California: The ABAG Caper

Tom Truax had the background and personality—not to mention the foursquare name—to succeed in government. Son of a U.S. Commerce Department official and son-in-law of a California municipal judge, the husky, crew-cut six-footer was graduated with honors from San Jose State College as a political-science major. Three and a half years ago, he landed an executive job with the newly formed Association of Bay Area Governments, a government-funded organization that was pioneering a regional approach to Northern California’s problems. As it turned out, ABAC might have been designed to finance the flings of Tom Truax.

The budding bureaucrat has been missing since Feb. 8 from his Berkeley job. Missing with him, at last count, is more than $600,000 from ABAG’s coffers. Investigators charged that, while ostensibly grappling with such area-wide concerns as water conservation, smog control and sewage disposal in his $218-a-week post as ABAG’s No. 2 man, Truax, 26, was also trying to beat the system in Las Vegas’ casinos. He lost “at least $200,000” at one casino, says California Assistant Attorney General Marshall S. Mayer, and perhaps more than that at several others, where he was known as a generous tipper and a big, if unlucky, chemin de fer player.

Brown-Paper Bonanza. Apparently it was absurdly easy for Truax to bilk ABAC. The organization had started out as a struggling discussion group seven years ago, depending on small fixed donations from its membership, which now numbers 87 cities and eight Bay Area counties; its financial practices were informal to the point of being nonexistent. In 1965, the new U.S. Department of Housing and Urban Development decided to back ABAG’s cooperative philosophy, named the embryonic outfit its regional planning agency and showered it with lucre. All told, HUD gave ABAC $1,080,000, sending checks in plain brown envelopes without prior notice, according to Truax’s boss, ABAG Executive Director Warren Schmidt. For the past 13 months, Truax apparently had been treating the brown-paper bonanza as personal mail. Investigators said that he had deposited the checks—including one for $399,649—in bank accounts under various names. In Las Vegas, he was known as Troy Thompson and carried a California driver’s license in that name.

His exposure came only after an inquisitive gambling-syndicate man from New York hired a private detective to learn how the young big spender was bankrolling his betting. Reporter Dick Carlson of San Francisco’s KGO-TV got wind of the quiz, did some probing on his own account, and became convinced it was a matter for the state Attorney General’s office. Within hours after examining the agency’s books, the hawkeyes latched onto the ABAG leakage, but by then it was already too late. Truax had fled, and ABAG, which had held such glowing promise for regional planning and cooperation, was now flat broke and appeared headed for extinction.