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?

William Baily Beachum Jr. flew rescue missions in Vietnam, each trip a gamble against the odds. His chopper was shot down five times. He looked into the staring eyes of men who'd been his friends and identified what was left of their bodies. He came home with screaming nightmares it would take his country years to understand.

He fooled 'em, though: He became one of the best damned national service officers the Disabled American Veterans ever had. Everybody liked Bill Beachum. He could pump up enough Mississippi charm to oil any situation. And he'd step out on thin, brittle limbs to get his men the benefits they'd earned.

He started working for DAV in St. Louis, and after a stint in Washington, D.C., he was sent back in 1993 to supervise the regional service office. Members of the local chapter -- DAV Number 1, one of the oldest and largest in the nation -- elected him their chief finance officer. He was a hero, after all, and a real personable guy; even had a college degree.

The power went down easy.

So did the Stoli, doubled, on the rocks.

By 1999, old fears and needs had caught up with him. He emptied his savings at the baccarat tables to prove he still had luck. He emptied DAV's coffers to transform a dingy old restaurant into a slick clubhouse for his men. He hired a sexy, hard-worn beauty as bartender and tried to convince himself she loved him.

He wanted what he never had in Vietnam: a way to win.

And he wanted what he craved growing up poor: easy money.

Bill Beachum was 56 years old, and want still burned his mind.

It changed him, led him down a reckless path that broke the old soldier's code of duty to comrades-in-arms and damaged the financial health and reputation of a charity he was charged to serve and protect.

It also brushed him hard against a group of fellow DAV officers applying another old soldier's tradition to the organization -- serve yourself first, make it work by making it work for you.

Beachum tried to follow that tradition and fouled everything up. Want got in the way. He sought relief in the cold ether of vodka. But when it mixed with his blood-thinning medication, the booze ignited.

That summer, he left hot, slurred messages on the bartender's answering machine, jabbing at her the way a drunk fraternity boy might:

"Get your ass over here -- I want a blowjob."

"I'm down at the Pinkeye, and I'm waitin' on your pink ass."

In time, he turned plaintive.

"After all I've tried to do for you," he said, months after he started paying her salary -- and more -- because she later claimed in a lawsuit the restaurant's manager had raped her. Beachum wanted to quiet Jane Doe for the DAV's sake, but he expected a little gratitude.

"I need somebody to talk to. Please."

When she wouldn't cooperate, he sobered, braced by her businesslike demands. In early autumn, he offered to meet her at a Bob Evans restaurant, "if that would be satisfactory," and said he was in a rush to get her latest check to her.

She requested a receipt. He started feeling a little frostburn.

"Hey, this is Bill -- you gonna pick up the phone?"

"What is so bad that I can't even come by your house? And the one time I did, I got arrested --" he'd torn the door off its hinges -- "and I'm gonna have to pay thousands of dollars."

That night, Doe answered and taped her response, preserving this conversation and the answering-machine messages for a future lawsuit:

"I thought you didn't have thousands of dollars anymore. I thought your accounts were frozen."

"They are, but I'm gonna have to pay thousands and thousands of dollars to get outta this shit. Fuck you -- I won't pay you any fucking money. I'll go to jail and spend the rest of my life there, because I've been miserable anyway."

Two years later -- after a massive investigation that twisted in other directions as well -- Beachum was indicted on 23 counts of money laundering, theft and forgery. Not only had he spent DAV money on Doe -- who sued anyway -- he'd allegedly siphoned money from the chapter to pay his gambling debts and buy himself a BMW.

While he was playing, the DAV Transportation Network's 71-year-old coordinator was scrambling for more volunteers to drive 1,600 paralyzed or infirm vets to their doctors' appointments. People were working their twentieth years at low-paying DAV thrift stores because they wanted to make a difference. Thousands of veterans were giving hard-earned money "to advance the interests and work for the betterment of all wounded, injured and disabled veterans."

While they were answering the call of duty, Beachum was going AWOL.

His wife was so shaken by his conduct that it took her weeks to agree to bail him out of jail. In December, she sued for divorce. Beachum is now in Mississippi, waiting for his July 1 trial.

To outsiders, it was a hero's tragic fall.

