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Beleaguered billionaire Henry Nicholas speaks

The Broadcom co-founder, in a lengthy interview, holds forth on his eclectic interests and touches on his legal troubles.

August 02, 2007|E. Scott Reckard and Kim Christensen | Times Staff Writers

Henry T. Nicholas III swept through the kitchen of his Newport Coast mansion, cellphone at his ear, talking a mile a minute to one of his attorneys.

"I can't follow your advice because you don't know enough about me to give me advice," the 6-foot-6-inch billionaire shouted into the phone. "Yeah, I thought I was your friend."

The former Broadcom Corp. chief executive is talking to lawyers a lot these days as he endures a public spotlight fueled by a federal investigation into stock manipulation at Broadcom, allegations of drug abuse, an acrimonious divorce and a claim that he once sought to build a subterranean pleasure zone beneath a Laguna Hills mansion.

Nicholas, 47, denies any wrongdoing and says through his attorney that some of his accusers are simply trying to extort money from him.

Citing advice from his lawyers, Nicholas declined to address specifics of the stock probe or the allegations made in court documents against him.

But in a marathon interview that began Tuesday evening and stretched to 3 a.m. Wednesday, Nicholas talked enthusiastically about his eclectic interests -- including his efforts to develop military vehicles that can withstand rocket-propelled grenades, his work to keep California's three-strikes law intact, his attempt to keep his sister's killer behind bars and his venture into the music business.

Occasionally, Nicholas touched on some of the trouble that has come his way.

"If you want to understand my behavior, and my wife, and all that crap, here's what you should know," he said, pointing to a photo of his children. "My wife thinks I should have nothing to do with those kids."

In this week's interview and an earlier one, Nicholas also disclosed a recent cancer scare, which his doctor later described as a precancerous condition known as Barrett's esophagus.

Nicholas' penchant for colorful speech was evident in his discussion of the condition, which UC Irvine oncologist Dr. Kenneth Chang treated this spring by zapping potentially cancerous cells using an endoscope.

"It's kind of like a Korean barbecue, only it's the Chang barbecue, and what it does is it goes down and it creates an intense electromagnetic field, kind of like a barbecue -- actually not like a barbecue, but more like a microwave oven, but directed," Nicholas said. "And it barbecues off only that amount it allows without taking out the whole stomach."

Such monologues are not uncommon for Nicholas.

"When you first meet Nick, you're shocked by his hyper-energy," said Robert Magnuson, a former Los Angeles Times executive who now runs the billionaire's family office. "His mind is always racing. He's a nonlinear thinker who can discuss the fine points of quantum mechanics one minute and the future of religion the next."

Nicholas said that as a youngster he had difficulty reading and doing simple mathematics because of dyslexia and attention deficit disorder. He overcame those problems to earn a PhD in electrical engineering in 1991 and went on to co-found Broadcom, a company that makes computer chips for iPods, mobile phone headsets and TV set-top boxes.

As they launched the company, Nicholas and co-founder Henry Samueli showered employees with stock options that made hundreds of them millionaires. The pair became iconic figures in the tech industry even after the dot-com bust deflated Broadcom stock and put many other companies out of business.

"Henry Nicholas was the fire in that enterprise and the other Henry was more deliberate, and the combination of the two was exactly what the company needed," said Anil Puri, dean of the Cal State Fullerton business school. "They were head and shoulders above any other tech firm in the county, and they created a company and products that have lasted beyond the dot-com era."

In recent years, Nicholas "has not been that visible, except in a sort of negative way," because of news of his marriage problems and other accusations, Puri said.

"It's unfortunate that his life turned out that way. But the spark that he created in those years -- you can't take that away from the guy," he said.

In January 2003, Nicholas resigned from his roles at Broadcom, saying he wanted to repair his tattered marriage.

Nicholas' wife, Stacey, had filed for divorce in fall 2002, soon after, court records show, a group of contractors threatened to disclose Nicholas' alleged effort to build a secret "lair" beneath his Laguna Hills home to indulge in prostitutes and illicit drugs.

The allegations stemmed from a dispute over payment for the construction work, which was resolved by a confidential settlement within a month. In a later flare-up of the matter, Nicholas won a separate judgment against the lead contractor, a filing in Orange County Superior Court showed.

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