JD Journal » scandals

Six Lawyers Hired for Blagojevich Defense Team

Erik Even — Fri, 26 Jun 2009 18:24:45 +0000

Six Chicago lawyers have been hired by the Blagojevich defense team as pretrial contract lawyers, to examine the 3.5 million pages of documents provided by the prosecution.

Former Illinois Governor Milorad “Rod” Blagojevich has been charged with conspiracy to commit mail fraud, wire fraud and solicitation of bribery.

The six attorneys are Michael Di Natale, Aaron Goldstein, Robyn Molaro, Elliott Riebman, Keenan Saulter and Rob Walker.

Detroit’s Top Lawyer Resigns After “Ghetto Court” Remark

Erik Even — Wed, 21 Jan 2009 17:32:15 +0000

Attorney Kathleen Leavey, head of the City of Detroit Law Department, has resigned after referring to one of the city’s courts as “a ghetto court.”

Leavey said her comment was taken out of context. The 23-year city employee adamantly denied allegations from a city judge that her words were racist and insulting to the predominantly black court.

“I am not a racist,” Leavey told the National Law Journal. “My reputation is at question.”

The controversy stems from a conversation that Leavey held last week with court staff about financial support for the court, and a recent $400,000 legal judgment against the court. According to Leavey, she told an administrator that “people regard this as a ghetto court because of the way they treat people.” She explained that she was referring to a poorly managed court.

“Judges don’t get on the bench until 11 o’clock. People wait in long lines. Files get lost,” Leavey said. “It’s just badly managed.”

But 36th District Court Chief Judge Marylin Atkins reports a different version. She said that Leavey told her judicial assistant, ” ‘When you stop acting like a ghetto court, maybe the city will be more inclined to pay your operations.’ ”

“I thought it was very insulting and racist to the court and the city of Detroit,” Atkins said. “It doesn’t matter to me what her explanation is. Referring to this court, with that word … it was insulting.”

Atkins also expressed her outrage in a letter, which she delivered to several judges and the mayor’s office.

Leavey said she resigned at the request of the mayor’s office. She has since returned to her former job as an attorney for the Law Department, as allowed under union rules that lets mayoral appointees return to their previous civil servant jobs.

Since resigning she also has sent a letter to the mayor’s office, asking it not to accept her resignation.

“I do not know that any effort to get my job back will be successful,” Leavey said. “[Atkins'] comments have made it difficult for me to move forward.”

Leavey was hired to head the department in September to replace John Johnson, a key figure in the text message scandal that drove former Mayor Kwame Kilpatrick from office.

Via NLJ. Also here.

New York Gubernatorial Aide to Join Kirkland & Ellis

Erik Even — Wed, 31 Dec 2008 18:43:55 +0000

Sean Patrick Maloney, the first deputy secretary to New York Governor David Paterson, resigned this week, effective at the end of the year. Maloney, who is openly gay, was a holdeover from the Eliot Spitzer administration.

Maloney, a senior West Wing advisor to the Clinton Administration, will become a partner at Kirkland & Ellis LLP, where he will join Michael Garcia, the Spitzer prosecutor.

Paterson has been a vocal supporter of LGBT issues in the past, but with gay marriage a contentious issue in the state Senate, community advocates are wondering how losing a top gay insiders in Albany will affect the community’s representation.

On March 10, 2008, The New York Times reported that Spitzer was a client of a prostitution ring under investigation by the federal government. Two days later, he announced his resignation as governor of New York.

Via The New York Blade.

A Top-Ranked Law School with Free Tuition. No, Really.

Erik Even — Sat, 27 Dec 2008 18:00:15 +0000

A new law school is opening at the University of California Irvine next fall. And it’s waiving tuition for three years to lure top applicants:

The financial carrot is part of an ambitious strategy by Erwin Chemerinsky, a renowned constitutional law scholar and dean of the new school… to attract Ivy League-caliber students to the first public university law school in the state in 40 years.

Scholarship winners will be chosen for their potential to emerge three years later as legal stars on the ascendance. Only the best and brightest need apply, but the school hopes to offer full scholarships to all 60 members of its inaugural class in 2009. Subsequent classes will be on a normal tuition basis.

“Our goal is to be a top 20 law school from the first time we are ranked,” Chemerinsky said. The school hopes to enroll 600 students and employ 40 to 50 professors.

The new school has already seen its first scandal, as dean Chemerinsky was hired away from Duke University, but then fired for his liberal politics. Protests led UC Irvine to rehire Chemerinsky.

Via The Associated Press.

Marc Dreier: World’s Most Amazing Lawyer/Liar

Erik Even — Fri, 26 Dec 2008 22:00:03 +0000

Bloomberg has a story about the sheer chutzpah that disgraced lawyer Marc Dreier used to scam investors and charities out of $380 million.

My favorite part describes how Dreier convinced officials that other firms backed his scam deals:

As the U.S. Attorneys Office in Manhattan tells it, [Dreier] would lie his way into an accounting firm’s or real estate developer’s offices as if he had business there.

He then would use their conference rooms for meetings with hedge-fund officials to make it seem the accountants or developers were in on the deal, according to the feds.

