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Archive for Sunday, October 6, 1996

AFTER A FALL FROM GRACE, JIM HERSHBERGER IS BACK ON TRACK

October 6, 1996

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Kansans have never witnessed as sensational fall from grace as that endured by Jim Hershberger, a one-time millionaire oil baron and KU track star pictured on Wheaties boxes.

Jim Hershberger can recall inmates screaming "Kill Hershberger! Kill Hershberger!" all night.

He can visualize the day he shuffled in chains under a cell full of Cubans while they dumped urine on him.

He can feel the pain of the night he nearly died in Leavenworth Prison Camp due to inadequate medical care.

These memories are slices of the deranged world Hershberger -- one-time KU track great, Wichita oil baron, philanthropist, promising governor candidate -- survived for more than five years as Inmate No. 04100-031.

One year after Jim Hershberger's release from prison and his move to Lawrence, his wife Sally Hershberger says: "I certainly don't expect anyone to feel sorry for us. We had a wonderful, exciting life for many, many years. But evidently, our lives were due for a bit of a reshuffle."

"I remember thinking that things like this just don't happen in the United States to people like us. The whole world was upside down."

In the end, the family empire was consumed in a nightmarish legal war. But those battles also represented a beginning.

In the beginning

James W. Hershberger came into the world on Sept. 2, 1931, in Wichita.

"I was a big baby and never got bigger," he joked.

Hershberger's father was strict. He prohibited Jim and his sister, Jean Anne, from inviting friends to their house. That struck a defiant chord in the young Hershberger, who vowed not to copy his dad's edict.

"I decided that when I got big I'd build a big house, have a lot of kids and have people over," he said.

Indeed, as an adult he acquired a mansion in Wichita and a summer house in Minnesota. The Hershbergers raised eight children and hosted many, many parties.

Despite his small frame, Hershberger excelled as a high school athlete. He was all-state in three sports: cross country, wrestling and track. His father wasn't among the cheering fans.

"He was tough. He never watched me compete. Never once."

Hershberger said that when it came time to settle on a college career path, he confided that he wanted to follow in his father's footsteps.

"I said, 'I want to be a lawyer.' He said, 'You're not smart enough. Pick something else.'"

Leaving the nest

Hershberger's collegiate career began at University of Oklahoma, where he had a wrestling scholarship. He eventually wound up at KU, where he competed on the 1950, 1951 and 1952 track teams.

His best events were the 220- and 440-yard dashes and at one time his 20.9-second clocking in the 220 was rated the second best in the world.

"I didn't run my senior year," he said. "Everyone thinks I did."

Hershberger had to quit for financial reasons. When he converted from Episcopal to Catholic, his father withdrew all financial support for him. To make ends meet, he waited tables and washed dishes in Lawrence.

He earned a bachelor's degree at KU in 1953 and entered the U.S. Air Force. After two years in the military, Hershberger tried unsuccessfully to break into the oil business in Wichita. Instead, he worked as a $348 a month sales coordinator for a chemical company.

In 1956, he borrowed money to buy an in-town truck delivery company for $16,000. At the time, he had 12 cents in his pocket.

While he ran the trucking company, he dabbled in the oil business. He out-hustled competitors by collecting his mail from the post office at 4 a.m. daily and rushing to counties south of Wichita to complete oil-lease deals.

He sold the delivery company for $32,000 in 1959 so he could concentrate on the oil industry full time.

He married Sally Pugh on April 15, 1964. It was his second marriage. In retrospect, Hershberger said: "She's the only thing in my life that turned out greater than I hoped for."

Six of his eight children survive: Angie, Nicky, Sally Ann, Erin, Chris and Shannon. Jimmy died of a drug overdose and Mike was killed in a car accident.

A sporting life

Sports remained a big part of Hershberger's life after KU. He was into racquetball, golf, tennis, track, basketball, badminton, kayaking and other activities. In competition, he was wound tight. The goal was to prove doubters wrong.

Some people may remember a couple of his peculiar athletic stunts.

In 1958, he played 180 holes of golf in 12 hours and 50 minutes. That's 10 grueling rounds while averaging 88 strokes per 18 holes.

On his 50th birthday, he showed off his versatility by competing in 18 athletic events in 14 hours. He went one-on-one with men who were either professionals or former conference champions in their sports.

In 1985, the NCAA created an award for the year's most outstanding track athlete. It's called the Hershberger Award.

His exploits landed him on the front of three million boxes of Wheaties in 1986 as a representative of the country's best amateur athletes. He can thank his daughter Erin for tearing off and submitted tops from 1,000 boxes of Wheaties so he'd qualify for a contest. She took the Breakfast of Champions to a children's home.