To insiders, it raised a different question:

Was he going down alone?


Beachum's year of infamy ended in November 1999, when officials from DAV's national headquarters whisked him into rehab and hired a private investigator to assess the damage.

Out in Windsor, Missouri, Beachum's friend Jerry Bay caught only the lightest spray of gossip: The St. Louis chapter was broke and some redhead was suing it.

Bay was out in the barn, methodically worming his quiet, heavily muscled russet and black Gelbvieh cows, when the call came summoning him to a January 10 meeting in St. Louis.

It was a three-and-a-half-hour drive, but Bay agreed automatically. He had the habit of doing, without hesitation or fuss, whatever was needed. When he was a fireman, he was the one who came home with his ears burned. Later he served as a deputy sheriff, a municipal judge, a DAV state commander. He liked helping veterans who'd been handed a raw deal. So when he went on 100 percent disability -- after two spinal fusions and the implantation of electrodes to intercept the pain -- he volunteered for DAV, helping Beachum organize service officers throughout the state.

On the surface, the two men had a lot in common. Both grew up poor, married young and went through hell in Vietnam. Once, Bay's tank hit two land mines and got ambushed by the Vietcong. Once, blood pouring from his ears, he managed to fire enough rounds to save his comrades' lives. He was seriously wounded twice and collected even more medals than Beachum.

But war wounds and tokens of honor had the opposite effect on Jerry Bay.

He came home passionate about fairness, convinced that a straight line ran between right and wrong. Death no longer scared him, but he'd sleep on a bed of knives to keep his conscience clean.

When Beachum wasn't drinking, he hung out with Jerry and his wife, Connie Bay, at the national conventions. When he drank, he avoided their eyes.

He hadn't looked at them straight for a long time.

When Bay walked into Jefferson Barracks for that meeting, he expected to talk about bailing the St. Louis chapter out of a financial mess. Beachum saw him and came over, already sodden, muttering something about doing it all for the sake of the DAV.

Before he could explain, the meeting began -- and swiftly turned hostile. Why was Beachum paying hush money to a woman who'd been a bottomless dancer on the East Side? How dare he spend all the chapter's money on a failing restaurant?

"We have lost track of our purpose," intoned the inspector general of the national DAV, Robert Gushee, who'd flown in from the organization's Cold Springs, Kentucky, headquarters for the occasion.

Gushee suspended the chapter and appointed three trustees from outside the chapter -- one of them Jerry Bay -- to clean up the mess.

Bay figured it would take maybe a month.

He spent the next two years driving back and forth between Windsor and St. Louis, pulling apart a tangled mess of misspent money, a drained pension fund, vanished life insurance policies, inexplicable property transactions and doubled or missing records.

He wasn't given to clichés, but by the time he'd read the investigator's reports, scrutinized the books and interviewed DAV employees, he was saying things like "Beachum's only the tip of the iceberg." He questioned the behavior of past officers, the management of the thrift stores, even the intent of the national organization's decision-makers.

Bill Beachum had indeed screwed up royally.

But other men's greed had given him permission.


Initially, all Beachum wanted was to give the chapter members a home, a place like the one they used to have on Kossuth Avenue, where they could meet to play cards or stuff envelopes, have a few drinks, talk to people who understood how years of drill and combat could shape the rest of your life.

Beachum found them Lemmons, a dim-lit little place on Gravois long famous for its fried chicken and lemon pie. He kept the owner, Joe Tucci, as manager but ignored the loyal bluehairs who lined up every Sunday.

Beachum envisioned a sports bar with leather couches and a four-star restaurant serving chateaubriand and bananas Foster.

"It was nuts," says Tucci. "I said, 'Bill, this is South St. Louis; this is an older clientele; these people want the chicken."

Tucci watched in amazement as Beachum, who'd agreed to pay $300,000 for the restaurant, wrote checks totaling $411,510 to Savbyo Construction to renovate it.

"We're talking about chicken," Tucci reminded him again, "$7.95 a plate."

Beachum signed off on a charge of more than $21,000 to install and light a donated flagpole. He spent thousands on the bar alone, a massive, lakelike oval of marbled burgundy Corian.

