Dreamers and Deceivers (13 page)

March 1, 1921

Woodrow Wilson was in tears. Addressing his cabinet for the last time as president—Republican Warren G. Harding, who’d beaten Ohio governor James Cox in the general election, would take the oath of
office in three days—he apologized for not being able to control his emotions.

Though many people seemed to think Wilson had changed dramatically since his stroke—he was more paranoid, more accusatory, more unstable—Wilson didn’t see any of it. He still felt the same, though he’d had to abandon his musings about a third term.

Regardless, he was outraged whenever anyone suggested he had any physical or mental shortcomings. Sure, he had relied on a cane to enter the Cabinet Room, but he thought that was of no real consequence. The cane, Wilson joked, had become his “third leg.”

Before adjourning, the president posed for photos with the cabinet. In one of them, he was holding his cane. But in a second photo, the cane appeared to have been erased.

23 Years Later

Hollywood, California

1944

Edith watched an early cut of the film about her late husband’s life. It was a fair rendering, she concluded. Hollywood had done a great man justice.

Of course, she hadn’t left the outcome of this project up to chance: The film was based on her own memoir, and biographer Ray Stannard Baker, an advocate of her version of events, was on the set, carefully looking over every word of the script. Along with a cooperative Hollywood scriptwriter, Edith and Baker had made sure the record was straight about her husband’s illness in October 1919.

Now, as she watched the scene in which Dr. Grayson informs her that the president is fully capable of continuing on with his duties and that resignation was never considered, she marveled at the masterpiece they’d created.

It was the final step in preserving her husband’s memory.

EPILOGUE

46 Years Later

Upperville, Virginia

March 27, 1990

The two men stood together as they released their late father’s papers to the press. James Gordon Grayson and Cary Travers Grayson Jr. knew they were contributing to history, even if they were exposing a story that their own father had worked so hard to keep concealed.

For the first time in history, the public was able to see the extent of Wilson’s incapacitation as a result of a massive stroke. They saw Grayson’s private assessment that Wilson should have announced his malady to the public, as well as a separate physician’s statement that the president’s condition was irreversible.

In response to the news, Arthur S. Link, one of the most prominent historians of Woodrow Wilson, felt compelled to amend his original conclusion that the rumor of Edith Wilson as president was “more the realm of legend than scholarship.” His new view was starkly different:

“Edith emerges as the master of the cover-up.”

•  •  •

Inspired in part by emerging revelations of Woodrow Wilson’s deception about his long and crippling illness, the Twenty-Fifth Amendment to the U.S. Constitution was adopted by the United States Congress. The amendment established procedures for presidential succession in the event of a presidential disability. Section 4 allows the cabinet to overrule actions like those taken by Edith Wilson and Cary Grayson:

Whenever the Vice President and a majority of either the principal officers of the executive departments or of such other body as Congress may by law provide, transmit to the President pro tempore of the Senate and the Speaker of the House of Representatives their written declaration that the President is unable to discharge the powers and duties of his office, the Vice President shall immediately assume the powers and duties of the office as Acting President.

Boston, Massachusetts

July 23, 1920

William H. McMasters was one of Boston’s top public relations experts. He’d handled political campaigns for everyone from Calvin Coolidge to former Boston mayors John F. “Honey Fitz” Fitzgerald and James M. Curley. It was this reputation that led the treasurer of the Hanover Trust Company to secure McMasters’s services for one of their top new shareholders: an overnight financial sensation named Charles Ponzi.

At fifty-six years old, McMasters had wavy graying hair, a small nose, and prominent lips. A lawyer and Spanish-American War veteran with political aspirations of his own, he was never averse to having a multimillionaire for a client—especially a guy who seemed to be throwing money around with abandon. Whether it was friends, staff, family, or charities, practically everyone Ponzi came across got money. McMasters liked that.

“Mr. McMasters!” Ponzi greeted him. “I’ve heard so much about you!”

The well-dressed lawyer smiled as the exuberant diminutive Italian approached him.

