He bends over a large sink in the corner of a laboratory while a group of prospective investors stands nearby. He is a man of prominent girth, over six feet tall, whose countenance has been likened to that of W. C. Fields. He tinkers with a foot-long, six-inch-wide metal cylinder as the group looks on expectantly. He could be a performer or a preacher, knowing just what strings to pull, priming his audience. He calls himself a scientist, though—a chemist, engineer, physicist, inventor—and those closest to him say he is a genius, a country boy with rare creativity. But mostly Eugene Anderson is a con man, and a big leaguer at that.
His audience this day is a small one, from a Northern city. A lawyer, an engineer, and a man with money have flown into the Dallas-Fort Worth airport and driven 55 miles northeast to Wills Point (population: 2600) on a tip and a hope. The tip is that Eugene Anderson has come up with an invention that will change the world, an invention that will realign geopolitics and make America number one again; this is 1978, mind you, and gasoline is alarmingly expensive. The hope is that by promoting this invention the investors will aid mankind and their country—and that by giving Eugene Anderson a little money they will make a lot.
The gentlemen grow restive while Anderson works at his sink. He eventually turns to them and begins talking about how worried he is, how worried they all should be about the world’s current energy problems. He says he may have something that will help solve those problems. He goes on talking, about Arabs, about his past, about the desirable properties of hydrogen gas as a ftiel, and finally about something he calls the Chemical Reactor Block. That is the discovery these investors have come to see.
The CRB, Anderson says, is the product of years of research and development, but more R and D will be needed before they will be able to manufacture and sell it. He speaks quietly, with a hint of a West Texas twang, dropping in a rural homily here, some scientific jargon there. Finally, he puts his beefy hands back into the sink, connecting one end of a hose to a water faucet, the other to the hose fitting at the base of the cylinder. It has a hole in its side that allows water to flow through the apparatus. He removes a small wire-mesh cage from the top of the cylinder, then holds up a chunk of chalky gray metal. This is the CRB. He carefully puts the precious substance into the cage. The group watches in silence. He lowers the cage into the cylinder and turns on the water. As water flows through the fitting, a popping sound is heard.
Calmly, Anderson strikes a match and moves it over the mouth of the cylinder. With a whoosh, a flame appears. As it flickers and burns, the observers begin to murmur. Slowly, each one realizes what is happening. It is astounding, certainly, but it is happening. The man is burning water! There is definitely a flame there; Anderson is even burning a paper towel in it. Every lake will be an oil field! Every Arab will be a pauper!
The visitors forget the fundamentals of physics and chemistry that they learned in high school. With a warm rush, the realization that they could be very, very rich floods their thoughts instead, for what Anderson is selling could be revolutionary—a cheap, safe, practical way to liberate hydrogen from water and thus produce the most desirable fuel around in this day of high-priced, polluting petroleum. We’ve been putting hydrogen to work for some time; it was used to lift dirigibles during the twenties and thirties, and NASA uses it as fuel to power the space shuttle. It burns efficiently, and its main by-product is water vapor, which makes it appealing to environmentalists.
Hydrogen can be retrieved from natural gas, coal, waste, water, wood, paper, and even spinach. There are many ways to get it. High school chemistry students might recall the fizzing that occurred when potassium was dropped into a beaker of water—that was hydrogen escaping. Drano works because the sodium hydroxide it contains releases hydrogen from water; the reaction burns through whatever is clogging your sink.
Two things have always stood in the way of the cheap production of hydrogen fuel: the reactant (usually an expensive metal) is used up too rapidly, or the process requires an external source of energy, such as electricity. In either event, the cost is usually prohibitive. Water is one of the most stable substances around and therefore very difficult to break up. It takes far more energy to “crack” water into hydrogen and oxygen than can be recovered from the hydrogen that is released. What’s more, hydrogen gas tends to be explosive. Remember the Hindenburg?
The beauty of Eugene Anderson’s discovery, the real nut of the magical and mysterious CRB material, is that it can supposedly dissociate the hydrogen and oxygen of water without using outside energy and without being consumed in the process. A little just might go on forever. Such is his pitch to prospective investors, dazzled by the flames flickering above the water.
Few mortals can withstand such heady visions for long, so after two minutes Anderson turns the water off. The reaction stops. The murmurs cease. The investors begin to ask timid questions, some scientific, some practical, many financial. Anderson fields them all with bucolic charm and scientific jargon. If challenged, he does not fight back but retreats craftily to other ground.
And retreat he must, for it is probably impossible for the CRB to work. The energy to get hydrogen from water has to come from somewhere, and despite Anderson’s claims to the contrary, his critics suspect that it really comes from the dissolution of the CRB material. In fact, Anderson doesn’t seem to have as much of the material at the end of his demonstrations as he does at the beginning. So much for defying nature. Rather than creating a perpetual motion machine, Anderson may have done nothing more sophisticated than what those high school chemistry students did.
The appeal of the CRB is that to the uninitiated, it teeters on the edge of being reasonable. Scientists across the world are racing to find a practical way to crack water for hydrogen fuel. It is one of the most tantalizing challenges around. It seems unlikely that a college dropout toiling in his garage lab will beat them. Or does it? No one knows, because Anderson has not come up with a sustained demonstration of the CRB’s powers. Only once has he allowed scientists to analyze the material, and then it wasn’t what he claimed it was. He keeps his discovery, such as it is, well cloaked, piquing the curiosity—and fury—of investors everywhere.
Audiences have watched variations of the CRB demonstration for more than thirty years, and the group in 1978 is no different from any other. After a few short hours the investors are on their way, dreaming perhaps of copious annuities and tropical sunsets. Anderson waits; he knows from experience that checks will be in the mail. A sharp sense of human nature, coupled with an acuity for things mechanical and scientific, has served him well, guiding him through a dozen jobs before he was fifty. Over the years, Anderson posed as a graduate chemist, an oil field engineer, and a geologist, while in fact he was none of those. He landed job after impressive job, moving on when his employers got suspicious. By the late seventies Anderson was ready to launch his most ambitious get-rich scheme ever. It would take him to the world’s capitals, introduce him to powerful men, and put hundreds of thousands of dollars at his disposal. He would con some of the best-known figures in government and industry. He would become a figure of international intrigue when he took his sales pitch behind the Iron Curtain. Even the Pentagon is now ensnared in his adventures. But despite the hope, time, and money that men invested with him, no one ever ventured into Anderson’s hometown, Big Spring, or thought to explore the inventor’s past.
