Call Her Madam -- and a Lot of Washington Nervous

Deborah Jeane Palfrey takes stock in her case.

By Dana Milbank
Tuesday, May 1, 2007; A02

The alleged "D.C. Madam," Deborah Jeane Palfrey, is a woman of many talents.

Palfrey, who is terrorizing Washington men by threatening to reveal the 15,000 clients of her, um, escort service, also revealed herself yesterday to be an expert stock picker. Moments after dismissing the lawyer who was defending her in a federal racketeering case, she rose to ask U.S. District Judge Gladys Kessler a question.

The defendant, in high heels and bright-red lipstick, told the judge she holds 5,000 shares of Dolby Laboratories in her Schwab account. "The stock has increased in value approximately $13 a share" -- to $37 -- "since this particular asset was seized," she explained after a brief struggle to operate the courtroom microphone. "I really do believe it's at its peak. I'd like the court to order this stock be sold as soon as possible."

The judge declined to play portfolio manager. "At this point, I cannot do that," Kessler said.

In a bit of felicitous timing, Palfrey had a status hearing in her prostitution case yesterday, only three days after she forced the resignation of a former client, Deputy Secretary of State Randall Tobias. But her performance made her look more mad than madam. In the space of a few minutes, she dismissed her highly regarded public defender, watched as another lawyer she brought to the witness table was kicked out by the judge, and gave a news conference explaining her "ethically conscientious choice" to give her phone records to ABC News in hopes that outed clients will serve as defense witnesses.

"Surely, most people have established by now that mine is a very bizarre and rather unusual case," Palfrey told the television cameras after the hearing. Moments later, she added: "I believe there is something very, very rotten at the core of my circumstance."

On these points, no objection will be sustained.

The fourth-floor courtroom was packed with reporters, curious lawyers and a couple of sex-trial tourists. "Do you know where the D.C. Madam is?" inquired a perspiring man in a yellow plaid shirt and white jeans as he wandered the hallway. At the prosecution table, one of the government lawyers was in a wheelchair inscribed with the word "QUICKIE" in big letters on the back.

Palfrey arrived with a freelance writer carrying a National Wildlife Federation tote bag and with a flamboyant lawyer, Montgomery Blair Sibley, who represents Palfrey in a civil case against the government.

"Do you have anything to say going in?" asked WRC-TV's Pat Collins.

"Yeah," Sibley answered. "Get out of my way." Sibley, wearing a moth-eaten suit and penny loafers, pulled out a chair and poured a cup of water for Palfrey; it was a gentlemanly way to treat a madam.

"She's asked me to sit next to her to explain what's going on," Sibley told the judge.

"Excuse me, Mr. Sibley," Kessler replied, evicting him from the defense table. "You are not in this case."

Palfrey wore a snug blue jacket, striped pants and 2 1/2 -inch heels. She had dangling teardrop earrings and heavy mascara, and lipstick applied to enhance her Cupid's bow. She sat quietly as Kessler granted her motion to dismiss her public defender but denied a request for $150,000 in taxpayer money to hire a new lawyer.

"You are operating under the Criminal Justice Act because of indigent issues," the judge explained. "It does not give you the right to select counsel."

Madam nodded her understanding and stole pouty glances at the spectators.

The judge spoke gently, as if addressing a child. "This is a serious criminal case, with serious charges, as Ms. Palfrey knows," she said, later adding, "You're a very intelligent person." Kessler even agreed to remove Palfrey's electronic monitoring, rejecting prosecution arguments that "the defendant has a history of flight." Only when prosecutors noted that Palfrey had already filed various pleadings before the appeals court and the Supreme Court did the judge gently suggest to the defendant that she might first consider "whether you want to ask for a hearing before me."

Madam nodded again, then left the defense table to go on the offensive in the courthouse plaza.

She began by saying "how genuinely sorry I am for Mr. Tobias," but she then made an example of him for the other clients in the "46 pounds of telephone invoices" she is releasing. "My hope [that] defense witnesses could be found by combing through the information indeed is being realized," she said, scolding Tobias and the "many, many others who have used my company's services" for not coming forward to defend her.

"How can this be described as anything else but blackmail?" one of the reporters asked.

"I call that due process of law, sir," Sibley shot back.

"What about the argument that this is witness intimidation?" asked The Washington Post's Carol Leonnig, seeking to direct the question to Palfrey.

"Everyone would like to hear Jeane and none of you will," Sibley answered.

Gabe Caggiano of "Inside Edition" tried to question Palfrey again as she left. "Unprofessional!" roared Sibley. "Please do not have 'Inside Edition' call me again." With that, the madam, her lawyer, her photographer and her biographer sped off in a black sedan.

Shares of Dolby Laboratories fell 2.07 points, to 35.42, on the New York Stock Exchange.