Results 1 to 8 of 8

Thread: What did Maggie know about John's drug entrapment?

  1. #1
    Senior Member nick sutton's Avatar
    Join Date:  Jun 2011

    Location:  Belfast

    Posts:    156

    What did Maggie know about John's drug entrapment?

    What did Maggie know about John’s Drugs entrapment and when?
    Margaret Thatcher vetoed a plan by a UK Consortium to save the DeLorean car company in Northern Ireland, then in receivership, which would have saved 1500 jobs and secured at least part of the UK government’s $160 million investment in the project. Weeks earlier she had been told that $17.65 million had been taken from the company’s coffers and that the likely culprit was John DeLorean and Colin Chapman Chairman of Lotus Cars.
    “I can build you a factory, design and produce a car, employ two thousand people all in eighteen months” DeLorean declared to the British government in June 1978. The catch was that he needed $100 million. His offer was accepted, but in return he was told that the car had to be built in West Belfast, Northern Ireland. Despite setbacks caused by styling changes to the car’s original design and sectarian conflict, that brought Northern Ireland close to civil war, the project took twenty six months to the first car and $160 million of tax payer’s money. The company was continuously dogged by cash shortages and poor quality. It went bust in February 1982 due to over production and excess overheads, particularly in the US.
    Just three months after signing the master agreement with the British government, in July 1978, well before the foundations of the factory were laid, DeLorean decided that he should benefit personally from the cash windfall, courtesy of the investors. A contract with Colin Chapman chairman of Lotus through an intermediary GPD, a Panamanian company with offices in Geneva, would be the conduit to move the cash out of the company. In all $17.65 million of payments went walkabouts to GPD and onwards. The money was split between Colin Chapman chairman of Lotus and John DeLorean with the loose change going to Fred Bushell the finance director of Group Lotus. The fraud would have gone unnoticed if not were not for receivership. It wasn’t too long before the receiver’s staff noticed a hole in DeLorean Motor Cars Ltd’s accounts and reported this to the government.
    So what made The Iron Lady reject the sound business proposal made by a UK Consortium, a plan approved by the Receiver, Sir Kenneth Cork and the Secretary of State for Northern Ireland, James Prior? The UK Consortium’s proposal also limited DeLorean’s involvement in the project and added a second vehicle to the line-up at the plant in Belfast; it was a perfect plan, except the initial £80,000 to allow due diligence was to be funded by the Northern Ireland Office, which they had already agreed, but final approval from the Prime minister was necessary. Much to everyone’s consternation in a meeting in Downing Street in mid- August 1982 she rejected the plan outright.
    It was now DeLorean’s turn to make proposals to fund the revival of his fledgling car company. In desperation he took the bait from the FBI posing as cocaine drug dealers during a phone call they made to DeLorean on 29th June 1982. Time after time the British government gave DeLorean more breathing space, a commodity they didn’t offer the UK Consortium, deadlines came and went; each week brought a fresh announcement of a new backer by John DeLorean non believed by the receiver to be real. During this period the home and business ‘phones of key employees were wired by authorities on both sides of the Atlantic.
    Finally the last deadline was given as 19th October, if by then John DeLorean had come up with the money the company in Belfast would definitely close. DeLorean chose the easy route for funding and met the FBI that day posing as drug dealers. They met in a Los Angeles airport hotel room.
    During DeLorean’s later drugs trial Gerald Scotti a former DEA agent involved in the entrapment of DeLorean said, ‘I knew from a long way back the (US) government would go to any lengths to prosecute Mr. DeLorean ’. Scotti also gave evidence that he overheard a heated argument the night before DeLorean’s arrest between the two law-enforcement agents, he said the name of ''Mr Meese'' was mentioned. Edwin Meese was then counselor to the President.
    Was Margaret Thatcher aware of the impending drugs bust drama being played out in the US when she rejected the UK Consortium’s plan so DeLorean could be lured into the FBI trap? Catching DeLorean dealing with drugs would be a huge bonus for Ronald Reagan as he was about to launch an issue close to his heart, The war on drugs. His announcement of the programme was made during his weekly radio broadcast on 2 October 1982. DeLorean’s arrest and associated scalp would hit the headlines a few weeks later providing a kick start Ronald Reagan’s initiative.
    Let’s look at the timescale of events:-
    • March 1982 – The Receiver sir Kenneth Cork advises that investigations into the accounts of the DMCL reveal that $17.65 million is unaccounted.
    • June 7 1982 -Margaret Thatcher and her staff meet Ronald Regan and his staff in London for talks on International issues.
    • June 29 1982 - John DeLorean receives his first phone call from James Hoffman an FBI confidential informer this call initiates the drugs sting. From this day forward all of DeLorean’s phone messages were wired - but not this one.
    • 23rd July 1982 –The UK Consortium submits a business plan to Hill Samuel the leading Investment Bank in the UK. The plan has the backing of James Prior secretary of State for Northern Ireland and Sir Kenneth Cork the Receiver.
    • 12th /13th August 1982 – Meeting in Downing Street. Margaret Thatcher rejects the UK Consortium’s plan despite the backing of The Secretary of State and the Receiver. By default leaving John DeLorean as the only remaining option to save the company. Now that the UK Consortium have been eliminated from the picture this gives DeLorean substance and reasons to continue his dialogue with the FBI Sting operators. Had the UK Consortium been successful then there would have been no need for DeLorean to continue the drugs route to finance the rescue of his company all would have been lost for him at that stage.
    • 7th September 1982 – In desperation, DeLorean mentions his IRA contact in Northern Ireland to the FBI sting team. The contact – says John DeLorean - that will fund the drugs transaction. The man mentioned was and still is a respected member of Northern Ireland Society. DeLorean writes in his autobiography DeLorean that the contact in Northern Ireland was subsequently cleared by the Security Agencies. Clearly at this stage the FBI would immediately contact the UK Government to research details of the person named. Officially the UK Government from this date now know about DeLorean’s drug entrapment actions by the FBI.
    • September 1982 – I was advised by other senior managers that my home phone may be wired . We thought at the time that this was a result of the GPD fraud and associated enquiry.
    • 19th October 1982 – John DeLorean was arrested on drugs charges.
    What do you think?


