Part 2: Richard Hirschfeld: Friend, confidant of Muhammad Ali
Reporter’s note: I knew Richard Hirschfeld in his wheeling and dealing prime, when he hobnobbed with celebrities, like Muhammad Ali, and with high-powered political types. The early years were but a window into the life that Hirschfeld would eventually find for himself, forming many of the details of his upbringing. But the full extent of the scheming would not be known for several years.
Richard Hirschfeld was born into privilege, the son of Gene Hirschfeld who graduated from high school in New York at the age of 15 and became a dentist, university professor, and successful investor.
In his early years, Richard showed a flair for finance and often spoke with his father about the stock market and price-to-earnings ratios. Often, at dinner his father would ask him about activities at school but Richard would turn the conversation toward what had happened in the stock market that day. He also showed an aptitude for another competitive pursuit: He was a boxer in high school and college, where he had won an intramural trophy.
When he was 16 his nose was broken in a fight and his mother took him to New York where a plastic surgeon repaired the damage and advised Richard against further endeavors of this type. Neither the doctor nor the patient could have ever imagined that one day, Richard Hirschfeld would arrange the financing for a multi-million-dollar fight at Caesars Palace in Las Vegas and manage affairs for the most famous boxer who ever lived.
As a teen, Richard was bright and clever and full of surprises. Whenever he would receive a letter from a friend or relative he sometimes corrected the grammar and spelling errors with a red pencil and returned it to the sender. Decades later, he would apologize for the disjointed nature of his own writing — in his suicide letter.
At 17, Richard got his first gander at Wall Street, then he was off to the University of Virginia. As an undergraduate, he majored in religion but later said that he was studying people he wasn’t studying religion. He learned to be an entrepreneur during his years at there.
His father had a financial interest in a company called Virginia Data Center, which Richard helped take public. He started the Richard M Hirschfeld company and sold electric toothbrushes and rubberized parkas out of his dorm room. He also wrote a column for the university newspaper, the Cavalier Daily, offering advice on investing money. In one column, he imparted his conservative wisdom to his fellow students stating that the very best results usually come from holding good stocks over a relatively long period.
His college escapades were the warm-up for the main event, which was creating a bank in his own name at the age of 27.
By 1974, Hirschfeld had taken a dozen companies public, was settled into a well-appointed office at Koger Center in Norfolk, wore expensively tailored double-breasted suits and was about to embark on the most audacious venture of his budding career.
The Hirschfeld Bank of Commerce was chartered by the State Corporation Commission in April 1974. By November 1975, the first bank customers would walk through the doors at the five- story Rodeside Office Building on Newtown Road in Virginia Beach.
At least that was the plan.
Hirschfeld enlisted a number of heavy hitters to bring credibility to the bank venture, which was to have partnered with an insurance company, a brokerage firm and a construction company.
Among the chief investors to be included in the project was the respected Congressman, G William Whitehurst and the godfather of Virginia Beach politics: Sidney Kellam.
In October 1974, the bank announced a novel plan to raise money: Hirschfeld had obtained the names of nearly 300,000 investors in 22 publicly held companies, among them Lockheed Aircraft Corporation and Hughes Tool Company.
The bank mailed a stock offering prospectus to the would-be investors offering them the chance to get in on the ground floor — a solicitation that Hirschfeld hoped would produce funding in the range of $76 million.
However, problems quickly began to surface. Several companies listed in the prospectus complained that they didn’t know their names had been used in the offering or that their shareholders had been solicited as investors. Banking regulators in Iowa, Pennsylvania, and Maryland moved to halt the offering. The controversy threatened to cloud Congressman Whitehurst’s1974 congressional reelection campaign, but his opponent did not make an issue of this matter.
Of further interest was the fact that Congressman Whitehurst was a member of a congressional committee, charged with considering a potential bailout of Lockheed Aircraft. This entire matter was very embarrassing to the Congressman not to mention the prospect of insider trading by the Congressman, which he absolutely denied.
Now retired from Congress, Whitehurst says that he felt Richard had betrayed him. Later, Whitehurst stated that he had lost about $50,000 on the venture — which Hirschfeld later offered to repay. But Whitehurst and wife Janie declined the offer.
