The Tennessean on Ruhe and Geissler in 1982 - Part I



Here's the first part of a lengthy investigative piece by The Tennessean on June 20, 1982 on then-new UPI owners Douglas Ruhe and William Geissler (written by publisher John Seigenthaler and reporter Robert Sherborne). It was headlined: "Out of Stormy Past, UPI's Two 'Mystery Men' Have Covered Long Distance":


In New York, it's about two miles from the courthouse where William Geissler received a prison sentence in 1969 to the sky-scraper office he now occupies in UPI's executive suite.

He knows the time and distance are much greater.

"It seems like I have come through a lifetime," he said last week as he sat in the office where he is working on planning United Press International's future.

"Obviously, when I was in Danbury prison I had no idea that in 1982 I would be part of a group that would assume the management of UPI. It is a sobering undertaking."

Down the hall from Geissler, his friend and business associate, Douglas Ruhe, the new managing director and chief executive officer of UPI, looks out on Second Avenue and shares a sense of miles traveled. Last week when he went into meet for the first time with labor officials to reassure them that the union contracts would be honored by the new UPI management, he thought back to the days he and Geissler were labor organizers in Texas.

And when Geissler and Ruhe are home in Nashville it is only 200 yards from their Focus Communications Inc. offices at One Commerce Place, across War Memorial Plaza, to the spot where Ruhe was physically assaulted in a one-man anti-war protest in 1968.

Again, they both know they have covered a great distance since those days of activists dissent when Geissler went to federal prison for refusing the military draft and when Ruhe was beaten up for demonstrating against Sen. Edmund Muskie during a vice presidential campaign speech.

The announcement less than three weeks ago that these two young men who came from backgrounds of social protest were among four principals in the purchase of United Press International -- one of America's two international news services -- shook the nation's business community and shocked the communications industry, which relies on UPI as a major source of news.

One June 2, E.W. Scripps Co., owners of UPI since its founding 75 years ago, announced it was selling UPI to a newly formed, previously unknown company called Media News Corp.

Its owners, in addition to Ruhe and Geissler, are Len R. Small, publisher andeditor of the Moline (Ill.) Daily Dispatch and heir to an extremely successful string of newspapers, and Cordell Overgaard, a Chicago communications lawyer and cable television owner.

Small was well known and highly regarded in the newspaper industry and Overgaard was recognized as an expert in communications law and cable company operations. Neither Scripps nor the new owners would discuss terms of the sale.

Had only Small and Overgaard been involved, it is likely that hardly a word of concern would have been spoken about the sale of UPI. But, then, there were also the Nashville "mystery men" -- Ruhe and Geissler -- with their controversial pasts.

When the news broke that they were involved, the same question was asked on Wall Street in New York and on Fleet Street in London as on Union Street in Nashville: "Who are Ruhe and Geissler?"

As ancedote after ancedote trickled out to fill the information vacuum about the two men, it prompted a second inquiry: "Where did they get the money to purchase United Press International?"

For they, indeed, had been labor organizers, civil rights demonstrators and war protestors during most of the decade of the 1960s.

Both of them are active members of the Baha'i faith, an Eastern religion founded in Persia in the 19th century and considered an "exotic" creed because it was little known in American culture.

Ruhe's father is one of nine international leaders of that religion. He left the United States 14 years ago to move to Haifa, Israel, the world headquarters of the Baha'i faith.

Neither Ruhe nor Geissler earned an undergraduate college degree, but both received master's degrees in education from the University of Massachusetts at Amherst -- without writing a master's thesis. It was not required under the program they pursued.

The dean of the school of education at Amherst, Dr. Dwight Allen, is a national leader of the Baha'l faith.

Both Ruhe and Geissler, after leaving the University of Massachusetts, worked on the national staff of the Baha'i church in Wilmette, Ill., until five years ago.

As information about the two "mystery men" began to come out, another important question emerged:

Was there "Baha'i money" involved in the purchase of UPI?

Only a few weeks before, the Unification Church of the Rev. Sun Myung Moon -- the so-called "Moonies" -- had started a newspaper, the Washington Times, in the nation's capital. Was UPI now to be under the financial control of the Baha'i faith?

