Searchlight on the States
September 2001
Liberty Lobby Closes Its Doors,
Spotlight Ceases Publication.
Forty-five years after he began as a small-time operator on the West Coast, Willis Carto’s career as America’s most successful professional anti-Semite and racist is effectively over. Yes, he will probably continue some kind of flimflam until the last sucker has coughed-up their last Federal Reserve Note. But when Liberty Lobby announced that its 9 July <Spotlight> was its “Final Edition,” the 73 year-old con artist went from boss to bankruptcy. If Carto had whined a bit less or had stood a tad more grandly, his epoch-ending loss would have qualified as genuine tragedy. He did, after all, inadvertently kill his own off-spring with his own hands. But there is nothing heroic in Willis Carto’s organizational demise; just a mean little tale of mendacity, greed and duplicity.
Almost from the beginning, Willis Carto maintained two distinct kinds of enterprises: one keeping his white nationalist faith alive, a second aimed at mainstream politicking. In the 1960s, his Liberty Lobby office in Washington, D.C., worked with arch-segregationists in the South and conspiracy-minded anti-communists in the North. Eventually it built an East Coast outpost on the right-wing edge of Gov. George Wallace’s 1968 independent campaign for president. During the same period he launched a second project on the West Coast, initially aimed at preserving the legacy of Francis Parker Yockey, author of a Euro-Nazi tome, <Imperium>. Together with Northern Leaguer and British national Roger Pearson, Carto produced an unabashedly white supremacist magazine, <Western Destiny> until 1966. After a split with Pearson, <Western Destiny> ceased publication. And then in a most fateful moment, Carto acquired control of a non-profit (charitable) corporation known as the Legion for the Survival of Freedom.
The Legion, from its office in California, became Carto’s umbrella for projects sharply defined by his true racist and anti-Semitic ideology. An old publishing imprint he had used in the early Sixties, Noontide Press, continued publishing under the Legion’s aegis. And in 1978, with the assistance of another British expatriate, National Fronter David McCalden, the Legion for the Survival of Freedom became the corporate parent of the Institute for Historical Review (IHR)—Carto’s Holocaust denial outfit. Although the Legion enjoyed “charitable” status, IHR’s budget was always stretched thin and its staff size remained small—as befit its more ideological, and therefore more marginal role.
Liberty Lobby in D.C., on the other hand, developed a larger, relatively amorphous far-right constituency. By 1980, Liberty Lobby had an annual budget in excess of four million dollars and a staff of forty; and it’s weekly tabloid, <Spotlight>, had over 300,000 paid subscribers. It spawned a bevy of connected corporate shells. Government Educational Foundation formally owned Liberty Lobby’s office building at one time. Foundation to Defend the First Amendment served as a fundraising funnel. So did the Foundation for Economic Liberty. Carto used these corporations like a street-side shell-game, shuffling money from one to the other. When a libel suit threatened Liberty Lobby in the mid-1980s, for example, he seamlessly switched Spotlight’s ownership from Liberty Lobby to a new corporation called Cordite Fidelity. (Cordite being one of the main ingredients in gunpowder.) And when the threat from the lawsuit faded, Cordite Fidelity disappeared and Liberty Lobby’s name once again appeared on the weekly’s masthead.
Although Willis Carto had ultimate command of both the Liberty Lobby complex in D.C. and the Legion for the Survival of Freedom in California, he often pretended otherwise. When Spotlight ran into legal trouble, he would contend that he was simply Liberty Lobby’s corporate treasurer and that the Board of Policy chair had the real power. Opposing attorneys would have to compel testimony proving that he actually controlled Liberty Lobby and its tabloid’s editorial content. By the same token, when IHR was pulled into court, Carto would contend he had little to do with its operations and served only as the “agent” of the Legion’s virtually invisible board of directors. In fact, Carto did remove himself from the Legion’s board, and used an elderly couple—LaVonne and Lewis Furr—as pliant corporate proxies; all while maintaining day-to-day control over its operations. At every instance, Carto denied that any kind of link existed between Liberty Lobby and the Legion.
