A wealthy investor gets sued by his longtime, part-time lover, who reveals a battery of shocking details of their private liaisons for all to see, including his colleagues and his wife and children. In a feud between two billionaires, charges fly of racism, the hiring of hitmen, and the planting of a pack of cocaine in an attempt to spark an arrest. At a prominent medical clinic, a married, ostensibly heterosexual doctor admits he fondled a male patient on the examination table. On two separate occasions.
Elsewhere, in a clash between a billionaire and a centimillionaire over issues in their gated community of vacation homes, the billionaire is alleged to have smeared his adversary with fabricated accusations of child molestation, among other dirty tricks. And in yet another case, the grown daughter of a wealthy family threatens to tell the world that she and her brother had incest in their teenage years unless her family pays her more than a million dollars.
I have represented one of the parties in each of these predicaments—as well as a famous male athlete caught in compromising photos, and a prominent executive accused of violating securities laws and dropping drugs in customers’ drinks. (All charges ultimately were dropped.) Dare I mention one of the more bizarre tales, in which a wealthy man carried on an online, real-time video-sex affair with a woman who, unbeknownst to him, was a quadruple amputee? She also turned out to be married. All he ever saw on-screen was her head and shoulders. She threatened to publicize their sexting escapades unless he paid her a considerable sum of money. We were able to make it go away—without his having to pay her one dollar.
Families of any income level can face accusations of salacious, tawdry, or perverse behavior, but when sensational charges are directed at the rich and famous, they often spark lawsuits and make for titillating headlines that leave the media and public hungry for details. Thanks to social media, the line between what really took place and what is fabricated is getting thinner. Merely being accused of doing something unseemly can become the equivalent of having actually done it in the public eye. Publicity compounds the problem—and that is where I enter the picture.
Cases involving deeply personal issues require acute sensitivity, not to mention extreme confidentiality. The level of embarrassment for a client can be especially high in these headline-grabbing situations, which need to be handled with great care and skill. Containing and stomping out an inventive lie can be difficult now that people can gossip across an online “backyard fence” that stretches around the entire globe. And lies—really bad ones—can be inserted in the middle of the truth, lending them a veneer of credibility. This happens all too often today in litigation, especially in divorce cases. Personal crises can hurt not only the principals, but also the companies where they’re employed and their families and friends.
Combating this kind of false information can be incredibly difficult. In the disputes about what is real and what is made up, what was consensual and what was forced, what was beneficial and what was exploitive, making these critical distinctions can trigger a backlash if not handled just right. The risk is particularly high in cases of “he said, she said.”
Family Feud
That was the predicament facing a prominent family when, late one afternoon, the voice of Stephanie Bruscoli, my longtime executive assistant, came over my intercom: “There is an attorney on the line. He wants to speak with you about retaining our firm to help one of his clients. He says he was referred by a mutual friend.”
I, of course, picked up the phone, as most of my cases come by referral.
The attorney told me he represented the daughter and grandson of a prominent family whose patriarch (his clients’ father and grandfather, respectively) is known throughout the United States and, indeed, much of the world. Unfortunately, said the attorney, he was not yet at liberty to disclose the name. (To make it easier to tell this story, though, I’ll call the patriarch “George,” his daughter “Mary,” and Mary’s son “Tom.”)
“That’s okay,” I said. “What’s the situation? How can I help?”
The lawyer said Tom, who had a successful business, and his mother had been threatened that unless they paid Tom’s sister (Mary’s daughter—I’ll call her “Jill”) one million dollars, Jill would file a false and defamatory lawsuit claiming that when she was an adolescent, her brother sexually abused and exploited her multiple times. In Jill’s explicit and detailed draft complaint, moreover, she identified herself not only by her surname but her middle name, which was her grandfather’s name, ensuring that the suit would get national attention and hurt her grandfather as well as her mother and brother.
“Specifically what is she alleging?” I asked the attorney.
“She is alleging that while she was an adolescent, she and her brother had sexual intercourse, and that their mother not only knew about it but permitted and encouraged it,” the lawyer said. “I have spoken with my clients, and both Mary and Tom say that this is patently false. Moreover, they tell me that Jill had made this claim in anger against her brother before and recanted it, apologizing before others.” He said Jill had also made a claim of child sex abuse against another family member but under oath had recanted that allegation.
