New Yorker, March 11, 1996
ANNALS OF LAW F. Lee Bailey has been in trouble before, but this time he may be heading for jail—partly because of the testimony of Robert Shapiro.
BY FREDRIC DANNEN AND IRA SILVERMAN
ROBERT Shapiro was smirking at F. Lee Bailey. It was the morning of February 2nd of this year, and the celebrated feud between the two criminal-defense attorneys which had begun in Los Angeles during the O.J. Simpson trial had advanced to Round 2—a round that would be fought this time not on national television but in a little courthouse in Ocala, a county seat of some sixty-five thousand souls in the alligator country of north Florida. The presiding judge, a slight, balding man in his sixties named Maurice Paul, peppered his speech with “y’all”s, but his demeanor was not friendly. He, too, had his sights fixed on Bailey, and, as one courtroom veteran put it, “he had that jail look in his eye.”
Bailey, who appeared ashen and sombre, was in trouble with federal prosecutors in north Florida, and he had been summoned to a hearing on a matter that could indeed cost him his liberty. Shapiro, deeply tanned and looking ebullient, had come to testify for the government. Though Bailey did his best to avoid eye contact with Shapiro, he could not fail to notice the smirk, and he later said he’d known just what Shapiro was thinking: “I got you back, you son of a bitch!”
In 1994, Bailey and Shapiro shared another client besides O.J. Simpson—a wealthy drug trafficker named Claude Duboc, who pleaded guilty in north Florida and agreed to forfeit millions of dollars in cash and assets in the hope of reducing a life sentence. One of those assets, a block of stock, was expected to rise dramatically in value soon, but if the Florida prosecutors seized it they were required by policy to sell it immediately; so the stock was given to Bailey to hold, they said, in trust for the government. Two years later, the stock had appreciated by about twenty million dollars, and, to the prosecutors’ astonishment, Bailey now said that those profits were his to keep. The government filed an emergency motion with Judge Paul, and he ordered Bailey to come to a hearing and to bring the stock with him. Bailey had shown up at the hearing, all right, but, to the further astonishment of the prosecutors, he had dared to come empty-handed.
F. Lee Bailey is a former Marine fighter pilot with the visage of a bulldog and a personality to match, and many of his professional colleagues are in awe of him. One of them has said, “He’s rough-and-tumble, he doesn’t live within the norms of society, and he fears nobody.” And in this case, as it happened, Bailey held an ace: the Florida lawmen had trusted him so thoroughly that the agreement between him and the government with regard to the stock had never been set down on paper—not even in a letter or file memo. All that existed to refute Bailey’s claim of entitlement to the stock profits—a claim that one of the prosecutors called “absurd and unbelievable”—was the memory of the people involved in the case.
One of those people was Robert Shapiro, whose testimony that afternoon, it seemed, was as damaging to Bailey as he could make it. By then, however, Bailey had regained not only his color but his swagger. In a subsequent interview, he referred to the north-Florida lawmen as “these backwoods people,” and at times he seemed to be laughing at his principal accuser, a federal prosecutor from Tallahassee named David McGee.
By the conclusion of the hearing, McGee was fighting mad, and in an emotional closing argument he told Judge Paul, “What you have is proof that F. Lee Bailey has stolen from the people of the United States in excess of twenty million dollars.... He has acted in complete and total derogation of his obligations to the people of the United States...to this court...to his profession, and...to his client. He did it for the oldest, the most tiresome, and the least excusable reason—to put money in his own pocket. For that, he gives up ethics, he lies, and he cheats.... I ask that the court place him in jail.”
Judge Paul retired to chambers to deliberate, and McGee sat down at the prosecution table, still fuming. It was apparent that McGee and Shapiro had become allies not merely in legal disputes with Bailey but in their feelings of betrayal by him. Shapiro had brought Bailey into the Simpson case, and he believed Bailey had tried to elbow him aside; McGee thought he had made a trust agreement with Bailey, never imagining that the famous defense attorney would in this manner defy, and embarrass, the government of the United States. Well, they had both underestimated F. Lee Bailey. Now the question was whether Bailey had underestimated them.
BAILEY had displayed a knack for getting under people’s skin—at the Simpson trial, Marcia Clark, in open court, called him a liar—and he seemed not to care what others thought of him. In a 1971 memoir, “The Defense Never Rests,” he writes fondly of “the satisfactions of being a renegade” and likens the role of criminal defense attorney to the heroic struggle of a single-combat warrior. The book opens with the story of how, as a Marine lieutenant in his early twenties, he was forced to land a Sabre Jet without engine power. “If I ran a school for criminal lawyers, I would teach them all to fly,” he writes. “The ones who survived would understand the meaning of `alone.’”