This set of legal fictions began to unravel after an heir of inventor Thomas Edison, Jean Farrel, bequeathed a multi-million dollar estate to the Legion for the Survival of Freedom. Farrel was an American who took Columbian citizenship, lived in Switzerland and established a Liberian corporation, NECA, to hold her considerable wealth. She died in August 1985, leaving behind US$16 million in bearer bonds, real estate, gold, diamonds and precious stones; all squirreled away in banks in the United States, England, Switzerland, Germany, Singapore and Japan. Farrel's executrix, Joan Althaus, tried to keep the estate for herself, and a legal dispute over the assets lasted six years. At settlement in 1991, Carto received 45% of the estate, or US$7.5 million, on behalf of the Legion for the Survival of Freedom.
The Legion never received the funds, however. Instead, a Swiss corporation, Vibet, held the assets. From that account, funds were transferred to another Legion account in Switzerland. In a twist of creative bookkeeping, IHR's executive director in California was paid by a check or direct deposit drawn from the Swiss account. And the salary amounts were carried on the Legion’s books as a loan. Adding to the financial chicanery, Carto also funneled funds that were ostensibly the Legion’s to Liberty Lobby, Inc. in Washington D.C., its Sun Radio corporation and other undisclosed "good causes." Leon Degrelle, the Waffen SS criminal then hiding out in Spain, received US$100,000 in Carto disbursements.
Carto's unrestricted use of the Farrel funds ended in September 1993. Tired of their boss’ shenanigans, IHR staffers convinced Carto’s proxie board members, LaVonne and Lewis Furr to resign. In their place, a new board of directors was appointed, including Mark Weber—who had been a leading cadre for William Pierce’s National Alliance in the late 1970s. With Weber’s ascension, Carto lost control of the Legion and the most important center for Holocaust denial in North America and Europe.
A flurry of lawsuits followed. After years spent denying that he had any connection other than serving as the Legion’s “agent,” Carto now maintained that he had always been, in fact, the only person in control. Similarly, after denying any link between Liberty Lobby and the Legion, he now maintained that the Farrel money had been given to him personally and that he could give it to either Liberty Lobby or IHR as he pleased. Based on these contentions, Carto sued to void the new board of directors. But a California judge upheld the standing of Weber and the Legion's new board. The Legion then sued Carto, Liberty Lobby and others to recover the Farrel funds that Carto had diverted. A second judge ruled that Carto and his co-defendants owed the Legion $6,430,000. That amount would grow with interest.
In a letter explaining his decision, the Judge concluded that, "Mr. Carto lacked candor, lacked memory, and lacked the ability to be forthright about what he did honestly remember." The Judge also ruled that LaVonne Furr had "allowed herself to become the pawn of Mr. Carto.” Eight years and a dozen lawsuits later, the verdict remained the same: Willis Carto and Liberty Lobby owed millions to the Legion for the Survival of Freedom and its offspring—the Institute for Historical Review.
To avoid payment, Carto declared personal bankruptcy in the California courts. Liberty Lobby similarly declared bankruptcy in Washington, D.C. It looked as if Weber, the IHR and the Legion might win every lawsuit, but lose the funds. Then, for a brief time, the antagonists reached an agreement with an extended payment schedule. By the end of December 2000, the Legion-IHR had received almost $400,000; enough for IHR to re-hire staff and re-start publication, but not enough to satisfy the entire debt.
That agreement fell apart, however, and earlier this year both parties went back to court once again. Finally, Liberty Lobby reached the end of its legal rope and was ordered to make payments to the Legion or face liquidation by the courts. After forty years of operating a D.C. office, Liberty Lobby closed its doors and ceased publishing Spotlight. On the West Coast, Carto faces a court-ordered liquidation of personal assets. In short, he can loose his house in Escondido to the Legion.
For its part, the Legion-IHR continues to carry the Holocaust denial banner world-wide, and claims its prospects are the brightest in years.
What next for Willis Carto? He is expected to begin publishing a new periodical, supposedly entitled <The American Free Press>, from new offices in D.C. He will also use one of his many corporate shells to continue producing a magazine, <Barnes Review>, for the Holocaust denial set. The Farrel funds, after all, have not yet been completely spent. And as long as Carto has money, he will remain on the white supremacist scene. But the long battle with the Legion-IHR has reduced him to a “has-been” who can only look on as the next generation of players takes center stage.
-end-