*
They look like any American family.
To the eye, nothing seems out of place.
They appear typical by all accounts
for a family living in post-World War II America.
An economic boom was in progress,
and the horizon is filled with opportunity.
The mood was different, then.
Very different from the mood in America today.
With the recent collapse
of the American banking system,
and the stunning fracture of Wall Street,
America, as we know it, has been changed forever.
Only one other time has America experienced
a financial catastrophe of such magnitude.
The Wall Street crash in 1929
was the most devastating economic upheaval
in American history.
The parallels between the crash of 1929
and the recent economic emergency in America
are chilling.
In both instances,
massive speculation gave license to those
who would take advantage of a system,
flawed from the outset,
and permissive to a fault.
The tragic irony of the recent financial collapse
is that our companies, banks, and financial institutions
operated, for the most part,
within the framework of the law.
So, who is responsible
when so many are so badly damaged?
Where are the checks and balances?
Where is accountability,
when corporations, institutions, and governments
are self
In the mid-1960s,
with the shifting social climate,
a new concept is introduced into the business mainstream:
Corporate social responsibility.
CSR is defined as:
"economic, legal, ethical"
"and discretionary expectations"
"which society has of its corporations"
"and institutions at any given point in time."
It sounds reasonable.
However, this concept presupposes
society has sway with big corporations
and big institutions.
It's rarely the case,
and it begs the question:
Is it realistic for society
to have such moral expectations of business,
where ethics and discretion are concerned?
With government deregulation during the past three decades,
and the freedoms the government granted
to American banks and financial institutions,
over-speculation and dangerously creative investment platforms
have proved one thing:
"Corporate Social Responsibility"
appears to have become a well-meaning proposition
with little traction,
while big stakeholders and corporations
helm the economy.
*
If social responsibility ought to apply
to corporations and institutions,
should it not also apply to government?
After all, government sanctions the way business works.
Government makes the rules and creates the laws
in our society.
So why not "government social responsibility?"
One thing is clear:
The application of corporate social responsibility
is no burden to success,
because to corporations, to Wall Street,
to the banking system, it simply does not exist.
Greed rules.
1947, Florida.
The Shaw family is living a life
not unlike any other typical American family.
Walter Shaw is bright, talented,
a man with a promising future.
The war is over, and everyone is back to work.
And a young man, fresh off a Navy patrol boat,
is being groomed for political office.
John Fitzgerald Kennedy's father, Joseph,
is a fiercely ambitious man.
In the 1920s,
he amasses most of his family fortune
in the stock market,
and he manages to exit the market
just before its fall.
A few years later,
Kennedy is alleged to have traded
in bootleg liquor during the Prohibition era.
If nothing else, it may be said
Kennedy has a knack for good timing.
In 1934,
Joe Kennedy becomes chairman of the Securities and Exchange Commission,
where he outlaws insider trading
and stock manipulation;
the very practice which was rumored
to have made his, and many of his friends,
their fortunes.
But his ambitions were not only for wealth.
Power was the real prize.
*
Using his considerable wealth and influence,
he aides his son
in a bid for a seat in Congress.
John F. Kennedy is elected to the 80th Congress
January 3, 1947, while his brother, Robert,
attends law school.
In a surprising twist of fate,
the Kennedys and the Shaws will soon cross paths,
and it will change their lives forever.
Walter Shaw, breadwinner, with a grade nine education,
works for the largest corporate monopoly in America,
Bell Telephone,
while Betty Lou, a stay-at-home mother,
raises their children.
Daughter, Linda, attends middle school.
New baby brother, Thiel, is just born.
My dad was still at Bell Labs
when I was born in '48.
Matter of fact, I was born the year
the inven- the-the speaker phone
was invented.
Walter Shaw has been a lineman
for AT&T's Bell Telephone company
since 1935.
He is paid a base salary, with bumps in pay
based on how many feet of line he could lay.
In other words, he is paid by the foot.
My earliest memories of- was Dad working for Bell Labs.
Uh, working- Well, he started out...
He was a, uh, pole climber.
But, uh, early on, he...
He, ah, I would find him...
...tinkering with projects.
And he loved electronics.
It was a natural love.
Bell would soon learn
that Shaw is capable of much more.
He studies at Bell's engineering school,
where they discover he has an aptitude
for calculus.
He becomes an engineer
in the research and development division
of Bell Laboratories,
the technology research and development division of AT&T.
It's no secret that Bell is the only telephone company in America.
It was designed that way.
Bell Telephone began in 1877,
with inventor Alexander Graham Bell.
Bell succeeded with his invention
and secured the patents in 1876 and 1877.
The patents were a contentious issue,
when many rivals challenged Bell's right
to the invention.
During the 17 years in which Bell
held the telephone patent,
he faced no less than 600 lawsuits.
Once Bell's patent expired,
tens of thousands
of independent telephone companies
sprung up across America.
Surprisingly to the Bell system,
they were serving the areas
that Bell had basically ignored.
So Bell started in Boston and kind of slowly spread
from the Northeast to the rest of the country.
And the independent movement started in the Midwest,
or what, at the time, they called the West,
places like Ohio, Indiana, and Illinois,
and, ah, tried to spread into the big cities.
And so, these companies achieved astounding levels
of telephone penetration.
The telephone business suddenly exploded,
but the thousands of new, competing telephone companies
produced a new set of problems for Bell.
They had, indeed, underdeveloped the country,
so they entered a race with the independents
to build out the rest of the country.
That was reasonably successfully,
and again, it was very good for the consumer
because, ah, it spread telephone service further
and further into the country,
and deeper and deeper into the cities.
And they lowered their prices.
Uh, but the next thing they did,
was they realized that they were not going to
out-compete the independents in most of these places.
As a young man,
Theodore Vail goes to work for a telegraph company.
That decision
will change the course of American history.
Vail meets a man named Gardiner Hubbard,
Alexander Graham Bell's father-in-law.
Hubbard hire Vail to run his new company,
called American Bell Telephone.
By 1907, J.P. Morgan,
with London and New York backers,
are in a state of panic.
Bell Telephone is suffering from a poor public image,
low staff morale,
poor service,
and serious debt and technological problems.
Vail had left the company by this time,
but he is brought back.
Vail was very surprised at how Bell
was basically losing this struggle,
or, at least, not assured of winning it.
So, Vail was brought back in 1907,
um, by some of the Morgan interests
who injected capital into the AT&T,
and he, again, said
we need to rethink this whole business of competition
in telephony.
We need to move towards what he called
"One system, one policy, universal service."
And by that, Vail meant
uh, fundamentally, a monopoly,
a regulated telephone monopoly
in which the independents, uh, they'd be allowed to exist
on the margins,
but they would be no competition
at the local exchange level,
and all of these phone companies
would be interconnected,
and Bell would fundamentally control the interconnections
among all of these systems.
They would be the ones
who really were the gatekeepers
for the national flow of telephone traffic.
And in order to achieve this monopoly,
Vail said, basically, "Let's make a deal to the government."
Theodore Vail convinces
President Woodrow Wilson, and Congress,
that no collection of independent companies
could ever give the public the kind of service
Bell could provide.
AT&T's extensive campaign
for One Policy, One System, Universal Service
was a thinly veiled front for complete control
of the telephone system under one roof.
