Hillblom’s response was immediate, if predictable. He stormed across the Nauru Building’s third-floor mezzanine to Mitchell’s office, where he once again excoriated Mitchell’s arguments and his tactics. The Battle of the Titans had begun.
Within weeks, an alliance of influential individuals and business leaders materialized from thin air. They called themselves SMART, an acronym for Saipanese Mobilized on Article Twelve. (Article Twelve is the paragraph in the CNMI Constitution that forbids nonnative ownership of land.) Mitchell seethed at the ploy, but Hillblom’s name was nowhere to be found—although one of SMART’s leaders was none other than Mike Dotts, now Larry Hillblom’s personal attorney, and the movement was suspiciously similar to Hillblom’s earlier campaigns against both the CAB and the postal monopolies. And the arguments proffered by SMART, broadcast in a series of television ads, were identical to those that Mitchell had heard Hillblom pontificate countless times from his office doorway. By late summer, those arguments had been neatly wrapped into a bill that, among other things, eliminated contingency fees for lawyers in Article XII cases and invalidated Mitchell’s “resultant trust” theory by name. Mike Dotts and Joe Lifoifoi were soon lobbying the Legislature to pass the bill quickly. So was Carlsmith Ball’s managing partner, a mild-mannered Pacific Northwesterner named David Nevitt.
Mitchell, his beard turned thick and white, his once-taut frame now spilling over his waist, drove up to Capital Hill and delivered his response to the Speaker of the House in person. He accused Hillblom of writing the legislation, ridiculed Hillblom’s minions as the “not so-SMART lobbyists,” and accused Mike Dotts of having a “hidden relationship” with his boss. But he read desperate. Everyone knew that Hillblom had penned legislation in the past; and no one, particularly an attorney as savvy as Mitchell, could profess shock that any wealthy businessman would cue up his personal attorney to do his bidding. Mitchell could have hoped that the many politicians who had sold land before Saipan’s property boom would vote their self-interest, but Hillblom had largely convinced them that clawing back their property would have the opposite effect: it would render their property worthless, because no one would dare touch it from that point forward. Those lucky enough to prove native status would be left to trade land among themselves.
One senses, in the documents that Mitchell has left behind (he died several years ago of cancer), an almost insatiable anger, an obsession with Larry Hillblom that bordered on the pathological; by the summer of 1993, the pages of his briefs had become little more than rants against “King Larry.” Mitchell subpoenaed the corporate minutes of DHL meetings; he unearthed several letters Hillblom had sent the president of Palau offering UMDA stock in exchange for air routes to Japan—proof of corruption, Mitchell noted; he reminded the court that Hillblom had yet to return his 25,000 UMDA shares to local governments as promised but had illegally kept them for himself; in a burst of ego, he proclaimed that Hillblom “has known from the beginning that I would not be his sycophant and that he could not win my uncritical allegiance with financial favors.”
The obsessed Mitchell got only one shot at his nemesis—a deposition in Mike Dotts’s office at the Nauru Building. No transcript remains, and Dotts admits that he ended the deposition prematurely, no doubt fearing an inquisition of DHL, Vietnam, and Hillblom’s personal tax situation. In any case, on July 14, 1993, Hillblom countersued in federal court, alleging that Mitchell was engaged in a comprehensive scheme to financially injure and damage him through unlawful acts, including violations of the Racketeer Influenced and Corrupt Organizations Act—the same statute he used to bring down Frank Lorenzo almost a decade earlier. Mitchell seemed to draw energy from being attacked. King Larry had not ignored him. “Hillblom is scared!” he told a reporter, promising that his nemesis would soon be exposed for masterminding both SMART and the lawsuits demanding that lands be returned to the government rather than the islanders. “We are on the verge of finding out who is really behind these actions and he is cutting and running,” Mitchell continued. “He got scared because we are narrowing it down to him. Who else could it be?”
Mitchell did have one ace in the hole. Several years earlier, when he was the general counsel of UMDA, Peter Donnici had told him that the disclosure of Hillblom’s tax returns would have dire consequences both for him personally and for DHL. If Mitchell remembered correctly, the exact word that Donnici used was disastrous.