He and Jane Doe held hands across that bar. She called him at the office. They were seen dining together. At one of the chapter meetings, coworkers say, she came in wearing a gauzy top tied under her breasts and a pair of shorts. Older, chunkier women were heaving trays up and down the stairs. When they offered her a chance to help, she reportedly informed them that she was there to entertain.

Months later, in a sworn deposition, she said that she quit in January of 1999 because of Tucci's sexual innuendoes and the way he "groped, grabbed and fondled" her and her female coworkers, offering to pay them for sexual favors. Tucci denies this -- and her subsequent allegations -- in the vehement inflections of his native Calabria, Italy.

But Doe went on to sue him for that and for what she said happened next.

She said that, at Beachum's urging, she returned to work when they reopened after renovation. She worked one week. In the deposition for her lawsuit, she testified that on March 27, 1999, Tucci told her to bring the money from the cash drawer to the upstairs office and help him count it. She said she argued and then obeyed, and when she stepped inside the office, he grabbed her, ripped her culottes and pulled aside her thong underwear.

"His penis went in from behind me which ripped me open," she claimed in her deposition. "After that happened, my mouth went between his legs over and over, and we fought, and when it was over, it was like nothing." During the act, she said, she "lost all coordination with life. I went back to some little-girl state, I guess because of the past child abuse."

Doe sued Tucci, Beachum, the national DAV and the local DAV company running Lemmons. The suit alleges that Tucci "raped her and ejaculated on her back."

She'd been raped as a child, she said in her deposition, and the second rape left her too traumatized to tell anyone for months -- except Beachum, to whom she admitted giving a different version, something about Tucci masturbating and ejaculating into a towel.

Doe said her ribs were broken, but she didn't go to Grandel Medical Center for a week. And when she did, she said, she didn't tell her doctor what had happened -- and she didn't remember whether she was X-rayed.

She said in her deposition that she couldn't even tell her husband.

In his deposition, however, her husband said that she told him all about the rape right away, describing how "she climbed out the window onto the roof, trying to get away."

Maybe she tried. But that window is barred.

Tucci says he only settled his part of her eventual lawsuit for peace of mind. He says he fired Doe on Easter Sunday -- the day after the alleged rape -- because she wouldn't work and kept whining about going home to her kids, even though another waitress had been working since morning and her husband was in the hospital. Tucci says Doe slung profanity at him and, fed up, he fired her, right in front of Bill Beachum.

Desperate to keep Doe from suing, Beachum started paying her salary and psychiatric bills, her father's medical bills, the legal bills to get custody of her daughter. According to his ledger and check records, in eight months he'd paid her $72,000.

Her attorney, Larry Bagsby, says, "She can only account for receiving $40,000."

Plus whatever Beachum paid to settle her eventual lawsuit. Where he got the money to settle, Bagsby won't say.

But by then, Beachum had also spent roughly $100,000 at the Casino Queen and Harrah's/Player's Island; bought himself a $40,000 BMW; used it for collateral to get a cash loan; replenished his negative-balance bank account; and drowned his sorrows -- all in 1999, all allegedly with the help of funds siphoned from the chapter.

At the chapter meeting that September, he was so drunk that he called "Hallelujah" after every line of the chaplain's long-winded blessing. Then, still in the middle of the prayer, he knocked against his glass, spilled the vodka and yelled, "Aw, fuck!"

In November 1999, he was suspended from his duties. On January 11, 2000, he took a long-distance call from the national DAV's investigator, Michael Kessler of Kessler International in New York. Kessler taped the call:

"Good morning, Bill."

"Hey, bud."

"How are you doing?"

"Oh man ... I just woke up. Can you believe that?"

Kessler chatted a while, then told Beachum he'd better wake up and answer some questions:

"What the fuck were you doing with $2,000 a day in a casino? Were you betting that money away?"

"I also won some," Beachum corrected.

"Why didn't you quit while you were ahead?"

"That's a good point. Greed."

Kessler asked who forged checks written to Jane Doe.

"I guess I did."

A few days later, Kessler called back to ask about a rumored prostitution ring at Lemmons.

"Well, if it is true, then I damn sure wasn't in on it."