Explosions in the Garage
Anderson’s birthplace, Big Spring, nestles in the crook of a small mesa that rises from the flat of the Permian Basin; the town lives on oil and cotton from the surrounding fields. Born in 1927, Anderson was the younger of two sons, raised on a cotton and dairy farm southwest of town. He spent most of his first thirty years on or near the farm.
In 1944 he entered McMurry College in Abilene, and sometime before he turned nineteen he got married, for the first time, to a student there. One of his teachers describes him as a bright and enthusiastic student who liked to perform experiments, often staying after class to do them. It was during his college years, as Anderson relates it, that he began his work on the CRB; after a hydrogen generator in a chemistry class exploded and injured him, he began thinking about better ways to produce hydrogen.
But Anderson’s version of his career at McMurry is different from that told by the records at the college. Though for many years he proudly displayed a transcript of his academic record showing that he had graduated with a nearly flawless performance, in fact he spent only two years at the school and never graduated. The transcript and the degree were fabrications.
Anderson’s booming social and business careers seemed to distract him from academics. In 1946, at age nineteen, he married for the second time. His new wife, a McMurry graduate, was a teacher. The couple moved almost immediately to Superior, Wyoming, a town of a few hundred people in the southwestern part of the state. There they both taught school and Anderson continued to work on the CRB. Newspaper accounts show that he publicly demonstrated the invention, purporting to run a car on hydrogen gas. That success prompted the pair to move again in the same year, this time to the East Coast.
Few would regard East Orange, New Jersey, as a scientific mecca, but Anderson did, for it was the home of his uncle Marion McCoy, an inventor. McCoy was a wiry, white-headed man with a penchant for tattered clothes. McCoy had patented three devices between 1939 and 1941, one of them a successful oil filter for a company called Motor Improvements, which later became Purolator. He was a respected engineer at Motor Improvements and then at Purolator. He had access to a laboratory there and had constructed a small facility of his own at his home in East Orange. Anderson moved in with his uncle to collaborate on the CRB, use McCoy’s equipment, and avail himself of free room and board.
Anderson and his uncle saw clearly that the basic problem of the Chemical Reactor Block was finding a material that would produce hydrogen without exploding at the same time. Sodium had long been known to liberate hydrogen from water—but the process was also highly combustible. McCoy and Anderson set out to moderate the reaction by combining the sodium with other ingredients commonly thought to be “unfriendly” to it. When they finally produced an amalgam, it was Anderson’s job to test it in the garage laboratory.
McCoy had acquired a few four-cylinder, war surplus engines, which he converted to run on hydrogen. Although Anderson’s working journal shows evidence of difficulties (things kept exploding), it also shows that the amalgam could produce enough gas to run the engines.
May 6, 1947: Got a 13 min. 40 sec. run with new timing setting and 10-100 watt bulb. Pop valve blew off and scared me. Don’t know why yet.
May 7: Finally ran under 7500 watts but reactor blew up. Neighbors came over to see what happened. Lots of steam came out garage windows.
May 12: Reactor blew up. Decided to use an electric fuel pump like Uncle Marion had on his car and he made me some new spray nozzles.
May 20: Reactor blew pop valve each time I shut down cooling water. Fire Marshall came out again today since some neighbors complained.
June 2: Went to Harvard Club today. Supposed to see man from Standard Oil Co.? Ran engine last night for 7 hours — Reaction rate slowing down.
In later years, men would examine Anderson’s notes and ponder their authenticity. Knowledgeable observers doubted that Anderson could have run the motors as long as he said he did. But if the notes are authentic, the reactions described characterize a material that even in its unperfected state could be of tremendous value.
June 6: Shut down cooling water and catalyst got too hot and backfired. Fire Marshall came out and told me to either quit what I was doing or he would have me fined and put in jail. Oil Co. was not interested so Uncle Marion and I decided we should quit spending any more time. I will pack up and go back to Big Spring.
And there, according to Anderson’s notes, the experiment ended. The journal does not mention that when Anderson packed up and went back to Big Spring he reportedly left behind hundreds of dollars’ worth of rubber checks, which his uncle had to cover. Bouncing checks was a habit he never broke.
But did Anderson take with him the formula for a revolutionary new fuel? Some of Anderson’s associates maintain that the young man, with his limited training in chemistry, had unlocked the secret of hydrogen fuel and created a catalyst that could make water burn. Or did he leave behind in New Jersey all hope of producing the CRB? Anderson’s journal makes no mention of what others would later suspect: that his inventor uncle kept his discoveries to himself and that the best Anderson could do was skip town with a large batch of the mysterious material, which he would use in demonstrations for years to come.
West Texas wasn’t such a bad place to be in those days, and for a man with Anderson’s ambition, it was a promised land. Big Spring and Brownfield and Pampa all became homes for the young couple. After his bad luck in New Jersey, Anderson started exploring a new idea, this one for a cotton stripper, a machine that could pluck the bolls from a prairie field better than any before.
A tool shop in Pampa built the stripper for him, on credit. The Andersons towed it from Pampa to Guymon, Oklahoma, to Abilene, crisscrossing the cotton country. There were incidents: in one demonstration a cow somehow got tangled in the machine and had to be shot; once, Mrs. Anderson was nearly killed on a narrow bridge as she pulled the machine behind the family car. Worse, Anderson couldn’t persuade farmers to buy the invention. When the tool shop would wait no longer for its money, he was forced to give it his machine. Depressed by the second major failure in his short life, Gene Anderson at age 25 left his second wife and their two children in her hometown of Brownfield, near Lubbock. He returned to Big Spring in 1952 and entered a period of frenetic activity.
In the fifties Anderson’s life was a procession of many jobs, many ideas, and many wives. He seemed determined to become wealthy, famous, and accepted in his hometown, all at once. He got a job as a research chemist at the nearby Cosden Oil refinery and held it for a while. He taught science classes at a local high school. He started a real estate partnership with a local college teacher. He invented an automatic chicken-feeding machine (which tended to jam). He marketed a chalky mineral called Ab-sol, which was dug from an area near his homeplace known as the dirty dirt works. He sold it to gasoline stations to absorb grease from the floors of service bays. He also got a divorce from his second wife and married a third, telling her that his earlier wife had been killed.