It is a goal which is only achievable
with government intervention.
Vail knows the public will never go
for a Bell monopoly,
so he invites government regulation.
He knows this will annihilate competitors.
He will not only get his monopoly,
he will get monopoly profits.
Congress passes the Kingsbury Commitment in 1913,
which will weed out most competitors to Bell.
AT&T Long Lines was responsible
for interconnecting all these companies.
Therefore, AT&T controlled all the little monopolies
that were sanctioned by the Kingsbury Commitment.
While the act had been intended
to stimulate competition,
instead, it has the opposite effect.
Theodore Vail writes in the AT&T annual report
that government regulation, provided it is independent,
intelligent, considerate, thorough, and just,
was an acceptable substitute for a competitive marketplace.
Vail convinces Congress
that the telephone is a natural monopoly.
The whole theory of natural monopoly
didn't really apply properly to the telephone industry.
Nevertheless, uh...
It was rationalized, after the fact,
as a natural monopoly,
and for about forty years, you know, utility economists
would sort of say, oh, of course it's a monopoly,
it's a natural monopoly under natural monopoly theory,
but if you looked at the the theory,
and you looked at the actual economics
of the telephone,
it wasn't.
There was no correlation
between the economics of the telephone exchange
and the natural monopoly theory.
Congress passes an act
which seals the fate
of all independent telephone companies
in America.
After World War I,
people at the federal level in particular,
as part of the sort of the progressive viewpoint
of the time, were convinced
that we needed this regulated monopoly system,
and then they passed the Willis-Graham Act in 1921,
which basically legitimized telephone monopoly.
It said you're exempt from the anti-trust laws.
Uh, it doesn't matter if you're a monopoly,
we're not going to prosecute you.
We, in fact, want you to be a monopoly.
*
Once the phone system is nationalized,
AT&T wastes no time in applying for rate increases.
Within five and a half months, long distance rates increase
by twenty percent.
AT&T makes over fifty million dollars
in just seven months.
AT&T, American Telephone and Telegraph,
was the parent company of four different companies.
One was the Bell operating companies
that would put in the lines to everybody's homes
and businesses.
There was AT&T Long Lines,
who interconnected those various exchange areas,
and then there was Western Electric,
who manufactured the equipment for AT&T,
and then Bell Labs,
who was the research and development arm
for AT&T.
Bell telephone had a... a-a-a tariff that said
you could not hook up the Bell lines,
you can't find it in the books anymore,
Bell lines without their explicit permission.
And they were emphatic about that.
If anyone uses a telephone line in America,
it belongs to Bell.
Three decades later,
Walter Shaw, while working at Bell Labs,
will challenge Bell's universal process.
He has a secret.
When he returns home each night,
he draws.
Not landscapes or portraits,
he draws schematic diagrams of inventions
he plans to build.
Later, he will go to his office
with his home projects under his arm
to impress his bosses.
And they are impressed.
Bell Labs was created in 1925
to service research and development technology
for AT&T.
Bell will not only provide communication services
to America,
but it will become one of the leading innovators
in science, technology, and military engineering
around the world.
Bell Labs provides key personnel
in all areas of communications science,
radar, and weapons technology.
And they provide the scientists and engineers
responsible, in part,
for the development of the atomic bomb.
It would not be an overstatement
to say that Bell Labs became the darling
of the U.S. Defense Department.
While at home working on one of his drawings,
Walter Shaw invents the first ever
voice-activated speaker phone.
He doesn't show Bell right away.
Instead, he actually builds the prototype himself.
Meanwhile, Bell promotes Shaw to the position
of senior engineer.
What Walter Shaw will soon learn
is that the U.S. Attorney General
under President Truman has filed a lawsuit
against his employer for anti-trust violations.
What was happening at that time
was a realization that so much technology
was really bundled up in the Bell system,
and we were afraid
that all kinds of new technologies
that could be competitive, and could be out there
in the marketplace,
and could be innovative,
that might actually undermine the control
of AT&T,
we started to become concerned
that, uh, those were gonna get bottled up
in-in the Bell system.
Oh, he used to always say...
He'd say it to me as a kid,
my mother, too, he'd say,
"If I can draw it, it'll work when I make it."
I said, "Why do you say that, Dad?"
He said,"Because my circuitry doesn't lie."
And neither did Shaw.
He isn't shy about impressing the executives at Bell
with his new invention.
Oh, he told 'em.
He says "This is just one of many I can..."
But, you- He'd say things like "I've drawn it, I've seen it."
"I've got it on paper."
And-and they saw what he could build
when it came from paper into a demonstration,
and they says, "This guy is somebody to reckon with."
They knew it.
Over the next few years,
Walter continues to produce designs
of advanced technology.
He designs systems for burglar alarms,
touch-tone phones, and conference calling.
Bell management is becoming worried.
Shaw is prolific.
He was a spiritual man.
He had to be, because he knew
that this was a gift.
What was coming through his hands, I'm sure,
and his mind, amazed him...
...more than it amazed most people
that didn't understand it.
But Walter Shaw has become a threat.
Bell executives call a meeting.
It's time to reign him in.
They praise his inventive work,
and they make him an offer.
They tell him, "We'll give you a raise."
"We'll put you in charge of a section, a department."
"You'll be a department head," you know, all this...
"We'll give you a white coat," you know...
You know, that kinda nonsense,
and, uh...
They made it appealing, as far as the status,
but they didn't make it appealing
as far as paying him.
...royalties, and things like that.
So, he-he just told 'em, he says, uh...
"No, I'm not gonna let you own my mind."
...so they won't steal his inventions.
They wanted him to sign a piece of paper
that said everything he invented
belonged to them.
...said with the knowledge you've developed,
you can't get into business, uh, competing with us.
My own personal opinion,
it's kinda stretching it a little far,
like putting a harness on one's mind.
1952...
The wheels of fate and history are set in motion.
Walter Shaw resigns from Bell.
Bell Labs executives press him to remain,
but Shaw is certain
the federal lawsuit against them
will have the desired effect,
paving the way for him to pursue ownership
of his own communications company.
He'll wait for Bell to be unwound
for anti-trust violations.
But in an eleventh hour negotiation
with the Justice Department,
the lawsuit filed against Bell was settled
with a consent decree.
AT&T, and its subsidiary, Bell Telephone,
will control the entire U.S. telephone system
for another thirty years.
Walter Shaw is devastated.
At a time in history
when American artists are being blacklisted
by Senator Joseph McCarthy,
Shaw is as good as blacklisted
from using Bell Telephone lines.
While Bell controls the phone system,
Shaw has no place to practice his craft,
no way to make a living.
Walter continues his quest
to find financial backers.
He finds one con man after another.
No amount of knocking on doors
will yield Shaw results.
The Shaw family begins to suffer.
The family is forced to live
in an impoverished neighborhood,
and use food stamps
to supplement their meager monthly income.
In my child-like observation, I noticed...
...that even though that love was there,
there was a new constant,
and that was preoccupation
with getting money to keep our h-
...our home life going.
My brother and I were in the same bed
with measles.
Two sick little cookies, and, uh...
I was woken up with...
...loud voices, about, "We don't have enough food."
"You need to go do something."
"We've got two sick children."
That's scary for a kid to hear.