Whatever forces drove Bailey, they made him a formidable courtroom advocate. Even people who did not like him acknowledged him to be one of the most charismatic trial lawyers this side of Edward Bennett Williams. Bailey, who stands a compact five feet nine, is renowned for his prodigious memory, his dogged cross-examination style, and his oratorical skills. (He has a resonant, William Holden sort of voice.) His critics say that he has slipped in the past decade or so—that his well-known excesses, which include four marriages, have taken their toll. The general populace does not seem to think so: a 1993 public-opinion poll taken by the National Law Journal selected Bailey as the most admired lawyer in America.
Bailey does lead an immensely busy life, and his overloaded schedule would probably be impossible if he didn’t maintain several airplanes. (He used to have a helicopter as well, and on at least one occasion flew it under a bridge.) He is the lead partner in two law firms, one in Boston and the other in West Palm Beach, and until recently was a partner in a third firm, in New York, which specialized in aviation disasters. He is also a businessman. Bailey is the C.E.O. of Palm Beach Roamer, a Florida corporation that upgrades executive aircraft and yachts. (One of the aircraft models, a retooled twin-piston, is called the Bailey Bullet.) And he is the owner of Computer Law, a consulting firm that helps attorneys computerize their data. (Bailey is a computer and gadget nut.) To date, he has published seventeen books, including a novel. He says simply, “I squeeze more out of life than most people.”
The eldest son of an advertising man, Bailey was born in Waltham, Massachusetts, in 1933. At twenty, he left Harvard, where he was majoring in English, to join the military—first the Navy, and then a Marine squadron at Cherry Point, North Carolina. While at Harvard, he had met a Lesley College student who, in 1953, became the first of his wives; within three years, they had had two sons, and in 1961 they were divorced. Bailey had another son, with his second wife—his former secretary, whom he described shortly before their divorce as an “unreasonably attractive blonde.” Both his third wife and his current wife, Patricia, were flight attendants. In the mid-eighties, Bailey moved his principal residence from suburban Boston to south Florida, so that Patricia could be near her ailing parents.
Bailey had discovered law by a fluke assignment to chief legal officer of his Marine squadron, after a more qualified candidate was killed in a Sabre Jet crash. When he completed his military service, he earned a law degree at Boston University, and in November of 1960 was admitted to the Massachusetts bar. A year later, Sam Sheppard, a Cleveland doctor convicted of murdering his wife—the case inspired “The Fugitive” television series and movie—hired Bailey. Sheppard had by then been in jail for seven years and had exhausted eleven appeals. Bailey argued the case up to the Supreme Court, won a new trial on the ground that the judge had failed to shield the jury from the press and public prejudice, and, in 1966, got Sheppard acquitted. Ever since, Bailey has been known for homicide cases—his other clients have included Albert DeSalvo, the confessed Boston Strangler, and Captain Ernest Medina, the Army company commander blamed for the My Lai massacre.
He has also been controversial. While preparing to try two related murder cases in New Jersey in 1968, he wrote a letter to the governor in which he accused the prosecution of having “pressured or bribed” witnesses; when the letter was leaked to the press, Bailey was removed as defense counsel and ultimately suspended from practicing law in New Jersey courts for a year. In 1970, a state judge in Massachusetts sharply criticized him for, among other things, attacking the conviction of a client during television interviews with Johnny Carson and Joey Bishop—a practice considered shocking at the time. The judge toyed with disbarring Bailey but instead opted for judicial censure. Bailey ran into far worse trouble three years later, as the lawyer for a Florida businessman named Glenn Turner, who ran Dare to Be Great, a motivational-tape distribution enterprise that was alleged to be a Ponzi scheme. Federal prosecutors in Orlando indicted Turner, eight of his associates, and Bailey for mail fraud. Two years and one mistrial later, the charges against Bailey were finally dismissed, but the case had nearly bankrupted him.
In 1982, Bailey was a defendant again—this time in San Francisco, on a charge of driving while intoxicated, which was punishable by up to six months in jail. He had been pulled over by a motorcycle patrolman, who claimed that Bailey smelled of liquor. Bailey was handcuffed and brought to the police station, and when he refused to take a blood-alcohol test, he was strip-searched, and held for several hours. After a two-week trial, the jury found him guilty only of running a stop sign, and he was fined fifty dollars.
