The Men Who Made Rosslyn
IT STARTED OUT AS NOTHING MORE THAN A BLIP in the budget of Arlington County. The County Treasurer had been informed of a sudden shortfall in real-estate-tax collections, and it was enough to throw Arlington’s balance sheets out of whack, perhaps by as much as a million dollars. In the early autumn of 1972, no one within the county government knew exactly why, save for the statistic that a larger-than-usual number of development companies were delinquent. Some owed the county more than $100,000 in back taxes, interest, and penalties.
In just 18 months, in fact, the delinquency rate on real-estate taxes in Arlington County had jumped from about 2 percent to 4 percent. The tax rolls themselves yielded only a single clue, but it soon would help solve the puzzle. A curiously high number of delinquent corporations were named after 19th century American presidents; they controlled high-rise office buildings and other commercial properties along the Jefferson Davis Highway near National Airport and on a prime parcel of lucrative land called Rosslyn.
Nearly 100 years earlier, in December 1877, gold had been discovered at the foot of the Aqueduct Bridge (predecessor to the Key Bridge) in Rosslyn, and the mine would make some minor fortunes for several years thereafter. But by 1960, a new breed of prospectors had moved into Rosslyn to mine what was, for one decade, the mother lode of Washington real estate. For too many years, it had been only an unsightly and neglected niche of acreage, a not-so-vast wasteland of roughly 20 city blocks, waiting to make mounds of money for those in the right place at the right time. In short, Rosslyn was a developer’s dream come true.
At the urging of a progressive and politically sensitive county government eager to expand the nonresidential tax base, a few savvy developers began rebuilding Rosslyn from the bottom up, turning tracts with abandoned warehouses, freight yards, and used-car lots into the foundations of high-rise office buildings of concrete and steel and glass. Developer Bill Brakefield had taken the plunge first, in 1960 completing a four-story, 27,424-square-foot office building at 1901 North Moore Street. Other well-known developers — Nick Antonelli and Kingdon Gould, Charles E. Smith, and Fred Gosnell, for example—moved in, too, with even more ambitious projects.
But through most of the 1960s, the undisputed wizards of Rosslyn were Louis J. Pomponio, Jr., and his younger brothers, Peter and Paul Pomponio.
When Rosslyn’s old Consumer Brewery building was leveled by the wrecker’s ball in 1958 to make room for the Marriott, the three Pomponio brothers decided to tear down the family’s plumbing-supply warehouse nearby and build a seven-story, $3 million office building; Louis was only 29 and his brothers 27. Within the next three years, the Pomponios put up two more buildings of 12 stories each on the site. There would be many more.
By 1969, the Pomponios were announcing plans for a $100 million complex of office, commercial, and apartment buildings on the site of the Shirlington Shopping Center, also in Arlington, a project so massive it was to rival Rosslyn and the entire Crystal City complex along Route 1. Their architect talked about building an entire city unto itself, transforming what had become almost a mercantile ghost town into one huge, snake-like 12-story building assembled entirely from precast concrete forms. Had anyone else proposed it, this gargantuan and grandiose redevelopment scheme might have been received as preposterous. But the Pomponios seemed to have the Midas touch and the evidence was sprinkled all over Northern Virginia.
Beyond Rosslyn, the biggest Pomponio project was National Center in Crystal City, a $94 million complex of office and apartment buildings that was to be joined by another “minicity,” National Center H, just coming off the drawing boards. More than anyone else, the Pomponios had reigned over the remarkable renaissance of Rosslyn, and now they were presiding over the wholesale and lightning-fast makeover of sizable stretches of Northern Virginia real estate.
Among their holdings at National Center were five high-rise office buildings that, along with two projects still under construction, the Buchanan House Apartments and the Stouffer’s Inn, showed up on Arlington County’s tax-delinquency rolls in 1972: the Millard Fillmore, Rutherford B. Hayes, James K. Polk, Zachary Taylor, and Martin Van Buren buildings.
Washington newspapers broke the story in September 1972, and it was the public’s initial inkling that the Pomponio empire might be in some sort of financial trouble. (A federal grand jury in Alexandria had been investigating a number of Pomponio-controlled corporations for possible federal tax violations, but the probe had not yet received more than footnotes in the press.) It remained unclear whether the Pomponios were simply in the squeeze of temporary cash-flow problems or whether they were seriously, and perhaps irreversibly, overextended. Severe rains and floods had pushed back construction schedules, heightening the damaging effects of inflation on payrolls, building materials, and other construction costs. In the face of rapidly escalating expenses, existing construction loans were no longer adequate to finish projects already underway; the federal tax investigation and resulting publicity only compounded the problem by giving some potential investors the shakes. Within months, the empire began to crumble; in a year or two, little would be left.