    Nick Sutton was a senior Manager of DeLorean Motor Cars, a junior member of the UK Consortium and later became a Director of Lotus Cars two years after Colin Chapman’s death. His book The DeLorean Story, the Car, the people the scandal is published by Haynes and available on Amazon as a hardback or e-book

    ©Nick Sutton 2014


    The DeLorean Story: The car, the people the scandal. http://www.amazon.com/The-DeLorean-S...delorean+story

  2. #2
    Senior Member
    Join Date:  May 2011

    Location:  Previously Ireland, now New Jersey

    Posts:    332

    My VIN:    4 Seater DMC24

    Club(s):   (DMA)

    Quote Originally Posted by nick sutton View Post
    [B][U]Just three months after signing the master agreement with the British government, in July 1978, well before the foundations of the factory were laid, DeLorean decided that he should benefit personally from the cash windfall, courtesy of the investors. A contract with Colin Chapman chairman of Lotus through an intermediary GPD, a Panamanian company with offices in Geneva, would be the conduit to move the cash out of the company. In all $17.65 million of payments went walkabouts to GPD and onwards. The money was split between Colin Chapman chairman of Lotus and John DeLorean with the loose change going to Fred Bushell the finance director of Group Lotus.
    Is there any proof that John DeLorean personally benefitted from this GPD deal? Was he not acquitted of this in a trial in Detroit?

  3. #3
    Former Owner delo2.8's Avatar
    Join Date:  Jun 2011

    Location:  Smithers, BC, Canada

    Posts:    29

    My VIN:    Former owner of 10787

    Very interesting timeline. Either a very elaborate plan or a complete fluke of events.
    Del Silveira
    Lived the dream, sold the dream, and now I dream again.

  4. #4
    Senior Member aotmfilms's Avatar
    Join Date:  Apr 2015

    Location:  Macomb MI #DOCBRWN

    Posts:    300

    My VIN:    5778

    Club(s):   (DCO) (DCUK)

    Being the history buff that I am, and living thru that time (John Z was all over the news here in Detroit), I thought that the UK didn't do more to assist John in his quest to save his company. I would think the local government would have helped more seeing as how 1,500 to 2,000 good paying jobs were on the chopping block.

    I think John's trial, and DMC failing, were probably more due to pissing the big 3 off than anything (that is my speculation). The Big 3 does not like competition of any sort, that is why there seems to be a "premium" to be paid for any parts or service here in Detroit on any foreign automobile.

    I also think that some of the issues that plagued the Delorean would have been ironed out had Thatcher helped save DMCL. More model years, more time to iron out engineering design flaws etc. Even though investing a $100 million then would be like $306,143,415.91 in 2015 it was a drop in the UK budget, even at that time, so I think Nick may be on to something.

