 |
Picture this: US Attorneys in Concord, NH put pressure on an employer who was footing huge legal bills for an ex-employee. Such payments, pointed out the US attorney, are clear evidence that the ex-employer has something to hide.
Less than two weeks ago, the WSJ wrote up this story. (March 28, 2006 WSJ, “U.S. Pressures Firms Not to Pay Staff Legal Fees”). Sadly, the case in point wasn’t the NH phone-jamming. The Republican National Committee continues to pay the legal bills for convicted felon James Tobin–up to at least $2.3 million so far. But the US Attorneys prosecuting Tobin ignored the clear implication that his million-dollar DC-lawyer defense team was protecting much bigger fish than Mr. Tobin. To quote Josh Marshall, “..the fact that the RNC is paying Tobin’s legal bills means either that he was acting under authorization or, frankly, that they’re trying to keep him quiet. There’s really no other reasonable explanation of this.” |
From that WSJ article:
The fee-payment issue has gained prominence in recent years, following a 2003 U.S. Justice Department memo that advised prosecutors to credit companies that cooperate with the government in an effort to avoid indictment. The memo, written by former Deputy Attorney General Larry Thompson, advises that a company’s willingness to advance legal fees to “culpable employees” may signal a lack of cooperation…
The Corporate Counsel blog has more on the subject:
“If you are convicted of crime and it damaged the company, the company shouldn’t pay your legal expenses,” says Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware….
The SEC lately has taken a harder line on companies paying employee legal fees. Last May, it fined Lucent Technologies $25 million for not cooperating in an investigation, partly citing the company’s legal-fee payments for employees. Lucent didn’t admit or deny wrongdoing.
In a recent speech, the SEC’s outgoing enforcement chief Stephen Cutler .. said paying employees’ legal fees insulates them from the consequences of wrongdoing. “If an individual can look to his/her employer to pay the freight,” said Mr. Cutler, “what good have we done?”
If still-stonewalling Ken Mehlman and Karl Rove want to promote clean elections, they should reconsider the message they’re sending their troops by footing James Tobin’s legal bills.