Deconstructing Sammy

by Matt Birkbeck

  Sammy had his own experiences in Las Vegas, memories seared deep into his psyche. It wasn’t that long ago that Sammy was headlining the Frontier Casino with the Will Mastin Trio but forced to room in the segregated west side of town with his father and uncle. Sammy could work in the casinos, but he couldn’t stay or play there.

  Sammy was irate.

  “Let him go!” he barked.

  The guard quickly released his grip as Sammy’s fans screamed his name and reached out past the bodyguards to touch him. The casino manager rushed over and Sammy, in no uncertain terms, made it clear that Joe Jackson was going to gamble at the Sands.

  “Of course, Mr. Davis,” said the nervous manager, who gave Joe a handful of coins.

  “Go, have fun,” said Sammy, turning to Joe. “And if anyone ever bothers you again, you come get me.”

  The flight from New York to Los Angeles was uneventful, with the exception of Altovise’s constant trips to the bathroom. She carried a large handbag that always remained under her arm. Inside she hid a small mayonnaise jar and kept several containers of Altoids, a strong breath mint.

  It was August 1994, and the trip to California had several purposes, including a much-anticipated meeting with Tracey Davis and initial discussions with the IRS, which finally recognized Sonny as Altovise’s legal representative. Sonny still had no idea how much the estate owed the government. Different numbers had been thrown out. Some thought it was $2 million. The people who really knew, the executors Rhodes and Climaco and their attorney, Herb Sturman, weren’t cooperating. Others thought it was less. After all, the government did sell the Davises’ home and auctioned off most of their possessions, they said.

  But when Sonny learned during his one-on-one meeting with IRS agent Marvin Samuels that the tax bill was currently over $6 million and rising each day thanks to interest and penalties, he nearly dropped to the floor.

  “How much?” he said incredulously.

  Samuels, who worked in the special collections department of the IRS, explained that Sammy and Altovise took deductions on their tax returns in the late 1970s and early 1980s from investments in tax shelters, deductions that the IRS later disallowed. Sammy appealed to the U.S. Tax Court, but the court opined in 1989 that the debt was valid. Altovise argued the “innocent spouse” defense, claiming that following Sammy’s death she knew nothing of her husband’s financial affairs. But Altovise signed the joint returns, and thus she was liable. Samuels said the IRS tried to negotiate a deal with Altovise through her previous attorney, Richard Ferko. After all, Samuels said, the IRS didn’t want to be seen as the cold, indifferent bureaucracy many thought it was, and it surely didn’t want to throw Altovise out onto the street. But that’s what the IRS did, after a verbal deal to settle the estate fell apart. Sonny asked for a copy of the tax court ruling. Samuels said he could get it.

  “Look, we didn’t want any bad publicity out of this,” said Samuels. “We are fully aware of who Sammy Davis Jr. was and we wanted to negotiate a deal. We had a deal.”

  Instead, Samuels said, the IRS had no choice but to move forward with the public sale and liquidation of Sammy and Altovise’s assets. The sale included their Beverly Hills home on Summit Drive and countless personal possessions. But the sales did little to reduce the debt, and four years after Sammy’s death interest and penalties continued to accumulate, ballooning the debt to its current level.

  It was the largest single open case of an individual taxpayer debt in the nation, and Sonny knew he had his work cut out for him.

  “I’ll get back to you,” said Sonny.

  The meeting at the Beverly Hills law office of Robert Finkelstein would serve as the first contact between Altovise and Tracey Davis in several years. Sonny and Tracey talked again after their initial conversations in April, and they agreed to meet as soon as he arrived in Los Angeles. But before the meeting, Altovise wanted Sonny to take a detour to see her old home on Summit Drive.

  Sonny was curious too. The twenty-two-room mansion on a corner lot was once owned by Tony Curtis and Janet Leigh, before Sammy and Altovise bought it after they married, and Altovise always talked about how happy she was there. So they drove up and through the winding roads of Beverly Hills, passing one expensive and flamboyant home after another. This was money, old Hollywood, thought Sonny, a secluded oasis for the rich and famous.

