CORPORATE ESPIONAGE AND RACKETEERING OUT-OF-CONTROL

 

Law Firms Run Interference, Cover-Up and Damage Control

 
“I proclaim that justice is nothing but the interest of the stronger." 
                                        Thrasymachus in Plato’s Republic I, 338c

 

            When wealthy and powerful elites want information they stop at nothing to get it.  This includes the use of corporate espionage and racketeering directed against any entity – even private citizens – who threaten their interests.  It also includes the strategic use of law firms to do their bidding.

This is the story of John C. Dodd III, a man who believed in the system and tried to do the right thing – only to be betrayed and pauperized by two law firms he thought were on his side.  But this story has implications far beyond Dodd’s own story.  It is one echoed as far back as ancient Greece in the above quote by the Sophist Thrasymachus, that “justice is nothing but the interest of the stronger.”  Today, the “stronger,” (wealthier, more powerful, more influential) certainly appear to be the corporate elites and their law firms, whose contacts and influence are such that they extend to all three branches of government, public relations firms, and mainstream media.[i]

            Beckett Brown International (BBI), later renamed S2i, was a corporate espionage group comprised of former Secret Service, CIA, NSA-type scoundrels and ne’er-do-wells.  But in 1995 when Dodd first invested in BBI to get it up and running in Anne Arundel County, Maryland, this group represented itself as a “high-end security company,” giving Dodd the impression that they provided body-guard, Secret Service-type protection services.  Dodd had no idea then that BBI had the capability to hack into the security of MARS, one of the most secretive and security-conscious corporations in the world.  In fact, BBI did hack into MARS on behalf of Nestle,[ii] just as it hacked into the Bank of Glen Burnie on behalf of Ed Hale, CEO of 1^st Mariner Bank, during Hale’s hostile takeover attempt of that bank.

In 1999 president of BBI, Richard Beckett, suddenly resigned.  Beckett then made an attempt to blackmail Dodd that can only be described as “odd.”  He demanded $50,000 and releases of liability in exchange for keeping things mum about BBI’s wrongdoing, claiming Dodd was in a compromised position as Chairman of the Board.  And yet, strangely, Beckett refused to produce a shred of evidence to substantiate any wrongdoing, while other BBI managers denied that BBI had engaged in any wrongful activities (telling Dodd that Beckett was just trying to “shake you down.”) 

As the tumult of the next few years grew, Dodd’s suspicions grew right along with them.  Not only had the officers of BBI failed to pay Dodd back as agreed for his investment, it would turn out that they were out-and-out defrauding him.  Moreover, their suspected criminal wrongdoing (the nature and extent of which was not yet known at that time) opened up a very real possibility that Dodd might be dragged down with them.

            In 2001, when Dodd definitively learned about BBI’s real activities, he drove a truck to their office in Severna Park, Maryland, to confiscate what its operatives had not already removed or destroyed.  He carted off hundreds of thousands of documents. 

The principal operatives of BBI included Richard Beckett, Paul Rakowski, and Timothy Ward, then living in Talbot County, MD (“spook central”, according to many knowledgeable sources in Louisiana involved in the racketeering lawsuits against operatives of BBI/S2i and their clients, Dow Chemical and Sasol North America, etc.[iii]).  In fact, among the notables who have retired to Talbot County on Maryland’s Eastern Shore are Richard Cheney and Donald Rumsfeld.

            In February, 2001 Dodd was referred to the Baltimore law firm of Semmes, Bowen & Semmes by an attorney involved in the audit of BBI’s books.  After meeting with Semmes partner and then chairman, Cleveland Miller, Dodd believed he had retained Mr. Miller to represent him in his lawsuit against BBI.  Dodd was set to sue them in his individual capacity and as BBI’s Chairman of the Board.  Shortly thereafter, Semmes made multiple trips to Talbot County to examine the documents, taking some back with them from time-to-time.  Dodd was kept extremely busy by Semmes, who was incessantly calling upon him to find and send specific documents that they requested.  He did not have much extra time or much incentive at that point to really pore through the documents.  

