Archive De Lorean's Days of Reckoning By Michael Ryan Published on April 16, 1984 12:00 PM Share Tweet Pin Email John and Cristina De Lorean were a man and a woman in love—in love with each other, it seemed, but also with power and wealth. Even after that day in October 1982, when John was arrested for conspiracy to possess and distribute $24 million worth of cocaine, they still managed to hang on to something of their fantasy existence. The 48-acre ranch in San Diego County was still theirs, although it was pledged for bail. The 20-room co-op on Fifth Avenue, with a view of Central Park, remained in their name, though creditors had liens on it. To shelter themselves and their children—adopted son Zachary, 13, and Kathryn, 6—as De Lorean’s day of judgment approached, they retreated to their 25-room mansion in Bedminster, N.J., with its horses, swimming pool and 430 acres of gentle farmland. It too was tied up in the Detroit bankruptcy action of the De Lorean Motor Company. The last 18 months have been a crucible for Cristina, 34, as well as for her 59-year-old husband. When they married almost 11 years ago, he was a successful automobile executive and she was a top model. Now their lives are in pieces, and she has encountered problems undreamed of in their glamour days. Some have been trivial (cancellation of his American Express card just after his arrest and cut-off phone service to their Fifth Avenue apartment), others all but crushing. Cristina is not an easy woman. In the last days of the De Lorean Motor Company, while the workers in the plant near Belfast, Northern Ireland faced unemployment, De Lorean grabbed at a bailout plan that required $5 million of his own money as a good-faith token. As author Hillel Levin reports in his book Grand Delusions, De Lorean planned to sell the Fifth Avenue duplex to raise the cash, but Cristina vetoed the plan; that lavishly appointed apartment, symbol of the rise of an Italian butcher’s daughter from Cleveland into the social stratosphere, meant too much to her. Salvaging other parts of her life has proved more difficult. Although her face was once familiar on the covers of magazines such as Town & Country and Harper’s Bazaar, Cristina’s modeling assignments have almost completely dried up. “I’m horrified at how the business has treated her,” says Eileen Ford of the Ford Model Agency. “They are not booking her and she’s being hung. What did she ever do? I wish people would realize that it’s not she who’s on trial.” Cristina’s business these days is largely limited to her promotional spots for Optica, a company that makes sunglasses, and her appearances in advertising for Albert Capraro, the dress designer. “Cristina said she saved the only other check she’s gotten, for $165,” reports her hairdresser, Richard Stein. “No one’s called her to work.” She has complained incessantly that old friends deserted her after the arrest—and for a long period last year she appeared to be gaining a considerable amount of weight. At times she has seemed angry at the world because of her troubles. In February she appeared in a fashion ad for Capraro, looking tough and aggressive in a leopard-skin pattern, over a caption that proclaimed: “Dressing well is the best revenge.” Indeed, her most publicized move in recent months was commissioning Capraro to design an 18-piece wardrobe for her to wear to her husband’s trial. Hollywood is abuzz with the rumor that Cristina recently had lunch at Ma Maison with Maureen Dean, wife of Watergate felon John Dean, whose appearances at her husband’s side during his trial made her perhaps America’s greatest expert on dressing for distress. Still, Cristina’s faith in her husband has been constant, friends report, and beyond holding the family together, she has somehow managed to even provide a few luxuries. Zachary got a ski vacation in Europe last month, and both he and Kathryn are still attending private school near Bedminster. If Cristina has managed to maintain her equilibrium, it may be because of her abiding—and much publicized—Christian faith. Raised a Catholic, she became a born-again evangelical several years ago. Last summer she persuaded her husband to join her in that faith. At a baptism ceremony attended by 200 other Christians—many of them handicapped—De Lorean was dipped in the the pool behind his Bedminster mansion. On that hot July day Cristina donned a flowing white robe to be christened along with her husband—not her first baptism, but certainly her most dramatic. Watergate sinner Chuck Colson, now head of Prison Fellowship, an evangelical organization for inmates, personally counseled De Lorean on his conversion, and the Rev. Robert Gustafson, who performed the ceremonies, is convinced that his most famous catechumen is sincere. “If he’s faking it, it’s the best con job I’ve ever seen,” says the minister. De Lorean has been quietly attending Bible classes in a small church in Hollywood during time off from his trial, but his fervor is not entirely constant. During one recent interview, Cristina prompted him to tell a reporter that he has found life’s greatest happiness since turning to Christ. De Lorean glumly demurred: “I have to admit I’ve been happier.” The afterglow of