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?

But Kessler couldn't find it in their accounts.

He asked the accountant, who swore he knew nothing about it. The assistant store manager who received the sealed envelope every month said she was told to give it directly to Pealer.

Kessler's report also noted that Pealer paid many people as if they were independent contractors, filing 1099 forms and saving on the employer's share of the federal withholding tax, even though their work was under the direction of the thrift stores and wasn't freelance.

He questioned Pealer's making cash and car loans to employees for a 10 percent flat fee, because the thrift stores weren't licensed to do so. Kessler's report noted large discrepancies between the sales prices listed in the store's books and the sales prices the bookkeeper wrote on the titles. He also noted that certain vehicles were repaired at DAV expense before sale -- one was given to Pealer's son.

The thrift stores were a cozy, familial operation. The bookkeeper stayed 18 years; her son managed one of the stores. Like Leach's and Stagner's sons, Pealer's daughter worked for the stores, and his brother-in-law was the traffic manager. Stan's brother, Paul Pealer, has been the adjutant commander for the state DAV for 14 years -- but started out working at the thrift stores.

Stan's wife was on the thrift stores' payroll too, and Kessler's report noted that, "unlike most employees, she received close to a 50 percent pay increase during 1999. A number of employees to whom we have spoken indicated that Pealer's wife had a 'no show' position. Pealer told us that his wife was removed from the payroll right after our investigation began."

After Kessler's investigation, Pealer was fired. For Bay, the irony was complete: He says Beachum came back to St. Louis with a mandate from national to get rid of Pealer and Stagner.

"Instead, he crawled into bed with them," says Bay. "He said Pealer wasn't that bad; he was making the chapter money."

Inadvertently, Beachum had fulfilled his mission.

Pealer fell butter side up, though. On January 28, 2000, two days after he was fired, he approved his own lump-sum pension disbursement of $152,882, bringing the fund to rock bottom.

Then he went to work for Stagner, reopening old DAV thrift stores as Thrift Plus Inc. The old Veterans Village on Delmar, DAV's first St. Louis store, now boasts a big red-white-and-blue sign announcing "a new kind of thrift store."

Prices are high for what they're selling: preworn ladies' panties cost $1, a bent plastic rack $4, an old glass florist's vase $5, a mangy kitty-fur scale $9, a Baggie of three muddy golf balls $1.

Proceeds, they say, still go to help veterans, and there's a big sign outside, even bigger than the Thrift Plus sign, that reads, "Help Hospitalized Veterans," the name of the not-for-profit organization designated to receive proceeds.

Thrift Plus itself, however, is a for-profit corporation.


Bay was shocked by Kessler's findings.

He's even more shocked by national's response.

National inspector general Gushee says they've said everything they're going to and have no further comment about the St. Louis scandal.

"I'm not about to get involved," he snaps. "We're not looking bad. Everything's been done properly."

Click.

But Bay says that when the trustees consulted with an attorney expert in pension funds, she urged them to turn everything over to the feds. He says when they reported her advice, national directed them to fire her and get all the records back. Shortly after Kessler started digging into the pension's history, they ended his investigation. Bay says Kooyman, who'd been working closely with Kessler here in St. Louis and asking lots of questions, was told to keep his mouth shut about the pension mess and had to pay Kessler's final bills himself.

"We strongly suggest that this matter be turned over to your legal counsel and the Attorney General," wrote Shields, Kessler's accounting expert, in an August 2, 2000, report. He promised to "wind down" his forensic investigation as national had requested but urged them to take further action.

"It appears that the Plan overwhelmingly benefited certain DAV Chapter 1 officials and has apparently deprived the rank and file workers of their vested benefits," Shields wrote.

By his calculations, more than 60 percent of the pension payouts made between March 1994 and June 2000 went to Leach, Stagner, Pealer and members of their immediate families. Another 1.6 percent, $14,718, went to Beachum at his termination, and 5 percent went to a list of employees who could not be identified.

Kessler referred the case to the St. Louis circuit attorney's office.

"They were not interested," he says, the sarcasm harshened by his New York accent.

"Neither was the FBI."

Finally the Missouri attorney general's office agreed to investigate. By May 2001, they'd found enough evidence to place the case firmly in the reluctant arms of the circuit attorney's office.

On December 4, 2000, a grand jury indicted Beachum on 23 counts.

One week later, national closed the five St. Louis thrift stores and declared a straight Chapter 7 bankruptcy, liquidating the inventory and turning its back on any possible comeback.

By 5 p.m. that day, the 88 store employees, many of whom had worked for the DAV their entire lives, had no job. Their last paychecks bounced. Their pension fund was as dry as the Sahara.

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