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Fallen Hero

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To the 2,600 inhabitants of Coudersport, Pa., a remote Allegheny Mountains town 70 miles from the nearest interstate, John J. Rigas reigned like a benevolent godfather. As founder and CEO of Adelphia Communications, the nation’s sixth-largest cable company, Rigas, 78, was reportedly worth billions—and he was widely revered for his largesse. He flew cancer patients to hospitals on corporate jets. He had his workers plow snow and mow grass for senior citizens. He bused scores of children 120 miles to see the Buffalo Sabres, the NHL team he bought four years ago. When a disabled local named Scott Bruzzi wanted to open a jewelry store in 1984, Rigas offered him a space on Main Street—gratis.

“How many people would give you a storefront, rent-free for 17 years?” asks Bruzzi, 50. Retiree John Burkhardt, 59, says Rigas helped perfect strangers. “People would wait in restaurants for him, to ask a favor,” he says. “If anyone had a problem, he’d take care of it.”

Now Rigas, the first chief exec to be arrested in the current wave of corporate scandals, has a few problems of his own. Just after dawn on July 24 federal agents busted him and his two oldest sons—former Adelphia executives Michael, 48, and Timothy, 46—in a handcuffed perp walk for photographers and network TV cameras. The charge: that they bilked their now-bankrupt company of more than $1 billion. (Youngest son James, 44, also an ex-Adelphia executive, was not charged.) Prosecutors maintain the Rigases used Adelphia as a private “piggy bank” to pay back personal loans, buy stock and bankroll such extravagances as an African safari and an independent film produced by Rigas’s daughter Ellen, 42. Plus, it seems, they used company money for many of those acts of charity that made John Rigas a small-town deity. If the allegations are true, it would be one of the most egregious cases of corporate fraud in U.S. history.

“The sheer magnitude and brazen nature jump out at you,” says Wayne M. Carlin, director of the northeast regional office of the Securities and Exchange Commission, which has slapped the Rigases with a civil suit. Released on $10 million bail apiece, the three men (who stepped down in May when it became clear they were under federal investigation) face prison terms. Rigas’s own company—which filed for Chapter 11 bankruptcy protection on June 25, listing $18.6 billion in debt—has sued him and his sons for racketeering, among other charges. But despite the avalanche of alleged malfeasance, many in town stand by the 5’5″ patriarch.

“John has been perfect in my book,” says Mickey Goodwin, owner of Mickey’s Coffee Shop, to whom Rigas once gave $1,400 when construction next door forced her to close for a week. “He would come in and I’d always give him a hug. He really liked it.” Even Burkhardt, who had lost money in an Adelphia spin-off, doesn’t hold a grudge. “I’m still sentimental for him,” he says. “I have to separate John Rigas the man from John Rigas the CEO.”

In both incarnations, Rigas seemingly lived a classic American success story. Born in Wellsville, N.Y., to James and Eleni, Greek immigrants who ran a hot dog stand, he saw combat in World War II and earned an engineering degree from Rensselaer Polytechnic Institute in 1950. A year later he settled in Coudersport with his new wife, Doris, now 75, an ex-high school English teacher who would go on to own a design firm and plan many Adelphia corporate buildings. With a $72,000 loan from his father and family friends, Rigas bought the town’s movie house. He sold tickets and made popcorn at night, working by day as an engineer for the Sylvania Corp. In 1952 he bought the local cable franchise for $300—overdrawing his bank account.

In the early years Rigas kept scarcely a step ahead of his creditors. Marty Weiss, who owns a local electronics shop, recalls that Rigas asked for one of the first color television sets. “I got him an 18-in. Zenith at cost,” he says. “I had to keep calling to remind him to pay.” (It took three years.)

But Adelphia grew successful enough that Rigas could afford to send three of his children to Harvard and one, Tim, to the Wharton School of Business. (Only James, a father of four, and Ellen, who lives in Manhattan, have wed.) When his sons joined the firm in the ’80s they pushed expansion, eventually acquiring other cable companies throughout much of the northeast. Last year Rigas was inducted into the Cable Television Hall of Fame. “If there’s one person I’d like my son to grow up to be,” Decker Anstrom, CEO of the Weather Channel, said then, “it would be John Rigas.”

Now, Coudersport faces the prospect of life without a company that employs 25 percent of its citizens, while grappling with the possibility that its patron saint is a thief. “That’s the difficult thing to reconcile, considering all the good things he did here,” says Donald Gilliland, editor of the weekly Potter Leader-Enterprise. “The question some people are asking is, to what extent did he do that for his own gain?”

Richard Jerome

Matt Birkbeck in Coudersport and Dimitry Elias Léger in New York City