by Vanda Krefft
Others in the family were bound to suffer severely if Fox continued to lie. The prosecution was threatening to indict Eva and Belle Fox. Although Fox would always maintain that neither of them knew anything about his payments to Davis, it was theoretically Eva’s money he had used, and it was Belle who had gone to the bank to make the withdrawals. They trusted him completely, and he had implicated them. He had good reason to fear that both might crumble psychologically if accused as criminals. Eva had had several violent, self-injurious episodes during the months that Fox was fighting to save his companies, and Belle, who worshiped her father, had in recent years developed a muscle disorder that some family members believed was hysterical paralysis. Then there was that rumor about Eva, Mona, and Belle crouching in separate corners of a room ready to shoot one another.
In Philadelphia, Littleton and a law partner spent two days negotiating the terms of Fox’s cooperation with the government. Then, on Saturday, March 22, 1941, five days after his meeting with Davis at the Governor Clinton Hotel, Fox waived his constitutional rights and told prosecutors that he had given $27,500 to Davis while he had cases before his court. On Monday, March 24, he repeated the information to a federal grand jury in Philadelphia.
Although no one ever said so, apparently part of the consideration Fox received for his cooperation was immunity from prosecution for Eva and Belle. He also evidently negotiated protection for two close friends, lawyer Murry Becker and Philadelphia business tycoon Albert M. Greenfield. Although both were involved, neither would ever be put on the witness stand or charged with any crime. For himself, Fox neither requested nor received immunity from prosecution. He didn’t want favors, he said later. “I was prepared to tell that whole story regardless.”
On March 28, 1941, six days after his confession, Fox was indicted along with Davis and Kaufman for conspiracy to obstruct justice and defraud the United States. He was the only one of the three present when the charges were read in the windowless, walnut-paneled Philadelphia courtroom of Judge Guy K. Bard. In a move that surprised those who knew him as a tireless fighter, Fox indicated that he wanted to enter a plea. Then, standing, he said in a low voice, “Guilty.” Escorted by deputies to the marshal’s office to pay his $5,000 bail, he pulled a roll of cash from his pocket and unfurled five $1,000 bills.
Davis and Kaufman were not nearly so compliant. Appearing hours later—this was the building where he had engineered the five Fox bankruptcy decisions—Davis glumly posted bail and, after trying to walk away, reluctantly submitted to being fingerprinted. Kaufman showed up the next morning. At arraignment on April 14, 1941, both pleaded not guilty.
Each of the three defendants faced a maximum penalty of two years in federal prison and a $10,000 fine. Fox would be sentenced later, after the prosecution of his two alleged co-conspirators.
The trial of Davis and Kaufman began in Philadelphia on May 19, 1941, with Fox as the star witness for the prosecution. Called to the stand early on by prosecutor Walter H. Gahagan Jr.—the tall, youthful, handsome government lawyer who had won the corruption-of-justice conviction of federal judge Martin T. Manton two years earlier—Fox calmly told his story about giving Davis two payments totaling $27,500. Several jurors’ eyes widened. Gahagan then presented a series of witnesses who traced the five $1,000 bills by their serial numbers from Fox’s Atlantic City bank account to the St. Augustine, Florida, bank account of Davis’s daughter, Mary Firestone. It was a tidy, persuasive case, not perfect, but weighted with facts laid out in logical, incriminating succession.
Unable to refute that evidence, Davis and Kaufman relied instead on emotionalism, crumpled reasoning, and flat-out lies. Each had his own team of lawyers, a circumstance that positioned them to turn on one another. They didn’t. Instead, they mutually maintained their complete innocence.
Shrewdly, Davis, now seventy-four, had hired Philadelphia criminal lawyer William A. Gray, who in mid-1932, as counsel to the Senate Committee on Banking and Currency, had interrogated Fox about his stock trading practices. Days later, Fox had stolen Gray’s big moment by pleading illness and not showing up for questioning in front of the Senate committee. Seizing the chance now to get even, Gray pilloried Fox as a paranoid kook and a pathological liar who saw conspiracies everywhere. Gray even claimed that Fox was “a confessed criminal in other matters” and that in exchange for his testimony, he had been promised a free pass for “his other crimes.” It didn’t bother Gray that the statement was completely untrue. As he would note in his closing argument, “[W]e haven’t got the slightest fear in connection with the facts in this case.” That is, when the facts weren’t convenient, he simply ignored them.
