Wesley Clark: The Penny-Stock General
The retired four-star general lends his name to some sketchy companies
by Zachary MiderZeke Faux
5:00 AM EDT
May 14, 2015
Sixteen years ago, Wesley Clark was the four-star U.S. Army general running the Kosovo war. These days, he’s been pitching food-truck franchises to military veterans and helping a convicted felon raise money to grow hydroponic lettuce. “We’d love it if you joined with us in an investment,” the silver-haired Clark, 70, says in a promotional video for a company called the Grilled Cheese Truck. He’s pictured standing in front of a statue of a bald eagle in a replica of the Oval Office. “We’re going to be one of the fastest-growing young companies in America.”
The grilled cheese venture is losing money and hasn’t signed any veterans as franchisees, and the lettuce operation is being sued for failing to pay its bills. They’re just two of a dozen precarious ventures with which Clark has been associated since he retired from the Army with the self-proclaimed goal—a joke, he says now—of making $40 million.
Clark is one of many former governors, generals, and congressmen who’ve found second careers lending their name to tiny companies that are willing to pay for prestige. Since he ran for president in 2004, Clark has joined the boards of at least 18 public companies, 10 of them penny-stock outfits, whose shares trade in the “over the counter” markets, a corner of Wall Street where fraud and manipulation are common.
All but one of the 10 lost value during Clark’s tenure. Three went bankrupt shortly after he left their boards, and the chief executive officer of one pleaded guilty to fraud. Only four of the 30,958 people in Bloomberg’s database of over-the-counter board members have served on more boards than Clark. “His appearance on a board is a huge red flag,” says Joe Spiegel, whose fund, Dalek Capital Management, made money shorting the stock of one of Clark’s ventures. “These companies use people’s names to get legitimacy.”
Clark’s also been a director of large, well-capitalized companies such as CVR Energy, an oil refiner listed on the New York Stock Exchange, and Amaya, a Canadian online poker company that trades on the Toronto Stock Exchange. Clark says he’s proud of his business record, and that he’s helped support small-time entrepreneurs with promising ideas and emerging technologies, rather than trading on his connections to work for a big defense contractor as do some former Washington officials. Companies turn to him for his global connections and engineering background, not an endorsement, he says. “Nobody’s going to invest in a company just because General Clark is a director,” he says.
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http://www.bloomberg.com/news/articles/2015-05-14/wesley-clark-penny-stock-general
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