Biz highs, lows

Meanwhile, Hershberger's public-owned company -- Hershberger Enterprises -- ran a good race into the mid-1970s. Cash flow problems forced him to file to reorganize the company's debts in bankruptcy court.

It would not be his last visit to a federal courthouse.

To raise cash, he sold his Lear Jet and took out a $300,000 second mortgage on his 14,000-square-foot estate in east Wichita.

A new streamlined privately owned oil firm called Petroleum Energy Inc. emerged and prospered. It was run by Hershberger and about 10 employees.

"We do the business that the average company does with 90 employees," he boasted.

The Hershbergers played the part of high rollers, especially Jim. He loved to be in front of an audience. He could afford to. At one point, he was earning $2 million a year. The fancy cars, jewelry, art, summer home, vacations and parties -- some for 1,500 people -- made the Hershbergers the envy of many.

By the numbers

Organization has always been a way of life for Hershberger. He constantly makes lists of things he must do. For trips, he writes alphabetized lists of items to pack.

"I'm a numbers guy," Hershberger said.

He became a huge contributor to athletics at KU and Wichita State University. He gave an estimated $750,000 over two decades to KU. His money went for scholarships and construction of the track at KU, which still bears his name. WSU's track also was named in his honor.

In 1987, KU Athletic Director Monte Johnson announced that Hershberger had been selected to the university's Athletic Hall of Fame. Hershberger lacked the required athletic credentials, but Johnson felt his monetary contribution superseded the criteria.

His commitment to philanthropy in Wichita was legendary. At one point, he was serving on 19 charitable boards. He founded Second Chance Inc. and started Goodwill Industries in Kansas. He also purchased 100 bullet-proof vests for Wichita police officers.

He estimates he gave $4.5 million to charitable causes.

He also kept his hand in Kansas politics, ranking among the elite in the state's Republican Party. He was national co-chairman of Bob Dole's "Dole for President" committee in 1987-88.

In the 1980s, Hershberger was planting seeds for his own bid for elective office. He had his eye on becoming a lieutenant governor candidate in 1990 and running for governor in 1994.

"I had visited each Kansas county three times before the indictment," he said. "You wouldn't believe all the people who were willing to do things for me."

Paradise lost

Hershberger's world of high finance and high living began unraveling in late 1988. Rumors circulated about an FBI investigation of Hershberger's business dealings.

The oil industry in Kansas was on a decline. Several business deals at Petroleum Energy fell through.

Eventually, Petroleum Energy was sold for $20,000. The mansion on Tara Lane was put on the market. About 10,000 people pored thru the residence over three days and bought family possessions, everything from light fixtures to bottles of drain cleaner.

The big house in Wichita sold in early 1989, followed by the family's summer home in Alexandria, Minn.

What was left of the Hershbergers' world came crashing down Oct. 5, 1989. Hershberger was indicted by a federal grand jury on 37 counts of fraud. He was accused of devising a scheme to systematically rip off investors and working-interest owners in Petroleum Energy.

At the time, Hershberger had a premonition he would die in prison.

Sally Hershberger, stunned by the bizarre twists of life, developed a stutter.

Hershberger pleaded innocent to all charges. He maintains his innocence. He claims the only thing he ever stole was a 5-cent piece of candy as a child.

Guilty, guilty, guilty...

After a seven-week trial in U.S. District Court in Topeka -- highlighted by testimony against Hershberger from former Petroleum Energy employees Dyrk Dahl and Steven Levandowski -- Hershberger was found guilty of 25 counts of defrauding investors and financial institutions.

Dahl and Levandowski earned a plea-bargain from federal prosecutors.

Essentially, Hershberger still blames Dahl for financial corruption at Petroleum Energy. Dahl was a company vice president.

Hershberger claims Dahl stole millions of dollars from Petroleum Energy. Based on a prison inmates sworn statement, Hershberger also alleged Dahl plotted to burn Petroleum Energy's office and have Hershberger killed.

Hershberger never took the stand in his own defense at the trial, a decision he maintains was made exclusively by defense attorney Tom Haney of Topeka. To this day, he regrets not testifying. In addition, he thinks Haney did a lousy job handling his case.

"It's unbelievable," he said. "If I had testified, it would have been a slam dunk (acquittal)."

All appeals based on the premise Haney provided inadequate counsel were rejected.

Richard Hathaway, an assistant U.S. attorney who prosecuted Hershberger, concluded that Hershberger's motive in orchestrating the scams was "pure greed." The prosecution claimed Hershberger charged investors to steal their own oil.

"He was trying to save his lifestyle by stealing from his friends," Hathaway said.