By contrast, Gray presented Davis as a monument of integrity, accenting the fact that for forty years, Davis had taught a men’s Bible class every Sunday at church. Davis himself gave a grand performance. Usually wearing the same rumpled, tan gabardine suit to court, he unfurled a rags-to-respectability tale that began with his farm-boy childhood of clearing land “with a yoke of oxen,” digging ditches, and hauling rails. Rising to theatrical heights, he declaimed, “While I have been poor, not a dishonest dollar ever found its way into my pockets or my possession.”
Morgan Kaufman’s defense was even more audacious, consisting largely of a ferocious ad hominem attack on Fox. Kaufman’s main lawyer, I. Gainsburg, railed against Fox as a person “with no conscience at all, much less a soul,” a “despicable liar” who was driven by a “vicious mind” and “lecherous thoughts” and whose true nature was reflected in the “satanic, vicious look upon his face.” According to Gainsburg, Fox was unfit for inclusion in the human race: “I say to you, and I mean it as earnestly as my outward appearance indicates it to you, that he is less reliable than the yellowest cur that runs wild in the streets of New York, or Philadelphia, if you have any yellow curs here.”
“One minute, gentlemen,” the judge admonished at one point. “This isn’t a three-ring circus we are running here.”
When testimony concluded on May 29, 1941, the tenth day of the trial, Gahagan wasn’t assured of victory. His case had three large holes. First, because bankruptcy referee Robert Steedle had died in May 1937, Gahagan couldn’t use the so-called “Steedle diary,” which documented Davis and Kaufman’s repeated attempts to bribe him. Second, a private detective hired by the Capital Company to watch Fox in Atlantic City had also died, likewise making his written reports inadmissible. That detective had seen Davis and Kaufman with Fox on his front lawn in Atlantic City in May 1936, around the time of Fox’s bankruptcy filing—a meeting that Davis and Kaufman had strenuously denied under oath. (In each instance, the evidence was inadmissible because the defense would not be able to assert its right to cross-examine the accuser.) Third, Fox refused to describe his payments to Davis as bribes. He repeatedly insisted that they were loans and that rather than intending to commit a crime, “I was hoping that justice would be done by me.”
Around 10:15 that night, after five hours and forty-nine minutes of deliberation, the jury of eleven men and one woman returned to report a hopeless deadlock. They had split right down the middle, six to six. The judge declared a mistrial.
Stunned, Gahagan suspected jury tampering. Judge Davis’s brother, lawyer J. Mercer Davis, was a well-known jury fixer and had been present during jury selection. In the course of the trial, two of J. Mercer Davis’s notorious associates, Harry Corbally and Peter J. Dodd, were rumored to have been loitering in and around the courthouse. FBI agents investigated, but couldn’t find enough evidence to take action.
Gahagan moved for a second trial, which began on July 28, 1941, and lasted for twenty days, twice as long as the first. This time, with Davis and Kaufman equally savage in their attacks, Gahagan was stronger, but Fox was weaker. He could appear only in the afternoons because he required diabetes treatment every morning. He looked pale and couldn’t recall details, even those he had discussed with Gahagan moments before taking the stand. “More or less, there is always something the matte
r with me,” he said. Could he truly not remember, or was he losing interest? Gahagan later wrote to a colleague, “I frankly cannot decide.”
Testimony in the second trial ended on August 22, 1941. Twenty-two hours later, the jury of nine men and three women returned to report a deadlock. They had split seven for conviction and five for acquittal. Again, the judge had to declare a mistrial.