Walter requests a meeting
with Bell Lab executives.
He appeals to Bell to allow him
to use their lines to hook up his speakerphones.
He, um, showed it to them,
and they says, "Well, how many you got of these things?"
He says, "Well, we've made 200."
He had a very wealthy investor at that time
who didn't care. He was a real...
A real chance taker.
And he says, "Well, that's good."
"You've got the invention, and it looks beautiful,"
"it works, but how are you gonna hook it up, Mr. Shaw?"
And my dad said, "What do you mean, how am I going to hook it up?"
"I'm gonna... I'm gonna put it on your lines."
He says, "Can't."
"It's an unauthorized attachment to our lines."
"We'll never get permission to market this."
And he came home, and I was listening to the argument,
and he says, "They're not gonna let me market this."
"I'll never be able to hook it up."
According to Bell,
it is a crime to compete against the company,
or even to attempt to innovate around it.
Shaw is despondent.
He returns to Bell with a plan.
They would partner and give him credit,
but he'd have to sign the rights over to him,
and he wouldn't do it.
They argued about it,
and it was a lot of arguments, and, uh...
He, uh, found a way to get around it.
He said, "Well, I'll tell you what I'll do, then."
He says,
"Then I'll donate them to the Iron Lung foundation."
So, he donated to them,
and he told them
to tell these people they can't have the phone.
So, of course, they made the exception,
and they didn't want to have that come out in the newspaper,
so they- they hooked them up.
There's only 200 of them, though.
And he donated them, too, and of course,
there was bad blood with the investor,
he lost his money, and he didn't make a dollar.
There are no other telecommunications companies
in America,
and Walter Shaw needs a job.
He goes to work for Philco Television.
However, Shaw does not own the Philco Television store
where he works,
he is a repair man.
The pay is abysmal, and the work, demeaning.
He was trying to work,
and then do this on the side,
and it was really hard.
And, uh, I remember that
he was gone quite a bit.
It started out, just little jaunts,
and then it seemed to me like he was gone
every other day.
Trying to, after work-
Trying to promote his inventions.
Meanwhile, the Cold War is in full swing,
and the Soviet arms buildup
simmers behind the Iron Curtain.
That's when they asked him
to go to Anchorage Elmendorf Air Force base
to work on the alert system for the government.
Bell Labs is a major provider
of scientific talent for the Cold War effort.
While they were unhappy with Shaw's exit,
they could not deny his talents.
Walter joins forces
with a team of America's most brilliant scientists
and engineers,
most of whom were taken from Bell.
For one year, Lieutenant Shaw
works on top-secret military projects.
Were a nuclear war to have broken out
between the Soviets and America,
the most effective route for missiles from Russia
was directly over Alaska.
Shaw and Bell Lab recruits were assigned
to design a missile-tracking radar system,
which would later be called tropospheric scatter.
They created technology
which will track Soviet missiles
the moment they're launched from anywhere in Russia.
Walter works on the renowned Red Phone system,
which allows Russia and America
to communicate during times of crisis.
In an effort to prevent a knee-jerk nuclear mistake,
the system he and his team create
uses a phone line to send a telex
between Washington and the Kremlin.
These are some of the happiest days
for Walter Shaw.
He is doing what he loves,
and he is respected for it.
1956.
Shaw is discharged.
After doing brilliant work, he returns home
to face the same dire circumstances
which he had left only one year before.
They came back to Florida, and, um,
he met a young guy from Miami Beach, um,
named Ralph Satterfield.
Ralph came from a very influential,
wealthy people in Miami Beach.
Very, uh, very nice young man.
Engaging, um... Very friendly.
And, uh...
At this point, I can safely say
Dad was probably feeling pretty desperate.
Ralph said, "I know some people"
"that can open some doors for you."
"I have an uncle..."
...who was a renegade type of guy,
in Canal Street, New York.
He owned this very posh, wealthy, jewelry store.
They used to sell jewelry to girlfriends, and...
...to mobsters' wives, and things like that.
So, he took a like to my dad, and, uh,
put him up in his apartment.
You know, he had a place in the city,
and he had a place on Long Island,
and he said, listen, stay at the apartment,
let's see if we can make something work.
So, I had been a jeweler for years.
I'm half Italian,
so my Italian relatives lived in Mount Vernon,
a lot of them were bookmakers.
He made some calls, and some guys came around,
the next thing we know, we're moved out of Florida,
up to New York.
Through Sylvester,
Walter and Ralph meet Archie Gianunzio,
and his boss, Joe Valachi.
Joe Valachi had been a soldier in the Lucchese crime family,
and would later become a bodyguard
for crime boss Salvatore Maranzano,
until his murder in 1932.
Valachi is now a soldier in the crime family
headed by Charles "Lucky" Luciano,
for the Genovese family,
in the crew headed by mafia underboss
Anthony Strollo.
They had this meeting with my dad,
and they said, "We-we make
thousands and thousands of phone calls,
and, uh, we're bookmakers."
"We're always getting busted because our phones give us up."
He said, "We need to make calls"
"we can't be traced, or..."
"...get caught," so my dad said, "Okay..."
"Well, give me- give me a little time"
"to think about this."
Shaw returns to his hotel
to consider Valachi's request.
He has a family,
and no prospects of work on the horizon.
There was frightening instances
where there just wasn't enough money
to run the household.
I remember, as a youngster, very clearly,
my brother and I being herded
into the bedroom.
Dad was away,
and there was two men pounding on the door,
and my mother put her finger up to her lips,
and said, "Shh. Don't say anything."
"Don't say anything."
And this man...
I guess he was there to serve papers,
he wanted his rent, and I remember him
saying, "Mrs. Shaw, we know you're in there."
Walter Shaw goes to work
for Joe Valachi and Archie Gianunzio.
Shaw comes up with a design
for what would come to be known as
"The black box."
...and Walter demonstrates the black box.
And they love it.
He made a- a prototype first.
And this guy, he says, "Go to the payphone,"
"call buh-buh," and they did.
They went out- he went outside to a payphone,
put the dime in.
They were wise guys, but they weren't smart guys.
Know what I mean?
So he put the dime in,
he says, now stay in the phone booth,
if the dime comes back,
it works.
So he calls the house,
they had the conversation,
they hang up th-th-th-the call,
and the dime comes back.
He says, "Hey, the dime came back."
"The thing doesn't work."
You know, they thought that's what it meant, it didn't work.
Walter meets Valachi on three separate occasions
to discuss his progress.
The wise guys turned to my dad, said,
"Listen, we like it, but you know what,"
"that's dangerous, because if they ever get onto us,"
"they can get us with this equipment,"
"and arrest us."
He said, "We want to be in the boroughs and different places."
"We want it to follow us."
So, you plug this into the wall,
and the phone rings, and you answer it over there.
And the cops break the door down,
they can't find a bookmaker.
So, he puts it in,
and he has them go outside,
go to another payphone, dial the number,
and the number goes to another number.
So long as there's no, uh, transformer
between the areas, you could be anywhere
and answer the phone from here.
Now, a thing called a carrier phone
that is hooked to this thing...
...so it follows 'em, see?
He says, "That's brilliant. That's great."
"So, when it goes there, it goes there."
"We can't get caught!"
That was the- That was the-
the prototype of what would become known
as "call forwarding."
