The China Syndrome

Holographic postage stamp produced in Santa Cruz

Intellectual property theft by China has become a big deal in recent years, to the point that today it is a major topic of our volatile relationship with the ancient nation. To quote from a recent article in the Wall Street Journal entitled “China’s Techno-Kleptomania… Beijing’s schemes imperil American companies and national security. It’ll take a huge effort to stop them.”
     I shudder when I read this, not because of imminent peril from China, but because of my guilt for having contributed to this situation.

I am a simple man whose knowledge of technology is so limited I have trouble turning off the noises coming from my iPhone. I should not own an iPhone. My iPhone owns me. I am two steps above Luddite in enthusiasm for high technology. Yet, because of job security, I was drawn into a web of  “technology transfer” with China. I was only trying to support my family.

The transfer lasted over a span of a few months in 1989, but my participation took place on a Saturday. To protect security concerns and the reputations of my colleagues, I have chosen not to name names. The monikers herein are made up, yet based on real people.

We were a small company operating out of an even smaller office and nearby laboratory in the little town of Santa Cruz, California, known primarily for surfing, a seaside amusement park and for being a stuck-in-time land of hippies. Wandering minstrels were not uncommon in our vicinity, some, incredibly, seeking the mysteries of our seemingly innocent, and mostly unknown, technical endeavors.

We were producing holograms.

The owner of the company was a vagabond-dreamer from Seattle whom I will call Mike McGee, recognized by his peers as either a crackpot, a genius or capitalist scoundrel. Or all three rolled in one. He recognized himself as a Renaissance man and the inventor of a process, utilizing laser beams, for recording holograms, three-dimensional and multi-layered images that could be micro-embossed in volume. 

“You have one in your pocket,” he would say. “It’s on your credit card.” 

McGee was about six-feet tall, wore glasses, light-brown hair, appeared rather average-looking, difficult to find in a crowd. He moved quickly, his upper frame leaning forward, as if his lower body couldn’t keep up with his mind, extremely confident and good natured. Any comment directed his way was answered instantly, without hesitation. He opened himself to anyone who asked.

The terms “hologram” and “micro-emboss” together created an impressive marketing cachet for his business: the romance of a hologram combined with the latest high-technology method of production — micro-embossing, then considered a technology of the future. McGee was as subtle about his wild ideas as a carnival barker, piquing the interests of business, government, foreign investors and eager entrepreneurs, some of questionable character.

He juggled projects simultaneously while much of his time was spent writing legal briefs to defend himself against patent suits by a giant international corporation that claimed to own the holography process that he invented. He had taken the role of being his own lawyer against a mega corporation with a stable of attorneys looking for something to do. In this case, threaten any business relationship that we might pursue that offered potentially lucrative returns. They wanted that business.

We will call this corporation, World Banknote Amalgamated, producers of paper money for most nations on earth. One can imagine their business and political connections. They were Godzilla. We were Bambi.

McGee was undeterred.  

I was his point person.  My job was to bring in new business and manage custom projects. If I came to him with an objection from a potential client who had been threatened by WBA, he would simply say: 

  “Just tell them we’ll change the optics. Change the process.” It was a blithe answer tossed off as though he were waving his hand at an annoying fly.

The Big Gamble

I remember his casual reply working only once. I received a call from one of our better clients, call him Big Sam, whose company, based in Las Vegas, Nevada, produced printed green felts for blackjack and craps tables for the gaming industry. We developed various holograms for Big Sam that he picked up in Santa Cruz in his armored, bullet-proof van.

He produced gaming chips, each embedded with a hologram, just across the border in Mexico through an assembly operation that employed local workers and by-passed tariffs called maquiladora.

A large man, receding hairline, comfortable in leather shoes, shorts and XXL golf shirts that exposed his Popeye-sized forearms, Big Sam spoke in a gravelly tone, in sentences punctuated with expletives. If he were an actor, he could easily have played the role that Marlon Brando portrayed in the Godfather as Don Vito Corleone.

“Hey Kevin. I gotta call from some fuck sayin’ he was gonna sue me if I did business with you. Who is World Banknote, anyway?”

I started to gag but regained purchase while Big Sam waited on the other end of the line. “They’re a competitor just playing games with you,” I said.  “They claim to own the patent that we use for making holograms. We changed the optics and it’s not a problem.”

“Well. Fuck. Them.” 

The three distinct words roared out of my telephone. Our account with Big Sam subsequently increased in volume. He invited me to Vegas and took me to his country club where we played a round of golf with one of his buddies. On the way there he pointed out a dubious venture by Debbie Reynolds who had come out of retirement to put her name on a casino.

“You see that, Kevin,” he said, his dark chocolate eyes scanning the Vegas landscape. “That’s what we call a strawberry patch.” He explained that business suppliers would descend on Ms. Reynolds while she was flush, before her nonsensical idea failed. Presumably because she had spent all of her capital.

