“Incidentally,” he added, “if Jane Doe were kidnapped and held for ransom, it would serve no one, really. Whoever the kidnapper is who decides to kidnap this child without this child being pronounced to be Hillblom’s child would be the most stupid kidnapper.”
“There are stupid kidnappers, contrary to what Mr. Lujan thinks,” Fennell shot back.
Castro allowed the attorneys to vent a little longer, then, grim-faced as usual, he adjourned the hearing without ruling on whether or not Fennell’s client could remain anonymous.
“M” would come forward on her own a short time later—at the behest of a pair of Manila family law attorneys named Luz Manlapaz and Gerry Paras. M’s name was Mercedes Feliciano. She was a fifteen-year-old native of Parañaque, one of the dirtiest and most dangerous slums in Manila. The year before, she had met Hillblom at a strip club where her sister worked as a dancer. And she felt lucky to be there. Her mother needed money to take care of her blind sister, Rumila, and Mercedes had been turned down by several clubs for looking too young. Her affidavit contained a few heartbreaking details of her relationship with Larry: fending off much older men at the club until Hillblom immediately agreed to pay her “cherry fee”; her mother negotiating the end of her virginity with Hillblom and a DHL employee at a Manila KFC; being led into his bedroom at a resort in the southern Philippines, with her mother and Joe Lifoifoi (and his girlfriend) in adjoining rooms; waiting in vain for Larry to return after she became pregnant, because he had promised he would marry her.
Thankfully, Mercedes, aka “the Benz,” had not been murdered or even kidnapped by Hillblom’s former employees. Nor had her mother sold her out a second time. Rather, at the behest of her mother, Mercedes had been rescued by a family friend from the home of Randy Fennell’s investigator, where she had become a prisoner, and ultimately, a pawn in the Hillblom probate. “The investigator,” Mike Dotts explains, “was saying, ‘You need to have a cesarean.’ There was a deadline coming up in the probate for claims. And they wanted the baby born before the deadline, so they were telling Grandma, ‘We need to get a cesarean for your grandchild.’ And that freaked her out and that’s why they fled.”
Fennell moved forward with his remaining client. And he soon revealed her identity, though only after bringing her family to Saipan and securing a work visa for her mother, who would soon become the attorney Jim Sirok’s maid. Jane Doe was Julie Cuartero; Baby Jane Doe was Jellian. Not that their names really mattered. Everyone knew there were thousands of Jane Does back in Manila and hundreds of those had probably slept with Larry. Hillblom’s taste in girls had proven remarkably unremarkable.
Fennell then asked for a delay so he could be present for the testing of the Hillblom mole. And he issued a number of subpoenas, including one for Dotts’s client, Josephine. It deserves mention here that had she been forced to testify that winter, her chances of receiving a settlement would have been quashed. Without immunity, she might have been deported—or worse. But Randy Fennell’s subpoena would not fall into Josephine’s delicate hands for some time. “Fennell’s process server couldn’t get his car up the hill to Hillblom’s house.” Dotts grins. “Larry always thought that Fennell was kind of lazy.”
Forty-Three
Judgment
fiduciary
1) n. from the Latin fiducia, meaning “trust,” a person who has the power and obligation to act for another (often called the beneficiary) under circumstances which require total trust, good faith and honesty.
beneficiary
1) n. any person or entity who is to receive assets or profits from an estate, a trust, an insurance policy or any instrument in which there is distribution.
—www.dictionary.law.com
“We were furious when we found out that the FILC attorneys had given Donnici a sample of Junior’s blood for nothing,” Barry Israel tells me. “At the same time,” he adds, “when they made a big settlement offer, then we knew that they knew Junior was his.” The estate’s offer was relayed to Israel and Lujan by David Nevitt in early December. Nevitt offered $5 million up front plus $50,000 per month for life, guaranteed for up to thirty years, plus $500,000 every five years, net of taxes. “Our first counteroffer for Junior that we made to Donnici included DHL shares and a board seat for Junior,” Israel adds. Nevitt angrily rejected it, as expected; after all, Junior’s owning those shares was the “nightmare scenario.” But Israel and Lujan’s partners at the Family Immigration and Law Clinic were equally furious that they’d turned down money on the table. In a tense conference call, the FILCers bemoaned the money they could have made, until Israel finally cut them off. “You should be ashamed of yourself!” he growled and hung up the phone.
