Florida Abortion Facility Owner to Stand Trial on Extortion Charges

Source: Business Week Magazine

Date: October 9, 2000

Ocala, FL -- James Scott Pendergraft IV likely will perform more abortions this year at the five abortion facilities he owns throughout Florida than any other abortion practitioner in the state, if not the country. By all accounts, Pendergraft is an abortion practition of boundless commercial ambition. The burly 43-year-old employs a host of high-profile marketing techniques, including highway billboards, that unsettle fellow abortion practitioner and infuriate right-to-lifers. ''I never try to sneak into a city,'' says Pendergraft. Pendergraft's dream is to expand his business up the east coast of Florida all the way to his native North Carolina. At the moment, though, he is focusing his energies on keeping himself out of jail. In June, Pendergraft and a former employee, Michael Spielvogel, were indicted by the U.S. Attorney's Office in Tampa for attempted extortion and lying under oath. The extortion charge is a felony carrying a maximum 30-year sentence. Both pleaded not guilty and are scheduled to stand trial in October in Ocala, a central Florida city of 50,000 best known for the lush Thoroughbred farms encircling it. The indictment stems from a lawsuit that Pendergraft brought in 1998 against the city of Ocala and Marion County for allegedly failing to protect his abortion facility there. The abortion practitioner won a preliminary injunction, but then let his suit languish. It was dismissed in late 1999. However, prosecutors now allege that Pendergraft and Spielvogel had given false testimony in the case as part of a scheme to extort an excessive settlement from Ocala officials. In their comments in court, prosecutors have insisted that the Pendergraft case is about extortion, not abortion. But as a practical matter, by indicting Pendergraft, the U.S. Attorney's office intervened in a highly politicized local dispute between a prickly, strong-willed advocate of abortion and a community offended by his very presence. Until Pendergraft came to town, Ocala had not had an abortion practitioner since 1989. As a businessman, the fiercely competitive Pendergraft stirred backlash from the moment he struck out on his own in 1995 by founding the first of his two abortion facilities in Orlando. ''He's as ruthless as I've ever seen,'' says competitor Susan Hill, president of the National Women's Health Organization, which opened Orlando's first abortion facility in 1976. Pendergraft essentially muscled his way into the already crowded Orlando abortion market by spending heavily to publicize his willingness to do abortions as late as 28 weeks into pregnancy. Most abortion practitioner shy away from late-term abortions because they are medically tricky and politically touchy. It was logical for Pendergraft to apply the tactics that served him well in Orlando to Tampa and Fort Lauderdale, where he opened abortion facilities in 1998 and 1999, respectively. But why Ocala? Pendergraft says that he thought that he would be able to at least break even while generating referrals for his big-city abortion facilities. But his behavior also suggests that he was spoiling for a fight. Pendergraft replied to the hundreds of letters of protest he received from Ocala residents with a form letter that amounted to a pro-abortion manifesto. He sent the same defiant response to Marion County's board of commissioners after it urged him to reconsider his plans to come to Ocala in a letter from Chairman Larry Cretul. ''We are a small, family-oriented community, relatively free from controversy of the kind this might create,'' Cretul wrote. Yet, Pendergraft put his abortion facility right in the heart of Ocala, a stone's throw from the county courthouse. He hung an oversize American flag from its roof and told a local reporter that he expected ''a wholesome welcome.'' In the months before the abortion facility opened, Mike Spielvogel had numerous conversations with Cretul. Spielvogel, 54, is a former real estate broker whom Pendergraft describes as ''my strategic analyst.'' In late 1997, Spielvogel called the FBI, which has an office in Ocala, to complain that Cretul had made ''veiled threats'' over the telephone. In an affidavit that Spielvogel later filed in court, he claimed that Cretul said, among other things, that ''it's not an 'if' but a 'when' that this new clinic is bombed.'' Spielvogel's accusations boomeranged badly. Investigators concluded that he was lying, and the U.S. Attorney's office authorized Cretul to begin secretly tape-recording his conversations with Spielvogel and Pendergraft. In December, 1998, Pendergraft filed his suit against Ocala and Marion County, asking a federal judge to require local government to take various steps to protect patients and staff members from the unruly demonstrators who had besieged the abortion facility from the day it opened. The original complaint made no mention of Cretul's alleged threats. It was not until March, 1999, that Spielvogel submitted his affidavit. Pendergraft filed a supporting statement, attesting to the fear he saw in his employee after one of his conversations with Cretul: ''His reaction was of someone seriously frightened [for] his safety and life.'' Shortly after these affidavits were filed with the court, Pendergraft met with Virgil Wright III, Marion County's lawyer. He was accompanied by his own lawyer, S. LeRoy Lucas, a legend in pro-abortion circles. As a young lawyer, Roy Lucas, now 57, devised the right-to-privacy argument that carried the day in Roe v. Wade. Lucas and his client had come to Wright's office to talk about settling the case, not realizing that an FBI agent was videotaping the proceedings through one-way glass. Lucas had sent a letter to Wright proposing a settlement of $6 million. But at the meeting, the county's lawyer said that anything over $100,000 was out of the question. Annoyed, Lucas noted that a jury in Oregon had just awarded $107 million to an abortion facility. ''We're going to go for a verdict of over $100 million, and they better come up with some money or they're gonna get burned,'' declared Lucas, according to the transcript. ''We'll try to bankrupt the county.'' Added Pendergraft: ''Not try. We will bankrupt the county. And I promise you I'll put a statue of myself [in Ocala's town square] that states that Dr. Pendergraft brought freedom to Ocala.'' A few weeks later, Pendergraft took a big step toward winning his lawsuit against Ocala when Judge W. Terrell Hodges ruled that the city had discriminated against the abortion practitioner by refusing to let police officers moonlight as clinic security guards. Pendergraft inexplicably failed to pursue his suit, which Judge Hodges dismissed in late 1998. So much for bankrupting Marion County. It's the solvency of Pendergraft's Ocala abortion facility that's at issue now. Just 673 abortions were performed in all of Marion County in 1999, far below what Pendergraft needs to break even in Ocala. Meanwhile, the spiraling cost of his legal defense is burdening the finances of his four other abortion facilities. Pendergraft's fellow abortion business owners think the extortion charge is ludicrous but are keeping their distance from him nonetheless. ''Everybody is really nervous about him,'' says Margaret Gifford, owner of the Alternatives of Tampa abortion facility. ''When somebody opens that many clinics that fast, corners are going to be cut.'' Pendergraft insists that he runs his business strictly by the book and says that competitors like Gifford resent him for taking business away from them. During a recent court hearing in Ocala, prosecutors revealed that a second investigation of Pendergraft was under way in Orlando and might result in additional criminal charges. The revelation infuriated Pendergraft, who accuses the prosecutor of conducting ''a smear campaign'' against him. Even as he prepares for trial in Ocala, Pendergraft continues to visit each of his five abortion facilities regularly, putting hundreds of miles on his car every week. As Pendergraft approached one of his Orlando abortion facilities on a recent afternoon, he was taking no chances. He punched some buttons on a cell phone and put it to his ear. ''This is Dr. P,'' he said in a rumbling baritone. ''I'll be there in 30 seconds.'' He pulled his car into a driveway and parked behind a tidy two-story building. Not a protester in sight. Pendergraft climbed out of his car and walked toward the building. A door opened suddenly from the inside and he was gone.