Guess-Jordache Feud Bloodied Outsiders, Too : Litigation: Some who investigated, reported or were otherwise drawn into the case say their reputations, and even their health, have been damaged.
Now that the owners of jeans giants Guess and Jordache have patched up their legal differences, they are free to bury the ugly memories of 6 1/2 years of brutal corporate warfare.
In fact, the Marciano brothers of Guess and the Nakash brothers of Jordache say they settled their dispute so that they could devote full attention to their apparel businesses.
But for many others drawn into the feud--employees, government officials, private investigators and even journalists--the agreement that restored full ownership of Los Angeles-based Guess to the Marcianos brought little relief.
Many express bitterness about the damage to their reputations suffered in the course of the government investigations, lawsuits and news reports spawned by the Guess-Jordache affair. Here is a look at some of the people who say they were battered in the fight:
Cary Nadler
On Wednesday morning, when the Guess-Jordache feud was finally being resolved, Cary Nadler had been subpoenaed to appear at a federal court hearing in one of the dozen cases in which the jeans makers were pitted.
Nadler, Guess’ production manager from 1983 to 1985, was to produce all records of his discussions about the case with a score of journalists, lawyers and government agencies--including, the subpoena said, the Central Intelligence Agency and the super-secret National Security Agency.
The appearance was canceled because of the settlement between the Marcianos and the Nakashes. But Nadler had prepared a statement that he intended to deliver to the two families and their attorneys during what was to have been his umpteenth court appearance in the dispute.
“I was going to say, ‘All you people are running around here thinking you’re James Bonds or Ian Flemings, and all you are is a bunch of . . . Maxwell Smarts,’ ” said Nadler, now a fabric salesman in the Los Angeles garment district. “Count your dollars. Make your jeans. Pay your taxes. And that’s the end of it.”
Nadler has been, at times, a pawn of both camps in the jeans war. For a time, he cooperated with Jordache investigator Octavio Pena and agreed to questioning by federal investigators probing the Marcianos’ business practices.
But when federal agents broke what he considered their promise not to call him before a grand jury--and when Paul Marciano demonstrated to Nadler that a conversation that he had with Avi Nakash had been secretly recorded--Nadler rebelled, refusing to give critical testimony against the Marcianos.
Earlier, in November, 1984, he had been beaten up by an unidentified assailant during a visit to a factory operated by Guess’ menswear licensee. Both the Nakashes and the Marcianos, he said, tried to persuade him that the other was responsible. No one was ever charged with the attack.
Nadler spent five years in psychotherapy, trying to overcome the stress spawned by his two years at Guess. “It’s still not over,” he said last week. “You never know when they’re going to drop a tape on you or a recorded conversation or a subpoena.”
Octavio Pena
For Octavio Pena, a 48-year-old investigator retained for two years by the Nakashes to dig up dirt on the Marcianos, the settlement was “devastating.” He said he signed it only because he wanted to help the Nakashes.
Pena said he was “in the process of proving” that he was the victim of false accusations by the Marcianos. In one of the suits settled Wednesday, the Marcianos charged that Pena planted false information about them with American officials in Europe and schemed to have Georges Marciano deported on the eve of the first Guess-Jordache trial in Los Angeles.
“I didn’t want to be included in the settlement,” Pena said. “I wanted to be vindicated. But Mr. (Avi) Nakash told me he’d probably have to go into bankruptcy if he didn’t have a settlement and lost the court battle, and I couldn’t do that to a former client.”
“That’s the only reason I signed,” he added.
(Avi Nakash couldn’t be reached for comment. But his lawyer, Howard L. Weitzman, said the Nakashes didn’t fear for their company’s future even if they were ordered to pay damages to the Marcianos.)
Pena said he has worked nearly full time during the past 10 months to develop evidence for his legal defense. He said that effort translated into loss of more than $200,000 in earnings. Pena added that because he was so busy defending himself, he recently turned away an account that could have brought his Fort Lee, N.J., firm $1 million in fees this year.
“My thinking (now) is that there really is no justice in this country,” said Pena, who emigrated from Mexico to the United States in 1966.
“It comes down to a matter of how much money you have in your pocket and how much justice you can buy,” he said.
Congressional investigators publicly supported Pena’s claim that the Marcianos manipulated an Internal Revenue Service investigation of Jordache. He brought to light the findings of the Marcianos’ own investigators, who wrote a report saying that French authorities considered the brothers “commercial criminals.”
But those investigative coups now become, at most, sideshows to the settlement. Many questions they raised will go unanswered. The Marcianos, Pena said, “are very smart and they have proved it. They have won a big battle. I didn’t have the finances to keep fighting it.”
