By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
Return to Camelot
I am writing in response to the article that appeared in the January 18-24 issue of the Dallas Observer ("It's the stock price, stupid!"), written by Miriam Rozen. The article is, in my opinion, full of lies, distortions, half-truths, and unfounded insinuations.
The article commences with a statement that I purchased and subsequently closed businesses and eliminated jobs. It omits to say that I have also grown Camelot's employee base from one to its present level of 70, and moved a declining oil-and-gas company into the software industry, an industry with a dynamic future. The introduction goes on to quote a private investigator, Lila Gill, who said, "He's the most ruthless businessman I have ever met." I have never met Lila Gill nor have I ever spoken to Lila Gill.
Next it indicates that I have said, "It's the stock price, stupid." I have never said that; however, it is true to say I am most concerned with the long-term stock appreciation of the company, and take very seriously my responsibility to Camelot's approximately 10,000 shareholders. During my tenure as CEO of Camelot, the market capitalization of the company has increased from approximately $700,000 to its approximate current value of $50 million. I believe that Camelot's investors are very pleased with that performance.
The article goes on to say that I promoted Camelot's software program, DigiPhone, "among penny-stock mavens through the computer online service Prodigy." This is untrue. I have never made any posts on Prodigy or any other online service.
A reference is made to the fact that I "touted" the news that Clark Hunt, a grandson of H.L. Hunt of Dallas, was an investor in our company. I have never "touted" such a fact, although Mr. Hunt's interests are long-term investors in the company.
The next commentary attempts to discuss my business career in England. It references that after a career in merchant banking in the city of London, I "traded in spare motorcycle parts." What it omits to say is that over a seven-year period I built up a small London, England-based business into a U.K.-nationwide distributor of motorcycle equipment and then sold that business following my appointment as chief financial officer of a London-listed public company, Bambers Stores.
The article insinuates that my immigration to America was connected to the Bambers situation. This is pure nonsense, as I commenced immigration procedures some two years prior to my appointment as CFO of Bambers.
The article then attempts to explain the process of taking companies public through reverse mergers, an activity that I successfully did for several years. I want to refute a statement made by the article which is untrue, namely, "Through press releases, Wettreich would promote a company's newly acquired assets, boosting the stock prices." Not true. Never happened.
The article then switches to investments made by Camelot in other public oil-and-gas companies which resulted in a profit. This may have disconcerted the companies in which these investments were made; however, despite the article's statement that "hostile takeover bids" were made by Camelot, no such bids were made.
Reference is then made to the termination by Camelot of its previous auditors, Hein & Associates. This has been fully disclosed in SEC filings. Camelot terminated Hein & Associates on advice of its legal counsel, as they did not provide the required accounts by the deadline for submission to the SEC, nor did they provide an explanation as to why they were not able to perform their obligations in a timely manner. They subsequently, in a filing, made an assertion that they were concerned about the accounting treatment of the acquisition of an office building that had a mortgage from one of my family trusts. Neither the auditors prior to Hein & Associates nor the auditors subsequent to Hein & Associates had any problems with this transaction.
Despite the article's insinuations, I am not aware of any investigation by the SEC, I have never been interviewed by anybody from the SEC, and do not anticipate any investigation now or in the future.
The article then turns to the claims made by a disgruntled ex-employee, Kathleen Williams. I shall focus on the blatant untruths and leave the minor distortions unanswered. It is untrue that I fired all but five of the employees of Business Investigations. What is true is that in total I fired five employees within a few days of the deal closing, leaving another 50 employees on the payroll. Ms. Williams resigned her position with the company following my expression of dissatisfaction with her performance.
Ms. Williams expressed her frustrations by filing a frivolous lawsuit against Camelot which was ultimately settled to eliminate the cost of continuing litigation. Her allegations were pure nonsense, and not a shred of evidence exists to justify her claims. Business Investigations was closed in mid-1992, and in March 1994 the RTC advised us that the MWOB [Minority Women Owned Business] status of Business Investigations was revoked as the RTC had interpreted the rules in such a way that Business Investigations was not deemed to be a MWOB. The board of Camelot made the decision that it was a waste of its resources to attempt to refute the RTC's interpretation of the MWOB rules. Camelot believes it fully complied with all the required regulations.
Ms. Williams' lawsuit references the sale of a building from Camelot to one of my affiliated companies. This transaction occurred as part of the reorganization of Camelot which involved the sale or closure of all its existing business in order to focus Camelot's activities on the software industry. Briefly, two buildings were sold to Forme Capital, an affiliated company. One building required that any future profits from the sale of that building would go to Camelot. The profits were in fact paid to Camelot. The other building is occupied by Camelot as its head office and an advantageous lease was arranged with Forme at a savings to Camelot of approximately $100,000 per year over a five-year lease. The allegations made by Ms. Williams are totally without merit.
