With Friends Like These

"Jo Ellen was somebody I respected very much," the mild-mannered Dalton recently remembered. "She was a bright lady who was very active in Republican politics, was president of a conservative women's group [Eagle Forum of California], and professed a deep faith in Christianity. She impressed me greatly. So I volunteered to help her in her [1992] Assembly campaign."

Dalton's story is typical of the many people who considered themselves the Allens' friends—acquaintances and political allies who, ignoring rumors that Eddie was running a giant scam, invested their life's savings with him and lost everything.

Sometimes the rumors became public. During Jo Ellen's Assembly race, opponent Tom Umberg—a conservative Democrat and onetime federal prosecutor—labeled the pious-sounding Allens hypocrites for what he said was a history of questionable business and financial practices. As unaccustomed to shopping at thrift stores as she was to having her morality questioned, Jo Ellen reacted with trademark biblical indignation. She assured supporters as well as reporters at both local daily newspapers that she and Eddie were innocent victims of a deceitful, politically motivated smear campaign. According to Jo Ellen, Umberg's strategy was to "lie, lie and lie more."

The Allens' public-relations effort didn't end there. Jo Ellen also enlisted help from then-Republican Assemblyman Curt Pringle, whom Eddie routinely used as a "confidential" personal reference to entice elderly Republicans into loaning him large sums of money. Pringle told the Weekly he was unaware that his name had been used for Eddie's business, but during the Allen-Umberg race, the Anaheim assemblyman publicly vouched for the Allens, calling Umberg's allegations "disgusting" and "despicable." Tom Fuentes, chairman of the powerful Orange County Republican Central Committee and Jo Ellen's close ally, described Umberg's allegations as "malicious" and "shameless." The Allens, he harrumphed, are "going to have some substantial grounds for lawsuits when this is all over."

Though no slander suits ever materialized, many Republican faithful were sold. The local mainstream media backed off further investigation of the Allens, and the Allens' reputation remained intact.

"I remember that Jo Ellen and Eddie denied the allegations with such conviction," said Dalton. "She said the charges were nothing more than personal attacks from political opponents and that they had no foundation whatsoever. We believed her."

The heated election ended with Umberg trouncing Jo Ellen, who had demonized sex education, child care and college women's studies classes—which she argued were a celebration of lesbianism. But it would take another half-decade before the allegations rose again in any public way. In September of this year, federal Judge Robert W. Alberts ruled that Eddie—operating a mystifying maze of businesses with incomprehensible accounting methods—had shamelessly used politics, patriotism and religion to "defraud" numerous, unsuspecting elderly Republicans of millions of dollars. Much of the investors' money remains missing to this day; in a stinging 86-page ruling, Alberts said Eddie "knowingly and fraudulently" lied under oath about what happened to the money.

Sadly, Dalton, a self-described diehard conservative Republican who worked on Jo Ellen's '92 campaign and considered himself their friend, is just one of the victims. He remembers he remained a "big fan" after the defeat and was happy to receive an unexpected visit from Eddie two years later. In November 1994, Eddie—who the judge says falsely represented himself as a Wall Street financial attorney, decorated Vietnam-era military hero, and prisoner of war who had spied for the CIA—wanted a short-term $15,000 loan to help launch a Florida business. He guaranteed Dalton would get his money back plus 15 percent interest, court records show.