The attorney told me that Jill had lived a troubled life. For two decades her mother had paid for her housing, mental health counseling, and substance-abuse counseling. She had once pleaded guilty to stealing from her mother, and earlier had stolen her brother’s car.
If we were retained, the lawyer would want me to provide advice and counsel to Mary and Tom and prepare a statement and press release in case the lawsuit was filed. “That’s fine,” I said, “but all that will do is set up a ‘he said, she said’ situation. I think we need to do more, if we can.” I had in mind something that didn’t fall within the traditional description of public relations but would help immensely with our case. “I’m not a lawyer,” I said, “but this sounds an awful lot like extortion or at least civil extortion to me.”
It wouldn’t have been the first time I had seen someone attempt to use the threat of a lawsuit to extort a settlement, although this case was especially egregious. The U.S. legal system, for better or worse, allows anyone to file a lawsuit and stuff it with inflammatory allegations, which the media dutifully amplify. Never mind that frivolous lawsuits are often tossed out or watered down by judges—the damage is already done, as plaintiffs’ attorneys well know. You can deny an accusation, but it lives on. Having reported that a case was filed, the media rarely report when it goes away.
“I had thought of that,” the attorney said. “What are you thinking?”
“I believe we should take a two-prong approach. One might not be admissible in a court of law, but it will be powerful evidence in the court of public opinion. I’m talking about a polygraph test. You can retain an expert through your law firm and give Tom a test. Assuming he passes, we can use it with media and his clients to demonstrate that the assertions are false. I recognize that these things aren’t perfect, and sometimes the person taking the test fails even if he is telling the truth. But as you know better than I, there’s no risk, since the results will be privileged and confidential.”
“I like this,” the lawyer said. He said he would talk to his clients.
Some days later, the lawyer retained our firm and disclosed our new clients’ names, as well as Mary’s maiden name, which would have been instantly recognizable on the media-centric East Coast. This lawsuit would indeed get national attention. The salacious accusations alone would generate headlines; the well-known name would have pushed it over the top.
The attorney put me on the phone with his clients, and we discussed the case and strategy in detail. Over the next few weeks we had numerous other conversations about the messaging, strategy, tactics, and timing. I tried to be upfront about the risks. I always explain the risks and benefits so clients don’t feel blindsided or deceived and so they can make an informed decision. Few people, apart from celebrities, are accustomed to the intense glare of the media, especially in a sordid case that invites scrutiny by strangers. But in the age of social media, anyone can pass judgment and render an opinion, irrespective of whether he knows what he’s talking about.
Because the filing of Jill’s lawsuit would undoubtedly attract attention among the frenetic New York media, as well as nationally, I recommended we inform one media outlet in New York and one in the clients’ hometown about the story. They agreed.
The attorney and clients decided to file a preemptive lawsuit against Jill. The risk, of course, is that it attracts attention you didn’t want in the first place. But if you let the other side carry through with their threat, you’re on defense from the start, trying to prove a negative. If you can go on the offensive, you set the terms of engagement. You have to consider how likely your opponent is to file a suit and whether you are willing to take that chance.
My concern in this case was that letting Jill go first would leave us with a “he said, she said” case. The lie detector test would give us an advantage, but the media would have a ten- or twenty-page lawsuit to write about but only a three- or four-sentence statement from us. That means that in a thousand-word article, we might have fifty words in the third or fourth paragraph, if we were lucky. I thought letting Jill file first was too big a risk, and it turned out our clients and their lawyer thought so too. So we decided to strike first.
We came up with a statement for Tom to use in his firm and one to use with his customers and worked on answers to questions he might receive from employees, clients, and friends. These mock Q&A sessions can prepare a client for the worst. I often ask one of the former reporters in my firm to put on his ink-stained-wretch hat and compose questions he might ask if he were still in the media, along with suggested answers. I tell him don’t sugarcoat it—the client should know in advance how to deal with anything thrown their way. The question you’re not prepared for is the question you’ll be asked.
