By Chris Lane
By Jeff Balke
By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
Edwards set up several subsidiaries, provided them with sumptuous office space at 600 Jefferson and hired friends and relatives to run them. The most ambitious was BCI Learning Systems, headed by Reed Amadon, who had known Edwards since their involvement with a Lufkin trade school years earlier. The company had a single product: an adult literacy software package called BCI Connections that was designed for non-native English speakers.
Amadon peddled the software for months throughout North and South America, often flying to make a personal pitch, with almost no success. Edwards furnished a list of ten nonprofits he said purchased the package, but half of those say the product was donated. Of the remainder, only three had confirmed their involvement by press time, and they collectively spent less than $20,000 for multiple copies. Edwards says the project cost BCI about $250,000; other sources cite a figure closer to $1 million.
As BCI's cash crunch worsened, Amadon started giving the software away to whoever would take it. "The program ceased costing us money at that point," Edwards says. "We basically shut it down."
He also shuttered Brittan Oil and Gas Inc., affectionately known as BOGI Oil. Conceived as a way to generate "another income stream," he says, BOGI Oil was headed by his father-in-law, Gene Doremus, who had experience in the industry, and another friend. The company acquired a lease and did extensive geological testing on a site in early 1997, but BCI ran out of money without ever drilling.
Another casualty was Brittany Services, a firm that marketed itself to other telecommunications companies needing help with data entry, customer service and other clerical functions. Manager Jackie Shelton flew around the country exhibiting Brittany at trade shows and other events but never garnered a single client. However, Shelton did manage to give away thousands of little clocks, binoculars, Koozies and other promotional freebies. "They spent a lot of money on their gadgets," says former administrator Susie Taylor.
BCI attempted to resurrect Brittany in mid-1998, reinventing it as a Web-site design firm that actually signed up two clients before the parent company nose-dived.
As complaints of slamming riddled the long-distance industry, several states began to require corroboration of customer switches through independent third parties. Sensing yet another golden goose, BCI developed a software program for several hundred thousand dollars under Brittany's name, purchased a bunch of computer equipment and leased the whole thing to a company called Third Party Verification Services, Inc. (TPV). TPV could fill the growing demand, and BCI would benefit indirectly.
TPV had only one customer during its existence: BCI. And had regulators known the details of the relationship, they might have scuttled it -- TPV was owned and operated by John Edwards, Jim's brother. "It always struck me as fraudulent that the supposed third-party verification was done by the brother of the CEO," says former public-relations director Steve Long.
Edwards defends the arrangement. "It did meet the definition [of third party], in that BCI did not own any part of his company," he says. John Edwards allegedly sold TPV to another outfit in 1998, and it disappeared off the radar shortly thereafter.
Edwards guesses BCI invested "something south of a million" in the various spinoffs. Others quote a figure of closer to $4 million, including development, salaries, equipment, marketing, travel and perks. Either way, the schemes were a total loss. "Jim didn't know how to manage his money," says former computer-systems manager Toby Hynes. "He just didn't know when to quit."
-- Bob Burtman