Subject: Is this an issue?......
From: "Eric Schwerin" <[email-masked]>
To: "Hunter Biden" <[email-masked]>
Date: Thu, 17 Jun 2010 12:11:45 -0400

Gorelick's challenge: Backing BP
By: Abby Phillip
June 17, 2010 04:44 AM EDT

When BP executives filed into the West Wing on Wednesday morning to meet with President Barack Obama, they were joined by at least one familiar Washington hand: former Clinton administration Deputy Attorney General Jamie Gorelick, who signed on earlier this month to represent BP in congressional inquiries linked to the massive oil disaster in the Gulf of Mexico.

As one of the top lawyers in Washington and a former Justice Department official, it is no surprise that BP tapped Gorelick and her prominent law firm, WilmerHale, to do the nearly impossible: defend it against a deluge of legislative inquiries into the oil disaster. 

And her role is not very different from the one played by another prominent Democrat, former White House counsel Greg Craig, who is now representing Goldman Sachs — which until the oil spill was Washington’s favorite corporate pariah. 

“Speaking generally, the reliance on high-powered insiders results in corporations escaping penalties that are not as severe as they would otherwise face. The familiarity of the former prosecutor with the system enables them to think creatively about tricks to end up with resolutions that seem much more significant than they actually are,” said Robert Weissman, president of Public Citizen. 

Still, Gorelick could easily have been on the other side of the table as one of the Obama administration’s key players. Her role in the Clinton administration and her later service as a member of the 9/11 Commission made her a logical choice for attorney general. 

But Gorelick has had her own share of controversies, which are widely believed to be why she is representing high-profile clients rather than working for Obama. 

After leaving the Justice Department, Gorelick served for six years as vice chairwoman of Fannie Mae and got caught up in the mortgage agency’s accounting controversy. In 2005, two years after Gorelick left Fannie Mae, a federal investigation into the public-private mortgage company found that accountants had falsified signatures to erase $9 billion in losses from the books. Eliminating those losses resulted in Gorelick and four other Fannie Mae executives taking away six- and seven-figure bonuses in 1998. 

The federal investigation found that Gorelick was paid more than $25 million during her time at Fannie, and the huge compensation received by Fannie Mae executives later became a major issue in Congress. 

When it comes to defending BP, Weissman said that Gorelick should feel some responsibility to defend the ideals that led her into government, especially given the importance of her former position as the Justice Department’s second-ranking official.

“She’s made a lot of money in her life,” Weissman said. “Does she wake up and say, ‘I want to defend BP?’ She’s a free agent, but it’s a reasonable ethical question to ask yourself in that position. Presumably, you felt some public service instinct when you went into government. On one hand, you’re trading in on that; on the other hand, you’re betraying the ideals you believed in when you went into government in the first place.”

Since leaving Fannie Mae, Gorelick has been a partner at WilmerHale and head of its Defense, National Security and Government Contracts Practice Group. Even with a Democrat in power, she has not shied away from representing clients with interests at odds with the Obama administration. 
Earlier this year, student loan giant Sallie Mae made it a point to hire prominent Democrats, including Gorelick, and Democratic lobbyists from the Podesta Group to stop congressional legislation that would severely alter its role in the student loan industry. Their efforts were defeated, and the Obama administration succeeded in attaching a reform bill to the health care legislation that made the federal government the only lender to students — effectively cutting out private companies like Sallie. 

Gorelick has also represented Steve Rattner, a prominent Democratic fundraiser, against accusations by the Securities and Exchange Commission that he arranged a pay-to-play deal that secured a $100 million investment from the New York public pension fund for his private investment management firm. 

Despite the potential for ill will in Washington, Gorelick is only reprising a role for BP that she played in 2007, when the company was scrambling to deal with yet another oil spill, off the coast of Alaska. Then, the company was fined $50 million. 

This time, the price tag is bound to be much higher. And BP will face intense scrutiny from Congress in the coming months. 

Gorelick will have plenty of work — and detractors. 

“They took her into this meeting, and they still got nailed for $20 billion. I would say that she’s not yet earning her money,” said Kenneth Green, a resident scholar on energy and the environment at the American Enterprise Institute. “I think their concern now is to avoid criminal prosecution, so they’re trying to figure out how best to navigate the justice system to minimize their criminal risk.” 
Even if Gorelick has friends in the White House, Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, said her connections are unlikely to save BP from paying the greatest possible price for the spill. 

“Of course, it helps if she has a good relationship with someone in the White House, but it doesn’t mean they’re going to go soft on BP,” she said. “They’re the villain of the world. Even a good lawyer can only help you so much.”

Eric D. Schwerin
Rosemont Seneca Partners, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
[email-masked]
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