John P. Quirk
John P. Quirk, a Connecticut investigator, described himself as more baffled than hurt by the “viciousness” of the Guess-Jordache fight.
“The money that they (the Marcianos and the Nakashes) spent, the time and the use of federal agencies and former federal agents, has been incredible,” Quirk said. “The whole thing,” he added, “has amazed me.”
Quirk was hired by the Marcianos to turn up evidence that would discredit Octavio Pena, the Nakashes’ chief intelligence operative.
But after Quirk instead began putting together a report that the Marcianos were well known to French authorities, though they had not been convicted of any crimes, the Beverly Hills brothers accused Quirk of having been turned against them by Pena. Quirk said he did an honest job and that the Marcianos simply were upset by what he found.
“I found the truth, and certain people didn’t like it and went berserk,” Quirk said.
Richard Behar
The Guess-Jordache fight was a personal landmark of sorts for Richard Behar, who wrote about the feud first for Forbes magazine and then for his current employer, Time.
“This is the nastiest, rottenest, sickest, vilest corporate battle that I’ve ever seen or written about or been sucked into,” said the 29-year-old Behar. “A lot of this litigation never should have been filed. Lawyers proved themselves to be greedy beyond imagination in doing so.”
Behar himself was dragged into the litigation. After reporting on how the Marcianos allegedly manipulated the IRS to harass the Nakashes, Behar says he was slapped with two subpoenas by the Marcianos’ lawyers. After fighting the subpoenas, he ultimately acceded to a deposition--questioning under oath, but outside court--conducted by the Marcianos’ lawyers. But he says he refused to answer most of their questions.
Behar says the Marcianos, who accused him of being duped by Nakash investigator Pena, didn’t stop there. Along with suing Pena, Behar said, the Marcianos threatened to sue or force depositions on people who they believed were Behar’s sources. They also urged the Internal Revenue Service to investigate the agents who spoke with him, he said.
“Everyone has been amazed at how relentless the Marcianos have been in their attacks, both on my sources and me,” Behar said.
(O’Donnell, the Marcianos’ lawyer, responded: “The Marcianos were fighting for their lives against a relentless attack, and they sought to defend themselves. But that’s all behind them now. . . . They want to get on with their lives.”)
One jab at Behar came in the form of a Business Week story in November suggesting that he and other journalists had been “used” by Pena--something Behar denies.
Still, Behar says he hasn’t been hurt professionally by the Guess-Jordache fight. He takes credit for spurring congressional subcommittee hearings last summer into the Marcianos’ ties to the IRS and for subsequent ethics reforms by the agency.
“That makes me pretty happy,” Behar said. The IRS, he said, now “is more accountable, at least a little more accountable.”
On the other hand, Behar acknowledges that there is little chance that the government will prosecute any IRS officials or others involved in the alleged wrongdoing.
Ronald E. Saranow
For former IRS agent Ronald E. Saranow, the Guess-Jordache battle is a source of lingering frustration. Saranow says he would like to clear himself of allegations raised in congressional hearings that his professional integrity was compromised by the Marcianos and that he actively defended their interests while he was chief of the IRS’ criminal investigation division in Los Angeles.
Trouble is, Saranow says, he is barred by federal restrictions from talking about his IRS work.
“I’m still in a position where I can’t tell the whole story,” said Saranow, 52, now a partner in a white-collar investigations firm. “I can’t defend myself. It’s a very awkward situation.”
Still, Saranow notes that he was never charged by authorities with a crime, despite being investigated by at least two federal grand juries.
“I have not been charged with anything but unfounded allegations,” he said.
He is critical of some federal officials and, in particular, much of the news media--including The Times--for what he says was their willingness to accept lies that were spread about him, his colleagues and the Marcianos.
He confirms reports that he socialized with Paul Marciano and talked about going to work for him at a time the IRS was investigating the Nakashes. But he denies accounts that he aided the Nakash probe and tried to thwart an investigation of the Marcianos.
“There’s no question that writing something negative about the IRS is something that some people in the media are anxious to do,” Saranow said.
“I spent a lifetime trying to build up a reputation of honesty and integrity,” he said, “and in some areas, it was damaged and destroyed.”
Toward the principals in the jeans war, however, Saranow says he has no bad feelings. He never got to know the Nakashes, and he has nothing but good things to say about the Marcianos.
“In my opinion, the Marcianos have done nothing improper, and neither have I,” he said.
The Marcianos, Saranow added, “all seemed like fine guys to me.”
