Joe Waldholtz - who claimed to be a millionaire whose shared wealth helped elect his wife, Rep. Enid Greene Waldholtz - was released from federal custody Friday in part because he says he is now too poor to pose much of a flight risk.
But he hired a Philadelphia lawyer who said Joe had fled his family for six days - and a federal warrant for two days - not to escape justice but to have time to think through pressures about his finances and news media probing into them.His lawyer also said Joe likely will not say anything to the grand jury investigating his finances next Wednesday, when he has been ordered to appear, and instead will invoke his Fifth Amendment right not to speak to avoid incriminating himself.
U.S. District Court Judge Emmet G. Sullivan noted Joe has not yet been charged with any crime and released him to the custody of a lawyer-friend in Philadelphia who had persuaded him to sur-render - and promised to get him to court again Wednesday.
A warrant was issued against Joe merely to compel his appearance as a material witness before the grand jury. Federal sources said that bought time to build a case against him because if he is charged as a criminal, an indictment must be filed within 30 days.
Sullivan said Joe posed little flight risk because he voluntarily surrendered in Washington Friday; agreed to cancel and surrender his passport; agreed to stay only in Philadelphia and Washington; and - according to his lawyer - had never failed to appear in any court-ordered proceeding.
However, Joe had failed to appear at a court appearance on Monday in Pittsburgh where he was supposed to turn over assets of his grandmother, which his family worries he may have embezzled. U.S. Attorney William E. Lawler III later said he was unaware of that, but it likely would not have mattered anyway because federal prosecutors feel steps ordered are adequate.
Lawler said another reason Joe is considered a low risk for flight is that he has only "fairly modest" assets - although the court would not release how much that is exactly - and not the millions federal authorities feared he could use to disappear for good.
When Joe first disappeared, FBI affidavits said Enid reported Joe likely had access to $2 million that had also apparently vanished. Sources said that was what was left over from $4 million that Enid's father had loaned or provided for the couple, and the rest may have provided the $1.8 million she reported giving to her campaign.
Harvey Sernovitz, Joe's lawyer from Philadelphia who accompanied him as he surrendered to the FBI at the U.S. attorney's office and at a hearing where Sullivan ordered his release, listed Joe's assets in court.
They included: a Merrill-Lynch account; two cash management accounts; a Visa card, a financial account and a $10,000 line of credit with Pittsburgh National Corp.; access to a loan in the name of his grandmother, Rebecca Levenson; two accounts in the Congressional Credit Union; a Nation's Bank account; a loan for a satellite dish and electronic equipment; part-ownership of his father's dental office; and two canceled credit cards.
Of note, several of the assets - including the Merrill-Lynch and Nation's Bank accounts, and the Levenson loan - did not appear on his wife's personal financial disclosure form of assets they held as of Dec. 31, 1994. Also, Joe's list did not contain many assets that had been listed on Enid's disclosure form - such as a variety of stocks, treasury bills and other money management accounts.
Joe disappeared last Saturday after driving to Washington's National Airport with a brother-in-law, Jim Parkinson, to supposedly pick up two men from Pittsburgh who could help explain his finances to Parkinson and Enid's worried family. Joe left Parkinson in the baggage claim area and disappeared.
The 300-pound Joe appeared in court Friday in the same type of clothes he was reported last seen in - khaki pants and a multicolored sweater - and his hands trembled slightly as he gave only short responses such as "yes, sir" and "no, sir" to the judge's questions.
Sernovitz said in court that Joe left Parkinson in the airport because of "intense, acute pressure he felt over his finances . . . and media pressures, not legal pressures."
He added, "He needed space to gather his thoughts."
Sernovitz said Joe went to Springfield, Mass., where he stayed two nights, then traveled to Philadelphia where he stayed two nights in a hotel and another two nights with his lawyer-friend.
Sernovitz said Joe did not know a warrant had been issued for his arrest until he read about it in a Thursday morning newspaper. He said his lawyer-friend in Philadelphia persuaded him to hire Sern-ovitz, and they called the FBI to arrange his surrender on Friday.
Sullivan gave that same friend custody of Joe Friday - but banned the release of his identity at Sernovitz's request. Sernovitz described the mystery friend as a lawyer who lives in a Philadelphia suburb who had been friends with Joe since working together in politics years ago.
Joe was ordered to appear before Sullivan again Wednesday morning where his lawyer and U.S. attorneys will announce whether they will have Joe testify before the grand jury.
But Sernovitz said, "On my advice he's not going to testify" - but will claim his Fifth Amendment right to silence to avoid incriminating himself - "so what is he a material witness to?"
Lawler said the U.S. attorney's office has not yet decided whether it will seek to keep Joe in third-party custody after the Wednesday hearing and possible grand jury testimony.
Lawler said the grand jury so far is looking only into possible check kiting on joint accounts held by Joe and Enid. An FBI affidavit says Joe spent $227,500 more than he deposited in a Congressional Credit Union Account in checks he wrote to himself that were deposited in a First Security Bank account.
It also says he wrote an additional $65,000 worth of other checks to third parties, and many of them were returned as unpaid.
Lawler said the investigation is still preliminary and is looking into activities by both Joe and Enid with the account. He would not comment whether Enid has appeared before the grand jury.
Lawler said the investigation may span into many other areas of controversy brought up in the press. They have included possible embezzlement by Joe from his grand-mother, his wife and her family and a former employer - and pressuring one of his wife's aides to let him use the aide's credit card, on which he ran up $45,000 in bills for which he did not initially provide reimbursement.
"At this point, it's important to keep an open mind about where this investigation is going to go," Lawler said. "We intend to follow the evidence wherever it goes."
Shortly after Joe surrendered, Enid made a brief appearance before reporters in Washington as TV cameras crowded into her small office lobby.
While trying to contain sobs, she said, "I have every confidence in the Department of Justice and its ability to get to the bottom of the fraud and deception that Joe has perpetrated on my family, his family, on me and friends and many others. I know that they are all hurt and sad as I am as we now try to comprehend what Joe has done."
She declined to answer questions about whether she is considering resigning. She has said she never intentionally violated the law, but her own former campaign officials and state party officials said she was warned about but ignored irregularities and possible election-law violations committed by Joe.
Meanwhile, the executive committee of the Utah Republican Party unanimously passed a resolution Friday voicing "its continued full support and confidence" in Enid "while she works toward a complete and honest disclosure of information related to current allegations."
Enid has promised to return to Utah and give detailed explanations about her finances after her lawyers and accountants try to reconstruct her financial history.