“I am in need of a PR agent,” Ponzi said. “And I have been assured you are the best in the business.”

Oozing charm and confidence, Ponzi shared with McMasters his plans for building a larger financial empire. He told him that he was bringing in hundreds of thousands a month and giving his shareholders a 50 percent rate of return in just ninety days.

McMasters was shocked by the numbers. “A fifty percent return? In ninety days? How is that possible?”

“It’s very possible, I assure you,” Ponzi replied. “Just ask my investors.”

“But how do you do it?” McMasters pressed.

“Well, I can tell you only so much,” Ponzi said. “Otherwise I might give away trade secrets that would put me out of business.”

Ponzi was self-assured, McMasters saw that right away. But he also saw something else, something that filled the seasoned lawyer with doubts. After all, a person who spins the truth for a living can always see when someone else is doing the same.

19 Years Earlier

University of Rome

April 12, 1901

“I am studying hard,” Carlo wrote his mother. He regaled her with stories about his grueling class schedule, the good marks he was making at university, and the laudatory comments of his professors. “I hope you will be proud.”

Of course Carlo knew that she was already proud. Imelde Ponzi had big dreams for her only child, who had ventured from the northern Italian countryside into the city. She had told Carlo again and again, especially after his father died, that he was the family’s future. Only he, with his brilliance, tenacity, and many capabilities, could bring them the wealth and recognition they deserved. He would build “castles in the air,” she often said, whatever that meant.

Perhaps that was why Carlo was drawn to his circle of friends at school. These were young people of sophistication and wealth. They wore the finest clothes, drove the finest vehicles, partied at all hours, and had seemingly unlimited funds. They lived
la dolce vita
.

Satisfied with his letter to his mother, Carlo had a few more drinks, scrounged together some money for gambling, and stumbled out into the night.

Parma, Italy

May 4, 1902

One year later, Carlo was sitting in his uncle’s house in Parma. Since his father’s death, his uncle had seemed to think it was his duty to offer counsel and guidance.

“College is over,” his uncle said. “I think it is time you found a job.

“Maybe you could apply to be a clerk. Or maybe you could join the postal service like your father. It doesn’t pay much, but you could earn an honest living and contribute to the family.”

The young man winced. Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi was not meant for a life of middle-class drudgery. Working at a monotonous job for meager wages? That was humiliating. And what a disappointment it would be to his mother. They were a rather ordinary middle-class family, but they had million-dollar designs. Carlo’s mother was a descendant of Italian dons—and Carlo believed it was time to return the family to wealth and prominence.

Imelde had been heartbroken when her only son had dropped out of the University of Rome. She was astonished when she learned of his poor marks. She couldn’t believe he had lied to her for so long.

Carlo hadn’t set out to deceive her. He never expected to flunk out of university. His rich friends had seemed to coast through their studies and stay in school. He couldn’t figure out why that same strategy hadn’t worked for him.

“I appreciate the suggestion,” Carlo said. “But I need to do something bigger. Something that would make Mama proud. I want to show her that her faith in me was not misplaced.”

“Well, then, what about America?” his uncle asked. Stories about uneducated, poor Italian boys leaving for America to get rich were everywhere.

“America?” Carlo asked, his face brightening.

“In America, the streets are paved with gold,” his uncle said. “All you have to do is reach down and pick it up.”

Boston, Massachusetts

November 17, 1903

Twenty-one-year-old Carlo Ponzi arrived in the United States amid choppy seas and an icy wind that whipped up the rain and ocean mist. He walked onto the docks and wiped the saltwater from his thick, expressive eyebrows. He barely spoke a word of English and had just $2.51 left in his pocket. The rest, his entire life savings, he had gambled away during the voyage. Ponzi bore no ill will toward the Sicilian who’d cheated him out of his money. To the contrary, he was impressed by the man’s skill.

But his current sorry state was of no consequence to him. At five feet four, Carlo may have been short of both height and money, but he had million-dollar dreams. America would be the place where great things would happen for him. He could feel it. This was his destiny.

