The following article appeared in the July 10, 1991 issue of the
Downtown
Manhattan-based alternative newsweekly Downtown--when Nation Institute
Trustee Arthur Carter owned The Nation magazine.  A few years after this
article was published former Corporation for Public Broadcasting Chair
Alan
Sagner became a major investor in The Nation (along with Hollywood actor
Paul Newman) and the CPB-subsidized Pacifica administration began airing
a
radio tie-show over the Pacifica radio network to help market the
magazine
owned, in part, by the CPB board's chairperson.

Who Rules The Nation?  A Look At Shepaug Corporation Director and NYU
Trustee Arthur Carter

by Bob Feldman      (July 10, 1991)

    "Ten years from now, I'd like our firm to be a major in the
investment
banking business."
        Nation magazine/New York Observer Publisher Arthur Carter in
1968

    "The 59-year-old Mr. Carter, whose holdings, primarily in real
estate
and utilities are said to be worth $200 million...describes his politics
as
`pretty much down the middle'...He says he has invested $24 million in
his
stable--$4 million in The Nation, $8 million on The Litchfield County
Times,
and $12 million in The New York Observer, the weekly newspaper he
started
in
Manhattan in 1987."
        The New York Times on April 29, 1991

"The Nation--72 Fifth Ave., New York, NY 10011...Pays $75 per published
page..."
        The 1989 edition of The Writer's Handbook

    On Oct. 17, 1974, the New York Times reported that [now-Nation
Institute
Trustee] Arthur Carter's Carter Group Inc. and its subsidiary Utilities
&
Industries Corporation had consented in Federal District Court to a
permanent injunction `against further violation of Investment Company
Act."

    The Securities and Exchange Commission (SEC), in the complaint
against
Carter's investment banking firm which led to this consent agreement,
had
charged that Carter's firm had "unlawfully arranged in November 1971"
for
its Utilities & Industries Corporation subsidiary's "employee welfare
benefit fund to purchase 15,000 shares of Fifth Avenue Coach Lines Inc.
under plan to acquire its control, but without letting trustee or
beneficiaries of fund know of use to be made of its assets."  A second
count
of the SEC's complaint against Carter's Wall Street firm was that by May
15,
1972 it had purchased shares of its own Motherweld Partners subsidiary
at
prices higher than the then-quoted market price of its Utilities and
Industries stock, in further violation of the Investment Company Act.

    As a result of the Investment Company Act violations of Carter's
firm,
the federal court also included the following provisions for increased
SEC
monitoring of Carter Group Inc. and its Utilities & Industries
Corporation
subsidiary, according to the Times:

    1.  "No officers or certain directors of the Carter Group or
Utilities
&
Industries can serve on the board of directors of a registered
investment
company--except Fifth Avenue Lines INc.--without prior approval of the
SEC."

    2.  "The Carter Group and Utilities & Industries shall not purchase
or
acquire any security issued by a registered investment company, nor
shall
any officer or director of either company purchase or otherwise acquire
the
security of any registered investment company in which the Carter Group
or
Utilities & Industries has any interest, without prior SEC approval."

    3.  "The Carter Group and Utilities & Industries shall not exercise
any
power they might have to direct or in any way advise as to the purchase
or
sale of any assets for any of their pension funds." and 4. "Utilities &
Industries shall reimburse the price to be received by Fifth Avenue
Coach
Line Inc. shareholders."

    Today [in 1991], despite the Carter Group's past violations of the
Investment Company Act, Arthur Carter is an NYU Trustee.  And like
another
NYU Trustee--Village Voice [and now LA Weekly] Owner Leonard Stern--NYU
Trustee Carter is currently a powerful figure in the world of
"anti-Establishment" and "alternative" journalism.  Multi-millionaire
Carter
owns both the "anti-Establishment" Nation magazine and the "alternative"
New
York Observer weekly newspaper, as well as northwest suburban
Connecticut's
Litchfield County Times.

    After graduating from Brown University in 1953, working in the U.S.
Coast Guard between 1953 and 1956 and securing an MBA from Dartmouth,
Carter
spent the late '50s working on Wall Street as an investment banker at
Lehman
Brothers.  In The New Crowd by Judith Ramsey Ehrlich and Barry J.
Rehfield,
Nation publisher [now Nation Institute Trustee] Carter is described as
being
in the late '50s "a sharp, humorless young man, the son of an Internal
Revenue agent."

    While working for Lehman Brothers, Carter also lived in East
Rockaway,
Queens, just across the hall from a Wall Street broker at Bear Stearns
named
Sandy Wiell.  According to The New Crowd book, "as Weill and Carter
became
more experienced Wall Street hands, their talk frequently turned to the
hope
of starting their own securities firm."

    In May of 1960, Carter and Will joined with two other Wall
Street-types--Roger Berlind and a non-Jew named Peter Potoma--to open an
office at 37 Wall St., for their newly-established stock brokerage firm
of
Carter, Berlind, Potoma & Weill.  In order to form Carter, Berlind,
Potoma
&
Weill, the four Wall Street partners had to raise $200,000--$160,000 of
which was required to purchase the Wall Street firm's seat on the New
York
Stock Exchange.  Berlind, Potoma and Weill raised their share of the
required $200,000 by running to their relatives for venture capital, but
Carter provided his share of the $200,000 from his own savings.

