Uploaded: Friday, July 27, 2001, 9:30 a.m.

Fitzhughs faced a financial crisis
Palo Alto couple had near-poverty-level income, testimony reveals as trial nears end

by Bill D'Agostino

At the time of Kristine Fitzhugh's death, the Fitzhugh family's finances were dwindling to near-poverty levels despite a Palo Alto-lifestyle facade, leaving them with liquid assets valuing no more than $20,000 despite spending near that much monthly.

Kenneth Fitzhugh took the stand Thursday for his third consecutive day of testimony. He is on trial for allegedly murdering Kristine in their Southgate home on May 5, 2000.

Testimony in the three-week ended concluded Thursday afternoon, and closing are scheduled for Monday. The judge and attorneys spent today (Friday) consulting on the instructions to the jury, which was dismissed for the day.

The financial evidence was allowed despite a ruling Wednesday by Judge Franklin Elia that Deputy District Attorney Michael Fletcher could not present such evidence as a possible motive for the killing since Fletcher had not addressed the issue while presenting his case.

` However, he did allow the financial testimony because of its possible relevance to Fitzhugh's credibility.

Fletcher told Judge Elia that the reason the financial evidence is important is: "Money and sex -- these are the things that drive people to do things they wouldn't otherwise do."

A key element was evidence showing that Kenneth Fitzhugh signed a loan application just four days after his wife's death in which he stated that his monthly income was $16,500.

But Fitzhugh wrote in his 1999 tax forms that he had made little more than $30,000 for the entire year.

Fitzhugh told Fletcher that the reason he reported making $16,500 monthly was that if he were to work full time charging his typical consulting fee of $90 an hour, he would be able to earn that amount. He said he had chosen to not work full time in order to take care of other obligations.

By using a large graph, Fletcher showed the jury the collapsing financial situation of the Fitzhugh family for two years preceding Kristine Fitzhugh's death. The chart showed the family's three investment accounts plunging from nearly $400,000 in early 1998 to approximately $11,000 in May 2000. There also were some small savings accounts and trust funds, Fletcher said.

Kenneth Fitzhugh testified that during that same time their home had increased in value more than a million dollars.

Prior to getting into Fitzhugh's finances Thursday, Fletcher continued to hammer away at apparent inconsistencies in his actions on May 5, 2000, once again asking about a bloody shirt that investigators discovered stashed under the front seat of Fitzhugh's Suburban.

Fitzhugh said he initially could not remember how the shirt ended up in his vehicle. On Wednesday, he said that a hypnosis session in April 2001 helped him recall how it had gotten there.

Fitzhugh said that he himself had put the shirt in the SUV on May 5, 2000 once he used it as a rag to clean up blood he had gotten on him while giving his wife CPR, in an apparent attempt to revive her.

Fletcher specifically asked Kenneth Fitzhugh why he had placed the shirt under the seat of the car. Kenneth responded that he had wanted to keep the shirt for continual usage a rag, and kept it under the car seat to remind him to remove it later.

"You were going to keep this shirt that had the blood of your precious wife on it as a rag?" Fletcher asked incredulously.

Fitzhugh agreed in a soft voice.

Defense Attorney Thomas Nolan maintains that the reason Fitzuhgh acted so strangely on May 5, 2000 was because he was in shock as a result of the trauma he received when he saw his wife's dead and extremely bloody body at the foot of their basement steps.

After Fitzhugh's testimony Thursday, Nolan called David Spiegel, a Stanford professor who put Fitzhugh in the hypnotic state to help him remember how the shirt (as well as blood-flecked tennis shoes and a paper towel) got into his vehicle.

Spiegel told the jury that hypnosis is only useful as a means to help someone remember events, and not as a "truth serum."