Lucy is the girl Dr. Gonzo meets at an airport on the way to the Flamingo Hotel. She is obsessed with Jesus and Barbara Steisand, and paints many portraits of her which she brought with her from Montana to give directly to her.
Sexual Intercourse and LSD
It has been stated by Dr. Gonzo that he gave her a couple of caps "before realising she'd never even had a drink before". It is implied that they had sex thereafter. Her mental state when Raoul Duke walks in to the suite is indicative that she is having somewhat of a bad trip.
Soon after Duke jokes about giving her into the cops for a reward and letting them rape and abuse her. Gonzo takes him seriously despite his obvious exaggerated tone and fake laugh, probably due to his current state of mind. Jokes have been known to lose their subtlety to people using hallucinogens