We also wrote a press release. The purpose was to summarize our complaint—so a reporter could see at a glance what it was about—and to provide a statement from the family. While a litigation press release is largely shaped by the underlying complaint, I want to get the attention of reporters, who don’t want to slog through a lot of impenetrable legalese. I try to give them a reason to write the story and guide them with a compelling narrative that will help them get it right.
The attorney retained a polygraph expert, and Tom took and passed a lie detector test.
Shortly thereafter, my clients filed a lawsuit against Jill alleging civil extortion and infliction of emotional distress. The introduction of a complaint sets the stage for the facts that follow. The lawyer wrote a strong and compelling argument, combining solid facts with measured outrage. I consider the introduction so important that I often assist in “punching up” the lawyer’s draft to ensure the right elements are highlighted and summarized. If done right, the reporters will often lift the introduction as the lead-in to their own stories, or at least quote it.
The complaint began:
Plaintiffs bring this action after defendant, through her lawyer, threatened to in effect unleash a public smear campaign against plaintiffs by making salacious false allegations public through the filing of a lawsuit charging one of the Plaintiffs, her brother, . . . with “child sex abuse” when they were both minors, and the other Plaintiff, her mother, . . . with knowledge of this false alleged conduct, unless plaintiffs paid defendant over a million dollars. Plaintiffs deny these allegations because they are false.
The New York newspaper that carried the story wrote along the lines of our complaint. Jill was “allegedly threatening to besmirch the family name in an effort to extract $1 million from her mother and brother, a new lawsuit reveals.” The story called it a “sordid $1 million extortion scheme” and “alleged get-rich-quick scheme,” among other colorful descriptions. To be sure, the newspaper also aired the details of Jill’s bogus accusations. But by getting ahead of the story, we were able to introduce and defuse the allegations on our own terms.
Most importantly, the story prominently noted that Tom “recently passed a polygraph test tied to his sister’s allegations.”
The other side’s contribution? Nothing. Jill’s “lawyer declined to comment.” The local paper where Jill lived and where the complaint was filed provided even more detail, describing “a pitched family feud that includes allegations of extortion, sexual abuse and emotional distress,” and reporting that Mary’s and Tom’s lawsuit “claims the daughter is trying to ‘unleash a public smear campaign’ against the family.” This story also mentioned that Tom had “passed a recent polygraph test during which he denied abusing his sister,” and cited specifics of the sister’s prior troubles. Once again, Jill’s attorney “declined comment on the lawsuit.”
Concurrent with the filing of the lawsuit, Tom emailed the prepared statements to his staff and clients and also called key clients. The reaction was appropriate: clients, employees, and friends alike told Tom and Mary how sorry they were that they had to endure this.
Perception equaled reality: they were the victims here, not the villains. It helped that they had one hell of a lawyer. Jill never filed her lawsuit.
When the Truth Hurts
Sometimes, unfortunately, the sordid accusations are true.
One day I received a telephone call from someone I had never met, the CEO of a well-known chain of medical facilities. After introducing himself, he went right into the subject matter of the call. I’m not one for small talk myself, so I welcomed his getting to the point.
“I really need your help,” he said, with more than a little urgency in his voice. “One of our top surgeons has been charged by the state medical board with inappropriately touching a patient during an exam.”
“Is there proof of this?” I asked. I’m not judgmental in these cases. I just want the facts. My job isn’t to render a verdict about human behavior, it’s to mitigate the damage.
“The doctor admitted it in a settlement he made with the patient and to the medical board,” he said. And the patient had a video of the act on his smart phone.
Okay, I thought. Guess he did it. And it sounds like the patient set up the doctor—but that won’t excuse the doc’s behavior or make the story go away.
“What do you mean he inappropriately touched a patient,” I said. “How and where?”
“He touched his genitals and then masturbated the patient,” the CEO answered. “And not on one occasion, but during two separate visits.”
“What did the doctor say when you confronted him?” I asked.
“He said he is heterosexual. He’s been married for twenty years and has two children. He had never done anything like that before.”
“Okay, fine. But how did he explain what happened?”
“He said he has no idea why he did that. He doesn’t know what came over him.”
My partner Sallie Hofmeister was in my office meeting with me on another client matter when the call came in, and so I drafted her to help me on this case. We told him we wanted to see the medical board’s complaint and would call him back.
