I saw a very candid and wonderfully revealing documentary about David and Jackie Siegel – the owners of the biggest timeshare business, "Westgate Resorts."
The documentary showed their story starting before the recession, when David was riding the real estate speculation bubble. He made some interesting comments:
"I got President George W. Bush elected. I’d rather not say [how], it was probably illegal.
"We sold people timeshares they could not afford.... We were addicted to easy money.... We could get loans for anyone.... The goal was to change moochers into purchasers, no matter what."
The producers filmed the hard-sell script that Siegel’s employees used to secure sales at all costs. They were ruthless!
At this time, the Siegels started to build a 90,000-square-foot home patterned after Versailles, spending about 120 million in France. Around the same time, they built the biggest building in Las Vegas: the Westgate Towers (at over $300 million). These projects relied upon financing from continued sales of timeshares – almost like a giant ponzi scheme.
All the while, the Siegels lived the life of the most wealthy: buzzing around in private jets, spending lavishly, and buying all they laid their eyes on.
Then, the recession hit. As we know, this crash was brought on due to "cheap money" and people purchasing real estate they could not afford. Countries, like Greece, secured loans for massive public projects that they could not repay. As you can imagine, all hell broke out in the Siegel Empire.
Suddenly, the Siegels had to halt further construction on their 90,000-square-foot "dream home," enroll their eight kids in public school, refrain from taking their pack of dogs to the grooming services, sell off their jets and other assets, lay off many of their servants (from ages 18 to 5), lay off over 6,000 employees, and default on the Las Vegas Towers.
Instead of recognizing what really likely caused the crisis (e.g., their business model of “selling timeshares that people could not afford,” feeding their addiction with cheap money and credit, spending money they did not have, and becoming over-leveraged), the Siegels made these statements:
"It wasn't our choice. The banks made us lay off our employees.... The banks cut off our credit line to finance more timeshare sells." Jackie claimed, "We didn't get any of the bailout money that was supposed to be for the common people like us." (Yes, she really said this! The documentary is called: The Empress of Versailles. Check it out for yourself.)
The Siegel Empire is one of the "small businesses" that Romney says should get a tax cut. These are the tycoons that are funding Romney. Siegel is the guy who would probably do the "illegal" to get him elected. Do you think they will expect something in return from Romney if he is elected?
Currently, David Siegel has been able to unload assets and buy them back at substantially reduced prices to unload the debt. He had to sell a controlling interest in his towers and has started construction on their "dream home."
To top it off, Siegel recently threatened his remaining employees’ jobs if President Obama is re-elected, saying he was not going to add health insurance as an employee benefit.
I have a message for David and Jackie:
Although the documentary painted a negative view of your thought process, it also showed you to be human. You have also done a lot of positive things, and I would appeal to that aspect of your characters. Isn't it a better business plan to sell timeshares to those who can afford them, to build up equity in your many land holdings, to build up cash reserves to finance in-house sales, to live within your means and nurture a dedicated and healthy workforce by providing healthcare and scaling back upon your need for "dream homes" that will cost more than $200 million to complete?
(NOTE: The Siegels currently live in a house that would be the dream house of several families, simultaneously.)
Loren M. Lambert © October 24, 2012
The documentary showed their story starting before the recession, when David was riding the real estate speculation bubble. He made some interesting comments:
"I got President George W. Bush elected. I’d rather not say [how], it was probably illegal.
"We sold people timeshares they could not afford.... We were addicted to easy money.... We could get loans for anyone.... The goal was to change moochers into purchasers, no matter what."
The producers filmed the hard-sell script that Siegel’s employees used to secure sales at all costs. They were ruthless!
At this time, the Siegels started to build a 90,000-square-foot home patterned after Versailles, spending about 120 million in France. Around the same time, they built the biggest building in Las Vegas: the Westgate Towers (at over $300 million). These projects relied upon financing from continued sales of timeshares – almost like a giant ponzi scheme.
All the while, the Siegels lived the life of the most wealthy: buzzing around in private jets, spending lavishly, and buying all they laid their eyes on.
Then, the recession hit. As we know, this crash was brought on due to "cheap money" and people purchasing real estate they could not afford. Countries, like Greece, secured loans for massive public projects that they could not repay. As you can imagine, all hell broke out in the Siegel Empire.
Suddenly, the Siegels had to halt further construction on their 90,000-square-foot "dream home," enroll their eight kids in public school, refrain from taking their pack of dogs to the grooming services, sell off their jets and other assets, lay off many of their servants (from ages 18 to 5), lay off over 6,000 employees, and default on the Las Vegas Towers.
Instead of recognizing what really likely caused the crisis (e.g., their business model of “selling timeshares that people could not afford,” feeding their addiction with cheap money and credit, spending money they did not have, and becoming over-leveraged), the Siegels made these statements:
"It wasn't our choice. The banks made us lay off our employees.... The banks cut off our credit line to finance more timeshare sells." Jackie claimed, "We didn't get any of the bailout money that was supposed to be for the common people like us." (Yes, she really said this! The documentary is called: The Empress of Versailles. Check it out for yourself.)
The Siegel Empire is one of the "small businesses" that Romney says should get a tax cut. These are the tycoons that are funding Romney. Siegel is the guy who would probably do the "illegal" to get him elected. Do you think they will expect something in return from Romney if he is elected?
Currently, David Siegel has been able to unload assets and buy them back at substantially reduced prices to unload the debt. He had to sell a controlling interest in his towers and has started construction on their "dream home."
To top it off, Siegel recently threatened his remaining employees’ jobs if President Obama is re-elected, saying he was not going to add health insurance as an employee benefit.
I have a message for David and Jackie:
Although the documentary painted a negative view of your thought process, it also showed you to be human. You have also done a lot of positive things, and I would appeal to that aspect of your characters. Isn't it a better business plan to sell timeshares to those who can afford them, to build up equity in your many land holdings, to build up cash reserves to finance in-house sales, to live within your means and nurture a dedicated and healthy workforce by providing healthcare and scaling back upon your need for "dream homes" that will cost more than $200 million to complete?
(NOTE: The Siegels currently live in a house that would be the dream house of several families, simultaneously.)
Loren M. Lambert © October 24, 2012
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