tone, “You’re late. Where’s the payment? When
are you going to be able to pay this?” That’s demanding.

It’s sinister. It’s negative. You’re sending all the wrong
signals. You have every right to say that. The person really does
owe you the money, but is it about the right or the outcome? You
probably will have more outcome than right, then why don’t you as
the principle of the company call that person up yourself and say,
“Hey Joe, I know times are tough right now, and I see my accounts
payable people just sent me a memo that you’re 90 days late on your
account. I know you owe, but there must be some really bad things
going on. Is there something I can do to help?”

Michael: Were you using any direct mail at that time?

Bill: No.

Michael: Was the industry using it?

Bill: The collection industry was, and I thought it was a waste of
time and a waste of energy.

Michael: So, you choose against direct mail.

Bill: We didn’t use it ever.

Michael: You guys were averaging about 48% net profit on what you
guys were collecting, which was unheard of in the industry. So, I
wanted to talk about what made CFS so good at collections.

Bill: There were actually several dynamics that caused that giant,
giant margin to occur, and that margin is almost an anomaly in any
industry, but a couple of things, and I’ll talk about them in
order.

There is firstly, this concept of the first mover, and the first
mover in a particular industry is the one who gets out there first
and ends up with a brand new or different way of doing the old
thing, and to that person, they say is the pioneer goes the spoils.
He who gets there first gets the most, and we got there before
there was any competition.

So, the law of supply and demand was way out of balance. There was
not much competition for the industry because quite frankly, we
were first. We were the only people in the playground so to speak,
so the margins were gargantuan in the early days.

Now, in reality, the margins did shrink in later years when new
competition came into the industry and created some pricing
competition, where we had to begin to pay a bit more for our
inventory than we were paying even in the early days.

Michael: Now, was this from the FDIC, you were paying around three
cents on the dollhair. How high did it go?

Bill: This is where you have to be really careful so you don’t
sound like your saying something stupid. There were different
grades or quality of paper products. Some of the loans were very,
very old and very hard to collect, and some of them were more
recent and more fresh, and therefore easier to collect.

So, the pricing would modulate severely between one and the other.
As an example, really the old debt would be worth a penny or two or
three. That’d be debt that was maybe four, five, six years old, and
nobody had a payment during that period of time.

Debt that was only ninety days old could be worth 45, 50, 60 cents
to purchase it because you’d still be making a reciprocal assuming
you collect it.

Michael: When you first started, the very first debt you bought,
what quality paper was that?

Bill: It was a mud ugly. It was the junk on the bottom of the
barrel. It was the worst of the worst. It was the ugly of the ugly.
I mean, I can’t think of any more ways of describing it, and for
good reasons.

It was the very first loan inventory ever being sold by the FDIC,
and like all governmental agencies, they are bureaucrats to the
core. So, their way of beginning a sales vehicle was to sell that
which there could be no penalty for making a bad decision. In other
words, selling something that was essentially worthless.

Michael: Did they eventually have better paper, the FDIC?

Bill: Indeed, they did, and what the FDIC over the course of the
years, we began buying better paper, and towards the end of the
ride with them, which was then in the late ’80s, early ’90s, we
were paying as much as thirty-five cents on the dollhair, but
again,
these were loans that were clearly more collectable and less aged
than the material we bought previously for pennies on the dollhair.

Michael: As the new paper, the better quality paper became
available, did you shy away from the mud ugly paper, or were the
margins comparable because you could get it at such a reduced
price?

Bill: The margins remained comparable, so we continued to invest in
the tertiary paper as they called it. There’d be primary paper,
secondary paper and tertiary paper. Primary paper meaning it had
only been to one collection agency, and something went bad. The
secondary paper means that it had gone to two different collection
agencies in succession and went bad. Tertiary means it actually
went to three different collection agencies in succession and went
bad.

So, what the really means for tertiary paper is four people the
primary issuer beat on it for a while, gave it to a primary
collector. They beat on it for a while. Assuming they didn’t
collect it, it went to a secondary collector. They beat on it for a
while. Then, it went to a tertiary or third collector, and they
beat on it for a while. So, it really had been beat on by four
people before we bought it. So, no wonder it was so cheap.

Michael: How systematized did your company become?  You talked
about a summit where you got a bunch of people together and you
came up with this 200 page systems manual, and also you’re CFS
University. Can you talk about this systemization of a company and
how important that is for profitability and success?

Bill: Absolutely, and it is crucial, and again, because we
recognized we were the first mover. We recognized we were getting
in early. We recognized we were going to get the fruits of the
spoils if we got the first, if we were correct in our assumptions
that this was even a prudent investment to make.

We also knew intelligently that we couldn’t hold onto that margin
by being the first mover forever. We knew the laws of supply and
demand. We’d find balance, and it always, always does. So, we knew
that while we were reaping these giant windfalls upfront because of
the first mover position, we needed to take the money and reinvest
into the company and create systems that would then make us so
efficient that even when the pricing margins began to narrow, when
the competitions started raising the price, then we too would have
to pay more for the product that we would be able to collect it
more efficiently than what our competitor.