1500 black boxes are delivered
to bookmakers across the country.
For the next five years,
organized crime would successfully conduct
illegal gambling operations using Walter Shaw's invention.
So, when we were on a wire tap
for-for a particular bookmaker...
And it was mainly bookmakers,
it wasn't anything...
I never had one of the black boxes
on narcotics.
And that black box would transfer the call
from that location to another location.
So, it-it saved them a lot of, uh,
a lot of legal expenses,
and a lot of individuals getting arrested
by-by incorporating this black box
into their operation.
For the first time in years,
the Shaw family has no worries
about putting food on the table.
Gianunzio buys Shaw a Cadillac.
It's a bonus for his good work.
The crime family also pays for Thiel's tuition
at a private academy in New Jersey.
And the FBI is becoming increasingly frustrated.
In the news,
stories begin to surface
about organized crime in America.
We are terribly concerned about the extent
of organized crime throughout the United States.
*
Finally...
This was when the federal crime commission showed up,
they went up to those guys, and they were pissed off
because the cops kept breaking doors down, finding nobody.
So they made a deal with them.
They took the books- the bookmakers' books,
they seized them.
And they said, "All right, we'll give you back your books"
"if you give us the equipment."
They wanted the black boxes.
So the bookmakers decided
they'd have to have their books,
so in Pelham, they left the...
...in a car,
and the books were in another car,
and they exchanged.
The Feds give 'em their books back,
and they gave the equipment up.
They grabbed the equipment,
they sent it off to Bell Labs,
Bell tries to x-ray it,
and try to get serial numbers on the-
on the, uh, capacitors and relays,
but my dad had it all sealed.
He has 'em sealed.
So, they tried to x-ray it, and they couldn't see it,
because he used to use black crayon,
and melt it in there in the epoxy.
So they got really frustrated,
because they never knew how it worked.
They couldn't x-ray it. They couldn't break it,
because by the time they chiseled it,
it broke all the stuff up,
so they end up with nothing on their- I mean, nothing.
So they were frustrated, they didn't know who was making it.
They had no idea who was behind this,
as far as the inventor.
FBI has a new target.
They want the bookies,
but not as much as they want the inventor,
whoever he may be.
Take the box away,
and the bookies become vulnerable again.
In 1950, Senator Estes Kefauver
introduces a resolution in Congress
to establish a committee on an urgent matter.
The Senate Special Committee to Investigate Crime
in Interstate Commerce becomes known
as the Kefauver Committee.
Kefauver holds hearing in fourteen cities,
and hears testimony from 600 witnesses,
many of whom are organized crime bosses.
So, Kefauver found himself
at the head of a committee that was going to investigate
ah, unions' labor racketeering
in interstate commerce.
Ah, that committee,
ah, to his advantage, turned out to be
the first time when Congressional hearings
were actually televised.
First time i-i-in American history.
Ah, so, here we have, ah, subpoenaed by the committee,
uh, the leading figures in organized crime in the United States
brought before the- the, uh, Kefauver Committee,
uh, people who had never actually been seen-
Certainly not on- on live television,
uh, people who, uh, the public oftentimes
knew their names,
but had never actually seen them...
Now they're being paraded
before a congressional committee,
and that's, uh, that's-that's on television.
Senator John Kennedy and brother, Robert,
take part in the hearings.
Meanwhile, over a period of a few years,
Walter Shaw begins scaling back
building the black boxes.
He's more interested in developing
his own inventions.
But Satterfield is not happy.
He needs money.
He takes out an ad in the Miami Herald...
And he says, "Call me if you want to make free phone calls."
And then he calls my poor dad,
and my dad goes to meet him,
and he had said he wasn't gonna make anymore.
He'd left, like,
five or six hundred of these, unfinished,
in a room, and Archie never got rid of them,
and they banged down this door
and found unfinished boxes,
brought the Feds in,
uh, and they had tracked them to Florida,
through Ralph, with this ad.
So, it all started making sense,
and they started following everybody.
One day...
Dad was in the back bedroom of this lovely house...
...and I answered the door...
This guy comes to the house, and he's...
...a guy that wants to buy one of these boxes.
He asked to speak to Mr. Shaw.
And...
I told Dad, and he said, "Just send him back."
And my dad says, um...
He smelt something right away, he says, "No."
He says, "I don't have any."
Finally my dad agrees to show it to him.
After ten brief minutes...
...my dad came out with...
...in the room, with this man,
and he was handcuffed.
His hands were behind his back.
He was very quiet.
And as he went out the door with this gentleman...
...he said, "Call your mother."
That's all he said.
And I watched as he walked my dad out,
put him in the car and drive off,
I was horrified.
Shaw, Gianunzio, and Satterfield
are arrested.
In the press, they call Shaw's black box
a "parasite."
The evening of the arrest,
Walter's son, Thiel,
is locked in the school infirmary
awaiting word from his mother.
Fellow students slide a newspaper
under the door the next morning.
It says, ah, they feel this is the brains
behind the, uh, infamous black box
bookmakin' ring.
And it named what the equipment did.
"Illegal equipment busts bookmaker."
Thiel Shaw is expelled.
Upon his return home, he confronts his father.
I had become truant in school,
and I became hard to handle.
I'd form my own street gang,
and wouldn't go to school.
When I was in the sixth grade, I got kicked out,
and I was getting in fights,
and my mother couldn't control me,
so she was telling my dad this,
long distance, every night.
She says, "He's out of hand, he's..."
"He's robbing with kids in the neighborhood."
"They're stealing..." It was horrible.
I rebelled against the fact that when my dad
had came home, that sho-short time,
it skirted the issue of what was really...
'Cause I-I didn't want to believe...
...that he was a bad guy.
Not only has Walter lost his way,
but he has lost his son, too.
I feel he knew they were bad guys,
and-and I feel that, uh...
He didn't want to be seen in that light.
He didn't want to be seen as a bad guy, too.
Walter Shaw is arrested by Florida state police,
and subpoenaed to appear
before the Senate permanent subcommittee
on investigations of organized crime.
John F. Kennedy gets elected President in 1960.
He appoints Robert Kennedy as his Attorney General.
And that unleashes all of the law enforcement
investigative apparatus of the federal government
to get organized crime.
The hearings are run by Arkansas Senator
John L. McLelland.
Senator McLelland
and Attorney General Bobby Kennedy
confront the five crime families.
The nation's underworld
get's the unwelcome spotlight of publicity,
as the Senate's investigation subcommittee
begins new hearings on crime.
Arkansas Senator McLelland is at the helm.
*
Senator McLelland was chairman
of the permanent subcommittee on investigations.
He chose John Kennedy to be on that committee, also.
Uh, John Kennedy was able to have, ah, his brother
Bobby Kennedy, uh, as an attorney,
as-as council to that committee.
Organized crime,
one of the biggest businesses in America,
has many faces.
Some are well known, like that of the gambler,
operating the roulette wheel which is not only illegal, but fixed.
Another is that of the narcotics peddler,
trading on the misery of the poor.
There are other faces,
those of racketeers who engage in extortion,
prostitution, corrupt labor relations,
and bootlegging.
The reason racketeering can flourish in our society
depends, however, on some other faces
not so well known.
There is the racket's leader,
seeking protection from the law.