It was widely known that UPI had been in a deteriorating financial condition for years, reporting losses of $10.2 million in1981 and $13.9 million in 1980, and projecting losses of $8.4 million this year. Its owner, the Scripps Co., had been trying to peddle the service to several media groups, most recently Reuters, the British-owned news agency. That negotiation had fallen through.

Now there was a sale to an untested new company whose strength and stability were unknown.

Not only were the participants publicly silent about the money transaction; there were no hints, no off-the-record leads, no leaks.

Reporters from daily newspapers across the nation -- including this one -- launched major investigations into the question of how the purchase, estimated by some press sources to cost more than $17 million, had been financed. They also scoured the nation -- and Latin America where Geissler had once lived and traveled -- for background detail on the two new owners with pasts many newspaper publishers would consider "radical."

Plenty of stories were afloat about Ruhe and Geissler, some of them exaggerated and others warped by fading memories and the passage of time.

There were no clues as to where the money to buy UPI had come from.

Some newspaper executives, including UPI clients, were outraged because there was no disclosure of financing details. A few issued strongly worded statements either about the failure to disclose the financial deal, or about the backgrounds of Ruhe and Geissler.

"The public is the read of the UPI service," said Richard Kennedy, publisher of the Waukegan (Ill.) News-Sun and a member of UPI's advisory board.

"If UPI is to be perceived as an independent news service and contributor to professional journalism in its purest form, then the partners should disclose their financial arrangements publicly."

Irby Simpkins, publisher of the Nashville Banner, said he paper would run no more UPI stories and contended the news service had published deceiving information about Ruhe and Geissler.

Most newspaper executives looked with mixed emotions upon the sale of UPI to the newly created Media News Inc. Nobody wanted UPI to die. There was a need for competition for The Associated Press, the other American news service with an international reach.

On the one hand, media executives trusted Len R. Small, known to most of them as "Rob," whose later father had been a distinguished leader in the American Newspaper Publishers Association.

The elder Small had attempted several years ago to put together a consortium of publishers to purchase and save UPI. That endeavor was unsuccessful, but the involvement of Rob Small in the takeover of the press service was viewed by other publishers as admirable -- an attempt by him to fulfill his father's dream of saving United Press International.

Some news executives looking at Small, with his family's reputation of prudence and conservatism, and then looking at Ruhe and Geissler, with their stormy pasts, wondered how they came together. As one publisher asked it, "Who wedded the wooden handle to the pewter spoon?"

The answer was "Cordy" Overgaard, a highly respected corporate attorney in Chicago, who long has been the lawyer for the business interests of the Small family and who also represented Ruhe and Geissler since they entered business in Chicago in 1977.

Overgaard had watched Ruhe and Geissler nurse their successful application for a full-power UHF station, Channel 66 in Chicago. He had observed their winning fight for Channel 39 in Murfreesboro. He liked them and thought they were smart.

He knew they had filed for seven full-power channels and 14 low-power stations. When they approached him with the idea of buying UPI, he was impressed enough to take them to Small.

A man with close ties in the past to the Republican Party -- Overgaard worked as an advance man for Richard Nixon in 1972 and for Gerald Ford in 1976 -- he was regarded as a stabilizing influence, a mediator, a man not likely to act impetuously. It was Overgaard, then, who had brought the other three men together to formulate the UPI deal.

But the two Nashvillians remained suspect.

So, twice last week Ruhe and Geissler sat down with a representative of The Tennessean to talk about their pasts and to try to set the record straight on the so-called controversial aspects of their lives.

Again they flatly refused to talk about the financial details of their purchase - except to deny repeatedly that any "Baha'i money" was involved in the purchase.

Small, who discussed the deal over lunch, added:

"I can tell you that UPI does not have any external obligations or debts. I mean by that that UPI does not owe any outside debts as a result of this sale. But I cannot say what the arrangements are."

It became obvious during the discussions -- although none of the three would even confirm this -- that they are under a strict contractual obligation not to divulge the details of the sale. It is apparent that the strictures were imposed by Scripps.

Financial analysts, when asked about how such a sale could have been negotiated, speculated that by using new tax laws which allow debt purchases, tax benefit deferrals and arrangements for the sale of proceeds on equipment sales or leases, the sale could have been made possible.

"From the little we know, it sounds like an imaginative and innovative adjustment of assets," said one analyst.

