Daddy's Money

"My rulings speak for themselves," says Scanlan, who is retiring this year. He slapped Pierce's team with close to 20 sanctions totaling approximately $200,000, plus $30,000 in court costs to date.

In the opinion of Lee Ware, Pierce's lead personal attorney, the Lawters are engaging in "trial by sanction" because they don't have much of a case.

Neither Jack nor Dianne Lawter would discuss the case with the Press. Jack Lawter did not return several weeks' worth of phone calls. Two weeks ago, Dianne Lawter informed the Press that she and her husband would respond to written inquiries, but later backed out of that agreement. In refusing to speak, the Lawters cited concerns that they might be sued by Pierce.

In 1996, Pierce did sue Anna Nicole Smith's attorney, Diana Marshall (no relation), for remarks she made to the Houston Chronicle; Marshall had accused Pierce of manipulating his ailing father to exclude Smith from inheriting her husband's estate. A jury eventually awarded Pierce $8 million in damages; he later settled for $800,000. In the opinion of Marshall Petroleum attorney Rusty Hardin, Pierce's willingness to settle for the lesser amount shows that Pierce is obsessed not by money but by principle.

"Pierce put up with his father's love of a young woman," says Hardin, "and all these other things that were kind of embarrassing to Pierce. Pierce would shake his head and still try to help his father. But the one thing his father always made clear to him was that Howard Jr. was not to get a dime. And that's what this is all about."

Three years after Howard Jr. sold his Koch Industries stock back to his father in 1980, Koch Industries also bought out Bill Koch and other dissidents for $1.1 billion. Bill Koch later filed suit, claiming he'd been duped into selling the stock for only half its value.

During his deposition in the Marshall case, Bill Koch testified that yes, Howard Jr. had told him of the inheritance agreement he claims to have had with his father. Koch knows something of family feuds, of money and betrayal, and he offered an incisive observation.

Howard Jr., he said, "should have gotten it in writing.