The BLT: The Blog of Legal Times

Lawyer Reaches Agreement with Interior in Cobell Case

In the winding history of the Indian land trust case, Cobell v. Kempthorne, few witnesses were as damning to the government as Robert McCarthy, a field lawyer in the Interior Department’s Office of the Solicitor. Without putting too fine a point on it, McCarthy’s October testimony battered the Interior Department’s central defense — that it could account for leases it manages on behalf of 300,000 Indian landowners.

U.S. District Judge James Robertson was listening, and in a whimsical 165-page opinion last month, he pronounced the 12-year case closed, finding that the Interior was incapable of managing the trust.

The day after McCarthy notified the agency that he was a potential witness in the Cobell case, the Solicitor’s Office issued a proposal to fire him, allegedly for disclosing confidential information to a reporter back in April.

In a joint statement today, McCarthy and the Interior announced they had reached a settlement “that resolves all outstanding cases and controversies between them.” Per the agreement, which according to the statement "does not admit any liability or wrongdoing on the part of either party," McCarthy left the Interior on February 16.

“We could not be happier for Robert McCarthy,” said Paula Dinerstein, PEER's senior counsel.

Morning Wrap

Rocket Man: The NYT reports that the House Committee on Oversight and Government Reform has taken the first steps to ask the Justice Department to start a criminal investigation into whether Roger Clemens perjured himself during testimony about taking performance-enhancing drugs.

Grand Opening: Visa Inc., the nation’s biggest credit card network, said that it plans to sell as much as $17.1 billion of stock in late March, which would be the largest initial public stock offering in United States history.

Guilty: Five former insurance company executives were found guilty of a scheme to manipulate the financial statements of the world's largest insurance company, American International Group Inc.

Karl Says No: Karl Rove responded to the the 60 Minutes story on the Don Siegelman case yesterday. He gave a complete denial that he ever knew Dana Jill Simpson, a Republican lawyer who told congressional investigators that Rove asked her to take a picture of Siegelman cheating on his wife. Siegelman is the former governor of Alabama convicted of corruption charges now serving a seven year sentence.

Not Buying: San Francisco federal judge Marilyn Hall Patel expressed strong skepticism toward an attempt by former McAfee general counsel Kent Roberts to obtain interview notes from the internal investigation of stock option backdating at the company. The Securities and Exchange Commission sued Roberts for securities fraud, and he is also under a criminal indictment stemming from backdating.

House Panel to Discuss Role of Special Counsels

Patrick Fitzgerald — now U.S. Attorney for the Northern District of Illinois — is among several witnesses lined up for an oversight hearing Tuesday before the House Judiciary Subcommittee on Commercial and Administrative Law to discuss the use of special counsels in Department of Justice investigations.

Joining Fitzgerald — who was the special counsel in the CIA leak case of Valerie Plame that led to the conviction of ex-White House aide I. Lewis “Scooter” Libby on perjury charges — will be Georgetown University Law Center Professor Neal Katyal, Lee Casey of Baker Hostetler, Carol Elder Bruce of Venable and Barry Coburn of Coburn & Coffman. Katyal, Casey, Bruce and Coburn all served in the Justice Department over the years in different roles and some served in independent counsel investigations as well.

The hearing comes amid recent unsuccessful calls in Congress for the appointment of a special counsel in the CIA tapes controversy. Last month, Attorney General Michael Mukasey refused to appoint a special counsel. Mukasey instead tapped Assistant U.S. Attorney John Durham of Connecticut to oversee the criminal investigation in the Eastern District of Virginia after U.S. Attorney Chuck Rosenberg recused himself.

Prior to Tuesday’s 1 p.m. hearing in Room 2141 of the Rayburn House building, the subcommittee on commercial and administrative law also plans to discuss whether to issue a resolution calling for a subpoena of former Attorney General John Ashcroft.

The subpoena would be “for testimony and related documents...regarding deferred prosecution agreements and independent corporate monitors.” As part of a no-bid contract arranged by federal prosecutors in New Jersey, Ashcroft’s consultancy firm is expected to earn between $28 and $52 million while it oversees the compliance program of an Indiana medical supply company.

Visa IPO

Earlier today, Visa Inc. went public with its plans to go public. And they’re record breaking: Visa, the world’s largest electronic payment processing company, said its initial public offering (IPO) could raise more than $17 billion in stock.