    It would be worth a look at the Big 3 to see how John's leaving and subsequent building of his company affected them. If I was a betting man, I'd go back and look at any records between the Big 3 or internal to them that had the key words "DMC" "DMC-12", "Delorean", "John Z" in them. I would be curious. The Big 3 and the UAW controls things here IMO so it wouldn't be hard to slant the media against DMC and the Delorean at least in the Midwest.

    I cite the example of the current auto company "Tesla" and the Big 3 saying that Tesla had to use the dealership model when selling their cars in Michigan: http://www.washingtonpost.com/blogs/...-with-dealers/

    It is heard that he took some of the best and brightest with him when he left.

    Just my .02 cents
    Last edited by aotmfilms; 05-14-2015 at 04:00 PM.

  5. #5
    Senior Member DMCVegas's Avatar
    Join Date:  Oct 2011

    Location:  Las Vegas

    Posts:    2,371

    My VIN:    6585

    Club(s):   (DOA) (DCUK)

    I'm sorry that I didn't catch this thread sooner.

    I was under impression that the £80M finance package for DMC was indeed approved, but under the condition that John De Lorean would first need to inject $20M of his own cash into the project. This was to ensure that De Lorean had a significant financial stake in the company, and would be more dedicated to it's survival.

    The Bankruptcy trial in Michigan was for creditors, but didn't really have much at all to do with GPD. Speaking of which...

    GPD was not actually JZD's idea. That was the result of the Juhan family. A successful racer turned businessman, Jaroslav Juhan introduced Porsche (among other Italian cars) to South America by becoming it's distributor, and the very wealthy Juhan family had financial connections to Colin Chapman. They had apparently been keeping Lotus afloat for sometime. The romantic tale of Colin Chapman founding a successful car company and racing team because of a loan from his wife isn't quite and shiny as you'd think. Lotus has always been puttering about with financial issues. Fred Bushell and his "creative financing" was the reason that Lotus survived all those years. It wasn't Colin Chapman, it wasn't his engineers or drivers. It was Fred Bushell that kept that company going.

    Anyway... After the Bill Collins Prototype (Proto-1) DMC realized that they needed to start over with the engineering. Porsche of course wanted the job, but wanted to take years to finish it up. Juhan heard about this and made the Lotus-DMC partnership happen. De Lorean was eager, but Chapman didn't want the job. Juhan pretty much had to twist his arm in order to force him to take the engineering contract for the DMC-12. HOWEVER, the Juhans had insisted that all money paid out by DMC needed to go through their Panamanian company, GPD. They did NOT want the cash paid out directly to Lotus... This of course is where the money came out to pay for the Bedminster Estate in New Jersey. As JZD himself said, he didn't want to wait for DMC to be a success, he wanted all of those things now.

    There was a TON of screwed-up accounting going on with GPD. One of the biggest things that caught my attention is in the Pennebaker & Hegedus documentary where they filmed a meeting in Hethel and I believe it was Thomas Kimmerly that was blowing a gasket because they were double-paying Volvo for engineering work done to the PRV engine to be used in the DMC-12. Not that the PRV needed engineering anyway given the fact that it shares the same lower crankcase and oil pan with the Alpine A310 and newer cylinder heads were on the way with the 2.8L version, but they were double paying. I always wondered if that was horrible accounting, or just a sign of red herrings meant to cover up the cash taken out of the GPD partnership.

    After DMC collapsed, Fred Bushell did 3 years in jail. But not before the judge lamented that De Lorean and Chapman were not there to accompany him in prison. And this is where I've heard various conspiracy theories over the years about DMC's collapse. Which are:

    1. Colin Chapman knew of the impending investigation, and faked his own death. Hazel Chapman has refused all requests to exhume Colin's grave. And even as a women who has always hated travel, she's been spotted in South America by herself with no proper explanation, terrified at being spotted.
    2. John Z. De Lorean was able to escape punishment for anything, and avoided extradition because of GM. While the theory is that GM killed DMC, JZD was still apart of the fraternety of "company men" with GM and they protected one of their own. They liked JZD, but hated his company.
    3. Dennis Thatcher owned a sizable amount of stock in General Motors, and had a vested interest in seeing DMC fail as it was a threat to GM. DMC was planning the DMC-80 bus to compete with GM, as well as the lack of a 1983 Corvette were signs that GM was set for an impending financial loss.
    Robert

