Outclassed
Sotheby's defendant had a defense team befitting his lofty status. But the prosecution had the facts -- and a deadly touch

By Dan Ackman

Scott Muller was cross-examining Christopher Davidge, the former CEO of Christie's International plc, and was having a rough go of it. Muller, representing A. Alfred Taubman, former chairman of Sotheby's Holdings Inc., listened to Davidge freely admit to his role in the price-fixing conspiracy between the two great auction houses. But Davidge refused to admit the small points. Muller, a partner at New York-based Davis Polk & Wardwell, kept pressing.

Muller asked about a man named Lord Camoys, who had once served on the Sotheby's board. He wanted Davidge to say that Camoys was a prominent man in British society.

Davidge testified that he'd heard of Camoys, but refused to concede his renown. Finally, Muller cried out in frustration: "Wasn't he lord chamberlain to the queen of England?"

Yes, Davidge answered, "but that wouldn't make him well known." The jury got a big kick out of Davidge's response and his added comment that being a lord was no big deal because there were lots of them. Muller let the matter drop and never asked Davidge anything else about Camoys or about what Davis Polk later alleged was his role in the conspiracy.

While the Camoys exchange came to nothing, it epitomizes the trial and conviction of Taubman on criminal price-fixing charges.

The eight-lawyer Davis Polk team, led by Robert Fiske Jr., the venerated former U.S. Attorney and the original Whitewater prosecutor, was beaten at every turn by a team of Justice Department antitrust lawyers.

The government's side didn't look like much next to the well-tailored Davis Polkies. Of the three -- John Greene, Patricia Jannaco and Philip Cody, all career trial lawyers for the antitrust division -- only Jannaco, a graduate of Brooklyn Law School, spent any time in private practice, and that was just for one year. The prosecutors were led by Greene, 56, a Fordham law graduate and infantry platoon leader in Vietnam, whose blunt style matched his hydrant-shaped physique. But what they lacked in polish they more than made up for in substance -- and in an ability to score points with the jury in federal district judge George Daniels' court in Manhattan. The prosecutors wasted few words in explaining the conspiracy, dealing sharp, telling blows to defense witnesses. They had marshaled a good set of facts, and they used them to full advantage, making all of their points with economy.

Fiske and his Davis Polk colleagues defending Taubman, on the other hand, rarely managed to undercut or explain away the government's wealth of incriminating evidence. They offered a traditional attack-the-rat defense, insisting that the price-fixing conspiracy had been orchestrated by Diana "Dede" Brooks, former CEO at Sotheby's, and by Davidge, without Taubman's knowledge or consent. They cast Brooks, the only witness who could implicate Taubman directly, as a skilled liar who squealed on her former boss to save herself from prison.

They also offered defenses more tailored to aging tycoons. They said that Taubman, while chairman, kept his distance and never even asked about the auction house's bottom line. And they theorized that Taubman was so wealthy -- his net worth having climbed as high as $1.2 billion -- and was of such an impeccable reputation based on his charitable works that he would never have risked his liberty and good name for the relatively paltry sum to be gained through price-fixing.

The Justice Department lawyers kicked away each leg of the defense so deftly that jurors who spoke to reporters after the trial said that the guilty verdict wasn't a close call.

Davis Polk's team, for its part, never articulated a plausible explanation for the most damning evidence against its client: that Taubman and Sir Anthony Tennant, his opposite number at Christie's, held a dozen private, one-on-one meetings, all but one of which occurred at Taubman's New York apartment or his flat in London. They offered no reason for why Taubman hid the fact of those meetings from his closest associates and from Sotheby's executives.

Taubman faces three years in prison and a fine. His April 2 sentencing will cap a four-year saga that has cost both auction houses dearly, in reputation and cash. Their September 2000 class action settlement carried a joint price tag of $512 million. Sotheby's paid an additional criminal fine of $45 million after pleading guilty to antitrust violations. Christie's got off easier, having rolled over first with a grant of amnesty from prosecution for itself and Davidge in return for helping to make the case against Sotheby's. Tennant, of Christie's, was indicted along with Taubman, but under British law could not be extradited on price-fixing charges. Brooks pleaded guilty and agreed to testify in exchange for a possible lighter sentence. That left Taubman alone, a 76-year-old shopping-mall mogul with Davis Polk by his side.

Muller's difficulty with Davidge illustrated a persistent tendency by the defense to score debating points while missing the bigger picture. Under cross-examination, as in his direct testimony, Davidge admitted that he had lied repeatedly to conceal the scheme. "I lied ... yes ... I did not tell the truth ... . That's correct ... and I knew it was a lie," Davidge said, over and over. But Muller wouldn't take yes for an answer.

After Davidge conceded that he had denied the plot even to lawyers for Christie's, Muller whipped himself up to a righteous climax: "You looked them straight in the eye, and you said 'no,' didn't you, sir?" "I don't know if I looked him in the eye, but I did say 'no,' " Davidge answered, retaining his British cool. As Muller became more overwrought, Davidge seemed all the more likable and credible.

