The Brothers Graham (Part I)

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"Humble's an old town," the neighbor points out, "you screw the wrong person E."

With time, the neighbor grew wary of the potential crossfire. He maintained a respectful distance from the Grahams, but kept an eye on things. The more he saw, the more he realized there wasn't much about Mike and Pat that you could get your hands around. "Just a bunch of crap," he says. "They were into just anything and everything."

The brothers' father, Harold Graham, appeared on occasion; on some of those occasions, he appeared to be drunk. Harold was supposedly some kind of an inventor, though the neighbor had begun to doubt much of what the Graham brothers told him.

By the early eighties, the neighbor's curiosity about the Grahams had waned. He had begun to hear things suggesting that the brothers' wheeling and dealing had spun out of control; he no longer wanted anything to do with them. A number of other people felt the same way, though, unlike Pat Graham's neighbor, they didn't make their breaks quickly enough.

A former business partner from those days -- a west Houston man who discussed his experience on the condition that his name not be used -- says his brief but memorable collaboration with the Grahams was the only venture on which he ever lost money. It was called Studio 1000, a nightclub for teenagers located in the 10000 block of the Northwest Freeway.

Mike Graham had come up with the idea in 1979, and brought in the Houston man and an insurance agent named Bud Harmon. The three borrowed $250,000 together and got the place going. Then, inexplicably, Mike Graham didn't show up one day, nor the next. Pretty soon it was obvious he wasn't coming back, though he hadn't really gone anywhere. Apparently, he was still in town and into something else, though the partners never found out what. Graham just refused to take or return their phone calls.

In early 1981, Studio 1000 failed, leaving the two active partners holding the bag. The Houston partner recalls that he also had tried to help out Harold Graham by investing in his women's clothing store, Harold's for Her. Incredibly, all three Grahams -- Harold, Mike and Pat -- abandoned their respective apparel shops at the same time, in much the same way Mike quit the kiddie disco business.

"They just walked off and never came back," the former partner says incredulously. "They just left their employees and walked away. It was a shame. Harold had a good little old dress shop. If he had just kept the money in it, he probably could have made a decent living."

Gents officially ceased to exist in March 1981, after the Grahams failed to pay their corporate franchise taxes. Mike's store in particular had become mired in debt. Several banks had foreclosed on some $60,000 in loans to Gents of Houston or Mike Graham. Vendors and suppliers sought another $50,000 by filing lawsuits.

Pat had similar troubles. First National Bank of Bellaire sued him over a $7,000 default. A clothing manufacturer won another $6,500 from Gents of Humble in court. One Pat Graham venture -- Dunkley's Donuts -- was sued twice before it ever got off the ground.

A subsequent partnership between Harold and his sons, a forklift company called All Lifts Inc., didn't fare well, either. One of its last transactions was the sale of a refurbished lull lift to Mac's Roofing and Supply Company. Mac -- Cliff McLemore -- put $8,000 down on the machine, but upon delivery, discovered it wasn't what he had agreed to buy. Mike took back the forklift, and that was the last Mac saw or heard from any of the Grahams. They didn't even respond when he sued to get his down payment back in 1984. The debt still hasn't been repaid.

While the Grahams' endeavors failed to gain much traction, the same can't be said of Mike's and Pat's lifestyles. Pat's neighbor in Humble says the brothers were "into the flash." They drove nice cars -- new Cadillacs and big Oldsmobiles. So did their children. Pat's neighbor bought a used car for his son and had it painted to look nice. A couple of days later, he looked out his window and saw that Pat's daughter, Lori, had a brand-new Chevrolet Camaro.

And, of course, as haberdashers, the Graham brothers were sharp-dressed men. "If they had sold the clothes instead of wearing them," quips one acquaintance, "they'd have probably been all right."

It goes without saying that much of the contempt in which some people hold Mike and Pat Graham can be traced to their conspicuous consumption. Investors who put money into business opportunities know the rules: no guarantees. But the Grahams had engaged their unwitting partners -- who in some cases were their neighbors -- in games of high risk. When they were over, it seemed that whatever losses the others incurred, Pat and Mike managed to let everyone know they had gotten theirs.

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Brian Wallstin