Twenty-Eight
Taxes
On Friday, August 6, 1993, Hillblom drove his trusty Honda Civic up the winding road to Capital Hill. Midway to the top, he turned left, into the Saipan offices of Deloitte and Touche Tohmatsu. His accountant had scheduled a meeting with two auditors from the CNMI Department of Finance—Revenue & Taxation regarding an audit they had just completed of Hillblom’s personal income taxes dating back to 1988.
No taxpayer looks forward to a meeting with the tax man, but Larry Hillblom had placed himself in a uniquely, almost unbelievably, precarious position. First, he had not reported any income from the sale of his DHL shares to JAL and Lufthansa; second, that money, funneled through Po Chung in Hong Kong, was already being spent; finally, his unreported income had flowed into a country where it was illegal for him to do business.
As Hillblom shifted in his chair, exhibiting his many tics, one of the auditors produced a statement showing the department’s calculations of his income versus what he had claimed on his returns. In each of the four years they’d analyzed, Hillblom had reported income of roughly $200,000, but the department’s figures were considerably higher.
In 1988, for example, Hillblom had failed to report over $100,000 in interest from ARW, a partnership he’d founded along with a few other DHLers to invest in real estate and cellular licenses.* The situation in 1990 was similar. In 1991, the discrepancy was far greater. That year, Hillblom had deposited nearly $800,000 into his checking account at the Bank of Saipan that had not been reported on his returns. But 1989 was the killer. In addition to the $201,000 Hillblom had reported on his return, the auditors had discovered another $20,000 in deposits to his local bank account—plus a capital gain of more than $226 million. The total difference, including interest—but not penalties—amounted to just under $29 million.
Hillblom challenged the auditors’ chart. The $226 million, he explained, was for the sale of his interest in a company that he co-owned with DHL’s Asia head and his longtime nominee, Po Chung. He’d never received any cash for it, he said, and the gain was closer to $30 million.
The auditors asked for a cost basis that would justify the lower amount, but neither Hillblom nor his accountant could provide one. Monterrey, the company co-owned by Hillblom and Po Chung, contained only one asset: their shares in DHL, International, which he had started back in 1969 with $3,000 and Adrian Dalsey’s credit cards.
So Hillblom argued that Monterrey should be treated as a “fresh start” transaction, meaning that the auditors should have calculated the capital gains based on the investment’s value when Hillblom had moved to Saipan. But once again, the auditors demurred. The “fresh start” provision of the CNMI tax code applied only to investments sold before 1984, they reminded him. Because Hillblom had never sold shares in Monterrey, taxes would be calculated based on the full amount. Unless he could establish a cost basis, Hillblom was now staring at a tax bill of more than $97 million, including full penalties and interest.
If Hillblom was suddenly contemplating financial ruin, he refused to let it show. Nine days after leaving that meeting, he gingerly invited a lawyer he’d recently hired named Bruce Jorgensen on a joyride. Jorgensen lived in Hillblom’s pool house. He had been tasked with writing the SMART legislation and lobbying the CNMI Legislature for its passage. And just in case that did not happen—or in case the law was subsequently ruled unconstitutional—Jorgensen had also worked on the lawsuits that would return recovered property to the Public Land Trust rather than to the previous owners—a personal attack that had enraged Mitchell every bit as m
uch as Hillblom’s legislative activities.
Jorgensen’s boss wanted to show off the new engine on a small plane he’d bought to indulge his on-again, off-again passion for flying. Jorgensen agreed to go, perhaps unaware that Hillblom’s student pilot license had expired—and that the offer had been extended to him because most of Hillblom’s friends knew better than to fly with him.