In 1954 his mother sold half of her land to him for grazing cattle. The farmhouse on the land had been vacant for a while, and Anderson began refurbishing it. One afternoon, as his wife of the time tells it, he returned home from doing some electrical work on the farmhouse. Soon after, a neighbor came to tell him that the farmhouse had caught fire and that the volunteer fire department had been unable to put it out. Anderson’s family did not realize that they were close to losing more than the old farmhouse.
That same summer Anderson decided he could make some money by drilling an oil well southwest of town. He persuaded the Fort Worth Pipe & Supply Company to give him pipe on consignment, an unusual arrangement for the oil business in those days. He also talked a Midland drilling contractor into drilling with no cash advance. The well was sunk, and the geologic data were somewhat promising—but not good enough. The pipe was pulled and Anderson sold it, pocketing the money. When the folks from Fort Worth and Midland found out and wanted their money, Anderson had none to give. The matter went to court, where the companies tried to get their hands on any assets he had, Anderson tried to protect himself, and his friends and family found out things about him they hadn’t known before. In its search for assets, Fort Worth Pipe & Supply learned that there was a deed for the entire family farm in Anderson’s name, so the company sought to garnishee it.
Anderson’s mother was surprised to hear that she was about to lose all her property because her son had gotten into trouble with a pipe company. She soon had an answer to the mystery, and she took both her son and Fort Worth Pipe & Supply to court, claiming that the deed in Eugene’s name had been forged. Anderson had a well-timed attack of mental illness during the messy legal proceedings that ensued, so he never did testify in the case. The court found in his mother’s favor. She got back not only her farm but also the parcel she had earlier deeded to Anderson, for he had quickly fallen behind on his payments.
Meanwhile, his real estate partner bought him out of their business for $3700. Anderson took the cash to a haberdashery and bought some suits. Then he skipped town to Berkeley, California, where he stayed for several weeks. His company’s promotional literature later claimed that he had taken graduate courses in nuclear physics at the University of California at Berkeley.
When he returned from the coast, though, he spoke little of nuclear physics or the CRB. His new idea was to mine uranium. Anderson told people that he had located a uranium deposit bigger than a house, formed the Rio Arriba Mining Company, and rented a hacienda for his family. He insisted that his wife quit her job as an anesthetist and move to Espanola, New Mexico. By that time they had a baby girl, and as was the case during most of their marriage, his wife’s job was the family’s primary means of support. But she grudgingly complied with her husband’s wishes.
Anderson invited some friends to New Mexico to see his find, but when they arrived he was unable to locate it. He spent hours driving around the Kit Carson National Forest, finally turning his jeep over in a ravine. The group was forced to hike out of the mountains, and the visitors returned to Big Spring wondering about Anderson.
They soon had more cause for concern. Within weeks Anderson began having convulsions. His wife had witnessed many convulsions in her hospital career, and she suspected that his were phony. But he had a convincing way of describing his symptoms. With leading suggestions from the patient, his doctor decided that Anderson might be suffering from a brain tumor.
On a summer morning in 1955, a brain surgeon drilled two holes in Anderson’s skull, looking for a tumor. There was none. (Anderson later told an ex-wife that the doctors in Albuquerque had removed “a tumor the size of a teacup” from his head.) When the patient awoke, his wife was in tears at his bedside. His friends had driven to Albuquerque to be with him, and when he showed signs of recovery from the surgery, they mentioned that he had to get well so they could go hunting for uranium again. “Uranium?” he replied. “I don’t know what uranium is.”
His wife took the family back to Big Spring, and Anderson spent August and September of 1955 in the psychiatric ward of what later became the University of Texas Medical Branch at Galveston. Since he had so many convenient bouts of mental illness, some people in Big Spring came to believe that Anderson was feigning psychiatric difficulties simply to extricate himself from tight situations.
His difficulties didn’t win him much sympathy in Big Spring, partly because several residents knew that his checks sometimes bounced and that he played fast and loose buying and selling cars. His third wife wasn’t happy about his activities either, and in 1957 she divorced him and won custody of his second pair of children. With that, the young entrepreneur, teacher, oil field engineer, and chemist moved on to Wills Point, where for the next twenty years he was employed intermittently as a testing engineer, a mining equipment salesman, and a petroleum engineer. The one thing that held his attention through all those jobs was an old project he couldn’t drop: the CRB.
Heading for The Big Time
People in Wills Point were fascinated by Anderson. His bulbous, pockmarked nose and large ears gave him an intriguingly offbeat appearance. He once again tarnished his reputation somewhat by writing bad checks, but he was a likable sort, and it was his affability, his knack for getting people under his sway, that really set him apart. His longtime employer, Frank Hollandsworth, overlooked repeated problems and kept Anderson on the payroll because he had an uncanny ability to soothe irate customers. Anderson, Hollandsworth says, “could come into a strange town and talk a man out of his shoes and shirt both. If you had a client who was disgruntled, Gene could have him purring like a six-month-old kitten in no time. He could lie to you and make you like it.”
During Anderson’s thirteen years with Hollandsworth Consulting Engineers, the good citizens of Wills Point assumed that he was an engineer. But Anderson and Hollandsworth eventually parted ways, and after a brief stint with the government, Anderson revived the CRB. He built a small storefront laboratory, and moneyed people began to parade into town. In every conversation, he would offhandedly mention his most recent visitors. Such understated gambits were his specialty, and they worked, for Eugene Anderson was convincing many in Wills Point that he was an important scientist.
But Anderson had a larger audience in mind, and to reach it he had been promoting his discovery. Back in 1974, when he was employed as a petroleum engineer by the Bureau of Mines, he got his hands on some excellent sources from which he fabricated an impressive document. Using statistics easily available from the Energy Department, weaving in energy buzzwords such as “quad” and “Btu” (British thermal unit), and adding projections for the future of the CRB, he created An Introduction to Chemical Reactor Block Hydrogen Fuel Generation Systems. Over the years, with slight alterations, it served him well through many sales pitches.
In 1977 Anderson decided he needed a corporate identity and formed Anderson Energy Systems. The corporation enabled him to solicit money from investors—usually his relatives and their friends in those early days.
Jesse Covin, the brother of Anderson’s fourth wife, remembers pulling into Anderson’s driveway one day in July 1977 and finding a test bench. According to Covin, Anderson was “burning water” with a water hose connected to a pipe fitting. The pipe was pointing up, like a Bunsen burner, and flames were shooting out the top. It was astounding. Covin was hooked. Within a year he quit his job and moved from Fort Worth to Wills Point to help his brother-in-law get the thing going. In two years Covin, not a wealthy man, invested $25,000 worth of time and money in Anderson’s project.
