The Haunting of Alex Daoud, Part 2

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

Galbut Galbut & Menin represented Daoud in the matter for a few months but then withdrew. Daoud blames Holtz, who he believes instructed the Galbuts to drop him as a client. Daoud says he heard this from Abraham Galbut, the firm's senior partner and Russell's brother. "He said he couldn't represent me because Russell said it made him look bad," Daoud asserts. "Do I think Russell owed me? He made his commitment that he was going to help me. When a man gives his word, I think he should keep it."

For his part, Russell Galbut denies ever promising Daoud a job or housing. He says he never told his relatives to dump Daoud's case and never told the ex-mayor he was feeling pressure from Holtz. "I've never spoken with Abel Holtz about Daoud other than in the context of bank meetings, which are regulated and which have nothing to do with anything personal," Galbut insists. (His brother Abraham couldn't be reached for comment.) Holtz himself also denies instructing the Galbuts to stop dealing with Daoud. He says that in the past year and a half he's spoken with Russell Galbut only once, and that conversation concerned an internal Capital Bank matter and was conducted in the presence of several attorneys.

Galbut and Bonafonte aren't the only former associates Daoud is tangling with these days. He has also been subpoenaed to testify in two federal trials involving men -- one an attorney and the other a lobbyist -- who did business with the City of Miami Beach during the Eighties. (The subpoenas are not yet public record and so Daoud will not identify the individuals for publication.)

And of course there is Abel Holtz. Daoud has been questioned under oath in connection with a state hearing to determine whether control of Capital Bank was transferred legally by Holtz to his wife Fana and to his sons Daniel and Javier, both of whom had held upper-level positions in the bank. Two years ago, just before pleading guilty to a charge of obstructing a grand jury investigation of Daoud, the elder Holtz passed the helm of the institution to Daniel, who was made chairman, president, and CEO. Javier was made executive vice president and chief credit officer, and Fana became a director.

A group of unhappy shareholders claims the transfer was illegal and that Holtz's two sons and wife are not competent to run the publicly traded bank, which has $1.6 billion in assets and 28 branches in Florida. State bank regulators began the hearing August 26; it is expected to continue until at least the end of next week.

The entire proceeding -- including all prehearing discovery -- is sealed by a confidentiality order; therefore Daoud, who was subpoenaed by the shareholders' lawyers, is prohibited from divulging what he said during his sworn deposition. He also expects to be called to testify in the hearing but won't speculate on the testimony he may give.

It's likely, though, that the shareholders' attorneys will want to use Daoud to scrutinize the retainer he received from Capital Bank when he held political office. Daoud has contended in court testimony that the retainer was a bribe arranged by Abel Holtz, who was then the bank's chairman. In return for the payments, Daoud says he used his political position to steer toward the bank companies and individuals doing business with the city. The ex-mayor has also told federal investigators that he supported the Holtz sons' election to various city boards in exchange for the payments.

Daoud's childhood bout with polio is never far from his mind. When he was six years old, he came down with the viral disease and was confined to a wheelchair. After six months, he was fitted with crutches and a heavy brace for his affected leg. His mother drove him several times a week to Variety Children's Hospital for therapy; he stumbled around in the apparatus for a year.

The illness was also emotionally and psychologically hurtful. At school he was teased and harassed by his classmates. "Children can be cruel, and against a partially paralyzed child they were brutal," he writes in his autobiography in progress. "It was a horrible existence that was magnified when I finally returned to school. I was thrown out of my wheelchair or knocked off of my crutches and ended up defenseless on the ground while my tormentors danced joyfully around me."

The polio eventually disappeared and Daoud found his strength in boxing. His mother carted the scrawny kid over to the now-demolished but then-hallowed Fifth Street Gym, training ground for Muhammad Ali, Sugar Ray Robinson, and other boxing legends. Daoud eventually grew to a powerful six feet four inches and has remained obsessive about his fitness -- or lack thereof -- as if it will help stave off a relapse of his childhood trauma.

Now he has a different scourge to overcome: his corrosive sense of betrayal. Despite his involvement in the ongoing legal proceedings, his bitterness toward his old friends and associates -- the ones he says turned their backs on him -- has only increased. So he seeks a remedy the only way he knows how: in public. He's ready to lead me into the furthest uncharted territories of his corrupt political career. He would like to see an article written. He wants to publicize his experience. "I want people to know the truth," he says. Recounting it, he adds, will be cathartic.

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