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Friday, November 20, 2020

Beldar's tale of Trump and Rudy G in 1984

I will share here a personal anecdote about Rudy Giuliani and Donald Trump, one which strikes me as particularly ironic in this season of insane lame-duckery:

Like most Americans who don't live in New York City, the first time Donald J. Trump ever pinged my personal radar screen was when he was mugging for the cameras at Herschel Walker's highly publicized signing by the USFL's New Jersey Generals in early 1983. But his name didn't stick with me at the time.

In early 1984, however, as a third-year associate at Houston's Baker Botts, I was privileged to be the most junior assignee to the litigation team representing T. Boone Pickens, Mesa Petroleum Co., and their deal partners in connection with their partial tender offer for Gulf Oil Corp. Although Mr. Pickens' bid was treated by the financial markets with great skepticism, it nevertheless had caused a big jump in Gulf's historically undervalued stock — action which in turn attracted all the bottom-feeders and sharp traders eager to do their drilling for oil on Wall Street instead of in the oil patch.

Among my tasks was to review and help our clients respond to civil investigative demands — basically administrative subpoenas demanding documents and information — which had been served by a joint task force from the SEC and the U.S. Attorney for the Southern District of New York, one Rudolph William Louis Giuliani.

Rudy G had only been in that job since the previous summer, but he'd already made waves and grabbed headlines as a crusading crime-fighter, so much so as to have already repeatedly stepped on the toes of the SEC's New York office, which considers that to be its job when it comes to insider trading and the like. So our litigation team was fully prepared when the SEC and SDNY jointly demanded that Mr. Pickens, Mesa, and their partners immediately turn over documents and information regarding any and all contacts between, on the one hand, any of our clients, and on the other hand, any of a long list of well-known arbitrageurs, sharks, and sharpies who were leveraging multi-million-dollar options one way or the other on Gulf stock.

These requests were of course incredibly broad, but my emphatic marching orders were to help our clients comply with them as quickly and with as little quibbling as possible: The last thing we wanted to see was any kind of action by the SDNY or SEC that might impede or even cast shade on our side's bid. And in fact, complying fully and honestly was easy, because Mr. Pickens, his company, and his partners — for whom this was not their first rodeo — had very deliberately and carefully avoided any contact with any of these arbs, sharks, and sharpies.

Still, we had to go through their requests carefully, individually, and with all due diligence — both complying and being seen to comply, leaving a full written record thereof. And I was therefore already in phone contact with my opposite number — someone extremely junior at the SDNY — to try to get a few clarifications that might make things go more swiftly.

I already was acquainted, by reputation from the financial news, with names like Ivan Boesky and Carl Icahn, so it was no surprise seeing that they were included in the SEC/SDNY demands. But one name was new to me, as a non-New Yorker: "Who," I asked my SDNY counterpart, "is this 'Donald J. Trump' guy you're asking about?"

"He's a schlub, but his daddy is a big slumlord here," he said, "and now Junior is trying to become a player on the Street. We think he maybe has been hanging around with some of the other people we've named, looking to scrape up the crumbs that might have fallen from their tables."

"Ah," I replied, "Thanks for that clarification, which I'll use to make the appropriate inquiries from our clients right away." (None of whom, it turned out, had ever heard of Trump, either.)

Thus I was unsurprised, during one of the GOP presidential primary debates in 2016, that when he was asked about his potential cabinet picks, Trump trotted out the name of Carl Icahn — who'd ended up bottom-fishing, and then unloading, Trump casinos decades later as they went through the wash-rinse-repeat cycle in the bankruptcy courts.

But it was a little bit surprising to me when Rudy G became such a Trumpkin, knowing that at least in 1984, when Rudy was the top law enforcement official on Wall Street, Trump had been on the SDNY's radar screens as a potential inside trader.

Posted by Beldar at 06:17 PM in 2020 Election, Law (2020), Trial Lawyer War Stories | Permalink | Comments (0)