And there is the public official
who offers it for a price,
daily betraying his position of honor and trust
in his community.
The hearings illustrate
the ruthless behavior of the mafia,
and its use of violence, fear, and corruption
to build its business.
He didn't actually say that he would kill me in a restaurant,
but he said they would find my body
off the Belt Parkway,
which was practically the same thing.
The first mafia witness
to testify for the government
is Joe Valachi.
The American public will have a first-hand account of mafia activities,
in their living rooms, on national television.
And the man who welcomed Walter Shaw
into the highest level of organized crime
in the United States
is now turning on his own.
These hearings always attract
a large number of spectators.
This one is particularly crowded,
awaiting the first public appearance
of Joseph Valachi,
the convicted hoodlum whose confessions to the FBI
have reportedly put a price of $100,000 on his head
by the infuriated mafia.
Ah, Valachi himself, ah, was a low-echelon individual,
member of the Genovese family,
what they call a- a soldier.
Uh, he had been imprisoned in a massive, ah,
uh...
...prosecution of members of the Genovese family.
While he was in prison,
uh, he was told that he was marked for death.
Uh, and one day he sees an inmate
heading towards him in the prison yard.
Uh, he believes that this is the inmate, in fact,
who has been chosen to kill him.
Valachi strikes first, uh, kills-kills this inmate,
only, of course, to discover he had- he had killed
the wrong- the wrong individual.
Whatever trouble Valachi was in before,
now he was even in-in-in more serious trouble.
Uh, and as a result of that, he says, you know,
"I've got a secret, too."
Valachi betrays all the crime families:
Gaetano Gagliano, Giuseppe Profaci,
Joseph Bonnano, Carlos Marcello,
Sam Giancana, Vincent Mangano,
Vito Genovese, and Carlo Gambino.
Ah, now there is a very, very strong feeling
that Valachi was actually
paraded before the McLellan committee
on behalf of the Federal Bureau of Investigation.
The Federal Bureau of Investigation,
as we all know, had been involved
in illegal wiretaps,
and they had done that for decades.
Uh, so they had all this wonderful information
about organized crime, and they couldn't use it.
So what they did was, they debriefed, uh, Valachi.
And how did they debrief him?
They asked him a lot of questions
that, in fact, disclosed what they already knew
as a result of these tapes.
So Valachi comes before- before this committee,
filled with information, in fact,
that was provided for by the FBI, uh,
and begins to talk about organized crime
on the highest levels,
which he couldn't possibly have known about.
He was able to name all the players of the major families
and who they represented and what they were,
how it worked, consiglieres soldiers and earners
and, you know, associates and, uh, you know...
he really labeled it all.
He really broke it up for Americans,
showed 'em how it all worked.
Joe Valachi, Walter Shaw's original crime family contact,
is now the most wanted man in America
by five mafia crime families.
Collectively known as La Cosa Nostra.
Valachi breaks his sacred vow
according to the Sicilian code of omertà.
Omertà, which has its roots in the Italian word for "man,"
means literally being a man.
Now of course, a man does not go to the authorities.
If somebody does harm to him or his families,
he takes care of its, uh, of it himself.
It, it means actually much more than a code of silence.
It's the code of being a man in the machismo sense.
Uh, how, how did you happen to go into
the union business?
The local 19?
I respectfully decline to answer
because I honestly believe my answer
might tend to incriminate me.
I "respectiful" decline to answer the question.
Did you feel that the working man
was having a difficult time that you could help
and assist him?
I respectfully decline to answer.
I refuse to answer on the grounds
that it may tend to incriminate me.
I respectfully decline to answer
because I honestly believe
my answer might tend to incriminate me.
I respectfully decline to answer
because I honestly believe
my answer might tend to incriminate--
Are you a racketeer and gangster?
Walter Shaw takes his 14-year-old son, Thiel,
to the senate hearing on the day he must testify.
Thiel catches Joe Valachi's eye and waves.
Valachi ignores him.
He asks his father.
I ask why he wasn't coming over to say hello,
and he says he can't.
Cause I didn't know any different. What did I know?
I didn't know the difference between the good guys
and the bad guys. They were all,
all in the same room.
In what can only be described
as one of life's cruel ironies,
Young Thiel Shaw encounters Carlo Gambino
in the senate chamber hallway during the hearing.
Carlo Gambino, head of the Gambino crime family,
is active in racketeering, gambling, extortion, drugs,
prostitution, and murder for hire.
Carlo Gambino shares his personal point of view
with young Thiel Shaw.
He says, Thiel, he says, remember one thing
about all these people
and these senators and these lawyers
and these judges,
they have a license to steal and we don't need one.
They're the bad guys, not us.
Your dad's a good man.
It's Walter Shaw's turn to testify.
He had halted making the black boxes,
so he has no money and no attorney.
Senator McClellan questions him
and Walter Shaw makes a fatal error.
They had all the head officials
that worked with my father at Bell
were there, testifying against him.
And they had told him he'd made this,
he had made the very first alarm that called the police.
He had another pe-- he had another invention
he was working on.
They, they asked him all those things,
he says, yes, I'm an inventor.
And I've got a lot of, uh, like the speaker phone
was brought up and McClellen was impressed.
He says, I'm very impressed with your knowledge
of the telephone system, how it works.
He says, you're, you're, you got a lot of people
saying you're this great genius.
But um...
They asked him about the box and my dad took the fall.
Senator McClellen to Walter Shaw:
"I am asking you.
Is it your intention to plead the Fifth Amendment?
Do you feel that it might tend to incriminate you
if you answer truthfully the question:
Are you the inventor of such a device?
Mr Shaw:
Yes, sir, I am the inventor.
Shaw apologizes to McClellen
and the committee.
Senator McClellen replies:
Mr. Shaw, try to go forth and sin no more."
Father and son return to Florida
where Walter is later tried and sentenced
for his complicity in illegal gambling
and for unauthorized attachment
to Bell telephone lines.
What did I think? I thought that, uh, my dad lied to me.
His kids looked up to me as a hero because my dad
was this notorious thing they painted in the newspapers
and they lived next door to me, but it was,
it was not good. It was terrible.
He is given one year and a day
in Florida's Dade county jail.
He serves 9 months.
I was with my grandmother,
his mother was still alive then. My grandma. My nana.
And um...
and she says, well Thiel, I want you to take me
to see your dad every week and I said,
well, I'll, I'll take you but I'm not going to see him.
I didn't see him the whole time he was locked up.
Not one time.
With their many hours on national television
in pursuit of mobsters,
Senators McClellen and Kefauver
become national media celebrities.
It gets down to personalities, now I didn't know.
It's not, uh, the Senator McClellen, is it?
Senator Kefauver becomes the running mate
with Adlai Stevenson
in the 1956 election for the presidency.
It's, you know, Valachi kind of drops off the radar.
I'm not even quite sure what happened.
I know that the man is dead, you know, of natural causes.
I don't know what the actual advantages
were bestowed on Valachi.
Uh, he was not prosecuted for murder,
which he could have been,
uh, and he again just goes off the radar.
Uh, he was unimportant prior to him being brought
before the committee and returned to his obscurity
after the committee hearings.
Walter Shaw returns home from prison to find his son
has changed dramatically.
