ON WALL STREET: Coudersport, population, 2,650, is the epitome of small-town America, the kind of place featured in Hollywood movies like Back to the Future.
Situated in wooded Potter County (known as God's Country) in Pennsylvania, it has a Victorian main street and a renovated single-screen cinema called the Coudersport Theatre, currently advertising The Rookie, a baseball movie with the theme, "If you don't have dreams, you don't have anything."
A three-storey building with granite columns and marble facing on North Main Street sets Coudersport apart however. This is the US headquarters of Adelphia Communications, a cable company founded 50 years ago with a $300 bank (€323) overdraft by the cinema owner, Mr John Rigas. The 77-year-old son of Greek immigrants fulfilled a dream of making the company one of the biggest cable operators in America by acquiring systems as far away as Los Angeles. But he never left Coudersport, despite pressure to move his HQ to a city, and lives with his wife Doris on a 10,000 acre landscaped property called "Wending Creek Farms" with its own championship golf course.
Over the years Mr Rigas became a local hero, employing 2,200 workers. He dispensed patronage, providing the company jet to fly a security guard to Cleveland for cancer treatment, and the dying daughter of a cleaning woman to Denver to see a faith-healer. He paid towards the renovation of the Lady of Justice statue on the courthouse and the monument to the Civil War which claimed half the adult males of Potter County.
"There are a whole bunch of little things that the family or the company sponsored," said Mr Donald Gilliland, managing editor of the weekly Potter Leader Enterprise (circulation 9,000). Everyone knew him. Many people remembered him from the 1950s "when he didn't, as they say, have a pot to piss in". When he walked down Main Street people would respect his privacy, and "he'll be the one to stop and say 'how are you doing?'" Adelphia's founder was as important a corporate citizen for Coudersport as Kenneth Lay of Enron was for Houston.
Unfortunately, Adelphia is now itself facing an Enron-style scandal, leaving Coudersport as stunned as Houston. On March 27th it emerged that Adelphia might be liable for some $2.3 billion in "off-the-books" indebtedness. A SEC filing on Friday, downloaded and passed around like a best-seller, reveals that company wealth enriched the Rigas family to the tune of $3.1 billion. Unknown to the directors, the family used a company Cash Management System as a personal bank.
Adelphia paid for two Manhattan apartments, occupied by a daughter who received millions of dollars for her film production company, and her husband who got $1.3 million a year to run a Rigas-backed venture capital fund. The Rigas family bought $1 billion in stock last year at prices set by a board committee of family members, and took $174 million to pay for margin calls after the stock fell in March. The company paid $12 million for furniture from a store owned by Mr Rigas, possibly at higher-than-market prices.
Adelphia also funded Rigas's Buffalo Sabres ice hockey team, the golf course, and possibly vacation homes in Colorado and Mexico. Such transactions were hidden through an Enron-type network of private partnerships.
Last Wednesday, the outside directors took over and Mr Rigas and other family members resigned and agreed to repay the company $1.2 billion. Mr Rigas also faces two grand jury investigations. The atmosphere in the upper echelons of Adelphia is "venomous" with everybody "trying to figure out how to stay out of jail", according to a company source quoted by Mr Gilliland.
The reaction of townspeople has varied. "In general it was not a huge surprise, but the specifics were a shock," said Mr Gilliland. The biggest fear was the devastating effect on jobs and the local economy. However, Mr Rigas is remembered for his many acts of kindness, and a number of business owners took out an advertisement in last week's Leader Enterprise. It said: "Thank you John Rigas for all you have done for our community in the past 50 years."