Moving to the absurd, Kessler asked him about the bread machine, one of several inexplicable charges on his thrift-store credit card.

Turned out it was a Juiceman he'd ordered; the Breadman was a bonus.

"I am trying to get myself to where maybe I would start eating the right foods," Beachum confided. Exasperation had already erased his good intentions. "Cup of kiwifruit, some damn gingerroot ... who the hell has that shit?"

He said he'd reimbursed the DAV for the charge.

That month, Beachum applied for a passport and reportedly urged a fellow officer to do the same.

By October of the following year, he was in jail. Police seized boxes of records. Check registers with double entries -- one set for public consumption, the other tracking the checks' real purposes. Computers from both home and office.

And his pretty green BMW.


Lemmons closed its doors in December 1999.

The pricey renovation wasn't even complete; employees had to patch the walls up, and there was a strip of silver duct tape in place of a threshold.

Then Bay and the other trustees found out they couldn't sell the place -- they didn't own it. Beachum had created a separate corporation, "DAV Chapter One Hall," and even though the regular chapter had made the down payment, he'd put the title in the Hall corporation's name.

Kessler discovered the second corporation by accident, during a database search, and notified the national organization.

But nobody notified the trustees or Pete Gullborg, the attorney for the local chapter.

"When I discovered that national had known and not told me, that was one of the singularly most exasperating moments," Gullborg says.

In time, the attorney did learn that the Hall corporation held title to Lemmons, but not before he started handling the sale of the restaurant. By then, several lawsuits had been filed, including two by fired restaurant chef David Lotz and architect Andrew Raimist. Had Gullborg known these actions were aimed at the now-dissolved Hall corporation, he could have simply filed a motion to dismiss.

But by the time he made his discovery, it was too late to counter the lawsuits without delaying the sale of the restaurant. So the chapter paid $50,000 to settle with Lotz and Raimist, using proceeds from the sale of Lemmons.

"We could have fought them," says Gullborg, "but it would have taken months, and our only potential buyer had given us a sell-by-this-date ultimatum. Besides, if another week had passed, there probably would have been another new lien."

The Hall corporation hit the news with Beachum's arrest in October 2001. Reporters called it a "shadow corporation." The sinister tone puzzled chapter members; back in 1998, their bylaws had been amended to establish three corporations: one for the chapter, one for the thrift stores and one, "Disabled American Veterans Chapter #1 Hall," for the restaurant. National gave Bay the impression of surprise when the Hall corporation surfaced, but the national judge advocate had signed off on the amendment the year before.

Nobody had asked to see the incorporation papers, though.

Beachum had played this like a lone hard-drinking cowboy. He was obsessed by his fantasy of a clubhouse for his men, and although he talked incessantly about his dream, he was never made accountable for its costs.

By the time he left, outsiders had a hard time even fathoming what he'd done, let alone why.

Bay squinted tired eyes at the registration his friend had filed with the Missouri secretary of state back in October 1997, scrawled in thick marker and listing only himself as registered agent -- no DAV attorney, no other officers. In the section stating the corporate mission, he'd written, "any legal purpose."

In 1998, Beachum stopped filing his annual financial reports.

But no one noticed until it was too late.

As the chapter's chief finance officer, Beachum wasn't used to much scrutiny. DAV's local accountants took what was given them. Kessler's forensic CPA, Charles J. Shields III, analyzed past audits and wrote:

"Certain workpapers are either missing or were never prepared, and ... even the workpapers that we inspected are not only illegible but don't sufficiently document the audit work that should have been performed."

By that point, Bay didn't even care. He wanted to close Lemmons and forget it ever happened.

But the investigator kept going.

Soon Bay was told that $12 million had run through the DAV bank account in six months of 1999, with no records available to explain the sudden swelling of both deposits and withdrawals. The June 1999 statement from Bank of America showed 21 "transfer from investment" deposits, averaging about $100,000 apiece. The total deposited that month -- and promptly withdrawn -- exceeded $2.2 million.

"Transfer from investment?" Bay reread aloud. "We have no investments."