Now that takes some brass ones.

Read the story.

Obama Aides Lawyer Up for Blago Probe

Erik Even — Fri, 26 Dec 2008 21:30:07 +0000

Top aides to President-elect Barack Obama are lawyering up, in anticipation of questioning in the probe of Illinois governor Rod Blagojevich’s alleged attempt to sell Obama’s vacant Senate seat.

Rahm Emanuel, the incoming White House chief of staff, has hired W. Neil Eggleston, a partner at Debevoise & Plimpton. Eggleston and Emanuel briefly served together in the Clinton administration in the early 1990s, when Eggleston was associate counsel to the president and Emanuel was a senior adviser. Eggleston specializes in securities litigation, white-collar defense and internal investigations.

Valerie Jarrett, a senior adviser to Obama, has hired Vincent Connelly, a partner in Mayer Brown’s Chicago office. Connelly is a former prosecutor in the US Attorney’s Office in Chicago.

Emanuel and Jarrett expect to be interviewed this month by the US Attorney’s Office in Chicago and by Gregory Craig, the incoming White House counsel and a partner at Williams & Connolly.

Prosecutors have not accused either Emanuel or Jarrett of wrongdoing.

Madoff Victims — Sue All You Want, The Money’s Gone

Erik Even — Fri, 19 Dec 2008 21:35:07 +0000

Lawyers ramping up to try to recover client’s investment cash squandered by indicted New York investor Bernard Madoff aren’t expecting to get back very much.

“There are going to be claims, but it’s not going to be billion-dollar litigation,” says Columbia Law professor John C. Coffee. “This is medium-sized litigation that will probably go to relatively small firms. I don’t think there are enough assets left. It’s a lean and starved corpse.”

Coffee doesn’t anticipate any Madoff-related financial recovery to top $20 million, making it relatively small potatoes compared to other legal issues involving the global financial meltdown.

With the Madoff funds looking like a recovery dead-end for investors who lost millions, several litigators have said that they plan to try to recover investor funds from the third-party institutions that funneled money to Madoff, such as banks, hedge funds and investment firms.

It remains to be seen how lucrative such third-party suits will be. Stanford Law professor Robert Weisberg said litigation over the Madoff fraud may prove to be a “loss leader,” meaning firms won’t make much money trying to recover investors’ funds. But the publicity of being involved in such a high-profile case could make it worthwhile for firms in the long run.

“I think there are firms that are doing this on spec. They are circulating their businesses cards,” Weisberg said. “Getting your name out there is important, even if there isn’t much potential for recovery.”

Blago’s Lawyer to Challenge “Illegal” Wiretaps

Erik Even — Fri, 19 Dec 2008 19:57:34 +0000

Indicted Governor Rod Blagojevich’s attorney will challenge the lawfulness of the court-ordered wiretaps offered as evidence in federal corruption allegations against the Illinois Democrat.

Chicago attorney Ed Genson criticized FBI wiretaps that prosecutors say record Blagojevich scheming to deal President-elect Barack Obama’s vacant Senate seat for campaign cash or a plum job.

Genson told an Illinois House panel investigating impeachment that its consideration of the recorded excerpts he characterized as meaningless “jabbering” was inappropriate, if not illegal. “I think you’re using evidence that was illegally obtained,” he said.

Members of the House panel pledged to do nothing that would interfere with the investigation by US Attorney Patrick Fitzgerald. If Fitzgerald asks lawmakers not to interview certain witnesses, the panelists will abide by that, they said.

Federal prosecutors’ case could be undermined if Illinois lawmakers compel certain witnesses to testify. Following the Iran-Contra scandal of the 1980s, the convictions of Oliver North and John Poindexter were thrown out after the courts determined that the cases against them were built too much on testimony they gave to Congress under a promise of immunity.

Unlike the US Constitution, which allows impeachment in cases of “high crimes and misdemeanors,” the Illinois Constitution does not define an impeachable offense. No Illinois governor has ever been impeached.

Blagojevich’s first substantial public comments on the scandal will probably come today, according to Genson.

Blagojevich Owes Winston Strawn Over Half A Million Dollars

Erik Even — Fri, 12 Dec 2008 01:14:11 +0000

We reported yesterday that embattled Illinois Governor Rod Blagojevich was no longer using Chicago’s Winston Strawn to defend him against Federal charges.

Today the Chicago Business News reports that Blagojevich owes more than $500,000 in unpaid legal bills to Winston.

Mr. Blagojevich racked up millions of dollars in legal fees over several years but stopped paying the Chicago firm earlier this year…. The firm stopped representing the governor after his payments dried up…

Winston Strawn has been the governor’s main counsel since the federal government began its investigation five years ago into pay-to-play politics within his administration… It named Winston partner Bradley Lerman as the governor’s main legal counsel.

In October CBN reported that over the last two years, Winston had billed Citizens for Blagojevich, the governor’s campaign committee and the group defending the governor against the Federal probe, nearly $2 million, and that the committee still owed the law firm $965,000.

Via BlogWonks.