At its zenith, with more than 1,000 employees and at least $80 million in business annually, the Pomponio empire was one of the largest real-estate conglomerates in the Wasington metropolitan area. But as 1972 ended, the empire, almost inexorably, began to shrink: Creditors chiseled off chunks of it, banks and other investors threatened foreclosure, suppliers with unpaid bills went to court to collect, and other legal entanglements mounted.
For the first time in a decade, the Pomponios’ building bloom was off.
THROUGHOUT MUCH OF ITS HISTORY, Rosslyn could legitimately be called little more than the hellhole of the nation’s capital. It was a downright awful place, a venal haven for the worst Washington had to offer. Every imaginable brand of illicit activity thrived there, under the watchful eye of no one in particular, deservedly bringing to Rosslyn its reputation as a squalid little outpost of crookedness and sin.
Its sorry state was such that by the late 1950s, when loan sharks and pawn shops had come to dominate Rossyln’s landscape, most of those with any kind of reliable memory had to admit it was a vast improvement. History hadn’t been kind to Rosslyn.
In the early 1800s, many major Virginia roads converged where Rosslyn is today for a ferry-boat connection across the Potomac River to Georgetown. The proprietor of the ferry service, John Mason, plotted out a little town there — then part of the District of Columbia — and named it South Haven. But Mason went bankrupt, and other schemes to develop the area met with similar fates.
If it had not been for Joseph Lambden, Rosslyn might still be known as South Haven. In 1860, upon the marriage of his daughter Caroline to William Henry Ross, Lambden gave his son-in-law a large farm overlooking the Potomac River. The Rosses, who named the farm Rosslyn, did not stay long. They were driven from their home when federal troops occupied Arlington during the Civil War, and eventually wound up in France. In 1869, the Rosses sold their farm to a group of investors who formed the Rosslyn Development Company, acquired some additional acreage, and resold all of it as lots in the “Town of Rosslyn.”
This ambitious plan did not work, for the simple reason that no one wanted to live in Rosslyn. By the 1880s, it had become the stronghold of what some charitably called “criminal elements.” Gambling dens, saloons, and whorehouses proliferated in Rosslyn proper, along with politicians paid to protect them. A deep, bowl-shaped gully on the river bank right below one gambling house earned the nickname “Dead Man’s Hollow” because corpses turned up there almost every week.
By the early 1890s, the situation had gotten so bad that Arlington farmers, returning from selling their produce in Washington, found it advisable to form armed convoys in Georgetown before crossing the Aqueduct Bridge and passing back through Rosslyn.
In 1911, John Roll McLean, publisher of The Washington Post, founded the Washington & Old Dominion Railway, which brought a streetcar line across the bridge from Georgetown into Rosslyn and then out to Great Falls, Virginia. It was heralded as the key to Rosslyn’s prosperity. As it turned out, the streetcars did bring plenty of new patrons into Rosslyn businesses, including those of the illicit variety, operating out of the reach of the law in the Potomac River.
Floating casinos — with blackjack, craps, roulette, and faro — operated under the shadow of the bridge in Rosslyn, while other barges — usually those marked by blue shutters — were floating houses of prostitution. They prospered until the mid-1920s, when the federal government began clearing out waterfront land to begin construction of the George Washington Memorial Parkway.
The eventual collapse of interurban streetcars in the 1930s and ’40s left Rosslyn even worse off. The trolley line was converted into a switch line for railroads, creating a large freight yard on the fringes of Rosslyn. With cheap transportation and large expanses of land for storing gravel, construction equipment, junked automobiles, and the like, Rosslyn began to resemble a large industrial dump pile. In a few areas, the only symmetrical structures were huge oil-storage tanks.
Rosslyn, in short, had been victimized by its own economic base, and by the 1950s, the downtown area had come to be populated largely by such engaging enterprises as pawn shops and E-Z loan outfits. Palm readers and assorted spiritualists held court in Rosslyn, alongside transient hotels, sleazy saloons and the like. By night, downtown Rosslyn was a sea of garish neon lights and glowing billboards; by day, it was merely an ugly mess that most Washingtonians did their best to avoid.