The verdict was a victory not only for Bailey but also for the man who had defended him—Robert Shapiro. The two had met on a drug case in Hawaii in the early seventies, as respective counsel for two of the defendants, and had got the case dismissed on procedural grounds before it came to trial. They remained close. When Shapiro’s first son, Brent, was born, in 1980, Bailey was his godfather.
In truth, Shapiro seemed to have little in common with Bailey. He had spent most of his life in Los Angeles, had a private practice on the Avenue of the Stars, and was an archetypal Beverly Hills lawyer. His client list was heavy on celebrities: between 1991 and 1993 he represented the baseball player Vince Coleman on a charge of possession of an explosive device, the director Ivan Nagy when he was arrested for allegedly recruiting prostitutes, and the rap star Vanilla Ice on a misdemeanor weapons charge. Unlike Bailey, Shapiro seemed intent on not making enemies, and he was proud of his good relations with prosecutors and with the Los Angeles Police Department. He was known especially for plea bargains; in 1991, for instance, he negotiated a voluntary-manslaughter plea for Marlon Brando’s son, Christian, who had originally been charged with murder in the shooting death of his half-sister’s lover.
In March of 1994, a new client unexpectedly came Shapiro’s way. Robin Duboc, a woman he knew socially, called him to say that her ex-husband, Claude, had been arrested on charges of drug trafficking and money laundering, and needed a lawyer. Shapiro was not yet famous—the arrest of O.J. Simpson was still three months away—but Claude Duboc liked him, and he was hired. Within a week, Duboc had also hired F. Lee Bailey; it would help to have Bailey on board, Shapiro had argued, because he had had experience with the Florida courts. The fact is, though, that Bailey’s Florida law practice was mostly in and around Miami—the Southern District—and he had never even met the judge assigned to the Duboc case, Maurice Paul. He had heard, though, that Judge Paul was a former military man, and was sure they would get along just fine.
THE federal judicial district that comprises Tallahassee, Gainesville, and Pensacola is notoriously hard-line, especially where drugs are concerned. Until federal prison sentences were standardized, in the mid-eighties, drug offenders fared worse in north Florida than almost anywhere else in the nation. One former district judge there, Lynn Higby, was nicknamed the Time Machine. Maurice Paul, the current chief judge, has been described as Higby without the sense of humor. Paul is a Reagan appointee, and his rulings tend overwhelmingly to favor the prosecution. He speaks with a drawl and has a tight-lipped smile. Though his legal acumen is undisputed, he has about him an air of provincialism. Paul took a particularly hard line on narcotics. “Judge Paul truly perceives himself as a warrior in the war on drugs, rather than a referee,” says Larry Turner, a Gainesville defense attorney.
There was something else about Judge Paul that did not bode well for Bailey in his own coming confrontation in north Florida. Paul’s reputation on forfeiture, according to Lucy Morgan, a veteran reporter for the St. Petersburg Times, can be expressed in five words: “He will clean you out.” Larry Turner adds, “Paul’s favorite thing to tell a drug defendant is `If you used drug money to buy a diaper for the baby your wife is holding out there—I want that diaper!’”
Paul had a perfect counterpart in David McGee, the tough first assistant United States Attorney for the Northern District of Florida, in Tallahassee. McGee is forty-seven, tall and rangy, with a bushy mustache and a resemblance to the actor Nick Nolte. Nationally, he is perhaps best known for his conviction, in 1994, of Paul Hill, the ex-minister who shot and killed an abortion doctor and his escort in Pensacola; but locally he is celebrated for his almost missionary pursuit of drug traffickers. The federal-court calendar in north Florida often seems to bulge with drug cases, even though the region has far less of a drug problem than, say, south Florida, which is a port of entry; the explanation, by and large, is McGee. By law, if traffickers so much as pass through a federal district that district may claim jurisdiction over them, and that is virtually all the pretext that McGee needs to bring a case.
The prosecution of Claude Duboc was a prime instance of McGee’s grabbing a case that arguably belonged in another venue. Duboc, who ran his enterprise with a partner named John Knock (now a fugitive), sold vast quantities of hashish mostly in Canada, and an estimated twelve hundred metric tons of marijuana almost entirely on the West Coast. Nevertheless, by the early nineties McGee had learned of Duboc and had plans for him. In June of 1993, an associate of Duboc’s was lured to a hotel in Gainesville, to talk business with a certain Earl Kelly, who claimed he could recruit a crew to unload drugs for Duboc in Vancouver and San Francisco. Earl Kelly was really Carl Lilley, an agent of the Drug Enforcement Administration working under the supervision of Dave McGee. Before long, the associate and two other members of the Duboc organization were arrested.