Ultimately, Semmes suggested that they send a truck over and take possession of the documents.  Given what Dodd discovered much later among the documents, it must have slowly dawned on Semmes just how explosive some of these documents were.  The attorney initially put in charge of the case, Mark Grimes, directed that all but twelve boxes be loaded onto the truck.  Dodd did not see those documents again until just before the trial got underway in 2005, and was too busy then to really see and fully grasp the import of what it was he had shipped to Semmes.  Nor did he look into the twelve boxes for a good long while. 

Suddenly, Attorney Grimes, after being on the case for about two years, was no longer with Semmes (probably, as Dodd speculates, because the ex-Philly City cop was doing too good a job).  Semmes then proceeded to ping-pong their client from attorney Mark Grimes to attorneys Ken Knuckey, Matt Weir, and finally to partner James Johnson, who actually litigated (or at least pretended to litigate) Dodd’s case in Talbot County Circuit Court before Judge Raymond Beck.  Semmes attorneys had pored over the Ed Hale/ Bank of Glen Burnie documents a good six months before the trial and knew full well about the reams of printouts with the private information of its bank customers (including many notable Talbot County residents).  In spite of knowing this, no evidence of obvious theft was ever introduced by Semmes at trial.  Why? – because Ed Hale, the CEO of 1^st Mariner Bank, was a client of Semmes, Bowen & Semmes, that’s why.  This was an outrageous conflict of interest, if, as documents Dodd later discovered tended to show, Hale had engaged the services of BBI in his attack on the Bank of Glen Burnie.

            A former Semmes attorney whom Dodd approached in hopes of retaining legal representation was quoted as saying that “Semmes is very good at covering things up.”  It would certainly appear that Semmes damage control was on high alert in this instance. 
 
           To prepare for trial, Semmes hired a so-called management expert – an expert witness who cost Dodd over $250,000 – but who would be thrown out by the judge at trial for being unqualified.  The other expert witness hired by Semmes, a forensic accounting expert, was allowed to testify.  However, the chart he presented to the jury (a chart reportedly prepared by Semmes) had a glaring math error of $800,000.  The fees for this expert?  He billed $500,000 – Dodd ultimately paid him $400,000.  Moreover, after filling up the back of the courtroom with multiple boxes, Semmes never presented a shred of evidence on corporate espionage or racketeering.  Instead it half-heartedly concentrated only on the fraud allegations.  Suffice it to say that Semmes carefully engineered the throwing of the case, while seeing to it that they systematically drained all of Dodd’s assets in the process.  Dodd of course lost.  After the trial, upon leaving the court, James Johnson threatened Dodd, saying in a forceful manner that he “would suffer severe consequences” if he “told anyone anything at all about the BBI/S2i criminal activities.”  Johnson himself admitted in a telephone conversation with Dodd some weeks later that Ed Hale of 1st Mariner Bank, was indeed a Semmes client.

Upon being threatened in this manner by his own attorney, Dodd was convinced Semmes had sold him down the river.  He then seriously set to work poring over the documents to see just what was going on and who BBI had harmed.  It turned out that BBI was indeed into corporate espionage and racketeering in a BIG way.  BBI had infiltrated and stole trade secrets and proprietary information from organizations far and wide.  Targets ranged from Greenpeace and the doctors’ and lawyers’ offices of private citizens down in Louisiana, to The Hebrew Home Advocacy Group in Rockville, MD and Children’s Hospital of Boston.  It even included spook mind-games against a likely contender to be spokesperson for Mary Kay Cosmetics.  Eventually Dodd began contacting these and other victims to alert them of BBI’s nefarious operations and to disclose to each as much as he could. 

            In the Fall of 2006, about a year after the bitter end of the “pantomime trial” that Semmes put on for the Talbot County Circuit Court, Williams & Connolly responded to Dodd’s heads-up to their client, MARS.  They quickly arrived on the scene – Dodd’s home in Easton, MD, where he had carted and amassed the relevant documents and other materials.  Dodd and his assistants repeatedly asked members of the W&C retrieval team whether they had any conflicts of interest with regard to Semmes prior to, during, and after their three-week foray into his documents.  Williams & Connolly repeatedly denied that they had any conflicts. 

            During their multiple-week sojourn with Dodd, W&C attorneys lent a very sympathetic ear to him and to the way Semmes had mishandled his case.  They found irrefutable evidence of all kinds of thefts of trade secrets and proprietary information.  (Semmes, having had possession of the documents for almost three years, certainly had time to review them.  In fact Dodd had been billed hundred of thousands of dollars for Semmes to do just that, and yet Semmes repeatedly denied that there was any convincing evidence of wrongdoing.) 