    Initially, Carter, Berlind, Potoma & Weill's Stock Exchange seat was
registered under Potoma's name because, according to The New Crowd
"Carter
had felt that as a non-Jew, Ptoma would be more accepted on the Exchange
floor."  But in 1962 "word came from the surveillance office" of the
Stock
Exchange "that Potoma faced suspension for `free riding' (i.e. buying
stock
on its way up without paying for it, through his wife's and his own
personal
account, and then selling the shares before he had even paid for them),
according to The New Crowd book.

    Upon learning that Potoma was under surveillance for improper
business
conduct, Carter and his two other partners took over Potoma's Stock
Exchange
seat, forced Potoma's resignation from their firm and "dropped his
name--months before the Exchange gave him a year's suspension," reports
The
New Crowd.  Thus, by the time news of the "Potoma Scandal" was
officially
announced, Carter's brokerage firm was no longer officially called
Carter
Berlind, Potoma & Weill, but just Carter, Berlind & Weill.

    From 1960 to 1968, Carter was the dominant partner in his firm as
its
profits from playing the stock market increased simultaneously with the
`60s
escalation of U.S. military intervention in Viet-Nam.  According to The
New
Crowd, Carter headed the firm "with the self-assured hand of a maestro."
The same book noted that Carter and his business partners would each
week
"get together for dinner at Christcella, an expensive East Side steak
house"
and that their conversation would revolve "around business."  The New
Crowd
also observed that "Pressured by Carter...each partner maintained a
separate
account of his output in the office" and "Carter's leading question
often
was `How much business did you do today?'"

    After the Carter, Berlind & Weill firm had accumulated more wealth
from
the stock market, it moved from 37 Wall St., to larger offices at 60
Broad
St.  By 1967, Carter's firm had played the stock market with such
craftiness
that it was able to move again and rent out "the entire top floor and
half
of the one below in a new building at 55 Broad St.," according to The
New
Crowd.

    Carter's firm "took in any business that came its way--meaning
whatever
they could sell to their collection of individual and institutional
customers," notes The New Crowd.  And between July 1967 and June 1968,
the
firm's profits jumped from around $350,000 per year to $1.3 million per
year, so that by the middle of 1968 it controlled more capital than 75
percent of the other member firms of the New York Stock Exchange.

    In a May 27, 1968 article entitled "Youth and Mobility Mark
Brokerage
House: At Carter, Berlind & Weill, Founders Are In Their 30s," the New
York
Times had taken note of how Carter's firm was increasing its special
influence in the world of Wall Street:

        "The firm has expanded into investment banking, block trading
and a
general brokerage business.  In 1967, it acquired the investment
counseling
concern of Bernstein-Maccauley Inc., which manages portfolios with a
total
market value of nearly $300 million."

    The Times article also reported that in 1968 Carter's firm was
selling
stock and providing financial advice to U.S. corporations like U.S.
Smelting, Refining & Mining Co. and Gulf & Western Industries, acting as
the
African government of Zambia's official financial advisor and serving as
an
investment banker for the government of Jamaica.  According to an
article
by
Edwin Diamond in New York Magazine's July 13, 1987 issue, "Now, The New
York
Observer," the reason Carter's Wall Street firm became profitable so
rapidly
in the 1960s was because it "began working with a new breed of
clients--mutual funds, insurance companies and banks" and "these
institutional investors grew to become the major players in the stock
market" by the end of the 1960s.

    The New Crowd book observed that by 1968, "Carter stood out" as his
Wall
Street firm's "budding presence on corporate boards, with four seats,
including one at Studebaker."  Carter, Berlind & Weill's securities
trading
for Gulf & Western Industries and its financial advising work for Gulf &
Western's chief executive officer, Charles Bluhdorn, was handed by a
partner
named Marshall Cogan, who had joined the executive committee of Carter's
firm in the mid-60s.

    At the same time that Carter's firm was dealing Gulf & Western stock
and
providing financial advice to Gulf & Western's CEO Bluhdorn, Gulf &
Western
was securing its dividends with ownership of 264,000 acres of land in
the
Dominican Republic and paying its 15,000 sugar cane cutters there
sub-standard wages, according to the first edition of Everybody's
Business:
An Almanac.  The major client of Carter's firm in the '60s also owned
four
resort hotels in the Dominican Republic, 90 other Dominican Republic
businesses and a free industrial zone which exempted them from taxes for
20
years.  In addition, Gulf & Western also had extensive investments in
South
Africa and Puerto Rico.  In the '70s, according to the Everybody's
Business:
An Almanac book, Gulf & Western would also be charged by the SEC "with
attempting to defraud the government and their own shareholders by
concealing a $64 million profit in Dominican sugar."