Last November, Visa filed an S-1 with the SEC that shows a few interesting financial numbers — and a warning sign that the IPO may not come without having to clear multiple legal hurdles. The IPO was filed by New York White & Case partners Mark Mandel, S. Ward Atterbury, and Colin Diamond.

According to the filing, which listed the compensation of Visa’s five top executives, general counsel Joshua Floum made more than $3.2 million. Before joining Visa in 2004, Floum was a partner with Heller Ehrman White & McAuliffe from 1985 to 1996. And he’s not the only lawyer doing well: As a non-employee director for Visa, Mary Cranston, senior litigation partner in the San Francisco office of Pillsbury Winthrop Shaw Pittman, received an annual stock grant of $162,000. That number will change significantly if the IPO goes through.

Visa’s $17 billion IPO would dwarf the previous $10 billion record IPO of AT&T Wireless in 2000. The San Francisco-based company said it hopes to sell at least 406 million shares to public investors and expects shares to be priced at between $37 and $42 per share.

Mukasey Speaks to the Fraternal Order of Police

Continuing his public appeal against the release of violent offenders, Attorney General Michael Mukasey will address the effects of the retroactive guidelines for crack cocaine sentencing in front of the national Fraternal Order of Police this afternoon.

Mukasey will speak to about 150 FOP members from across the country who have gathered in Washington this week for a legislative update on their organization's priorities. Chief among the issues of concern at the FOP is their opposition to the retroactive application of the sentencing guidelines, which the U.S. Sentencing Commission voted for last December.

Mukasey's 3:45 p.m. speech is part of the FOP's annual Day on the Hill, in which the legislative office and committee brief members on their upcoming congressional agenda.

Mukasey earlier this month asked Congress to block the Sentencing Commission guidelines, which will go into effect next Monday and make some 1,600 convicts eligible for immediate release.

Mukasey says the early release of felons will impact some communities already experiencing upticks in violent crime. He told the House Judiciary Committee at a Feb. 7 oversight hearing that up to 70 percent of the inmates have violent records, in which guns were used or possessed at the time of the crimes.

Battling for Superdelegates

The superdelegates of the Democratic Party may determine if the party’s presidential nominee is Hillary Clinton or Barack Obama, and how these superdelegates should make such a choice is attracting a lot of political commentary.

In The New York Times today, Geraldine Ferraro, who helped create the superdelegate system before running as the Democratic vice presidential candidate in 1984, writes about her views of how superdelegates should act. Meanwhile, in today’s Legal Times, political scientist David Ponet and law professor Ethan Leib analyze the same question.

The two commentary pieces disagree over several issues, including whether superdelegates should already have chosen a candidate. Ferraro supports this; Ponet and Leib warn that superdelegates who pledge their support in advance are “shirking certain of their fundamental duties.” The commentaries also disagree about the relevance of Republicans and independents to choosing the Democratic nominee.

GSA Appoints Deputy General Counsel

The U.S. General Services Administration appointed Lennard Loewentritt to deputy general counsel announcing he will also continue as acting general counsel.

Loewentritt, whose appointment is effective March 2, is replacing Fred Hink who retired 15 years ago. The position was eliminated for the past 15 years and hasn’t been reinstituted until now, but is being filled for "continuity's sake," says an administrative spokesperson.

Loewentritt began his career at GSA as a law clerk in 1972 and has served his entire career at the agency. In his most recent position, as acting general counsel, he has been responsible for providing all legal services to components of the agency including: the Federal Acquisition Service, Public Buildings Service, and the Office of Governmentwide Policy. Loewentritt took over as acting general counsel after Alan Swendiman left in 2006 to join the White House as special assistant to the president and director of the Office of Administration.

“We’re proud to announce this appointment,” says GSA Administrator Lurita Doan in a released statement. “Lenny’s leadership skills and institutional knowledge have been invaluable to me and to all leaders at GSA. Under his guidance, I’m certain the Office of General Counsel will continue to provide timely and insightful advice that will help us achieve our mission of service for the American people.”

Gun Case Argument Schedule is Set

In a brief order on today's order list the Supreme Court dashed the hopes of gun rights advocates who hoped to have two lawyers and additional time arguing their cause before the Supreme Court when it hears arguments in the historic case D.C. v. Heller March 18.