  After reaching Summit Drive, Altovise pointed toward a front gate, where they stopped. Sonny looked past the gate to the house, a portion of which was covered by vegetation. It didn’t look like a twenty-two-room mansion from the outside, and Sonny peered across the street to the palatial estate once owned by actress Mary Pickford. Sonny’s eyes darted around the grand surroundings while Altovise sat slumped in the car, her eyes focused on her old home, tears streaming down her cheeks.

  “I lived here twenty years,” she said. “Twenty years. This was my home. This was my life. See that front door? I welcomed the First Lady there. The president’s wife. I hosted charity events. I was a SHARE girl. They all came to me, they all wanted me. And now…”

  Altovise buried her head in her hands.

  “I want my life back!” she screamed.

  “We’re going to get you well, and then we’re going to settle your debts. But you have to trust me. Okay?”

  “Let’s go,” she said.

  They drove to Finkelstein’s office without saying a word to each other and upon arriving they were led toward a large conference room. Sonny noticed the fine appointments throughout the office, the well-dressed employees, and the numerous signed photos of celebrity royalty that hung on the walls. Finkelstein was a Hollywood deal-maker whose legendary reputation was enhanced by his representation of Frank Sinatra, and Sonny could feel the power. When they walked into the conference room, they were greeted with a loud welcome.

  “Altovise!”

  Sonny recognized the voice. It was Tracey, and as she rushed to greet Altovise, he was struck by her beauty, which was a potent mix of Puerto Rican, African-American, and Swedish genes.

  “You look wonderful,” Tracey said, embracing Altovise. “It’s the best I’ve seen you in years.”

  “Oh, Tracey, it’s so good to see you,” said Altovise. “It’s been too long.”

  After exchanging pleasantries, and introductions to Sonny, they sat down around a large, rectangular table, with Sonny and Altovise on one side, Tracey on the other side, and Finkelstein at the head.

  “Well, it’s good to see everyone together again,” said Finkelstein. “I want to tell you that Frank, Nancy, and Barbara Sinatra all send their regards. They wanted me to tell you they missed you.”

  Altovise smiled. “Please give them my love.”

  But the small talk, goodwill, and warmth masked years of deep mistrust, which reappeared as soon as Finkelstein said Altovise had no choice but to agree to Tracey’s demands and sign over her rights to her late husband’s estate.

  “There are far too many problems with the estate and with the IRS,” Finkelstein said. “We have the opportunity to make some money so long as Altovise signs over everything to Tracey and the other children, and as soon as she resolves her problems, those rights will revert back to her.”

  Sonny was firm.

  “I can’t do that,” he said.

  Sonny’s response didn’t sit well with Tracey. Her refined beauty aside, Tracey had the personality of a pit bull, and whatever warmth she displayed moments earlier toward Altovise morphed into a raging rant fueled by two decades of seething anger.

  “This is embarrassing!” Tracey screamed. “This is about my father and his legacy, and right now it’s as dead as he is. There is no legacy!”

  Altovise remained quiet while Sonny responded, and after a few minutes she placed her handbag under her arm and simply excused herself for the bathroom. When she returned, she popped several Altoids into her mouth.

  Tracey was still ranting.

  “Why? Why can’t we do this? We have a bona fide offer on the table
from Quincy Jones for a musical about my father. We can do other business and generate income. Don’t you understand?”

  Finkelstein expanded on Tracey’s point, arguing that it was the only way to capitalize on Sammy’s name and body of work.

  “Besides,” said Finkelstein, “you’ll never settle with the IRS. It’s impossible to settle that debt.”

  Sonny said he understood their position but he wasn’t going to advise Altovise to sign away her rights. Sonny also believed, privately, that Altovise was a victim, and the children along with Finkelstein were just another group in a long line of people looking to take advantage of his client.

  “Al, you’re wrong. I know you’ve been fighting with Herb Sturman to get the records. This is going to be impossible and I think you’re making a big mistake,” said Finkelstein.

  Altovise got up from her seat again and excused herself. She was clearly wilting from the stress of the meeting, which took a decidedly negative and nasty turn.

  “This is bullshit,” said Tracey.

  When Altovise returned, the smell of alcohol wafted through the room, and Tracey shook her head.

  “Just like old times,” she said.

  Sonny and Altovise said good-bye and left the meeting with no resolution, leaving behind a frustrated Tracey whose forceful, passionate argument fell on deaf ears.