“With some exceptions,” the Arlington’s planning board soberly reported of Rosslyn in 1957, “its general appearance is no credit whatever to the county.”
THE POMPONIO REAL-ESTATE EMPIRE HAD ITS ORIGINS in a plumbing-supply business started by Louis J. Pomponio, Sr., the youngest child of a South Plainfield, New Jersey, carpenter. He had brought his family to Arlington in 1936, buying two small stores in Rosslyn and starting the A & H Plumbing Supply Company, which eventually became one of the largest plumbing-supply wholesalers in the Washington metropolitan area. He was president of A & H until 1960, when he retired, shut down the business, and became a consultant to his three sons and chairman of the board of their firm, the Pomponio Brothers Construction Company.
“He firmly believed that Rosslyn would, in time, be a site for office buildings and apartments,” Louis Pomponio, Jr., said in 1964, “and he impressed that belief upon me and on my brothers.”
Land values in Rosslyn had started an upward climb in the early 1960s, when 50 acres of poorly used property were lopped off for Interstate Highway 66, leaving only 37 acres for commercial development. But the real high-rise boom was ignited in 1962 when the Arlington County government, at the urging of its planning staff, approved a system of zoning incentives called the “site plan approval procedure.”
Within the new “C-O” (commercial-office) zoning district, developers were given two choices. They could escape virtually all government red tape by keeping their new office buildings to 35 feet in height. Those willing to submit their development plans to the government and make concessions to Arlington County’s fiscal health, however, could be granted a bonus: permission to build up to 12 stories.
This carrot-and-stick system worked its wonders quickly. Within two years, the Arlington County Board had approved site plans for about half the land in Rosslyn suitable for development. By 1967, 19 high-rise office buildings had gone up in Rosslyn with the C-O classification; all but one climbed to the 12-story maximum.
Arlington residents disturbed about Rosslyn’s monolithic metamorphosis had few grounds for griping. The county had sought condemnation powers through the establishment of an urban-renewal authority, but voters had rejected the plan in referendum. They wanted Rosslyn cleaned up, but told local politicians they didn’t want to pay for it through increased taxes. To support Rosslyn’s redevelopment, capital expenditures were needed for easements, street paving and lighting, sidewalks, sewer and water lines, pedestrian bridges, and so forth. As a political and fiscal necessity, the county’s new zoning system transferred many of these investments in Rosslyn’s infrastructure to private developers as a cost of building there.
In the first 15 years of the Rosslyn Master Plan, the county estimated that at least $18 million had been pumped into capital improvements, with Arlington picking up a little less than one-third of the tab and private developers like the Pomponios paying for the rest. Moreover, the county government assured voters that its investment would be recouped through the resulting increases in revenues from commercial real-estate taxes.
Arlington County’s open-arms attitude toward private developers made Rosslyn an ideal springboard for success, and the Pomponio brothers moved more quickly — and less cautiously — than any other company. Their own original master plan was to turn the family’s Rosslyn warehouse into the site of three modern, high-rise office buildings — the Lynn, Donata (named after their mother), and Pomponio — with a total of 31 stories and more than 234,000 square feet of space.
The development of this complex was largely the vision of Louis Jr., the oldest son, who had graduated from the College of William & Mary in 1954 with a business degree (he also had been a football star there). For years, he and his brothers had gotten up before dawn to load delivery trucks at the Pomponio warehouse. But in college, he began spending long evenings talking with his roommate about his dream of fashioning a small city of office buildings around the site. After returning to Rosslyn and the family business, that dream only intensified.
“Lou got the bug,” one acquaintance told a newpaper reporter in 1972. “He had been to college, and here he was hustling pipe, driving a truck around at three o’clock in the morning, and he said to himself, ‘There must be a better way to make a living.’ ”
There was. As president of the Lynn Equipment Company, a family subsidiary, Pomponio obtained a permanent loan and then arranged construction financing of the Lynn Building from Riggs National Bank, which also would provide the construction loan for the Donata Building. (Construction financing for the third building in the complex, the Pomponio Building, came from the pension fund of the International Brotherhood of Electrical Workers.)
As the business mushroomed, Louis assumed responsibility for general planning, as well as the acquisition of land, financing, and actual construction. Peter Pomponio, with a degree in engineering, handled building design and supervised construction on the sites; Paul, his identical twin brother, had earned a degree in business administration, so he took charge of the leasing and maintenance operations. In 1965, Louis Pomponio lured his former college roommate, Charles J. Piluso (the two had been nicknamed “Heckle and Jeckle” at William & Mary), away from his Ellenville, New York, law partnership to join the Rosslyn firm as counsel and business partner.