    Board Member, DeLorean Owners Association



    Recording Secretary

  6. #6
    Senior Member DMCVegas's Avatar
    Join Date:  Oct 2011

    Location:  Las Vegas

    Posts:    2,371

    My VIN:    6585

    Club(s):   (DOA) (DCUK)

    Quote Originally Posted by aotmfilms View Post
    It would be worth a look at the Big 3 to see how John's leaving and subsequent building of his company affected them. If I was a betting man, I'd go back and look at any records between the Big 3 or internal to them that had the key words "DMC" "DMC-12", "Delorean", "John Z" in them. I would be curious. The Big 3 and the UAW controls things here IMO so it wouldn't be hard to slant the media against DMC and the Delorean at least in the Midwest.
    Good luck with that. After the Ivey Memo accidentally got leaked when it was turned over during the suit against GM for Malibu gas tank fires, you can bet that they're not going to let anything like that ever just lie around anywhere. They'd destroy it in a heartbeat. It's why companies now have strict policies that unless documentation, data backups, or any and all types of archives are flagged by a legal team to be saved, they must be promptly destroyed as soon as legally possible. Though yes, I have heard in a couple of places that as soon as the DMC-12 came out, 2 were snapped up by GM. One for driving, and the other was dismantled to learn more about it. And given the Corvette's Ferrari suspension, that's not unheard of.

    Quote Originally Posted by aotmfilms View Post
    I cite the example of the current auto company "Tesla" and the Big 3 saying that Tesla had to use the dealership model when selling their cars in Michigan
    I can tell you right now, that isn't a "Big 3" conspiracy. It's the Dealer Associations behind all of that. Trust me when I say that I've purchased vehicles through vendor courtesy to get both Dealer Invoice and Employee Pricing on brand new cars, and dealerships HATE it. You'd think I was beating their children in front of them with a tire iron they get so upset. Dealer markup is in itself about $4K-$8K per vehicle, depending upon what you buy. Then if it's a popular enough vehicle there are "Market Adjustments" which are just pure dealer markup beyond MSRP, and with these pricing plans, dealerships loose that too. I've known people who have walked into the showroom with the employee purchase authorizations, and get $12K off a new car. There isn't anything that the dealer can do. It's money on the line, and it's why you always see the Dealer Associations fighting Tesla, not the manufacturers.

    Let's say you have a $5K profit per car, and you sell 20 in one month because you're a good sized dealership. That is $100,000. Now imagine someplace like Tesla opens up, and now you loose those sales. You just lost $100,000 worth of profit. But now, let's say that you're a car manufacturer, and you sell 500,000 vehicles a year, but you do it directly to consumers. You keep the same profits that you make selling to dealers, but only do a $1,000 markup per car. That is an additional $500,000,000 a year that you could add to your bottom line (minus operating expenses of course).

    Tesla wants to sell cars themselves because they know EVs whereas most dealers don't, and would rather shove you into a more profitable vehicle on their lot. That's the story they have. But there's lots more at stake here than just Tesla. Face it: If you had to buy a new car, would you rather go to a franchise, or a factory store? I just think that the manufacturers here are playing things very cool to keep their dealers happy, but also want to see where this goes to open up new business opportunities for them. Especially when you consider the example of Daimler's smart brand that they can't kill because it'll violate dealer contracts if they do.
    Robert

    Board Member, DeLorean Owners Association



    Recording Secretary

  7. #7
    Senior Member
    Join Date:  May 2011

    Location:  Houston

    Posts:    598

    My VIN:    16113

    Club(s):   (SCDC) (DCUK)

    Isn't the time for keeping documents secret long past in the UK? Can someone request the files from the UK government dealing with the Delorean factory?
    Shannon

  8. #8
    Senior Member jamesrguk's Avatar
    Join Date:  Jun 2011

    Location:  England UK

    Posts:    190

    My VIN:    5462

    Club(s):   (DCH)

    Quote Originally Posted by lazabby View Post
    Isn't the time for keeping documents secret long past in the UK? Can someone request the files from the UK government dealing with the Delorean factory?
    Yes the Freedom of Information act (2005 I think) allows members of the public to make a request for information.

    The 30year rule would also allow for this information to be publicly available on request.

    In fact researching online it's quite easy to do and you can be quite broad about your request perhaps I should file one.

    J
    Last edited by jamesrguk; 02-05-2016 at 05:43 PM.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •