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Price of Political Life Is Increasingly Tallied in Lawyers' Fees

By Ruth Marcus
Washington Post Staff Writer
Monday, August 11, 1997; Page A06

In 1996, political consultants raked in the big bucks from political parties and politicians. In 1997, it is the lawyers who are benefiting.

Like the Watergate, Iran-contra and Whitewater investigations before it, the sprawling campaign finance scandal – with its international cast of characters and multi-pronged inquiries by the Justice Department and both houses of Congress – has been very lucrative for lawyers.

The legal bills from Debevoise & Plimpton, the Democratic National Committee's outside law firm, are already $8.5 million – nearly triple the amount of questionable contributions the party has returned to donors. Moreover, the DNC faces another $500,000 in legal bills – with more to come – from the lawyers for 17 current and former workers whose expenses it has agreed to pay.

"This really dwarfs most civil litigation," said DNC general counsel Joseph Sandler.

The Republican National Committee has spent far less – $300,000 to $400,000 – according to general counsel Michael Grebe, and has budgeted $500,000 for the inquiry.

In one graphic example of the lawyerization of political life, former RNC chairman Haley Barbour was accompanied by seven attorneys when he testified before the Senate Governmental Affairs Committee last month. They included his lawyers at Williams & Connolly and the RNC's outside lawyers from Foley & Lardner. Grebe estimated the cost for that appearance alone was $1,000 an hour – which doesn't account for his time, which he donates, or the costs of the RNC's in-house lawyers.

"To the layperson, it seems curious but it is sensible," Grebe said of Barbour's legal squad. "There were that many people there . . . to provide Haley with the sort of instant response he would need if something came up where he needed help with a particular document."

If modern political campaigns have become big-budget affairs, with their supporting cast of consultants and pollsters and media buyers, modern political scandals have become something of the same, with a big cast of white-collar criminal defense lawyers.

The current investigation may be the biggest of them all.

One administration official caught up relatively late in the fund-raising inquiry had to shop around for two weeks before finding a firm that was not "conflicted out" of representing him – the modern legal equivalent of waiting too long to ask a date to the prom. White House aide Bruce Lindsey is being represented by a Baltimore firm for the same reason.

The law firm of Perkins, Coie, which has a specialty in campaign finance law, represents seven clients who have already been interviewed by the Senate investigating committee and others who expect to be called, according to partner Robert F. Bauer, the lawyer for former DNC finance director Richard Sullivan.

"This is a very, very problematic political culture that we're currently functioning in, in which the price of participating in the political process is an almost endless demand for legal advice – and very steep fees to go along with it," Bauer said.

For the relatively small white-collar defense bar, having a client – especially a high-profile one – is a matter of pride. Even if the clients are slow to pay – or may not be able to pay at all – the lawyers still want to be in the mix.

"Particularly lawyers in the criminal defense bar – we like a good story. You want to be where the action is," said Robert Luskin, who is representing former White House aide Mark Middleton. "It's professional standing. All the other horses are out of the firehouse. Why are you still inside? There's clearly a cachet."

Luskin said he is trying to trim costs for his client by charging a reduced rate, writing off part of his fees, and taking money-saving steps such as attending depositions without an associate. "The object is to leave him standing at the end of this thing," he said.

Some observers say the legal costs of the fund-raising scandal are a symptom of the larger woes of an increasingly expensive legal system.

"We've set up a system in which to bring an accusation is to inflict the kind of costs that very few individuals or institutions can withstand and when we do that, we put the effective power in the system into the hands of those who can get an investigation going," said Manhattan Institute scholar Walter Olson, who has written extensively on the costs of litigation. "What I see here is a pattern that goes on, unfortunately, every day in the legal disputes of private life."

The DNC's fees are a case in point. The Democrats' $8.5 million bill includes more than $4 million in legal fees, even though Debevoise agreed to cut its normal billing rate by 15 percent. The bill also covers the firm's work on the "internal audit" the DNC conducted – but not the $235,000 the DNC paid the accounting firm of Ernst & Young for its work on the audit.

The Debevoise bill also includes more than $800,000 in copying costs, and almost $2 million for a computer scanning and document retrieval system that the DNC ultimately decided to stop using because it was too expensive to scan documents into it.

The DNC still owes Debevoise nearly $6 million – and it is incurring new bills at the rate of $200,000 per month. That is the "discounted" rate the party negotiated with Debevoise this spring after officials decided the legal debt had gotten out of hand and that it was going to move the massive "document production" effort in-house as a cost-saving measure.

The DNC is also paying $15,000 a month to another law firm – Dickstein Shapiro Morin & Oshinsky – for the services of Peter Kadzik, who is overseeing the in-house document review. "You can understand why we are a little bit suspicious that part of the purpose [of the GOP congressional investigations] here might be to impose some costs and burdens and harass and disrupt our operations a little bit," said DNC general counsel Sandler.

Some other lawyers involved in the inquiry look at the DNC's bills with a mixture of astonishment at the size, envy that they're not earning at that rate, and relief that they will have an even more egregious example to point to the next time a client questions a bill.

"It's like when some house in your neighborhood sells for an exorbitant amount of money," said one lawyer involved in the campaign finance case. "On the one hand you feel really bad for the suckers who bought it. On the other hand, you think, `Well, my house just went up in value.' "

DNC officials defended the costs, which far exceed original projections. "We weren't going to watch CNN and look for a lawyer with an 800 number," said one official. "We went out and hired one of the best firms in the country." Judah Best, the lead lawyer at Debevoise, did not return calls seeking comment on the fees.

But the campaign finance inquiry has not been good to the bank accounts of one set of lawyers – those who left the private sector to work on the issue for the White House and Congress.

Financial disclosure forms show that White House lawyers Lanny J. Davis made $724,719 at Patton Boggs and Lanny Breuer made $234,955 at Covington and Burling. Both earn around $100,000.

Michael J. Madigan, a partner at Akin, Gump, Strauss, Hauer & Feld before becoming the chief Republican counsel on the Senate Governmental Affairs Committee, reported making $634,214 last year, while his Democratic counterpart, Alan I. Baron, made $281,623 at Howrey & Simon and Foley, Hoag & Eliot. They're now getting $130,000.

Staff researchers Nathan Abse and Barbara J. Saffir contributed to this report.

© Copyright 1997 The Washington Post Company

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