By the spring of 1994, Duboc had taken up residence in the twelve-hundred-dollar-a-night Ambassador Suite of the Grand Hyatt in Hong Kong. Tall and sandy-haired, with a Gallic nose, he was born in New York, to French parents, in 1944. Duboc’s enterprise did an estimated $165 million a year in drug business, and his capacity to earn was rivalled only by his capacity to spend. Among his possessions was a magnificent villa in the South of France, near Cannes, next door to the villa of a Saudi Arabian sheikh, who was obliged to move two palm trees that were obstructing Duboc’s view of the Mediterranean.
McGee’s office quickly obtained an order of extradition against Duboc, and in March of 1994, while dining at an expensive restaurant, he was arrested by the Royal Hong Kong Police and thrown in jail. He hired attorneys from Coudert Brothers—a law firm based in New York, with a specialty in international law—to try to fight the extradition. (Coudert also does legal work for this magazine.) But it was hopeless. By early April, Claude Duboc was incarcerated in the federal detention center in Tallahassee, awaiting trial.
Once Bailey and Shapiro had been hired to represent him, Duboc was faced with a decision. In a surprising role reversal, Shapiro wanted to fight the charges, and Bailey was the one recommending a plea bargain. “Shapiro was acting like an asshole,” Bailey says now. “The government had an overwhelming case.” The drug charges in the indictment against Duboc carried mandatory life terms, but Bailey told his client that if he cooperated with the United States Attorney’s Office—and, most important, if he forfeited an “extraordinary” amount of money to the government—he could get as little as three to five years. Shapiro says he refused to endorse Bailey’s optimism.
By mid-April, Shapiro and Bailey were still deadlocked over whether to fight the charges, and Shapiro essentially quit the case. (Bailey says Shapiro wanted a hefty referral fee from him; Shapiro denies this.) Within a week, Duboc had made his decision: he would plead guilty and cooperate. On April 25th, Duboc and Bailey sat down with prosecutors in their office in Tallahassee, and, as Bailey took notes on a portable computer, Duboc made a recitation of his worldly goods. Apart from cash holdings of about fifty-seven million dollars, Duboc’s most valuable possession was the villa in the South of France, which was worth about thirty million. He also had a home in Poigny, near Paris, worth perhaps ten million. He owned expensive cars, boats, watches, art work, and antique furniture. And he held six hundred and two thousand shares of stock in a Canadian pharmaceutical company called BioChem Pharma, which traded on the NASDAQ.
&nbDuboc strongly recommended that the government not sell the stock right away. BioChem Pharma, he said, was in the last phase of trials for a new drug called 3TC, to be used in the treatment of AIDS, and, if the drug was ultimately approved, the shares, then trading at around nine dollars, could go to fifty. Duboc says that he gave the prosecutors this information because he believed that the more money he made for the government the greater his chances of getting a lighter sentence would be—hadn’t Bailey told him exactly that? Bailey maintains, however, that Duboc’s real motive was that he entertained some scheme to keep the stock profits for himself.
The day after Duboc was debriefed on his assets, Bailey had two private meetings with Gregory Miller, then the head of the criminal division of the United States Attorney’s Office, who reported to Dave McGee. Both Miller and Bailey agree that Bailey was offered possession of the BioChem stock, but the two men have different recollections of what else was said. According to Miller, Bailey was told that he would be holding the shares in trust for the government, so that if Duboc’s prediction came true, and the value of the stock went up, the government would profit. Miller recalls being concerned about Duboc’s houses—they had to be kept up, at considerable expense, in order to be sold advantageously. He says that by taking the stock Bailey was assuming responsibility for the upkeep of the houses, because it was to be paid for out of the stock fund. Finally, Miller says, Bailey was told that, even though the stock was drug-tainted, and therefore subject to forfeiture, the government would not oppose Bailey taking his legal fee for representing Duboc out of the stock fund. Of course, any such fee would have to be determined and approved by Judge Paul.
Bailey agrees only about the stock being the source of his legal fee. He says that there was no mention of his acting as a trustee; that he volunteered to use the fund to help maintain the French properties; and that, as he understood it, the stock was not a forfeitable asset. He also says there was no mention of the government receiving any upside gain from the stock. Indeed, he says, Miller warned him that he would be at risk in taking the stock, because it could go down, leaving him in danger of losing his fee. Therefore, Bailey says, “it was my risk and my gain.” In any event, on May 9, 1994, the BioChem stock, then worth $5.89 million, was deposited in F. Lee Bailey’s bank account at Credit Suisse in Geneva.