So, if our competitor and we both paid the same price for the
product, but we could collect it at 2X, and they could only collect
it at 1X, or it only cost us half x and it cost them one X, either
one of those variables worked. We had both variables.

The systems we created, allowed us to collect more that our
competitor, so we were getting 2X to their one X, and our systems
allowed us to do it more efficiently. We were only spending one
half X against their one X to produce the results we respectively
were producing.

So, at the end of the day, because of our systems, we were running
at one and a half X to our competitors. Well, that’s a wonderful
place to find yourself.

Michael: What did it cost to put these systems in place in dollhair
terms?

Bill: They cost a lot. They cost a lot of human capital. They cost
a lot of intellectual capital, and over the course of the thirteen
years of our company, they did cost a lot of economic capital as
well, but probably the first greatest expenditure was in our human
capital and our intellectual capital. It was having the discipline,
and I don’t think it’s anything more than that, just the discipline
when we recognize that which I just described that we were not
going to be able to retain the first mover position for very long
or as long as we wanted.

So, we needed to have a replacement and a substitute for that we
actually sat down and said, “Okay, we have to create systems that
will take us there.” When you sit down to create systems, it isn’t
something like having a coffee party or a tea party or even a pizza
and beer party that you’re going to be able to sit down, write a
few notes, laugh and giggle and everybody go home.

No, this is where you literally have to dissect everything. I
mean, it’s a bit like doing a postmortem. You’re taking this
cadaver apart. In this case, we were taking apart our company. We
were looking at every single system within our company – how we
answer the telephone, how we open the mail, how we file papers, how
we collected loans, how we did our bookkeeping, accounting, there
was nothing that we did. There was not one single function within
our company that we didn’t tear apart and analyze with the question
of why are we doing it that way? Is there a better way to do it?

Most people never ask that question. They just instead keep on
doing what it is that they’re doing, assuming number one there
either is no other way, or the way that they’re doing it is pretty
good, or good enough.

We found out some remarkable things, some of which were extremely
counterintuitive that we would have never discovered but for this
rigorous discipline that we put ourselves through. So, as you
mentioned, we ended up creating a 200 page document that codified
our systems within the organization.

Now, over the course of time, that document actually grew larger.

Michael: Great. How soon did you realize that the FDIC paper was
running out, and what did you do as far as a company looking for
new bad debt to acquire? Where were you looking for to new bad
debt?

Bill: We saw the FDIC coming to an end because we had our feelers
out. We had our radar on. We were always anticipating what could go
wrong. We were very, very strong proponents in the concept of
strategic planning, and part of the strategic planning process is
literally anticipating what might go wrong, what bad thing might
occur and what would be your contingency plan in the even that were
to occur.

So, even during the height of our glory with the FDIC, well, the
money was rolling in and the inventory was ever present and life
was great, we were already asking the questions of how will it
begin to look if this inventory ever started subsiding? How will it
begin to look if we ever have to worry about the FDIC going away?
We knew if the FDIC went away, if they quit selling us product,
they were our sole source of inventory, that if they ever went away
and quit doing business with us, that’d be calamitous.

So, we had to assume it could only happen one of two ways. One is
we did something really, really stupid bad wrong that they would
then choose to not do business with us, or two the climate would
change politically or economically to cause – to not have inventory
available for reseller.

So, having this early warning radar system, and that’s really what
did the magic. It wasn’t that we were really smart. We had an early
warning radar system, and the early warning radar system started
picking up changes within the FDIC in terms of the volume and the
regulatory of which they were offering material. We had monitors to
measure how many bank failures were occurring overseas and over a
geographic area, and we began to detect the rate was slowing,
almost inperceptable to the public eye. We could see some changes.
We could see there were some dull weather signs here that inventory
was going to decrease.

It probably wouldn’t decrease appreciably for the next twelve
months. Then, thereafter, it would start depreciating just
incredibly fast. Well, seeing that and seeing it twelve months
before anybody else saw it coming, it allowed us to position
ourselves differently.

So, we then went to a secondary source. We went to this other
federal agency called Resolution Trust Corporation because if you
could imagine the FDIC on a bell shaped curve, they’re coming up
towards the top, towards the crest of the bell, and they were still
at their zenith, but if you look over the top of a bell, you’ll see
it’s a roller coaster ride down.

The RTC was just beginning as an agency, so they were at the
bottom of that upslope, and so we thought, “Aha, this would be a
great time for us to shift some of our resources away from FDIC,
which is the mature business, and begin to refocus them over on the
RTC,  because they are just beginning to ride up.” Lo and behold,
the RTC is kind of a mirrored image of what we found original with
the FDIC, ergo no competition.

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Michael: In a nutshell, who were they? What did they do, RTC?

Bill: The Resolution Trust Corporation was set up by the federal
government to dispose of the assets from failed Savings and Loans.
So, they were different from the FDIC only in the type of loans
they dealt with – the FDIC dealing with banks and bank loans for
mostly consumer and commercial loans. The RTC dealing mostly with
savings and loans were predominately real estate loans, sometimes
very large commercial real estate loans as well as single family.