his conversion experience was dimmed on Sept. 1, 1983, when two lawyers representing De Lorean’s creditors arrived at Bedminster carrying a federal warrant that allowed them to search the house. De Lorean was in Los Angeles, preparing for the cocaine trial. Cindy Brady, the former governess who had risen to become the De Loreans’ chief housekeeper and secretary, angrily tried to stall the intruders while she called Los Angeles to reach her employer. “The first John knew about this was when Cindy called my office,” says Howard Weitzman, the lawyer who is representing De Lorean in his cocaine trial and in his tangled financial problems. “They went in there and looted the guy’s place. They copied his personal papers and notes about the trial. And there was nobody there but Cindy.” In fact, De Lorean had known all too well that the raid on his home was coming; William Simon, a New York lawyer who then represented him, had accompanied the two attorneys to the Bedminster house that morning. Simon attempted to waylay them in their search while a colleague back in Manhattan made a last ditch effort to persuade a federal judge to stop the raid. The delaying tactic failed, and at 11 a.m. a Globe Storage & Moving Company van with a crew of four arrived to carry off 63 file boxes and nine file cabinets from the home. For 18 months the public focus of John De Lorean’s life has been in California, where he is finally standing trial on charges that he attempted to possess and distribute 55 pounds of cocaine, worth $24 million. That alleged drug deal may have been a final, vain attempt to raise the money to save the dying De Lorean Motor Company and his Utopian dream of manufacturing a sleek, silvery sports car in Dunmurry, outside Belfast. But there has always been a murkiness to John De Lorean’s goals, his ambitions, his life. As a promising engineering student in Detroit, he was caught bilking businesses by selling advertising in a fake telephone yellow pages. No charges were pressed after he returned the money, but the incident has followed him ever since, usually invoked by those in search of his life’s true motives. Did he want to succeed by using his formidable talents for great achievements, earning satisfaction and acclaim as well as the financial rewards that go with success, or did he simply want to get rich quick, at any cost? As his creditors’ attorneys waited for the files to be removed from De Lorean’s home that day, they noticed something that a court-appointed photographer had reported the day before. Shiny round spots on otherwise dusty wooden shelves marked places where statuary and art objects had lately stood. The carpets bore indentations from the articles of furniture that had been removed. Although a judge had ordered De Lorean not to take any object of value from the house, someone had apparently cleaned the place out. The documents from the raid on De Lorean’s house, now publicly available through the bankruptcy court in Detroit, suggest that the car company may have served for years as a source of free money to support De Lorean’s glittering life and his private ventures. That, at least, is the position of John De Lorean’s creditors. They charge that the alleged drug deal was intended not to save the company but to salvage a life-style—that the fabulous existence of John and Cristina, so much talked about in the gossip columns, so admired in the fashion magazines, was financed with company money. The legal language may be dry, but according to a report filed with a Detroit court, “Documents…recovered from the Bedminster estate revealed for the first time that…there…was a secret escrow agreement whereby $8.5 million of the funds raised by De Lorean Motor Company were deposited with a Swiss attorney, Jacques Wittmer, and remained there…until Mr. De Lorean authorized the disbursement of said funds.” The allegation, in other words, is that De Lorean was the last person known to have controlled $8.5 million. The investigation into this matter will, the creditors believe, prove an even greater embarrassment to him than the drug trial. A federal grand jury has been impaneled to look into De Lorean’s dealings, and one of his former lawyers, Thomas Kimmerly, has been informed that he could be a target of the investigation as well. Kimmerly allegedly assisted De Lorean in the establishment of a series of companies—13 have been identified so far—which De Lorean used in a variety of endeavors, some of which are now being investigated in connection with bankruptcy actions. De Lorean’s lawyers have filed papers in bankruptcy court indicating that he, too, is a target of the grand jury probe. In his flamboyant career as head of, in turn, the Pontiac and Chevrolet divisions of General Motors Corp., John De Lorean became one of the few genuine celebrities the notoriously but-toned-down automobile industry ever produced. De Lorean wedded his image of Detroit power with a self-cultivated macho swagger. He dyed his hair, had his face lifted twice, worked out with weights and had synthetic implants in his jaw to make it more masculine. When he started his own company he had a roster of celebrated friends who were only too happy to invest. In 1975 he persuaded