The BLT: The Blog of Legal Times

So, Who's the Next AG?

My crystal ball is still cloudy, but there are a few images starting to take shape in the fog.

Legal Times' sister paper, The National Law Journal, says two of the most confirmable prospects are Solicitor General Paul Clement, who will serve as acting attorney general until a permanent replacement is named, and retired New York federal judge Michael Mukasey, now of Patterson Belknap Webb & Tyler.

Mukasey likely has support from Sen. Charles Schumer of New York, a prominent Democrat who has made it clear he intends to have a voice in the process of nominating a new AG.

Other names: former Rep. Chris Cox, now chair of the Securities and Exchange Commission, and Homeland Security Secretary Michael Chertoff, whose appointment would leave a vacancy that also requires confirmation.

Meanwhile, Thinkprogress.org cites "a source close to the White House" who says ex-Deputy Attorney General George Terwilliger III is "looking very good" to replace Alberto Gonzales, but former Solicitor General Ted Olson and Senior D.C. Circuit Judge Laurence Silberman are still in the mix.

Legal Layoffs?

Market turmoil could cost some law firm associates their jobs before it's over, especially in formerly lucrative practice groups such as structured finance, real estate, and corporate mergers and acquisitions, according to an article in Legal Times' sister paper, The Legal Intelligencer.

At least one prominent chairman, Sheldon Bonovitz of Duane Morris, called layoffs "a realistic possibility" in areas most affected by turmoil in the debt markets.

Still, others said they're unlikely, and corporate lawyers will find new work.

With continuing volatility in the markets, it's hard to say what will develop. But the rumblings are out there.

Morning Wrap

Going, Going, Gonzales: Gonzales’ resignation tops the news this morning. Here’s the story from the NYT, the Post, the LAT, and Legal Times.

Corruption in Iraq: The New York Times reported on a possible kickback scheme involving members of the U.S. military and the distribution of weapons and supplies in Iraq.

Oops: Sen. Larry Craig, a Republican from Idaho, was arrested in a Minneapolis airport bathroom for tapping the foot of the man in the stall next to him. The man just happened to be an undercover agent investigating reports of sexual escapades in the bathrooom. The senator pleaded guilty to disorderly conduct three weeks ago.

How Sad: Michael Vick might have to give up a portion of his $37 million bonus fee, according to the Washington Post. Vick's original contract with the Atlanta Falcon’s is for $130 million for ten years, and the Falcons might be able to retrieve around $6 million in bonuses.

Lawsuit: Several creditors of the brokerage service Refco filed suit against the bankrupt company’s accounting and legal providers yesterday for $500 million. The accounting firms, Ernst & Young and Grant Thornton, are named, as is Refco’s legal counsel, Mayer, Brown, Rowe & Maw.

Mortgage Crisis: With many homeowners facing the prospect of foreclosure in the coming months, Republicans and Democrats are debating a possible bailout.

Dewey & LeBoeuf

Dewey Ballantine and Leboeuf, Lamb, Greene & McRae have decided to merge. The combined firm, called Dewey & Leboeuf, will have around 1,300 attorneys worldwide and a predicted gross revenue of nearly $1 billion. 

The merger between the two firms evolved over several breakfast meetings, according to the New York Law Journal - sealed, one imagines, over bacon, half a grapefruit, and some strong coffee.

This is Dewey's second merger attempt in the past year. The first was the failed affair with Orrick, Herrington & Sutcliffe, which ended in a messy breakup eight months ago. Though Dewey lost several big-name partners as a result, the firm has been regrouping since then and picking up laterals.

Last Friday, the two firms signed a merger agreement, and pending partner approval, the combination should be official at the beginning of October. Washington angle: The new firm will have 140 attorneys in the D.C. office.

Nixon Peabody's Monster Ballad

Here’s a short break from Gonzales coverage. Surely someone at Nixon Peabody feels a little on the sheepish side at the moment. Not only did they compose a fairly ridiculous song in celebration of the firm’s inclusion in Fortune’s best place to work club, but they then proceeded to freak out when the ditty skipped merrily from blogger to blogger across the digital universe like an out of control synthesizer.

The firm's reaction caused the New York Times to write a story about the “Everybody’s a Winner at Nixon Peabody” anthem in today’s paper.