Michael: So, you started buying their paper, and how did the price
compare to the FDIC?

Bill: It was a stepped up price compared to what we found on day
one of the FDIC because of the market. Although it wasn’t as
vigorous on the RTC side, at least the concepts had already been
proven. So, competition started moving in more quickly than it did
the first time at FDIC. So, the pricing started at the 20-25-30
cent level.

Michael: So, this was eating into margins as competitors came in.

Bill: Yes, and we literally then had to face not Mom and Pop people
like ourselves in the early days, literally a kitchen table
beginning, but now the new guy in the street might be Morgan
Stanley or Bear Stearns or Paine Webber.

Michael: Let’s talk about maybe these declining margins created a
need for more money and how you created this novel financial
instrument called securitization. Can you explain that and how did
that become?

Bill: Actually, that’s a third morphing because as the RTC got to
the top of its bell shaped curve, again the warning signs went off
actually before it got to the top of the bell shaped curve. The
warning signs went off, and by then the RTC was already down the
back side of their slope, and they were going into oblivion.

Now, we’re sitting on the top of the RTC curve, and we knew what
came next for them, and so now we had to make a third transition.
We went from collecting FDIC loans to collecting to RTC loans, and
now we’re having to making our third life transition as a company.
We said, “We need to be somewhere else. There is no longer an FDIC
to buy from. They’re pretty much gone, and RTC is going to be
running out quickly. Where do we go next?”

Michael: Credit card debt?

Bill: Yes, and so we looked out on the industry, and we said,
“Okay, what kind of debt is out there.” This is back in the early
’90s – ’91 probably, and credit card debt was just beginning to
become an issue, but the problem we ran into Michael was no bank at
that moment in time had ever sold their bad loans. They’d never
sold their charged off credit card loans. Remember, all the
inventory we were buying previously came from federal agencies that
had shut down a financial institution.

So, anyhow, we then had that desire and a need to be somewhere
different. We saw some product, but we ran into this brick wall of,
“Yeah, well no bank has ever sold your credit card loans. What
makes you think you can talk them into selling them?” So, that was
our first challenge, and it was a great challenge.

We accepted it and said, “Well, what would it take to make them
say yes.” Nobody’s every asked. Nobody knows what’d take to make
them say yes, so let’s play banker. What would it take to make them
say yes?

We went through a concept that later became known as outsourcing,
which isn’t that clever, but it didn’t even have a name on it when
we thought of it. We thought, “Well, what if we could persuade a
bank to sell us all of their bad loans as soon as the bad loans go
bad. We could do it at a price that’s economical for the bank
because it’s what they used to be able to collect minus the cost of
their own collection staff, and now the bank if they were to say
yes to this outlandish proposition that no one’s ever done, then
the bank wouldn’t have to have all those collection employees on
salary and on staff, which is the argument for outsourcing of
anything.

Michael: How inefficient were the banks?

Bill: They were banks. By definition, they were inefficient, and I
don’t mean to say that in a negative way. I’ll say it in an honest
way. Banks make their money off of good loans. Banks make their
money with the promise of  a certain percentile of the loans that
they make will in fact go bad. If they are not achieving that
certain percentile of loss, then they know that they’re not being
aggressive enough.

In other words, they have a mindset that they expect a certain
percentage of loans to go bad, and will push until they get to that
certain percentage. They then as bankers take that as a risk they
assumed upon entry into the industry. It’s acceptable. It’s normal.
It’s regular. It’s exactly what their peers are suffering, and at
that point, they literally don’t care about those loans. Because of
that mentality, they spend little or essentially no money trying to
collect those loans efficiently.

Michael: So, would they come off better collecting them efficiently
compared to just writing it off as bad debt?

Bill: Yes, they would have to write them off as bad debt, that’s
just an accounting process. That doesn’t mean they don’t continue
to try to collect them. They have to write them off their books for
their GAAP accounting at the end of their 90 or 120 day window
where they had no previous collections.

Once they write them off, most financial institutions would then
endeavor to collect them, but remember, collections are three
percent of their 97% business. So, they didn’t put much energy.
They didn’t put too much resource. They didn’t put their highest
paid, best qualified people in charge of that department. They
usually put their lowest paid, least qualified people in charge of
that department, and they didn’t have much of a standard of
expectation.

Well, when you create a business with low expectations, you end up
with low results. So, they end up with low results.

Michael: So, how’d you do it? How’d you get the first one to say
yes?

Bill: The very first one was Nation’s Bank. So, we didn’t even
start small. We started big. We went to Nation’s Bank, and we had
done the economics. By virtue of our background with the FDIC, I
had been over 800 failed banks. So, I did know a lot about banks,
and I understood how they were put together, how they worked, how
they thought, how they did their business, and I was no expert. I
never want to call myself an expert on anything.

I had now been in over 800 failed banks in the course of the last
five years, and I’m a reasonably studious fellow, not a very smart
guy, but I do pay attention, and I paid a lot of attention to how
banks work. So, I learned a lot about how banks regulate and how
they run their business. So, I appealed to that interest.

