Posts

SDNY Doesn’t Think Michael Cohen Is Much of a Lawyer

/84 Comments/in , , , /by

In this post, I noted that a bunch of what got seized in a raid of Michael Cohen’s home and office on Monday wouldn’t be privileged.

But boy oh boy was I being nice compared to the way the prosecutors from Southern District of New York dismissed the notion that Cohen was much of a lawyer in this filing opposing Cohen (and Trump’s) efforts to prevent FBI from going through Cohen’s seized documents.

Housekeeping

Before I get into that, a few clarifications on questions we’ve had. First, the filing makes it clear that the referral from Mueller’s office came months ago. SDNY has their own taint team.

The FBI agents who seized materials pursuant to the search warrants were filter agents who are not part of the investigative team and have been walled off from those AUSAs or FBI personnel assigned to the investigation (the “Investigative Team”).

The venue in SDNY is primary. Indeed, they mock Cohen’s representation that Mueller’s team wrote this warrant application by pointing out his misunderstood the metadata of it.

Although Cohen accurately states that the Special Counsel’s Office (“SCO”) referred this investigation to the USAO-SDNY, the investigation has proceeded independent from the SCO’s investigation. Cohen’s speculation, see Br. at 10, that the SCO drafted the search warrants is unfounded. The date in the bottom corner of the attachments is the date that the USAO-SDNY’s standard form search warrant rider was most recently updated for use by the office.

Given that Mueller handed off this part of the investigation entirely, then, it’s highly unlikely Mueller thinks there’s evidence of coordination between Wikileaks and the Access Hollywood video, as I laid out here (which is not to say Mueller isn’t happy that SDNY has raided Cohen).

In addition, the filing makes it clear that Geoffrey Berman has recused, with Robert Khuzami acting as US Attorney for this investigation.

The filing also reveals the scope of the search: “Michael Cohen’s residence, hotel room, office, safety deposit box, and electronic devices,” even while noting that they limited their search to certain categories of documents.

Not much of a lawyer

The lawyers from the famously self-important SDNY spend much of their brief not just demonstrating that Cohen was not serving as an attorney in the seized materials, but that he’s not much of a lawyer in any case.

The repeatedly note he has few if any clients besides Trump.

Based on information gathered in the investigation to date, the USAO-SDNY and FBI have reason to believe that Cohen has exceedingly few clients and a low volume of potentially privileged communications.

In a long passage arguing — as I did — that much of what was seized would not be protected by privilege, they sniff about how Cohen differs from a “traditional law office,” mocking the idea that he “holds himself out as a practicing attorney.”

Although Cohen is an attorney, he also has several other business interests and sources of income. The searches are the result of a months-long investigation into Cohen, and seek evidence of crimes, many of which have nothing to do with his work as an attorney, but rather relate to Cohen’s own business dealings. As set forth below, unlike a search of a traditional law office, the information gathered thus far in the investigation suggests that the overwhelming majority of evidence seized during the searches will not be privileged material, but rather will relate to Cohen’s business dealings.

Nevertheless, because Cohen holds himself out as a practicing attorney, each of the search warrants contains the following provision: Additionally, review of the items described in this Attachment shall be conducted pursuant to established procedures designed to collect evidence in a manner reasonably designed to protect any attorney-client or other applicable privilege.

When appropriate, the procedures shall include use of a designated “filter team,” separate and apart from the investigative team, in order to address potential privileges.

In one redaction, they suggest something about Cohen’s recent behavior suggests he couldn’t be practicing much law.

Cohen’s discussion in his own memo of the Strategic Partnership between him and Patton Boggs is entirely redacted (it may be included in the significant redaction on page 3), but in the government’s memo much of it remains unredacted. Which means this redaction might state, in more damning terms, what is described elsewhere — that they cut him off on March 2, in part because he had brought in only 5 clients for the $500,000 a year he got paid.

SDNY goes on at more length about how weak Cohen’s claim that his marketing relationship with Patton Boggs creates a great risk of privilege in the materials that got seized.

