University of California, Hastings College of the Law UC Hastings Scholarship Repository Publicity & News Clippings Judicial Ethics and the National News Council 5-5-1969 Fortas of the Supreme Court: a question of ethics, The uJ stice... and the Stock Manipulator William Lambert Follow this and additional works at: http://repository.uchastings.edu/publicity Part of the Judges Commons, and the Legal Ethics and Professional Responsibility Commons Recommended Citation William Lambert, Fortas of the Supreme Court: a question of ethics, The Justice... and the Stock Manipulator (1969). Available at: http://repository.uchastings.edu/publicity/17 This News Article is brought to you for free and open access by the Judicial Ethics and the National News Council at UC Hastings Scholarship Repository. It has been accepted for inclusion in Publicity & News Clippings by an authorized administrator of UC Hastings Scholarship Repository. For more information, please contact [email protected]. Fortas of the Supreme Court: a question of ethics The .Justice ••• and Associate Ju stice Abe Fortas: W hy would a m an of his legal brilliance and high position do busin ess with . 32 the Stock M anipulator by WILLIAM LAMBERT On Tuesday, April 1, the Su­ preme Court of the United States shut the door on an appeal by financial manipulator Louis Wolf­ son and his longtime associate, Elkin "Buddy" Gerbert. It was very nearly the last hope of the two men to set aside the fi rst of two convictions for violating U.S. se­ curities laws. In the announcement of denial of the writ, one of the Jus­ tices, Abe Fortas, was noted as "re­ cused," a lawyer's expression meaning ' he declined to take part in the decision. On the surface, the recusal seemed usual and proper, for it was widely known that the Jus­ tice's former law firm-Arnold, Fortas & Porter-had represented a Wolfson company, New York Shipbuilding Corp., while Fortas was a member of the firm. More­ over, after Fortas had ascended to the bench and his name had been scraped off the law firm's door, Ar­ nold & Porter had represented Ger­ bert in his two criminal trials with Wolfson. Actually, quite apart from the actions of his former firm, Jus­ tice Fortas had reason to abstain from judging Louis Wolfson. In an investigation over a pe­ riod of severa l months, LI FE found evidence of a personal association between the Justice and Wolfson that took place after Fortas was seated as a member of the na­ tion's highest tribunal. The basic facts are simple: While a member of the High Court, For­ tas was paid $20,000 by the Wolf­ son Family Foundation, a tax-free charitable foundation set up by Wolfson and his brothers. Osten­ sibly, Justice Fortas was being paid to advise the foundation on ways to use its funds for charitable, ed­ ucational and civi l rights projects. Whatever services he mayor may not have rendered in th is respect, Justice Fortas' name was being dropped in strategic places by Wolfson and Gerbert in their ef­ fort to stay out of prison on the se­ curities ch arge. That this was done without his knowledge does not change the fact that his acceptance of the money, and other actions, made the ni\me-dropping effective. Justice Fortas ultimately refund­ ed the money to the foundation -but not until nearly a year after ... Louis Wolfson, a well-known corporate stock manipulator known to be under federal investigation? CONTINUED 33 A $20,000 check' banked in Fortas' private CONTINUED boxer, w as a familiar sight at vari­ the government over making "false ry Committee. Some Republicans receiving it. By that time Wolfson ous corporate board meetings and and misleading statements." A wished to hold the job open for a and Gerbert had been twice in­ on the newspaper financial pages. prominent financial writer called possible Republican appointment; dicted on federal criminal charges. He took over the W as hington, D .C. him " the biggest corporate raider conservative senators attacked For­ Wolfson is no stranger to lit­ transit company and siphoned off of all time." tas for his liberal positions on igation. He began his ri se in finan­ its rich capital reserves. He nearly On his part, Fortas was a well criminal law and censorship. But cial circles in the 1930s when he succeeded in gaining control of known figure in legal circles- and there w ere also considerations took over the family junk business Montgomery Ward, but was nar­ a high-powered political operator which seemed germane to his ju­ his immigrant father had built. By rowly beaten in a proxy battle. At as well-long before he was ap­ dicial fitness. the