As he exited the ship, he was wearing his best suit. He’d learned from his former classmates in Rome that one always had to look the part. With a smile on his lips and a twinkle in his eye, he was sure he looked as if he had just walked out of one of Boston’s finest homes.

Carlo dutifully submitted himself for inspection to the officer at the U.S. entry point. Like every other immigrant arriving in America, he vowed that he had never been in jail or the poorhouse, and that he had no communicable diseases. It was all rather demeaning for someone of his merit, but what could he do?

“What’s your occupation?” the officer asked.

“Student,” Carlo replied.

Walking through the inspection gates, he felt an unpleasant texture
beneath his finely polished Italian shoes. As he looked down, he made a surprising discovery: The streets of America were not paved with gold.

They were in fact caked in mud.

Banco Zarossi

Montreal, Canada

April 4, 1908

Luigi Zarossi chomped on a cigar and eyed the young men carefully as he listened to them outline their plans for the bank.

In a matter of months, Charles, with his steady smile, confident gaze, and infectious optimism, had won his boss’s trust. Zarossi had promoted him from assistant teller to manager of the bank in record time
. A bank manager
—his mother couldn’t help but be impressed with that!

Charles’s English, if not his finances, had improved enormously over the last few years. He had drifted from one job to another, working in all sorts of odd places, including as a dishwasher at a restaurant, where he’d slept on the floor to save money. But he knew none of those jobs were going to help him achieve his dreams. It wasn’t as though he was starving—he wasn’t. He knew he could lead a perfectly comfortable lower-middle-class existence like any number of his fellow immigrants. Find an Italian woman. Raise some Italian kids. But that wasn’t for him.

In his frustration, he sometimes turned to dice or card games to try to make some extra money, but, for whatever reason, luck rarely took his side. That was why, after hearing about an Italian immigrant who had started a successful banking business in Canada, he’d decided to head north.

And so he was starting over again. He was now in a new country, with a brand-new name to match: Charles Bianchi. “Charles” was more acceptable than “Carlo” and “Bianchi” was Italian for “White.” White like a piece of paper. A blank page. A clean slate.

Under the direction of the jovial Luigi Zarossi, Banco Zarossi
catered to Italian immigrants, luring them in with promises of competitive interest rates and fair dealing—not to mention speaking their native language. Banco Zarossi became one of the fastest-growing financial institutions in Canada, but Charles knew it was also a troubled one. Zarossi had been dipping into customers’ deposits to pay for some bad investments. His boss was a nice man, Charles thought, but a stupid one.

It was during his time at the bank that Charles ran into Antonio Salviati, a friend from the old country. Salviati was still the same slick guy he’d known at the University of Rome, complete with the small scar on his cheek from a knife fight. It was Salviati who had helped Charles come up with the plan they were now presenting to Zarossi.

“Mr. Zarossi, what if you could offer customers a ten percent interest rate on their accounts?” Salviati asked.

“Ten percent?”

Charles smiled and said, “They would be beating down our doors!”

“I agree with you—but, Charles, you understand banking enough to know that such an interest rate is impossible. We’d never be able to turn a profit.”

Charles exchanged a look with Antonio. “Mr. Zarossi,” he said, “haven’t a good number of the bank’s customers given you money to wire back to their relatives in Italy?”

Zarossi nodded.

“Well, take the money, but don’t actually send it,” Salviati advised. “Use it to pay off your debts instead.”

Zarossi’s eyebrows rose. “But what will happen when the customers realize their money never reached their relatives?

“That’s why we should pay a ten percent interest rate,” Charles said. “To bring in big depositors.” He explained that by the time anyone was wise to the scheme, the bank would have more than enough money to wire to customers’ families in Italy.

Charles smiled. “Everyone will win. The customers will get ten percent interest. You will be able to pay off your debts. And more and more money will flood into the bank’s coffers.”

Ponzi’s confidence was infectious. “Yes,” Zarossi said, puffing on his cigar. “Maybe this plan could work.”