Another day, a call came in about a water bill for a piece of property allegedly owned by the DAV. When an employee told Don King, who by then was investigating for the Missouri attorney general, she says he sighed heavily and murmured something about another piece of property they'd have to investigate.

The investigation went deep and stayed secret, but at the surface, loose talk and unproven rumors clung like chicken grease. A brothel upstairs at Lemmons. People snorting cocaine in the DAV parking lot. Real-estate deals swung all over the country. Everybody making money off everybody.

Sickened by possibilities that grew wilder by the day, Bay drove home and spent time with his Gelbviehs, soothed by the calm brown eyes that asked for no more than they needed.

When he came back to St. Louis, he saw panic in the patrician features of Ken Kooyman, the New Englander assigned by national to take over the thrift stores. Bay said Kooyman told him he was being followed by a guy with a skinny face and a gray beard, wearing sunglasses and a ball cap, driving a hunter-green Lexus with 795 written in the back window as a license plate. Someone was calling his home, too, urging him to back off. And his tires had been slashed.

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."


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.

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.

Nobody outside what DAV calls its "inner circle" of leaders could justify the decision. National inspector general Gushee had called the St. Louis thrift stores the lifeblood of the chapter. Four months after the trustees took over, national commander Michael Dobmeier had issued a memo to local members and employees announcing that sales had increased by $32,000; the number of customers had increased; they'd saved $225,000 by reorganizing staff; and enhanced benefits had improved morale.

Overall income from the stores was $3.9 million in 1998. Despite the chaos of transition, it was $3 million in 2000.

To this day, Bay can't figure out why the chapter had to be declared bankrupt. Publicly, national said the trustees had failed to turn the stores around -- a sharp contradiction of their earlier internal memo. Bay knew this: Not only had the stores' bottom line improved, outside experts had agreed they would continue to clear $250,000 to $300,000 a year.

Bay thought about national's decision until his stomach felt like a rag soaked in acid, twisted and wrung out hard. If they were trying to save money, why had they directed the local chapter to continue paying the mortgage on Lemmons, even though it was titled in the name of the Hall? If they were worried about the lawsuits, declaring the local chapter bankrupt wouldn't exempt them anyway. And if the problem was the capsized pension fund, why not just reorganize and let the federal Pension Benefit Guaranty Corp. that insured the fund reimburse the employees?

Maybe national just thought it would be simpler to shut down the internal investigation, dissolve all business operations and let a bankruptcy trustee clean up the mess.

Either that, or they were desperate to avoid more exposure and publicity.

It had been a rough decade: The national DAV made the Washington Post in 1993, when they kicked out their adjutant commander for misuse of funds, and again in 1996, when they were sued for abolishing a director's job because he made waves about improper spending. In 1997, the treasurer of a chapter in Danville, Illinois, was indicted on charges of stealing more than $10,000 from the group; he'd come under scrutiny after the local hall burned in a suspicious fire. In 2000, national closed a clubhouse in Biddeford, Maine, revoked the chapter's charter and confiscated the chapter's savings, hoping to end allegations of illegal gambling and vanished money.

Here in St. Louis, depositions filed in a 1990 lawsuit revealed that one of Pealer's predecessors at the thrift stores had a criminal record, ran a gun business and gave thrift-store merchandise to cops as repayment for favors. Depositions also described how this manager used a separate "manager's account" that was regularly replenished by the bookkeeper and how, when a local dealer sold a few cars for the thrift store, the dealer was trusted to deposit the cash for them.

In his deposition, the former manager admitted freely to the past criminal charges, which were lodged in California years earlier, one when he was a juvenile. He said sure, the cops did lots of favors for the stores and deserved the repayment. And yes, he said, there definitely was a special manager's account in addition to the regular checking account.

It was already set up, he said in his sworn statement, when he started working there.


Pealer and his supporters have their own theory: They believe national wanted the thrift stores closed because the national management doesn't like locals to have much autonomy and that they wanted Pealer out because he'd supported a man named Charles E. "Butch" Joeckel back in 1993.

Joeckel was the national adjutant, DAV's equivalent of a CEO. Pealer was the national judge advocate. The two men were good friends.

Then the guild of national service officers voted 202-5 to remove Joeckel, alleging misuse of funds and questioning millions spent on a traveling DAV exhibit, legal fees and overseas travel.

