By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
By New Times
That may be true, though Harrod and Hap deny it. But there's evidence that the deal had threads of legitimacy.
Harrod first had been to China in early 1986, as a middleman in a deal orchestrated by Valley attorney Gilbert Montano.
A former prosecutor, Montano convinced two Denver men to invest $50,000 in a prospective shrimp-farming venture in China's Yantai Province.
Hu had connections in China, a difficult country for foreigners to engage in commerce. Exactly what Harrod brought to the table is unclear. But records show Montano paid Harrod $4,000 a month in late 1985 and early 1986 to help with the shrimp deal.
Harrod's passport indicates he spent about three weeks in China and Hong Kong, during which he and Hu won a coveted "letter of intent" from the Chinese government to do business.
But Montano had illegally pocketed much of the investors' $50,000, and the project evaporated before one shrimp ever saw the barbie. A Maricopa County grand jury indicted Montano in June 1986 on fraud and theft charges, and prosecutors recruited Butch Harrod as a potential witness.
(Montano plea-bargained, then fled before his scheduled sentencing in January 1987. He remains a fugitive.)
An investigator in the Montano case wrote in July 1986 that Harrod feared "his reputation and ability to deal with the Chinese government has been damaged severely . . ."
That didn't stop Harrod and Jason Hu from signing a 20-year contract with Hap Tovrea on March 15, 1989. That day, the trio flew to China, ostensibly to investigate prospects for sulfur mining.
The contract called for MECA to pay Harrod and Hu an unspecified amount for services and expenses. If the project took off, Harrod and Hu stood to collect a percentage of the royalties.
The trio spent about three weeks in China. Harrod says he and Hap shared a hotel room during their stay. His descriptions of Hap (whom he calls by his given name, Ed), the China deal and their relationship evolved over a yearlong series of interviews with New Times.
June 1996: "We weren't falling-down-getting-drunk buddies, but I got to know him living in the same room with him. He was not what you call a spending fanatic. Ed's kind of a Southern California, laid-back guy. There's not the greed that I've seen in some people. He's a nice guy. What went wrong with us over China was business, not personal."
August 1996: "He's fairly articulate. He's got this air of assurance--but more from the money he's had backing it up. He's pseudosophisticated or Phoenix-sophisticated--a standard level of arrogance for a trust-fund baby."
December 1996: "Ed thought big because his predecessors did big things, but there was a distinct difference between them: He talked big and they did big. Ed was pampered--you could tell he wanted to scratch the dirt, but that's hard when you get your nails manicured."
February 1997: "It could have been, should have been a deal worth multimillions of dollars. If someone comes back and says, 'Why were you upset with Ed?' Basically, I wasted a lot of time and effort. They're trying to make it look like we put this little package together real quick, so we'd have, quote, a cover for the big payoff on the murder. This was a real deal. Sometimes you get the ring, sometimes you don't."
The sulfur project died as abjectly as the shrimp-farming project had died.
If Harrod testifies at his trial, he'll surely be asked to explain what he did to merit payments from Hap and MECA for 15 months after he returned to the States in April 1989.
Records show MECA paid Harrod $13,300 throughout 1989 for "consulting" fees related to the China trip.
Jason Hu was paid $11,000 by MECA, with payments ceasing that July. That's when the payments to Hu--arguably more important to any deal that might be struck in China than Harrod--stopped.
In September 1989, MECA's board of directors met in a special session chaired by Hap Tovrea. The minutes of that meeting take note of the China deal:
"The chairman noted that the exploratory agreement with its agents in re the possible exploitation of sulfur deposits in the People's Republic of China have been placed on indefinite hold in light of the tumultuous political situation [the June 1989 student rebellion] there."
But Hap's records suggest he continued to pay Harrod for "consulting" work on the China project until July 1990. According to Hap's check stubs, MECA paid Harrod at least $21,000 more after the September 1989 board meeting. It isn't clear who those checks were made out to--only that they were deposited in unspecified accounts in San Diego-area banks.
Authorities suspect that the continued payments were for services rendered not in China, but at Lincoln Hills Estates in April 1988.
Harrod is adamant that $13,300 is all Hap Tovrea ever paid him; records examined by New Times don't show whether he actually collected the extra thousands put into the San Diego banks.
"I never got any $35,000 from Hap," Harrod says, "though I had it coming to me per the verbal part of our agreement. I'd like to see my signature on any of those checks. Sounds to me like he might have been funneling some money to himself and then putting my name on his register."