&nbsAround the same time, Duboc decided that perhaps Shapiro was right, and that he should consider fighting the indictment. Duboc scouted around for a new attorney to evaluate his case and advise him on whether he should fire Bailey. He settled on Edward Shohat, a Miami lawyer who had defended the Colombian drug trafficker Carlos Lehder. Shohat says that he initially planned to replace Bailey, as Duboc wished, but that he changed his mind when he saw how deeply admired Bailey was in the Northern District. “I’m sitting there, and the goddam court reporter asks Bailey for his autograph,” Shohat recalls. Besides, Shohat agreed with Bailey’s earlier assessment, that Duboc did not have much chance of winning. So, on Shohat’s recommendation, Duboc retained both attorneys and on May 17, 1994, with both of them present, he pleaded guilty to one count of drug trafficking and one count of money laundering.
Shohat and Bailey did not get along. That May, the two lawyers met in France to visit Duboc’s properties, and, during a train ride to Poigny, Shohat requested that Bailey provide him with copies of all the financial records in the case. Bailey, he says, did not respond and, after the trip, cut off all communication. By December of 1994, Shohat had been edged out of the case. Bailey, he says, finally sent him a sixty-five-thousand-dollar check for his services, which included fifteen thousand dollars in expenses. Today, Shohat has kind words only for Bailey’s courtroom skills. “Lee is a terrific lawyer,” he says. “Terrific. On his feet. He just dominates a courtroom. But no way could I work with that son-of-a-bitch prick.”
THOUGH Duboc’s guilty plea remained a source of disagreement between Bailey and Shapiro, they stayed good friends. When, less than a month later, O.J. Simpson became Shapiro’s client, the two lawyers found they needed each other again. Bailey had tried some thirty murder cases; Shapiro had tried none. Big-name trial attorneys—Gerry Spence, for one—were hovering around Simpson like sharks. Shapiro immediately invited Bailey to join the defense team, ostensibly as a consultant but also, in a sense, as shark repellent. Bailey, for his part, had not had a high-profile case since he defended Patty Hearst, unsuccessfully, on bank-robbery charges, in 1976; the Simpson case was exactly what he needed to put him back in the public eye.
Shapiro was not about to share his fee in the Simpson case with Bailey, however—not after giving him Claude Duboc. In a letter dated August 24, 1994, Shapiro spells out his agreement with Simpson: the former football star will pay Shapiro $1.2 million, in monthly installments of no less than a hundred thousand. Payments to Bailey, however, “shall be my responsibility, if any,” the letter says. Bailey confirms that Shapiro never paid him for Simpson. At the hearing in Ocala last month, Dave McGee explored the question of whether any of Duboc’s drug money found its way into the Simpson case. Shapiro testified that Bailey contributed “a tremendous amount” of sophisticated computer equipment used for Simpson’s defense, and said he did not know who paid for it. The equipment was installed and operated in Shapiro’s office on the Avenue of the Stars by Howard Harris, Bailey’s computer guru, with whom Bailey started the Computer Law consulting firm.
It is possible that another of Bailey’s associates who worked on the Simpson case, a private investigator named John McNally, was paid out of the stock fund. McNally is a tough-talking Brooklyn-born former police detective; Bailey is fond of telling people how McNally had shot two robbers in a bar before he even graduated from the training academy. McNally quickly came to despise Shapiro, and probably had a good deal to do with Shapiro’s falling out with Bailey.
&n“I think Lee Bailey’s the greatest lawyer in the world, and Bobby Shapiro is the biggest fraud in the world,” McNally says today. “I don’t think Shapiro paid any attention to the Simpson case. He was out takin’ bows and signin’ autographs. I was there four months, I saw him in the office maybe seven times. One time, he asked me how long it took Ron Goldman to walk to Nicole’s house—he didn’t even realize Goldman drove. Another time, he calls a meeting and asks for a show of hands—how many think O.J. is guilty? Our jaws dropped. Look at the video when the verdict came in. You don’t know which side he was on. He looked disappointed.”