  “Un-fucking-believable,” said Tracey, pounding her fist on the table.

  “Calm down,” said Finkelstein. “You’re just like your father.”

  CHAPTER 6

  The diagnosis from Dr. William Van Meter was far worse than expected. Several months of one-on-one treatment with the Stroudsburg, Pennsylvania, psychologist, often three times a week, failed to improve her condition. She was an alcoholic, and her addiction was severe, the worst Van Meter had ever seen.

  Altovise’s problems began long before she suffered the pain and depression over losing her husband and her home. But she couldn’t, or simply refused, to discuss what appeared to be traumatic events that transpired during her twenty-year marriage. Altovise had other health issues to deal with, including seizures, and Van Meter told Calvin and Sonny that she required intensive care and therapy twenty-four hours a day, seven days a week, for an extended period of time. Months, he said, perhaps even years.

  Van Meter suggested three long-care facilities. Two—in Connecticut and another in Reading, Pennsylvania—charged $300 per day and were cost-prohibitive. The third was the Little Hill–Alina Lodge in Blairstown, New Jersey, which was across the Delaware River and roughly fifteen miles away from the Hillside Inn. Alina Lodge was for people who were “reluctant to recover” from their addictions. Admittance meant that you understood “your way wasn’t working” and long-term care was required. Once admitted, you could leave only for a medical emergency. Alina Lodge could accommodate up to sixty patients and there were fifty there now, mostly female. The cost was a more reasonable $95 per day, with a required thirty-day advance payment of $2,850 along with a mandatory three-month minimum stay.

  Altovise had been treated for her addictions before. In 1986 she entered the Betty Ford Clinic for a short stay, after which she attended Alcoholics Anonymous meetings, but again only for a short time. In May 1993 she suffered from severe anxiety and hyperventilation, which led to a seizure and admittance to Freeport Hospital in Long Island for a detox. Following each instance, she refused to acknowledge she had a problem and simply resumed her drinking. Dr. Van Meter didn’t mince words about Altovise’s condition: her lifestyle, particularly her drinking, may have produced minor brain damage. She was also in denial about her dependency on alcohol and she had to submit to intense treatment or die.

  The Alina Lodge didn’t accept health insurance, and since the facility dealt primarily with people with severe addictions, the structured and rigorous program demanded limited contact with the outside world. That meant very few visits from family and friends and no phone calls. Treatment, they said, would be uninterrupted. Everyone was on board, including Altovise and her parents, who agreed to borrow against their Queens home to pay the bill. Following a complete physical at Warren Hospital in Phillipsburg, New Jersey, Altovise was admitted to the Alina Lodge on September 19, 1994.

  Few people knew that Altovise was living in the Poconos, and Sonny decided that aside from him, Calvin, her parents, the Judge, and Mama, no one would know she was being treated at Alina Lodge. If anyone asked, Altovise was out of town, in New York or Los Angeles, or somewhere. Anywhere but the truth, said Sonny, who believed Altovise deserved privacy and respect.

  But Altovise’s first few weeks at Alina Lodge were difficult. Just days after she was admitted, she suffered a seizure while standing on line in the cafeteria. Officials called Calvin and told him she was near death and paramedics had to use CPR to revive her before she was rushed to Warren Hospital. She was returned to the Alina Lodge a week later.

  By mid-October Altovise showed signs of responding to the program and her welfare became less of a concern, which allowed Sonny to zero in on settling several other outstanding matters. First and foremost, he still needed to get copies of all Sammy’s financial documents so he could assess all his debts in order to make an Offer in Compromise to the IRS. But Sammy’s handlers, particularly his attorney John Climaco and manager Shirley Rhodes, continued to ignore his many letters and requests for a meeting. Following his trip with Altovise to California in August, Sonny sent off yet another letter to Rhodes, but Rhodes never replied.

  The frustration over Shirley Rhodes and John Climaco was put aside when the package with a return address of INTERNAL REVENUE SERVICE, LOS ANGELES arrived in the mail. Inside was a copy of the 1989 U.S. Tax Court decision reaffirming Sammy’s IRS debt, courtesy of agent Marvin Samuels. Sonny slowly read through the eighteen-page opinion, and with each passing page his eyes grew wider.