W&C kept reassuring him that when they sued Nestle over this matter that Dodd would at least be partially vindicated by their showing that there indeed existed a huge corporate espionage scandal.  Obviously, proof of corporate espionage and racketeering by BBI would help Dodd immensely in his planned malpractice case against Semmes.  Then W&C dangled the carrot out even further, floating the idea of possibly representing Dodd in his malpractice action against Semmes. 

            But W&C had a conflict of interest after all – one big enough to drive the truck through that they used to haul off Dodd’s documents.  W&C, it turned out, represented the legal malpractice insurer for Semmes, Bowen & Semmes.  Obviously if Semmes lost a malpractice lawsuit against them, the legal malpractice insurer would be on the hook for the damages, which would almost certainly include punitives in the millions of dollars.  Thus, W&C had a vested interest in covering-up this massive corporate espionage as well, and not just to ward off unwanted publicity for its client, MARS. 

So what did they do?  After creating a sense of complete empathy and trust, W&C lulled Dodd into allowing them to remove whatever documents they wished.  They did so by orally promising him that they would deliver a complete, written accounting of the items that they had in their possession, and would return every scrap to him once they were done with them. 

            As the astute reader might guess, W&C never sued Nestle.  Not only that, W&C never produced an accounting of the documents and hard drives that they had so deviously procured.  And in the end, much of what they took they kept.  What they did ship back to Dodd had been so ransacked – e.g., pages torn from briefing binders and documents in such complete disarray that it was impossible to figure the source from whence a particular document came and to what exactly it pertained.  The result of their efforts was that the documents were practically worthless as evidence to introduce at trial.  

            Due to the tremendous experts’ fees and legal bills that Semmes generated of over $2 million (while all the while stabbing him in the back), plus failing to recover his BBI investment of over $700,000, Dodd finally was unable to pay his mortgage when it came due in mid-2009.  Dodd, now practically penniless, had to fight yet again, this time just to save his home and keep a roof over his head.[iv]

            Around this time Dodd contacted the FDIC about 1^st Mariner Bank and the Bank of Glen Burnie.  In response he received some routine form letters from their Consumer Response Center. 

More to the point, Dodd, having been pauperized by Semmes, now had no financial where-with-all to retain a law firm to go after them – even if he could find one willing to do so.  Most of the attorneys that Dodd consulted told him, effectively, that they could not go after Semmes because they would be destroyed if they did. 

It may be a hard truism to accept, but no big law firm (i.e., one with the available and necessary resources) is willing to accept cases against other major-player law firms.  There seems to be an unwritten code of conduct among noted barristers not to “rock the boat.”  And of course knowing how such firms would bury their accuser in discovery paperwork and expensive depositions, no firm with lesser resources has so far been willing to take the case on a contingency fee basis (which means bearing, in the interim, the huge costs of the paper storm).  Knowing the glacial pace of how cases proceed through the court system – and the abuse of process routinely engaged-in so as to buy time and pulverize opponents – financially, emotionally, spiritually – “the interim” could be years and the costs enormous.  These are the tactics of all big, scorched-earth law firms.

            But go after Semmes he did – pro se.  Semmes raised a statute of limitations argument in its motion for summary judgment – even though it had not yet been three years since the last day of the trial when the jury had rendered its verdict – and incredibly, Semmes motion was granted!  Presiding at that hearing was Judge Broughton Earnest.  Judge Earnest himself was drawn from the good old boy network of Easton law firm Earnest & Cowdrey.[v]  Dodd filed a timely motion for reconsideration, and that motion was duly ignored by Judge Earnest. 

 

   After Dodd appealed the case – again, pro se – the Court of Special Appeals remanded the case to the trial court so that the motion for reconsideration could be ruled on.  That was in January 2011.  The Talbot County Circuit Court finally got around to scheduling the motion for a hearing, which was held on July 12.  Presiding at that hearing was Judge Earnest’s predecessor, Judge Sidney Campen. Dodd had the very distinct impression that Judge Campen did not want to overturn Judge Earnest’s ruling that granted summary judgment in Semmes’ favor.   Sure enough, Judge Campen denied Dodd’s motion for reconsideration.  His appeal was then re-filed in the Court of Special Appeals.  The Court of Special Appeals affirmed the decisions of the circuit court on October 18, 2012, eight days after oral argument.