From a 12th-floor penthouse headquarters in the Donata Building, the Pomponios were doing much more than directing the day-to-day operations of a highly successful realty and construction company. They were building an empire.
THERE WAS NO REAL SECRET TO ROSSYLN’S RAPID RISE SKYWARD. It was a perfectly situated slice of Northern Virginia land: close to downtown Washington, close to National Airport. Rosslyn’s boundaries could not be broadened: Tt was neatly hemmed in by the Potomac River to the north and east, by Arlington National Cemetery to the south, and by a forested residential bluff to the west. At the beginning of the 1960s, all that was needed was to wipe Rosslyn’s slate clean and start from scratch.
By laying out the welcome mat for private developers, Arlington County did exactly that. Land could still be gotten in Rosslyn for $2 per square foot, though that figure would skyrocket to $25 within six years. (Today, that same land is worth up to $75.) Money was easy to find at low interest rates — those were the good old 5 percent or 6 percent days in the lending industry. And inflation, which would become the scourge of the construction industry in a decade or so, was virtually unnoticeable. All things considered, the invitation to rebuild Rosslyn was more than tantalizing. It was irresistible.
The rush into Rosslyn also was accelerated by the federal government, which was having trouble finding new office space in the District of Columbia. In downtown Washington the office vacancy rate was just 0.4 percent, and the price was high. Government agencies, bureaus, and commissions deserted Washington for Rosslyn lock, stock, and barrel, filling up entire floors at a time. They were not always the most desirable tenants, but they signed long-term leases and brought along with them some blue-chip hangers-on: trade associations, consulting firms, computer service bureaus, and so forth.
In just a few years, with the advent of the Great Society, the federal bureaucracy bulged as it never had before — in the process spilling tens of thousands of white-collar workers into the brand-new office buildings just beyond the perimeters of Washington. With Rosslyn slated for a Metrorail stop, growth could only continue.
The Pomponio brothers were fortunate to have positioned themselves on the pulse of this change. Their original Rosslyn complex was completed by 1964, but they put up other high-rise office buildings nearby in short order: the Architects Building in 1965, Pomponio Plaza in 1966, the Rosslyn Commonwealth Building in 1967, and Pomponio Plaza East in 1968. The Pomponios had acquired sites for two more 12-story office buildings, but their Rosslyn record already was amazing: seven buildings in eight years, with 1.8 million square feet of space and garages that parked thousands of cars a day. In their 20s, the Pomponio brothers had donned construction clothes to help dig the foundation of the Lynn Building; in their 30s, they were, at least on paper, millionaires.
Theirs was the name most closely identified with Rosslyn’s renaissance, and rightfully so: The Pomponio portfolio included fully one-third of Rosslyn’s new high-rise office buildings. Louis Pomponio had been Rosslyn’s earliest and most effective evangelist, but he and his brothers had realized that room was running out. The suburban sprawl had not slowed one whit; if anything, its pace was even more frenetic than ever. Competing developers were staking new claims left and right, not only on the fringes of Washington but beyond the Beltway. In their search for superlatives, the Pomponios settled on a particularly bold stroke: to create a clone of Rosslyn.
They called it National Center, and proposed to put it on an $8.5 million, 17-acre stretch of land running along the Jefferson Davis Highway next to National Airport. The Pomponios had acquired the desirable parcel from John McShain, one of the nation’s leading contractors (he was building the Kennedy Center for the Performing Arts at the time), and for years it remained the most expensive land transaction in the history of Arlington County. The $94 million project was designed to include five huge office buildings (with 1.5 million square feet of space), a 433-unit luxury apartment house, a 500-room hotel, an underground parking garage for 5,000 automobiles, and another 250,000 square feet of commercial space.
“By the time we got to National Center, we had virtually totally integrated our construction activity,” Louis Pomponio recalled years later. “We did our own sheet metal, our own sheet-metal fabrication, assembled our own elevators, our own batching trucks, concrete trucks, made our own precast walls, had our own architectural staff of about 80 men, and an organization by 1969 that was about 2,000 people!”
