WHY WE DO Bill and Kathy Bartmann are the parents of two daughters and know the loss of 3,900 jobs and a $3.5 billion fortune, no matter how significant that would seem to some, would pale in comparison to the loss of a child. Though the loss Bill and Kathy suffered is not the same as that suffered by John and Reve Walsh, their response to the loss is very similar. Bill and Kathy’s story: In 1986, Bill and his wife Kathy & a business partner, borrowed $13,000 and from their kitchen table created a new industry – Debt Resolution. Over the next twelve years they grew this “kitchen table” enterprise into an international company with over 3,900 employees with revenues in excess of $1 billion and earnings in excess of $182 million. That company, Commercial Financial Service, Inc, (CFS) was novel in a number of regards. It was novel in the way it treated its employees. The company implemented unheard of perks and benefits for their employees, such as salaries at 2 times the industry standard, free health care, free on-site day-care, 250% 401K match program and legendary company trips where they took ALL of the employees and their spouses on annual trips to the Bahamas, Las Vegas and Ocean Cruises. One year they leased 27 – 747’s so they could fly 6,000 employees and spouses to Disney World. As a result of the way they treated their employees – the company received a large number of awards, including the following: Working Woman Magazine’s 1998, - “One of the Top 100 Best Companies for The company was novel in the way it treated its customers. CFS pioneered an approach whereby each customer was treated with dignity and respect. CFS was publicly acknowledged as having revolutionized and reformed the debt collection industry in America. “Bill Bartmann has built a big business of bad debt. He also may have made bill collectors kinder and gentler.” “Bill Bartmann…remade one of the ugliest industries”. “Bartmann…managed to turn his loss into an opportunity…and changed an entire industry”. “Bill Bartmann…put a seedy and inefficient industry on the road to respectability”. The company was novel in the way it did business. CFS created novel financial instruments on Wall Street that are still in use today. CFS received a large number of awards and accolades including: The Better Business Bureau’s “Torch Award – For Ethics in The Marketplace”. Inc. Magazine’s list of 500 Fastest Growing Companies In America – four years Awarded a permanent place in the Smithsonian Institute’s Museum of American History for “Visionary Use of Information Technology Which Produces Positive Social Change, Economic and Educational Change”. Bill and Kathy individually graced the covers of national business magazines, Kathy on the cover of Forbes, and Bill on the cover of Inc. They were listed individually in the Forbes 400 wealthiest people in America. One national magazine ranked them number 25. Then, in 1998, tragedy struck when an employee of their company sent an anonymous letter to the Wall Street Rating Agencies, detailing the suspicious conduct of Bill and Kathy’s former partner. This employee chose to send the anonymous letter to the Rating Agencies because there was no mechanism in place to protect the employee’s anonymity had he sent the letter to anyone connected to CFS. Bill, immediately upon hearing of the allegation, instituted a full investigation and commissioned the former Director of the Central Intelligence Agency, James Woolsey. to head the investigation. On the very day of the allegation was made known, Bill fired CFS’ attorneys, accountants and investment bankers and replaced them with new unbiased professionals so the investigation would be untarnished. Bill then went a step further and removed himself because of his former relationship with his ex-partner and appointed a Committee to run the company during the investigation. Before the investigation could even get under way – Wall Street panicked and law suits and allegations rained down upon the company. Without new funding available from Wall Street, the people appointed to run the company during the investigation, filed for bankruptcy. Within a matter of months, all 3,900 employees were let go and the assets of the company liquidated. Although Bill and Kathy’s former business partner told the prosecutors that he had acted without Bill’s knowledge, admitted his guilt, was sent to prison and ordered to pay $1 billion in restitution – in the post-Enron, post-WorldCom, pre-election Willie Horton environment, U.S. Attorney General, John Ashcroft, indicted Bill on 57 felony counts relating to Bill’s partners activities. The Justice Department then froze all of Bill & Kathy’s financial assets precluding them from hiring the criminal attorney of 1st choice. It also prevented them from paying attorney fees to the law firm that was defending them in civil litigation. That law firm ultimately withdrew on the day of trial (because of non-payment of fees) and within hours Bill and Kathy had a $20 million judgment against them. Because their financial assets were frozen they could not post a bond to forestall the collection of the judgment pending appeal. One month before Bill’s criminal trial started, Bill & Kathy had to file personal bankruptcy, effectively losing everything but their home and some of the items of personal property within the home. One month later - Five years after the anonymous letter was sent, the criminal trial began. The trial lasted 2 ½ months and the Government called 53 witnesses and produced over 1,000 exhibits. Bill rested his case without calling a single witness or producing a single exhibit. The jury unanimously acquitted Bill on all counts. Ironically, 17 months after his acquittal and six and a half years after his company was liquidated, the Federal Bankruptcy Trustee, the person appointed by the Federal Bankruptcy Court to liquidate their company and the person who sued them for $20 million that caused their personal bankruptcy, issued his report which publicly acknowledged for the first time, “CFS was not a fraud”. This report was confirmed by four independent “Expert Witnesses” hired by the Trustee in the civil proceedings. This earthshaking revelation came six years too late for the 3,900 hard working, dedicated loyal employees of their company who lost their jobs because of an unnecessary panic. These employees lost more than a good paying job with above average perks and benefits; they also lost their hopes, dreams and aspirations. Many of them suffered severe trauma and dire financial circumstances. The financial stress of losing their job, day care, health care and retirement all in one fell-swoop devastated many of them beyond recovery. Some families were torn apart by stress and anxiety unnecessarily created by an unwarranted panic. Many families experienced divorce, foreclosure, bankruptcy and sadly even unconfirmed reports of suicide. The entire community suffered. The 3,900 jobs that were directly lost impacted thousands of other jobs in industries as diverse as food services, retail, auto sale and home sales. The loss of $110 million in annual salaries alone had a severe impact on tens of thousands of innocent people. Bill and Kathy witnessed first hand the collateral damage created by this unnecessary panic. They saw the damage done to the innocent hard working dedicated employees who had helped them reform an ugly industry. They saw the damage done to the families of these people as well as to the community at large. This experience would have embittered most people, but not them. Bill and Kathy know that the only way a tragedy can ever have value is if the experience causes someone to take new and different preventive steps to make sure it never happens again. By creating America’s Whistle, a not-for-profit foundation that will 1. Allow healthy companies to survive a corporate scandal thereby avoiding the unnecessary collateral damage to hundreds of thousands of innocent victims.2. Provide a truly anonymous system for employees of every company in America, both private and public to report wrongdoing without fear of reprisal or retaliation. |
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