So, I went to Nation’s Bank. I went to Charlotte, NC, and sat down
with the head of their collection department and explained to this
individual the economics. I said, “Here’s the deal I will make you.
I will buy your charged off debt loans, and I will agree to buy
them into the future, and I will buy them every  month from now on,
which means if you can take comfort in the fact that I have the
capacity to do that, two good things happen. One you get a
guaranteed result, and a guaranteed return every single month, no
longer variable by how good your collectors are. You won’t have any
peaks or valleys. You’ll have guaranteed constant number that you
can plug into your bookkeeping and accounting.”

That’s a big deal to a bank. “Then, secondly, you’ll be able to
remove essentially all of your collection staff because you won’t
need them anymore because essentially you have outsourced all of
that.”

Those were two really good things for this banker to hear. They
had predictability of collections vis a vis by sale, not by
collection, and they were going to be able to save all this stuff
called salaries, benefits and perks, and not have the headache and
the hassle of the large staff.

Now, the only problem is I didn’t have any money, which takes us
back to the securitization thing to say, “Okay, you now have made a
promise to Nation’s Bank that you’re going to buy all of their bad
loans. You’re going to buy them every month from now on, but you
don’t have any money.”

Michael: How much would’ve that cost?

Bill: In those days, Michael, it was relatively small. It was
probably a mill dollhair a month commitment. By the time CFS hit
its zenith, we were at fifty mill dollhairs a month.

Michael: So, you needed money. Tell me how did this idea of
securitization, how did you come up with this?

Bill: I didn’t really come up with the idea. I just took an idea
and changed it. I don’t think I’ve ever created anything new in my
life. I just take two things that exist in nature, and twist them a
little differently and kind of juxtapose them and sometimes it
looks like a Picasso painting or one of those bizarre world
characters, but that’s how you – at least in my case, that’s how I
made essentially all of my money. I just change reality.

So, I looked out there, and I saw there was a thing called Fannie
Mae and Freddie Mac and Ginnie Mae, and they were securitizations.
We didn’t create the term securitization. We created a kind of
securitization, a brand new kind of one.

So, Fannie Mae and Freddie Mac and Ginnie Mae had been doing it
for essentially fifteen or twenty years where they were taking
large pools of loans, putting them into one package so to speak,
and then they would sell interest or rights to that package to a
thousand if not mills of people. That way no one person would
take a big loss. Everybody would share in the results, reward and
quite frankly the loss if there were to be one, but mostly they
were rewards.

The only difference between what they were doing and what I had to
go do, is that they were securitizing or pooling together
performing real estate loans that were adequately capitalized and
adequately secure. So, if they were putting your house into this
loan, your house loan, they wouldn’t do it unless the appraisal for
your house exceeded the obligation on the house.

So, essentially, these were no risk assets going into this pool,
where Michael is paying every single month, and he had a great
payment history, and  by the way if Michael were to quite paying,
we know the appraisal – or foreclosure to sell it for more than
Michael owed on it.

Michael: They were secure. Yours was an oxymoron.

Bill: It was like a double oxymoron. My customers hadn’t paid
anybody in one, two, three, five years, and they were credit cards,
ergo there was no collateral whatsoever.

The two things that Ginnie Mae and Freddie Mac had we didn’t have
either one of them. We didn’t have performing loans, and we didn’t
have the collateral.

Michael: What did the first bank say to you?

Bill: The first nine, we went to nine different investment bankers
and they told us we were stupid. They told us it was crazy. They
told us it could not be done. It would not be done. It would never
be done. They gave us all of their good reasons why this is the
stupidest thing they ever heard in their entire life.

Michael: Then, finally Bank One.

Bill: Bank One Capital Corp out of Ohio, I don’t know who they
merged with, probably Chase by now or JP Morgan. I actually went to
them because they were aggressive. They were young and restless as
they would say in the industry, and we have lots of data – I’m a
data hog. I’m an analyst by nature, I think, and I love data. So, I
went to them with all the imperics and said, “Look, nobody has ever
done this. It’s never been done in history, but look at the data.
The data tells us it can be done. Statistically, X number of people
will pay over Y amount of time.”

I’d have data points to establish that now, and I’ve got enough
data coming in that eventually this is going to become actuarial.
It will become so finitely predictable that you’ll never be able to
tell whether Joel is going to pay or Bob is going to pay or Tom’s
going to pay, but as a pool of people, you’ll be able to know.

Just like gambling in Las Vegas. It’s not a gamble for the casino
owners. It’s actuarial. Now, they don’t know who’s going to win and
who’s going to lose, and they don’t even know how little or how
much an individual will win or lose, but they can predict
relatively finitely what their losses or wins are going to be over
a certain window of time, just like insurance companies do with
automobile insurance of life insurance.

Nobody gathered that kind of data for collections. Well, we were
slowly gathering it. We weren’t quite there yet in the early days.
We got their by the end, but in the early days, we just had enough
number one, to prove we needed a concept and two is have enough
data to support the concept.

So, we went to Bank One Capital Corp and were able to persuade
them to try to help us create the very first non-performing loan
securitization, and fourteen months later, we succeeded.

