All That Glitters--

In 1980 the Hunt brothers of Texas--Nelson Bunker, William Herbert and Lamar--enjoyed a combined net wealth in excess of $5 billion and fame if not notoriety as one of the nation’s richest families. Today, after an unfortunate series of business setbacks and legal reversals, the Hunts’ notoriety has deepened but their collective fortune has shrunk to only around $1 billion. Bad enough as this has been, worse may yet be coming.

After a six-month trial, a federal jury in New York has found that the Hunts committed fraud and violated commodity and antitrust laws, and it awarded more than $130 million to a Peruvian minerals company that says it suffered grievous financial loss because of their actions. That verdict is expected to clear the way for other lawsuits with hundreds of millions of dollars more at stake, including two class-action cases that have been filed on behalf of about 17,000 investors. Meanwhile, in another case, the Internal Revenue Service is after Nelson Bunker, his wife and five other relatives for allegedly failing to pay $358 million in owed taxes.

What accounts for the Hunts’ descent to this unfortunate condition? In 1979-80, as the federal jury found, the Hunts along with others conspired to corner the world silver market. To that end, the federal Commodity Futures Trading Commission charges in yet another lawsuit, they acquired and stockpiled nearly 200 million ounces of bullion. This process sent the price of silver soaring from $9 to $52 an ounce. Many will remember stories from those days of the frenzy that saw irreplaceable heirloom silver melted down for its bullion value. By late March, 1980, the speculative bubble collapsed and silver slid back to $10 an ounce. A lot of people lost money playing the silver market. The Hunts themselves are believed to have come out about $1.3 billion in the red.

One of the Hunts’ lawyers argued that his clients, rather than trying to control silver supplies and manipulate prices, were only trying to prudently hedge against inflation. The jury, though, seems to have concluded that hoarding 200 million ounces of bullion isn’t so much prudent as it is piggy. It found that Minpeco S.A., the Peruvian company that sued the Hunts, had lost its investments in the U.S. market because of their improper actions.

That would seem to be the end of a major chapter in this continuing saga, even though the most intriguing question of all remains unanswered: Why did they do it? What was it that prompted men whose worth already exceeded $5 billion to take actions that in the end would bring them such great woe, all for the sake of heaping up gain that common sense--to say nothing of simple accountancy--should have told them they didn’t need? Greed is an obvious answer, but too easy a one. Power may be a better answer, but even that isn’t satisfactory. A million subpoenaed documents have shown in a court of law just what it was that the Hunts did. What the documents can’t show is what on Earth possessed them to do it.