A lawyer for Mobil Oil Corp. President William P. Tavoulareas yesterday opened a $50 million libel case against The Washington Post by accusing the newspaper of engaging in "reckless . . . unrestrained investigative reporting" in two 1979 stories that detailed how Tavoulareas set up his son as a partner in a London-based shipping management firm.
The stories were "reckless from the start," Tavoulareas' lawyer, John J. Walsh of New York, told the four-man, two-woman U.S. court jury on the first day of what is expected to be a contentious month-long trial that will examine the newspaper's investigative techniques and explore the business dealings of one of America's most prominent industrial chieftains.
Irving Younger, a lawyer representing The Post, immediately countered in his opening statement that the stories not only were true, but "if anything . . . understated.
"These articles were as true as a conscientious reporter could make them," Younger concluded. He said the reason for the lawsuit was simply that "Mr. Tavoulareas did not want the American public to know" about how he had helped his son Peter, then 24, get started "at the top of the heap" of the business world in 1974 through the shipping venture and be able to earn $1.5 million to $1.75 million by 1978.
The two Tavoulareases, contending that the newspaper's stories held them up to ridicule and embarrassed them, filed the libel suit against The Post, Benjamin C. Bradlee, the paper's executive editor; Bob Woodward, an assistant managing editor who did some intitial reporting on the story in 1976 and later had a hand in editing the Nov. 30 and Dec. 1, 1979, stories; reporter Patrick Tyler, who wrote the disputed articles, and Sandy Golden, a former Montgomery Journal reporter who wanted a job at The Post and led Tyler to one source for the Nov. 30 article.
The source that Golden introduced to Tyler was Dr. Philip Piro, a Baltimore eye surgeon, who in 1979 was in the throes of an acrimonious divorce and child custody fight with the elder Tavoulareas' daughter, Patrice. The Mobil executive and his son sued Piro for $20 million for his role in The Post's stories, which the newspaper contends was relatively minor, and the two cases are being heard simultaneously.
More than 50 spectators gathered in U.S. District Judge Oliver Gasch's courtroom for the opening statements, including Katharine Graham, chairman of the board of The Washington Post Co., who originally was a defendant in the case but was dropped from the proceedings when it was determined that she did not know anything about the preparation of the articles before they were published.
In his opening remarks, Walsh contended that "there was a strong desire of The Post to get the story (about the Tavoulareases' business dealings) out and get it out on the front page."
He said the newspaper's goal was to "keep up its reputation . . . to compel the reader tostand up" and take notice when reading a particular article.
Younger contended that Tyler painstakingly reported the stories he wrote and recounted the Tavoulareases' actions that led to the creation of the shipping firm, Atlas Maritime Co.
The Tavoulareases' lawyers called Golden as their first witness and he recounted how he and Tyler met with Piro at a restaurant in Baltimore. But he said that Tyler found the Tavoulareas son-in-law to be something less than fully knowledgeable about the family's business dealings.
During their conversation with Piro, Golden said that the physician mentioned that the elder Tavoulareas kept his tax returns and important personal papers in a safe at his New York home, at which point Tyler raised the question of whether they could find someone "who could rifle the safe."
Tyler said at one point during more than 30 hours of depositions in preparation for the trial that the remark was meant as a joke.
Later, Golden testified that as he and Tyler were returning to Washington from Baltimore after interviewing Piro, Tyler, then in his first year at The Post, remarked: "It's not every day you knock off one of the Seven Sisters," referring to the seven largest international oil companies, including Mobil.
Golden conceded he also was anxious to "see the story out" and felt strongly that by getting his name on the story he would ensure his getting a job at The Post.
While he pursued the story independently of Tyler when he felt that Tyler was going to renege on an agreement to let him share a byline on the story, he later stopped trying to peddle the story to other publications when Tyler agreed to list him as a special correspondent at the bottom of the story.
Golden has been a freelance journalist in the last 2 1/2 years.
Even before yesterday's opening remarks, lawyers for the Tavoulareases had spent hundreds of hours questioning Tyler, his sources for the stories, Post editors involved in the preparation of the articles and other key figures in the dispute. Meanwhile, attorneys for The Post have taken depositions -- testimony under oath in preparation for a trial -- from the Tavoulareases, Mobil board chairman Rawleigh Warner Jr., Securities and Exchange Commission staff members and others familiar with one aspect of the case or another.
Both sides of this battle between officials of two Fortune 500 companies have hired high-priced legal talent to press their cases. The Tavoulareases hired the Wall Street firm of Cadwalader, Wickersham & Taft and the elder Tavoulareas late last year told Newsweek magazine that he already had spent $1 million on the case. Tavoulareas acknowledged yesterday that the suit has "cost me a lot of money," but said he could not remember mentioning the $1 million figure to the magazine.
The Post is being defended by the promiment Washington firm of Williams & Connolly and, according to one source, already has run up a legal bill of more than $500,000.
After The Post's stories ran in 1979, Tavoulareas twice traveled from his firm's New York headquarters to Washington to demand a retraction of the articles. The Post, believing in the accuracy of the stories, refused.
So a few days before the one-year statute of limitations expired in November 1980, the Tavoulareases filed the libel suit. The lawyers have been skirmishing over the facts in the case ever since.
While Mobil itself is not a party in the case, it, too, has hired a legal heavyweight, Washington attorney Judah Best, to protect its interests. On Tuesday, Best, over the protests of Post attorney Younger, persuaded Gasch to extend an earlier protective order that prohibits the public dissemination of certain Mobil documents in the case.
Best said the giant oil firm, which is second in size only to Exxon, did not want to close the trial to the public or limit the use of company documents within the confines of Gasch's courtroom. But Gasch's extension of the protective order in effect complies with Best's request to give the company 24 hours after each day's testimony so that Mobil can decide whether any portions of the transcript or Mobil documents submitted as evidence should be withheld from the eyes of newspaper reporters and the public.
Younger said such an arrangement was not only a "classic example of prior restraint" on the press' First Amendment rights of freedom of the press, but also "increases the possibility that whatever is reported may be inaccurate."
The trial continues today.