A mean fight ensued, with Joeckel's supporters accusing the service officers of sour grapes because he'd streamlined their budget. Pealer defended him.

The next national election was a coup in which all of Joeckel's supporters -- including Pealer -- lost office.

Joeckel was dismissed from the DAV. His attorney, John W. Karr, later defeated national in court and won him reinstatement as a member.

Karr is said to terrify national.

He now represents Pealer.


Last month, Bay walked into the pink-stone Thomas F. Eagleton Federal Courthouse and watched DAV employees file in for the final bankruptcy hearing.

Rufus Conner, who worked for the stores 20 years and said he and his fellow employees "used to get a pension statement yearly. The last one I remember was in the early '90s. I used to wonder why we didn't get them anymore. A few times I went to Stan Pealer personally, and he would always assure me that everything was going well."

Barto Edwards, who had finally gone to the Department of Labor last November to ask about the pension. That very afternoon, says his wife, Mary, federal investigators showed up at the thrift-store office.

Ella Ashford, manager of the Natural Bridge store, who'd written to the bankruptcy attorney on jagged loose-leaf, "I'll waver [sic] the sick pay. But, do not waver the pension."

The pension was already wavering.

Bay thought about all the people who'd worked their entire lives for the DAV. All the volunteers who drove paralyzed vets to the medical center. All the donors who gave in good faith.

The anger came over him and would not leave.


"There's enough pus and poison there to kill anybody who gets near it," a St. Louis veterans' advocate says of the St. Louis scandal. "These posts become little microcosms of the military. The guys who would've been the million-dollar supply sergeants rise to leadership positions very quickly."

He's seen the power hunger, the sense of damage and entitlement, the easy game of favors and opportunities, play out again and again.

The last to notice are the members, whom Connie Bay describes as a mix of "the World War II guys, who just want a place to be wined and dined, and the Vietnam guys, who want to be left alone."

Member Harry Donnegan, who's near 80, remembers that he and a friend, both businessmen, used to raise an eyebrow at the minimal financial data presented at the chapter meetings.

"We didn't raise any Cain about it," he admits, "because in an organization like that you don't want to stir up a lot of stuff."

He sighs.

"It was our apathy that got us where we are."


Attorney Pete Gullborg has been acting as custodian for heavy boxes of files on the DAV.

Two weeks ago, out of the blue, he received a letter from Ken Hale, identifying himself as the adjutant of Chapter One -- which is still dissolved -- on letterhead listing a phone number that now rings in the office of a well-known local charity with no connection to DAV.

Hale requested all files in Gullborg's possession and offered no explanation.

When Bay found out, he made a phone call. He says he was told that the directive came from national but that they wanted the request to go out on the local's letterhead and said it didn't matter that the chapter no longer existed. Just get those records back.

Gullborg refused to release them.


In ancient Mesopotamia, the community laid its sins on a goat and drove it into the wilderness to die alone.

Some say that's what's happening with Beachum, a particularly foolish goat but surely not the only one to bend the congressionally chartered DAV's "benevolent, fraternal-beneficial and educational purposes."

He goes to trial July 1 and faces 221 years in prison if convicted on all counts. The prosecutor's office has offered seven years if he pleads guilty.

Questions about the pension, the books, the management practices and the bankruptcy hang in midair.

"The whole thing stinks from beginning to end," says Kooyman, who refrains from further comment.

Jane Doe and Jess Stagner are pressing their lawsuits.

The thrift-store employees are still waiting for the money due them -- and an explanation of how it drained away with nobody noticing. They've been told that the Department of Labor is investigating.

Members just want their charter back. They've been promised that their chapter will be reinstated when the bankruptcy proceedings conclude, and everything will return to normal.

If this is normal -- and if trying Beachum and closing the thrift stores is the sum total of the consequences -- Jerry Bay plans to leave the organization.

Members and former employees say he's the one DAV leader they still trust. They pronounce his full name and draw comfort from it:

"We can ask Jerry Bay."

"Jerry Bay will tell us the truth."

He will.

But he no longer trusts the other leaders to give it to him.

More by Jeannette Batz

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