Their Own Defense
D.C.'s Clubby Attorneys Keep Corporate Work in the Flock

By Carrie Johnson
Washington Post Staff Writer
Monday, June 18, 2007; D01

In the beginning, there was Bob.

Twenty years ago, lawyer Robert S. Bennett represented Boeing in a huge government bid-rigging investigation. Conflicts barred him from handling all the work himself, so he passed parts of the sprawling case to lawyers he knew from Washington's tight-knit legal community.

By the time the next round of corporate mega-scandals came along in the early 2000s, the lucrative referral system was firmly entrenched. Having secured Enron and HealthSouth as clients, Bennett handed million-dollar offshoot work to friends, proteges and onetime colleagues from the U.S. attorney's office.

Hidden to all but insiders, a web of financial and social ties connects the top Washington lawyers who represent corporate targets of government investigations. Generations of lawyers who attended the same school, worked in the same prosecutor's office, or belong to the same social clubs mingle again as they defend companies and executives.

Among members of this community, it's as much whom as what you know. In a city with a defense roster flush with former prosecutors, it's often the personal connection -- to such lawyers as Bennett, Brendan Sullivan, Gerald Feffer or Reid H. Weingarten -- that determines who gets high-profile, lucrative cases.

"I feel very loyal to people," Bennett said. A District institution in his own right, Bennett works in an office overlooking the Treasury building, steps away from the headquarters of the Justice Department's fraud section.

"There is sort of this old-boy-and-girl network of old U.S. attorneys, and I must say I tend to think of them for business," said Bennett, a former assistant prosecutor whose closest colleague, Carl Rauh, ran the U.S. attorney's office in 1979.

The cycle begins with a phone call:

A company is fielding subpoenas from the Justice Department, the Securities and Exchange Commission and Congress. With little or no experience in criminal law, a chief executive or in-house lawyer reaches out to a veteran defense attorney with a history of handling government investigations. The attorney develops a strategy. He compiles a roster of executives who are in the government's sights. Ethics rules prevent him from handling all their cases -- in fact, some potential conflicts of interest would prohibit other members of his firm from handling them. So he considers other lawyers he trusts and refers some clients to them. A positive recommendation from a well-known attorney can mean a lot to a business executive facing years of litigation and possible prison time.

"You're probably better equipped to go out and buy a 50-inch plasma TV than you are to pick a white-collar lawyer. You don't have the resources; you just don't," said Robert D. Luskin in a phone interview from Paris, where he and a half-dozen lawyers he recommended are handling a corruption case involving French energy giant Total.

Such recommendations can be worth tens of thousands of dollars or more. Top practitioners such as Bennett bill from $850 to $1,000 an hour. Michael Levy, who worked for Bennett early in his career, parlayed a recommendation from his former boss into the task of advising scores of former Enron employees as witnesses in the long-running probe of the Houston energy trader. When it became clear that the government would try to charge some of them with crimes, Levy in turn referred some of them to other lawyers.

Altogether, the once-in-a-generation case brought Levy's law firm more than $15 million, according to court records.

"Bob's thinking of me and referring that matter to me, in particular -- it's hard to describe just how grateful I am," said Levy, who later represented a slew of witnesses in the Fannie Mae accounting probe based on a referral from a law school classmate.

Sharing legal fees is rare in the criminal defense practice. Rather, the reward for the person doing the referring is a deep reservoir of goodwill and the unspoken expectation that the business tip will be reciprocated.

"Obviously it is both human nature and a good thing for people to help those who help them," said Washington lawyer Abbe D. Lowell, who defended former HealthSouth chief Richard M. Scrushy. "It's a rule of good human resources."

Putting in a good word for a colleague is all the more important in a city with a rising supply of former SEC and Justice Department lawyers becoming defense attorneys, each marketing himself or herself as an expert in regulatory investigations.

"I don't think there's enough business for everybody who practices white-collar," said Jamie Gorelick, a former top Justice Department official. "You can get the A team. Why go with the B team?"

Gorelick said that early in her career as a defense lawyer, she sometimes relied on colleagues who sent her cases involving female employees. But once Gorelick began forging her own relationships with executives and in-house lawyers at major corporations, she gained the clout to make referrals herself. "I became a lot more popular," she said dryly.

