The Firm: Do the ties bind McBride?
By SYDNEY P. FREEDBERG
I have represented some of the biggest cruds in Florida. But I don't carry their viewpoints past the time I go off the payroll. -- Chesterfield Smith, senior partner, Holland & Knight law firm, Feb. 3, 1974
Bill McBride was in the audience that afternoon as Smith, his boss and mentor, told a U.S. Senate subcommittee that a corporate lawyer can serve both his clients and the public good.
McBride, 57, is not nearly as plainspoken as Smith. In fact, he is as cautious as Smith is indelicate.
But in the nine years that McBride led Holland & Knight, he turned it into a global empire with even more corporate clients that Smith might call "cruds."
McBride captivates campaign audiences by recalling the work the law firm performed for people who could not afford a lawyer, yet rarely mentions the who's who of corporate clients that have long dominated his firm's agenda and made McBride and his partners wealthy.
And so the questions linger as the campaign for governor enters its final days:
Can McBride be an effective opponent of casino gambling in Florida when for years the firm reaped millions of dollars representing Las Vegas casino owners, horse-track and cruise-to-nowhere operators, as well as Indian tribes seeking to expand gaming?
Can he fight for consumers and working people when his firm fought whistle-blowers, sought to conceal information about potentially hazardous products and lobbied for tax breaks and subsidies for mega-corporations?
Can he champion the environment when the firm represented corporate polluters, hazardous waste generators and large developers?
The Jeb Bush campaign says that McBride, who has never held public office, should be held accountable for the law firm's record.
But McBride, backed by many legal experts, says that is unfair. A multinational corporation that pays big legal fees is just as entitled to a good lawyer as a homeless person charged with vagrancy, they say. And a lawyer can advocate a client's position in legal proceedings without personally embracing that position.
"Lawyers are hired to be advocates and they don't adopt personally -- and aren't supposed to -- the views or positions of their clients," says McBride.
McBride acknowledges the potential for conflicts if he is elected.
But he vows to operate in the sunshine, seeking ethics advice on matters where he might be perceived as using the governor's position to benefit the law firm or its clients.
"If there was ever any question as to whether anything I was doing might constitute a conflict of interest or a perceived conflict, I'd certainly make full disclosure to everybody about any issue," the candidate says.
When asked whom the voters will get if they elect him -- McBride the corporate lawyer or McBride the education reformer -- he pauses for a few seconds, then replies.
"You're going to get me, the person. I've been investigated thoroughly by . . . everybody that's endorsed me. . . . They feel very comfortable in where I am as a person."
A powerful mentor
Much of McBride's style and savvy are patterned after Smith, a country lawyer from Arcadia who rose to become one of the most powerful people in the legal profession.
Smith, now 85, built Holland & Knight on the fat fees of the powerful phosphate industry and other corporate giants while becoming the father of Florida's modern Constitution and an architect of its judicial system.
As president of the American Bar Association in 1973-74, Smith gained national fame by calling for Richard Nixon's resignation and total amnesty for Vietnam draft dodgers. The standing joke around the ABA's headquarters was that every time Smith made a speech, 100 members resigned and 900 joined up.
McBride studied law at the University of Florida, but much of his education came during a year as Smith's assistant. The apprenticeship included the trip to Houston, where Smith appeared before the Senate subcommittee investigating allegations that lawyers catered to the special interests of wealthy clients.
The seeming contradiction between the corporate lawyer as zealous advocate for rich clients and the people's lawyer serving the larger public interest would stay with McBride for the rest of his public life.
He says Smith taught him that a lawyer can be a force for community good and still serve corporations that give him status, wealth and power.
Does McBride agree with his mentor that some Holland & Knight clients were "cruds?"
"(I) didn't have a clue because I was a law student," says McBride. "I wasn't with the firm and I really didn't know who the clients were."
He would soon find out.
Friends and clients
The young apprentice known as "Chesterfield's boy" rose quickly. The assistant's job became a full-time job, then a career capped by nine years as Holland & Knight's managing partner. By the time McBride left the top job in June 2001, the law firm had 1,150 lawyers in 27 cities and six foreign countries.
For McBride, power didn't flow from courtroom appearances or brief writing. It came from friendships built on small favors and courtesies like calling a partner on his birthday, remembering a client's wedding anniversary or interceding for a homeless AIDS patient in need of legal help.