The word was out, traveling along the electric “my cousin told me about an unbelievable deal” grapevine. Checks, most of them small, came in. Important people were notified. Lloyd Hinton, a staff member of a congressional committee, was told about the remarkable new material by his brother from Texas. While on a business trip to Texas, Hinton got the driveway demonstration.
As a result, on September 29, 1977, Eugene Anderson found himself standing before 32 bureaucrats and scientists, most from government, some from industry, in a laboratory at the National Bureau of Standards in Gaithersburg, Maryland, outside Washington. The bureau by law must survey promising inventions that are presented to it. The scientists in the gathering were none too happy to be there, coerced as they were into witnessing the demonstration because a congressional aide had arranged it.
The presentation was straightforward enough. Anderson had a small box affixed to a water hose in a sink, with a Bunsen burner device attached to the top of the box. After a short speech he turned on the water and lit a combustible gas that came out of the burner.
Some of the scientists thought the demonstration was ludicrous. There are a lot of ways to liberate a combustible gas; Anderson had simply used one of them. When the scientists asked him about his methods, he refused to answer questions, saying the invention was proprietary. That raised further suspicion. “We patted him on the back and showed him the door,” says Dr. Wayne Goodman, now at Sandia National Laboratories in Albuquerque. “He comes in, does a magic trick, clearly a magic trick, not science, and then he won’t tell us how he sawed the lady in half. He was either a con man or stupid or both,” Goodman says. “The guy was so confident, he even seemed to believe it himself.”
Hinton lost his congressional job when his boss decided not to run for reelection, but he still had Washington contacts and continued to arrange demonstrations in the capital. He bankrolled a Washington office for Anderson in the prestigious Watergate complex, with a magnificent view of the Potomac, and watched as the inventor’s tastes became more expensive every time he visited the city. Eventually, Anderson would stay only in the best hotels.
A second major demonstration was arranged in the spring of 1978, this time at the Naval Research Laboratory in Washington. Anderson brought a chunk of CRB the size of his fist and put it in a sink, placing a funnel over it. The gas passed up the funnel, and he lit it, producing a faintly blue-tinged flame. Most of the scientists at the lab thought Anderson was a phony, but Dr. Homer Carhart, who was the chief naval representative there, was not so quick to dismiss him. “Sometimes in science,” he says, “you think you know everything, and you don’t. Some of the biggest breakthroughs have come from people when everybody said nothing could be done.” Carhart wanted to give Anderson a chance, but the portly Texan would not let the Navy experts analyze the material. He was so secretive he even wiped out the sink, lest scrapings of the metal be found and their content analyzed.
Anderson’s pitches didn’t take off until 1978, the year he met Les McGhee, a short, white-haired man from Arlington who describes himself as a promoter. McGhee had a company called Union Pacific Oil & Gas, and he had been trying to develop a down-hole steam generator, a device that would produce steam within oil wells to make thick crudes flow more easily. McGhee thought Anderson’s invention might be adapted for use in the generator; it would be a good fuel source for his project. Anderson was interested in McGhee because the Irishman had connections.
In December 1978 McGhee introduced Anderson to James Buckley, a former U.S. senator from New York and brother of conservative columnist William F. Buckley. That same month Buckley came to Texas to see what Anderson had created. By then Anderson had started a laboratory on Commerce Street in Wills Point.
Buckley is described by Anderson’s Texas assistant at the time as a “slender-type fella,” with gray hair, wearing an old gray flannel suit and a narrow black tie. Although his family is known for its reserve, Buckley was enthusiastic about what he saw. Today he remembers Anderson’s production of a combustible gas from water as an “impressive show. If it was commercial, if it was correct, it would have been something,” Buckley says. “Remember, this was at the height of the Arab oil embargo.” Upon leaving the laboratory that day the ex-senator stressed that the invention needed to be proved scientifically. He also shook Anderson’s hand and said, “Someday this place will be a shrine.”
In a letter to Anderson dated December 8, 1978, Buckley thanked him for his hospitality and voiced even more excitement about the CRB. “Its potential is truly revolutionary,” Buckley wrote. “It is so revolutionary, in fact, that I think it is terribly important to try to anticipate public reactions and political demands so as to be able to best plan and man the barricades.”
Buckley says he did not consider investing in the CRB, but a letter to Lawrence Taylor—a New York intermediary for Buckley and Anderson, and himself a potential investor—indicates that Buckley’s interest was at least intense. It begins, “We can’t underestimate the impulse to nationalize CRB. . . . The Mondale, Metzenbaum mentality will proclaim that CRB is too vital a national asset to be left in private hands, and I fear that the fifth amendment can no longer be considered absolute protection of property rights. . . . What this means to me is that Anderson Energy Systems should not go public for some time. . . . A far larger stockpile of CRB in production capacity may be required than is presently anticipated so that significant delays do not develop in the ability of Triladyne to satisfy what could prove to be an explosive demand.” (Triladyne was a company Taylor wanted to form to produce and market the CRB.) The Buckley letter continues, “I think it is important to recommend to Anderson Energy Systems that cost figures be treated as extremely confidential. I would think it sufficient to take the public position that Anderson Energy Systems (Triladyne) undertakes to produce CRB itself, at a price that will enable users to cut their net existing energy costs by at least half, and that it will be able to do so at a profit sufficient to enable it to greatly enlarge its research activities.”
Twelve days later Anderson was at a brownstone office owned by the Buckley family on East 37th Street in Manhattan, giving another demonstration for some of Buckley’s relatives and acquaintances. In a muted conference room on the second floor, Anderson stood in front of a fireplace. He gave a quiet speech and then used an old kerosene stove he had converted to show the gas-producing properties of the CRB. The gathering—which included Buckley’s sister Priscilla, then managing editor of the National Review, as well as some prominent New York investors—did not seem impressed. But Buckley set up negotiations between Anderson and the venture capital department of Donaldson, Lufkin & Jenrette, a Wall Street brokerage house. In return for a $2.5 million investment, which would fund the manufacturing of the CRB, the investors wanted 10 per cent of the stock in Triladyne.
The negotiations did not go well. The New Yorkers were not about to invest their money without strings. They wanted a substantial piece of the action, and they wanted to make sure that the action was for real: they demanded scientific evaluation of the CRB on their terms, followed by assurance of adequate patent coverage. Anderson thought the Easterners wanted to steal his invention, and he refused to turn the CRB over for tests.