Shapiro declines to comment on anything McNally has to say, but he has publicly blamed the detective for abetting Bailey’s treachery, as Shapiro sees it, in the Simpson case. In January of 1995, the New York Daily News ran an article headlined “VAIN SHAPIRO DESERVES FATE,” and reported that Simpson was “benching” Shapiro in favor of Johnnie Cochran, and that “legal legend F. Lee Bailey is expected to assume an expanded role.” Shapiro believes that McNally planted the article—the detective denies it—as part of a Machiavellian campaign by Bailey to enhance his own role in the case. Shapiro says he stands by a statement he made to Barbara Walters immediately after the Simpson acquittal: “I will not talk to F. Lee Bailey again.” At last month’s hearing in Ocala, he described their relationship as “permanently severed.” Bailey simply shrugs. “Shapiro is history,” he says.
DUBOC had been right about BioChem Pharma. On November 17, 1995, the company’s AIDS drug was approved by the United States Food and Drug Administration; its shares had already begun to soar. By January of this year, the stock had risen from about nine dollars a share to the high forties. Duboc had been sitting in jail in Tallahassee for nearly two years, and he was still awaiting sentencing by Judge Paul. In order for Duboc to get anything less than life, he needed the prosecutors to write the Judge a letter detailing all that he had done for the government, but it was too soon to ask for the letter. He had pleased the prosecutors by assisting the Royal Canadian Mounted Police in a drug case in British Columbia, but after two years the houses in France remained unsold. And Bailey still had the BioChem shares. In the meantime, Duboc says, Bailey was slow to return his calls, and Duboc rarely got to see him except on prison television, performing at the Simpson trial.
Finally, early this year, Duboc decided to fire Bailey and replace him with two lawyers at Coudert Brothers, the law firm that had advised him on his extradition battle in Hong Kong. On January 11th, the Coudert attorneys appeared before Judge Paul, and Bailey sent, as his representative, a Florida attorney named David Schultz. During the hearing, Schultz made a surprise announcement: Bailey would, of course, withdraw from representing Claude Duboc, but he had no intention of returning the BioChem stock. The prosecutors were dumbfounded, and the following day Judge Paul issued an order to Bailey calling for a full accounting of Duboc’s assets. The accounting that Bailey submitted a week later did not include the stock. Paul then ordered Bailey to appear before him with the stock in hand and with all relevant financial records.
&nbUntil February 1st, the day before the hearing in Ocala, Bailey insisted that he was too busy with another case to show up. In less than two weeks, he would be defending an alleged Gambino-crime-family associate named Joseph Watts, in federal court in Brooklyn, on one murder and three murder-conspiracy counts. McGee informed Bailey’s lawyer that if he did not come a warrant would be issued for his arrest. Bailey caught the last flight out of town, arriving in Florida at midnight, and walked into the Ocala courtroom the next morning at nine. Shapiro was already there, and so was Shohat, the Miami lawyer who had found Bailey impossible to work with. Shapiro took a seat against the wall no more than ten feet from the defense table, placing himself directly in Bailey’s line of vision. Next to Shapiro sat Claude Duboc, in leg irons.
Bailey had come with two lawyers. One of them, Roger Zuckerman, the senior partner of a Washington law firm, had known Bailey for twenty-two years and helped defend Bailey in the last phase of the Dare to Be Great case in Orlando in the mid-seventies. Zuckerman, a balding, well-spoken, earnest man, clearly hoped to defuse the tension in the courtroom and keep his client out of jail. It was not going to be easy. The BioChem Pharma stock, he said apologetically, was not in the courtroom, and he explained that the Swiss government had frozen it, because the previous day Bailey’s lawyer in Geneva had notified the Swiss authorities in a letter that the stock was alleged to be drug-tainted. (McGee was roused to sarcasm: “Drug money...has been there for eighteen months, and that letter goes out the day before this hearing. What a coincidence!”) As for the financial records that Judge Paul had ordered, very little was in the courtroom. Bailey, Zuckerman told the court, led “a fairly complicated life,” and spent his money in “a myriad of ways,” and he believed that if he turned over his personal banking statements he might inadvertently compromise other clients.
Zuckerman’s peacemaking mission was made vastly more difficult by Bailey’s belligerence. As the morning wore on, Bailey, who had come to court in black cowboy boots with two-inch heels, affected a strut. When he sat down to be cross-examined by McGee, he answered McGee’s perfunctory “Good morning” by saying sharply, “I don’t think so.” After a few more testy replies, Judge Paul called for a recess and asked Zuckerman to try to teach his client some restraint. Otherwise, he said, Bailey would not have to worry about preparing for his trial in Brooklyn, “because he will be a guest of the government here.” Zuckerman did his best to oblige. “Mr. Bailey, would you try to control yourself?” he said at one point.