He says, well I've been locked up for nine months
you didn't even come see me.
He says, why?
Father and son cannot reconcile.
He says, I guess you blame me for all this, huh, Thiel?
I said, no I blame you for lying to me.
We were all upset about what was happening
to my, our family and to my dad in particular
and he's all of a sudden infamous.
His name is being said over the news stations
but it's not in a way that we ever dreamed.
After Walter's release from jail,
he seeks financial partners to help fund his inventions.
His struggles continue.
They had bankrupted the company
that had the patents
cause he transferred them into the, into the company.
That was a way of not paying the, the royalties.
They could still manufacture,
still market, still sell the idea,
and trash the, the royalty contract.
And I told my dad, I says, you're, you're just not
gonna let these people just do what they want.
He says, well what do you want me to do?
And I said, well, what do you think Archie would do?
What do you think any of those guys would do?
He says, I don't think the way they do, Thiel.
I said, well, if you want their respect
you gotta put 'em on ice.
And he says, I don't think that way.
So I told him. I says, well then,
that's where me and you divide, cause I would.
You would? I said, in a minute.
I wouldn't blink an eye. Not a hesitation.
I wouldn't even think about it.
I defend my family at all cost.
He said, well, I, I don't think that way.
We don't have the same,
uh, blood running through our veins then.
His family is disillusioned.
Frightened.
It is more than they bargained for.
My brother was talking on the phone.
I was standing outside the room and I came in
because I heard his voice...
get higher and higher and angrier and angrier
and upset and just, just in turmoil
and took the receiver and he's telling,
saying, "No, no, no" and...
he starts beating his own head
with the headset
of the phone
and he's slamming his head with it...
hard, hard, hard...
and he starts to go down to the floor
cause he's beating himself in the head.
Beating so hard that he's losing his balance
and he's going down to the floor.
Once Thiel gets out of the hospital,
it isn't long before he goes hunting
for Archie Gianunzio.
Knowing Archie is connected,
Thiel uses him as his back door into organized crime.
Over the coming years, Walter Shaw
continues inventing with hopes of finding backers.
Thiel seeks solace in revenge.
He begins to work his way up the crime ladder,
working for associates of Archie Gianunzio.
At first he does deliveries for the mob.
He learns the business.
He resented the rich,
and that resentment would grow to a point where
he lost his, his uh. sensibilities about...
what was right and wrong, but for him, anger took over.
In 1956, a company named Hush-A-Phone
attaches their equipment to Bell lines.
They are halted immediately and charges are filed
for illegal attachment.
Well the Hush-A-Phone case was very important
for competitive telephony because
it cracked the door open
for attachment of non-Western Electric
or non-Bell devices to AT&T's telephone network.
The courts rule against Bell.
Bell Telephone Tariffs on the Hush-A-Phone device
are unwarranted interference
with telephone subscriber's right to use his telephone
in ways which are privately beneficial
without being detrimental.
In 1968,
Carterfone attaches their equipment
to Bell telephone lines.
Once again, Bell halts their business
and charges are filed
stating Carterfone illegally attached to their lines.
Carterfone decision was very important in 1968.
It opened the door a little bit wider for competition
with the Bell system.
Uh, they had already become the largest
monopoly, largest corporation in the world.
So Carterfone was an acoustically coupled device
for the purposes of transmitting data
over a telephone network.
So it was a device that you would take a handset
and set it inside of it
and you could transmit and receive
via a device that, uh, touched the network,
but without any electrical connection.
By the 70s, uh, the courts had become impatient
with these big monopolies and again,
the FCC upheld AT&T on Carterfone
and the courts overturned, uh, the FCC and said,
this is ridiculous. You've got to allow
foreign attachments onto the network.
Both courts handed down decisions
in favor of the defendants,
stating that they may attach equipment
to the Bell telephone lines
as long as attachments were not damaging Bells service.
These cases are watershed moments and a turning point
for telecommunications in America.
But in 1972, they do not help Walter Shaw.
In Florida, Shaw makes another mistake.
This time he uses Bell phonelines
to test a tone generator.
Bell's own internal security force
and is watching Shaw and listening.
He is arrested again.
My dad had an uncanny ability to understand...
the telephone system.
He was a threat. He was a threat to the day he died.
During his trial,
Walter's lawyer argues that Bell has a vendetta
against his client.
Bell argues that he made phone calls
bouncing off Bell lines.
They file charges against him
for theft of four telephone calls
and for illegal attachment.
Shaw reiterates to the court
that he was only testing his equipment.
His objection falls on deaf ears.
Walter Shaw is sentenced to four years in federal prison.
It amounts to one year in prison
for each alleged phone call.
In the mean time, with Archie Gianunzio's help,
his son, Thiel, continues to move up the ladder
of organized crime.
So we can, we can completely understand.
Not agree with it necessarily, but understand
why individuals living in a, uh, in depressed economic
conditions being discriminated against
would, uh, find organized crime attractive
as...economically.
I was very bitter at my dad's...
lack of business sense
and lack of sticking up for himself.
And I knew he could
cause you, I've seen it before.
He was angry at daddy,
he was angry at the world,
he was angry at the rich,
why shouldn't, why can't that be us?
My dad deserves that, you know, well...
I think one of the, the biggest effects
on my brother's life that changed, changed him so
was to have this wonderful man that had taught us
the true meaning of integrity.
He lied to, to us.
He lied to my brother and it changed him.
The Dinner Set gang becomes well-known
to the police when Pete Salerno, Dominick Latella,
and their crew including Thiel Shaw,
commence robbing hundreds of homes
across America.
The Dinner Set Gang.
You know we were professional high rise,
you know, second story...
high line thieves.
Thiel drops his nickname and takes the name Walter.
What the Dinner Set Gang would do was uh,
after reading these architectural magazines
or getting information from various jewelers
and fences in the area from Atlanta to, uh, to Miami
about the comings and goings of these individuals.
They would, uh, they would go surveil these locations
and they would set up, uh, why they say dinner set,
they would set up around dinner time
and observe the comings and goings
of that, of that particular location.
And one time he, um, he had uh, ran with
the older guys in the group, Peter Salerno,
Dominick Latella, um, and Walter had split off with them
when they found out what they were stealing from him,
portions of the profits and the proceeds that they made
from the burglaries they did together.
Thiel leaves dinner set to form his own
younger band of thieves
using the same method he learned from them.
Walter was a little more sophisticated.
He was a little bit more dedicated
just to doing burglaries.
He had a younger squad.
He had a crew that he had trained.
Shaw confronts his son
about the direction his life has taken.
He says, Thiel, what are you doing here?
And I said well, I'm straightening out
what you should have done years ago.
He says, what's that?
I said, we got into it anyhow and he says,
well uh, if you if you're doing what I think,
I'll turn you in myself.
I said, we're through.
I said, because see,
I don't see me in the way you do.
I see...a man slaps me on one cheek,
I'm gonna slap him on his.
You know, it's like the old verbiage...
you don't go to a gunfight with a knife.
So that's the, my philosophy.
So we just...we pull away totally at that point.
We were, we were done.
MCI files an antitrust suit against AT&T in 1974.
While Walter Shaw is in prison,
the most important event in the history
of telecommunications has happened.
The department of justice is convinced
MCI is right in their claims and they follow suit.
