Fifty-year old Deborah Jean Palfrey, the California woman accused of running a $2 million Washington prostitution ring, said she was "genuinely sorry" for former Deputy Secretary of State Randall Tobias, who resigned last week after he was asked about an upscale escort service allegedly involved in prostitution.
Palfrey added, "I unfortunately know first-hand the impact such a revelation can have upon one's life."
Palfrey has previously denied any role in illegal activities and said for 13 years she headed Pamela Martin & Associates, a "legal, high-end erotic fantasy service."
Tobias has said escorts from her firm provided legal massage services in his home.
Montgomery Blair Sibley, Palfrey's attorney in a civil suit, said that Tobias may be called as a defense witness. Sibley denied that calling Tobias as witness amounts to intimidation.
Defense witness search
Phone records of more than 15,000 client calls, Palfrey said, will be used for her defense. "My hope defense witnesses could be found by combing through the information indeed is being realized."
Tobias resigned after ABC News contacted him with questions about the escort service. ABC News published on it's online "The Blotter" a report saying Tobias acknowledged he had used the service to provide massages, not sex.
But Palfrey added that, "I am dismayed however, by Mr. Tobias' refusal to come forward until now with this valuable exculpatory evidence." She said, "Had he done so earlier along with the many, many others who have used my company's services throughout the years, I most likely would not be in my current predicament."
Palfrey read a statement outside the courthouse, that "the decision ultimately was made to hand over the records to a responsible media outlet, in this case ABC News, in New York."
Palfrey also has said Harlan K. Ullman, "is only one of dozens of such officials" who will be exposed as she prepares her defense.
Ullman, a former U.S. Naval officer and author of "Shock and Awe, Achieving Rapid Dominance," told the Associated Press, "the allegations are beneath the dignity of a comment."
New defense counsel approved
Palfrey, who has set up a legal defense fund at www.deborahjeanepalfrey.com, appeared in U.S. District Court this morning to move to fire her court appointed lawyer in the criminal case.
Federal Judge Gladys Kessler, who called Palfrey an "intelligent person," said that "irreconcilable differences" existed between her and her court appointed lawyer A.J. Kramer and approved her motion for new counsel.
Kessler said that this was a "serious criminal case with serious charges," and would quickly appoint another attorney to represent Palfrey.
The judge said she would not allow Palfrey to pick her own attorney. She wanted a New York attorney to represent her and have the court put aside a fund of $150,000 for her legal fees. Kessler said there was no basis to set aside such funds.
In an unusual request, Palfrey took to the podium in the courtroom to ask if some 5,000 shares of Dolby Laboratories, which she said were confiscated by the government, could be sold.
She said the stock rose from $22 to $34 a share and would not want to see the stock, "wasting away."
The judge deferred a decision on the stocks.
Kessler also ruled that Palfrey does not have to continue electronic monitoring. She now has to report to pretrial services three times a week by telephone.
The government's case
Officials say Palfrey advertised for her "female employees" at the University of Maryland's Diamondback newspaper.
Palfrey, they say, also hired "male 'testers' who agreed to and did meet with women who wanted to work with Pamela Martin and Associates and determine the ability of those women to perform the appropriate prostitution activities," according to the indictment.
The prostitution business allegedly involved 132 women, with the prostitutes keeping half of the fees and mailing the rest to Palfrey in money orders, prosecutors allege in the court filing.
The indictment, which also accuses Palfrey of arranging sex for money in Virginia and Maryland, occurred months after authorities seized Palfrey's bank accounts, stocks, real estate and gold coins in connection with the investigation.
On a Web site seeking donations to her legal defense fund, the company is described as "a high-end adult fantasy firm which offered legal sexual and erotic services across the spectrum of adult sexual behavior."
But federal authorities say it was a thriving call-girl service, begun in 1993, that dispatched college-educated women in their 20s to male clients in the Washington area who paid $275 to $300 per sexual encounter.
Palfrey has three homes, two in California and one in Florida.
No date had been set for her trial.