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Troubled Cable Mogul Is Still a Hometown Hero

Media: Federal probe or no, loyalty to Adelphia founder John Rigas runs deep in Coudersport.

April 18, 2002|SALLIE HOFMEISTER | TIMES STAFF WRITER

COUDERSPORT, Pa. — The owner of one of the most popular diners in town sent the first flower arrangements to John Rigas' office. Her neighbors followed with daisies and potted plants, sent from all over this wooded hamlet, population 3,000.

Their messages offered love, support and prayers to the cable TV magnate whose company, Adelphia Communications Corp., faces a federal investigation and 18 shareholder lawsuits alleging securities fraud.

But in contrast to Houston, where protesters marched on Enron Corp.'s headquarters after the energy company collapsed, in this small western Pennsylvania town Rigas remains a hero, if not a saint, because of decades of good deeds.

Only three weeks ago Adelphia disclosed some questionable, Enron-like accounting practices. Wall Street swiftly wiped out almost two-thirds of Adelphia's stock value. Yet as Adelphia scrambles to survive by selling off cable franchises, including some in Los Angeles, residents here are rallying around Rigas, the slight, stooped 77-year-old cable pioneer.

"He's our Greek god," said Shirlee Leete, a council member, antiques shop owner and local journalist who since 1968 has written about the folksy, white-haired son of Greek immigrants. "People here feel a certain element of fear about the future and what might happen, but mostly they feel trust."

Like hundreds of other locals, Leete lost money investing in Adelphia and an affiliated fiber-optic phone company that filed for bankruptcy protection last month.

But over coffee at Kaye's Hometown Restaurant on Main Street, Leete fought back tears as she thought of the pressure Rigas faces. "I lost thousands of dollars in [his companies], but I have faith it will all be fine because of John," Leete said. "Integrity is his middle name." She even started a "prayer chain" for Rigas at local churches.

Loyalties run deep in this town with two stoplights and only one taxicab, where waitresses know customers by their first names and Boy Scouts collect syrup from maple trees near Main Street.

It's not only that Rigas provides 2,400 jobs, keeping the region from becoming an economic sinkhole. He's also a mythical caretaker, who sends Adelphia crews onto the streets to plow driveways in the harsh winters and to do landscaping work in the spring. He gives jobs to those who ask and routinely lends money to families in need, never expecting to be paid back.

Rigas' wealth soared in the late '90s when Adelphia had a dizzying run-up, its stock jumping seventeenfold. On paper he was a billionaire. Bankers were eager to lend him money during a frenzied consolidation that sent cable values flying.

In 1999, Rigas bought Century Communications Corp., Los Angeles' largest cable provider. The deal doubled Adelphia's size and took it far afield of its small and mid-size cable markets.

Now shareholders accuse the Rigases of misleading them by secretly securing loans for as much as $3 billion, guaranteed by Adelphia, through family partnerships. The family apparently used the money to buy stocks and bonds in Adelphia, gaining control of the nation's sixth-largest cable provider.

But locals say that if bad things happened, it was the fault of big-city lenders that permitted Adelphia and the Rigases to over-borrow. Or they blame Rigas' sons, with their Ivy League degrees and oversized ambitions, who expanded the company too big too fast.

"Maybe the boys tried too hard to prove themselves to Dad," said Chris Schmoyer, owner of Jack's Steak & Seafood restaurant.

Schmoyer has a soft spot for John Rigas. She remembers when she split open her leg sliding into second base as a kid. She received speedy medical service--and 63 stitches--only after her father called Rigas, who was on the hospital board. "He came and sat with me," said Schmoyer, whose two sons work for Adelphia. "He has a gift for giving, and what you give comes back to you."

Adelphia is critical to surrounding Potter County, which derives 10% of its tax dollars from the company. "They'll land on their feet," said County Commissioner Ken Wingo. "When they get more information out, that will calm these fears."

Very few facts have come out of Adelphia since the crisis began. Some townsfolk are uneasy because John Rigas, a regular at eateries around town, hasn't shown his face in weeks, staying holed up at headquarters on Main Street.

An important banker in town believes Adelphia is like any other company that must take big risks with other people's money to beat the competition. "A lot of people in town don't understand that it's a tough, cutthroat world out there. It's not Mayberry," said Charles Updegraff, chief executive of Citizens Trust Co., the local bank of which John Rigas sits on the board.

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