On November 19, 2012 Dodd filed a Petition for Writ of Certiorari with the Maryland Court of Appeals.  It was denied by order dated February 25, 2013.

Feisty as ever, and unwilling to give up the good fight, Dodd took his case to the Supreme Court of the United States, the court of last resort.  In October 2013 the Supreme Court denied certiorari.  Now, certainly, Dodd’s case is dead in the water, or is it?  There is no statute of limitations on fraud and if new evidence of fraud surfaces, Dodd will be knocking at the courthouse door once again.

Dodd also tried suing W&C – pro se.  One of many counts he alleged included conspiracy.  Proving a conspiracy between Semmes and Williams & Connolly meant, of course, trying to find evidence that attorneys from one large law firm and one mega-firm actually agreed to help each other bury this espionage and racketeering activity in order to protect their respective clients’ interests.  Lawyers, of course, know the elements of conspiracy and the rules of evidence and therefore how best to cover their tracks.  Initially, Dodd won a favorable ruling wherein W&C’s motion to dismiss was denied.  But, as the paper storm started to engulf Dodd, his prospects faded for finding a law firm to represent became bleak indeed.  In the end he was forced to capitulate; first, W&C convinced the Talbot County Circuit Court that Dodd was not forthcoming enough on its discovery, and then got the court to sign off on a gag order concerning all documents that were in Dodd’s and W&C’s mutual possession.  In short, it was another brutal, judicial stomping by attorneys trained to twist the system to their best advantage. 

Dodd tried reporting Semmes to the Attorney Grievance Commission of Maryland, and also reported W&C to the comparable oversight board in DC.  Their response?  We must wait and see what the outcome of the litigation is before we can act – a Catch-22 if ever there was one; it is highly unlikely, given the respective resources of the parties, that the outcome of the trial will go against the law firms, who might then use this as evidence in their favor in any ethics proceeding.  So this, too, seemed to be an exercise in futility.

Reporting the facts to the newspapers and “trying the case in the court of public opinion” seemed like a strategy.  After all, business ethics expert, Prof. Norman Bowie has called the BBI scandal the biggest case of corporate espionage ever uncovered.[vi] 

The Washington Post published a story that blandly highlighted a bit of the corporate espionage angle.[vii]  But Dodd has it on good authority that public relations don Eric Dezenhall, “the ultimate corporate fixer,”[viii] had sent the Post a “50-page letter” in advance of the story being published.  Predictably, when the story came out it was considerably “watered down.”  When being confronted about Dezenhall’s letter, the journalist argued in her defense that the letter was “not 50 pages.”  Dezenhall’s PR firm has been described as the “mafia of corporate industry”[ix] and Dezenhall Resources, Ltd. has been named as one of the defendants in the Greenpeace lawsuit.

For months Dodd talked to multiple Baltimore Sun reporters and faxed them reams of documents.  No story has yet been published by the Baltimore Sun, once venerable home to H.L. Mencken, muckraking, and the truth – no longer it would seem.

Not long ago, Dodd made some renewed efforts to shine the light of government oversight onto 1^st Mariner Bank and the Bank of Glen Burnie.  He contacted the Commissioner of Financial Regulation for the State of Maryland, and more recently, the Federal Reserve Bank for this region.  So far the response, according to Dodd, has been largely perfunctory and he has not yet received anything in writing from either. 

Has Thrasymachus been vindicated? – is, indeed, justice nothing but the interest of the stronger?

In times such as these, one might hope for a Clarence Darrow to champion the cause of the underdog.  But even Clarence Darrow might not save the day.  In a major revision of history, Darrow may have been just as much the money-monger and corrupt jury-briber as were his opponents.[x] But then, corporatist media influence reaches all the way into the publishing houses as well.  Maybe these recent revelations about Clarence Darrow are meant to instill yet more fear and douse any scintilla of hope that may remain in anyone hoping to stand up to the Goliath elitist interests that rule today by force, not by law. 