early '50s his tall, lean fig­ one time he was the largest share­ pointed to the Court. As a leading His cronyism with the President ure and ruggedly handsome face, holder in American Motors, and partner in one of W as hington's bore on the doctrine of se parati on which shows some marks of youth­ when he so ld out his position, he most presti gious law firms before of powers among the branches of ful experience as a profess ional got embroiled in a dispute with his elevation to the bench, he is government. There were accusa ­ widely considered to be more than tions that Ju stice Fortas had been comfortably rich. He is acknowl­ functioning as a conduit for pres­ edged a brilliant lega l scholar idential wrath agai nst friends who and also a violin virtuoso and a opposed his policies; that Fortas connoisse ur co llector of art and had tried to arran ge appointments antiques. to the State Departmer)t and the federal bench; that he had func­ tioned as a presidential consulta nt F rom Lyndon Johnso n's days as on va ri o us problems and position a co ngress man through his term papers. He irked some senators by as President of the United States, declining to comment on certain Fortas was co un se l and cl ose con­ as pects of these matters. f idant. In 1964, when Johnson aide Th e iss ue of his appointment ap­ Walter Jenkins ran afoul of the proached a climax w hen a news­ law, it was Fortas (a long w ith Clark paper revea led that Fortas had ac­ Cli fford) who tried to get the news­ cepted $15,000 for lecturing at papers to suppress the sto ry. If a Ameri ca n University's Washington person had to see the President, Co llege of Law. Such compensation Fortas was the man who co uld ar­ (though overlarge) was not in it­ range it. If the Pres ident wished se lf criticized ; but w hen it de­ to fe nd off influential tormentors ve loped that Fortas' form er law - including the press-Fortas f re­ partner, Paul Po rter, had so li c­ quently w as dispatched to do the ited funds fo r the lectures from fending. five of hi s or Fortas' influential Fortas continued to advise and f riends, consternation prevai led do favors for Pres ident Johnson even among Fortas supporters. One after he took his seat on the Su­ contributor was Troy Pos t, a p reme Court in October, 1965. Th at wea lthy Texa n and Fortas friend extrajudicia l activity finally got hi m whose so n had been helped by Por­ in troub le and cost him the job of ter afte r an indictment for mail Chi ef Justice. fraud. Another w as Maurice Laz­ W hen Johnson nominated him arus, w ho at one time sat w ith For­ to succeed Earl Warren last June ta s on the board of Federated De­ 26, 1968, Fortas had to face a not partment Stores. Others were in­ altogether friendly Senate Judici a- vestment bankers Gu stave Levy and John Loeb and New York lawyer Paul Davis Smith. Critica l senators were eager to press questioning about the fund and other matters. But on Sept. 13, in a letter to the cha irman, For­ tas declined to appear agai n be­ fore the committee; and on Oct. 2, 1968, at Fortas' request, President Aerial view of m ain ranch house, Johnson withdrew his nomination. pool and guest house at Wolfson' s expansive Harbor View horse ranch near Ocala, Fla., w here Fortas was Fortas' personal association with a guest in June 1966. He was met corporate tycoon Wolfson ap­ at th e airport by Wolfson partner pears to have begun about four Buddy Gerbert (right), who later, yea rs ago. Wolfson himse lf recall s according to Wolfson associate that Milton Freeman, a partner in Alexander Rittmaster (far right), A rn old, Fortas & Porter and a high­ said that the Justice was there to ly skilled sec urities lawyer, was ac­ " take care of" the SEC matter. tive in his behalf as ea rl y as De­ ce mber1964 in regard to his grow­ ing difficulties with the Securities and Exchange Commission. Fortas himse lf says that apart from the firm's representation of one of Wolfso n's companies since Mayor 34 Former law partner Paul Porter a count (left) told LIFE that Fortas (below, with old friend Lyndon Johnson) refunded Wolfson's $20,000 be­ June, 1965, his "only 'association' cause of overload of Court work. with Mr. W olfso n had to do with co nversati ons beg inning when I first met him in 1965, in which he told me of the program of th e Wolfson Family Foundation ...." This statement is contained in a letter to LIFE written in res ponse to a requ es t for a meeting where he would be give n an opportunity to explain any information in LIFE 's possess ion that might be construed in any way as an impropriety on hi s part.