Nearly 80 years before the recession of 2008 brought down Tom Petters, the crash of 1929 toppled Wilbur Foshay—or at least shattered the illusion that he was the Midwest’s answer to Midas. By 21st century standards, of course, and even allowing for inflation, Foshay was a piker, his excesses fueled more by a Gatsbyesque hubris, it seems, than by the pathological greed of a Petters or a Bernard Madoff. Still, fraud is fraud, and Foshay’s rise and fall were as spectacular in his time as Petters’s have been today. For that matter, odds are that Petters—whose $3.5 billion fraud trial is scheduled to begin in October—will be long forgotten in another 80 years. Foshay, dead and buried already for half a century, still has his name atop a grand building.
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In fact, mainly owing to that building—the unique, 32-story Foshay Tower in downtown Minneapolis—Foshay has outlived every fraud, cheat, chiseler, and snake-oil salesman who’s besmirched the Twin Cities business community since the Great Depression. Who, after all, recalls without this prod the likes of Fred Ossanna, William Rubin, Janet Karki, Eugene and Michael Gruenberg, and Harold Greenwood, all of whom got crosswise with the law and made big news for business-related offenses? Among the happy ironies that accompany them to history’s dustbin is the gulf that yawns between the arrogance that led to their crimes and their virtual nothingness afterward.
None of the aforementioned miscreants had the good sense to build a 447-foot-high monument to himself in the middle of a major city, affix his name in 10-foot letters at its zenith, and commission John Philip Sousa to compose a march in its—his—honor. True, Sousa’s check from Foshay (for $20,000) bounced, and two months after the skyscraper’s dedication, Foshay’s businesses were cast into receivership.
As Time magazine, in its November 11, 1929, edition, noted, “Not the tower but the man who built it fell last week.” It would be another two and a half years before Foshay—plump, pleasant, ever smiling, the unlikeliest of crooks—would be convicted of mail fraud and sentenced to federal prison, leaving the locals, not to mention thousands of investors around the world, poring over worthless securities and scratching their heads. At least he left us with that building.
Charles Ponzi, a contemporary, is not mentioned in the headlines that cascaded out of Minneapolis during Foshay’s trials, but it was Ponzi’s infamous scheme that Foshay’s crimes allegedly resembled. Though Foshay was ultimately convicted of mail fraud—the feds’ trusty warhorse when prosecuting white-collar crime—what he did, according to the government, was peddle investments in overvalued properties and reward early investors with money deposited by later ones—until, that is, the bottom fell out of both his operation and the nation’s economy, and the money was gone.