Conduct Unbecoming

Bill Beachum, war hero and Disabled American Veterans honcho, had an out-of-control dream that may soon land him in jail. Question is, was he the only old soldier on a mission of greed?

Bay wrinkled his forehead, wondering whether the stress was getting to Kooyman. Then another employee, a woman Bay treasured for her honest good sense, mentioned odd phone calls to her home:

A man's voice asking, "What happened to all the cash from Lemmons?"

With outsiders asking tough questions, the same voice telling her, "The less you know, the better."

David Hollenbach
David Hollenbach

Bay couldn't help but agree with that voice: He wished he didn't know half of this. Still, he forged ahead -- by digging backward, reconstructing the chapter's history.

Three names wove through the story: Bill Leach, Jess Stagner and Stan Pealer. They've never been accused of any criminal acts, but they made themselves a cozy nest in the DAV's top branches.

Leach was a favorite son of DAV, friends with national's top officials and an officer in the National Service Foundation. His father had helped start the St. Louis chapter.

Stagner was Leach's Army Air Corps buddy in World War II, stationed with him in the South Pacific. In civilian life, both took active roles in the St. Louis DAV. Soon Leach supervised the service office (he was Beachum's predecessor and mentor) and presided as the chapter adjutant, with Stagner as his chief finance officer, re-elected every year from 1954 until they both retired in 1993.

Stagner and Leach signed each other's checks. The members trusted them implicitly.

The power was sealed tight for four decades.

In 1965, Leach and Stagner and three other vets incorporated Fivestar Realty. Because the chapter had no money, Leach says, Fivestar bought buildings for its thrift stores to use. Fivestar rented these rather undistinguished buildings to the chapter for the next three decades -- on terms quite favorable to Fivestar.

Under the most recent leases, DAV was paying $5,618 a month for the Natural Bridge Road store; $7,842 a month for the Delmar Boulevard store; and $3,875 a month for the Wells Avenue store, all with annual inflation increases.

Long-term leases made the chapter responsible for all physical maintenance, including roof repairs, as well as all utilities, licenses, permit fees, taxes and insurance.

Meanwhile, in 1966, Leach and Stagner set up a pension fund and life-insurance policies for employees. According to Kessler's report, Leach's brother Pete Leach, an insurance salesman who helped establish the pension, collected more than $46,000 in DAV commissions between 1982 and 1988.

In 1993, Leach and Stagner retired and took lump-sum settlements -- $212,090 for Stagner, $185,778 for Leach. Their sons, whom they had hired to work for DAV, received smaller settlements.

Pealer, a younger man who'd served on a Navy submarine and taken over managing the thrift stores in 1987, eventually took charge of the pension plan. In 1997, H.C. Foster & Co., a pension and employee benefits consulting firm, warned him that it was seriously underfunded. Slowly, the switch was made to a 401(k). Longtime employees say they never did find out what happened to their life insurance.

After Leach retired, he stopped going to chapter meetings and withdrew from Fivestar.

"There were things Jess did that I didn't approve of," he says.

Now Fivestar's president and only remaining founder, Stagner is asking DAV for nearly $1.8 million; he's filed a lawsuit against national and, overlapping that, a bankruptcy claim against the local chapter. He says they breached contract by closing the stores, thereby ceasing to pay rent. His lawsuit also accuses them of "wasting" the properties by failing to keep them in good repair.

What he doesn't mention is that the manager who deferred maintenance -- to the point that the beams were rusted through, walls bulged, joints hung in midair and structural engineers recommended that the Delmar building be demolished for safety reasons -- was his pal Stan Pealer.

Former employees describe Stan Pealer as oily -- they say he has to be to slide into those tight pants, keep that artificial tan, flash the gold chains beneath his unbuttoned shirt. Handsome, with graying blond hair and a serpentine tattoo the same blue-green as his eyes, Pealer "can charm the drawers off you," says one woman.

"Pealer in one word?" asks a man who worked for him nearly two decades. "Opportunist."

Even Leach, who hired him, says, "Pealer does what's good for Pealer."

But what was good for Pealer seemed also to be good for the chapter. They received a motley array of donations, from moth-eaten varsity sweaters to motorcycles, cars, real estate, antiques and collectibles. They needed a sharp businessman who could discern what was of value -- and maximize the profit.

Pealer got the thrift stores out of the red almost immediately. And every year thereafter, he turned back a healthy profit to the chapter. He insisted on autonomy, and that was fine with the members; they didn't know jack about how to run thrift stores, let alone make them profitable.

But because Pealer took a percentage of those profits as his management fee, Kessler's report says he had a strong incentive to "make the bottom line 'look' as good as possible to enhance his own compensation."

Pealer also collected $300 in cash every month from Jose, the owner of the Royal Palace restaurant next door to the Natural Bridge store, for use of the rippled and cracked parking lot, the Kessler report noted. Allegedly that money went to the chapter.

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