Anderson made several trips to New York, where McGhee tried to smooth out dealings with the Wall Street firm and footed the bill for the limousines the inventor had become so fond of. On one of his trips east, Anderson asked to be driven to his uncle’s house (McCoy had died in 1957) in East Orange, New Jersey. He told McGhee that the journey had a sentimental purpose, that he wanted to return to the place where he and his uncle had experimented with the CRB. But as they drove out, McGhee became convinced that Anderson wanted to look for something inside the old house, either CRB material that had been hidden on the premises or descriptions of its manufacturing process. When they arrived in East Orange, Anderson was extremely distressed that the house had been torn down and replaced by a parking lot. Whatever Eugene Anderson had wanted to retrieve from the house was gone forever.
As the Wall Street investors began to press for results, Anderson acted more and more insulted. He lost his temper over their questions and sometimes ignored their calls altogether. Finally, the inventor demanded a guarantee of $2.5 million from the brokers by 5 p.m. that day. Not without some tests, came the reply. And as quickly as the excitement had mounted, it was over. The deal evaporated.
Science and Girls At Le Rififi
After the Buckley debacle, McGhee found another interested party, Coachmen Industries of Indiana. Coachmen manufactured motor homes—ponderous, gas-consuming motor homes that were costing more and more to run. As the oil crisis deepened in the seventies, the recreational vehicle industry watched its sales dwindle, and the Coachmen engineers were on the lookout for energy conservation ideas.
Anderson, his brother-in-law Jesse Covin, and McGhee went to Middlebury, Indiana, to the headquarters of Coachmen. Anderson piqued the interest of Coachmen executives by dropping a pellet of CRB into a cool cup of coffee. The heat generated by the material quickly warmed the brew, and the inventor nonchalantly drank it to prove that his material was nontoxic. Later, in an employee washroom, Anderson filled a stainless steel sink with water. Taking a chunk of CRB in one thickly gloved hand, he held the metal under water. Bubbles formed. Anderson struck a cigarette lighter near the basin, and immediately a pale blue flame flickered over the surface. The flickers became a fire under the hopeful gaze of the Coachmen executives. Their motor homes could easily be equipped with water tanks as well as gas tanks. Instead of getting ten miles per gallon, they might be able to get twice that.
They arranged a second meeting. Anderson chartered a plane from O’Hare Airport in Chicago so he could arrive for a session at the Coachmen factory with flourish. (“Give Anderson ten thousand dollars and he’ll find a way to spend it before sunset,” one of his lawyers later said.) Coachmen offered Anderson $1.5 million for licensing and future purchase rights. Before any money changed hands though, the inventor was charged with proving the device on a recreational vehicle. He returned to Wills Point with a motor home, but true to form, he never proved that the CRB worked to the satisfaction of the Coachmen engineers. The deal dragged on until 1982, when it finally fell through. But long before then, Anderson had moved on to a far larger stage.
The Grosvenor Hotel may not be the best hotel in London, but it is top drawer, especially in the eyes of a small-town fellow. In the late summer of 1979 Gene Anderson was ensconced not in a room but in an entire suite at the Grosvenor. Henry VIII had once hunted in what was now Hyde Park across the street. Proper British schoolboys were sailing their toy boats in the Round Pond at the nearby Kensington Gardens. The hotel staff responded to his every whim. Industrial potentates hung on his words. Anderson developed quite an enthusiasm for life in Britain. He dined at the Twenty-one Club in London’s Mayfair district. The gilt-edged crimson draperies, the heavily ornamented chandeliers, and the brocaded chairs at the Twenty-one may have seemed a bit swank to some, but to Anderson they were just right. And it looked like this was only a taste of things to come, for he had arrived in London to sell the worldwide rights to the CRB.
Britain got its first exposure to the CRB not in a laboratory but in a nightclub called Le Rififi. On a Sunday morning, at a coffee table in the club’s bar, Anderson immersed his material in a pan of water and burned the resulting gas. In Anderson’s audience that day was an Australian engineer named John Bainton, whose favorable opinion and faith in the inventor would end up costing him $250,000.
Anderson also discovered that Le Rififi was a popular haunt for women who took a great interest in the club’s customers. In addition to sharing conversation, they made private arrangements for other favors, and the price of those favors was often the first topic discussed.
The most important thing Anderson did in London was cement a relationship with Sidney Cohen, a small, paunchy man of 64 years who boasted about his appetite for girls. Cohen was for Anderson in Europe what Les McGhee had been for him in the United States, a valuable entree to investors. In addition, he advised Anderson on the negotiation of international contracts for the CRB. The visitors trooping through Anderson’s suite at the Grosvenor were there at Cohen’s behest. Germans, an Irish scholar, an African prince and his entourage—all were shown a copper tube that held the revolutionary CRB material. Water went in one end, flammable gas came out the other.
What the American didn’t know about Cohen was that he had many international contacts of the wrong kind. In the summer of 1979 Cohen was on the verge of bankruptcy. Two years later he was serving time for trying to bribe a policeman during a drug raid at his apartment. Repeatedly Cohen promised investment money to Anderson only to come up with an excuse at the last minute. In that respect Cohen bore a striking similarity to Anderson. He now claims that Anderson owes him $2.25 million.
After a ten-day stay, Anderson returned to Wills Point, full of England. He talked about the fog, the rain, even the scones. But waiting for him on his return were the remnants of a botched con that would nearly erase his successes.
The letter was printed on stationery from the University of Texas at Dallas. It began: “The University was to comment on and attest to the results of the tests and demonstration procedure of the Chemical Reactor Block (CRB) Hydrogen Fuel Generation System.” The letter concluded: “The apparent economics are such that this fuel system should result in widespread demand once it made , [sic] available on a commercial basis.” At the bottom was the signature of Bryce Jordan, then president of the University of Texas at Dallas.
Dated November 6, 1978, the letter had been in circulation nearly a year when Anderson returned from London. The university was receiving calls from an Irish science consortium, a West German chemical company, half a dozen American concerns, and United Technologies, all wanting to know if the letter was authentic. The university knew nothing about a CRB demonstration.
Had any of those callers examined the letter carefully they would have noticed irregularities. While it bore the UTD letterhead, the stationery had the subheading “Graduate Program in Enviromental Sciences.” It was peculiar that the president of the university was using departmental stationery, more curious still that he was writing under a letterhead in which the word “environmental” was misspelled. The letter was a forgery, and not a particularly good one at that.
