by Coll, Steve;
Miller was confident that Boisi’s personal integrity would impress the jury. But Irv Terrell, who again drew the cross-examination assignment, felt that Boisi was vulnerable because he was a naturally high-strung man. Terrell decided to put the witness under as much personal pressure as he could muster. By attacking Boisi again and again, by hounding and pressing and challenging, Terrell hoped to exploit the banker’s innate nervousness, to make him sweat and stammer before the jury. On the facts, Boisi was most exposed in two areas: his participation in Getty Oil management’s “conspiracy” against Gordon Getty, as Pennzoil was now describing it, and his telephone calls on January 3 and 4 to Texaco, Chevron, and other third parties while negotiations with Pennzoil were under way.
“And you felt that was an honest thing to do?” Terrell asked menacingly at one point, questioning Boisi about the Getty Oil November board meeting where Gordon was invited to leave the room while the directors voted to intervene in the family lawsuit against him.
“Well, any—he was going to be—it was going to be communicated to him, so he knew what was going to happen.”
“That’s fine as an explanation. Could I have a yes or no? Did you feel that was an honest thing to do?”
“I guess I do.”
The challenge to Boisi—the challenge to all the Wall Street witnesses—was to explain the precepts of their profession generally, and their actions in the Getty Oil deal particularly, in confident, concise, and accessible language. None of them could afford to sound defensive. But since “the other side” of Getty Oil management’s dealings with Gordon Getty—the examples of Gordon’s own questionable behavior—was never explored in direct examination, Terrell and his partners were free to exploit with impunity, and in isolation, the most dramatic examples of management’s maltreatment of Gordon. Then, when the cross-examination moved on to the detailed issues that were crucially important to Pennzoil’s case, such as the meaning of an “agreement in principle” and the ethical appositeness of Geoff Boisi’s telephone calls on January 3 and 4, the Wall Street witnesses were already on the defensive. Terrell and his partners could ask their questions in language that rang with broad moral implications. The Wall Street witnesses, whose experience with language centered on the formulation and use of precise, narrow, morally neutral definitions, found themselves in an exceedingly difficult position. They had to respond to the questions by attempting to dissect and redefine words that contained universal moral meaning. Asked if they accepted the commandment “Thou shalt not steal,” they had to answer, “Yes, but it’s important to understand what stealing means on Wall Street.”
“My question to you is, do you have to use good faith?” Terrell asked Boisi in one critical exchange on the morning of Thursday, October 10. “Are you required to use good faith to see whether you can implement the details of the agreement in principle?”
“Well, you put a word in there, ‘required’.”
“That’s the word I put to Mr. Petersen. That’s the word I’m putting to you.”
“Okay. I’m trying to answer that—with that caveat. When one talks about required, when you are dealing with a public company, you also not only have to operate in good faith, which I think people should do all the time—I hope that I do—but in addition to that, you have a fiduciary responsibility. Whether you are a chairman of the board or whether you are an investment banker for the company, you can be working in good faith to an agreement in principle you’ve been developing. But that doesn’t mean that you don’t have a responsibility to look into other proposals that perceptibly would be better than the agreement in principle that you have on the table.”
“Listen to? Or go out and shop for, solicit them? Listen to other proposals or shop for them?”
“Well—you, you use whatever word you want. I don’t understand your question.”
“Well, you used the word, you have a ‘responsibility’ to listen to other offers. Do you have a responsibility to go out and solicit other offers?”
“Well, now you are getting into specific words again. I don’t know—what is your definition of solicit?”
“What you did on the fourth.”
“Well, what I did on the fourth was I called somebody to thank him for his cooperation the day before and to indicate to him that, out of courtesy, a public announcement was going to be made. And in the context of that conversation, a question was asked of me as to whether or not a binding agreement had been developed. And my answer was no. And then the second question was, well, in that case, if somebody came in and made another offer, would you have to listen to it? My answer was yes. I don’t regard this as soliciting.”