Second, Cohen’s claim to have privileged communicatons through a law firm that he describes as “Law Firm-1” omits facts about his relationship with Law Firm-1 that render it unlikely that a significant volume of attorney-client privileged material – if any – was seized in connection with Cohen’s relationship with that law firm. Specifically, on or about March 1, 2017, Cohen—through his wholly-owned entity, Michael D. Cohen & Associates P.C.—entered into a “Strategic Alliance Agreement” with the law firm (the “Agreement”).6 Among other things, the Agreement provided that Cohen would receive a $500,000 annual “strategic alliance fee” from the law firm. Under certain circumstances, Cohen would also receive a percentage of the fees charged by the law firm for clients introduced to the law firm by Cohen. The Agreement also spelled out other aspects of the relationship between Cohen and the law firm, including: (1) Cohen would be given an office at the law firm; (2) Cohen would maintain his own computer server system not connected to the law firm’s computer server system; and (3) the law firm would not have a key to Cohen’s office. In addition, based upon conversations with a representative of the law firm, the USAO-SDNY understands as follows, in substance and in part: (1) Cohen did not have an email address associated with the firm; (2) Cohen did not have access to the firm’s shared drives or document systems—and vice versa; (3) Cohen’s documents were to be kept in a locked filing cabinet; and (4) Cohen did not have access to any of the firm’s client files.

What is left (and what I’ll deal with in a follow-up) is the way Cohen wields his relationship with the President to try to shield his files.

Chris Christie-Patton Boggs Contract Shows Disturbing Trend

/49 Comments/in , /by

New Jersey Governor Chris Christie, in one of his first major acts in office, killed the NJ-NY Hudson River Tunnel Project that had already been agreed to and would have brought much needed transportation congestion relief as well as billions in long term Federal construction spending, and related job creation, for his state. Christie said New Jersey could not afford to participate. As a result of Christie’s breach of the agreement and withdrawal, the Federal government, via the FTA, formally noticed demand for losses and expenses in the amount of $271 million dollars that resulted.

Christie, of course, doesn’t want to honor the government’s loss claim any more than he does the tunnel agreement. So Christie has hired the ultra high dollar white shoe Washington DC power law firm Patton Boggs to fight the claim:

New Jersey Governor Chris Christie has hired a law firm to challenge a $271 million tab the federal government says the state owes for the canceled ARC rail tunnel. Christie says he’s approved the selection of the high-powered Washington, D.C. firm of Patton Boggs.
…
A Christie spokesman Michael Drewniak defended the hire, saying “We’re much better off using a firm like this than using our own in-house attorneys or attorneys general. Not to knock their expertise, but let’s face it, that’s what these attorneys [at Patton Boggs] do for a living.”
…
Drewniak said the firm would be charging $485 an hour. He wasn’t sure where the money to pay that rate would come from — only that it would be found. “There are always contingencies for every agency of government for conducting legal affairs,” he said. “Everybody has to budget money.”

Patton Boggs is listed by the Center for Responsive Politics, a non-profit group that tracks influence in Washington, as the nation’s top lobbyist over the last twelve years, with about $400 million in billings since 1998. Its clients include Walmart, several health-care related companies and local governments.

Only $485.00/hr. for a high powered firm like Patton Boggs, the kind of firm where senior level counsel regularly charge $800-$1,000 an hour, looks pretty reasonable on the surface doesn’t it? Looks like Christie actually negotiated a pretty fair deal on outside lawyers, if he is not going to use any of the hundreds of state attorneys he already has on the payroll, doesn’t it? Well, not so much.

$485 an hour for a firm like Patton Boggs means they are using “blended rate” on their RFP response. They put in an estimate that shows a small number of partner hours at $800+, and large number of low level associate and paralegal hours at much lower rates.

After they get the contract, there will be lots more partner hours billed than in the estimate. The final bill will be a multiple of the estimated bill in the RFP.

This is how big white shoe law firms, with huge and expensive overhead, compete with small firms who legitimately charge less than $500 an hour for partner time on governmental contracts. It is a scam that was invented so politicians can funnel lucrative steady contract money to big powerful supporters and the big firms can siphon money from government coffers.

In the old days, the government would set a maximum “government rate” per hour they were willing to pay, and the big firms would not touch the work. Mid sized and smaller law firms specializing in such work, manned by ex-prosecutors and other government lawyer types who still wanted to do “public good work” would open boutique firms that charged less than 1/2 the per hour rate for senior attorneys the big firms could and would get these assignments because the big firms wouldn’t take the government rate. These firms often consisted of attorneys with substantial federal agency or DOJ experience, wanting to actually do more than get rich, and gave the taxpayers a far better deal, and just as good, if not far better, results because the firm was not beholden to Washington DC masters and political and lobbying affiliations.

So, if past practice in such situations is prologue, Chris Christie’s contract with Patton Boggs is not only questionable because the State of New Jersey has plenty of capable attorneys already on its payroll, it is also far from the reasonable deal it is being pitched as.