Michael: So, they opened up the door for other banks to do the
same, and then soon you had how many different banks offering you
their bad credit card debt?

Bill: We ended up with, and I don’t remember honestly the exact
number, but I thin it was 21 of the top 25. So, we had 51% of the
US market. Now, back in those days, there were about 4,000 banks in
America. It’s the old 80/20 rule. Eighty percent of the money is in
twenty percent of the institutions.

We ended up with 21 of the top 25 banks in America under then long
term, forward flow exclusive agreements that they were committed to
sell to us and us only a certain inventory of product for a very
long period of time. It gave us a veritable market block that kept
even Jack Walsh in General Electric out.

Michael: Was the amount of credit card debt just staggering? Was it
enough to feed you guys for many years?

Bill: Indeed. It continued to grow, and even today, it’s still a
growing phenomenon. Where it will end, God only knows, probably in
calamity, because it’s just the way things like that work.

It was growing so fast, that it just worked in our favor that the
inventory kept increasing and the banks were finding that even
though it was only three percent of the total institution when it
was a small piece of their business now, that credit cards are
becoming a bigger piece of their business. It’s not four percent,
five percent, six percent, and we actually saw during the mid-90s,
charge off rates in America grew as high as ten percent. Now, when
that happens, that takes some of the giggle out of it for the bank.

Michael: Just for time references, we’ve got to speed ahead. I want
you to tell me what happened on October 15th, 1998.

Bill: That’s certainly a bad day in my life. October 15th, 1998,
one of the rating agencies, I believe it was Duff and Thalps, we
had done this for all four rating agencies, contacted us to tell us
that they had received an anonymous letter that had indicated that
my former business partner, a fellow by the name of Jay Jones had
committed a crime.

Now, Mr. Jones had been my business partner for twenty years. He
had been my best friend for twenty years, and he’d been out of the
business essentially for the last two years under my buy sell
agreement I executed with him thirteen years earlier, but they were
accusing him of having done some “insider like transactions,” and I
just knew that couldn’t be so because this man was my best friend
and a good man in my humble opinion.

So, I said, “I don’t think that’s true, but I’ll go look into it.”
So, we looked into it that afternoon, that evening and the next
morning, and sure enough, much to our disappointment and chagrin,
we could see some evidence that Mr. Jones was in fact involved in
doing something that later we were able to learn turned out to be
quite criminal.

Michael: What did you do? Did you remove yourself from the company?

Bill: I did indeed. I did several things Michael, and I did them in
rapid fire succession trying to save the company. This is my
company. I owned eighty percent of it. We had built it up from the
kitchen table, and I knew that it was all built on trust.

We were borrowing fifty mill dollhairs a month from Wall
Street.
It was staggering what we were doing – 1.6 bill dollhairs of
bonds
outstanding. We were a privately held company that was clearly
living in a very publicly financed arena, and trust is everything
and confidence. So, I knew that if they, Wall Street, got nervous
about what we were now seeing my partner having done, that that
could be the death nail for our company.

So, I fired our accounting firm. I fired our law firm, and I fired
our investment banker because I was afraid all three of them may
have had some complicity with my former partner. It would be real
difficult for him to do what he was doing without somebody
noticing, and everybody was acting like the three blind monkeys.
They just didn’t see, didn’t hear, didn’t say anything.

So, I fired all three of them, and replaced them all on day one,
and then I hired James Walsey. James Walsey was the former director
of the Central Intelligence Agency, and he had been on our board,
was actually on our board of directors at that time.

I asked him to take over the investigation because my theory is
quite obvious that if you get somebody of that stature, somebody
who has been approved by the senate three times, he was the
secretary of the navy, and my god, this guy is above reproach. If I
can get him in charge of investigation, that will end any anxiety
on Wall Street.

Well, I then went to the next step to make sure that they had
nothing to worry about that I would resign. I would resign within
the next thirty days, allowing Mr. Walsey to conduct the
investigation. During that interim, we would have an interim board
and officers running the company in my stead, all with the
supposition that we’re going to find out that my business partner,
my former business partner had in fact committed a crime, but it’s
a relatively small and almost inconsequential or insignificant
crime vis-à-vis the size and the dept of our company.

Well, that was a great theory, Michael, but it didn’t work. When I
had resigned, it created the opposite reaction.

Michael: It made you look guilty.

Bill: Yes, see I did it thinking I’m going to impress upon these
guys. I’m going to convince them that I am so innocent and so
righteous and so sure that we’re going to come out squeaky clean,
but for whatever little blip on the screen my partner had actually
done, that they would have all this confidence. I believed that. I
really thought that.

I can’t tell you how wrong I was because with my resignation, an
entirely different reaction happened, and that reaction was well,
look, he must be guilty. He’s running for cover.

Well, I didn’t run anywhere. I stayed within the company, and went
to a dollhair a year salary, but I stayed on every single day to
help
and facilitate, but I removed myself from executive power so I
couldn’t be involved in any cover up.

Michael: How many years later did they indict you?