As Bailey spoke, Duboc shook his head in disbelief. Bailey had sold about a third of the stock, before its steep climb in value, netting $2.2 million, and he had taken a $2.3-million personal loan from Credit Suisse, using as his collateral the remaining shares, which were now worth about eighteen million. Of the four and a half million in cash that he had withdrawn, $1.1 million had been spent maintaining the French real estate, four hundred and fifty thousand had gone toward legal expenses related to Duboc, and about three million had simply been spent by him personally. Bailey said that he could not recall where most of it went, but he believed that three hundred thousand had been spent as a down payment on his new $1.2-million house in Manalapan, Florida, near Palm Beach, and he thought about a hundred thousand had gone to an engineering company that was doing some work on “an airplane I was building.” Bailey has since admitted that about $1.5 million of the money went directly into Palm Beach Roamer, his aircraft-and-yacht company.
Bailey continued to insist that the stock had never been given to him as a trustee but had been paid to him “in fee simple”—but he added that, as the result of poor advice from an accountant, he had not paid any income tax on the money. Though Bailey did not disclose these figures at the hearing, he has since revealed that from the time he got the stock through the end of 1995 it represented eighty per cent of his gross income.
After Bailey stepped down, McGee called Ed Shohat, who seemed almost gleeful to be testifying, and who stated repeatedly his belief that Bailey had acted unethically. He said he had not seen a comparable case of “self-dealing” by a lawyer in twenty-three years of practice.
Shapiro was next. He pointedly contradicted Bailey at every turn, saying that in a conversation at the time of the stock transfer Bailey was “very specific” in stating that he had been appointed to hold the stock as “a trustee.” McGee was clearly delighted with Shapiro’s testimony. As Shapiro left the courtroom, a local reporter asked how it had felt to take the witness stand against a former friend. “Very painful,” Shapiro said. He smiled broadly.
By now, it was almost 6 p.m., and Bailey’s lawyers had still not put forward their case. By order of Judge Paul, the hearing resumed the next morning—Saturday, February 3rd. Bailey took the stand once again, and made another potentially damaging admission: he acknowledged being told that only Judge Paul could approve any legal fees, yet he had nevertheless already paid himself about six hundred thousand dollars in fees. Bailey continued to maintain that he was entitled to the money, because of the risk he had assumed in taking possession of the stock. “I would never have made an agreement where I took the downside risk and turned over any gains,” he said. “It would have been insane.”
McGee pounced: “Did you tell your client that? `Mr. Duboc! Made a heck of a deal for you. If this stock goes up to fifty, like you say, I’m going to make twenty million dollars!’”
Up to this point, McGee had been firmly and indignantly in control of the courtroom. After Bailey concluded his testimony, however, McGee made what seemed a tactical error: he called his colleague Gregory Miller, as a rebuttal witness. Miller fared poorly on the stand, and Zuckerman was able to seize the momentum by making an issue of the government’s inexplicable failure to set down its agreement with Bailey on paper. Zuckerman asked Miller what provision had been made if the stock in Bailey’s bank account went to zero and nothing was left for a fee. No provision, Miller said, explaining, “That was a gamble he would have had to have taken.” Miller even admitted that he had no idea how well the BioChem stock had done until January, when Bailey was replaced as counsel, though that information had been readily available in the newspaper. Zuckerman, in his closing argument, described the government’s fee arrangement with Bailey as “the most poorly negotiated and most poorly drafted...since the beginning of time.” (Fletcher Baldwin, a professor of law at the University of Florida in Gainesville, and an authority on criminal forfeiture, says that both the prosecutors and Bailey showed “incredibly poor judgment” in failing to memorialize their agreement on paper, and that Miller’s testimony might work to Bailey’s advantage if Bailey decides to litigate his right to the stock profits.)
For once, McGee sounded chastened. “There may be room for criticism in this case,” he said. “We did in fact to some degree trust Mr. Bailey. And, Your Honor, we sincerely regret that trust.” At that point, McGee regained his fire, and pressed hard for Judge Paul to send F. Lee Bailey to jail.
The Judge deliberated for nearly an hour and a half, and then returned to the bench. Bailey, he found, had shown no good-faith effort to comply with the court’s order to produce the stock and the financial documents, and therefore was in civil contempt. “For such contempt,” he said, “Mr. Bailey is sentenced to the custody of the Attorney General”—meaning imprisonment—”for a period of six months.” Bailey remained impassive. “However, Mr. Bailey may purge himself of such contempt,” Paul continued, provided that by February 29th he turned over the stock and financial documents, and repaid the three million dollars he had taken, without the court’s permission, for his personal use. With that, the hearing was adjourned.