Much of National Center was built at breakneck speed, reportedly because the Pomponios had promised the General Services Administration to do so in exchange for its commitment to lease about two-thirds of the complex’s office space for the U.S. Navy. The around-the-clock schedule enabled some plumbers and carpenters to pull down more than $1,000 a week. But the job got done, albeit expensively: the 600,000-square-foot Zachary Taylor Building, said at the time to be the largest privately owned building in Northern Virginia, was finished in barely more than six months.
As the 1960s ended, the Pomponio brothers were billing themselves as “Creators of New Skylines.” Their companies had built and leased properties throughout the Washington metropolitan area valued at more than $100 million. The two principal firms were the National Realty and Construction Company, Inc., which provided management and leasing services for the buildings once they were completed. At least a half-dozen subsidiaries did the electrical work, carpentry, precast concrete forms, and other trades. There were perhaps two dozen more Pomponio corporations that owned land and buildings, plus one subsidiary to oversee and service the Pomponio parking facilities. One corporation even was set up exclusively to operate a private jet.
With intense enthusiasm and a quiet, almost soothing voice, Louis Pomponio was the trio’s most skillful salesman. His relaxed and reassuring smile betrayed no traces of arrogance. On average, he flew to New York City three times a week to meet with existing and potential financial backers. While in Washington, his preferred place of business was not a corporate board room, but a table at Georgetown’s Rive Gauche restaurant.
In contrast to their upbringing in a modest Arlington apartment, the Pomponios surrounded themselves with all the accoutrements of success, including an executive gymnasium in the Donata Building, chauffered limousines, and a Dunhill cigar bill that ran into the thousands of dollars. They were said to give potential investors the red-carpet treatment, on occasion flying them to the Caribbean for fishing trips or taking them to New York’s Madison Square Garden for big boxing matches.
As they were getting ready to unveil their two biggest and most ambitious projects to date — the $100 million redevelopment of the Shirlington Shopping Center and the construction of National Center II — everything was looking up for the Pomponio brothers. “They were just hitting their stride,” one official who knew them told a newspaper reporter. “They not only had all the confidence in the world, they showed it.”
BEHIND THE FAÇADE OF BOUNDLESS ENTHUSIASM and expansion however, there were worrisome — and mounting — financial difficulties. Perhaps, as some said, the Pomponios simply had built too much too quickly. In any event, they discovered, as Washington’s Harry Wardman had nearly 40 years before, an important real-estate rule: the multiplier effect that helps fashion fortunes on the way up works just as powerfully on the way down.
The Pomponios methodically tried to contain the damage to the bottom line. They resorted, in a rather orderly way at first, to shore up the sagging corners of their empire with every skill, every tactic, every strategy they had learned on the fast track to the top. But the tremors rippling through their vast corporate network soon added up to an earthquake: There were too many creditors to pay, too many potential investors hemming and hawing, too many leaks to plug. The slide was greased for the descent.
The problems started with higher-than-normal construction costs, as the Pomponios rushed to meet occupancy dates promised to tenants by paying thousands of hours in overtime at premium wages. Bad weather would later push back construction schedules on other projects, forcing either more overtime wages or longer “carries” on construction financing. To pick up needed mortgage agreements, the Pomponios apparently were signing too many long-term leases with federal agencies at rates well below what the market actually would bear. It only compounded the problems. (Their competitors blanched, and lost plenty of deals, but later found the market was deep enough for them to stand firm at higher prices.) At the same time, inflation was mercilessly driving up the costs of construction, energy, maintenance, and professional support services. And each month of higher costs came closer to wiping out the Pomponio empire’s narrowing line between profit and loss.
Finally, earlier financial transactions yanked wildly at the foundations of the Pomponio empire. Delayed mortgage payments that seemed manageable a few years earlier suddenly converged on the cash-strapped conglomerate, which had lost at least two important financial backers. The first, Joseph Resnick, the multimillionaire inventor and manufacturer of the pre-assembled television antenna (“rabbit ears”), had died in 1969. Later, loans from the Royal National Bank of Manhattan, the Pomponios’ principal lending institution, were suddenly cut off when it merged in 1972 with the Security National Bank of Long Island. (The Pomponios already had reached Royal’s lending limit.) So by 1972, there simply wasn’t enough money in the Pomponio empire to pay off mountains of debt.
But the most devastating blow may come from the Internal Revenue Service, which since mid-1970 had a small army of agents (up to 15 at some times) poring through financial records in the Pomponio offices. On November 29, 1971, a special grand jury was impaneled in Alexandria to look into the tax practices of companies controlled by the Pomponios.