If the ancient Greek Sophists are right, it would appear that justice has little to do with law or lawsuits.  One can only hope that the real essence of Thrasymachus’ term, “stronger,” is found in one’s strength of character.  In this respect Mr. Dodd is the stronger by far, having had the tenacity to endure attorney after attorney and years of setbacks and disappointments, waiting seemingly in vain for justice to prevail.  And so, as unfortunate as the outcome of his legal odyssey has been, one might still proclaim that justice is nothing but the interest of the stronger, viz., that of John C. Dodd III.  As far as this and the dwindling few other cases like it are concerned, justice might simply be recast as the virtuous functioning of character, of natural law, in its dogged pursuit of what is right regardless of the odds and the consequences.           



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[i]  However, Sophists are expert at arguing both sides of any issue.  Thus, a contrasting view was presented in Plato’s Gorgias (483b-484a, quoting the Sophist Kallikles, Jowett trans.): “[T]he makers of laws are the majority who are weak; and they make laws and distribute praises and censures with a view to themselves and to their own interests; and they terrify the stronger sort of men, and those who are able to get the better of them; and they say that dishonesty is shameful and unjust; meaning by the word injustice, the desire of a man to have more than his neighbors; for knowing their own inferiority, I suspect that they are too glad of equality.”  And so, the Sophists also argue that human law goes against natural law, viz., ethics; the golden rule of reciprocity: that one should treat others as one would like others to treat oneself.  Thus, does it accord with natural law that the stronger should be held in check by the weak?  Just who is the stronger here?

 

[ii] Javers, E., Broker, Trader, Lawyer, Spy, Chap. 6: The Chocolate Wars, pp.137-172 (2010).
 

[iii] Greenspeace v. Dow Chemical, Sasol North America, Dezenhall Resources, Ltd., Ketchum, Inc., Timothy Ward, Jay Arthur Bly, Michael Mika, and George Ferris, Case No. 0008036-11 (DC Sup. Ct., 2011); also see, Cox, Cox, Filo, Camel & Wilson, LLC v. Sasol North America, Timothy Ward, Jay Arthur Bly, Peter Markey, Mary Ann Fisher, Mary Lou Sapone, and Wendell Richard “Dick” Rogers, Case No. 2011-001341B, 14^th Judicial District Court, Parish of Calcasieu, LA; Beth Zilbert and Michael Tritico v. Sasol North America, Timothy Ward, Jay Arthur Bly, Peter Markey, Mary Ann Fisher, Mary Lou Sapone, and Wendell Richard “Dick” Rogers, Case No. 2:2011CV00862, 14^th Judicial District Court, Parish of Calcasieu, LA; Laura Y. Cox v. Sasol North America, Timothy Ward, Jay Arthur Bly, Peter Markey, Mary Ann Fisher, Mary Lou Sapone, and Wendell Richard “Dick” Rogers, Case No. 2:2011CV________, 14^th Judicial District Court, Parish of Calcasieu, LA

 

[iv] Among other irregularities, that foreclosure was one of those infamous Maryland foreclosure cases wherein hardly a document, even notarized documents,  that purported to bear his signature was actually subscribed by Thomas Dore, Esquire,.  It was none-the-less upheld and unsuccessfully appealed .

 

[v] Cowdrey currently represents all four of the BBI/S2i defendants in the Greenpeace lawsuit.

 

[vi] Personal comment to Dodd by Dr. Norman Bowie, former holder of the Elmer L. Andersen Chair in Corporate Responsibility at the University of Minnesota, where he is currently Professor Emeritus. In 2009 he received the first lifetime achievement award in scholarship from the Society for Business Ethics.  Prof. Bowie has also held an appointment to the London Business School and is a former Harvard fellow.

 

[vii] Jenna Johnson, Corporate Espionage Detailed in Documents, Washington Post, June 22, 2008.

 

[viii] Opinion stated by John Wilke, deceased, Wall Street Journal reporter who was hoping to break the original story on BBI.  After passing away, all of his research and his story were shelved by the WSJ.

 

[ix] Eamon Javers, (quoting Bill Moyers), The Pit Bull of Public Relations, Business Week, April 17, 2006, http://www.businessweek.com/magazine/content/06_16/b3980101.htm

 

[x] See, NY Time Review of Books, July 8, 2011. http://www.nytimes.com/2011/07/10/books/review/book-review-biographies-of-clarence-darrow-by-andrew-e-kersten-and-john-a-farrell.html?_r=1&ref=review