Red, White and Pissed-Off

Photo by Jack GouldOn Oct. 8, Jo Ellen Allen came to visit.

Four days earlier, "God Bless America," my expos on Allen and her husband, Eddie, had appeared on the cover of the Weekly. That story documented Eddie's masterful use of patriotism and religion to (in the words of the judge overseeing Eddie's bankruptcy trial, which had just ended) misrepresent himself and defraud his investors of millions of dollars. Eddie fraudulently portrayed himself as a Harvard-trained lawyer and financial genius who managed billions of dollars of assets on Wall Street, narrowly missed making the Forbes magazine list of wealthiest Americans, and was a decorated CIA spy who was captured and tortured in Southeast Asia.

My article also cited court documents and testimony that Jo Ellen, a high-profile Republican Party official and Southern California Edison public-relations official, sometimes assisted her husband in cultivating his clients.

I tried countless times without success to get the Allens to speak to me before the story went to press. Eddie left several messages, finally indicating that he could not talk with me in the absence of his attorney, Donald Segretti—and Segretti, he explained, was out of town. But Jo Ellen failed to respond to any of my many phone and e-mail messages requesting her side of the story.

On Oct. 8, we finally got Jo Ellen's side when she hand-delivered to the Weekly's editor a 1,900-word response to "God Bless America." Like the tales Eddie told prospective investors—stories that emerged in his more than two-year bankruptcy case—Jo Ellen's response is shot throughout with high-sounding morality and politics. Nor is it surprising that Jo Ellen would portray herself as a victim who "hurts deeply" because of my article. I would ask Jo Ellen to consider the real victims here: Eddie's many creditors who, collectively, have lost millions of dollars entrusted to him. Eight of them say Jo Ellen accompanied Eddie during his sales pitches to them, vouching for his tales of military heroism, bolstering their sense that he had powerful political connections. They include Mrs. Lee Picket of Washington—now nearly blind, her aging husband near death, her house foreclosed, her life savings lured away by the Allens' tales of patriotism and faith. Jo Ellen Allen has no shame.

I had intended in this issue to document Eddie's wild, contradictory stories of his career as a top-secret spy for the U.S. government, but that story will have to wait so I can respond to the charges Jo Ellen levels in her letter.

1) The article "God Bless America!" was an "effort to malign yet another conservative Republican." In fact, the article relies almost exclusively on the findings of a federal judge in a case in which the Allens' critics identify themselves as conservative Republicans. Rather than a figment of left-wing imagination, the story is built on a bedrock of evidence from a federal trial.

2) "I am not, and never have been, in any way involved in my husband's business." This assertion is the basis of Jo Ellen's letter, but it's contradicted by her own words (as you've no doubt already seen) and flies in the face of the testimony of eight creditors—all conservative Republicans—who said Jo Ellen helped Eddie in his sales pitch to investors. Sworn testimony at Eddie's bankruptcy trial by investor Pickett, to cite just one example, noted that Jo Ellen actively assisted Eddie in his sales pitch.

3) Is Eddie a colonel? Did Eddie fight in Southeast Asia? Was he a POW? A CIA agent? All of these questions will be answered in my forthcoming story. For the moment, let's recall the unequivocal words of federal Judge Robert W. Albert, the Republican who presided at Eddie's trial last month. At the close of trial, the judge described Allen's story of military heroics as "internally inconsistent" and "thoroughly discredited."

4) In documenting links between Jo Ellen's political organizations and Eddie's financial firms, the Weekly "deliberately created a completely false impression of impropriety and possibly illegal behavior." I never alleged or even implied that the many well-documented financial ties between the organizations were illegal. Improper? Only if one of the results of those relationships was that investors felt more confident of Eddie's sales pitch. My point was that contrary to Jo Ellen's assertions in this letter, the organizations were, indeed, linked in several ways, including—but not limited to—shared office space and finances. Creditors allege that Eddie used tens of thousands of dollars of their money to help fund Jo Ellen's unsuccessful 1992 Assembly campaign.

The case of the changing birthdays

5) "If the Weekly has a document which indicates an August 8 [birth] date, I would certainly like to see it." Please see the photograph at right.

6) "Moxley's facts [about the National Council of Business Advisors] are totally inaccurate." Evidence collected during the trial suggests the council was a shell organization designed merely to enhance the Allens' rsums. The council had no office, equipment or employees of its own, operating instead (according to the group's letterhead) from the Allens' Newport Beach business address. What did the group do? The only evidence Eddie has offered is two brief, impersonal form letters, one each from the Reagan and Bush White Houses, thanking Eddie for his comments on the economy. I have asked Jo Ellen for a list of the council's accomplishments; she has produced nothing. I have been able to find just two mentions of the organization on my own: Eddie lists it in his 1989, 1990 and 1991 Who's Who in Business and Finance entries, and when she joined Southern California Edison in 1995, Jo Ellen listed among her accomplishments her role as a consultant to the "prestigious" group.

7) "Moxley's innuendo concerning my moral character has created more pain than he will ever know." I don't deal in the economy of personal pain. I reported that Jo Ellen married Eddie two months after she divorced her first husband because that's what the marriage certificate shows.

8) "Mr. and Mrs. Steven Wagner. We had never met them before the day we agreed to rent their home." I think Jo Ellen protests too much. I never said the Allens knew Wagner before they moved into his Santa Ana home. But now that she mentions it, after years of politicking on various right-wing issues at the Newport Mesa School Board, Jo Ellen ran for a seat on the board in 1989, when Steven Wagner was the district financial officer. And she never met him? Then, while randomly driving the streets of Santa Ana three years later, she settles on a rental property owned by the same man?

9) "They were landlords and we paid monthly rent." Paying rent would have been a change for the Allens, who moved into Wagner's Santa Ana home after stiffing their previous landlord for $14,000. In the course of the bankruptcy proceeding, the Allens finances have been laid open in court. Those documents reveal no payments to the Wagners. Jo Ellen has refused my request for proof she ever paid rent.

10) "I made an inquiry on behalf of Lucinda." I recounted this story for one reason only: to point out that Jo Ellen, who asserts she knows nothing of her husband's business schemes, used her political contacts inside the district attorney's office to obtain a document about her husband's key employee—a document that would have been denied to Lucinda Herdman herself had she made the request.

11) "[I]n keeping with the Weekly's style of journalism, which knows no bounds of privacy or decency, Moxley calls Eddie's sexual impotency a 'bizarre assertion.'" On the contrary, it's Eddie who apparently knows no bounds. Under questioning from his own attorney in a bankruptcy proceeding, Eddie told the court he carried in his wallet a card declaring himself impotent. Where I come from, card-carrying impotents are bizarre. Eddie didn't mind disclosing highly personal information when he apparently believed doing so would help his bankruptcy case. (Note to Jo Ellen: As you know, I refrained from publishing other truly embarrasing sexual information that was introdued at the trail.)

12) "Eddie's health problems were sustained as the result of activities in the Air Force in late 1963." See No. 3 above.

13) "Lucinda's employment was not a secret to anyone." Here again, Jo Ellen contradicts her own assertions that she knows nothing of her husband's business deals. Creditors in the bankruptcy proceeding said Eddie received more than $500,000 from Lucinda's mother, defaulted on repayment, and signed a secret deal with Lucinda after her mother's death. Eddie claimed that the settlement with Lucinda was legitimate. The judge disagreed, calling Eddie's story "simply not credible."

In two weeks: Eddie Allen, master spy.

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