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Online Poker Black Friday

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Full Tilt Poker: Reorganizing the Lederer Files!

By Wendeen H. Eolis

After sitting in the hot seat during two separate interviews with poker media last month, Howard Lederer, a former director and the best known voice of Full Tilt Poker (FTP) had enough.  

 Lederer had enjoyed the stature of Big Man on Campus in the poker world against the backdrop of FTP’s success, but once the Company was brought to its knees by the United States Department of Justice, he was tarred by the same brush applied to Ray Bitar, the former CEO of FTP with angry accusations.

 Lederer received a hard-nosed reception in some quarters as he sought to rise above a personal image in tatters with a gutsy gambit; selective interviews over the worldwide Internet. By his own reported admissions, they were harder than he expected--for him and his family. But the man who has been known over the years, variously, as Howard, Howie, Bubba, Bub and the Professor continues to hold on to more than a fair share of loyalists. And, they are firmly behind the effort to rekindle his image as an honest, stand-up guy whose foremost concern since the events of Black Friday has been repayment of FTP player funds to customers. So far their effort has moved forward on a rocky road.

Lederer Flirts But Fails to Reach Finish Line

 After taking to the Internet, first in a filmed and edited seven-part interview with Matt Parvis of Poker News, and then in an uncut 3 ½  hour interview with the tag team duo, Adam Schwartz and Mike Johnson of TwoPlusTwo Pokercast, Lederer headed home, scrapping  plans for a final performance with an avid blogger who specializes in reporting on Black Friday affairs.

 The spurned blogger, known as Diamond Flush, has since said her interview would have been different, suggesting she would have made mincemeat of Lederer’s “distortions of the truth” and “misrepresentations” if given the opportunity go toe to toe with him.  

 Diamond Flush also expressed her disappointment in the “seven out” roll, thrown her way by Lederer, with promises of upcoming juicy commentary on her website. She has followed up with further reports, but the sizzle has yet to materialize.

 It is not the first time Diamond Flush, or any other reporter has missed the ”big get,” or the flashiest scoop, but second chances seem endless in the Black Friday saga.

Spotlight on Online Poker Media    

 Before launching into a post mortem on the Lederer interviews by lawyers who have reviewed relevant legal documents and have read between the lines of the interview transcripts, it is only right to acknowledge extra credit where due—

 Parvis gets high praise for jumping at the chance and meeting the challenge of getting Lederer on camera for the most detailed report of the collapse of FTP to date, before Lederer had any second thoughts about becoming a “no show.”

 Accolades also go to Schwartz and Johnson for snapping up the opportunity for continued dialog and then keeping Lederer’s feet to the fire enough to disrupt his telling his story, strictly in his own choreographed terms.

 Additional plaudits are in order for Diamond Flush, the pen named blogger who prefers not to disclose her identity in the poker world.Her real name is  known in courtrooms where she has attended FTP proceedings during her year-long efforts to nail and splice facts meticulously for the online poker community. She is widely respected in that community as one of the most trustworthy sources for Black Friday- related news.

Lawyers Weigh In—Insightfully

 Included in the mix of attorneys consulted for this article are corporate and white collar litigators from major law firms, senior partners at additional firms with significant gaming practices, lawyers who know Lederer personally, and other members of the Bar with a passion for poker.  

 These lawyers concur that it is hard to serve up a more revealing story of Lederer’s part in the FTP collapse than the one that he has presented himself through in his declarations, equivocations, memory lapses, and omissions of fact—during his interviews..

 But they take a stab at it, making points that might otherwise elude most of the poker world.

Early Reactions

 Lederer’s interview performances initially left many lawyers shaking their collective heads--wondering why on earth he took the two interviews at this point in time. And they cogitated for a bit on what really might have brought Lederer to his senses, resulting in his decision to drop a third one. The lawyers were divided on the reasons for Lederer’s about face, on a third event, but uniformly in accord with his rethink, despite harsh criticism that was lodged against him for welching on a deal. .

 Lawyers say his biggest weakness in his first interview was fudged answers, in the second, the interviewing team started to peel the onion more efficiently and believed the final planned show down would have surely inured to the benefit of the interviewer, at least by providing a powerful positional advantage.  

 Many lawyers queried right after FTP settled its civil case with the DOJ suggested that Lederer was out of the woods” with the Government, except for money troubles.