One hundred twenty miles to the north, the special master, Rex Kosack, plodded through more than three thousand pages of interview transcripts, and half again as many exhibits. By working endless days, he managed to produce a preliminary report in less than six weeks. When I request a copy from Dex, the assistant clerk of the CNMI Superior Court, I am mistakenly handed two versions—one heavily redacted and the other not at all. Without revealing what I am not allowed to reveal, I can divulge that virtually all of the sealed information concerns DHL’s operations in Saudi Arabia; none has to do with the estate or its management.
Kosack’s 124-page final report, which he turned in to Judge Castro in early February, begins with a brief history of DHL and an inventory of the estate’s other assets. The special master then describes the creation of the Hillblom estate and the takeover of its executor, the Bank of Saipan, by CHC, before turning its full attention to its chief administrator: Joe Waechter. That’s when Kosack throws down the legal gauntlet: the executor, he writes, is by definition a fiduciary of the estate and its beneficiaries. Therefore, according to the Law of Trust and Trustees, Waechter and his associates at the bank are bound by a two-part duty of loyalty: one, a prohibition against self-dealing; and, two, a requirement that any conflict of interest, either real or potential, be completely avoided. The language in Hillblom’s will directing his executors to do what he would have done, as well as the argument that conflicts of interest existed to begin with and were simply carried over into the estate when Hillblom died are dismissed with a single word: irrelevant.
Kosack does acknowledge that the probate has been made unusually complex by virtue of the unconventional way in which Hillblom structured his empire. And he warns that he will not make either side happy before itemizing the ten major transactions that Joe Waechter has executed thus far, including the CHC deal, the DHL loans, and the inventory. Within these transactions, Kosack cites eleven instances in which Waechter and Peter Donnici have engaged in self-dealing or conflicts of interest. Kosack states unequivocally that the scheme to take control of the estate was illegal—just as Lujan had alleged. Moreover, Waechter’s role as executor of the estate and Donnici’s role as chairman of the trust while they remained directors and executives of estate-owned companies, Kosack asserts, create a pattern of being on both sides of every transaction. Even if they have not benefited personally from these transactions, they are just as guilty, because the duty of loyalty is absolute.
There is plenty in these first paragraphs that must have concerned Hillblom’s old friends, but Kosack’s report is far from finished. Because, he continues, Donnici has claims against the estate—for stock that Hillblom had been holding on his behalf, in lieu of payment for legal services—participating in estate business virtually guarantees him a favorable resolution of his claims over others. And although, during the time of the hearings, Donnici, Waechter, and Lifoifoi dissolved CHC and transferred its Bank of Saipan shares to the estate—something they claimed to have planned to do all along—the bank’s board remains stacked with their nominees. This, Kosack observes, could prove very much to their future benefit.
To say that Peter Donnici did not agree with Kosack’s conclusions would be an understatement. During one of our two interviews, Hillblom’s former consigliere and friend
intimated that Kosack was motivated by a personal grudge. At the time, however, Donnici made no such allegation. Instead, he toed the familiar line that Hillblom’s friends were just doing what they knew Larry would have done—and they should be allowed to do it without being second-guessed. “I know more than any other living human being about the business activities of, assets owned by, and potential business-related claims against Mr. Hillblom prior to his unfortunate and tragic death,” an indignant Donnici would write to Castro. “I know the nature of Mr. Hillblom’s business relations with third parties and the extent to which Mr. Hillblom attempted to keep some of these business matters and relationships confidential.”
