To say that Henry T. Nicholas III is a man of contradictions doesn’t begin to convey the scope of it.
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A brilliant, driven entrepreneur, Nicholas co-founded Broadcom Corporation in 1991, with his onetime college professor Henry Samueli, and turned it into a multi-billion-dollar maker of integrated circuits for broadband communications. In the years since, he became a philanthropist and major contributor to Republican causes, with a special affinity for victims’ rights crusades and get-tough-on-crime ballot measures.
This year alone, the 48-year-old Orange County mogul underwrote two California ballot initiatives to the tune of almost $6 million - one, a victims’ rights campaign, named for his murdered sister, Marsy, and a second measure to stiffen penalties against gangs.
Yet if the charges against Nicholas contained in a pair of recent federal indictments are proven in court, the billionaire may join the ranks of the criminals he has inveighed against - not to mention face some serious jail time himself.
The shorter of the two indictments unsealed last week alleges that Nicholas led a manic, drug-fueled existence, stocking a secret lair underneath one of his homes with all manner of illegal substances and spiking the drinks of technology executives and employees with ecstasy, without their knowledge.
The indictment reads like a docudrama about a dissolute rock star. It alleges that in 2000, Nicholas built out a commercial warehouse and office space in Laguna Niguel, California with plush digs to share and do drugs, and increasingly, resorted to death threats and payoffs - including a $1 million settlement with an employee in 2002 - to enforce silence about his illegal activities. It also maintains that Nicholas hired prostitutes and escorts for himself, associates and customers, and that on one trip on his private jet, he and others smoked so much marijuana that “the pilot flying the plane put on an oxygen mask.”
The second indictment, which also names Broadcom’s former chief financial officer, William J. Ruehle, alleges that the two men committed conspiracy and securities fraud in connection with the manipulation of stock options, which resulted in more than $2 billion of restated expenses.
Nicholas’ attorney Brendan V. Sullivan Jr. said in a statement that “Dr. Nicholas will contest these charges vigorously.”
“He is confident that he will be fully vindicated,” Sullivan said. An arraignment hearing is set for June 16. Nicholas is free on $3 million-plus bail.
The securities charges are on top of a civil lawsuit brought last month by the Securities and Exchange Commission that charged Nicholas, Broadcom Chairman Samueli, David Dull, who is Broadcom’s general counsel, and Ruehle with fraudulently backdating stock options. In May, Samueli and Dull both went on a leave absence from their roles at Broadcom. Samueli also stepped down as chairman, according to a company press release.
Nicholas, who was ranked No. 195 on the 2007 Forbes list of richest Americans, with a net worth of $2.3 billion, stepped down as Broadcom’s chief executive back in 2003, ostensibly to tend to a pending divorce and spend time with his three children. A billionaire since the company had gone public in 1998, he had always been a larger-than-life character with a personality that matched his 6-foot-7-inch physique, according to CNET writer Marguerite Reardon.
So why would a high-flying billionaire have tempted the fates with his public campaigns for tougher enforcement of crime?
There is his support, for example, of the Orange County Sheriff’s “Drug Use Is Life Abuse” program, noted by Robert Greene at the Los Angeles Times. And his receipt of the Ronald Reagan Award for Pioneering Achievement in Criminal Justice in 2005.
Those who know Nicholas insist his efforts grew out of his experiences as the brother of a murder victim, rather than any attempt to game the system.
His sister was a senior at the University of California at Santa Barbara in November, 1983, when her ex-boyfriend, Kerry M. Conley, who had been stalking her, shot her to death. Conley was convicted of second-degree murder and sentenced to 17 years to life (and died in prison last year).
A year later, Nicholas’ mother, Marcella Leach, and her husband, journalist-turned-screenwriter Robert Leach, founded Justice for Homicide Victims, and have been active in victims’ rights causes ever since. (Leach remained president of the group until his death in March and Marcella Leach remains director.)
At least as far back as 2000, Nicholas has bankrolled anti-crime measures, according to the Los Angeles Times. That year, he donated to the campaign for Proposition 21 to increase punishment for gang-related felonies.
In 2004, he donated $3.5 million to defeat a successful measure that would have softened the state’s three-strikes law that required tougher sentencing for felony offenders.
But this year was a record even for a big spender like Nicholas: Until his indictment last week, he had contributed almost $6 million to two ballot initiatives, whose reception by voters may now be compromised because of the adverse publicity about Nicholas.
Records show he has donated $4.8 million to the Victims’ Rights Act of 2008, also named Marsy’s Law, in honor of his late sister, to restrict an inmates’ access to parole. The measure had special resonance to Nicholas, whose mother has spoken about seeing her daughter’s killer in the grocery store, free on bail, shortly after her funeral.
Nicholas also gave $1 million this year to the campaign for The Safe Neighborhoods Act, which would earmark hundreds of millions of additional dollars for crime-fighting programs.
Earlier this week, Nicholas released a statement saying he had surrendered an active role in either campaign. A news release from Mitch Zak, partner with Randle Communications and lead strategist for the campaign for Marsy’s law, underscored his departure, according to the Los Angeles Times.
“During the last week,” the release said, “legal issues arose affecting one of the initiative’s major supporters, Dr. Henry Nicholas. . .Dr. Nicholas has proactively acted to help the campaign move forward without distraction.”
Nicholas has also been a top donor to Gov. Arnold Schwarzenegger, giving the governor’s political committees $1.65 million. Asked after the indictments if the governor would return the money, Schwarzenegger spokeswoman Julie Soderlund told the Sacramento Bee: “We will allow (the legal process) to run its course and make a decision based on the outcome.”
Nicholas is now free on bail and staying at Cliffside, a $63,000-a-month drug rehab facility in Malibu.
Another one of his lawyers, Gregory Craig, contended in court last week that his client has been drug- and alcohol-free since checking into the Betty Ford Center in April. Craig insisted that a video posted on Youtube last year, that appears to show Nicholas bending over a desk and holding a straw to his nose, showed, if anything, a single “recreational” use of drugs, according to the Orange County Register.
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