his friend Johnny Carson to put up $500,000. Ironically, Carson was not just buying stock in the Motor Company, he was paying De Lorean for the right to become the company’s commercial spokesman on terms to be negotiated later. In September 1978 De Lorean formed a group of investors, called the De Lorean Research Limited Partnership (DRLP), designed to raise money for the new car company he was starting with the help of the British government. DRLP raised $19.5 million, much of it in contributions from a stellar list of investors. Sammy Davis Jr., for example, chipped in $150,000, as did author Ira (Rosemary’s Baby) Levin. It is the creditors’ contention, however, that the lion’s share of that money went not into the De Lorean Motor Company but into its owner’s pocket. When the partnership finished raising its money, the papers from Bedminster reveal, De Lorean flew to Geneva, where he turned over a check for the proceeds ($12.5 million). At the same time a $5.15 million wire transfer of British government funds arrived in Geneva. The money was turned over to an escrow account for a company called GPD Services, Inc. To this day no one outside De Lorean’s inner circle knows precisely what this company is. It was incorporated in Panama by a woman named Marie-Denise Juhan. Juhan was a friend of the late Colin Chapman, the head of Lotus, the British car company that De Lorean hired to design his sports-car body. Investigators in Britain are so convinced that Chapman made off with the money that tax authorities there have slapped a lien against his estate for the missing cash. But the creditors, citing records found among the Bedminster papers, have publicly charged that John De Lorean received at least $8.5 million of that money in a complicated transaction. That amount plus interest, they charge, went from a London bank to a Swiss bank to a Dutch bank to De Lorean’s personal checking account in a New York bank to a credit account in a Chicago bank, where De Lorean used it to purchase Logan Manufacturing Company, a highly successful maker of ski-area equipment. Since the checks were in American dollars and were returned to this country to clear, creditors had only to serve subpoenas on the New York banks that handled the clearing to unravel the mystery. For more than a year now lawyers for the De Lorean creditors have been trying to take over Logan, arguing that it was bought with their money and should be returned to them. Logan records show that De Lorean collected checks of $900,000 plus in one year from the company—paying himself a $400,000 salary, although he rarely visited the Logan, Utah plant, and charging the company “rent” of around $600,000 per year on the land he owned under the factory. A Detroit judge has ordered De Lorean to take no more money out of the company, and judges have thwarted two attempts by De Lorean to sell the company to a newly minted corporation run by Roy Nesseth, a former car salesman with a 1950s California conviction for grand theft and forgery that has been cited by the creditors. The Detroit court is holding hearings on whether Logan should be handed over to the creditors—and whether De Lorean’s apartment and Bedminster house should go with them. “Based on what we’ve learned,” says bankruptcy trustee David Allard, “any of the assets De Lorean has would be subject to a claim.” De Lorean turned down repeated requests through a variety of intermediaries to be interviewed for this story. His lawyer, Weitzman, however, insists it is only a coincidence that on the day the Dutch bank received an amount almost identical to the amount paid to GPD, it credited $8.9 million to De Lorean’s personal account. Weitzman says that money, used to buy Logan, was the proceeds of a loan from the Dutch bank that has yet to be repaid. In the last days of the Motor Company, John De Lorean began putting company money in his personal checking account, and, according to his secured claim, paying company bills with his own checks. Now other creditors, including the British government, are asking for $130 million from the bankrupt company. But De Lorean argues that he is the only “secured” creditor—entitled to be paid his $900,000 claim from what’s left of the company before anybody else gets a penny. The disposition of the DRLP money is the largest financial question facing John De Lorean, but it is not the only one. This small but telling infraction was discovered by Monthly Detroit writer Edward Lapham, who found evidence in the Bedminster papers that De Lorean had doctored a receipt from the Beverly Wilshire Hotel, changing the price of a lunch from $17 to $191.50. To that charge, lawyer Weitzman says: “It’s something every executive in the world does.” Of more concern to the creditors are a number of seemingly bizarre expenditures that De Lorean allegedly authorized as the company was going under in 1982. According to the affidavit of C.R. Brown, former financial vice-president of the Motor Company, some $180,000 went to Roy Nesseth. “It was commonly known that Nesseth spent most of his time handling John Z. De Lorean’s personal affairs and spent little or no time contributing to the development of the automobile company,” says Brown. “In