Shortly after hanging up, I got a call, coincidentally, from an old friend who knew this doctor. Small world.
“You’ve got to help him, Mike,” he said. “I know him and his family. He is devastated. He doesn’t know what he is going to do. He’s never done anything like this before. He is married and has two wonderful children.”
I responded that I was sorry, but I couldn’t help him. I had already been retained by the medical facility. “Look,” I said, “neither they nor we want to hurt him, and we have no intention of doing so, but we have to protect the reputation of the facility.”
Minutes later, the doctor himself called me, his voice cracking slightly. I told him the same thing I told our mutual friend but added, “You should check yourself into counseling so you can understand why you did what you did and so you can tell your patients you have done so. And you need to put into place measures to ensure that this can never happen again.”
“Like what?” he interrupted.
“Like making sure that you are never in an examination room alone with a patient; like having a nurse in every examination room when you are with a patient.”
Sallie and I then began our research on the client’s facility. First, we went online to look at and familiarize ourselves with the medical board complaint, just as a reporter would do. Then we began a review of the facility. We wanted to see if they had a spotless record. We wanted to ensure there were no complaints against any of their other doctors that the media could use to construct a larger story. Fortunately, everything checked out.
We did this immediately because with the complaint online, it was only a matter of time before reporters got wind of it. Accusations like this would bubble up to the national media in no time.
We called the client back and told him that he needed to take a series of immediate actions. First, he should communicate with the doctors and staff. They already knew through the grapevine what had happened, but it was important they know that the facility had terminated the doctor and the steps that were being taken to ensure that this would never occur again. Internal transparency is critical in these situations to avoid panic among employees, who might be nervous about their jobs or worried about damage to their reputation. It is also critical because word has a way of spreading. Since they could be asked about the incident by patients and others, it was important that they know how the facility was responding. What actually happened is not as important as assuring everyone that it won’t happen again.
We shared some suggestions, which the CEO said he would implement. Sallie, with her reporter’s instinct for leaving no question unturned, asked if there was anything else he could tell us that might be of use. He casually mentioned that the incident happened while the doctor was moonlighting at an unaffiliated facility. This would prove critical in turning the story away from our client’s facility.
We told our client that his outside lawyer should call the medical board’s lawyers and explain that the incident occurred in another facility. It was not fair or accurate to have the name of our client’s facility on the cover of the complaint, and it was not fair or accurate to fail to make this fact clear in the body of the complaint. The medical board’s lawyer agreed.
When the media got wind of this complaint—obviously not from us—Sallie pointed out to the reporter that while it was true the doctor was on the staff of our client’s facility, the incident happened while he was moonlighting at another facility, as the medical board complaint itself noted. For the sake of fairness and accuracy, she insisted, that fact should be reflected in the story.
The media reported it that way, and our client came through this incident with its reputation deservedly intact. In fact, in much of the coverage, our client’s name was not even mentioned. As for the doctor, he too took our advice, got counseling, implemented the procedures we suggested, and is still in practice today.
Head Them Off at the Pass
Less sordid but just as potentially damaging was another situation I handled where an employer faced the potential of collateral damage because a partner was the subject of a pending negative story.
The call came on an otherwise pleasant spring Saturday from an attorney I had worked with previously. The client was an investment banking firm, a partner of which had been nominated for a high-ranking position in the new administration. His congressional confirmation hearings were a few days away, and a national news organization was investigating his alleged ties to a man behind a Ponzi scheme—a man who had committed suicide as investigators were closing in on him. The partner was also said to have worked on deals with and served on the board of a company in an industry that he would oversee in his government role.
I called my partner Seth Lubove and asked him to work with me on the case. As noted elsewhere in this book, Seth is one of the best researchers I have ever worked with. He is able to uncover critical information that is key to our representation of our clients. He has great news instincts and a grasp of an uncanny variety of topics. A former reporter and editor, Seth provided valuable guidance in this case on the ethical guidelines subscribed to by news organizations, which we were able to use to protect a client from an unfair report or a lack of transparency about a journalist’s story.
The attorney set up a conference call with another partner of the client, who explained that the reporters were trying to make a connection between the Ponzi schemer, the administration nominee, and the investment bank. “We don’t want to get our name dragged through the mud,” he said.