But the “trust us” argument failed to convince Castro, just as it had failed to convince Kosack. A short while later, the judge would adopt the Special Master Report in its entirety and ask for suggested punishments. So Donnici turned to a more academic argument: Throughout his report, Kosack had considered Junior and the two young Filipina girls as beneficiaries of Hillblom’s estate rather than outsiders. If these children were suddenly the equals of the chief beneficiary named under Hillblom’s will, the medical trust that Donnici was to establish, then the estate would be prevented from contesting their paternity claims because it could not favor one beneficiary over another. This scenario would leave the estate defenseless against a trio of children who had never been a part of Hillblom’s life. Leaving them his fortune was clearly not what Hillblom had intended, nor did Donnici believe such a scenario was good law. Indeed, there was plenty of precedent to suggest that the unacknowledged children, “putative heirs” as the law called them, were outsiders challenging Hillblom’s will. Therefore, Donnici believed, Hillblom’s executor not only had the right but the obligation to defend the estate, and arguably by any means it deemed necessary.
Forty-Four
Lobbying
“They’re saying that we stole from Larry!” Joe Lifoifoi groused into his cell phone. Waechter had just told him about Rex Kosack’s report and the islander was stunned. How could anyone have accused him of being anything less than loyal to Larry? he demanded. He owed nearly everything in his life, including his wife, Amalia’s, cancer treatments, to Larry. Larry had even named an apartment building on Saipan for him and paid—anonymously!—for the renovation of his church in Tanapag. If Kosack had found some legal problems with the way that CHC was structured, fine. Lifoifoi was no lawyer. But how could Kosack prove theft? Lifoifoi had never benefited from CHC—or from any part of Larry’s estate.
On the other end of the line, Waechter offered no answers. He himself had become so vilified that, when his visage had flashed across the television at a popular Saipan bar a few days earlier, one of its customers had given it the finger and shouted “liar” until the bartender turned it off. The CHC deal had poisoned the well and Lujan’s sucker punches were connecting. Judge Castro would certainly fire Waechter as executor, though he might have to keep the bank involved so as not to put the estate in default of the DHL loans. Lifoifoi, Waechter said, would need to meet a final time with the estate’s lead attorney, David Nevitt, about plan B.
Unbeknownst to the court, Lifoifoi had been trekking to Carlsmith’s office once a week since October to discuss “clarifying” the CNMI’s probate code, to no effect, but Lifoifoi immediately promised Waechter that he would meet with Nevitt one more time. As Larry had promised the day he’d been hired at UMDA, Lifoifoi’s time had finally come.
“We’ve had a couple of our guys in Los Angeles working on the probate code,” Nevitt tossed out after Lifoifoi sank into his usual chair, “so Joe asked me to sit down with you today and work out something that you could present to the Legislature quickly.”
“How fast?” was Lifoifoi’s only question.
“This week, if possible.” Nevitt added, “We were hoping that there were things we could do on a more limited basis than change the entire code.”
Lifoifoi nodded. “Maybe just a few things. It’s easier to amend an existing law than push through something brand-new.”
“That’s what we were thinking, too.” Nevitt smiled and handed him a fax from an attorney at Carlsmith’s Los Angeles office—a memo attached to what Lifoifoi would later call a wish list but what was really the outline of a bill to gut CNMI’s probate code. Most glaring was a paragraph that would amend paternity laws retroactively; under the new bill, a father would have had to “openly and notoriously” acknowledge a child before his death, which included taking his son or daughter into his home in order for them to be considered heirs. The bill would also outlaw contingency fees and would specifically authorize an estate to use its assets in order to defend against heirship claims. Most audacious, however, was a clause that made DNA evidence inadmissible as proof of paternity.
Lifoifoi nodded his approval. You didn’t need a law degree to understand that the bill checkmated Junior, Baby Jane Doe, Baby “M,” and whomever else the attorneys dredged from the Manila slums. Then he lifted himself out of his chair. The drive to his next destination would take less than five minutes.
The CNMI government operates out of two dozen white bunkers erected atop Capital Hill by the U.S. Navy Seabees shortly after the end of World War II, a complex originally built for the training of Chinese spies by Office of Naval Intelligence (ONI) agents, the precursor to the CIA. The largest of these buildings, a two-story monolith that resembles a high school gym, houses the Legislature. The gallery is little more than an oversize conference room with a U-shaped table. When the Legislature is in session, the Speaker and a clerk sit or stand behind the curve. Seventeen representatives from Saipan, Rota, and Tinian cluster the sides in swiveling black office chairs. Their districts range in size from slightly more than 14,000 residents to well under 150. Lifoifoi could have found his way around the building blindfolded. He had been elected to serve here three times, once as Speaker of the House.