“So your evidence is that when you talked to Mr. DeCrane on the fourth, you did not solicit an offer. It was merely a courtesy call. He was the one who made the offer, is that right?”
“Well, he didn’t even make an offer on that day. He was asking for information. I gave him information.… And it was apparent to me from the conversation that I had with Mr. DeCrane that that clearly was still a possibility in his mind, if not a probability. So when he asked me the question about where the transaction stood, it was also clear to me that he understood the implications of what went over the Dow Jones wire with regard to the agreement in principle.”
“You’ve given your explanation. Was the answer to my question yes or no? Did you solicit him? Did you solicit him the morning of the fourth; yes or no?”
“Well, yeah, I’m asking you—”
“Yes or no.”
“I would say no.”
“All right. Were you soliciting when you called Chevron and the Saudi government that same day?”
“No, I was doing the same thing I did with Mr. DeCrane. I was calling them because I had spoken to some of them the day before, to the Saudi government.”
“All right. So people you called on the fourth and fifth were just courtesy calls. They weren’t to solicit? That’s your evidence?”
“No, that’s not what I said at all. That is not what I said at all.”
“Were you—”
“What I said—what I said was the first telephone call on the third, excuse me, on the fourth was out of the courtesy call to several different people.”
There was a surreal quality to these examinations, a sense that lawyer and witness were speaking in two different languages. In his answer to Terrell’s question about negotiating in “good faith,” Boisi even seemed to acknowledge the point. He conceded that he hoped everyone acted in good faith all the time, out of a general sense of morality and fairness, but Boisi then went on to qualify his answer by explaining that this moral precept coexisted with a “fiduciary” responsibility. Thus, Boisi implicitly acknowledged that financial and moral imperatives might well come into conflict. There was no real way around it. In the language of his own world, Wall Street’s world of complex, high-stakes merger-making, the distinctions Boisi drew were perfectly understandable, even necessary. But in a Houston, Texas, courtroom before twelve ordinary, working-class citizens, the subtlety was lost. It sounded like double-talk.
No more dramatically was this linguistic chasm evident than in Joe Jamail’s cross-examination of Marty Lipton, which began one week after the close of Boisi’s testimony. There had been a long and vigorous debate within the Texaco defense team about whether to call Lipton to the stand at all. Dick Miller, for one, opposed the idea. He knew that the Pennzoil lawyers had targeted Lipton. Unlike all the other key Texaco witnesses, Lipton had not been deposed by the Pennzoil lawyers, and Miller correctly surmised that this was because Jamail wanted to spring his questions for the first time in open court, before the jury. “They set us up,” Miller told Texaco’s lawyers and executives. But at Texaco headquarters in White Plains, there was an inexorable momentum in support of Lipton’s appearance at trial. Lipton was the preeminent merger expert, perhaps the best-known corporate lawyer in the country. Texaco felt that Liman’s testimony could not go unrebutted. As Miller put it later: “It became impractical
not to put him on. Texaco board members were his friends. He had represented Texaco in the past. The perception was that it would be intolerable to try the case and lose without Marty Lipton testifying on your behalf. I didn’t see it that way. I didn’t think we needed him. I didn’t want to worry about what would happen if we lost—I want to win.”
Texaco executives said later that while Miller initially opposed calling Lipton, it was he who made the final call. They said that an important element of the debate centered on Patricia Vlahakis, the young lawyer who had worked with Lipton during the Getty Oil deal. Vlahakis had been scheduled to testify live, but at the time of trial she was pregnant and under a doctor’s orders not to travel. She testified by video deposition, but the effect was not the same. So the decision was made to call Lipton.