my opinion, Nesseth’s association was counterproductive to our efforts to establish the company.” Nesseth roamed DMC, from the factory near Belfast to the Quality Assurance Centers in Irvine, Calif., reportedly cajoling, bossing and threatening employees who were frankly confused about what authority, if any, he held over them. At the same time, a complaint lodged by the creditors alleges, De Lorean Motor Company spent more than $15,000 to reimburse servants at Bedminster and to pay for parking, laundry, gardeners, designers and decorators hired by Cristina and John. One of the more inexplicable expenses De Lorean charged to his bankrupt company is the nearly $9,000 that he paid interior decorator Maur Dubin as the company was going out of business. The creditor’s complaint alleges that Dubin, along with Nesseth and others, received $228,300 “for unspecified reasons” from the company during its dying days. A short, bald, egregiously demonstrative middle-aged interior decorator who affected a full-length mink coat, Dubin was initially contracted to redesign the offices of DMC in New York’s Bankers Trust Building. That task took him several years of showing up, often at the close of the business day, with a work crew of young men in tow. Dubin’s role was otherwise elusive. He was a friend and confidant of De Lorean who, while tranforming the penthouse offices into a cynosure of interior decor, also seemed to have greater influence in business decisions than many line officers of the company. It may be years before all the mysteries of John De Lorean’s life and work are cleared up. Allard estimates that the Detroit cases alone may drag on for three or four years—in-large part, he charges, due to the delaying tactics of De Lorean’s lawyers. Weitzman strongly denies that. He argued successfully last month that his client should be able to sell his ranch in San Diego County—under court supervision—in order to pay his legal fees. But Weitzman insists that both he and his client want to get the civil and criminal business wound up as quickly as possible. “John’s whole life has been on hold for the past 18 months,” he says. “He wants to get back to doing something productive.” Adds Weitzman’s co-counsel Donald Ré: “He wants to get back in business. He still believes he can make the De Lorean car.” The cocaine trial: Could he be acquitted? The trial of John De Lorean, which may finally get beyond the jury-selection stage next week, promises to be a rich display of legal pyrotechnics. It matches Howard Weitzman and Donald Ré, two of the brightest criminal defenders in the West, against James Walsh Jr. and Robert Perry, two career government prosecutors with a long record of winning narcotics cases. In presenting their arguments, Walsh and Perry will rely heavily on documentary evidence amassed during the joint FBI and Drug Enforcement Administration sting operation. That evidence includes, most prominently, the now-famous videotape of De Lorean, standing in Room 501 of the Sheraton La Reina hotel near the Los Angeles International Airport on Oct. 19, 1982, holding $24 million worth of cocaine and saying: “It’s better than gold.” Weitzman and Ré, for their part, are confident that they can beat the charges against their client by turning the cocaine trial on its head, making the U.S. government and its investigating agencies the defendants. De Lorean’s story, his defense counsels are convinced, will shock any fair-minded jury. “I can’t imagine that there won’t be a congressional inquiry when people understand how this case was conducted,” says Ré. Since the disastrous afternoon when he was arrested, the best thing to come into De Lorean’s life has probably been Weitzman, 44, the undersize but voluble Beverly Hills lawyer who is the ex-automaker’s chief defense attorney. ” ‘Confident’ is the operative word,” Weitzman insisted while discussing the case four days before jury selection began. Sitting in his corner office in Beverly Hills, with its picture windows giving out on a stereotypically stunning southern California sunset, the tieless Weitzman looked more like a ’60s caricature of a movie producer than an attorney—but, leaning across his formidable desk, he spoke his lines with the authority of a leading man: “He… shall…be…acquitted.” Weitzman is expected to advance a defense theory heavy on government bungling and injured innocence. Early on he and his client floated the notion in the press that the British government, chagrined at the success of the American’s car company, pressured the U.S. to destroy John De Lorean. Public reaction to that suggestion was cool. For one thing, De Lorean’s company was failing. For another, London had no conceivable reason for torpedoing any operation that might help bring stability to Northern Ireland. When the case finally gets to trial, the defense thesis will be augmented by a more complicated one. Several sources close to the trial say that Weitzman probably will call a disgruntled former DEA agent, who once worked on the De Lorean case, to give the jurors an inside look at how the investigation was conducted. Weitzman will likely attempt to show that the DEA and the FBI, which had joint jurisdiction in the case, feuded