Greenberg Traurig on the Defensive as Abramoff's Guam Dealings Blow Up

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Greenberg Traurig on the Defensive as Abramoff's Guam Dealings Blow Up

Billy Shields
Daily Business Review
04-08-2008

The dark legacy of disgraced lobbyist Jack Abramoff still haunts Greenberg Traurig four years after they parted ways.
With Abramoff locked in a federal prison in Maryland, a far-off U.S. territory is dragging Greenberg's four-year stint as the notorious lobbyist's employer back into the public eye. But the Miami-based law firm issued a statement Monday, saying, "We are working closely with the Guam attorney general and are near a resolution of this issue."
Greenberg's alleged offense -- billing Guam for services that had nothing to do with the lobbying task Abramoff agreed to undertake.

"There were a lot of things like travel with nothing related to it," said Lewis W. Littlepage, the former Guam prosecutor who indicted the Miami-based firm. "It appeared to be a practice of illegal billing." The firm faces felony counts of unlawful influence, theft by deception and conspiracy. "It should be something every client of Greenberg Traurig should be concerned about," Littlepage said.
The firm issued statements after its indictment saying it was innocent and noting the firm has cooperated with "all investigations into" Abramoff. "Any employee or shareholder who refuses to cooperate with internal or government investigations will be asked to leave the firm" according to one of the firm's statements.

When Greenberg learned it was indicted, the firm issued a statement saying, "Greenberg Traurig was a victim of Abramoff's actions." His plea agreement on charges in Washington involving Indian tribes Abramoff admitted taking some fees directly without notifying Greenberg, which was entitled to a share. The law firm said some of Abramoff's conduct was unknown to the firm until he pleaded guilty in Washington in 2006 to federal charges of aiding and abetting mail fraud, tax evasion and conspiracy for his dealings with American Indian tribes. The next day, he pleaded guilty before U.S. District Judge Paul Huck in Miami to charges tied to an illicit loan to buy SunCruz Casinos and is serving a sentence of almost six years in prison.
A report issued by the Senate Indian Affairs Committee concluded the lobbyist's behavior "required Abramoff to deceive his former employer, Greenberg Traurig." But the Senate report also raised issues about the firm's knowledge of Abramoff's financial arrangements with Michael Scanlon, Abramoff's one-time partner, who pleaded guilty to defrauding tribal clients in 2005. It also called into question the billing practices of two lawyers who worked under Abramoff.

Billing practices also put the firm in the crosshairs of Guam prosecutors last month. In one instance, Greenberg billed the territory $4,000 for one day's travel for lobbying work that had nothing to do with Guam Superior Court, the agency that hired the lobbyist, Littlepage said. Guam Superior Court administrator Anthony Sanchez has been charged along with Abramoff and his former firm.
Less than a week after amending the charges March 11, Littlepage ended an eight-year career as an assistant attorney general in Guam and went into private practice, a switch he said he made for completely personal reasons. "It was time for a change," he said.
Greenberg said it was caught completely off guard by the charges. Littlepage said he didn't see a reason to notify the firm when he amended a 2006 complaint to charge the firm. "You usually don't notify criminals ahead of time," he said. ..... Littlepage said Greenberg also billed for work that it was not hired to do, including a totally unrelated open-skies initiative to lobby for additional flights by foreign carriers to the U.S. mainland through Guam.

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Greenberg has paid settlements to many of Abramoff's victims, and the firm has to face other controversies, including: A Philadelphia of counsel was convicted in a city hall corruption case there involving a waterfront development effort. In August 2006, Leonard N. Ross was sentenced to 2 1/2 years in prison by a federal judge. In 2006 the firm and shareholder Robert L. Grossman agreed to pay $925,000 in fines to settle allegations by federal banking regulators over legal work for Hamilton Bank, which collapsed in one of Miami's biggest bank frauds. The bank was seized by federal regulators, and its three top officers have since been convicted of fraud.
A month before that settlement, Jay Gordon, former chairman of the tax practice at Greenberg Traurig resigned from the New York Bar for taking more than $1.2 million in kickbacks on tax shelters he recommended to wealthy clients.

The firm has negotiated settlements with several of Abramoff's tribal clients. The firm cut a deal with the Alabama-Coushatta Tribe of Texas last year for an undisclosed amount of money. The tribe had sued Abramoff and several others in a federal court in Texas, claiming they took part in a scheme that shut down the tribe's casino. But Greenberg avoided being named in that case.

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Sure didn't hear much about this on the teevee news. No surprise there.