With an ever-widening circle of friends, he quickly became known as an up-and-comer in the firm's banking practice group.
At the time, big banks were growing in a wave of mergers, buyouts and raids. McBride mentions that he represented institutions like Exchange National Bank, SunBank and AmSouth, but never handled their merger or acquisition work.
"Basically, the work that I did was pretty boring; (I) never had anything sensational out of it," he says.
Most of his billable hours were logged on mundane tasks like documenting loans, he says, but he can't recall a lot of specifics. He sees much of his work as "confidential matters" and won't release a full list of his personal clients.
McBride made his real mark as a big business-getter, or "rainmaker," turning friends into clients and clients into friends.
"He was good at bringing in clients," says Smith, who still works at the firm. "One of the best."
Candidate McBride downplays his salesmanship skills, weaving around questions like who was the biggest client he ever landed or how many names are in his Rolodex. ("I don't use one any more," he says.)
"Maybe I was able, in some circumstances, to expand relationships with some clients," he says. "Closing deals and having a business transaction go well is always satisfying because if it goes well, it means that everybody engaged was pleased with the outcome."
With his ebullient personality, McBride found it easy to meet and become friendly with politicians and judges.
He got plugged into political circles as an officer in the Hillsborough Bar and was invited to join an elite men-only club, Tampa's University Club, where second- and third- generation businessmen met to cement deals. (McBride says he quit in 1984 because of the club's refusal to admit women.)
And with important friends, McBride's influence in the Tampa Bay area began to grow.
Nearly every task he attacked with abandon, especially his courtship of a banker named Adelaide "Alex" Sink, whom he married in 1986.
As their careers bloomed, McBride and Sink threw parties for politicians and clients and donated heavily to political campaigns and charities.
Since 1991, he and Sink have given about $1-million to charities and $150,000 to politicians and parties, mostly Democrats.
"Whoever I gave to was generally a friend of mine," he says.
Profits and public service
When McBride's partners made him managing partner at Holland & Knight in May 1992, they saw him as a leader with a big heart, a guy who could mend fences, quash trouble, seal deals.
He promised to deliver profits and public service and turn the firm into a national powerhouse. And he delivered.
He nudged partners to volunteer in the community, pushed for free legal work for the needy and counseled colleagues not to sacrifice money for pride. He mentored a Tampa teenager and funded seven college scholarships. He actively recruited women and minority lawyers and promoted the idea of a congenial workplace.
McBride rarely fired a staffer or second-guessed a partner. He became adept at quietly ironing out delicate situations between clients or partners.
One of his first public tests came in late 1992, when the federal government accused Holland & Knight of malpractice and breach of duty. The case concerned a now-defunct savings bank, CenTrust, and David Paul, the disgraced chief executive whose greed and mismanagement led to the institution's collapse. The failure cost taxpayers $1.7-billion.
The Resolution Trust Corp., the federal agency responsible for untangling the mess left by the failure of hundreds of thrifts, said 18 Holland lawyers had spent 3,348 billable hours (for which Holland was paid $670,000) to concoct a "lengthened and tortured" legal analysis that protected Paul at the expense of CenTrust's depositors. The case supervisor was Chesterfield Smith, McBride's mentor -- and David Paul's friend.
McBride, a man who stuck by his friends, came out swinging. He defiantly vowed to fight the charges and rejected a settlement offer of less than $3-million. "They can't attack our legal position," McBride said at the time, "so they have to go after Chesterfield."
Fourteen months later, the defiant tone was gone. Holland & Knight quietly agreed to pay the RTC $3-million at the insistence of its insurance company.
"I don't recall all the details on that now," he says. "I remember I tried to be open about it and make public statements."
Meanwhile, the law firm was growing, as McBride had promised. As it stretched into new markets and new cities, McBride added some of the most profitable industries in America to Holland & Knight's client roster: utilities, computer giants, biotech and pharmaceutical high-flyers.
McBride also dramatically boosted Holland's presence and influence in the nation's capital, adding a cadre of lobbyists that included former members of Congress and former government officials.