They also file against AT&T.
The fatal anti-trust case was filed by MCI in 1974.
And MCI stood for
Microwave Communications Inc.
It was simply, wanted to create a link
between St. Louis and Chicago using microwave
and then interconnect into the AT&T system.
Uh, so...
you got not only a change in the economic climate
and the interest groups involved,
but you also got a change in a political climate,
uh, the whole deregulation theory,
the deregulation of the airlines,
the, both the democrats and the republicans at that time
were pro-deregulation.
And uh, before you knew it,
you had the justice department
supporting this anti-trust case
and eventually ordering the breakup of AT&T.
While Walter Shaw serves his time in federal prison,
others make attempts
to enter the telephone business.
I was thumbing through the paper one day
and found a telephone answering bureau for sale.
Uh, it was in the town of Bel, Air Maryland
and they had, accumulated about 75 customers.
At that time, they provided, um...
telephone answering services, which is uh,
essentially messaging services for doctors
and people that needed emergency communications.
Ottensmeyer knows Bell is a monopoly.
How is it safe to enter a telephone business
which requires attachment to Bell telephone lines?
Well, it was uh...
a business that was sanctioned by, uh, AT&T.
They provided the equipment, meaning,
switchboards, operator switchboards that we used.
They provided all the lines,
and it was an area that
apparently they did not want to serve,
uh, because of probably the liability associated
with emergency services.
So it became a niche business that...
uh...
other entrepreneurs stepped up to, to fill the shoes.
Ottensmeyer's business begins to increase.
He leases more equipment from Bell to accommodate
his growing customer base.
In March of 1979, they resided my premise
with the Maryland state police
and telephone company AT&T security personnel.
They came in armed with a search warrant
and uh...
the door was open so they just walked right in
and...
one of my operators, uh, came back and got me.
It was early in the morning
and said there's a whole bunch of people
and policemen here to see you.
They said they were there to...
uh, that I had been operating an illegal telephone service
with illegal equipment.
Um, I knew what they were talking about
because we had openly provided this service
at that time, uh, and what they ultimately did
was walk out with the eight diverters,
uh, the equipment that we used to provide the service.
Suddenly his life is upside down.
If Ottensmeyer's company
was a Bell telephone customer,
why would they raid his home and business?
It's a mystery to me.
They they could have asked me about it at any time.
They were in the answering service premise
maybe three or four times a week repairing lines,
hooking up new customers,
you know, making adjustments
to the switchboards.
The final judgment allows
the sanctioned emergency switchboard to continue
provided Ottensmeyer does not operate it
or enter the premises.
The problem is, the premises for his business
happens to be in his home.
Ottensmeyer is never allowed
to set foot there again.
They did not want me to compete with them
and they were...
afraid they were, would lose revenue.
I was considered a competitor.
It will take another four years for Bell's monopoly
to be undone.
After his release from prison,
Walter Shaw goes on the road from city to city
with his inventions under his arm.
He maintains his faith that life will turn around.
He tells his wife over and over again,
I only need one deal and our life will be better.
He had people that would represent his,
quote, his office, and sell the servers
and have people sign the agreement
to subscribe to the service.
But I got the impression that he,
it attracted a lot of people
that were taking advantage of Walter
and they were selling the service,
but they weren't furnishing the call system.
He just was not really, and I hate to be blunt,
not a very good businessman.
Father and son cannot reconcile their differences.
It will be many years before they meet again.
It was never really the same between us
ever at that point.
I would, he, I think my dad was tolerable
of my decisions
but I think he was heartbroken and, and...
disappointed how my life was going.
Thiel has two great kids.
Uh, my niece and my nephew and uh,
we were there for birthday party
and Thiely had a beautiful home in Emerald Hills
and there was just a group of us, my mother, my aunt,
her sister,
the two kids, and uh, my brother's former wife
and um,
we were sitting in the kitchen having birthday cake
and...
my brother came in the kitchen door
and I almost fell off the... chair.
He came in with, uh, two or three of his uh,
dinner time gang.
And he had a big sack like a bad Santa Claus.
He had a big sack on his back filled with goodies
that didn't belong to him
and he had some black stuff on his face
so they wouldn't shine in the dark.
That was, that was reality walking in that door
as a bad Santa Clause with a sack on his back.
I mean, that just stopped the party right there.
Thiel and his jewel heist crew
rob as many as eight homes per night.
They hit different states at different times of the year.
It is a seasonal business.
Well anyway, he was involved in some major,
um, major uh, uh, burglaries and major robberies.
On, on his own he started his own, own little crew up,
you know, and uh, uh, was also a, there wasn't control
but he also had participated with some major
organized crime individuals
in the selling the jewelry
or whatever they, that they were involved in.
He did something one time that really hurt me and...
I had an answer, uh, I had a knock at the door one day,
late, late as I remember it,
and uh...
he said would you keep some stuff for me?
Just for a little while?
And I said what stuff?
He said, just, just some things
and, and things are kinda hot right now.
And um...
I said okay...
what, what are we doing?
He said, I wanna put it up in your attic.
And I said, okay.
And...I couldn't refuse him.
But when he left I cried
because it was the first time I ever felt unloved.
I felt like he wasn't thinking
that he was putting me in jeopardy
because I could have gotten in trouble
if the police were following him
and I willingly accepted stolen goods
and put them up in a safe place for him.
An organized crime task force is set up specifically
to get Thiel Shaw and crew.
We were more motivated when, when they started
hitting the homes that they were, they were living in,
in the area.
Uh, you know, when they went to Miami
or, we wold pass on the intelligence to other,
you know, other intelligence agencies.
But it was really ticking the, uh, the, uh, bosses off
when, when these guys were hitting local houses,
right in their own neighborhood.
That's when we said that's it, you know,
we've had enough and uh,
we've uh, we've I had a group of 44 guys under me.
44 guys in a city our size.
We had tactical everything was under me.
After a 15 year crime spree,
Thiel is caught by Broward county detectives.
He will spend 11 years in a series of state prisons.
Florida state prison,
Lawtey correctional institution
and Sumter.
Walter was indeed probably the greatest jewel thief
that ever lived.
I will still maintain that I never
committed that burglary. Thats right.
Actually, he was an official suspect
in more than 100 burglaries
when these pictures were taken
and suspected on the side in thousands of others.
Walter is hated by many law enforcement officials
throughout uh, this tri-county area.
8 years later, he finishes his sentence
at Lawtey correctional institution.
As he exits he prison,
his father is entering the same one
for a probation violation.
Walter Shaw's wife of 44 years, Betty Lou,
has just died.
In his depressed state,
he stops reporting to his probation officer.
Walter Shaw is compelled to serve the balance
of his prison sentence.
Thiel loses touch with his father completely.
A lifetime.
Probably...
20 years, 25 years.
Somewhere around there.
We'd run into each other through the years
by accident, strictly.
Like for instance, he, he, he got violated on probation
and when he got out
after my mother died, uh, he had prostate cancer.
I didn't know it.
And the doctor just happened to be my doctor
and she calls me from Beaches hospital and says,
uh, I just, I just operated on a man
that has prostate cancer and he's got your name.
And I said, is he an older man?
She says, yeah, he's slightly older.
And I says, really?
I says and what, what'd you do to him?
