The Haunting of Alex Daoud, Part 2

The disgraced former Miami Beach mayor comes out swinging at his former friends and associates

Sometime in autumn of last year, Elliott told Galbut that "Alex wants to see you," according to the complaint. That same afternoon Daoud allegedly appeared at the Crescent Heights headquarters, entered Galbut's office, and raised his shirt to reveal that he wasn't wearing a body wire. Supposedly Daoud then began to frisk Galbut for a wire. "While Galbut was still stunned by this episode, Galbut was then led by Daoud into the executive bathroom in Galbut's office," the suit says. "Once in the bathroom, Daoud turned on the water loudly, and when Daoud was comfortable that he could not be overheard, Daoud then demanded from Galbut another apartment to reside in indefinitely and that such apartment be titled in Daoud's name. When Galbut refused, Daoud threatened to 'expose' several alleged secrets which Daoud claimed he knew about other people friendly to Galbut."

Galbut reportedly responded: "Go ahead. If you've got something to say then say it. But don't threaten!"

"You're making a mistake, Russell," Daoud allegedly said. Then, according to the lawsuit, he "threatened to 'take down' Galbut and destroy Galbut and the Galbut family. Daoud claimed that he wanted to get even with other people whom Daoud claimed used to be his friends back when he had 'power,' but who had since 'abandoned' Daoud as a result of his criminal proceedings. Daoud stated that he was particularly angry at Abel Holtz, former chairman of Capital Bank." Galbut says he kicked Daoud out of his office.

As for Elliott, Galbut says that in the final months of her employment she made numerous threats to Galbut that he if didn't pay her bonuses or if he ever tried to fire her, she would call a press conference. Galbut says the administrative assistant demanded $5000 for her silence. "Elliott also began making a series of comments against Capital Bank and the Holtz family, who prior to her involvement with Daoud gave no consideration one way or another about any of these people or entities," Galbut's lawsuit states, a suggestion that Daoud was turning Elliott against the bank and the Holtzes. (In addition to being a director and shareholder of the bank, Galbut also chaired the institution's "independent committee" that reviewed claims made by several dissident shareholders alleging wrongdoing by the Holtz family.)

According to Galbut, Elliott quit the company on December 27, 1995, retained a lawyer, and then increased the price of her silence to $1.2 million, which she demanded in a letter sent April 1 through her attorney, Roderick Hannah.

In the letter to Galbut, Hannah outlines various charges against the developer and describes the correspondence as "a form of damage control given the substantial downside and risks you and your company now face." He offers the possibility of a "confidentiality agreement" should a settlement be reached, and demands a "lump sum payment" to Elliott of $1.2 million.

Hannah says the extortion allegations are "bogus." He refutes Galbut's claim that Elliott ever threatened to call a press conference if she were fired or if she didn't receive bonuses; he says Galbut offered $5000 for her silence; and he denies the insinuation that Daoud has turned Elliott against Capital Bank. "In fact, Alex Daoud has discouraged her from doing her lawsuit because of her emotional distress resulting from the stuff Galbut did to her."

Daoud, too, denies Galbut's allegations of conspiracy. "I never threatened him," the ex-mayor says. "That's the most idiotic thing I've ever heard in my whole life! I never led Russell Galbut to the bathroom. He's old enough to go to the bathroom himself." Daoud does admit he asked Galbut for another place to stay, but he says he never demanded money or property from his former friend. Soon after their talk, Daoud says, he vacated the Crescent Heights condo and moved into Elliott's two-bedroom house in Davie. (Elliott refuses to comment on this or any other matter for this story.)

So what went wrong with the friendship between Daoud and Galbut? For years Daoud had refused to say anything negative about his old pal. And Daoud admits that Galbut was very generous when he got out of prison: Galbut sent Elliott to pick him up, he loaned Daoud an apartment, he gave the ex-mayor $3000 cash, and he even bought Daoud a laptop computer so he could work on his book.

But Daoud complains that Galbut didn't do enough. While he was in prison, Daoud contends, the developer promised to find him a job and a permanent place to live. Once freed, though, Daoud came to believe Galbut hadn't made good on his word. "I think Russell treated me the way he did because of Holtz," Daoud asserts, his piercing blue eyes going hard and cold. "Basically what happened was Holtz told him not to do anything to help me, that I was a government snitch." As Galbut is on the board of directors and still does business with Capital Bank, he had to heed Holtz's words, Daoud maintains. "Galbut said, 'I'm too connected with the bank.'"

Daoud says "the final straw" came when the Galbut law firm withdrew its representation of Daoud regarding a lawsuit he'd filed against the administrator of a trust he'd established for his son. Daoud had brought the suit in the fall of 1995 against Dade businessman Rafael Bonafonte, whom Daoud had counted as one of his best friends before going to prison. Daoud accused Bonafonte of stealing thousands of dollars from the trust. (It's another irony of Daoud's life that when he had his falling out with Holtz and decided to drop "Abel" as his son's middle name, he chose to rename the boy after Bonafonte.)

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