Fire Power: It Took Three Lawyers to Stop the Destruction of CDI Inc.
Volume 1, Number 86_Law
The senior attorney in a two-lawyer firm got word that a long-time corporate client and the company's two principals faced federal felony charges stemming from allegedly illegal campaign contributions. A conviction - any conviction - would leave the company in ruins.
The attorney could either panic or put together a trial team.
William F.C. Marlow Jr. opted for the latter.
Marlow, with his partner Michael T. Wyatt, has his office in a converted house on a tree-lined street in Towson flanked by colonials, Cape Cods and Victorians. The exterior is peaceful, tranquil even.
Inside, a dynamite-ignition plunger sits on a bookcase, next to a white hard hat stenciled with the letters "CDI". Across the room, like a family portrait, hangs a four-photo montage of the implosion of the Traveler Building in Boston in March 1988.
The CDI on the hard hat stands for Controlled Demolition Inc., a world-renowned Baltimore County company that uses explosives to implode structures such as skyscrapers and hotels.
Marlow, 56, began representing CDI "between 25 and 30 years ago," when a late-evening emergency hit company-founder Jack Loizeaux at a time when his regular attorney couldn't be reached.
Marlow handled it and soon became Loizeaux's new regular attorney.
Now, CDI and Jack Loizeaux's sons, J. Mark and Douglas Loizeaux, were facing the battle of their livelihood, if not their lives.
A felony conviction for the company or its principals would mean the loss of the Bureau of Alcohol, Tobacco and Firearms license that allows CDI to handle explosives. It would mean debarment as a federal contractor, when 10 percent to 75 percent of the company's yearly gross income comes from government projects, J. Mark Loizeaux said.
"It was apparent from the start that the case was going to trial," Marlow said. "We needed some lawyers who weren't afraid to try a case."
Marlow graduated from the University of Virginia in 1966 and the University of Maryland School of Law in 1969.
"I have kept 30 years' worth of indexes of attorneys across the nation and in foreign countries," Marlow said. "These are solution-oriented attorneys."
Marlow knew former federal prosecutor Gregg L. Bernstein's reputation, but not the man. After interviewing several attorneys, he recruited Bernstein for the job.
"I needed somebody who could communicate well with a jury, and Gregg Bernstein certainly fits that description," Marlow said.
Bernstein, 45, is a partner in Martin, Snyder & Bernstein, P.A. He graduated from the University of Maryland in 1977 and its law school in 1981.
In 1987 he joined the federal prosecutor's office as an assistant U.S. attorney, a position he held for nearly five years.
Bernstein is accustomed to high-profile cases. In the summer of 1999 he helped win an acquittal for former state Sen. Larry Young on state charges of bribery and income-tax evasion.
Bernstein recommended Martin S. Himeles, Jr. to round out the team.
"We decided we needed a technician who could distill reams of [financial] documents into something meaningful a jury could understand," Marlow said. "I will never, to my dying day, forget his cross-examination."
Himeles, 44 and president of the roughly 500-member Maryland chapter of the Federal Bar Association, is a partner in Zuckerman, Spaeder, Goldstein, Taylor & Better. He graduated from Yale University in 1978 and Harvard University School of Law in 1981, and he served as an assistant U.S. attorney from 1986 to 1990.
Himeles was on the team that won an acquittal for Thermal Science Inc. in 1995 when the St. Louis manufacturer of insulation for nuclear reactors was charged with falsifying laboratory reports.
But it was the case of the missing thiodiglycol that first brought Bernstein and Himeles together.
The two were assistant federal prosecutors when shipments of the embargoed cleaning agent (which can be combined with hydrochloric acid to form mustard gas) started showing up in Iraq and Iran at a time when those countries were at war with each other.
The case involved suspects throughout Europe, but Himeles and Bernstein won convictions.
In the CDI case, their job was to win acquittals for the Loizeaux brothers.
Marlow would take care of the company.
The amounts involved were small - all told, $4,000 - and no one suggested that the candidate even was aware of the contributions, let alone influenced by them.
But to the prosecutors, it was a matter of principle.
"This is the case about two powerful businessmen who decided to use employees of their own company to funnel money into a federal campaign," Assistant U.S. Attorney Kathleen O. Gavin told jurors in her opening statement in September.
It was the first congressional-campaign contribution case ever tried in the U.S. District for Maryland, according to the defense attorneys.
Witnesses testified that the case against CDI, which has fewer than 20 employees, took shape during an investigation of contributions to Rep. Elijah E. Cummings' 1996 campaign.
Prosecutors claimed the Loizeaux brothers asked four CDI employees to contribute $1,000 apiece to Cummings' campaign because Cummings supported demolition of high-rise public-housing projects, which could mean more business for CDI.
The company then reimbursed each donor, some on the same day they made campaign contributions, the prosecution charged.
It is illegal for a corporation to reimburse employees for making campaign contributions because corporations cannot donate cash to federal campaigns. And it is illegal for anyone to use "straw contributors" to hide the identity of the true donor.
The defense attorneys countered by saying that CDI's payments to the employees were bonuses, not reimbursements.
After a two-year process and a trial that ran intermittently for three weeks, the jury came back in less than two hours - including a break for lunch.
Not guilty. Not guilty. Not guilty.
Federal prosecutors did not return a reporter's calls for comment.
Back to work
A week after the verdict, Himeles and Bernstein pondered the government's prosecution of the Loizeaux brothers.
They'll leave it to others to speculate how four $1,000 checks would ever cross the prosecution's radar and what effect the case will have this winter when another businessman faces trial on similar charges.
But they do see the CDI prosecution as part of a larger picture.
"The federal government does these investigations and thinks a person did something wrong, then tries to fit the facts into a legal theory,"Bernstein said.
Himeles said this case fit the pattern for white-collar criminal cases in other ways, too.
"The issue in most white-collar cases is intent. There are shades of gray," he said. "There is no alibi defense when the issue is intent, and there's a lot more potential for innocent people to be charged"
The Loizeaux brothers aren't sitting around worrying about it.
Three days after the CDI verdict, Marlow chased Douglas Loizeaux down by cell phone. Loizeaux was in Las Vegas, prepping the El Ranchero Hotel for explosives.
"Thank the Lord they had enough trust in me to accede to my recommendation of Marty and Gregg" Marlow said.
Reprinted with permission from The Daily Record.
Copyright 2000 The Daily Record.