If the letter was a fake, the stationery was not. Typographical error and all, it had been set, printed, and delivered by the university print shop before the “enviromental” mistake was noticed. Rather than throw away all that good print stock, the department decided to use the erroneous stationery as scratch paper. Someone, apparently ignorant of the misprint, had filched the paper and forged the letter. Was it Eugene Anderson?
But just when the bogus letter threatened to choke off funds for the CRB, fortune smiled on Anderson. He met a group of Texans so sure of themselves, so excited about the material, that they bypassed normal caution.
Patent Magic With James J. Ling
A small-town coffee shop often captures the style of its community. It can be a casual forum for community issues, a crossroads where deals are cut, a news center, a spawning ground for gossip. The Cattlemen’s Cafe in Wills Point is all of those. The walls of the Cattlemen’s serve up some of the town’s history: a black and white photo of the Liberty Hardware with a Longhorn steer in front, drawings of the old train station and the Keep-u-Neat Cleaners. The conversation at the cafe serves up current events, which in January 1980 were Eugene Anderson and the shotgun patrols.
Anderson’s laboratory was just two doors down the street from the Cattlemen’s. One morning he bustled out the door with a uniformed guard in front of him and two others bringing up the rear. To the bemusement of onlookers, each carried a sawed-off shotgun. When the foursome swept into the First National Bank, conversation ceased.
Anderson was now in business with James J. Ling, of Ling-Temco-Vought, the Texas titan and industrialist-conglomerator who had set the pace of mergers in the sixties by buying companies and redeploying their assets into others. In the flush of his success in the early sixties, Ling built a $330-million-a-year company, not to mention a $3.5 million mansion in North Dallas complete with a Louis XIV living room, a Japanese teahouse, and a three-hole golf course. Since then his fortunes had fallen, risen, and fallen again. By early 1980 James Ling was looking for a grand slam to get the whole cycle restarted. The soft-spoken inventor might just be it.
On January 8, 1980, Anderson received a U.S. patent for the CRB, described as “Material and Method for Obtaining Hydrogen and Oxygen by Dissociation of Water.” The existence of the patent—and Anderson’s subsequent procurement of similar patents in 76 other countries—became a great tool for selling the invention. To many investors the patent made the CRB legitimate; they viewed it as government certification that the stuff worked. But a patent is nothing more than a guarantee that the invention is unique and cannot be duplicated without the owner’s permission.
Anderson had also, wisely, refined his demonstration beyond sinks, coffee cups, and inverted funnels. When James Ling and his fellow investors saw it, the exposition included a device that looked like a fish tank. Anderson purged it of air and filled it with an inert gas—the new and dramatic twist. Like a magician asking his audience to make sure he had nothing up his sleeves, Anderson began by urging his witnesses to put a burning cigarette lighter into the tank, where the flame was promptly extinguished in the oxygen- free atmosphere. Then he put a copper tube containing CRB inside the tank and ran water through it, producing gas. With a small smile, Anderson proceeded to light it.
“You see something like that,” says Ed Miles, who oversaw Ling’s investment in the project, “and you want to fall in love with the guy.” Ling says he checked out the scientific probability of Anderson’s doing what he said he could do with the Hudson Institute, a New York-based think tank. “They put it through their computer,” he says, “and told us it was physically impossible. But in the preliminary testing, there was a certain amount of success, and that put us in a position to go ahead the way we did.” Ling and his fellow investors committed $450,000 to Anderson. “It wasn’t that much money, really,” Ling adds. “Under the circumstances we really couldn’t afford to pass it up.”
Bedford Wynne, a wealthy Dallasite, put in $90,000. Jimmy Harrison, Wynne’s cousin from Fort Worth, put in $120,000, and Ling, backed by his own investors, put in the rest. Ling formed a company, Magna Matrix, to manage the CRB. Anderson received seed money to manufacture the first batches of the material; the investors, in return, were supposed to get a percentage of the income once the product was sold.
What is surprising about the episode is the confusion each investor seems to have had over the scientific validity of the project. Ling thought Harrison had explored it. Harrison thought Innocept, a group Ling had hired, was doing the scientific analysis, but Innocept, according to Ling, was a marketing group. Wynne, on the other hand, seemed content to go along no matter what: “I’m no scientist. I couldn’t ask him [Anderson] a question he couldn’t answer. He put on quite a show.”
With help from members of the Ling group, work began in Wills Point. Sixteen-hour days were common; Anderson planned the work and Miles and his assistants executed it. Anderson would generally be making calculations while the others were in the laboratory, taking breaks only to walk down the street to the cafe. His armed companions never left his side; they were hired, for thousands of dollars, when Anderson became convinced that Arab hit men were out to get him. Anderson ate while the guard sat at the table with him, shotgun at the ready.
Anderson began buying exotic and expensive equipment, but he couldn’t come up with the key to manufacturing the material. The CRB, which seemed to exist idealized in a part of his mind, eluded formulation. Anderson originally predicted that he would have the first batch of CRB finished in 45 days. But days stretched into weeks, weeks into months. He seemed uncertain of his basic chemistry. He became depressed and uncommunicative, and he sometimes disappeared from the laboratory for hours or even overnight. It was as if he knew something fundamental was missing from his process, that perhaps he’d even created the material himself before but had forgotten a critical step. When questioned on simple matters he would become belligerent or he would pout.
The investors were alarmed by Anderson’s problems. Jimmy Harrison was an inventor of no small accomplishment. He had created the Styrofoam cup in the fifties, using his kitchen stove to heat the material and a vacuum cleaner to form it. When he saw the CRB tested, he was amazed: “Sure enough, the damn thing burned!” But he was skeptical, knowing from his engineering background that the energy to crack water had to come from somewhere. Being an A&M grad, he wanted to “take it down to Aggieland and get it tested.” At first Anderson agreed, but whenever a test was scheduled, something seemed to interfere—problems with materials or impurities in the manufacturing environment.
Finally, in the spring of 1980, a group of interested parties came together at Southwestern Laboratories in Dallas. It was a somber, earnest gathering. Everyone had to sign agreements of confidentiality before they were allowed into the long laboratory room. The armed guards stood in one corner; Anderson, with an assistant, at one end of a long table. A camera was positioned to record the historic event. Metering devices to monitor the flow of gas from the CRB were in place. Water was to be fed at a specified pressure into a copper tube about one and a half inches in diameter, which contained CRB. Seconds after the water started flowing, however, the copper began to swell. Soon it was twice its original diameter, looking like a cherry-red light bulb. Suddenly, the copper tube split, spewing molten metal up to the ceiling and dropping smoking bits on the crowd. No one was hurt, but all were dazed. Anderson left quickly, saying he didn’t know what had happened. He promised a successful demonstration, if not a scientific test, in Wills Point that evening.