The most damning evidence against Taubman was his own diaries and schedules, which showed the extent of his contact with Tennant. The diaries often omitted mention of Tennant's name. Instead they referred to him as "A" or "a gentleman." One entry, for instance, read: "Possible meeting at London flat with a gentleman."

That much was widely reported during the trial. But more remarkable was that Muller's cross-examination helped put that evidence in its most negative light. In questioning Melinda Marcuse, Taubman's executive assistant, Muller urged her to say that the omissions and code words were innocuous, products of the personal styles of the various Taubman staffers.

But then Muller watched Marcuse drop the hammer on her boss. He asked why a particular calendar entry referred to Tennant only as "gentleman." Marcuse answered that the auction world was full of gossip, and that it was "[her] job to protect Mr. Taubman's privacy." She kept Tennant's name out of the records for fear that the purpose of the meeting might be "misconstrued." Thus, rather than being inadvertent, Marcuse implicitly told the jury, the omissions were part of a deliberate strategy.

A centerpiece of Davis Polk's defense was its claim that Taubman kept his distance from the finances of Sotheby's. To advance that theory, the defense used, among other witnesses, William Sheridan, the chief financial officer of Sotheby's. Sheridan testified that Taubman had never called to ask about the firm's financial posture and that he was "meek" and "silent" at board meetings, where his main concern was lunch.

On cross-examination, the Justice Department's Greene asked a simple question: Had Taubman been negligent in his duties as the Sotheby's chairman? Absolutely not, Sheridan replied: "Not when he had a bulldog like Max Fisher." Fisher, a Michigan oilman and financier who served as the vice-chairman at Sotheby's, was Taubman's longtime confidant. Once Sheridan explained how Fisher -- whom Sheridan described as a financial genius -- had kept Taubman constantly informed, another key leg of the defense case was kicked away.

The defense's efforts to depict Brooks as a liar appeared no more successful. While she admitted that she had lied repeatedly to conceal the scheme -- if she had not, there would have been no scheme -- prosecutor Cody pointed out in his re-direct examination that the defense had not asked about a single lie other than those used to further the scheme. Brooks' lies about the scheme were essential to the scheme, and to the defendant, if he in fact had ordered it. Cody, by pointing out that Brooks' dishonesty was limited to price-fixing, seemed to do much to restore Brooks' credibility with the jury, which, at the end of the day, believed her.

The prosecutors even turned Fiske's presentation of character witnesses to the government's advantage. In one of the more unusual moments of the trial, Fiske called to the stand Damon Keith, a sitting judge on the 6th U.S. Circuit Court of Appeals. Keith was one of the first blacks appointed to the federal bench and has served 34 years. Over the years, he served with Taubman on several civic and charitable boards. Based on that association, Keith testified that Taubman enjoyed "an absolutely wonderful reputation for honesty and integrity ... without a single blemish on it."

Fiske walked Keith through some of the highlights of his own career, including winning a prize that Supreme Court Justice Thurgood Marshall had once won. Cody looked on, appearing bored, as Fiske led up to Keith's chairmanship in 1989 of a committee commemorating the bicentennial of the U.S. Constitution. One of that committee's achievements was the placing of a plaque in federal courthouses and law schools listing the Bill of Rights. (Never mind that the Bill of Rights itself was not passed until 1791, making its bicentennial two years later.) Fiske then moved to place a copy of the plaque "in evidence." "Any objection?" Daniels asked.

"No objection to the Bill of Rights," Cody said.

The resulting laughter took some of the wind out of Keith's testimonial.

Then, the gray, pencil-thin Cody, an assistant chief of the antitrust division, with more than 30 years on the job, did more damage, with a few short questions on cross. Despite their long association, Keith said that Taubman never told him about meetings with Tennant. Indeed, as far as Keith knew, his good friend Al never even knew Sir Anthony Tennant.

Throughout the trial, Davis Polk never came up with a justifiable explanation for the Taubman-Tennant meetings. Fiske brought up a number of legitimate topics that they might have been discussing -- the British value-added tax, for instance. But there was no evidence that they actually did discuss them. Taubman never testified. In his closing, Fiske was left -- beyond extolling the wonders of a system that let ordinary people decide Taubman's fate -- arguing not much more than presumption of innocence and reasonable doubt. But the jurors decided that, despite the former, there was none of the latter. They took 10 hours, spread over two days, to find Taubman guilty as charged.

Fiske may have been dealt a tough hand in his defense of Taubman. Folding was probably not an option. But if Taubman had an easy case, he wouldn't have needed eight lawyers, plus a jury consultant, from Davis Polk. And he wouldn't have needed Bob Fiske.

Dan Ackman writes "Top of the News" for Forbes.com. His e-mail is dackman@forbes.net.