Twenty-Nine
Disaster
The Cessna 182, also known as the Skylane, is a two-door, three-wheel, four-seat airplane powered by a single propeller. Popular with flight instructors and weekenders, the 182 weighs less than a small BMW sedan, and its engine produces fewer horses than a modern sportscar. The ubiquitous 182 has been manufactured since the early 1950s and remains one of the most common aircraft in the world; its design, featuring a wing that rests above the cockpit attached by two aluminum alloy rods to the small body, is one of the most familiar in aviation. Hillblom’s 182 was built in 1960 and had been repainted cherry red. The plane had been bought used by Hillblom and Jim Sirok, a local collections attorney and amateur pilot who had been coplaintiff in one of Larry’s antigovernment lawsuits. It had been flown across the Pacific Ocean to Saipan from Spokane, Washington—a near-miracle made possible by a number of island stops and the addition of auxiliary fuel tanks in the cabin. Its maximum speed of roughly 140 knots and the fact that its cabin was not pressurized had no doubt made for a long, rough, and very cold two weeks.
When Jorgensen and Hillblom arrived at the Pacific Aviation hangar near the end of the Saipan International Airport’s extraordinarily long runway, Adonis Gotas, a young Filipino whom Hillblom had hired as his mechanic, was checking on the more powerful engine that he had recently installed. Jorgensen noticed that Hillblom had no time for the standard checklist that pilots are taught to perform before flying, much less inspecting the new engine. Gotas was quickly directed to the rear seat of the airplane and Jorgensen climbed into the tiny front seat, cramping his lanky frame. Hillblom jumped in next to him, secured his door, and started up the engine. Then he pulled a headset over his ears as Jorgensen and Gotas did the same, but when the propeller began spinning, creating a loud drone, it became apparent that Gotas’s microphone did not work.
Hillblom glanced at the instrument panel as he contacted the control tower for permission to take off. Warned that a Continental Micronesia 737 was incoming, he immediately opened the throttle and turned toward the end of the runway. Once aligned with the large white stripes and pointed toward a seemingly infinite strip of concrete, Hillblom let it go. Within seconds, they were airborne. Hillblom banked crosswind to avoid the incoming jet.
The sky was perfect, as usual, a gleaming turquoise. But, as Jorgensen would later recall, his boss was having difficulty trimming the throttle and reducing the engine’s speed. So Hillblom banked again, bringing the tiny plane parallel with the runway, a trajectory that pointed them toward the narrow channel separating Saipan and Tinian. As Saipan disappeared from beneath them, however, the plane was suddenly cloaked in a foamy white cloud. Jorgensen was now very concerned. There was no way now that they would be able to see the incoming 737.
Hillblom glared at the instruments for a moment longer, then turned back to Gotas and shouted at him to examine the throttle cable housing. But Gotas quickly gave the thumbs-up. Jorgensen stole a glance at the plane’s tachometer. The needle had not moved. Hillblom looked frustrated. The RPMs, he suddenly shouted, were still way too high. He asked Jorgensen if he should attempt a landing on Tinian.
But the young lawyer shook his head. They should return to Saipan, he said. And Hillblom should broadcast a radio distress message. Saipan had a longer runway than Tinian; and if they did crash, Saipan also had a real hospital.
Instead of making the U-turn, however, Hillblom continued toward Tinian. He made no attempt to broadcast a distress signal as he frantically decreased the engine’s power by turning off the fuel mixture, obviously hoping to slow the plane down enough to land by starving the engine.
There was no more time to argue. Jorgensen turned back to Gotas and jerked on his seat belt, which had seemed too loose before. Unlike Larry, they were both preparing for the worst. By then they were midway over Tinian’s runway, but Hillblom had not lowered the flaps and he had clearly lost control. Suddenly, he remembered the flaps, but as soon as they engaged the plane flared. Realizing his mistake, Hillblom immediately pulled up to abort the landing.
As Hillblom desperately tried to gain altitude, he seemed unaware that the flaps were still engaged. He jerked the steering yoke repeatedly in a panic, causing the plane to sway violently up and down in a porpoising motion. The stall siren began to shriek as the violent swings induced a series of aerodynamic stalls. Jorgensen looked down to see the end of the runway. Then silence. The engine had failed.