Reporter’s note: Congressman Whitehurst was a friend of mine and we spoke by phone often and my wife and I often saw Bill and Janie at restaurants. In my opinion, Bill Whitehurst was the most honest man I have ever known — except for my father — so this venture with Richard was very troubling.
After the 1974 stock offering, complaints to the Securities and Exchange Commission resulted in threats of sanctions. The SEC declared the offering false and misleading. In November of that year, Hirschfeld withdrew the solicitation, but too late to stop publication of a full-page ad touting the stock in Time Magazine, Newsweek Magazine, U.S. News & World Report and Sports Illustrated.
At that point, Hirschfeld scaled back the financing plan and delayed the proposed opening until March 1976.
On May 13, the office building that housed the bank facility was sold at auction to Mellon National mortgage, which held the first deed of trust for $2.1 million. Prior to that, the president of a construction company — which built the building — stated that Hirschfeld had called a meeting at which time everyone was fired.
Creditors started lining up, and lawsuits followed claiming Hirschfeld Bank had defaulted on payments on a bank vault, deposit boxes and other amenities. By then, Hirschfeld had a growing list of enemies. In November 1976, a limousine owned by Hirschfeld (originally used by Elvis Presley) was gutted by fire of mysterious origin.
In later years, Hirschfeld acknowledged that he had sometimes acted ruthlessly. This was somewhat of an understatement to say the least, even from a friend.
In late 1976 he was too busy trying to get out of town quickly to apologize. Facing a failed bank, $5 million in debts, two dozen or more angry investors, and mounting civil lawsuits, he fled to Southern California.
In 1977 he was observed cozying up to actress Jaclyn Smith. Despite his welcoming demeanor, Hirschfeld was actually down and out in Balboa Beach. Financial records showed that he had $56 in the bank and millions of dollars in debts with assets that were worth less than $2000 and finally, his gross income for that year was less than $10,000.
But it did not deter his willingness to come back as he was soon seen in the company of other Hollywood types, including actress Penny Marshall, Mr. T, and many other Hollywood notables. He was doing legal work for Donald Nixon the former president’s brother and arranging for financing of the sequel to Kenny Rogers film “The Gambler.”
Hirschfeld clearly enjoyed the company of celebrities and how one gains access. A friend said that Hirschfeld was energized by these contacts with the rich and famous and powerful. Among them were Ken Norton, Larry Holmes, Roberto Duran, Sen. Orrin Hatch who spoke at Ali’s recent funeral, Teamsters boss Frankie Fitzsimmons, various Saudi sheiks, Jean Kennedy Smith, and actress Linda Evans.
He took great pleasure in acquiring the baubles of fame and using them to impress people. He once tried to make a security deposit on an oceanfront home in Virginia Beach by offering a $30,000 Rolex watch, claiming it had once belonged to actor Paul Newman.
Hirschfeld had begun appearing in the company of world leaders such as Leonid Brezhnev, Ferdinand Marcos, Shimon Perez, Moammar Gadhafi and also Soviet President Mikael Gorbachev.
Various acquaintances marveled at his ability to rise in a Phoenix-like manner from the ashes of the failed bank venture, winning friends in high places. Family members began to speculate that his access to celebrities and world leaders began with his Nixon connections.
On one location, Hirschfeld visited the home of Richard Nixon and while former first lady Patricia Nixon served ice cream to his nephews, Nixon and Hirschfeld carried on an animated conversation in the Nixon study.
Among the celebrities that Richard had come to know, there was one famous person that he had not met and that everyone in the world wanted to meet. That person was Mohammed Ali. Everyone wanted a piece of Ali.
But in the 1980s you had to see Richard Hirschfeld first. Richard and Loretta Hirschfeld were in the process of returning to Virginia Beach after he gotten back on his feet in California. It was at this point in time when Richard Hirschfeld contacted a Virginia Beach homebuilder (whom he had never met).
I was that homebuilder!
And, as I remodeled a portion of his new home in Little Neck, I also entered the life of this strange and remarkable man.
In next week’s edition, we will examine how the lives of Muhammad Ali and Richard Hirschfeld became intertwined.