Was There Madness To His Method?

A big time lawyer says he's insane... And saves his career

That earned Hoover a spot on the Supreme Court's Committee on Character and Fitness, a position that made subsequent events all the more surprising.

While his career was flourishing, however, his personal life was foundering. He and Ann had broken up in the late 1960s, and a depressed Hoover had consulted a psychiatrist to help him through the tough times.

He remarried in December 1971, but he and new wife Jo Ann had their ups and downs. Part of the problem may have been that work always came first. Hoover told a committee hearing his case in 1986 that he had taken his law books along on their honeymoon to prepare for a class he was teaching.

While Hoover's home life wasn't the greatest, his law practice was doing just fine. In the mid-1970s, however, something changed.

"He got rid of his Volkswagen," Gene Rice says of Hoover, "and he bought some kind of fancy car, and he began to buy different kinds of shoes . . . We began to see a real change in his personality."

Although the "change" was never satisfactorily explained--even by the psychiatrists who testified later--it bothered Rice so much that in 1975, he asked Jennings, Strouss to assign another attorney to First Federal. Hoover also was asked late that year to take a three-month leave of absence after he allegedly made an "improper sexual advance" toward a female employee at work.

Hoover's roller-coaster ride continued in the early 1980s, when he and Jo Ann separated, then divorced. Around that time, however, Rice--who had stayed friendly with Hoover over the years--convinced Jennings, Strouss to reassign him as First Federal's lead lawyer.

That made Hoover the bank's negotiator in a deal Rice has called "the most important loan that we've ever done in the history of our sixty-some years."

THE HEAT WAS on Charlie Hoover to close the Marriott Hotel loan by the end of 1983.

Marriott was seeking $400 million from First Federal for a proposed fifty-story hotel in New York. The paperwork was mind-boggling, the negotiations fierce. Hoover drove himself and those around him.

"I got a foam-rubber pad, and I put it in the office," he testified in 1986. "I would just work until the late hours, and then lie down and take a few hours sleep, and get up and get back to work . . . I just dove in all the way."

Hoover spent more and more time in New York as the deadline approached. Gene Rice heard stories that Hoover had become an arrogant tyrant, but he didn't intervene. Hoover always had been a hard-driving perfectionist anyway, and Rice knew that the Marriott deal was particularly demanding.

Around Christmas 1983, with the deal almost done, Hoover tried a last-minute bargaining maneuver, one apparently so unusual that Hoover's lawyers later raised the incident as an example of how wacky he was at the time.

Hoover explained later that he'd read about the "greenhouse effect's" causing widespread flooding. The next day, he had demanded that Marriott pay for flood insurance before he would close the deal. The Marriott people laughed it off, and Hoover dropped it.

"Sometimes," says Gene Rice, shrugging off what appeared to be Hoover's odd conduct, "I would be in positions where Charlie would throw out something wild, and then negotiate from that in order to get a better position, as you negotiate in those big transactions."

(Rice asked Jennings, Strouss much later to assess Hoover's performance in the Marriott loan. "They had reviewed it," Rice testified, "and said it was impeccable.")

The honchos inked the $400 million loan papers December 30, 1983. Hoover returned to Phoenix with a $275,000 check made out to him by Marriott--which was footing the legal bills. An office manager at Jennings, Strouss office deposited the check into the firm's trust account.

Then, the conduct that may have started years earlier when Charlie Hoover traded in his VW bug for a Mercedes reached its startling conclusion. He began to steal.

From January until June 1984, Hoover illegally tapped into that trust by asking bookkeepers at the firm to deposit four checks totaling more than $61,000 into his account at First Federal.

Hoover cashed the first check--for $15,876--at First Federal, where he had a checking account. He gave $5,000 to three secretaries who had worked with him on the Marriott loan and pocketed the rest.

Hoover used the cash from the next three checks to pay off a $15,790 loan at First Federal and to invest $12,250 for a son. He kept the rest of the booty.

"The money was very well-hidden," says the State Bar's chief counsel Harriet Turney. "The firm's lax bookkeeping system allowed it to happen--there was no countersigning of checks."

Hoover also had charged thousands of dollars in personal items to the firm's VISA card. But it would be months before a partner at Jennings, Strouss saw some bookkeeping numbers that didn't add up, and Hoover had to face the music.

Until then, Hoover had gone about his business without incident. E.F. Hutton district manager Paul Butt saw him every few weeks from February 1984 until that September.

"He got the work done just fine," Butt later testified. "My opinion is that he acts with complete integrity, always has."

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