While the purchase price has been estimated at more than $17 million, some who are familiar with UPI's financial condition say the figure could have been much lower.

All the principals anticipate that the formula used for the purchase will become public knowledge at some point, but won't even speculate as to how soon this might occur.

While Small's categorical statements that there was no "funny money" or outside debts incurred in the sale won't satisfy reporters who will continue to pursue the formula developed in the transaction, his words may have a chilling effect on the speculation about the involvement of the Baha'i religion in the deal.

Small's family has a reputation for integrity. He knows that many of the news organizations whose reporters are questioning him are UPI clients. Those who know him say his flat denial of "external" debts or money is convincing.

But even that will not stem the continuing stories about the lives of Ruhe and Geissler.

While they do not repudiate the actions of their past, they insist that at present they also are conservative businessmen who have come to believe in "supply side economics."

They spent years dedicated to the struggle to improve economic opportunities for minorities -- in fact their Focus company enterprises presently include multiracial ownership and employment -- but they say federal programs have failed to improve the plight of the poor.

"The federal programs have blunted initiative," said Ruhe, who is 38. "They have created the impression that the disadvantaged can't get ahead without government help. The result is that too few ever get ahead. I'm not suggesting that compensatory support isn't justified. I am saying that federal programs simply have failed."

The words sound out of character coming from a young man who 15 years ago, while a federally paid VISTA Volunteer, created a major labor conflict in Laredo, Texas, by encouraging a group of Chicano women cafeteria workers, then making 25 cents an hour, to go on strike for higher wages.

The strike led to a heat confrontation in the office of Laredo's then Mayor, J.S. (Pepe) Martin. There were reports that during one fiery meeting in the mayor's office, Martin pulled a pistol. Later the former mayor went to jail for misappropriating government funds.

According to Ruhe, Martin complained -- apparently to officials in Washington -- about Ruhe's involvement in the labor dispute. Ruhe was abruptly fired as a VISTA worker.

The incident was neither the first, nor last, of its kind for Ruhe, who was born in Atlanta where his father, a medical doctor, was involved in a public health project at the federal prison. The Ruhe family lived in Connecticut and Illinois before settling in Kansas City while Douglas was still a schoolboy.

His father became professor of medicine at the University of Kansas.

His parents always had an interest in social justice, Ruhe recalls. They were Baha'is and he was reared in the faith.

He was 16 years old, an alternate delegate to a youth meeting in Kansas City, when he participated in his first civil rights protest. A group of black young people walked out of the meeting because they could not win support from white youngsters there to join them in a protest picketing action against downtown retail stores.

The black youths were denied job opportunities at the stores, Ruhe said -- and he joined them in their protest. After that experience he became involved in civil rights activities headed by the Congress of Racial Equality.

He was arrested twice during these protest demonstrations -- once at a park which denied admission to blacks. He was fined $25 for this arrest and the conviction later was overturned by an appeals court. Shortly, after the park demonstration, Kansas City passed a public accomodations law.

The second time he landed in jail was the result of a protest march at the University of Kansas, where his father was a teacher. This was an action aimed at halting the university from lending supplemental financial support to segregated sororities and fraternities. The charges against Ruhe were dismissed in this case, records show.

Ruhe recalls that once, after newspapers reported that he was involved in protests, several doctors in town came to call on his father and ask him why young Ruhe was out in the streets marching.

"My father recalled Thoreau's words to Emerson and he ask these doctors why their sons were not in the streets with me," Ruhe recalls.

There were times, he said, when both his mother and father joined in the civil rights marches.

"They were very proud of me," he said.

After public high school, he entered Earlham College, a Quaker Institution in Richmond, Ind., and spent two years there, then transferred to the university of Kansas for two additional years, studying sociology. He had trouble with math, however, and failed to get a degree.

Each summer he was off demonstrating with various groups in the South -- in Georgia, South Carolina and Alabama. He was in Birmingham durng the days when that city was wracked by civil rights turmoil, and he participated in the last part of the Selma march. he remembers on two occasions meeting Dr. Martin Luther King Jr., whom he admired.

"He was a man of great vision and he had this marvelous delivery," Ruhe said.

Having washed out of college, Ruhe signed up as a VISTA worker and was sent to Laredo. There he was associated with another young VISTA staff member named Richard Geissler -- the older brother of his present business associate.

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