Regan Sued By Dreier

Erik Even — Thu, 11 Dec 2008 00:30:05 +0000

We have good news and bad news for Judith Regan, the former celebrity biography publisher. The bad news is, she’s being sued by her former law firm for unpaid fees related to her wrongful termination suit against News Corporation.

The good news is, that law firm is Dreier LLP. Which as of this week, depending on your definition of “exist,” doesn’t.

Regan was the controversial publisher of her own imprint at HarperCollins called ReganBooks, which specialized in celebrity biographies. She triggered outrage when she unsuccessfully attempted to publish O.J. Simpson’s arguably non-fiction “If I Did It,” his version of the Brown/Goldman murders.

In December 2006, shortly after the Simpson debacle, Regan was fired for making allegedly anti-Semitic remarks. With Dreier LLP as counsel, she sued Harper’s parent corporation for wrongful termination, and reached a $10.75 million settlement with News Corp last January.

Now Dreier, which appears to be missing tens of million of dollars in clients’ escrow money, wants to recoup some of that cash by suing Regan over unpaid legal fees. With Dreier bleeding lawyers, maybe Marc Dreier can hire a prison lawyer to go after Ms. Regan.

Dreier-gate Day 4: Millions Missing From Dreier LLP Accounts

Erik Even — Wed, 10 Dec 2008 17:55:34 +0000

At the WSJ Law Blog:

A flurry of SEC filings, reviewed last night by the Wall Street Journal, reveal new allegations of [Dreier LLP founder Marc] Dreier’s recent activities, including allegations that funds are missing from clients’ escrow accounts. Here’s the WSJ story.

…

According to a declaration by the firm’s Controller John Provenzano, millions of dollars owed to clients appeared to be missing from the firm’s accounts.

Provenzano says that last week, Dreier called him multiple times from a Canadian jail (where Dreier was held on impersonation and fraud charges), begging Provenzano to wire $10 million of firm money to his personal account. Provenzano refused, but Dreier was able to get his bank to comply.

Provenzano also admitted that since 2005, Dreier has taken up to $40 million our of Dreier LLP accounts to buy art.

Also, from Dreier LLP partner Joel Chernov:

… because Dreier ran the firm by himself he was the only one who could access bank accounts to transfer or disburse money to rectify many of the financial problems. The December health insurance premiums have not been paid, the firm’s December rent is overdue and AT&T Inc. was set to terminate Blackberry service as of Tuesday. Chernov also says the quarterly premium for the firm’s malpractice insurance is four weeks’ overdue.

Chernov says requests are pouring in for the firm to return client funds held in escrow. But only Dreier can do so. “In addition, many Dreier LLP attorneys and staff have left the firm and it is my understanding that they have taken certain files with them.”

This post will be update as the situation develops.

Bloggers React to Dreier, Blagojevich Arrests

admin — Tue, 09 Dec 2008 18:58:04 +0000

At Portfolio.com, blogger Felix Salmon sees a larger trend in the Dreier and Blagojevich scandals:

Yesterday, the idiot was Marc Dreier; today, it’s Rod Blagojevich. Both of them powerful men near the very top of their professions; both of them sworn to uphold the law; both of them resorting to the kind of desperate criminality which is almost certain to be caught and prosecuted.

Is this the beginning of a pattern? First it was subprime mortgages, then credit markets, then the financial system, then the economy. Now it’s civil society in the crosshairs.

At ICantBelieveItsNotADemocracy.com, class anger over the Dreier “tragedy”:

My stomach turned when I read that a lawyer who worked with the miscreant, Marc S. Dreier, years ago called this sordid tale “a tragic story.” … Dreier was a Yale man with a Harvard degree, and he rose to be the head of litigation at a major law firm, etc. He also liked having lots of shiny toys, to wit: [Dreier] has a triplex apartment on the East Side of Manhattan, along with a house near the beach in Southampton, N.Y., and a 120-foot yacht. The walls of his Park Avenue office drip with expensive modern art, and he kept three personal assistants busy. That is, tragic story, my ass. Greedy, sociopathic [expletive deleted] got caught and now he will spend the rest of his life in prison. Sounds more like a good old-fashioned morality tale.

At BearingDrift.com, on Blagojevich:

Before the 17th Amendment, this likely happened all the time. State legislators appointed all US Senators, and except for the many times that they deadlocked and didn’t send anyone to the Senate, accusations of bribery and corruption abounded.

There have been several calls to end the popular election of US Senators, arguing that with that change went the last vestiges of states rights and any state check on federal power.

But the brazen actions of Democrat Rod Blagojevich (”I want to make money”), and the fact that he can still exert his power, tells me that while the 17th amendment on balance was a good thing.

Conservatives are suggesting, sans evidence, that someone on Obama’s team may have been involved with selling the Senate seat. On the other hand, Abe Greenwald helpfully points out it’s pronounced “bluh-GOY’-uh-vich.”

And finally, Carrie Shepherd at the Chicago Public Radio Blog is watching the Twitter feed, and reports this gem about Blagojevich:

“I really see this as more of an indictment of bad pompadours and turtlenecks.”