Our business remained fairly steady with McGee appearing and disappearing. Among his many projects, he was developing contacts in China.

First Holographic Stamp                                                               

In the spring of 1989, McGee and I jetted off to Springfield, Massachusetts, to meet with a room full of engineers at Westvaco Corporation to discuss how to produce a holographic postage stamp, the first for the U.S. I believe Finland was the first country to introduce a holographic stamp.

      Westvaco Envelope made the pre-stamped envelopes for the U.S. Postal Service. The USPS Art Director in charge of imagery for stamps joined us at the meeting, a bearded philatelist and aesthete versed in graphics and art, and I’m sure haute cuisine and the higher ambitions of good theater, although his baggy grey suit and plain red tie indicated a Postal Service soldier and not a man of fashion. He introduced the image of a space station as the subject of the first U.S. holographic postage stamp.

At one point things bogged down regarding exactly how we were going to patch the holograms into a pre-made window on the envelopes. The registration of the hologram into the window had to be exact. We had not perfected a micro-embossing technique that could hold an exactly repeating register. This was a problem.

McGee, his shirt half-untucked and sly grin twitching the corner of his mouth, walked to the front of the room of engineers and with a piece of chalk began drawing a diagram on the blackboard. The engineers nodded their heads as though they were in church listening to a sermon. The diagram was simple, yet based on my experiential management of such projects, impossible.

Then McGee asked for a break. He wanted to call a colleague in Los Angeles. I accompanied him into the hallway where he dialed a number on the telephone attached to the wall, known as a pay phone.

“Can this really be done?” I asked him, incredulously, referring to the diagram he presented to the engineers. 

“I’m going to find out,” he said.

He was able to reach his colleague in L.A., one of a handful of renegade inventors within the nascent holography community. They all knew each other. They all competed against each other. McGee, understanding that Mr. Los Angeles boasted of a secret, "dead nuts" high-volume embossing technique, had no qualms about reaching out to him.

“Can do,” came the answer from Los Angeles, where time was around 7 a.m. 
      I'd like to say that the rest is history. However, WBA was given the contract to produce the first holographic stamp for the USPS: a 3D image of a space station. We made the second one a year later, an inferior image of the Lombardi Super Bowl trophy issued on opening day of the 1990 NFL season.

Here Come the Chinese

About this time groups of Chinese men and women, dressed in brown and white and smoking foul-smelling cigarettes, began appearing at our office in Santa Cruz and spending most of their time in our production room. McGee had courted them, evidently promising cutting edge technology — the manufacture of embossed holograms — to provide jobs and industry to China.

Selling our technology to China was viewed by some as questionable practice, yet in reality the embossing machines that we were touting seemed to me clunky Rube Goldberg-like dinosaurs. I could not wrap my brain around selling this funky equipment to China in the name of high technology.

Although I was not involved in this project, McGee came to me with a request. Would I rent a large van and escort the group from China to San Francisco for a day?

“Sure,” I said.

That Saturday I drove a multi-passenger van carrying ten people from China, my wife, youngest daughter and a friend, to San Francisco. My family does not speak Chinese and our group spoke very little English.

We visited Coit Tower in North Beach, dined at renowned Tosca Cafe on Columbus Avenue and I dropped the group off at the south end of the Golden Gate Bridge so that they could walk across it, soak up the views as they stepped one-foot-after-another across one of the world’s most famous bridges. I picked them up on the other side in Marin County. We ended our day in Chinatown where I experienced by biggest surprise and revelation.

In the midst of mingling aromas and sights of pagodas, hanging skinned ducks, markets of ivory, strange produce, the tinkling of bells and cacophony of commerce, we came upon a store whose sole product was Ginseng, in various forms — from roots to tonics. Our group went absolutely wild.

They were shouting and smiling and hopping around, grabbing boxes of Ginseng as if it were gold, the most animated they had been all day. This was manna. The secret to health and long life, they explained. “Cures everything.”

“Don’t you have Ginseng in China?” I asked.

“Not easy to get,” they answered. “Growing illegal.”

I was silenced. This was not a technology transfer so much as an opportunity to smuggle American Ginseng into China. If the mere presence of Ginseng created such elation and high energy, I figured I had better get some, too. 
      The technology transfer itself was completed some months later.

                                                                   
                                                                          ***                                                                   

 

Downtown Santa Cruz following the Loma Prieta Earthquake

      Shortly after our excursion to San Francisco, on October 17, 1989, a 6.9 earthquake struck the area— Loma Prieta — that destroyed buildings, homes and killed 63 people. The epicenter was in The Forest of Nisene Marks State Park, a short distance from Mike McGee’s home. His cabin had slid down a hill and collapsed into rubble. Thankfully, neither he nor his family were in the structure at the time. He subsequently left the area and hired an advertising man from New York City to run and grow his company, which had been shaken but was still on its feet. He came with his own tricks and sidekicks.

From Silence of the Oranges © 2019 Kevin Samson, a working title memoir.