Since Lederer’s personal online interviews, however, a lawyer who has known him and the FTP cases over many years, solidifies the consensus among attorneys consulted for this article, expressing concern that the interviews were perilous, for a multitude of reasons:

  1. By deciding to do interviews on his own without counsel at his side, he has gambled too much. In lawyer speak, it is said a lawyer who represents himself has a fool for a client. They say a  lay person who does so is at even greater risk of causing himself trouble.
     
  2. By allowing himself to do the equivalent of two very long unsupervised depositions, he fell into the inevitable trap of providing substantive contradictions and misstatements without possible rehabilitation through counsel.
     
  3. By presenting himself as evasive rather than as mindful of that his circumstances dictate certain limitations, he raised rather than resolved many credibility questions.
     
  4. By his periodic rifle shots at former colleagues at the site, he has pushed them to become his harshest critics.
     
  5. By taking center stage to tell his story, he has invited the Government to scrutinize his conduct and his actions, anew; whatever he wanted the Government to know would be better relayed through his counsel.
     
  6. By delaying a full on apology until late in his interviews, he may have lost many listeners who might otherwise have remained neutral until hearing him out.

Other Observers Chime In  

 Lederer claimed that he was prompted to speak out now, because the time was right. Nevertheless, even some Lederer’s supporters acknowledge that his interviews were dicey bets with the court of public opinion and maybe  with the Government, too, unless he knew he was in the clear, as to a possible indictment arising from his involvement with FTP. He did the first interview two days before the Government filed an amended civil complaint.

 Lederer also stated that his customers deserved the facts, but the most frequent comment among players who have talked to Poker Player Newspaper is that countless times he fell into memory lapses, and misleading responses.

 Be all of that as it may, Lederer sympathizers come back to basics as far as they are concerned; they believe Lederer to be innocent of any intent of wrongdoing and that he did the best he could do in an unimaginably tough situation. Now they are focused on doing all possible to pave the way for his peaceful return to a livelihood in poker rooms.

 A cross section of poker players that have talked with PPN, since the interviews, generally agree that while Lederer’s meetings with the press produced no home for him in the online poker community, he scored far better than vociferous online critics might think.

Lawyers Take on the Lederer Files

 In a more studied response, the lawyers consulted for this article who have reviewed the taped interviews or transcripts say Lederer’s responses sometimes raised more questions than they answered:  

  1. Lederer suggested the operating agreement tied his hands on delving into the finances of FTP. The lawyers did not interpret the operating agreement in this way.
     
  2. Lederer explained his role as a Board member as merely an advisor; lawyers say otherwise, pointing out that he was a member of a corporate board with responsibility and authority to oversee member welfare and security of player deposits.
     
  3. Lederer acknowledged understanding that player funds were never held in player trust accounts but responded as if “ring-fenced funds” were foreign words and as if no such option was known to FTP during a period in which he was a manager and director.
     
  4. Lederer commented that he was not a key license holder and never spoke to the Alderney regulators, as if the regulators’ responsibilities (which were not discharged effectively) exonerated him of any burden as a board member to assure fiscal integrity of his company.
     
  5. Lederer mentioned, the Company moved to Dublin with lofty plans to go public. Still, he dismissed the idea of having outside accountants, though certified financials would doubtlessly be required to complete such a transaction and member inquiries about the fiscal integrity of the CEO dictted a need for an independent accounting arm. 

The list goes on!

Lederer: Road to Image Repair

 One lawyer’s comments synthesized the combined views of lawyers and lay persons queried: “He was a professional gambler who winged it as a businessman.” They concur that he got ahead largely ignorant of sound business principles. And they leaned strongly toward a conclusion that at the end of the day it was Lederer’s lack of business savvy  —not an intention to defraud nor involvement in wrongdoing as far as he knew —  that left his customers behind the eight ball. But they insist his decision to retain the FTP distributions he received “in error” (even if advised by counsel of the right to do so) will likely impede his efforts to obtain redemption among his current critics, anytime soon.   

Editor’s Note: Wendeen H. Eolis is CEO of the legal consultancy, Eolis International Group. She formerly served as a senior advisor to Mayor Giuliani; then as First Assistant and Senior Advisor to NY Gov. Pataki. She also acts as an advisor to government agencies here and abroad; vetting lawyers for high level positions.  In spare time she has posted seven cashes at the WSOP. This article, and related research is property of the author, and may be used in her other writings.She can be reached at eolis@eolis.com and at the website www.eolis.com you can also find her on FacebookTwitter and LinkedIn.

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