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Copyright © 1986 Forbes, Inc.

Forbes

June 16, 1986, Monday

LENGTH: 1068 words

HEADLINE: Play LOOT-O! (in search of sunken treasures)

BYLINE: BY RICHARD BEHAR

BODY:

Few forums would seem more appropriate to the launching of a big-time adventure than the oak-paneled chambers of New York's venerable Explorers Club, whose luminaries down the decades have included Admiral Richard Byrd and astronaut Neil Armstrong. Thus it seemed entirely fitting when a robust British adventurer and deep-sea diver, Keith Jessop, rose to the rostrum of the club's grand salon one day last month and unfurled plans for what promised to be a spectacular treasure hunt: the search for perhaps billions of dollars in sunken loot off the Turks and Caicos islands of the British West Indies.

In fact, Jessop was simply the latest point man in what has become a salty fringe activity for investors: the financing of treasure hunts beneath the seas of the world. In the last three years more than 600 expeditions have set sail, some to enormous press coverage and hoopla, to locate sunken vessels as old as Christopher Columbus' Pinta and as new as the Titanic. Meanwhile, governments throughout presumably treasure-rich regions like the Caribbean have reaped windfall fees by granting exclusive exploration rights to offshore tracts that lie within their jurisdictions.

Treasure hunting is hot, at least in part because of technology. The search for sunken vessels requires much the same equipment as is used in offshore oil exploration. High-definition sidescan sonar devices are used by oilmen and treasure hunters alike to produce detailed charts of the sea bottom. Another key device is a marine magnetometer, which measures the earth's magnetic field and reacts to iron. Depression in the oil services industry now means such devices are readily available to treasure hunters, sometimes at resale prices of less than a third what the equipment cost when new only a few years ago.

The very magic of searching for sunken treasure has drawn in investors by the boatload. Regional brokerage firms like Sperber Adams & Co. of Westport, Conn. now offer limited partnerships to well-heeled individuals; others use ads in publications like the Wall Street Journal, often complete with an 800 telephone number to call for more information.

Yet, in all the excitement, one question seems to have gotten overlooked: Is anybody actually finding anything out there, beyond tax writeoffs? Put succinctly, the answer is, not much. "I can't recall any investor who has ever made out, even to the point of barely getting his money back, in these schemes,' says John Fine, a maritime attorney. "I don't even know a rich salvage operator.' Adds Warren Stearns, a leading venture capitalist for treasure hunts, who has lately turned bearish on the business, "For every 50 deals I see, maybe one is worth further investigation.'

On rare occasions an expedition does strike gold, yet value estimates quickly get inflated by hype. Take the case of Harvey Harrington, who discovered what some experts believe to be the British warship H.M.S. De Braak off Delaware in 1984. Press accounts quickly put a figure of $500 million on the treasure, but so far less than $5 million worth has been recovered. Meanwhile, the venture has become swamped in lawsuits from angry backers and others who assert claims on the vessel. Says Harrington, who has sold everything he owns, including his wife's pension, "People should be awful careful who they get into bed with, because this kind of business attracts sharks.'

Or consider the much-publicized find of Melvin Fisher, who located the treasure from the sunken ship Atocha off Key West, Fla. last summer. Fisher himself has claimed the Atocha contains $400 million in loot. But, says Fay Feild, the firm's electronics engineer and a major stockholder, "My judgment is more like $40 million. Mel always exaggerates everything anywhere from three to ten times.'

No sooner did Fisher bring up the booty than he struck a deal with Amway Corp. to market $50 gold-covered ballpoint pens promoted by Zsa Zsa Gabor, and he arranged for a Hollywood studio to film his life story-- starring Cliff Robertson. Such gimmicks are nothing new. Six years earlier a partnership called Caribbean Ventures discovered a wreck south of the Bahamas, proclaimed it Christopher Columbus' Pinta, and promptly set up a business to market Pinta T shirts, jewelry, mugs and videogames. Clever? Brazen might be a better word. Says George Bass, whose Institute of Nautical Research at Texas A&M is now excavating the site: "There is no shred of evidence that this is the Pinta.'

Such hype simply stirs up yet more investors. In Michigan earlier this year, a Detroit service station owner sold his business, took a YMCA diving course, packed his wife and four children into a camper van and showed up on the doorstep of a Florida treasure hunter pleading for an opportunity to become his assistant.

In Los Angeles an organization called Galleon Hunters now offers seven-week Caribbean treasure cruises for $5,000 per person. Complains Gary Williams, 45, of Canoga Park, Calif., "They promised we were going to go down and find something. Our chances turned out to be as real as shoving wet noodles in a wildcat's rear end.'

Sometimes the treasure hunters wind up fighting so ferociously among themselves that searching for the actual treasure seems a side adventure. Martin Bayerle, a Brooklynbred diver, spent a decade trying to determine the whereabouts and cargo of the sunken British vessel S.S. Republic. No sooner did he pinpoint its location 70 miles off Cape Cod than a rival band of hunters appeared with a team of 22 Manhattan lawyers and persuaded a Massachusetts judge that they also had the right to look for the loot. Some experts think the whole dispute is a waste of time since there probably is no treasure aboard anyway.

"People believe what they want to believe,' says Robert Marx, a prominent treasure hunter and author of 31 books on maritime history. "It has to do with love and religion and fun and movies and business. That's what treasure hunting lives on.' But even Marx is growing bearish. "I've done this full time all my life, and I'm fed up. The fun's out of the business now. The phones are bugged, people follow you around and break into your house for documents. They put drugs on your boat to get you arrested, they sink each other's ships, people are getting shot at and everyone sues each other. It's a very sick business today. The days of getting drunk together are over.'

LOOT-O!, anyone?

Photo: Keith Jessop at the Explorers Club

More than just a tax writeoff?