The firm became one of the nation's top lobbying shops (annual Washington lobbying income totaled more than $3.4-million in 2000), with dozens of big-name clients that at one time or another have included General Mills, United Airlines, Walt Disney's ESPN and Texaco in Washington, and Microsoft, American Express, IBM and Bristol-Myers Squibb in Tallahassee.
Though McBride liked lawyers with a social conscience, his partners say he was especially proud of snaring Republicans like former U.S. Rep. Tillie Fowler and former state Sen. Curtis Kiser. That's because the firm's Democratic image and reputation for do-good causes were a drain on the law firm's bottom line, they say.
Usually working behind the scenes, Holland & Knight's lobbyists tried to preserve corporate tax breaks and rewrite rules to benefit developers. They tried to block stringent criminal penalties for negligent manufacturers and exempt new polluters from paying cleanup costs.
Under McBride, the firm increased its legal and lobbying work for gambling interests, which included Las Vegas casino giants, cruise-to-nowhere operators and multiple Indian tribes seeking to set up casinos.
Holland & Knight lawyers and lobbyists negotiated gaming contracts, drafted agreements to finance and build casinos, and litigated against competitors and anti-gambling government officials.
McBride also helped bolster the gambling business by recruiting a lawyer who was a national expert in helping Indian tribes comply with gaming laws.
Records show the firm has reaped more than $2-million in federal lobbying fees from at least eight tribal groups since 1997 -- though McBride now says he personally opposes an expansion of casino gambling in Florida.
New clients, new challenges
Holland and Knight's growth was so feverish that it created new challenges for McBride. Many of the new lawyers were strangers, with values at odds with McBride's Democratic impulses and the firm's public service tradition.
"Bill had a lot of problems, and it's hard to manage, as big as it got," says Smith. "Did he work at them? Yeah. Did I ever disagree with him? Of course. But he did a damn good job."
As the firm grew in size, power and wealth, McBride the social reformer had to confront McBride the hard-headed businessman.
When a citizens group asked for legal help in its quest to stop Medfly spraying, McBride wanted to help but deemed it "ethically impermissible." Why? Holland & Knight -- thanks in part to a recent merger -- now represented the maker of the pesticide, Malathion.
When a children's advocacy group asked him to help gay couples fight for the right to adopt children in Florida, McBride said no even though he believed in the cause. New politically conservative law partners in Orlando were adamantly opposed to gay adoption.
McBride says he couldn't possibly know the details of every case handled by the big national firm. For example, he says he didn't keep tabs on the firm's representation of Bridgestone/Firestone. Holland & Knight received at least $160,000 to lobby for Bridgestone/Firestone in Washington after the massive tire recall.
Sometimes the firm would represent a client on one matter and later oppose the client in another. Shortly after McBride became managing partner, Holland & Knight sued the state of Florida on behalf of a newspaper for concealing public safety information about the dangers of Benlate, a fungicide made by DuPont. The chemical was causing crops to wither and die.
But by the late '90s, as a new wave of lawsuits accused DuPont of lying about Benlate, Holland & Knight was lobbying for DuPont on other matters. Under McBride's stewardship, the firm received at least $80,000 from the chemical company to monitor Superfund and environmental issues in Washington.
McBride says he didn't know details about DuPont or several other cases in which Holland & Knight battled consumers, whistle-blowers, patients or employees alleging discrimination.
McBride says he strongly opposes discrimination, and the NAACP honored him and the firm for winning $2.1-million for African-American survivors of Rosewood, a town destroyed by white people in the 1920s.
But Holland & Knight fought for the gunmaker Heckler & Koch when the NAACP charged the gun industry with selling firearms without proper safety devices. It lobbied for ChoicePoint, a database company that the NAACP and other groups later said improperly purged people from the voter rolls.
He says he knows few, if any, particulars about his firm's lobbying work for several Florida companies, including the St. Joe Co., the state's largest landowner. The company, which wants to develop thousands of acres of forest, beaches and swamps across the Panhandle, paid Holland to help it obtain federal funding for a major new airport next to a state forest north of Panama City, records show.
McBride says he is bothered by aspects of the St. Joe plan and vows, if elected, to re-examine the proposed site of the airport, which would be twice as big as Tampa's and paid for largely with taxpayer dollars.
McBride notes that he persuaded his partners to refuse work for the tobacco industry.
Could he name another firm he recommended rejecting on moral grounds?