This time, Gahagan was certain that the jury had been fixed. Within days, he and FBI agents began extensive interviews with the jurors. Among the five who had held for acquittal, the ringleaders appeared to have been Edward Slocum, an American Legion employee, and Ella B. Clark, a doctor’s wife. Other jurors described Slocum and Clark as close-minded bullies who monopolized the deliberations. Before any discussion of the evidence, Slocum jumped up and said that rather than convict Davis and Kaufman, “I’ll stay here until hell freezes over.” Clark said it would take dynamite to make her change her opinion. Slocum refused to listen to the other jurors, constantly interrupted them, shouted “for all he was worth,” and pounded his fists on the table. One juror described the proceedings as “Bedlam” and commented, “At no time did we have an ordinary, sane discussion.”
Gahagan believed that Slocum and Clark had been illegally influenced by two shrewdly ambitious Philadelphia lawyers, husband and wife Raymond Pace Alexander and Sadie Alexander, operating on behalf of Davis and Kaufman. Although the well-educated Alexanders would later be lauded as saintly civil rights advocates, in 1941, as African Americans, they were still struggling for professional advancement. Ella Clark was evidently the inside connection. The Alexanders and the Clarks, who were also African American, had been close friends for about a decade, and over the years, Dr. Edgar Clark had referred many personal injury cases to Raymond Alexander. It was Raymond Alexander who had submitted Ella Clarke’s name for the jury pool, and she apparently recruited Edward Slocum, another African American member of the jury.
Other suspicious events occurred: phone calls from strangers to the homes of jury members; an overheard comment in the courtroom, “Everything’s all right,” from an outside lawyer to Morgan Kaufman on the last day of the trial; in response, a broad smile from Kaufman; and the behavior of jury foreman Harry McDougall. A sixty-eight-year-old guard at the Publicker Commercial Alcohol Company who also voted for acquittal, McDougall made virtually no attempt to subdue Slocum and Clark. According to an FBI informant, Davis’s lawyer Gray was well connected in the liquor business and could “get to” anyone connected with it. When asked about several of Davis’s self-contradictory statements, McDougall told Gahagan, with what one might imagine was a Cheshire cat smile, “I guess us jurors ain’t bright enough to pick up some of these things.”*
In the end, the evidence of jury tampering was again too insubstantial for authorities to bring charges against anyone.
Gahagan wanted a third trial. U.S. attorney general Francis Biddle overruled him. The federal government had spent more than $10,000 on the first two trials, and it was customary to drop charges after a second mistrial. In November 1941, a judgment and order of nolle prosequi were filed, formally abandoning the case against Davis and Kaufman.
The Justice Department, however, kept after Davis and Kaufman through other channels. To get him off the public payroll, on November 8, 1941, Attorney General Biddle asked the House Judiciary Committee to begin impeachment proceedings against Davis. Within two weeks, Davis had resigned, forfeiting the $12,000 annual salary he’d been guaranteed for life as a retired judge. Then Davis’s former stronghold, the Third Circuit Court of Appeals, began a two-year investigation of his conduct that culminated in a blistering October 1943 report condemning him for at least six crooked decisions—including all five related to Fox’s bankruptcy case. Leaving his New Jersey home, Davis returned to the area where he had lived as a teenager and settled on a farm just outside Norfolk, Virginia. He died there on February 21, 1945, at age seventy-seven.
Morgan Kaufman, too, was punished. In May 1943, the U.S. District Court disbarred him, and in November 1944, so did the Circuit Court of Appeals, citing “unethical conduct.” He was now unable to practice in federal court. In July 1947, Pennsylvania’s Board of Governance recommended disbarment; Kaufman fought back for more than a year, then gave up and resigned as a member of the Pennsylvania Bar.
The government’s abandonment of the case against Davis and Kaufman left Fox standing alone as guilty of the conspiracy in which all three had participated.
When, in March 1941, Fox had agreed to testify against Davis and Kaufman, federal prosecutors assured him that if they failed to win a conviction, the government would not object to his withdrawing his guilty plea and standing trial on the original charges. That seemed only fair. After all, Davis and Kaufman had actively solicited the bribe, and without Fox’s cooperation, the government would have had no case against them.
