Thanks, Beverly, I don't think I'll do a book, but maybe an ET Article, or update the biography of Dodge on this site --which, frankly, is woefully inadequate.
Thinking out loud here-- another point about Valencia Development Company, consider this: the $480,000 paid to Valencia, which appears to have been run by Dr. Dodge's father-in-law, or other relative, Nathan Vidaver, in connection with the $1,600,000 sales of Poulsen's rights to the U.S. government, was a 30% commission. Dr. Dodge's share of that was purported to be 11% of the $1,600,000, or $175,000. Aside from the self-interest conflict on Dr. Dodge's part, and duty of loyalty issues, does this seem like an usually large finders or brokers fee for Valencia to take?
Notably, Federal Telegraph was controlled by a voting trust. Additionally, directors of companys are like trustees of a trust. As such, they have duties of full disclosure, not to act in their own interest at the expense of the trust, a duty of loyalty, etc. Now, given the amount of money involved, and Dr. Dodge's family connections, the Valencia commission looks very suspicious, even tainted.
Sometimes, company directors get away with stuff like this because the value of the company is so enhanced by the insider transactions, that nobody complains. But here, the company's value went way down --and shareholders started to inquire about why. Taking the commission looked like a milking of the company's assets.
I would like to learn more about Dr. Dodge's side of the story. Perhaps there was full disclosure to the company's other directors, and shareholders, about Valencia. The fact of Valencia's commission, and its connection to Dr. Dodge may have been no secret. With full disclosure, and approval by a quorum of directors not including Dr. Dodge, the transaction may have been okay.
Further, perhaps Dr. Dodge did a lot to earn this commission. Nathan Vidaver, perhaps, had some key connections in Washington, D.C., that enabled the sale. I'm sure that Dr. Dodge would have offered at least some basis or justification for his receiving this fee.
That aside, it's hard to figure out where Dr. Dodge was coming from--other than from the vantagepoint of greed. Valencia may have just been the alter ego of Dr. Dodge, and in effect, he created a shell to look like a separate entity and was paying himself a huge bonus with the $480,000 commission.
But even if he really didn't do anything illegal, or improper, in a technical sense, Dr. Dodge's actions are still hard to fathom. He was always very concerned with his honor, and the appearances of things that might implicate his honorable reputation --but this Valencia thing looks very questionable, just on the surface, i.e., a family controlled entity gaining a 30% commission from which Dr. Dodge receives nearly half, from a sale of a assets of a company Dodge controls. Didn't Dr. Dodge think about how all this would look to the shareholders, or the public? Did he think that by having the money funneled through a shell that no one would ascertain what went on?
He also, when serving as President of Federal Telegraph, sold his shares of stock at $15, when everyone else just took a bath on it. As president of the company, he obviously had superior knowledge about what the company's value was, realistically. Didn't Dr. Dodge think about how that would look?
Maybe, like Titanic, this is a story of arrogance of power, and fish. The big ship was in control of its fate and there is no destiny to worry about. Dodge, Hopkins and the others believed they were firmly in control of Federal Telegraph Company, because they controlled the voting trust (created in 1911). They could do as they pleased --take commissions and whatever else- because they were "unsinkable." But the first thing that the guys in New York got rid of was that voting trust. As such, there's always a bigger fish.