The grand jury soon had subpoenaed corporate tax records, and was expected to study them for at least a year before deciding whether to return any indictments. By the following September, the news broke that a number of Pomponio companies were seriously delinquent on property taxes; in fact, they owed more than half of all unpaid real-estate taxes and penalties in Arlington County. Faced with a fiscal squeeze, Arlington County Treasurer Bennie L. Fletcher, Jr., was forced to arrange extra short-term borrowing to meet expenses. He filed a lien against the bank account of one Pomponio firm, and soon would be sending out letters to tenants in several Pomponio buildings telling them to pay their rents directly to the county.
Within a week, back taxes, penalties, and interest had been paid on several Pomponio companies, but a Boston firm took possession of two Pomponio office buildings in National Center, saying that July, August, and September rents totaling $173,250 had not been paid. By November, the brown-brick Rosslyn Commonwealth Building was scheduled to be sold at auction on the steps of the Arlington County Court House, but the Pomponios reportedly were able to avoid foreclosure by buying up the second mortgage.
Another wave of unfavorable publicity came as creditors went to court to collect money from Pomponio companies for unpaid bills. A North Carolina electrical supply firm won a $245,478 judgment against the Pomponios’ National Realty and Construction Company, Inc., and the Virginia Electric and Power Company won a judgment for $249,772 in unpaid utility bills for four Pomponio high-rise buildings at National Center. It was said to be the largest amount owed by any single Vepco customer at the time.
Through the rest of the year, creditors would continue to chisel away piece-by-piece at the Pomponio real-estate empire, composed of nearly four dozen separate corporations originally created to satisfy the demand of investors and financiers that each new project be otherwise unencumbered. More than four acres of prime land slated for development as part of National Center II were sold for $2 million at public auction. A New York bank, principal investor in the 14-story Columbia Plaza office building in Washington, advertised it for sale at public auction, as did investors in the Pomponio Plaza East Building in Rosslyn.
The zoning administrator of Arlington County revoked the occupancy permit of another Rosslyn high-rise, claiming the Pomponio company that owned it had failed to pay the county $30,000 for the construction of two elevated pedestrian walkways — as required by the approved site plan. American Century Mortgage Investors, based in Jacksonville, Florida, took control of three office buildings and the Stouffer’s Inn — together worth $24 million—at the National Center complex, saying that Pomponio companies had failed to make rent payments and defaulted on a mortgage.
THE IRS AND GRAND-JURY INVESTIGATIONS on top of the financial squeeze frightened away potential investors and dried up traditional sources of credit, leaving the Pomponios vulnerable to a crippling whipsaw effect. Years later, Louis Pomponio would blame the conglomerate’s troubles on those government investigations.
“We were virtually forced out of business,” he said. “A grand-jury investigation started in early 1972. The government agents went to all of our lenders, went to all of the individuals that we were dealing with, who were investors, went to all of our suppliers, and virtually started a run on the bank — a stampede.” The investigations also dashed any hopes the Pomponios might have had to bring in desperately needed capital through a public stock offering, which they had contemplated at least twice before.
In 1973, the Pomponios would be dragged even more deeply into a quagmire of legal difficulties. On September 24, the three Pomponio brothers and their attorney and business partner, Charles Piluso, were indicted by a federal grand jury in Alexandria on charges of tax evasion and conspiracy for allegedly using millions of dollars in corporate construction loans for other purposes.
Louis Pomponio, Jr., and his brother Paul also were charged with bribery for allegedly making cash payments and gifts of automobiles and decorating services to a former vice president of the Royal National Bank of Manhattan in exchange for his help in securing at least $75 million in loans between 1967 and 1972. In response to the indictments, the four issued a statement to the press that said, in part:
“No one ever likes to be indicted, but in this instance the indictments are almost a welcome relief. At long last we have been advised of the charges against us and we will have an opportunity, in turn, to defend ourselves before an impartial court. . . . There is no doubt in our minds of our innocence and that the ultimate outcome of these legal proceedings will once and for all times end all of the rumors, leaks, and gossip circulated in the press and elsewhere.”
The ultimate outcome of the government’s legal proceedings against the Pomponio brothers and Piluso, however, would not be resolved for another five years. The 113 individual criminal counts against the four of them were split into three layers of trials. The first, focusing on government charges of mail fraud, ended in February 1974 with guilty verdicts, but the convictions were reversed by an appeals court more than two years later because the judge had not asked jurors whether they had read potentially prejudicial newspaper accounts.