The gallery was empty this morning, so Lifoifoi strode down a whitewashed hallway and into the office of his friend, Representative Oscar Babauta. After dispensing with the normal pleasantries, Lifoifoi handed him Nevitt’s fax.
Babauta looked it over twice, chuckling. Then he shook his head. He read the newspapers. There was no question what this bill was designed to do.
“I can amend some of the language,” Lifoifoi offered, almost as an apology. “I’m not entirely comfortable with it yet myself. But I think you should go ahead and draft the bill and have it introduced. We can polish it up later.”
“What’s the hurry?” Babauta grinned.
“We need to do it now,” Lifoifoi said, “because it looks like there’s gonna be a lot of these girls filing a claim. They’re coming out of the woodwork.”
“How many now, two?”
“Three.”
“And you think there’s gonna be more?”
Lifoifoi shrugged his shoulders.
“Why the hell didn’t Larry take care of the boy?” Babauta said.
“I asked him,” Lifoifoi replied. “I said, If that’s your son, then you better start taking care of this boy, you know? You better give him some money for his school. His bags, his clothes. He just says no.”
“Joe,” Babauta finally said, “I’ll help you improve the probate code. But this ‘openly and notoriously acknowledge’ language, and this stuff about ‘bringing the child into his own home,’ those just are not acceptable standards. You know, what if the father dies before the kid is born? Or moves away?”
“We can fix that later.”
“I’ll give it to Maya,” Babauta finally said, referring to Maya Kara, the House of Representatives’ chief legal counsel. “I’ll see what we need to do.”
“Thanks,” Lifoifoi said. But if the court said it was unconstitutional, he would just revise it again and again until it stuck.
Babauta pushed the fax aside and changed the subject. They talked for a while longer about their late friend Jess Mafnas, in whose honor the building in which they now sat was to be named. M
afnas’s widow was suing the estate for negligence and the rumor was that she had recently turned down a settlement offer of $2 million. But the Mafnas family had problems of their own: an illegitimate son of Jess’s had popped up out of nowhere and was suing for his piece of the inheritance.
Then they talked about Larry—how he’d made his friends laugh by using the word papalatto to describe liars and otherwise deceptive people. For years, they had assumed papalatto was Tagalog—until a Filipino told them that there was no such word. Larry had just made it up to play a joke on them. Who knew what else he’d made up? Maybe he’d invented the word papalatto to describe himself. Or maybe he had meant the term to apply to his former friends, the ones who were a dime a dozen, the ones who were swarming Asia, the CNMI courthouse, and Capital Hill as they sought to dismantle his empire.
Forty-Five
The Hillblom Bill
“Are you James Scurlock?”
I will admit that, after living in Saipan for five months, the possibility that I might become known has crossed my mind more than once. The island is small, Larry Hillblom was by far its most famous resident, and dozens of attorneys who became involved in the case still live here. In my most delusional moments, I imagine being sought after by those who want to be certain that Hillblom’s biographer gets their side of the story right. However, having spent most weekdays—from 7:30 a.m. until 4:00 p.m. at least—in a cubbyhole adjoining the CNMI Superior Court clerk’s office for what already seems like an eternity, being spoon-fed files (one at a time) from In the Matter of the Estate of Larry Lee Hillblom, I have learned otherwise. The employees of the clerk’s office are suspicious or aloof. The few attorneys who encounter me on their way to their wooden mailboxes ignore the figure hunched over an unsteady Formica counter, increasingly soft ass molded around the edge of a broken chair that sits far too low, transcribing entire pleadings by hand in tiny block letters. Until today, at least, when a quick twist of the head reveals a middle-aged man of medium height and military build in a pressed white shirt and tie, face framed by wire-rimmed lenses.
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