Hillblom yanked the steering yoke hard, inducing another stall as the siren wailed. Jorgensen yelled at him to drop the nose down and straighten out, but once again he was ignored. Jungle was approaching fast through the windshield. They were going down.
Jorgensen braced himself as the landing gear hit something—a treetop, he assumed—beneath his feet. The wingtip impacted next. And then he was upside-down. Silence. Behind him, Gotas was unconscious. Inches to his left, Hillblom was gushing crimson blood; the impact had forced the steering yoke directly into his face. Through the cracked windshield, thick black smoke poured over the wreckage and into the sky.
Jorgensen forced open his door with his right shoulder, exited the plane, and ripped his shirt off. His first instinct was to smother the engine and suffocate the smoke. That accomplished, he walked over to the other side of the plane and tried to open Larry’s door, but the impact had jammed it shut. He returned to the open door on his side of the plane. In the backseat, Gotas’s small frame was crumpled upside-down and his eyeballs appeared to be completely rolled back in his head. Larry was still bleeding profusely and his neck was hugging the dashboard at an unnatural angle.
Amid a rush of adrenaline, Jorgensen pulled Gotas out of the plane and laid his body on the inverted wing. He was too scared of breaking Hillblom’s neck to touch him. Instead, he grabbed his shirt off the engine and started waving it frantically at a small plane that was just taking off. Unsure whether or not he’d been seen, he rushed toward the tiny airport, finding a fire truck close to the perimeter. Thankfully, it was occupied. Jorgensen ran up to the driver’s side and told a stunned islander that Hillblom and Gotas were badly injured and to radio medical personnel and a medevac. They’d need to fly them to the hospital on Saipan immediately.
Satisfied that help was on the way, Jorgensen now ran back to the wreckage, the plane gleaming amid the dense jungle like a ruby. Crouching down next to the open passenger door, he could see that Hillblom had regained consciousness. Larry begged him to pull him out, but Jorgensen refused. So Hillblom slid a bloody hand down to his lap belt, unclipped the buckle, and immediately collapsed headfirst into the cabin ceiling, moaning in excruciating pain.
Jorgensen managed to wrench his seat aside and pull Hillblom from the open doorway. Then he laid him on the wing next to Gotas. The right side of Larry’s face was gone. Blood was streaming out of a huge gash beneath his eye, where the steering yoke had lanced the face. Jorgensen grabbed his shirt, bundled it up, and pressed it into Hillblom’s wound, trying to stem the flow of blood. But Larry refused to sit still. He was clearly in shock. He was rambling something about not having a pilot’s license or insurance. Suddenly he shot off a bunch of nonsensical questions, rapid-fire: “What happened to my face? Where are we? What happened?” And, pointing to Gotas, “Who is that?”
Jorgensen maneuvered behind Hillblom’s body, sat down behind him, and wrapped his arms around his torso in an attempt to immobilize his boss. But Larry kept trying to get up to see what he’d done. Finally, an emergency vehicle arrived and a couple of locals relieved Jorgensen of his duty. They slid Larry onto a backboard and secured him with rope so he couldn’t move. Jorgens
en turned around to see Gotas stirring; he was alive. They traveled to Tinian’s small hospital in the ambulance together. Once there, Jorgensen grabbed a hospital telephone and dialed the only man presently capable of saving Hillblom’s life: Joe Lifoifoi.
Thirty
Recovery
“Has anyone mentioned suicide?” the tall, sixty-ish man in the white lab coat inquires offhandedly.
“No,” I stammer. “Why? Do you think—”
“Oh no.” The doctor grins. “I was just wondering.” He is Douglas Ousterhout, MD, the preeminent craniofacial surgeon in the United States, author of Aesthetic Contouring of the Craniofacial Skeleton, protégé of the great French surgeon Paul Tessier. He has just shown me a PowerPoint presentation of grotesquely deformed skulls, mostly belonging to children. “There are many more out there. Cleft palates, cloverleaf skulls, and so forth. We just don’t see them because they do not show themselves. Jackie Kennedy is a good example of a public figure with a craniofacial abnormality. She’s bug-eyed. If you look, the eyes are too far apart.”
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