John T. Reed' review of Russ Whitney' book Building Wealth 4 COOP, Inc. The only other Schenectady affiliation I have been able to identify is the aforementioned Confederation of Organized Purchasers, Inc. Was he an owner or partner there? The pertinent evidence is a bit comical. A lot of it came out in Whitney' civil trial for hitting the pedestrian. The victim' attorney was trying to get Whitney' employer, Confederation of Organized Purchasers, Inc. to be a defendant because he figured they had some assets to go after. During the litigation, there was conflicting testimony about Whitney' role in the company. Indeed, some of Whitney' own statements conflicted with other Whitney statements. First, Whitney said he invested"”and lost"”$12,000 in the company. That makes it sound like he was some sort of principal. But let' go to the testimony. Joe G. Meet Joe G. He is not mentioned in Building Wealth. Nor is his company Confederation of Organized Purchasers, Inc."”except by the vague reference to Whitney' being "an owner or partner of several other businesses." To meet Joe G., you need to read Whitney' earlier book Overcoming the Hurdles and Pitfalls of Real Estate Investing. Whitney speaks highly of Joe G. in many respects"”in a chapter called "Getting Off Track Can Be Costly." Whitney calls him, ""¦one of the slickest, most knowledgeable salesmen I"ve ever met." Whitney says Joe G' "salesmanship" was a "con scheme," but that the "co-op itself was legitimate." I don"t see how the co-op, of which Joe G. was president, can be legit when he is a "con schemer." Then there' that pesky problem of COOP, Inc.' own attorney denying that it was a co-op. I guess the corporate initials were just a coincidence"”as is the fact that Joe G. quit the Confederation of Organized Purchasers and started another, competing firm with those same initials: Consumers Organization of Purchaser, Inc. There' also the question of why the "co-op" went bankrupt two years after it was founded if it was so legitimate. Whitney goes on, "Joe had a huge diamond ring, a new Corvette, an Eldorado Cadillac and definitely had the aura of success at the age of 34." (p. 20) Sounds like a pimp or
drug dealer to me. In 1/80, Whitney went to work for Joe G. so "he could train me at sales and teach me how the co-op worked." Whitney claims to have been "mesmerized" by Joe' charisma. He worked there for a year and says he made no money"”and he only paid $12,000 for this privilege. But still, "Joe taught me everything about the psychology of sales. This has helped me grow and is benefitting me tremendously in my personal life and my business of real estate investment." Russ Whitney is the first guy I ever heard of who got swindled out of $12,000 and a year' pay yet continues to credit the swindler with being a great influence on his life. I think the fact that he speaks so highly of a swindler tells us more about Whitney than it does about Joe. What was Whitney' title? So what the heck was Wihtney' role or title at COOP? On page 20 of Overcoming"¦, Whitney says Joe ""¦offered to help me open a satellite co-op and pay him an override on membership sales." So Russ Whitney is going to open the co-op and Russ is going to pay Joe. Remember that. As I mentioned above, Whitney says he went to work so he could get trained. That would make his title sales trainee. Whitney' deposition On 6/8/81, when he was 25, Whitney gave a deposition under oath in the pedestrian suit against him. [My comments about his answers are in brackets.] Q: What is your occupation now? A: I have a real estate license. Real estate sales agent. [What happened to "owning well over $1 million in real estate and being owner or partner in several businesses?"] Q: Are you doing business under an assumed name presently? A: No. [What happened to R&I Enterprises and R&I Contracting?] Q: Are you working for any particular broker? A: Plumb Realty and Plumbannd. Q: So how long have you been engaged with them? A: About two and a half years, three years, on and off with them. Q: Do you have any other occupation other than that? A: Salesman. At the time of this incident I was employed as an Area Coordinator for the Confederation of Organized Purchasers. [Another title appears: area coordinator. Again, what happened to "owning well over $1 million in real estate and being owner or partner in several businesses?"] Q: Organized who? A: Purchasers. Coop. Q: And what was your title with that organization at that time? A: I was an Area Coordinator, Supervisor. [Now he' a supervisor] Q: And how big an area did you cover? A: I covered six counties surrounding the Capital District. Q: Back in November of 1980 did you have any other jobs that you were involved in? A: No, that was my full-time occupation. [Again, what happened to "owning