The BLT: The Blog of Legal Times

Burning Issue of the Week

Blogs are all about controversy, right? So here at the BLT, we'll roll out the introductory segment of something we like to call "The Burning Issue of the Week." (Although, truthfully, no one here has ever called it anything, since it didn't exist five minutes ago.)

Baseball season begins (surprise) Sunday night. My particular cross to bear along those lines is the team from the shores of Lake Erie, the Cleveland Indians. I've been a fan of the Tribe, as they are called, since I was four years old and going to games in old dilapidated Municipal Stadium with my grandfather.

Part of loving the Indians was embracing its mascot, Chief Wahoo. I grew up sporting the Chief on hats, jerseys, shirts and jackets. But no longer. These days, I've distanced myself from Wahoo faster than you can say "Alberto Gonzales." The reason should be evident from the image next to this post. I can't justify it. Despite mounting pressure, however, the Indians have announced no plans to dump the Chief. And as a team that frequently is in the top tier of merchandise sales, they have no financial incentive to do it.

A sidenote: I briefly taught at a community college out in northwest New Mexico, near the Four Corners, where the majority of my students were Navajo. One day, I showed them a picture of the Chief and put it to them: racist or not? The class came back at just about 50-50. And I guess I shouldn't be surprised, as this was a place where you could see many Native Americans wearing Indians caps at the local Wal-Mart. Some students, for sure, saw it as a demeaning racist image, others saw it is a tribute, and a sizeable bunch asked why it mattered at all as an issue in a place where alcoholism, unemployment and domestic violence ran rampant.

By the way, here is a piece I wrote for Legal Times about my time out there.

So faithful BLT reader, what do you think? And everyone, don't answer all at once.

Hey Big Spenders!

The Center for Responsive Politics is reporting the top lobby spenders for 2006. At the top of the heap is the U.S. Chamber of Commerce which dished out over $72 million to lobby Congress. Runners up include the AARP ($23.2 million), AT&T Inc. ($19.1 million) and the U.S. Telecom Association ($18.3 million).

Money, Money, Money

In a longstanding fee fight, D.C. District Court Judge Paul Friedman earlier this week denied a summary judgment to dismiss a suit brought by Thomas Fay against Greenberg Traurig and Steven Perles. Fay and Perles are fighting over the windfall after successfully litigating two wrongful-death actions against the government of Iran.

But that victory has led to lawsuits. Anne Marie Kagy, an attorney who worked with Perles from 1994 to 1999 on the two wrongful-death suits is suing Perles for $1.3 million. It was during the first legal salvos from Kagy, that Fey and Perles transferred $2 million into an account that would pay for legal defense and any money that was to be paid out to Kagy. That account was operated by Greenberg partner Steven Schneebaum, who was then a partner with Patton Boggs. (Schneebaum is still representing Perles in his suit against Kagy, which is being appealed en banc to the U.S. Court of Appeals for the D.C. Circuit.) But Fay says that only half of the $2 million was intended to pay for Kagy’s lawsuit. The rest, Fay contends, belongs to him. Which is exactly what will be for the D.C. District Court to decide.

Yeah, What do you 'DO' with Lobbyists?

Washington Post lobby reporter Jeffrey Birnbaum hosted an online chat today and responded to a question from a writer asking if Democrats "will ever do something diffrent (sic) than Republicans about all the lobbyists." K Street can breathe a collective sigh of relief as Birnbaum writes that "there's not really all that much that anyone can DO about lobbyists." Any reform on the horizon, Jeff? "I'm not holding my breath on that one either."

Too Taxing

Dallas-based law firm Jenkens & Gilchrist will close its doors by the end of the month in the wake of a criminal probe into its illegal tax shelter advice, according to an annoucement today from the U.S. Attorney's Office for the Southern District of New York.  The firm, which once had more than 600 lawyers nationwide, has already shuttered several offices and lost more than two-thirds of its headcount as a result of the scandal. 

Jenkens' announcement that it will disband comes as a part of a non-prosecution agreement the firm entered into with federal prosecutors in Manhattan over its involvement in illegal tax shelters, our sister publication the New York Law Journal reports. 

The firm's Chicago-based tax shelter practice group pumped out hundreds of opinion letters from 1998 to 2003 in support of tax shelters the Internal Revenue Service later found to be illegal. 

As part of the deal with the U.S. Attorney's Office, the firm agreed to pay a $76 million civil penalty to the IRS and also pledged continued cooperation with the investigation.  The firm agreed to pay $75 million in 2004 to settle civil claims from clients concerning the legal opinions. 

Earlier this week a group of intellectual property lawyers from the firm's Chicago office decamped in order to open an office in the Windy City for  Nixon Peabody.  Richmond, Va.-based Hunton & Williams is reported to be in talks to take on many of the firm's Dallas-based attorneys.   The firm closed shop in DC late last year.