She said I had to castrate him
to try to stop the progression of his cancer and...
I said, well I'll come down, where's it at?
And I drive to Beaches hospital and it was my dad.
And uh, he had just gotten out of jail, you know.
And I said, well what are you doing here?
And he says, well... then he got choked up
and he said I, you know, they had to castrate me
and he was a little weak and groggy from the operation
and I said, well I'll come back tomorrow and see you
and I came back and he was gone already.
He'd gone back to Reno.
With his wife Diana, Thiel finds his father
living in a bus station
broke, starving, and shattered by life.
He was the early stages of, he'd, he told me at the party,
he said, I have 18 months left to live.
And I didn't want us to die this way.
On June 13th, 1980,
a jury in Chicago awards MCI 1.8 billion dollars
in damages to be paid by AT&T.
For nearly 80 years, Bell telephone
vigorously blocked or eliminated competitors
from the communications industry.
Is that how you feel? You feel like it was a war?
Yeah.
There's no doubt about it.
Why do you say that?
We were the good guys and they weren't.
Um, they wanted to stop us from making a living,
feeding our families,
bringing good things to people that helped them
that they didn't want to do themselves.
What did they want to do?
They wanted to make money
and they wanted to control the telephone system.
The AT&T system, uh, had...
uh, fought it in the 70s.
They created, uh, a bill, known as the Bell bill
in the mid 70s it was, would have re-legitimated
monopoly and reasserted monopoly
and they were just hooted down.
I mean, it was clear by that time it was AT&T
versus the rest of the economy
and uh, despite the support of the defense department,
um, they were indeed broken up.
Which is really still quite a remarkable achievement
of uh, the Reagan, uh, anti-trust department,
that they actually did that.
Uh, but it was an explosion.
It was the big bang of telecom policy.
It was something that just completely reset the terms,
uh, for telecommunications
uh, for the 21st century.
In January of 1982,
AT&T was forced by Judge Harold H. Green
to divest itself of the wholly owned
Bell telephone operating companies,
which halted Walter Shaw from making a living
and pursuing his dreams.
On January 1st, 1984, the Bell monopoly was dead.
What exactly was this marriage of big government
with big corporation?
Was this a unique relationship?
It was not.
The marriage of Bell with the government
is what economists call corporatism.
Fascism is corporatist.
I mean, there's no, it's not an extreme,
fascism was corporatist.
And Mussolini, uh, was the one who kind of
first promoted the idea,
well the Italian fascists were the ones who developed
the idea of corporatism.
AT&T was the epitome of, uh,
kind of a corporate structure.
You had a very powerful labor union,
The Communication Workers of America.
You had the biggest corporation in the world,
uh, with a monopoly,
a government sanctioned monopoly
and you had them working very closely
with the government on things like uh,
uh, national security technologies,
uh, um...
wire-tapping, uh you know, providing information
to the government about who was doing what,
uh, you have a consolidated stakeholder group.
This is what big business wants.
This is what government wants.
This is what the representatives of labor want.
And that's what happens.
America is a democracy.
It is a free society.
Yet it employed a fascist economic structure.
But that was 90 years ago.
The question is...
can it happen again?
Today, elements of corporatism are still active
in America where corporations
representing different groups exist
to influence government legislation through lobbying.
While these corporations have no membership,
in any legislative body, they wield considerable power.
American corporatism is alive and operating today
as reflected by the relationships
between members of the former Bush administration
and corporations such as Halliburton.
Circumstances like these further support the notion
put forth by critics of capitalism.
They argue that any form of capitalism
will eventually devolve into corporatism.
Where concentration of wealth
is in fewer and fewer hands.
The administrations of presidents Carter, Reagan,
Bush Sr., Clinton, and Bush Jr.
favored deregulation policy
throughout their respective terms.
The idea was to let big business, big corporations,
big banks, operate with less government interference,
unlike the Bell structure.
In 1999, the financial services modernization act
is enacted in the 106th United States Congress
under President Clinton.
Banks, securities houses, finance companies,
and insurance companies will be allowed to merge
and consolidate at will.
Soon, investment brokers will create and sell
high risk, virtually worthless investment products
to commercial banks
which will result in one of the greatest
economic catastrophes in American history.
Uh, the United States had organized crime
on a, on a scale that uh, uh was way, way
beyond that of what ethnic groups
like Italian-Americans and Jewish-Americans brought.
Uh, we know the whole story about the,
about the robber barons.
Uh, we know about the Rockefellers.
We know about the Vanderbilts,
uh, we know about the people who indeed
are organized crime on a, on a, on a level
uh, that uh, perhaps is being repeated again,
uh perhaps being repeated again
by corporate America.
Big business in cooperation with big government
worked together to take the country
to the brink of disaster.
How does their behavior differ
from the criminal behavior we know
as organized crime?
Well, first of all, the difference is that they,
the individuals who are doing it
at the corporate level of America
are certainly making money way beyond anything
ever dreamed of,
but the kind of organized crime that titillates all of us,
uh, American Mafia groups.
So, thats a, an important difference.
Uh, I provide in my research, in my books
a definition of organized crime.
I would suggest seven of those attributes
could certainly fit all of the, the corporate
criminal activities that have become,
uh, well known to all of us as a result of media exposure.
Perhaps the only one, and I would have to be cautious
about saying that we're not gonna include that one,
the only one was that the willingness to use violence.
Big corporation, big government,
big stakeholders, capitalist, socialist,
regulate, deregulate.
In the end, what do these words mean
to a democracy?
What do these words mean to Walter Shaw?
These words are ideologies.
Methods of government, manipulations of power.
Economic rationales.
And they profoundly affect every level of our society
for decades, even centuries at a time.
While there are no easy answers to explain
why we are, where we are today,
there are also no easy answers
as to what to do about it.
At very least, as members of a free society,
we have the opportunity to educate,
to demand truth,
to object, to reject,
to demand clarity from those who serve us,
supply us, and govern us,
and to speak up when wrongs are not righted.
It's all we've got.
Winston Churchill said this:
"We accept in the fullest sense of the word,
the settled and persistent will of the people
all this idea of a group of super men
and super planners making the masses of the people
do what they think is good for them
without any check or correction
is a violation of democracy.
Many forms of government have been tried
and will be tried in this world of sin and woe.
No one pretends that democracy is prefect
or all wise.
Indeed,
it has been said that democracy
is the worst form of government,
except all those other forms that have been tried
from time to time
but there is the broad feeling in our country
that the people should rule
continuously rule
and that public opinion
expressed by all constitutional means
should shape, guide, and control the actions
of ministers who are their servants
and not their masters.
I says, why do you think we never benefited?
I said, what, what do you think it was all about, dad?
He said, I never questioned it.
I just know I had the gift,
the ability and the blessing from God to do what I did
and I never ever questioned him
but he says, you know what, Thiel?
It doesn't matter what anybody says about me
'cause my inventions will speak long after I'm gone.
Walter Shaw would live to see
the dismantling of Bell telephone.
But many years too late for him
and his family.
- Final question. - Mmm.
If your father walked in here right now,
what would you say to him?
Greg, I don't know. I'd ask for another day.
And that would be a gift?
That would be a gift.
**
* Isaac and Thorald Koren: "For One More Day" *
**