well over $1 million in real estate and being owner or partner in several businesses?"] Later regarding how many times he had driven down the road where he hit the pedestrian: Q: Approximately how many times previously? A: Oh, every day from September. I had opened up a Saratoga outlet for the corporation I was involved with, and I operated that as a manager and coordinator, so I traveled it every day, six days a week. [Now he' a "manager" and he opened the outlet.] Q: Were you on commission at that time or were you paid a yearly salary? A: Salary plus commission. [I thought this guy was financially independent two years ago by virtue of being self-employed. Now he' got a salaried job?] Attorney affidavit Another document on this score is the affidavit of Phil Rodriguez, the attorney hired by the family of the pedestrian to sue Whitney. They were arguing about whether a summons had been served properly on COOP. [Again, my comments are in brackets] 10. Service [on COOP] was made on June 25, 1981 by service upon Russell A. Whitney"¦ 11. [The process server said that] Whitney stated that he was the person in charge of the Woodlawn Plaza Store, State Street, Schenectady, NY, and that he was an officer of the defendant corporation. [Process servers generally do not identify their purpose until after they have asked you to identify yourself and your position. If that' the case, Whitney probably thought he was talking to a prospective customer when he claimed to be an officer of the corporation. Ironically, June 25 is the same date Whitney filed his lawsuit against me.] Joe G.' deposition Discussing Whitney and another man A: One was fired and one was quit. Q: Who was fired and who quit, which one? A: There was only one but I don"t know which one was which. Q: You say between H.M. and Russell Whitney one was fired and the other one quit. A: One said he quit and the other one said he was fired. Q: In any event they both left. A: In any event Whitney left. Q: Are you telling me Whitney did not have any official capacity with the corporation at least as far as you understood back in November, 1980? A: Right. [Remember Joe G. is the president of the corporation] Q: Do you recall an individual by the name of Russell Whitney? A: Yes. Q: And was he affiliated with your corporation? A: He was a salesperson. Q: Okay. And how were [the salespersons] paid? A: They were paid on a commission. Sometimes we paid them a draw versus commission. [A draw is an advance or loan to be paid back out of future commissions. It is not a salary.] Q: And was there someone in [Saratoga] that was in charge of opening and maintaining that office? A: H.M. [Whitney claimed he opened the office] Q: Did Russell Whitney have any other responsibilities with your corporation other than being a salesman? A: None. Q: Are you saying that he did not have the responsibility of opening and operating that store in Saratoga? A: That' correct. Q: What if I told you that Russell Whitney told me he was in charge of the operation of the Saratoga store. What would your comment be? A: Mr. Whitney was always a very cocky person who thought he could run the whole show. Summary on "owner or partner in several businesses" So was Whitney an "owner or partner in several businesses" when he turned 25? It would appear not. Here are the only affiliations I could find for that period: Business Connection Comment R&I Enterprises Just another name for himself and wife Apparently just a business card company name to get people to take him more seriously than they would if the card just said Russell A. Whitney R&I Contracting Just another name for himself and wife Apparently used only for the purpose of misleading lenders as to the source of an improvement estimate and to make it look like an outside firm was general contractor on improvements to be done by Whitney on his own properties Plumb Realty Licensed salesman No mention of his ever earning a commission other than on his own purchases or sales Confederation of Organized Purchasers, Inc. Commissioned salesman and shareholder Lost $12,000 investment and was paid nothing for a year' worth of work"”obviously not owner or partner He was an "owner or partner" in the two R&Is, but they are simply restatements of his name in initial form, not a separate company in any real sense. He was associated with Plumb Realty and COOP, Inc., but appears to have made little or no money as a result and was apparently not an owner or partner in either. He mentions no other companies during his New York period in any of his books, nor do the public records show any other Whitney affiliations in Schenectady County. So until he comes forward with the details of the companies in which he was an owner or partner on 11/18/80, I am inclined to believe that there were none.