Rotund, bespectacled, Semitic in appearance, Lipton was preceded into courtroom 151 by his reputation not only as an attorney but as the celebrated representative of a specific class and culture in modern American society. If the jurors had not heard of him before trial, they had learned a great deal about him during three and a half long months of testimony. He was the father of the poison pill, the man of a thousand mergers, the most respected and feared attorney on Wall Street. It was Lipton who had insisted that Texaco provide legal indemnities to protect the museum’s peace of mind when the deal was done. It was Lipton who had been so active at the Inter-Continental board meeting, negotiating compromises and scribbling out the terms of detailed transactions on his notepad. It was Lipton who had been summoned to the Pierre Hotel at that key moment on the evening of January 5 when John McKinley was stalemated in his discussions with Gordon Getty, and it was Lipton who handwrote the letter of intent that sealed the sale of Gordon’s stock to Texaco. From the moment of his entrance into Getty Oil’s affairs, he had been at the center of the company’s destiny.
It was telling that Pennzoil’s attorneys were eager to cross-examine Lipton not because they knew him personally or because they believed that he was a man of dubious personal integrity. They wanted Lipton to testify because of what he represented. They understood that Lipton could not help but feel uncomfortable on the stand in courtroom 151, questioned for the first time by that great muckraking, populist advocate, Joe Jamail. The decision not to take Lipton’s deposition, to target him as a live witness, as John Jeffers put it later, “was not directed to him as a person so much as to my experience that when a lawyer like that or an investment banker is able to give his testimony by deposition, it’s a very comfortable experience for him because he’ll be in his own office or his lawyer’s office, with five or six lawyers around him objecting and harassing the examiner at every turn.… But to make Lipton sit in front of a jury, where he’s unprotected, where it’s just him and the examiner and the jury and the judge, it’s going to be a different story.”
Joe Jamail made a five-hundred dollar bet with his old friend Jim Kronzer, who had been an early partner of jamail’s back when he was getting started as a Houston “sore back lawyer,” that Texaco would decide in the end to call Lipton to the stand. On Thursday morning, October 17, when Lipton rose from the audience and walked to the witness box, Jamail turned to Kronzer and said, smiling, “Now. Pay now.”
The semantic dilemma which had lurked just beneath the surface of Irv Terrell’s examinations of Bart Winokur and Geoff Boisi was drawn fully into the open by Joe Jamail during his cross-examination of Marty Lipton. Indeed, Jamail’s first question that Thursday afternoon dove straight to the heart of Lipton’s predicament.
“Mr. Lipton, you seem to be a man who uses his words precisely. Do you?”
“I try to.”
And try he did. But the more Lipton struggled to defend his language against Jamail’s attacks, the more he became entangled in contradiction. Paradoxically, the more articulate Lipton was, the less clear became his meaning. Jamail employed words and ideas in the way they were used by ordinary Houstonians. Lipton spoke the language of a New York specialist.
Referring to negotiations between Marty Siegel and Arthur Liman leading up to the “Memorandum of Agreement” signed by Gordon Getty and Hugh Liedtke, Jamail asked, “They would know what was essential to those two if they were going to run the company, wouldn’t they?”
“Well, I would think not really. I would think neither Mr. Getty nor Mr. Siegel would know that. And they would need expert advice in the oil and gas business to work out a real agreement with respect to that.”
“You mean they can’t agree without hiring a bunch of experts to tell them what it is they think and want to do?”
“I think that the Getty Trust and Kidder, Peabody and Mr. Siegel would need considerable expert help in working out any agreement along those lines, yes.”
“Are you suggesting that Mr. Cohler and Mr. Woodhouse are not expert help?”
“Well, I think both Mr. Cohler and Mr. Woodhouse are lawyers who have considerable expertise, but I think for that kind of arrangement, lawyers who specialize in the oil and gas business and who understand joint operating agreements and things like that would be essential to work out any kind of agreement at all.”
“Mr. Lipton, I want to be real sure that I understand this. Are you saying that two people cannot agree unless they hire a bunch of lawyers to tell them they’ve agreed? Is that—”
“No.”
“—what you are telling us?”
