THE CHRONICLE FRIDAY, JANUARY 15, 1988 © DUKE UNIVERSITY DURHAM, NORTH CAROLINA CIRCULATION: 15,000 VOL. 83, NO. 79 Bloom charged with mail fraud By ROCK f ROSEN same misdoings as those contained in the Federal officials Thursday charged in­ SEC's civil action, according to Robert vestment adviser and University alum­ Plotz, an assistant U.S. attorney general nus David Bloom with one count of mail working on the case. fraud, a crime punishable upon conviction Bloom is not required to enter a plea to by up to five years in prison. the government's preliminary charge of Wearing a gray pin-stripe suit, blue mail fraud. The government now has 30 shirt and dark tie, the embattled 23-year- days in which to take Bloom's case before old stood silently in a New York City a grand jury, which may or may not courtroom as federal magistrate James choose to indict Bloom, according to Plotz. Francis read the charge and released If a grand jury does indict Bloom, he will Bloom on a $50,000 personal recognizance then have to enter a plea. bond. Bloom appeared "somber and In agreeing to tranfer his assets to a re­ frightened," according to Paul Moses of ceiver following the SEC's action, Bloom New York Newsday. The proceedings neither admitted nor denied any wrong­ lasted less than five minutes. doing. Bloom's sudden downfall from promi­ Plotz said if the grand jury does choose nent Wall Street whiz kid and art collec­ to indict Bloom, they could do so on the tor began Monday night when Bloom one count of mail fraud or on additional agreed to transfer all his assets to a re­ charges. He could not speculate on what ceiver after being named in a civil action the other charges would be. SPECIAL TO THE CHRONICLE by the Securities and Exchange Commis­ Plotz could not comment on whether sion. Bloom allegedly acquired the assets, the criminal investigation into Bloom's "Lady on a Pink Divan, ' one of the two paintings David Bloom donated to the more than $8 million in cash, paintings, dealings is complete, or on whether any of University in August. homes, cars and jewelry, by using clients' Bloom's employees are under inves­ money for his own expenses. tigation. Gary Lynch, the SEC's director of enfor­ Bloom had made a $20,000 payment on cement, said the confiscated assets a $1 million pledge to the University's art Bloom was ambitious loner amounted to "everything except his tooth­ museum and had recently donated two brush." paintings worth a total of about $60,000. Some not surprised by alumnus' troubles Bloom is also barred from ever again University officials announced plans working in the securities industry. Wednesday to turn over the cash and paintings to the receiver and to cancel the The criminal complaint, filed by the By LAURA TRIVERS cepted. He was constantly on the "fringe" remainder of the pledge. U.S. attorney general's office, alleges the "We can't guarantee anything. It is ille­ of popularity. gal and not proper to guarantee a profit. "We balled him from Betas a couple of We do guarantee our own dedication." times," said a member of Beta Theta Pi who asked not to be identified. "He would Although few today could guess the Pyle requests have killed to be a Beta." identity of the speaker, David Bloom, who the SEC alleges did not practice what he A woman who lived in Hanes House preached, told The Chronicle in 1982 that freshman year with Bloom and who asked revocation of he felt a responsibility to his clients. not to be identified said, "It was hard not to know David. He was so different from Freshman dorm mates, who invested the other college kids. We were all run­ with the dynamic duo of Bloom and Spen­ ning around trying to find ourselves and club charters cer Waxman,-trusted them and enjoyed he was out trying to make as much money favorable returns on their investments. as he could . [the SEC charges] do not By CHRIS GRAHAM Eric Krantz, Trinity '86, who invested surprise me." with Waxman and Bloom his freshman As many as five students groups The news of Bloom's downfall did come may lose their rights as recognized year said at the time, "They seemed knowledgeable and had good connections as a surprise to Jake Phelps, director of campus clubs if the ASDU legislature the Bryan Center. Bloom and Waxman approves a recommendation by Stu­ . There is always money to be made, and I trust Spencer and David." worked with Phelps during the opening dent Organizations Commission (SOC) months of the Bryan Center. The two A member of that freshman year invest­ chair Dave Pyle at