Hershberger faced a maximum sentence of 130 years.

U.S. District Judge Dale Saffels, who presided over the trial, sentenced Hershberger to nine years and nine months in prison. Saffels ordered portions of the sentence to run consecutively, rather than concurrently, which meant Hershberger would spend more time behind bars.

"This was not a close case. The evidence against the defendant was overwhelming," Saffels later wrote when denying one of Hershberger's motions.

With good behavior, Hershberger was looking at 70 months in the Federal Prison Camp, a minimum-security faculty in the shadow of the U.S. Penitentiary at Leavenworth.

"I know my life is over," Hershberger told Saffels in court.

Penthouse to prison

Sally and Jim Hershberger made the 202-mile drive from Wichita to Leavenworth together on June 11, 1990. It would be Jim's last hours of freedom for 1,940 days.

Both were in a state of shock, bewildered, lost.

"It was the worst day of my life," Sally Hershberger said.

Both expected Hershberger's appeals to quickly end the frightful dream. The last thing Sally Hershberger mumbled in his ear at the prison gate was, "We're going to get you out of here."

In the interim, Sally Hershberger knew Jim's incarceration would test their marriage. Intent to remain united, she visited him weekly. For three years, she commuted from Wichita to Leavenworth. She then moved to Lawrence, which cut the drive time to the northeast Kansas prison dramatically.

"I never lost faith in my husband because I knew he was innocent," Sally Hershberger said.

In a sense, she became a prisoner. She was immobilized emotionally. She felt like walking around with a bag over her head. She found it hard to say her last name out loud in public.

Hershberger had difficulty adjusting to life among 300 convicts, most in prison on drug convictions. His story was of an American Dream established, maintained and destroyed. He was depressed, lonely and angry.

In prison, Hershberger was a workaholic. The man who made millions of dollars on the outside was now working for pennies cleaning floors, picking up trash, washing dishes and making mattresses. He did landscaping, worked as an electrician and helped out in the chaplain's office.

Sally Hershberger, still living in Wichita, landed a job as district sales manager for Doncaster Fashions of North Carolina. It led to a series of jobs in Wichita and Lawrence-- some rewarding, some not.

They both said the worst part of the prison experience was the separation from family and friends. That was no more acute than on Day 262 in March 1991, when Hershberger was accused of plotting an escape from prison with his wife's help. Hershberger was sent in chains to the walled penitentiary.

"They sent me to the Hole in the Big House," Hershberger wrote in his diary. "Another guy and I are in a cell that measures four feet by nine feet."

Inmates in the Hole were handcuffed four to a group when taken to a shower.

"We travel basically the same route as when they take us to exercise three times a week -- right under the Cuban cells and they pour piss all over anyone unlucky enough to be below them. This time I was the unlucky one."

Some of the 1,650 Cubans devoted the night to yelling "Kill Hershberger!"

The inaccurate charge regarding his escape attempt was cleared up in a few days, but memories of the Big House full of hard-timers lingered.

Within two weeks of returning to the minimum-security camp, guards searched his locker. He was promptly sent back to the Hole for possession of drug paraphernalia. Guards alleged a needle found in the locker was for narcotics.

At a disciplinary hearing, a prison official agreed Hershberger was against drugs and that all evidence showed the needle was used for opening foot blisters. The officer found Hershberger guilty anyway and ordered him transferred to another prison.

Sally Hershberger, in desperation, wrote a letter to Leavenworth's warden pleading for mercy. The warden intervened, blocked the transfer and allow Hershberger back into the regular camp after three weeks in the Hole.

Where's a doctor?

Hershberger said another frightening aspect of prison life was the quality of medical care provided inmates. The hospital facility is almost as bad as being in the Hole, he said.

For example, Hershberger was given a medicine for 31 months that he said shouldn't be prescribed longer than 30 days. One inmate sought treatment for hemorrhoids, but three days later the physician's assistant defiantly cleaned wax out of the guy's ears and refused to do anything else.

"What a great place to celebrate Halloween -- it's so scary," Hershberger wrote in his diary.

Medical shortcomings of the prison came to the forefront in a personal way Jan. 14, 1995. Hershberger at first thought he was having a heart attack, but sensed something worse was wrong. The prison's physician assistant thought Hershberger simply had gas.

Hershberger started having convulsive shakes and was screaming in pain. After eight hours, he was taken to a Leavenworth hospital. Surgeons found he had a perforated ulcer with a hole about the size of a quarter.

"Doctors said I had about an hour to live," he said.

At times, the worst news didn't come from inside the prison. On Day 1,473, Sally Hershberger called the chapel where her husband worked.