That night, much the same group turned out behind Anderson’s laboratory, where the second test was being held outside, just in case another problem developed. Anderson had rigged a vertical CRB module this time, assuming there would be less of a chance for an explosion in that configuration. “Everybody was there,” as Jimmy Harrison retells it. “The shotgunned guard was standing by. The camera was set up, and he turns it [the CRB apparatus] on. It looked like the Fourth of July. He’d like to have burned up Wills Point! Everybody ran away, but the camera stayed and watched. When I looked at the film later, there was this shotgun leanin’ against a tree where the guard had been. He ran away, too.”
Ling was more than mildly disturbed by the developments. By the terms of his agreement with Anderson, he had a six-month option to put up more development funds. After a few weeks a final make-or-break test was arranged at Southwest Research Institute in San Antonio. Hydrogen and oxygen were produced, but the amount of oxygen, according to the Southwest report, was “far below the level one would see if the evolved gases were the result of water dissociation.” That meant that the oxygen probably came from the CRB material itself instead of from the water. The day of the test, a Ling representative said he doubted that Anderson’s material had passed; Anderson called him a goddam son of a bitch, threw his books on the laboratory floor, and stomped out, pausing at a sink to wash a small amount of CRB remaining in a beaker down the drain. The next time the investors saw Anderson was in court, with Ling and company suing him for the funds they had advanced.
As if his problems with the Ling group weren’t enough, Anderson then ran into a personal snafu. In the spring of 1980 his wife answered a phone call shortly after midnight from a woman asking for Anderson. The inventor was not home, and as often happened, his wife did not know where he was. “Who’s calling?” she asked. “I used to be his wife,” came the shocking reply. Though Anderson had been married to his fourth wife for twenty years, he had never revealed anything about his past to her. As the conversation went on, the shock went deeper; she learned about three earlier marriages and four other children.
The fourth Mrs. Anderson filed for divorce while Anderson was hopscotching through Europe. He went to Barcelona and Dusseldorf and revisited London, where he met a former hostess from Le Rififi Club. They were married in late 1980. Anderson developed an affection for Zurich, the Alps, the quiet service of Swiss hotels. He chartered a company in Zurich, Hyfuel Limited, and opened an account in a Swiss bank. He told investors about his office in Zurich, often producing a postcard of Grossmunsterplatz, where two seventeenth-century spires overlook a square. “My office,” he would say, pointing to the postcard, “is right here.”
A Fortune in Penny Stocks
Salt Lake City has been called the stock fraud capital of the United States, one of the prime markets for penny stocks. In an ideal world, penny stocks are low-priced equity in a little-known company that appreciates in value as the company matures, going from, say, 20 cents to $5 a share. In an imperfect world, they are worthless stocks craftily promoted by company owners whose personal fortunes will rise if their stock goes up in value. Even the Mormons’ world is an imperfect one.
Penny stocks are businessman George Jensen’s game, and wealth is one of his lifetime goals. His riches have always been on display. “The first time I met him,” says one Salt Lake City lawyer, “he was wearing a yellow suit and driving a yellow Mercedes-Benz.” Since his dealings with Gene Anderson, however, Jensen drives a Rolls-Royce. His house has nine bathrooms and an indoor swimming pool. It is protected by a brick and iron fence hung with sixteen ornate, imitation gas lamps. He says he owns it all, free and clear; it is worth $2.4 million.
Jensen heard about Anderson’s invention and wanted to invest. Anderson decided to sell Jensen part of a part of the invention in 1979. He had already changed the name of his company from Anderson Energy Systems to Horizon Manufacturing. He created another company, Horizon Marketing, which would handle the marketing of the invention. George Jensen, through a new company he formed called Horizon Energy, was allowed to buy a portion of the marketing rights for $100,000. The corporate relationship was labyrinthine, but all that potential investors needed to know was that the company had the partial rights to a marvelous new invention.
Somehow, although Jensen denies that he was the one who told them, penny stock buyers in Salt Lake City found out about Anderson’s invention. Stock in Horizon Energy went from 50 cents to $14 a share in the last six months of 1979. The growth was probably due in no small part to press releases describing a Patent Cooperation Treaty for the invention and outlining the demonstrations Anderson had conducted at the Pentagon and the Department of Energy. Though the stock was allegedly being offered so Horizon could afford to buy more of the invention, George Jensen, a major stockholder, sold over $1 million worth of his Horizon Energy stock in a year and a half—the stuff, perhaps, of which Rolls-Royces are made.
Early in 1980 stories about Anderson’s achievements began to appear in the press. UPI business reporter LeRoy Pope wrote a story based on press releases and an interview with Anderson. Referring to the interview, the story said, “Successful independent laboratory tests on his invention now have been carried out in Britain and he [Anderson] expects to announce licensing agreements soon.” There had been in fact no successful laboratory tests, but Pope would not be the last reporter to buy Anderson’s line.
In May 1981 Anderson called me at the Dallas TV station where I work as a reporter, saying he had an invention we might be interested in. A photographer and I went to Wills Point, where Anderson greeted us cryptically, then began working under the hood of a weatherbeaten 1970 Chrysler, saying he was installing a CRB element. Neither of us knew what he was talking about, but we stayed while he continued. The CRB hydrogen generator allowed the car to achieve 44 miles per gallon, he explained, while reducing pollution and engine wear. He took us for a ride, and the photographer shot videotape. Anderson had intricate plans for the invention: it would be used in power plants, automobiles, and numerous other applications.
Anderson led us into his laboratory, where he lit CRB-produced gases from a white vertical pipe. “We can have a new energy resource that will replace, basically, the fossil fuels,” he said. His eyes blinked languidly, as he talked, as if he were about to fall asleep. He showed us another chemical invention, a water additive that supposedly removed the oxides from metals such as aluminum. When it was all over, the photographer and I didn’t understand exactly what we had seen, but we thought it was important.
Neither of us suspected that Eugene Anderson was a con man. The unusual-looking fellow in the Hush Puppies and an open-necked shirt might be a crackpot, but not a con artist. After a day’s reflection and some checking, we put the story on the air.