constantly; that both distrusted other federal agencies; and that, in what Weitzman portrays as a Keystone Kops operation in which the supposedly cooperating agencies attempted to one-up each other, De Lorean was sucked into a trap. Weitzman believes that he can show the jury that his client never understood that he was being brought into a drug deal until it was too late. He will also likely contend—as De Lorean has publicly said—that the government’s chief informer, James Hoffman, threatened harm to De Lorean and his daughter if he backed out of the deal. Both Hoffman and Benedict Tisa, an FBI agent who posed as a banker willing to finance the deal in exchange for De Lorean stock, will probably be targets of Weitzman’s attack. De Lorean may testify in his own defense, attempting to give the jury an explanation of the videotapes congruent with the defense’s theory of the case. Getting the case delayed this long has been a defense triumph. Weitzman requested the discovery process—the procedure by which prosecutors are compelled to turn over to the defense evidence and testimony that may be used against it—and protracted it for one year. Most federal drug cases are in court six to eight weeks after arrest; Weitzman, by demanding every document the government—from the FBI to the State Department—had on his client, kept the case from trial until last October. Then, in an apparent lucky break for the defense, CBS News obtained and aired the videotape of the arrest, and Judge Takasugi postponed the case six more months. “The longer the defense can stall, the better off they will be,” observes Los Angeles County Assistant D.A. Peter Andre Bozanich. “Witnesses might die, the case might fall apart. The best defense is to stall, and it is a great advantage to the criminal defendant being on the outside rather than on the inside of prison.” The reason De Lorean is not on trial yet is in part a 42-page questionnaire inspired by Weitzman and issued to each of the 143 prospective jurors to determine prejudice on issues ranging from religion and politics to drugs and John De Lorean. It provided the defense with enough material to make the process of jury selection drag on for weeks beyond the one or two days it normally consumes in federal court. Walsh, the slow-talking, undramatic government lawyer who is the third prosecutor assigned to this drawn-out case, said during jury selection that Weitzman had tried to “mousetrap” would-be jurors by drawing them into contradictions during his questioning. But as Beverly Hills attorney Paul Caruso observes, “He’s just postponing the inevitable. Sooner or later the judge will intone, ‘Call your first witness,’ and all these little victories will become Pyrrhic ones, because when they call that first witness it’s for keeps.” Los Angeles trial watchers say that Weitzman, whose courtroom manner is congenial, winning, almost boyish, may have more jury-appeal than Walsh, a former Navy flier, summa cum laude graduate of the University of San Diego Law School and a veteran of Chicago’s organized crime Strike Force. But Weitzman’s engaging manner is no guarantee of success; he has lost at least five major cases in recent years, including last June’s much publicized “Grandma Mafia” trial in Los Angeles, in which he defended a 44-year-old woman accused of laundering money from cocaine deals. She is currently serving a 25-year sentence. In 1980 Weitzman suffered perhaps the greatest embarrassment of his career when he accused a judge of reneging on a sentence agreement. When he was haled into court for contempt, he abjectly apologized, admitting that no such understanding had been reached. The judge, a onetime friend of Weitzman, issued a blistering rebuke. “You took advantage of a former friendship to a degree that I’ll never forget,” he told the chastened lawyer. “I’ll tell you now from the bench I hope we never have any relationship of any type anymore.” In the De Lorean case, Judge Takassugi has allowed many, if not most, of Weitzman’s delaying motions—and may well continue to bend over backward to preserve every right asserted by the defense. Takasugi is rare among federal judges in that he worked his way up from municipal and state benches; he doesn’t belong to the old boys’ club of judges who arrived at the district court from a prestigious law firm or a government job. His sympathy for the underdog may spring from a horrendous childhood: Along with his family, he was held prisoner during World War II for four years in the Tule Lake, Calif. internment camp for Japanese-Americans. But his patience with Weitzman’s long delays seems to be waning; he is by no means sure to deal lightly with the defendant if a guilty verdict is returned. “There’s a strange phenomenon among judges known as ‘out-con-stitutionalizing’ the defendant,” says lawyer Caruso. “This means giving the defendant and his lawyer everything they want.” But out-constitutionalizing reduces the defendant’s chance of appealing on the grounds that the judge has erred. Judges have been known to take out their impatience with such defense tactics by handing out heavy sentences. If Howard Weitzman’s strategies fail him, John De Lorean could face up to 72 years in prison.