She said that their son, Mike, had been killed in a car accident the night before. Mike, 37, had been married four days before the crash.

Hershberger was allowed to travel unescorted to the funeral in Wichita. His wife drove, since Hershberger no longer had a valid driver's license.

"What a strange feeling it was to walk through the doors with her," an entry in his diary says.

Back in the prison camp, the biggest challenge was to fight devastating boredom. To pass the time, Hershberger wrote 520 sayings to live by.

His favorite: "Good friends are for bad times."

Monte Johnson, KU's former athletic director, was among Hershberger's most faithful visitors. He made the trip to the prison camp about 200 times, often arriving with mutual friends from the athletic and business world.

"It became unbelievable he was incarcerated so long," said Johnson, who had testified at Hershberger's trial as a character witness.

Taste of freedom

In June 1995, Hershberger was granted a furlough. He left the prison at 7:50 a.m. on Day 1,818.

During his two days of freedom, the Hershbergers ate five meals a day. At a Kansas City restaurant, Hershberger had the best prime rib of his life. He also visited with family and friends. They dined at Free State Brewing Co. in Lawrence.

Then reality set in: Back to Leavenworth.

"I feel like Cinderella," Hershberger says in the diary.

In August 1995, the criminal justice system granted Hershberger a victory. His petition to reduce his prison time by eight months was approved. It meant he would be released from prison to a halfway house in two months.

On his last day in prison, Hershberger got up at 3:45 a.m. He showered and shaved, cleaned the chapel as usual. He reflected on his going-away party the previous night.

"Today," he wrote in the diary, "I am leaving. There are quite a few people I will miss and quite a few people I hope to never see again. But I will never forget this place and the last five and one-half years of my life."

Hershberger was freed Oct. 2, 1995. He said survived with the help of God, his wife, family, friends and exercise, he said.

He was sent to a halfway house in the Kansas City area for 123 days and was required to wear a monitoring device at home in Lawrence for an additional 57 days. That came off March 29, 1969. He's serving three years probation.

Writing therapy

Sally and Jim Hershberger wrote about their experience throughout the 5-1/2 year term. The words were therapy for both.

That material has been compiled for "Fame, Fortune, Framed & Freed." The book, due to be published this month, details Hershberger's story.

"I think Jim has earned his right to have his story told," said Sally Hershberger, who is author of the book.

"I wrote it because I was compelled to write it," she said. "People should know what can happen to them if they are careless with their business, friends and family."

Her warning to the naive: "Circle the wagons. Draw your family tightly around you."

Hershberger said he tried, but couldn't read the manuscript. After 10 pages, he put it down. Too painful.

Sally Hershberger said her husband was changed by prison. He's a better listener and more patient. Her husband became introspective. His decisions are made in a more deliberate manner now.

"Priorities change," she said. "Family and friends are important. More important than anything else. He values his friends highly."

Hershberger, 65, is attempting to personally thank everyone who corresponded with him regularly. He received 9,600 letters in prison. The back of the book contains a list of names of people who remained loyal and helpful to the Hershbergers.

In prison, Hershberger lost the desire to come in first every time.

"I don't have to be so competitive anymore," He said.

Most of all, the Hershbergers try not to play the blame game. They realize life doesn't end in prison, it just changes. Complex feelings of sorrow and joy, guilt and innocence, anger and compassion must be channeled into a productive life.

"It's so wasteful to have animosity," Sally Hershberger said. "I'm not sure that we haven't gained more than we lost. Every day now, is a joy for Jim and I."

Hershberger's reliance on Christian faith blossomed in prison.

"Anybody who looks back wastes energy. I'd like to think I'm Christian enough to forgive people," he said.

The encounter with the judicial system also changed Sally Hershberger. She's more assertive, outspoken and independent.

Their surviving children were moved by their father's prison sentence.

"We all struggled financially and emotionally for quite a few years," Sally Hershberger said. "But I'll tell you, they're so strong now."

The Hershbergers live and work in Lawrence. Jim is a partner in a telecommunications company and Sally works at a carpet store.

"You don't appreciate freedom until you don't have it," she said.

Other than campaigning for use of lie detector tests in court and dealing with publicity for the book, Hershberger said he would prefer to become just another guy in the crowd.

"I'm so paranoid, scared. So I keep a low profile. You've got to protect yourself," he said.

They both seek a simple life, which includes quality time with family. They're finished with the legal system.

When Hershberger was an millionaire oil tycoon a decade ago, he wondered what it would be like to leave Wichita, live in an apartment in a small city and work at a routine, modest-paying job.

"Why?" he asked. "Just to see if you could do that and have people still like you just for your personality."

Now, not by choice, he's putting that notion to the test.

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