Without explanation, the Court denied the motion of Texas Solicitor General R. Ted Cruz for argument time on the side of Alan Gura of Gura & Possessky, who has argued the pro-Second Amendment position from the start of the case.

But the Court did agree to give Solicitor General Paul Clement 15 minutes to argue, in addition to the 30 minutes for each side in the case.

The Court's action can be read as a small but not insignificant victory for supporters of D.C.'s handgun control ordinance at issue in the case.

Cruz had argued to the Court that he should be heard on behalf of 31 states favoring a broad view of the Second Amendment, because Solicitor General Paul Clement's brief in the case is "contrary" to the position of gun rights supporters. While Clement supports an "individual right" view of the Second Amendment, he advocates a standard of review that critics say will allow too many gun regulations to stand. Clement also urged vacating and remanding the lower court ruling of the U.S. Court of Appeals for the D.C. Circuit in the case, the first ever to strike down a gun regulation on Second Amendment grounds. Walter Dellinger of O'Melveny & Myers, who will argue in defense of the D.C. handgun ban, had opposed the Texas motion, but supported Clement's request for added argument time.

It is very common for the Court to say yes to a request from the solicitor general for argument time as amicus curiae no matter where he stands. As for states, in recent years they have won argument time with greater frequency — four times last term alone — though this term the success rate has been lower. One factor working against Texas in the D.C. case is that states are not unanimous on the Second Amendment issue; New York, joined by Hawaii, Maryland, Massachusetts, New Jersey, and Puerto Rico, filed a brief on the gun control side.

So, even though Clement's brief lends support to both sides, the net effect of today's Court action is that the justices will hear 45 minutes of advocacy from those who want the lower court ruling eliminated, and 30 minutes from those who want it upheld.

This Week in Legal Times

Take a look inside the world of Robert Bennett, the Skadden, Arps, Slate, Meagher & Flom partner and consummate Washington spinmaster. Last week all of Bennett's considerable skill was on display, showing why he is the go-to-guy for the scandal-plagued, writes Attila Berry. What started as a book tour for his new offering, In the Ring: The Trials of a Washington Lawyer, soon became a tour de force as Bennett spent his time trying to save John McCain's presidential campaign amid reports of an inappropriate relationship with a D.C. lobbyist.

Tony Mauro says that for 80 minutes last Wednesday, spectators at the Supreme Court saw the Roberts Court displaying the look and feel of a new institution, complete with different priorities and dynamics. After being in office for more than two years, Chief Justice John Roberts Jr. looked like he was heading in a new direction.

Joe Palazzolo takes a look at new developments in patent law. After a decade of disagreement over the precedent's bearing on American innovation, the Federal Circuit decided Feb. 15 to revisit State Street Bank & Trust Co. v. Signature Financial Group Inc. through the lens of another case, In re Bilski, which lifts State Street's holding on business methods and attempts to carry it further.

Influence reporter Carrie Levine finds that lobby shops are investing resources into new offerings as they look for different ways to grow. "I think the world of ‘lobbying,’ quote unquote, is dramatically changing," says former Sen. John Breaux (D-La.). "Nowadays, to be a full-service operation, you have to be involved with strategic advice."

And in Points of View, David L. Ponet, director of research at Public Insight in New York, and Ethan J. Leib, a professor of constitutional law and legislation at the University of California’s Hastings College of the Law in San Francisco, explain how Barack Obama and Hillary Clinton have it wrong about superdelegates.

Morning Wrap

The Oscar goes to ... No Country for Old Men. The story of a relentless killer chasing down his prey won best picture last night. The film's directors, Coen brothers Joel and Ethan, also shared the directing and adapted screenplay awards.

Deal Stopper? Clear Channel's $1.2 billion sale of its television unit to Providence Equity Partners, a media-focused buyout firm, is in danger of collapsing after Wachovia, one of the three banks financing the deal, sued Providence, saying that the new agreement voided a previous commitment.

Waiting Game: The Army is waiting to find out whether one of its largest contractors in the Middle East will satisfy a $4.9 million judgment levied by a federal judge in Atlanta. The Kuwait & Gulf Link Transport Co. response could put at risk the company's $100 million a year in contracts for truck supplies with the U.S. military in Iraq.

Key Losses: Weil, Gotshal & Manges has long held a market dominance in the field of bankruptcy. But the practice has suffered through important partner losses, most recently in November, when its co-head, Martin Bienenstock, departed for Dewey & LeBoeuf.