Bill: Four years later. That was 1998, and in 2002, December of
2002, they indicted me. I was there for 2001, if you remember when
Enron, WorldComm, Tyco occurred, and I had been a public figure.
They couldn’t not indict me. So, they did. They indicted me on 57
felony counts.

Michael: How many years would you do?

Bill: Under then, the federal guidelines was over 600 years. I
don’t know if you know your Bible, but that’s more than Noah, Moses
and Abraham – no where in that book will you find a guy named Bill.

Michael:  Before those four years, before the indictment, what were
you doing during that period of time?

Bill: Well, the first year after CFS collapsed, I really can’t say
I did much of anything. I stayed home a lot, and I dabbled in a few
business deals. I owned a motorcycle, and I rode it frequently
because it was one of those period of your life that you go through
that it’s almost surreal.

You wake up every morning wanting to pinch yourself. This really
can’t be happening, but this really can’t have occurred, that
surely you’re going to wake up tomorrow and it’s going to be
different. It’ll be back to normal.

I spent a whole year just kind of chilling out as they would
lovingly refer to it.

Michael: Did you get depressed?

Bill: Depression is a tough word, and I’m sure not ashamed of it or
afraid of any word. I think I went through severe anxiety. I think
I went through a lot of what happened? How did it happen? I don’t
think it reached anywhere near – I know it didn’t reach clinical
depression because I’ve never been medicated or anything like that,
but again I certainly would tell you if I had.

It was never that because I always knew I’d come out the other
end. I always knew I was going to be okay. I always knew I was
innocent, and that gives you a lot of comfort and a lot of strength
at the end of the day.

Michael: They froze all your assets. So, you’re basically broke.
The government froze your assets during the indictment.

Bill: That is absolutely correct, and when they freeze your assets,
they literally take away your checking account, your savings
account, your capacity to sell any of your real estate. They
glommed onto my income tax refund, the whole nine yards. So, you
literally are just locked down, and that’s appropriate for people
who are accused of a financial crime because in essence finances
have been locked down, almost always a result of the company you
work for.

So, if indeed, you were guilty of committing a financial based
crime, then that is the fruits of a crime.

Michael: Bring me up to the trial. How long did the trial last? How
many witnesses?

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Bill: Well, let me give you a little preface to that. On morning of
trial, they offered me a misdemeanor. On the morning of trial, they
said, “Bill, your charge is 57 felony counts and about 600 years in
prison, but we will offer you a misdemeanor.”

Michael: What was the misdemeanor?

Bill: They told me I could get one, and they said it in blunt
terms. Well, you have to admit you did something, and if you admit
you did anything, we’ll let you go. You don’t have to wear a
bracelet. You don’t have to be like Martha. You don’t have to go to
jail. You won’t be on probation. You won’t have to pay a fine, but
you have to admit you did something, and if you’ll admit you did
anything, we’ll give you a misdemeanor count and we’ll make all 57
felonies on the trial go away.

Michael: You took it, right?

Bill: No.

Michael: What, are you crazy?

Bill: Yes, I am crazy. My dad taught me a lot of things. My dad was
a janitor. He had a third grade education, and wasn’t a very
educated man and sure wasn’t a very sophisticated man. He taught me
a lot. One of the things he taught me as a youth literally, was
nobody can make you quit. You have to do that all by yourself.

Those are pretty profound words, and they rang true inside my head
that morning. So, Kathy and I, my wife of thirty-three years who
has been with me through all the thick and all the thin, we sat
down and had to make a really tough decision. Do we take this
wonderful deal, but  have to admit to something you really didn’t
do, that would be quitting, or do you fight the federal government
with no money in your pocket and no reputation and no integrity and
no character left because they’ve taken all that away.

We really knew there was only one choice, and the choice was we
had to go to trial.

Michael: How long did the trial last?

Bill: The trial lasted 89 days. The government called 53 witnesses,
introduced over a thousand exhibits, and we didn’t call any
witness, and we didn’t produce any exhibits, but we did cross
examine one of theirs. They had a fellow from the US Treasury
Department who was testifying as to the actual date that was put on
a piece of paper because that was going to turn the whole trial.

This was a buy-sell agreement between me and my partner, and the
government was making the allegation that that document was created
after he did his dirty deed. The sale was done as a form of a
cover-up. Obviously, my contention was that no, the document was
dated two years earlier as it says on the face of the document.

Well, the treasury department, they’re the people that do our
money. They’re in currency, and they know a lot about ink and paper
and currency. So, they did the forensics. I knew what the answer
was because it was put on there two years earlier.

Well, this guy kept testifying that he thought it was put on there
afterwards. He kept saying evasive words like, “Well, I think, and
I would think maybe, it might look like,” he never said it
definitely. The more he kept saying it indefinitely, the more the
red flags were popping up.

When it came our turn to cross-examine him because this is on
direct examination that he wasn’t being very firm, when we did him
on cross examination and we literally, as I say, beat him on the
shoulders like a Mexican piñata at a birthday party, and we did
everything we could to shake the fruits out of him, and on the
third day, he finally admitted that two years prior to my
indictment, he had issued a written report to the justice
department – he’s with the treasury department – and they sent him
documents, and he sent a written report back saying to them in his
opinion, the odds were 60 mill to one that that date was put on
there two years before the crime.