The article describes a minority investment in a video distributor called Goldstar Video. That was not a good investment for Camelot; however, it relates to a 1993 transaction which has absolutely no relevance to today's activities.
The balance of the article focuses on the present activities of Camelot, which it describes in a very skeptical tone. In my opinion this skepticism is misplaced. I believe Camelot has a tremendous future, and in that regard I have demonstrated my commitment to the company by recently investing $2 million of my own money into Camelot.
I have been involved for over 20 years in public companies as an advisor, principal investor, and executive, and I believe that my activities have been appropriate, effective, and in the best interests of the shareholders of the companies concerned.
I believe that responsible journalism requires that the facts stated in any article should be accurate, and in that regard Miriam Rozen has failed.
Chairman and CEO
1. Lila Gill states flatly that she met personally with Danny Wettreich. Moreover, she details her meeting with him--on April 12, 1991--in a sworn affidavit made in connection with litigation between Camelot and her client, Golden Triangle Royalty & Oil.
2. Miriam Rozen's story doesn't state that Wettreich said, "It's the stock price, stupid." It notes that "one can sum up his credo" with that statement--and Wettreich's comments above reaffirm that point.
3. In its November 20, 1995, issue, Business Week described a Camelot posting on Prodigy's Money Talk Bulletin Board. The story quoted a Camelot spokesman attributing the company's rising stock price partly to online postings.
4. Camelot's 1995 annual report includes the following comment about the Hunt partnership's involvement in Camelot: "Management believes that to have investment advisors of the quality of the Hunts directing a substantial investment into Company is an expression of confidence in Company's future prospects."
5. Wettreich issued a number of press statements about acquisitions.
6. The story doesn't say Wettreich formally launched "hostile takeover bids"; it says he "threatened" hostile takeover bids--a point his letter does not dispute.
7. Our story noted Wettreich's contention that he knew nothing about an SEC inquiry. It also included comments from former employees who say SEC investigators personally interviewed them about Camelot's activities.
8. Wettreich complains that it is "untrue" he fired "all but five of the employees of Business Investigations" after buying the company. Three former BII employees tell us he did just that--though it took him four months, not five days as our story stated.
For the love of Molly
The recent decision of the Fort Worth Star-Telegram to pull Molly Ivins' column from the Dallas Observer ["'A little bit of revenge,'" February 22] is a most petty move. Evidently, they hold criticism in as much contempt as Ivins holds objectivity.
I have read Molly's column for many a year, and have always marveled at her ability to mangle, obfuscate, and distort the truth to such an extent as to make George Orwell blanch. Though I am neither a Republican nor a Democrat, her sweeping generalizations about both parties, as well as any other number of subjects, were always presented from an emotional and subjective, rather than logical or factual, stance. She demonizes her foes while idealizing her allies to such an extent as to render her columns mere propaganda.
This tendency had become so bad that one would almost dread her patronizing defense of some very enlightened causes, many of which I am a very passionate believer in! Thus, it was not her perspective that was so odious; rather, it was her debate style--filled with contradictions, illogic, wild rationalizations, and a contempt for the truth--which was always sure to fill me with disgust.
It is also exactly why her column is so important. Two of the great dangers today are apathy and ignorance. Those in power thrive on people exhibiting those features. Thus, it is invaluable to have such extremists around; whether it's a Pat Buchanan, who chooses to blame all society's ills on "foreigners," or a Molly Ivins, who chooses legal gun owners or any other perceived nonliberal as the Ultimate Evil. They are two sides of the same coin. One must become galvanized into action to counteract their propaganda. If any real change is ever to occur, lies and prejudice should be met and defeated in the public forum.
However, the Fort Worth Star-Telegram way of doing things imperils this. So as Molly speeds off (probably in a BMW) into the sunset, smugly rhapsodizing about "the '60s" and how her generation "made a difference," I can but hope that she will yet again find a way to make herself heard in Dallas. Reading her column was not unlike viewing a smug murderer who regularly beats the system and smirks at his superiority and your stupidity: It was impossible to remain apathetic.
I was sorry to see that Molly Ivins' column will no longer be published in the Observer. Her column was the only reason I ever picked up the Observer. It was the most amusing and laughable collection of liberal trash to be found. The people of the Dallas area will be fortunate not to be exposed to the garbage she put out. Too bad the rest of the country can't be so lucky.