Two days later, Bailey appeared before Charles Sifton, the Chief Judge of the Eastern District of New York, in Brooklyn, and was asked whether he would be too busy “scrambling around” for the three million dollars to concentrate on defending Joe Watts. “I raised it last night,” Bailey said. “Can we get on with this case?” In fact, Bailey had not raised the money, and he had to come up with more than three million. In order to get back the stock, he first needed to pay off the $2.3-million loan he’d taken against it, so he was actually $5.3 million in the hole.
Nevertheless, by the following Saturday, February 10th, Bailey was in fine spirits. He was ensconced in an apartment on the Upper East Side that had belonged to the former Columbia Pictures studio head David Begelman until his suicide, six months earlier. Bailey had converted it into a war room, with computer equipment and an overhead projector, to prepare for his defense of Watts. As his wife, Patty, served white wine and hors d’oeuvres to several of his law associates huddled around a table, Bailey reflected on his dustup in Florida. He was wearing brown slipper loafers and an aqua shirt, and looked utterly relaxed.
“Let me tell you something,” he said. “After some of the things I saw and did as a marine, this was like playing in the sandbox with a bunch of little boys. I have no fear of the United States government or any of the bad people in it. My training is to deal with assholes.” Bailey insisted he was fully prepared to sue the government for the right to keep the stock. “I do not intend to give it up,” he said. “I worked damn hard, and sweated every day and night, and read the NASDAQ to try to decide whether to hold it or sell it.”
Bailey had nothing but scorn for Shapiro and Shohat. “They were lying through their teeth, and I have a way to show it,” he said. “We’ll see how well they go through a polygraph test.” His harshest comments, though, were aimed at Dave McGee. “I’ve gotten mad at a lot of people and never done anything, but this one’s going to be hard to forget,” he said. “He’d better never meet me coming around the corner. No one stands up in an American courtroom and calls me a thief. His family needs to know some pain. That was a dirty, filthy thing to do.” Anyway, he added, McGee had underestimated him. “He thought if he sent me to the can I’d knuckle under,” Bailey said, with a contemptuous half laugh. “Hell, I’d do six months standing on my head for ten million dollars!”
As the deadline approached for complying with Judge Paul’s order, however, Bailey seemed to be losing his bravado. He suddenly had more time to concentrate on raising the money; the Joe Watts trial had ended abruptly in a plea bargain. But even with his days free he could not scrape together anything close to $5.3 million.
On February 27th, two days before the deadline, Bailey and Zuckerman, his defense counsel, appeared before Paul to ask for a three-week extension. As a gesture of good faith, Zuckerman said, Bailey was offering the court title to anything he owned—his planes, his boats, even his house. Bailey simply did not have much cash. His account at the Barnett Bank in Florida had a balance of about twelve thousand dollars. The Judge was plainly incensed to hear about the bank balance. On January 12th, he had ordered a freeze on all BioChem proceeds, and now, he was learning, Bailey had withdrawn and spent more than three hundred thousand dollars from that account after the twelfth. (Bailey said he had not read the order.)
One day before the deadline, Bailey once again took the stand in Paul’s courtroom in Ocala. This time, he didn’t strut. “I have worked day and night in every quadrant where I have any clout whatsoever to come up with the money,” Bailey said. Zuckerman looked exhausted, and, during a break, he and Bailey were overheard shouting at each other. At the close of the hearing, McGee continued to urge the Judge to put Bailey in jail. “He speaks of his generosity,” McGee said. “He’s going to give you his home. The down payment, three hundred thousand dollars, came from money he took from the Swiss account, money he stole from the taxpayers. This is no generous act.” Judge Paul ruled on the twenty-ninth. The request for more time was denied, and Bailey was ordered to comply by the following morning or surrender to the United States Marshal Service in Gainesville and begin serving his six-month sentence for contempt at the federal detention center in Tallahassee—the same facility that houses Claude Duboc. Bailey then got a temporary reprieve from jail when the Eleventh Circuit Court of Appeals, in Atlanta, stayed Paul’s order; a hearing was set for March 5th. Bailey’s legal battle to remain free continues. Meanwhile, the Florida Bar has begun an investigation, and the Internal Revenue Service is expected to follow suit. Somewhere, presumably, Bob Shapiro is smiling.♦