Rudy! And "The Queen Of Mean"

Another notable from the ‘80s bit the dust today, and that would be hotel magnate Leona Helmsley.

It’s difficult to find sympathy for someone who fired a former manager in her employ because he was gay (as noted here), as well as the fact that she tried to stiff her landscaper of $100,000 and sued the Woodlawn Cemetery in the Bronx for $150 million because they planned an expansion for 2,000 more – ahem – “arrivals,” thus (allegedly) “disrupt(ing) the serenity she was promised for her family's eternal resting place” (her son and husband were buried there).

And we all know about the “only the little people pay taxes” quote, and she denied speaking those words (but would it have been truly surprising if she admitted that she had?).

But in spite of all of that, I would ask that you read this column from Paul Craig Roberts that appeared at the National Review Online about Helmsley’s trial in which she was convicted of tax fraud.

Now I realize we’re talking about the NRO here, but Roberts (for anyone unfamiliar with his writing) is a wholly other breed of writer, and I wouldn’t even call him a conservative any more at this point. As Roberts explains….

The government used…personal attacks to paint the picture of guilt, but they were irrelevant as a matter of law. The crux of the government's legal case hinged upon the testimony of accountants from the Helmsleys' outside accounting firm, Eisner & Lubin. The accountant most familiar with the Helmsley account testified that the firm was totally unaware that personal expenses had been disguised as business expenses. Without this testimonial evidence, the government would have failed to satisfy the elements of a prima-facie case, and Mrs. Helmsley would have been entitled to a directed verdict in her favor.

After Mrs. Helmsley was convicted, her attorneys discovered compelling evidence that the government had known the accountants were lying. In order to protect the credibility of its key witness, Gerald Marsden, prosecutors painted him as an honest accountant, duped by Mrs. Helmsley. Yet for several years he had been the subject of a criminal investigation for signing fraudulent "comfort" letters exaggerating the financial strength of a client, Robert Landau Associates, resulting in the Miller Brewing Company's being defrauded of $2 million. After Marsden testified against Mrs. Helmsley in the grand-jury hearing, and shortly before he testified at her trial, the charges against him were dropped.

And as for the charge that Helmsley was framed…

THE EVIDENCE…was so overwhelming that two prominent attorneys known for their divergent legal philosophies took up her case: first Harvard Law professor and criminal defense attorney Alan Dershowitz, and then former appellate judge and conservative constitutional scholar Robert Bork.

No one disputes that the Helmsleys purchased many items for the renovation of their estate through their business. This practice, engaged in by millions of family-owned businesses, is perfectly legal so long as personal expenses are distinguished from business expenses when tax returns are filed. Like many others, Mrs. Helmsley relied on her accountants to sort out these expenses. The government claimed she submitted false invoices to make personal expenses appear to her accountants as business expenses.

The problem with this charge is that the accountants treated the same expenses differently on different sets of books. Both Dershowitz and Bork concluded that if there was tax fraud going on, the accountants had to have been in on it, and the government's case that Mrs. Helmsley deceived her accountants had no basis.

Dershowitz and Bork offered proof, moreover, that the government knew this. For example, the handwritten notes and workpapers of Eisner & Lubin accountant Arthur Nowak, who calculated the ground rent for the Helmsley-owned Graybar Building in Manhattan, made repeated reference to the Dunnellen Hall invoices (the property at issue in the action against Helmsley).

When James DeVita, the assistant U.S. attorney working on the case, discovered this near the end of his pre-indictment investigation, he and four government tax experts interviewed Nowak, who obliged them by denying that he had seen the invoices. In his motion for a re-trial, Dershowitz noted that the government had to have known that this denial was a lie, but had gone ahead with the case.

And who was the U.S. Attorney who prosecuted the case? Why, that would be one Rudolph William Louis Giuliani, of course.

As Roberts concludes…

Conservatives tend to view prosecutors as allies in the fight for law and order. So many criminals get away without punishment that tough prosecutors willing to employ all the power they can marshal might seem to be an appropriate response. However, justice suffers when winning at all costs becomes the prosecutorial ethic.

And as far as Rudy! is concerned, I think his “winning at all costs” M.O. is part and parcel with a whole bunch of other issues, resulting in a plethora of “dirty laundry,” a good bit of which is noted here.