Accordingly, when Fox appeared for sentencing on October 21, 1941, in the Philadelphia federal courthouse, he submitted a petition to change his plea to not guilty, and expected it to be automatically approved. In all known cases at the federal and state court level, when the prosecution agreed, a motion to withdraw a guilty plea had always been granted. However, U.S. attorney Gerald A. Gleeson opposed Fox’s petition because of the gravity of the offense and asked for “a substantial prison term.” Judge Guy K. Bard—in whose court Fox had pleaded guilty seven months earlier—agreed, sentencing Fox to a year and a day in federal prison and fining him $3,000.
Fox showed no sign of emotion and he remained silent while his lawyer, Martin Littleton, protested for more than thirty minutes. Bard would not change his mind. Instead, he raised Fox’s bail from $5,000 to $15,000.
While Littleton went out to get the extra money, Fox spent two hours in a detention cell on the third floor of the courthouse. He became ill, but when Eva appeared with bicarbonate of soda pills, the guard refused to let her into the cell. Federal law prohibited anyone except a federal officer from giving medication to a prisoner.
“Talk about your Gestapo!” Eva shrieked. After an argument, she was allowed to give Fox the medicine. After Littleton appeared with the additional $10,000, Fox and Eva left the building arm in arm—a sad pair, unwell in body and mind, trying to support each other amid unfathomable desolation.
Although Fox perceived it as yet another betrayal, the government’s opposition to his motion to withdraw his guilty plea was simply a bureaucratic snafu. Hugh A. Fulton, the U.S. attorney who had given Fox the assurance, had moved on to another government position and had neglected to fill in his successor, Gleeson. Once informed of the mix-up, Fulton wrote to Judge Bard explaining the situation. Gleeson then withdrew his objection, and even U.S. attorney general Francis Biddle got involved, sending word that he had a “definite desire” that Fox be allowed to stand trial. Bard did not relent. Fox’s guilty plea stood, and so did his punishment.
Fox spent the next year fighting Bard’s decision. The prospect of prison shook him deeply. The one person who might have counseled him through the psychological trauma was gone. On November 2, 1941, less than two weeks after Fox’s sentencing, his longtime friend, psychiatrist Dr. Menas Gregory, suffered a fatal heart attack at age sixty-three while playing golf at the Lake View Golf Club on White Plains Road. Ten days later, Fox wrote to Albert M. Greenfield that he was in a “desperate state of mind.”
Fox’s lawyer, Martin Littleton, tried hard. He argued that to let Fox’s guilty plea stand would accomplish “an unheard of result”: a cooperative government witness with no previous criminal record would be punished for a crime that the government had never proved existed. Littleton pointed out that, by definition, one person alone could not constitute a conspiracy—and the government had abandoned its case against the only other people ever alleged as co-conspirators, Davis and Kaufman. At the very least, Littleton asked, wouldn’t the court suspend Fox’s prison sentence and punish him with the fine alone? The answer was always no.
Littleton’s reas
oning was not altogether sound. Regarding criminal conspiracies, the law took a practical view and counted itself lucky to have caught any of the participants. The general rule was that a single defendant could be prosecuted and convicted for conspiracy. That had happened in the past. The only restriction was that one defendant in a conspiracy couldn’t be convicted if all the accused co-conspirators had been acquitted or discharged under circumstances amounting to an acquittal. Davis and Kaufman had not been acquitted. The government had simply dismissed the indictment against them because it had come to the end of the resources it was willing to commit to prosecution. The final obstacle to Fox’s withdrawing his guilty plea was the guilty plea itself, which was legally equivalent to a proper conviction. Additionally, no judge was bound to honor any agreements made between lawyers.
Fox prepared for the worst. Aware that his family would be flummoxed to try to handle the matter alone, he wrapped up his six-year bankruptcy case, effecting an $895,000 settlement with his creditors and being formally discharged from bankruptcy on July 27, 1942. By the fall of 1942, sixty-three-year-old Fox had exhausted all legal recourse. On November 16, 1942, he surrendered to the court in Philadelphia and was sent first to the county facility, Moyamensing Prison, in South Philadelphia. Four days later he was transferred to the federal penitentiary at Lewisburg, Pennsylvania.
Once a great leader of industry, Fox had become a social pariah. Once the boss of thousands of employees worldwide, he had lost the authority to determine even the course of his own days.