Too Much Trust

Her eye was on the till

She was a simple farmer's daughter, one of ten children, and never went to college. But Melba Till Allen had big ambitions. She taught herself accounting and, after 13 years as a bookkeeper, was elected state auditor of Alabama in 1966. Voters were charmed by her beehive hairdo, ultrafeminine ways and strong Baptist principles. In office, she went so ferociously after state employees who padded their expense accounts and otherwise wasted public funds that she became known as "Melba Watching-the-Till Allen." She was enthusiastically re-elected in 1970 and four years later easily won election as state treasurer. The farmer's daughter seemed well on her way toward higher office, perhaps even the realization of her girlhood dream of serving in the U.S. Senate.

But Melba Allen also wanted to become rich, and according to testimony last week in a Montgomery courtroom, this ambition led to her undoing. While state auditor, she began dabbling in her own business on the side, taking out 26 bank loans, mostly to speculate in land sales and help her husband Marvin expand his trucking business. Once installed as Alabama's $23,000-a-year treasurer, she quickly turned her new powers to personal use. Chief among them was authority over the cash in the state treasury, sometimes amounting to $550 million, which by law must be deposited in Alabama's 311 banks.

Soon bankers learned that they could improve their chances of getting the state as a customer if they made personal loans to Melba Allen.

In all, she received 130 loans from 58 banks. They totaled $2.9 million; half of them were unsecured. The money went into a variety of enterprises, including more than $400,000 into land development, $378,000 to Marvin's trucking firm and $75,000 for a movie distributing company. She invested $281,000 in Stars over Alabama, a Hamilton amusement park that never opened and mysteriously burned last summer. She even made a brief fling at manufacturing wicker furniture, sinking $14,165 into a company headed by her two children and their spouses.

But Melba Allen's investments went sour. As cracks appeared in her financial empire, she obtained more loans to cover overdue debts. "Out of desperation she was trying to keep her corporate house of horrors from falling," said District Attorney Jimmy Evans. Toward the end, her debts rose to $1.7 million. Finally, after an anonymous letter to the state ethics commission last September, the Allen get-rich scheme collapsed. A grand jury conducted a three-month investigation, subpoenaing 270 bankers, and indicted her on charges of misusing her office for personal gain.

She denied wrongdoing. "My only mistake has been in putting too much trust in some of my business friends," she said. She received scores of letters and calls from well-wishers. Friends raised $4,000 so that she could explain herself on TV. Supporters crowded into the courtroom during the three-day trial. Said she: "I've got whole churches praying for me."

Banker Hillary Hayes Jr. told the jury his bank in Geneva had needed funds to help local corn farmers who were hurt by last summer's drought. After loaning the treasurer $50,000, he said, the bank received $725,000 in state deposits. Businessman Clay Baker described how he arranged $175,000 in financing for Stars over Alabama, in exchange for 10,000 shares of stock. On another occasion, he said, he obtained from her a $100,000 state deposit for a bank in Tuscumbia.

Throughout the testimony, Melba Allen, immaculately coiffed in spit curls and a Grecian wiglet, sat impassively, toying with a ballpoint pen and whispering occasionally to her four lawyers. Only once did she break down, during a parade of 24 character witnesses, including old friends, her preacher and Governor George Wallace, who attested to her "good" reputation. Nonetheless, the jury needed only 45 minutes to find her guilty as charged. When sentenced next week, she faces up to 20 years in prison and $20,000 in fines.

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