    The New Crowd also described how Carter and Cogan "hooked one of the
biggest deals of 1968" which involved an investor named Saul Steinberg:

    "A report came out of Carter, Berlind & Weill's research department
in
1967 concluding that fire and casualty companies held vast untapped
financial resources: the insurers, in many cases, had cash-heavy assets
received from paid premiums...The budding dealmakers sounded out
potential
institutional investors and told them if they bought stock in an
asset-rich
insurance company and it was taken over, as shareholders they most
likely
would make a substantial profit.

    "Reliance...was selected by Cogan and Carter as their target.  Even
as
they made their pitch to institutional investors to buy Reliance stock,
they
were on the prowl for a predator.  They located Saul Steinberg...He
agreed
to pay them  a finder's fee of $750,000 for pushing him toward Reliance.
The next step was for Cogan quietly to buy the Reliance stock for
Steinberg
on the open market, so as not to drive up the price of the stock."

    After Nation publisher organized Saul Steinberg's enormously
profitable
purchase of Reliance Insurance Company by Steinberg's Leasco company in
1968, Steinberg donated a "then secret sum of $250,000" to Richard
Nixon's
1972 presidential re-election campaign, according to The New Crowd.  The
New
Crowd also states that Carter's client "years later, claimed to have
raised
$8 million more" for Nixon's 1972 presidential campaign.  By 1986,
Steinberg's Reliance Insurance/Reliance Group was earning $3.1 billion
in
annual revenues and $103 million in annual profits and the value of Saul
Steinberg's family holdings in the company had increased to $650
million,
according to Louis Rukeyser's Business Almanac.  Steinberg also became a
large shareholder in The New York Times Company and in 1988--when his
daughter, Laura Steinberg married NYU Trustee Preston Tisch's son,
Jonathan
Tisch--Steinberg spent $2 million on his daughter's wedding.

    As a result of such financial wheeling and dealing, Carter's firm
continued to expand in 1968 and was scheduled to move from 55 Broad St.
to
even larger office quarters in Uptown Manhattan in the General Motors
building on 59th Street and 5th Avenue by the end of 1968.  A few months
prior to the planned move Uptown, however, according to The New Crowd:

    "Carter made up his mind that he was ready to move on to bigger
thins--either by starting a new company of his own or by restructuring
Carter, Berlind & Weilll...Carter, apparently tired of the brokerage
business, wanted to turn the firm into a merchant bank, providing advice
and
its own capital to companies in exchange for a share of the ownership."

    On Sept. 10, 1968, Carter suddenly made a bid for even more power
within
his firm at a Carter, Berlind & Weill board meeting, demanding "the
title
and authority of chief executive officer" and demanding that the board
"reshuffle the stock ownership percentage" between the firm's partners,
according to The New Crowd.  The two other founding partners of Carter,
Berlind & Weill, as well as the two other members of the firm's board
who
had joined the firm in the '60s, Michael Cogan and Arthur Levitt Jr.
(who
just happened to be the son of the New York State controller in the
1960s,
Arthur Levitt Sr.) recessed the meeting to consult, reconvened the
meeting
and demanded that Carter resign from the firm immediately or the other
partners would fire him.  Carter agreed to resign adn Michael Cogan
agreed
to stay with the firm "only if his name replaced Carter's up-front,"
according to The New Crowd.  So after Carter's September 1968
resignation
from his Carter, Berlind & Weill firm, it became known as Cogan,
Berlind,
Weill & Levitt.

    Despite Carter's departure, Carter's former business partners
continued
to prsoper in the world of Wall Street during the '70s and '80s under a
variety of names produced by absorption of 10 other Wall Street stock
trading firms.  In 1970, Cogan, Berlind, Weill & Levitt became Cogan,
Berlind, Levitt, Weill, Hayden Stone.  In 1972, Cogan, Berlind, Weill,
Levitt, Hayden Stone became Hayden Stone.  In 1974, Hayden Stone became
Shearson Hayden Stone.  In 1980, Shearson Hayden Stone became Shearson
Loeb
Rhodes and then began to operate as the Shearson Lehman Brothers
subsidiary
of one of the companies which Henry Kissiner helps direct: American
Express.
Carter's old friend and initial Carter, Berlind, Pomona & Weill business
partner, Sandy Weill, continued to head the firm during these years, as
it
grew to the third largest stock trading firm by 1986, and he also served
as
the American Express Company's president between 1981 and 1986.

    Despite his resignation in 1968 from the firm that became American
Express's Shearson Lehman Brothers in the '80s, Carter remained on good
terms with his former Wall Street business partners.  When American
Express
held a black-tie party in May 1985 in Sandy Weill's honor to, according
to
The New Crowd book, "celebrate the 25th anniversary of the firm that had
begun as Carter, Berlind, Potoma & Weill," Nation owner Carter attended.
And as recently as May 27, 1991, Carter's New York Observer printed a
"news
item" in its "Arts Digest" column which stated that "Sanford I. Weill,
the
investment banker for whom Weill Recital Hall was named, will succeed
James
D. Wolfensohn as chairman of Carnegie Hall"--but did not mention that
Weill
was the former business partner of the New York Observer's publisher.

     end of 1