Calls came in from around the country; news travels fast when it involves a potential investment. To our surprise, a call came from the Securities and Exchange Commission in Salt Lake City; it was investigating Anderson’s companies. In the next few months I began to realize the impact of having fallen for Anderson’s con. He was using a videotape of the report minus the end—which said the CRB had yet to be proven—to sell his invention.
On to the Pentagon
The CRB case, Securities and Exchange Commission v. Horizon Energy Corporation, Horizon Manufacturing Corporation, Eugene R. Anderson, Eugene Brown, George R. Jensen and Richard A. Willits, was tried early in 1982 in U.S. district court in Salt Lake City. The SEC took more than two years to prepare and bring it to trial, and for all that, Eugene Anderson’s lawyer engineered an agreement that allowed him to get out scot-free before the trial even ended. George Jensen and the other company officers were prohibited from selling any more shares of Horizon Energy. On the way to that judgment, however, the court found that Anderson’s tests of the CRB had never lasted long enough to prove what he said it would do, that it had never been used in anything except automobiles, and then only in short-term tests, and that overall the invention did not, as Anderson claimed, dissociate water without using an outside source of energy.
By mid-1982 Anderson’s cash flow from investors in the CRB was dwindling. Visitors to Wills Point found the laboratory closed, with, as the landlord would vehemently say, some rent due.
Meanwhile, Anderson was moving in on his biggest target yet, the U.S. government. The thought of him padding the broad hallways of the Pentagon, CRB in hand, is at once fitting, alarming, and somehow ridiculous, especially if one accepts the assessment of a government lawyer, who, having closely followed Anderson’s trail, said simply, “Some generals are idiots.”
Anderson, through the connections of his Washington associates, had been trying for years to interest the Pentagon in the military applications of his invention. Suppose, for example, that a CRB module was installed in the fuel system of a battle tank for emergency situations only, times when, with fuel supply lines cut, only water was available to combat units. A CRB module, by allowing combat units to use water as fuel, could help tanks, jeeps, and trucks extricate themselves from hopeless situations.
In an environment where acronyms, jargon, and tautology were often the sole means of communication, Anderson fit right in. To his disappointment, however, the military did not fund the CRB. But it did buy something that came out of his laboratory.
Over the months and years that Anderson and his associates labored behind the storefront in Wills Point, trying to find the correct metallic combinations for the CRB, they noticed something. Their screen door fell apart. Subjected to the exhaust gases from the experiments, the aluminum door simply disintegrated. Anderson connected that to a compound he had used in the production of the CRB, an additive that removed oxides from metals. It became a kind of CRB II, a chemical that had far-reaching strategic implications. The deoxidizer would become the country boy’s link to the Pentagon.
The additive, according to Anderson, “affected the isotopic relationships of the hydrogen and oxygen in water.” Its effect, when applied to metals, was to remove their oxide coating and eventually realign their internal molecular relationships, he said. Whether his explanation is correct or not, the compound can weaken metal without leaving any trace of the destruction on the metal’s surface—or so Anderson led the Pentagon to believe.
The material takes several hours to affect metal, but those effects, when complete, are substantial. Dab it on the wings of an aluminum aircraft, says Anderson, and the plane might fall out of the sky. If poured on parts of a battle tank, the tank could be reduced to scrap by a single bullet, he says. Apply it to electrical transmission towers in the dark of night, he says, and those towers will unexpectedly topple the next day.
The Pentagon granted Anderson a top-secret contract in June 1982. He was to be paid $250,000 for one hundred hours of study and testing of CRB II at laboratories in Watertown, Massachusetts—a pittance compared with what Anderson thought his idea was worth. He began to tell acquaintances that the contract was for $1 million. One rumor even put the contract at $4 million. Though Anderson thought he was selling cheap, he entered into the contract anyway, hoping it would lead to more government work. The Pentagon was not all that sure that CRB II was feasible, but by making Anderson commit to a contract, the government could then legally prevent him from selling to an unfriendly country.
Anderson had already tried to sell one invention to the wrong side: in the early days of the CRB he had offered the amalgam to a country behind the Iron Curtain. The United States government, he says, would not buy it but would not let him sell it either.
The selling of the Pentagon, Anderson style, is something officials do not talk about, under orders from the Secretary of Defense. Pentagon insiders describe CRB II as one of “the truly nasties,” a development so sinister that if dropped into the wrong hands it could, in military hyperbole, change the course of world history. Is CRB II going to revolutionize modern warfare? Or is the Pentagon trying to cover up an embarrassing mistake?
The Defense Department’s dealings with CRB II fall into a pattern similar to Anderson’s previous arrangements. Anderson received his initial payment from the government but completed only a few days of testing. When he tried to get out of the contract by reimbursing the government for that first payment, the check bounced.
The Department of Defense is still watching the inventor, as are people all over the world. In January of this year Anderson sold the Caribbean manufacturing rights to a man from Thackerville, Oklahoma. In May he was negotiating with a Los Angeles group to develop the CRB as a tax shelter. And he still holds a shamanlike spell over his former investors, who claim to have spent millions on his project. They watch his moves, these investors, reluctant to sue him because they still think he may hit it big. One of them has located in Dallas, partly so he can observe Anderson when he visits his children in Texas. Another has constructed a model of the Wills Point laboratory in his own garage (“There is something there,” says this investor. “Anderson just didn’t know what he had.”) A third still talks about his stock in Horizon Manufacturing as if it will be worth something someday.
In July 1981 Hyfuel Limited of Zurich, Switzerland—the newest member of Anderson’s burgeoning empire of CRB companies—made a deal with Fukai Sangyo Limited of Tokyo, Japan. In exchange for the technological know-how to produce the CRB, Fukai Sangyo agreed to make a multimillion-dollar initial payment to Hyfuel, followed by royalty payments from worldwide sales. One of Anderson’s British backers was recently contacted by the Japanese. They still have no CRB and have lost track of Anderson.
And Anderson, the wizard of Wills Point, is either living in London in a modest rowhouse or lying low outside of Dallas. A lot of people would like to know for sure where he hangs his lab coat these days. Some say he has thousands tucked away in his Swiss bank account. That doesn’t explain why he recently reapplied to the U.S. government for disability payments for a back injury he suffered on a government job several years ago. Perhaps Gene Anderson is just bored, playing his cards close to his chest, looking for another system to outwit. Or maybe he’s in the first-class section of a transatlantic jet this very minute, showing the person in the next seat a postcard of his office in Zurich.