In Washington, where the U.S. attorney's office handles more violent crimes than corporate investigations, there are still relatively few lawyers with connections to industry and Wall Street. Sullivan and Feffer, both of Williams & Connolly, Bennett and a few others have attracted enough corporate business to become legal brand names. For others, it can take years of scraping together assignments and defending low-level executives before a Fannie Mae or a General Motors calls.

Weingarten, who has built an unusually high-profile practice mostly by defending individual executives, including real estate developer Douglas Jemal and former Tyco lawyer Mark Belnick, said former Justice Department colleagues and younger lawyers are increasingly hitting him up for business.

"If you're 56 and your practice has dried up and you have three kids in private school and a big mortgage, you're in panic," Weingarten said. "It happens with ex-prosecutors. The Enron days were elusive, and they're gone."

Deciding whether to send a case to a needy friend, a highly competent up-and-comer or a distant acquaintance with a stellar reputation can be a dilemma, Weingarten said. Each has to be able to handle the legal heavy lifting, but how much weight to give friendship is a delicate balancing act.

"It's the grease," he said. "It's how the business works."

Steven Salky, who has defended the finance chiefs at Fannie Mae and Freddie Mac, remembers that he agreed to have a hot dog and share some legal advice with an out-of-town attorney years ago. Later, the lawyer called him and offered him a role in what was then the biggest case in Salky's career.

"You get cases serendipitously," he said.

Just as often, though, it is nearly impossible to break into circles of relationships that are decades old, overwhelmingly white and male, and mostly closed to outsiders. Social networks are key to the process.

Former U.S. attorney Earl Silbert, a dean of the local white-collar legal group who handled part of the Watergate investigation, invites defense attorneys, former prosecutors and longtime family friends unconnected to the legal profession to his annual garden party around Memorial Day. Another batch of lawyers who worked together on the sprawling BCCI bank-fraud case in the early 1990s has for more than a dozen years made an annual ski pilgrimage to Aspen, Colo., a social event that turns to business talk on the lifts. Former Treasury official Robert Altman, who was acquitted of charges involving his role at BCCI, makes the journey to what's known as "the boys' ski trip," as well.

"I think it's more social, frankly, although without question, a substantial part of the conversation over dinner or on the ski lift is going to be about cases," said lawyer Hank Schuelke, a charter member of the traveling party, which expanded to include attorneys not involved in the Altman investigation. "I bet you every year there are referrals that arise."

Defense lawyer and former FBI general counsel Howard Shapiro noted, "It's useful to be in a number of these overlapping circles because they create opportunities in both directions." This interlocking world of referrals can work to the client's advantage, too, defense lawyers say -- for example, helping them encourage other government targets to resist pressure to plead guilty and implicate colleagues.

But former prosecutors say the situation raises questions about whether lawyers are fully protecting their clients' interests. Plato Cacheris, who has practiced law in the region for nearly 40 years, said lawyers can struggle while trying to please two masters: the client and the other lawyers who send them business. He declined to provide examples.

Friendship, in any case, extends only so far. When a client refuses to pay, not uncommon in the case of executives who have lost their jobs and corporate legal insurance policies, it is all right to complain to the lawyer who referred the case but not to hit him up for money.

"You apologize; what else can you do?" said William H. Jeffress Jr., who has represented Reliant Energy, the former chief executive at Rite Aid, and Vice President Cheney's former chief of staff I. Lewis "Scooter" Libby. "If the guy has trouble getting paid, he shouldn't call me," he added, laughing.

Bennett became the subject of a critical report last year that he allegedly assured prosecutors that lawyers for former KPMG partners would cooperate with the investigation. A federal judge ruled that the giant accounting firm had pressured its employees to go along with the government in an effort to save itself from being indicted.

In an interview, Bennett called the trade magazine's report "grossly unfair" and said his comments to the government were distorted. He added that the defense lawyers involved in the KPMG case, many of them his friends for decades, ultimately did not cooperate and are fighting criminal conspiracy charges. The most one can ask, Bennett said, is to not be misled.

"One advantage if you know the people and you've danced with them before is there's an element of trust there," he said. "I don't mind getting stabbed in the chest. I don't want to be stabbed in the back."