their weekly meet­ wanted to have a franchised food service ment club said Tuesday that he thought ing Jan. 18. in the new student center. Pyle told the ASDU legislature at its the practices of the club were fair. "I made money, so I can't complain." However, "I'm so glad that nobody had asked my Jan. 11 meeting that he plans to re­ op'ni< u about investing with [Bloom] be­ quest revocation of the charters or offi­ other Hanes House residents who did not participate in the investment activity do cause I would have given him a very good cial recognition of groups that have recommendation," Phelps said. failed to submit either a copy of their not remember Bloom with the same glow­ SCOTT NEUMEISTER / THE CHRON ICLE ing reports. "In a completely pejorative sense I constitution or the name of their could see him as a wheeler-dealer . But "None of us thought he was very trust­ faculty advisor to the SOC, as required Dave Pyle, Student Organizations I would have thought that it would have by the ASDU bylaw governing char­ Commission chair worthy, and I'm not saying this in the af­ See BLOOM on page 9 • tered or recognized student organiza­ terlight," said Tony Glad, Trinity '86. tions. the legislature. Organization funding "Most of my friends were very skeptical of According to Pyle, the constitution comes through the student activities it." requirement can be satisfied with a fee, collected and distributed through Bloom was always on the periphery of Inside single paragraph detailing the roles of ASDU. the "in" group in both high school and col­ the major officers. Also, Pyle fre­ Although Pyle said he did not expect lege, according to people who attended Winning Ugly: Yeah, we won by 16 quently aids groups to find faculty ad­ his action to be popular, he believes it school with him. points, but Coach Krzyzewski was visors, he said. is necessary for the sake of ASDU's in­ A woman who attended the Trinity none to happy with the effort. No doubt If the legislature agrees to Pyle's re­ tegrity. "If ASDU is not going to be a School in Manhattan with Bloom said he the team will spend today working its quest, which requires a two-thirds joke organization on this campus, then was "always trying to be in with cool peo­ way up to "deplorable" before Satur­ majority vote, the groups will lose their we have to follow the rules that we ple but didn't make it." day's Maryland game. See page 21 for privileges to meet on campus, use pass," he said. She described him as "quiet, nerdy, all the gory details. Duke or Duke University in their In the past, ASDU had not at­ pompous and arrogant." name, use University facilities or have tempted to revoke charters because At Duke, Bloom had a very small circle Weather an account with the office of student "it's a very time-consuming thing to do of close-knit friends. activities. Chartered organizations will to make sure all the groups have all Harris Schild, Trinity '86, lived down Weather Or not: You like it, today also lose the right to request funding their information in," he said. Pyle an­ the hall from Bloom in Hanes House. will be mostly cloudy and cold with the from ASDU, an option which is not ticipates both students and groups will "Bloom had a mysterious manner," Schild high in the low 30s, mostly clear to­ available to officially recognized benfit through what he described as "a said. "He was pretty low-key, always night with the low from 15 to 20. groups. renewed effort to live up to the require­ friendly in the hall, but quiet. He was not Please, someone do a rain dance to give a ladies' man." Currently, none of the groups in ments of the bylaw." a gentle nudge to the ice which freezes question have been allocated funds by See PYLE on page 8 • Former classmates said he rushed the our souls and bruises our backsides. Beta Theta Pi fraternity but was not ac­ THE CHRONICLE FRIDAY/JANUARY 15, 1988 World & National Newsfile Dole's national finance chair resigns N.Y. Times News Service ByJEFFGERTH Taiwan has new president: Lee Teng-hui, and STEPHEN ENGLEBERG Taiwan's new president, is dedicated and scholarly, N.Y Times News Service but associates say he has no clear political base on WASHINGTON —- The national finance chairman of which to consolidate power and may be a transitional Sen. Bob Dole's presidential campaign stepped aside leader. Thursday as Mr. Dole sought to distance himself from the growing political controversy over the aide's finan­ UN VOteS for Palestinians: The Security Coun­ cial dealings with his wife, Elizabeth Dole.