  The case was known as Davis v. Commissioner and the court was asked to rule on a previous decision that determined Sammy and Altovise were not entitled to deduct losses from tax shelters they invested in over a five-year span, from 1978 to 1982. Calvin told Sonny about the tax shelters, something about how Sammy’s former partner, Sy Marsh, had put Sammy into the shelters beginning in 1972 to gain deductions to pay previous income tax bills. But the tax court decision, in its “Findings of Facts,” said the investments disallowed by the IRS began in 1978, and included tax returns for the years 1979, 1980, 1981, and 1982, with amounts owed varying from $798,483 for 1978, to $1.53 million for 1982.

  As an example of the unworthiness of the investments, the court focused on details of one particular shelter, a limited partnership known as Cannel City Associates. The shelter was formed in December 1980 by Ernest William Hall, who the court said later became Sammy’s business manager in 1983. Cannel City planned to lease the rights to approximately three thousand acres of land in Kentucky to mine and sell coal in five- or ten-pound bags to consumers at fifty cents per pound. A market and economic report commissioned by Hall offered projections of 9 million tons of coal available in reserves in Kentucky, which would be sold at $200 per ton, which was ten times the actual market price. There was no explanation in the prospectus for the discrepancy between the consumer price and the expected per ton sale price. The prospectus included an engineering report confirming the availability of the coal, but the court said Hall included that information without the knowledge of the engineer. Hall also failed to state that his coal reserve estimate included more than a million tons of “gob,” a waste product of coal mining that was unusable. Gob piles also posed an environmental threat, because they leak acidic substances into the soil, which Hall didn’t disclose since he only referred to the gob piles as a source of recoverable coal.

  Because of the project’s high risk, the prospectus limited investment only to people who could afford it and had high taxable incomes with a net worth of $250,000. Sixty units at $150,000 each were made available, but only twenty-one units were sold during the first offering, and eighteen went to Sam
my on Climaco’s advice. Two other investors, who had previous business dealings with Hall, bought three units. A second offering was made and, using Sammy’s name as a lure, another 10.5 units worth $1.57 million were sold. But after selling the subscriptions and raising the money, Hall changed his strategy and decided against selling the coal in bags. The new plan was to mold the coal in the shape of a log, which could then be sold in supermarkets and hardware stores.

  The court noted that coal logs had been manufactured before, but they were made of coal dust, sawdust, and a binding agent, and used only for aesthetic appeal and not to burn. The court, in clear language, said the idea of consumers buying such small amounts of coal for home-heating purposes was so ludicrous there was never any possibility of turning a profit. Cannel City, said the court, was never a genuine mining operation, with no realistic expectation that the coal could even be dug from the ground, and the lofty market studies commissioned by Hall predicting millions in revenues were fictitious.

  The court determined that Cannel City had “no economic substance” and the entire endeavor was a carefully crafted scheme designed to defraud investors, whose money ended up in the account of another shell company, Salem Coal Corporation. By 1983 Cannel City defaulted on notes to its investors, and Sammy and Altovise claimed losses on their tax returns totaling over $2.5 million, which were later denied by the tax court.

  As Sonny read through the decision, his eyes grew even wider when he saw that it wasn’t Sy Marsh who advised Sammy and Altovise on the tax shelters. Instead, it was Sammy’s attorney, John Climaco.

  According to the court, the paperwork for the Cannel City tax shelter had been drawn by Climaco’s law firm, Climaco, Seminatore, Lefkowitz & Kaplan, which was based in Cleveland. And it was Climaco who not only put Sammy into the Cannel City tax shelter, but who introduced Sammy to Hall, who, the court said later, became one of Sammy’s “most trusted financial advisors.” Climaco had a nearly twenty-year relationship with Sammy, first representing him in various business transactions in the early 1970s and rising to become his official attorney of record in the early 1980s, even being named coexecutor of Sammy’s estate prior to his death. Despite the court opinion, there were never any allegations of wrongdoing levied against Climaco or his firm, but Sonny’s head danced with questions: Who was John Climaco? Why was Sammy using an attorney from Cleveland? And since it was Climaco whose firm created the Cannel City tax shelter, why was he still a coexecutor of the estate?