He says there were several others but he can't talk about them. "The reason I mentioned tobacco is because everybody knew about tobacco."
As the law firm gobbled up other law firms, Holland & Knight increasingly took on government agencies as clients. The list ranged from Trinidad and Tobago to the U.S. Environmental Protection Agency to counties, cities and school boards across Florida.
Neither McBride nor the firm will release a list of the public clients or say how much it receives in public fees.
The firm became so large that partners sometimes found themselves trying to obtain state or federal funds for local government projects -- while at other times threatening to sue those same governments.
Holland lost one public job in January 1998. The Department of Housing and Urban Development terminated the law firm's contract after it allegedly failed to tell HUD about 67 matters in which Holland & Knight represented clients battling the agency.
McBride vehemently denied a conflict, and the firm still says it did nothing wrong.
McBride has always liked to settle disputes discreetly; his partners frequently talk of his ability to make all sides feel like winners.
But his preference for quiet diplomacy blew up in early 2000, when McBride was publicly stuck in an ethical bind.
He was chairman of a Greater Tampa Chamber of Commerce board that tried to negotiate a secret deal with board members of Tampa General Hospital, which had been losing money for years.
McBride, whose law firm was suing the hospital for concealing records, pledged that the chamber would operate as openly as possible. But he did not let reporters into a chamber board meeting.
"Most of us don't know how to handle ourselves with cameras," he said at the time.
Bank loans and loopholes
Off and on the campaign trail these days, McBride often is a man of contradictions as he repudiates his former firms' causes while almost religiously defending his former partners and their right to zealously represent corporate clients.
And while he portrays himself as a folksy populist, his personal financial dealings bear more the markings of a savvy businessman.
For example, McBride found a way to reduce the cost of borrowing on his small orange grove near his elaborate lakefront house in Thonotosassa.
In December 1993, he obtained a $326,400 loan from Farm Credit of Central Florida, a cooperative formed by Congress in 1916 to help rural America finance agriculture businesses -- at terms better than they could get at a commercial bank.
That's because farm-credit borrowers are members of an association that usually refunds a portion of the interest that they pay every year on their loans.
"Mr. McBride was certainly not taking advantage of anything anyone else could not take advantage of," says Robert Teston, executive president of the farm-credit cooperative.
Asked about the farm loan, McBride said he wasn't sure of the loan rate but he was sure he didn't get a better deal than anyone else.
McBride had fully paid off the farm loan by 2000. According to a financial disclosure report filed in July, he had four outstanding loans totaling more than $500,000, all from banks that were clients of his former firm.
McBride, who listed his net worth as $1,925,885, says neither he nor his banker wife received preferential treatment. He had no real choice of lenders, he says, because Holland & Knight represented "virtually every bank in Florida."
What's more, banks compete for the loan business of every big law firm. "Some banks have total departments that loan money to lawyers and law firms," McBride says.
Like any sophisticated consumer, McBride and Sink used an accountant to help them realize advantages of the loophole-ridden federal tax system: depreciation, tax credits, deductions on gifts to charity and interest paid; limited partnerships; S-corps.
In 2000, the last full year he was with Holland & Knight, McBride reported $577,284 in income from the firm. But paper losses from his orange grove, including depreciation of his citrus and persimmon trees, helped reduce his income by more than $100,000 to $450,721.
He paid $147,731 in federal taxes.
After stepping down as Holland & Knight's managing partner on June 4, 2001, McBride resigned from the firm on Aug. 13, 2001.
He says he didn't submit a resignation letter but continues to receive equity payments of about $25,000 every quarter.
Departing partners usually receive their share of the partnership back over a three-year period, so McBride still has about $200,000 to come.
"However, if Bill McBride is elected governor, he will receive his remaining equity immediately, at a discounted present value, to avoid any appearance of conflict of interest by Holland & Knight," said Robert Feagin III, who replaced McBride as managing partner.
McBride reported $436,890 in income for six months' work in 2001, about $140,000 less than he received for all of 2000.
Feagin said McBride is owed no other compensation and has "no active relationship with Holland & Knight, financial or otherwise."
-- Times researcher Kitty Bennett and staff writers Wes Allison, Scott Barancik, Craig Pittman and Jeff Testerman contributed to this report.
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