The Bigger They Come, The Harder They Fall On You

Graduate students and other students of politics and government are wasting their time taking seminars. They should be sitting in on white-collar crime trials in federal court. Here in the United States District Court in Baltimore, lobbyist Gerard E. Evans has been found guilty on nine counts of wire and mail fraud, with the jury hung on two counts; his fellow defendant, legislator Tony E. Fulton (D-Baltimore), was acquitted on five counts, with the jury hung on six.  Evans is reputed to have been the top lobbyist in Maryland, where lobbyists learn early to be all that they can be.

According to Bonsib, Evans’s firm, founded in 1994 with partner John R. Stierhoff—who testified under a grant of immunity—grossed over a million a year in 1996, 1997, and 1998. (Income tax returns from the period were not presented in court, for either defendant.)

Fallout from the fraud conviction may not actually slow Evans down much. As everyone comments, criminal charges are something of a tradition for regional high-flyers; the previous top-grossing lobbyist, attorney Bruce Bereano, was convicted and continued his lobbying activities, literally, from the halfway house. Eventually he was also disbarred—not a feat any ordinary man could pull off in Maryland—despite a roster of character references and statements on his behalf in the Court of Appeals by the best-connected political figures in Annapolis. Evans, however, has never passed the bar in Maryland, becoming barred in Pennsylvania and then by waiver in the District Court in DC.

Allegedly the defendants defrauded some of Evans’s corporate clients—several paint and asbestos companies—by scaring them into thinking that politicians here were on the verge of introducing market share liability legislation. A market share bill, as the corporate lawyers emphasized on the stand, would leave former manufacturers and sellers of lead-based paint substantially less able to defend against litigation. Under current law, a plaintiff wanting to sue for damages related to lead paint would have to prove what company manufactured the lead paint ingested or breathed by individual plaintiffs. Under the purported legislation, damages in a lawsuit would be apportioned among the companies by current market share, as with tobacco.

The source of the market share concept, as more than one lawyer-witness testified, was DES litigation, the host of cases involving pregnant women who took DES to avoid morning sickness and consequently brought to term babies with what one attorney called a “signature injury,” i.e. missing limbs.

Obviously scary stuff, and the companies reacted, by and through legal counsel of their hardnosed reps, with fitting horror. A whole fictive scenario was unrolled before their terrified eyes by their man on the scene, Evans, including dramatis personae from upstairs and downstairs: Peter Angelos, multi-million-dollar plaintiffs’ attorney, whose asbestos and tobacco litigation among other pursuits enabled him to purchase the Orioles; popular former Mayor Kurt Schmoke; and state Senator Paul Pinsky (D-22nd).

Scare figure Angelos is evidently a living legend well beyond the mid-Atlantic. All the attorneys who testified on behalf of companies for the prosecution detailed Evans’s having freely injected Angelos’s name into discussion. The argument was that since Angelos is winding down asbestos cases (with a mere 12,500 trials now bundled for trial in Baltimore), and since tobacco has settled—three billion for the state and one billion for Angelos, unless he cuts his take to half a billion, as Attorney General Joseph Curran would like—he must be looking for other fertile fields for plaintiffs. Indeed, Angelos has already filed lawsuits on lead paint. So he was nicely positioned to serve as a bogeyman.

As to Schmoke, he testified by videotaped deposition that he had known Fulton since their childhood in the same part of Baltimore, had kept in touch over the years, and had contributed to Fulton’s campaigns. So it would seem—to the paint companies—that a rather fire-breathing letter from Fulton to Schmoke (allegedly drafted by Evans, for Fulton to send over his signature) would command attention. Copies of the letter, calling for the mayor’s office to act on lead paint hazards, were duly sent to the paint companies by Evans. In the prosecution’s most dramatic testimony, a young former employee of Evans & Stierhoff described Evans engaged in what he called “creative lobbying,” i.e. cutting a fax line from an unrelated message from the mayor’s office and attaching it to Fulton’s letter, to hype Schmoke’s purported interest in a lead-paint bill.  Senator Pinsky came with a different reputation, testifying to a concern for poor households and working people, and adding a touchingly frank boast for inside the Beltway: “I’ve probably received less money than almost anybody else in the Senate.” To his credit, his name was mentioned, apparently feverishly, in conversation and correspondence between the hapless corporations’ attorneys and their paid lobbyist. Unlike Angelos and Schmoke, the disinterested Pinsky figured as a bogeyman more because of his beliefs than because of his position.

Three attorneys for the corporate victims (a phrase we do not read every day)—Harry Lehman for Sherwin-Williams, Susan Pace for Glidden, and Timothy Knaus for National Lead Industries—testified that they were induced to pay sizable sums to Evans specifically by their fear of market share liability legislation. That this legislation would have been wildly atypical for the Free State, which has just made cable companies free to charge late fees though no one enforces the companies to pay theirs, seems to have occurred to no one. Evans claimed both in conversation and in writing (including through the mail, which is where the feds come in), that Senator Pinsky was having a market share bill drafted, that he was shopping it among his colleagues, and even that he was doing so on behalf of Peter Angelos.

This legislation, for defraying some public costs of brain damage in children, in Baltimore and elsewhere, who ingested chips of lead paint or breathed in dust laden with lead, has virtually never been on the table in Maryland. When Senator Sandy Rosenberg (D-Baltimore) finally introduced a market share bill in the 2000 state legislature, it promptly died in the Judicial Proceedings Committee—where matters of environmental or health concern are sent to die, according to testimony—killed by unanimous vote. Responding to Evans’s assertions, Pinsky testified that he had never had such a bill drafted and had never introduced one. Schmoke also testified to having had no meetings and to having taken no action on the concept. Angelos, subpoenaed by the prosecution in the last week of trial, did not appear on the stand.