The client said there was no direct connection between the firm and the Ponzi scheme, but the reporters were calling around to the firm’s customers and asking pointed questions about the relationship. At least three of the firm’s clients reached out to the partner and said the reporters were focusing on the Ponzi scheme. Until this point, the firm never received any communications from the reporters.
With the confirmation hearings looming, I said we should immediately contact one of the reporters and find out what exactly they were working on. “We need to speak to the reporter and tell him that fairness dictates you provide us with any questions or information you have so we can adequately respond,” I said. “We need to flush him out.”
Reporters can be coy about what they’re working on, counting on the element of surprise to catch you off guard or force you to comment on short notice. The first time you hear of a story might be when a reporter calls, and in the worst case he says you have thirty minutes to respond. Or you may hear that “something is in the works” when a former employee or vendor is contacted by the reporter, before the subject of the story is even aware of it. It’s a common technique, especially among so-called investigative reporters. When it happens, I often get in touch with the reporter and politely ask how may we assist. It won’t make him any less aggressive, but at least I have time to engage and provide thoughtful comments.
The partner we were talking to thought the reporter’s calling around to customers amounted to “character assassination,” a common feeling when one’s business practices are subjected to the tender mercies of the media. I said we would tell the reporter we were surprised the firm hadn’t received the courtesy of a call, since it was a primary subject of the story.
The investment bank had had some indirect business dealings with the Ponzi schemer but in completely legitimate transactions that were unrelated to the Ponzi scheme, and the partner who was nominated to a government position had had nothing to do with any of those deals. And even then, the deals were done solely through a third party, not directly. Members of the investment bank had met the Ponzi schemer all of one time, at a conference, and were unaware of his side scam.
When the reporters finally sent their questions, the story became much clearer: not only was the nominee tainted by conflicts of interest and associated with a (now dead) Ponzi schemer, but the firm—our client—was incompetent.
Left unanswered, these accusations could have caused irreparable damage to the nominee and the firm. As I have said, there are times when “no comment” will suffice, but they are few and far between. This clearly wasn’t one of them. After getting the facts, I encouraged the client to respond forcefully and factually in writing to all of the allegations, refuting them with the strength of our detailed answers. Although the questions were addressed to the partner who was up for nomination, the bank answered on his behalf, since many of the queries concerned the firm and its business practices.
The reporter, for instance, demanded a response to the statement that “client companies listed on your disclosure forms are down between roughly 50% and 99% since the time of [the firm’s] first deal with them until now.” We responded that their assertion was “a misleading, selective, and inaccurate portrayal,” and that the firm had far more successes than failures. “Overall results are not reflected by a handful of investments, selectively singled out,” we said, providing multiple examples of successful investments and the returns.
The reporter also asked about the nominee’s and the firm’s “relationship” to the Ponzi schemer. The response was assertive and unambiguous: neither the firm nor the nominee “had any knowledge of or interactions with this entity, and it is false and defamatory to suggest or imply that [the client or nominee] had any knowledge or involvement in alleged illegal activities conducted by” the person behind the Ponzi scheme.
Other questions asked about the nominee’s compensation and his “involvement” in companies that had suffered “large stock losses.” Again, after getting the facts, I counseled full and factual disclosure. The reporters’ follow-up questions were along the same lines, getting into details about prior transactions and the alleged connection to the Ponzi scheme.
For good measure, I made sure one of the top editors of the news organization was copied on our responses along with the reporters, ensuring that the boss was in the loop. While editors are usually deferential to their reporters and will defend them to outsiders—presuming they’re even aware of a story in the first place—copying the editor ensures that they see the answers that the reporter is getting. If there is a dispute about context or how the reporter has characterized those answers, the editor has the original answer and context from the onset. Reporters don’t like it when you go over their head, which is why I either show a copy to them or tell them in advance that I plan to speak to their editor.
The story did not appear prior to the nominee’s hearings, and he was confirmed with little debate. When it was finally published a few weeks later, it reflected the facts and was far less accusatory than first represented. The reporters had done their job fairly, and neither the nominee nor his prior firm suffered from unfair or unfavorable publicity.