Now that the government has turned up the heat on his legal troubles, Mario Gabelli has said his company, GAMCO Investors Inc., has an emergency plan in place, should he be forced to step down as chairman and chief executive.

The firm's board of directors has identified an individual who would serve as an interim chief in his stead, Gabelli told Reuters . Though that person is not aware of the decision, he said the candidate "is very capable of bringing us to the other side."

On March 17, the Justice Department officially moved to take control of a five-year-old lawsuit claiming Gabelli and another of his companies, Lynch Interactive, wrongfully manipulated special discounts offered to small companies bidding on cellular telephone licenses in the late 1990s. The government's involvement has given weight to the case, and though GAMCO is not a defendant, its shares fell promptly when news of the intended motion broke earlier this month.

Gabelli, one of Wall Street's most high-profile money managers, started GAMCO in 1977. Like any company driven by a noteworthy founder, GAMCO faces a shaky future without its boss's strong leadership to rely on. Despite adding a COO and a new CFO two years ago, the firm's own board has doubts: "The loss of Mr. Gabelli's services would have a material adverse effect on us," stated its recently released annual report.

Efforts to distance the firm's brand from its founder have been underway for some months. Just last August, Gabelli Asset Management Inc. became GAMCO. The domain name for GAMCO Investors -- www.gabelli.com -- was left to expire on March 21, and the firm's Web presence remains in limbo.  

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