Allegedly the paint companies were further softened to Evans’s inducements by Fulton’s participation, although the federal jury found no direct connection. First Fulton had a market share bill drafted, providing a copy to Evans (only), who sent the copy to his clients. (The exact legal language is, “for the purpose of executing and attempting to execute the scheme and artifice to defraud, did knowingly and willfully cause to be transmitted in interstate commerce by means of a wire communication, signs, signals and sounds, that is, a facsimile memo from Annapolis . . .”) Fulton then withdrew the bill a few days later, after lobbying by Evans—at the same time sending Evans a letter extolling the latter’s advocacy for changing his mind, a copy of which Evans also sent his clients. (Subsequently, prosecutors allege, Evans arranged for Fulton to receive a $10,000 real estate commission in the firm’s purchase of an Annapolis building.)

Children brain damaged by lead chips or particles develop learning disabilities and behavioral problems, further burdening the juvenile-justice and family-law systems, none too robust in the mid-Atlantic to begin with. It need hardly be said that these problems have been around for years; still, as the corporate reps testified repeatedly, the companies refuse to fund even certifiably community-based programs for lead abatement and blood screening for children (although they don’t oppose legislation for such programs, referred to in court as “good legislation”), or even to donate to related charities.  To be sure, the companies can still work in other directions, in a “three-pronged strategy” of legislation-influencing, political contributions and donations to charity designed to enhance their standing as “good corporate citizens” (another phrase repeated). As elicited in testimony, specific recipients of their largesse in Maryland in recent years have been the Assembly’s Black Caucus—formerly headed by Delegate Fulton—and a duck decoy museum on the Eastern shore, a pet project of another legislator.  By the way, questioning also elicited that the Assembly did successfully pass a bill in 1994 reducing landlords’ liability in connection with lead paint, with the overlapping support of the Black Caucus and the Baltimore city delegation among other groups.

Whether Delegate Fulton is a landlord did not come out. Meeting with press after the trial, Assistant U. S. Attorney Dale P. Kelberman said that Fulton has been a landlord but that he did not know whether he is now—this item either a stone left unturned in the year-long FBI investigation, or another X-marks-the-spot successfully excluded by the defense. Undisputedly Delegate Fulton is a licensed real estate agent and broker, and by all courtroom accounts his only sustained legislative effort on lead paint—that is, the only concern manifested consistently and materially—has been with connected with the issue of landlord liability. One of the more chilling moments in the trial came in Harry Lehman’s off-the-cuff thumbnail sketch of Delegate Fulton as provided by Evans: “Chair of the Assembly’s Black Caucus; wife a pediatrician; some history of marital problems; three daughters in private school [it turned out to be two]; sometimes conservative; police protection; sometimes carried a weapon.”

When the hired guns ride into town for the showdown, and hire others to help them, they come armed.  So, how did the public come out, in this trial? Good news, up to a point: the good guys won one, or most of one, and the truth did come out, or largely. The jury, which was attentive, diligent, and businesslike, appropriately rejected Evans’s insinuations against other persons, assigning responsibility for his actions where it belonged. (Predictably, Evans’s lawyer said in opening that Pinsky had been “out to get my client for a long time.”) The rather transparent smoke screen signified by “Angelos” was repudiated.  Also, a qualified federal judge, Chief Judge J. Frederick Motz, applied consistent courtroom discipline and meticulous attention. Most motions were heard in chambers or over white noise at the bench—thwarting the press—and final strikes in jury selection were submitted in writing rather than in open court, but the defense seems to have been given ample opportunities. On the other hand, if it wanted a sloppy jury, it didn’t get one; it got at least one full row of note-takers.

Happily, both Bonsib and Fulton’s attorney, state GOP chair Richard Bennett, modified their trial strategies over the course of the month. After the first two weeks of trial, Bonsib somewhat ameliorated what one attorney called the “classic defense by tedium”—mind numbing parsing, frequent mixing/shuffling of papers, omitting to cite document numbers when referring to them with lawyer-witnesses, and frequently pausing with the formulaic phrase “court’s indulgence, your honor”—interspersed with his standard response, “Fair enough,” in which he sounded like Dan Aykroyd on the old “Saturday Night Live.” Farther in, he did what looks to a lay perspective like a better job, given not that much of a defense. (Evans blaming a young African-American office assistant, whose law school tuition was being paid by the firm, for the cut-and-paste artifice, apparently did not sit well with the jury. The prosecutor dispatched this one briskly in closing: “How about the James-Davis-did-it-all-by-himself defense?”—"You going for that one?")

Another bright spot was the excellent job done on behalf of the public by the prosecutor. Whatever efforts defense counsel made to throw Kelberman off the track, if any, did not work; he never lost his focus, never left out details in a rush to conquest, and did not over-emphasize points already bolstered by repeated testimony—regardless of courtroom jokiness, moments of candor, righteous indignation, murky personal exchanges or any other Jane Austen-scaled weapons from the other arsenal. Speaking of saving money, the Evans trial may actually keep some other trials out of court. With Evans convicted of fraud, his corporate clients may be able to get restitution through sentencing (September 14), instead of through civil litigation. Restitution, as Kelberman pointed out, would have the effect of an award in a future lawsuit, without the cost of a trial. As U. S. Attorney Lynne A. Battaglia joked, “We’ll be the collection agency.”

The bigger picture, however, is that this trial laid out a road map of legislation almost incontestably in the public interest—market share liability, changing the cap on punitive damages, changing the statute of limitations in product liability, and ending the concept of “comparative negligence.” All these laws would give consumers back some redress, which explains why the corporate reps are fighting on legislative turf around the country.