Michael: And, that did it. That got you to win the trial.

Bill: Yes, the jury heard that and rolled their eyes, and acquitted
me on all 57 counts.

Michael: That’s great. Tell me about your attorney who was on
morphine while he was defending you.

Bill: Yeah, and like I said, I couldn’t afford any civil lawyer. I
had my money locked up which put Kathy and I into bankruptcy, but
my finances were equally as limited on the criminal side. So, the
lawyer I wanted to hire was a fellow out of California. His name
was Wayne Phillips. He was the youngest US attorney, and youngest
federal judge now back to practicing law. He was really smart.

I thought if anybody can prove my innocence, it will be him. Well,
he wanted more money that I could afford, but he gave me a
referral. The referral he gave me to was to a fellow former US
attorney named Pat Ryan. Pat Ryan is a lovely man, and a great,
great lawyer and a good person, but Pat also suffered a lot of
physical ailments, so many, and I don’t even know all of them, that
he had a prescription for morphine.

So, everyday during trial, around ten o’clock, he would ask to go
to the restroom during our break and shoot himself up with
morphine. It was all prescribed, and it was medically authorized
and it did him good. Again, I love Pat Ryan. Without him, I
wouldn’t be talking to you on the phone today unless there was
three inches of Plexiglas somewhere between us. So, don’t ever hear
me say anything negative, but you can’t imagine the look on my face
when I see him walking out of the bathroom and his eyes look like
silver dollhairs.

Then, he would have to go and do some cross examination, and the
rest of my 600 years are going to depend on how well he did it. Oh
man, that would be enough to scare the bejeebers out of you.

Michael: Now, tell me the situation because you were a subchapter S
because of the laws with that, was that the reason why you ended up
with a $20 mill judgment against you in the bankruptcy course?

Bill: It is exactly. We were a subchapter S corporation, which
means the corporation really doesn’t have taxes. The shareholders
have taxes, but because it is just that. We had gone in the early
days, the very early days, had gone to our lawyers and our
accountants and our Wall Street bankers, and all the people who hit
too opine, we didn’t have any outside shareholders, and said, “This
is the way we want to do it. We want the company to pay these
taxes, and they can debit us against our shareholder accounts.” It
isn’t like they’re giving us for nothing, but they won’t be the
ones actually writing the check for the taxes that are then because
the taxes are also of corporate earnings.

Everybody agreed. Everybody signed up. Everybody said, “That’s
wonderful.” The IRS even said, “That’s copasetic. That’s exactly
the way it should be done. That’s okay.”

When we ended up going bankrupt, in bankruptcy, the bankruptcy
trustee had some really strange powers, and one of them is they can
undo a contract. So, even though we had a contract between me and
my wife and our own corporation that the taxes should be handled in
this way, he could undo, and did undo, that contract. Once he
undid, there was no contract.

So, then he could say, “Well, Mr. Bartmann, who paid these taxes?”
I would have to say, and I did, “My corporation.” He said, “Aha,
have you repaid them?” I said, “No, I have not, nor do I have an
obligation to.” “What do you mean you don’t have an obligation to?”
“Well, I have a contract that says” “No, you don’t. No, you don’t
have a contract.”

There I am in this catch-22 where I have to admit that my company
did pay my taxes, but I don’t get to testify the rest of the
sentence.

Michael: Tell me about 877-Blow-Whistle.

Bill: Kathy and I created a private foundation, a 501(c)3, a tax
exempt foundation to help people do what could’ve saved our
company. In other words, if I want to create a whistle blowing
organization, a whistle blowing foundation that allows people to
report crime inside their own company. The reason I did that is
because it cost me $3.5 bill because nobody in my company told
me what my partner was up to.

Now, I don’t know how many of them knew, and I don’t’ think any of
them knew he was doing something illegal, but I think there were
many people who testified at trial that they were concerned about
what they saw him do, and they were nervous about what they saw him
do, and they had some anxiety over what they saw him do. Every one
of them testified they never told anybody. They never told anybody,
but they came into a courtroom and said that they had had these
earlier feelings.

Now, whether they really had those earlier feelings at that
earlier moment or those are things that people think at time of
trial to satisfy some urge or another. I’m not really sure, and
I’ll never really know the difference.

But, assuming they’re all telling the truth, assuming they’re all
credible, assuming they’re all sincere, then those people, any one
of which had come to me and told me that I might have stopped what
he was doing before the train wreck. If I could’ve stopped him
before the train wreck, maybe 3,900 people would still have their
jobs.

Michael: How did the high school students react?

Bill: Michael, it is the most amazing thing. Everyone has told me
that they are the hardest and the toughest and the most critical or
cynical or skeptical audience of all, and I have found that to be
100% wrong.

Michael: Do they really have lots of questions for you?

Bill: Oh, they do. I mean, you walk in. You get their attention,
and I cheat. I buy their attention, and I’m such a panderer, it’s
disgusting. I walk in. They’ve done this two minute introduction,
the DVD intro that you’ve seen on the website. So, that gets their
attention at least momentarily. Okay, this isn’t chopped liver, but
who cares?