SEC Charges Enron In-House Lawyers

For those of you who have been in Enron withdrawal since former-CEO Jeff Skilling reported to a Minnesota prison in December, take heart.  The Securities and Exchange Commission filed civil charges yesterday in Houston against two former in-house lawyers accusing them of participating in the massive fraud that took place at the company and helping other Enron execs mislead investors about the true financial state of the Houston-based energy trading giant.  The Commission charged Jordan Mintz, a former Enron Vice President and General Counsel of Enron's Global Finance Group, and Rex Rogers, a former Enron Vice President and Associate General Counsel, in connection with a fraudulent scheme to make material misrepresentations and omissions in Enron's public filings. 

"We're bringing a case against lawyers who are traditionally viewed as gatekeepers. Unfortunately, they used their expertise to further aid and abet Enron's massive fraud," said Fredric Firestone, the associate director of the SEC's division of enforcement, the Houston Chronicle reports.

The SEC alleges that Rogers failed to properly disclose that former Enron Chairman Ken Lay sold more than $86 million in Enron stock back to the company to repay company loans in 2000 and 2001.   The Commission accused Mintz of providing legal advice for and making murky disclosures about off-the-books deals engineered by former Enron finance chief Andrew Fastow to conceal billions of dollars of debt.

Mintz is being represented by Christopher Mead of DC's London & Mead, while Rogers' defense team includes Blank & Rome's B. Michael Rauh.

Morning Wrap

Flame-Broiled: U.S. Attorney General Alberto Gonzales was grilled in Chicago by a half-dozen U.S. attorneys who voiced their criticism over the Justice Department's firing of eight U.S. attorneys. Gonzales' right-hand man, Kyle Sampson, will testify before a Senate committee investigating the firings.

Straight Democratic Express: Democrats assert that Sen. John McCain (R-Ariz.) considered leaving the Republican Party in 2001 weeks before former Republican Senator Jim Jeffords (Vt.) switched parties and became an Independent.

Onward Christian Soldier?: Former Republican senator and current Law & Order actor Fred Thompson is mulling a run for the presidency however one prominent evangelical of the Republican Party is taking issue with the former Tennessean. Focus on the Family founder James Dobson says Thompson is not a Christian adding that will make it difficult for the actor to reach out to social conservatives.

The Jokester: President Bush engaged in a little self-deprecating humor at last night's Radio and Television Correspondents' Association dinner at the Washington Hilton Hotel. When asked how things had changed since last year's dinner, Bush replied: "A year ago my approval rating was in the 30s, my nominee for the Supreme Court had just withdrawn, and my vice president had shot someone. "Ah, those were the good ol' days." The event also featured Karl Rove rapping.

Reporter Protection

Media giant Hearst Corporation covers lobbying in many of its newspapers, but the company also is lobbying for its own interests. Hearst recently hired government relations firm Corallo Comstock Inc. to lobby for reporters' privilege legislation, which would create federal protection of journalists and their confidential sources. Former Justice Department spokespersons Mark Corallo, who was Karl Rove's spokesman during the Valerie Plame investigation, and Barbara Comstock, spokeswoman for Scooter Libby, opened the firm in January.

Venable Adds Two

Venable continues to add to its ranks in Washington this week with two new partners: Claude Bailey, former general counsel for the D.C. Sports & Entertainment Commission and Washington Convention Center Authority, and Patricia McDermott, former counsel to Congress’ joint Committee on Taxation. Bailey, 52, who had been the principal legal advisEr on the construction of the Washington Nationals baseball stadium, the construction and operation of the Washington Convention Center and the MCI Center (now known as the Verizon Center), joins the firm’s state and local government group. McDermott, 53, spent 17 years at the Internal Revenue Service before joining the tax committee and helped craft the sweeping reforms in the Pension Protection Act of 2006, joins the firm’s employee benefits and executive compensation and taxation groups.

Second Time Around

The Ethiopian lobby in Washington is starting to push lawmakers to reintroduce a bill that was killed in the last Congress after big-named lobbyists representing the Ethiopian government — including Dick Armey, the Texas Republican and former House Majority leader turned DLPA piper lobbyist — got a hold of how it would affect Ethiopian officials if passed. The bill, The Ethiopian Freedom, Democracy and Human Rights Advancement Act, introduced by Rep. Chris Smith (D-N.Y.) calls for strengthening the U.S.-Ethiopia relationship and fostering democracy, economic development, and freedom of the press. It calls for a sanction of the Ethiopian government by cutting off non-humanitarian aid if the African nation does not follow the bill’s call for democracy.

Prompted by police killings of about 200 protesters after 2005 general elections in Ethiopia, the bill seeks the release of political prisoners and the withholding of visas from key Ethiopian officials who are suspected of links to human rights violations. Mesfin Mekonen, head of the Ethiopian-American Council, has already started meeting with congressional staffers and writing letters to the U.S. State Department to rebuild support for the bill. "While the failure of Congress to act on this legislation last year is disappointing, we must focus our attention on achieving results," Mekonen says.