“I’m not saying that at all, Mr. Jamail. I’m saying that two people who are contemplating an agreement with respect to a ten-billion-dollar transaction would be awfully foolish to do it on the basis of an outline and the absence of experts’ advice. I would think that they would want to very carefully, with experts, negotiate every aspect in trying to envisage every possible problem and enter into a formal, definitive, signed agreement that specifies what the relationship is going to be.”
“Mr. Lipton, are you saying that you have some distinction between just us ordinary people making contracts with each other and whether or not it’s a ten-billion-dollar deal? It’s a different standard in your mind?”
“Yes, indeed.”
“I see. So if it wasn’t a bunch of money involved in this Getty-Pennzoil thing, it could be an agreement?”
“Well, if there was five or ten dollars involved, I guess you might say that. But even if it was a five-million- or a one-million- or a ten-million-dollar transaction, I would think it would be downright foolish not to have experts’ advice and a formal agreement.”
“Well, I didn’t ask you about being foolish, now. We’ve got Mr. Cohler. He’s a lawyer, isn’t he?”
“Yes.”
“Mr. Woodhouse, he’s a lawyer, isn’t he?”
“Yes.”
“Are you saying that they could misadvise or did misadvise Mr. Getty?”
“No, I’m not saying that at all. All I’m saying is that in a transaction of that kind, I would expect that Mr. Getty would have other lawyers. Every time I’ve been involved in a transaction that involves oil and gas business and operating agreements and so on, I’ve consulted with experts in that field.”
“I’m sure the legal profession would be very grateful to you for creating all this business, but that is not the point. The point is that people can agree without lawyers, can they not?”
“Yes.”
It is a general rule that lawyers do not make good witnesses for precisely the reasons Marty Lipton demonstrated—they pay too much attention to detail. They worry over narrow definitions while losing sight of larger themes. By declaring that “Yes, indeed” there was a distinction in his mind between contracts carried out by ordinary people and a ten-billion-dollar transaction, Lipton was only voicing what seemed an obvious truth to him. In effect, he was declaring the reason for his professional existence. But he could not see that Jamail was asking about something else entirely. Jamail was not talking about contracts per se—the actual documents written out and signed during a transaction. He was asking about the reason contracts existed—the so
cial, legal, and moral obligations implied by them. Certainly, Marty Lipton understood such concepts as well as anyone. But in his world, the word “contract” had been stripped of its abstract quality, its underlying meaning. It was defined only in practice, as an accumulation of case precedent and appellate opinion narrowing and enhancing its meaning in infinite progression, the way the number pie is calculated by a computer set permanently to the task.
As the cross-examination progressed, Jamail took an increasingly personal tack. He sensed that Lipton was uncharacteristically afraid and that the jurors were measuring the witness by the standards Jamail had set at the beginning of trial. Faced with Jamail’s battling demeanor, Lipton’s attempts at precision became increasingly intense.
“This escrow agreement prepared by your partner would ensure that you had some advantage over the other shareholders, financial advantage?” Jamail asked at one point, referring to a draft agreement prepared by Patricia Vlahakis.
“You said Ms. Vlahakis was my partner. She’s my associate.”
“Excuse me. I strike that. The rest of that statement is true, is it not?”
“I don’t think so. I’m sure if we go back I can get you the answer to the question.”
Here Lipton had crossed an important line. By taking pains to point out that Vlahakis was not his partner, he had given his obsession with exactness a human face. Jamail sensed that the jurors would be offended. The jurors were secretaries, office managers, custodians—the boss that awaited them when the trial was over wielded a very real power over their lives. Though his remark about Vlahakis was inadvertent, a product of his desperate verbal jousting with Jamail, Lipton had carried his “expert” use of language into a realm the jurors intuitively understood.
Jamail took advantage of Lipton’s error at important moments in the examination, using it to underline the lawyer’s testimony.
“If the board approved it, they were bound, weren’t they?” Jamail asked, referring to the first vote on the “Memo of Agreement” at the Inter-Continental board meeting.