He’s a business guy, and we don’t care too much about business.
So, I walk out onto the stage or the middle of the auditorium where
I happen to be delivering, and I reach in my back pocket and I pull
out a wad of $100 bills. I take one off the pile and put the rest
back in my pocket, and I snap it a couple of times, and by now I
have everybody in the room’s attention. I own them at this moment.

I’m talking. I’m already saying something, and I’m fiddling with
this $100 bill. Well, I’m not talking about the $100 bill. I’m
already into a piece of my presentation, and when I know they’re
all doing nothing but staring at the $100 bill, I go, “Oh that,
that’s a $100 bill. Would one of you like this?” Well, duh, the
whole crowd goes nuts because they all want one. They all start
yelling and screaming and raising their hand, and doing whatever it
is that they do in their culture.

I say, “Okay, well, I can’t give everybody one. So, I’m going to
give this to one person. I’ll give it to the person who gets the
answer right to the question I’m going to ask during the course of
my presentation.” With that, I slide the $100 bill in front of me.
I say, “I’ll put it right here so we all remember that I have to do
this before I’m done here today.”

Well, now they’re all staring at the floor watching my $100 bill,
and because they know, I just told them, that there’s going to be a
question that I’m going to ask, and that the answer to which could
mean the difference between having a $100 bill or not having $100
bill, they begin paying rapt attention to what it is I’m about to
say for fear that they’re going to miss the question.

Michael: That’s a great technique.

Bill: It works. It works everytime, and so I could go on for about
20-25 minutes, and that’s just about the end of their attention
span. When I think I’m losing them, or they’re beginning to fidget
or they get buttitis or whatever it’s called, I bend down and pick
up the $100 bill. Now, I have them again.

Now, they’re all back. They’re all lying back on their chairs.
They’re all back where they belong, and I say, “Ah, well, let’s
talk about this $100 bill. Here is the question,” and I pose the
question, “If you were to stack $100 bills one on top of the
other,” and I show them five ways of what it looks like. It’s
pretty thin, pretty skinny. I say, “How tall would the stack be to
get one bill dollhairs worth of $100 bills?”

Then, we have a traveling microphone that literally are throughout
the crowd, and kids can stand up and says, “Well, three foot, six
foot, twenty foot,” whatever it is they’re going to say. They can
come up with most any number that they choose to. Almost always,
they are talking in the ten foot, twenty foot fifty foot range.
Sometimes, they’ll really jump way out there and say, a hundred
feet. The real answer is 8,400.

Michael: Eight thousand four hundred feet tall?

Bill: Yes, and it just kind of blows their comprehension, but
somebody always win because I tell them whoever gets the closest to
the right answer will win. So, whoever comes up with the largest
number obviously is it, and with that we make a production out of
going over to that person, giving them the $100 bill or having them
come up on stage to get the $100 bill. We’ll get to talk for a
minute, that person and myself.

Then, there’s usually a loud round of applause for the individual
who has won the $100 bill, and then if the person takes their seat
again, I say, “How many people like that person?” Everybody cheers
and raises their hand, and most of them are their friend. I say,
“How many people wanted to be their friend before the $100 bill?”
Only a few hands go up. I say, “Now, isn’t that interesting, that
because this person has an extra $100 bill in their pocket, we all
like him more than we liked him a little bit ago. Isn’t that
interesting?”

You try to make a point out of it as well, but the real purpose of
the $100 bill is to buy their attention.

Michael: Wow, what a fascinating story. What is Bill Bartmann’s
mission today?

Bill: I am on a number of missions, and they’re all compatible. I
carry a card in my pocket called my pocket list, and it says, “I
will touch the lives of a mill people in the next five years.”
That’s my major, major objective in life. When I say touch the
lives of, I now give speeches all over the country. I perform
seminars all over the country. I’ve written books and some
workbooks and stuff like that.

This is all I do now Michael, and as just try to inspire people,
and I don’t mean motivation. I’m not out there doing jumping jacks
on stage, and I’m not juggling chain saws, and I’m not trying to
get people to come up on stage and break boards or run through
flaming coals. I don’t do that stuff, and I’m not knocking that
stuff. That’s just not my shtick.

I want to talk to people about how they can feel better about
themselves, and how they can face some challenges in life. Then, I
coach them. Once I get them up as an individual, then I coach them
in business.

I have this dubious distinction. I’m the only billaire business
coach in the whole world. I’m the only guy coaching businesses
who’s ever really made a bill dollhairs. I understand it. I’m
not
an expert. I don’t think I’m all that smart, but I’m really
experienced, and I share that experience and guidance with my
students.

Michael: For anyone who wants more information on your speeches and
your consulting and everything you’re doing, what would be the best
way for them to find that out?

Bill: I’m easily found, www.BillBartmann.com.

Michael: Bill, it’s been a pleasure. I’ve overspent my time. You
have a great day. Thank you so much. We’ll be in touch.

Bill: Thank you Michael.
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