Documents Show Chappell’s Tangled Finances

A few weeks before Rep. Bill Chappell Jr. (D-Fla.) sold his holdings in a financially troubled Florida health club to several defense industry officials in December, 1984, he acknowledged that the disastrous venture had cost him so much money that “I get sick thinking about it,” according to documents released Tuesday.

The testimony, in answer to questions by a divorce lawyer, was contained in 275 pages of documents released by Chappell in an effort to dispel suspicions about his relationship with defense contractors and consultants. He is chairman of the defense subcommittee of the House Appropriations Committee.

The documents, detailing the proceedings of Chappell’s acrimonious divorce from Marguerite, his first wife of many years, also reveal his tangled finances and extensive losses from bad business ventures. In many cases, these ventures were financed with loans from a Florida bank in which he served as a major stockholder.

Wiretapped Conversations

According to federal investigators, Chappell’s name has turned up in wiretapped conversations of a principal figure in the massive Pentagon procurement scandal currently under investigation. Investigators are trying to determine whether defense consultants implicated in the case illegally funnelled money or other benefits to influential elected officials to receive help in getting defense contracts. Chappell has denied any wrongdoing.

Although the material sheds no new light on Chappell’s relationships with central figures in the defense scandal, it does render a vivid portrait of his dire financial condition when he sold the health club, which was resold two years later to Martin Marietta Corp., a major defense contractor.

Under questioning from his wife’s attorney in November, 1984, just a month before he sold the health club, Chappell testified that he had invested thousands of dollars in the venture and never received any return on his investment. But he could not confirm the attorney’s estimate that he had put as much as $89,695 into the club.

“I have put a pile, I don’t know how much,” Chappell said. “. . . I put a pile of it in there. So much that I get sick thinking about it.”

Borrows From Banks

Moreover, Chappell acknowledged that much of the money he invested in the club, known as the Wind Meadows Racquet Club of Ocala, Fla., had been borrowed from two banks, including the Bank of Belleview.

Chappell, who organized the Bank of Belleview, was serving on its board at the time he obtained those and other loans to further his business interests. It is not illegal for a major bank s1953457003as the loans are disclosed to its directors and no preferential treatment is accorded.

In addition to the nasty divorce case that was dogging him at the time of the sale, Chappell was facing foreclosure proceedings on the racquet club and had been ordered by a court to pay $159,375 judgment against him and his partner.

Bought by Investors

Chappell sold the health club in December, 1984, to a group of investors led by W. Leonard Killgore Jr., a consultant who had once worked for Chappell and was then a Washington representative of defense contractor Avco Corp., and George L. Dalferes, who heads the lobbying arm of Martin Marietta. On May 30, 1986, the Killgore-Dalferes group sold the club to Martin Marietta for $200,000.