A second trial, encompassing the tax-fraud counts, centered on government allegations that the four Pomponio officers had used corporate funds to pay for such expenses as European vacations, tickets to Washington Redskins football games, flowers, liquor, and cigars, and to construct personal residences. Two days before this trial was to begin, Louis Pomponio, Jr., was hospitalized after suffering chest pains, so he was later tried separately on identical charges. Attorneys for the other three officers branded the government’s case “a patchwork of half truths, innuendoes, gimmicks, and red herrings,” but the juiry found them guilty of filing false income-tax returns. The following year, their convictions were thrown out by an appeals court but then upheld in 1976 by the Supreme Court.
In a third trial beginning in March 1974 and involving charges of using interstate commerce to further bribery, the charges against Peter Pomponio were dismissed by the judge, Paul Pomponio was acquitted by the jury, and Piluso was convicted.
Piluso, who was the first of the four to go to jail, eventually decided to testify against his former business partners in return for lenience from government prosecutors. Throughout the subsequent trials, the Pomponios steadfastly maintained they had never read legal documents — even ones they signed — because they trusted Piluso’s advice completely.
Louis Pomponio’s tax-fraud trial had begun in April 1974 and, after taking the witness stand in his own defense (unlike the other three), he was acquitted on all counts. Later in the month, however, he was convicted of bribing the former vice president of the Royal National Bank. Pomponio again had taken the stand to maintain that hundreds of thousands of dollars in payments and two automobiles were proper compensation for the official’s help in obtaining secondary financing and were unrelated to his bank’s construction loans.
A federal judge later suspended the jury’s guilty verdict because of technical errors in the indictments, but an appeals court upheld the conviction. In 1975, Pomponio was sentenced to three years in prison, and he began serving in 1977 after the Supreme Court refused, for a second time, to hear his appeal. In April 1978, after appeals were exhausted, Peter and Paul Pomponio would begin serving their prison terms, which Judge Oren R. Lewis refused to stagger so that one could oversee what was left of the family business.
FOR A WHILE, ROSSLYN HAD BEEN DUBBED “Houston-on-the-Potomac,” but the name did not stick. Little wonder, perhaps: Rosslyn has never been a city, nor even a town. It is an island of incongruity, the only place anywhere near Washington where a church rises above a gasoline station, where the architecture is even more mediocre than on K Street, and where there are few trees and oases of green. With few exceptions, Rosslyn opens at nine and closes at five.
For better or worse, though, Rosslyn will not change much. From across the Potomac, Rosslyn’s skyline is vibrant and striking, but the place itself still leaves something to be desired. The land is gone, the buildings are built, and Arlington County’s master plan has room only for tinkering, for fine-tuning here and there. Ten years after the collapse of the Pomponio real-estate empire, what sits on those 37 acres largely represents the vision of three brothers who believed Rosslyn deserved and could support something better than pawn shops, junk yards, and used-car lots.
In March 1981, the Pomponio name briefly surfaced in Washington newspapers as one of the last properties fell to the auctioneer’s hammer. It was a 200,000-square-foot Colonial mansion started in 1973 by the Chowning Development Company, a Pomponio firm, but never finished. Nestled on a six-acre estate off Chain Bridge Road in McLean, it had been assessed as the most expensive house in Fairfax County, featuring such amenities as a wine cellar that doubled as a bomb shelter (it was connected to an escape tunnel), an elevator, a third-floor ballroom, a swimming pool and freezing system for an ice-skating rink, and a stunning two-story foyer. The house, built for Louis Pomponio, had for eight years been an unwanted $2 million entry on the real-estate market. On auction day, it sold for $1.15 million.
Some of the Pomponio story is a mystery even today. For more than 10 years now, the Pomponios have broken their public silence only rarely to talk with reporters. Louis Pomponio, whose genius was largely responsible for transforming a family plumbing-supply business into a $100 million real-estate operation, occasionally works from a nondescript townhouse office in midtown Washington.
He and his brother Peter are proud of their role in the renaissance of Rosslyn, even though they are modest enough to give much of the credit to others. Even today, though, the imprint on Rosslyn is unmistakably theirs, and the Pomponio vision still churns out handsome profits for those who picked up the pieces.
This article originally appeared in the October/November 1982 issue of Regardie’s.
Bill Hogan