Above the Law first called attention to the ditty last Thursday. And since then the firm has been on the offensive, demanding that law blog remove the song from its Web site on copyright grounds. David Lat, founder of Above the Law, has refused to take the offending (in so many ways) song from the site and has dubbed the fracas “ThemeSongGate.” This, folks, is a lesson in how not to handle publicity. Not to mention, how not to write successful pop music.

Money quote from the Times piece: “The lyrics, sung in a kind of Earth, Wind & Fire style, include: ‘Yeah, yeah, yeah, it’s all about the team, it’s all about respect, it all revolves around integrity.’”

Judge Tosses Out Chalabi's Lawsuit Against Jordan

A federal judge today dismissed former Iraqi Deputy Prime Minster Ahmed Chalabi’s three-year-old lawsuit against the Kingdom of Jordan.

Chalabi, who came to be known as the personification of American intelligence failures in Iraq, filed the suit in 2004, alleging that in 1989 the country seized Petra Bank, which Chalabi founded and ran, and charged him with embezzling millions of dollars in retaliation for his opposition to Saddam Hussein. (Chalabi was convicted of embezzlement and sentenced in absentia to 22 years in prison.) In sum, the complaint alleged that Jordan had conspired with Hussein’s government to dent Chalabi’s reputation.

Senior U.S. District Judge Louis Oberdorfer threw out the case with prejudice, writing that Chalabi had violated the statute of limitations by filing his complaint nearly 15 years after the fact.

Once on the shortlist to lead the Iraqi government, Chalabi abruptly turned persona non grata in the United States, once it was learned that he had provided American intelligence agencies false information about Hussein’s alleged weapons of mass destruction and ties to al-Qaeda. (Chalabi bragged of his dissembling in a British newspaper.) Chalabi also was accused of supplying information to the Iranians and withholding government documents from U.S. officials in Iraq. Paul Bremer finally had to order a raid of Chalabi's compound to seize them. Soon after, his political capital all but dried up. He was unable to capture a seat in the December 2005 parliamentary elections, and the new leadership locked him out of the cabinet.

Gonzales' Greatest Hits

We're avoiding the cheap "Gonzo" headlines and, despite temptation, the Muppet jokes.

But it seems as if The BLT should offer you highlights of the U.S. Attorney firing scandal - for context. Click here for our coverage.

Clinton: Gonzales' Loyalty "To the President, Not the American People"

Sen. Hillary Rodham Clinton, D-NY, a leading Democratic presidential candidate, has weighed in on the Gonzales era at DOJ:

"This resignation is long overdue, and so is the appointment of an Attorney General who will put the rule of law and our Constitution above partisan politics.

"Attorney General Alberto Gonzales took an oath to uphold our Constitution and respect the rule of law, but time and time again, he demonstrated that his loyalties lie with the President and his political agenda, not the American people or the evenhanded and impartial enforcement of our laws. In his actions and inaction, from warantless (sic) wiretaps to the firing of U.S. Attorneys, his loyalty was to the President, not the American people.

"The Department’s hardworking lawyers, law enforcement officers, and staff are trusted to defend our Constitution, not one Administration or political party. That trust is central to the sanctity of the rule of law and the vitality of our democracy. Because he betrayed his obligations and the trust of the American people, I welcome today’s announcement that Attorney General Alberto Gonzales has resigned his post as Attorney General of the United States.

"My hope is that the President will select a new Attorney General who will respect the rule of law and abandon partisanship, who will serve the American people and not the President’s political ideology, and who will answer to the Constitution and not political operatives. It is past time to clean up this mess and restore non-partisan accountability and competence to the Department of Justice.

The second anniversary of Hurricane Katrina is one more reminder that the President must appoint someone to lead the Department of Justice with the leadership and competence necessary to defend the Constitution."

Kyl Statement

Statement from Sen. Jon Kyl, R-Ariz., member of the Senate Judiciary Committee:

“The Attorney General’s resignation offers an opportunity for Washington to stop partisan bickering and move forward with the people’s business.

“The President can start the process by nominating a quality non-political person to serve; and the U.S. Senate can reciprocate by using the confirmation process not to settle old scores or politicize the nomination, but to fairly examine the qualifications of the nominee.

“As the highest ranking Hispanic ever to serve in the federal government, Alberto Gonzales should be commended for his achievements and service.”

Rahm Takes Swipe at Alberto

Rep. Rahm Emmanuel (D-Ill): "Alberto Gonzales is the first attorney general who thought the truth, the whole truth and nothing but the truth were three different things."

More liberal pot-shots can be found here.