RE: A LAWYER IN TROUBLE

About a week ago, Tim posted a DMN article about two lobbyists hired by the Dallas lawfirm of Locke Liddell & Sapp getting into hot water because of dealings with Iran. One of those lobbyists, Roy Coffee, gave the News a “no comment,” which hurt his image. Now, after his client has signed a release, he can comment. And does so. At length. His 2,800-word statement is after the jump.

As many of you know, Dave DiStefano and I were the subjects of a recent front page story in the Dallas Morning News. This story was prompted by a brief mention in a prior Newsweek article. Due to my client’s right to attorney-client privilege, I was ethically bound not to discuss the representation of FN Aviation beyond our registration forms that indicated we were working on trade issues. After reading the story and hearing from several friends, 2 things became clear – the article left the impression that we were trying to make an end run around the Iran-Libyan Sanctions Act to obtain military parts for Iranian military aircraft and that my inability to comment helped fuel the speculation that we were working on something either unethical, illegal or both. Those assumptions are false. After the article was published, it became clear that “no comment” was not a viable option. I have since contacted our former client Nigel Winfield and he has signed a release that allows me to comment on all apects of our representation of FN Aviation. Surprisingly, only one reporter has called since the DMN article, but it became clear to me that this story had gotten around when I received 3 emails last night from friends in California saying they had read the story and to keep my head up. If it was making the rounds in California, I was pretty sure the same was true in Texas and Washington and decided I needed to attack this head on with friends both on the Hill and off. Feel free to send this to others if you get any questions because in this business all we have is our reputation and our record of success – both of which I am very proud of – so I want folks to know the true story if they have any questions. Since many of you are very busy, I’ve listed a few short facts and then included a longer narrative if you are interested in all the details.

Short Facts:

1. Everything that Dave and I did was filed legally and ethically and we are not the target of any investigation – just news media accounts who are out to unfairly tar Congressman Bob Ney in any way they can.

2. Neither of us were aware of Nigel Winfield’s felony tax convictions until the summer of 2003, well after we introduced him to Mr. Ney. The characterization in the Dallas Morning News that Fouad al-Zayat was an arms dealer was the first time we have ever heard that accusation. It has not been carried in other press reports.

3. While the press reports always tie in the Jack Abramoff probe, Abramoff was not involved in representing FN Aviation and not involved in this trip. In fact, neither Dave nor I have ever met Jack Abramoff.

4. Mr. Winfield has now signed a release to talk about our representation of FN Avaition in full detail.

5. Our efforts on behalf of FN Avaition were to pursue a humanitarian exemption to the Iran-Libyan Sanctions Act (ILSA)for spare parts for civilian commercial aircraft and possibly new civilian commercial aircraft. We were not attempting to make an end run around the sanctions act for military parts. Neither Dave nor I would ever have worked on such a proposition.

6. We approached Mr. Ney about FN’s request because he has a long history of interest in the Middle East – he lived in Iran before the revolution and later in Saudi Arabia. He has a passion for the Iranian people that is inspiring.

7. Our trip to London was at our clients request. It was a very quick 3-day trip to London and back with a series of meetings at FN Aviation’s London offices. We flew through the night on Thursday night arriving Friday morning and returned on Sunday.

8. Before we could move forward with a Congressional strategy, the U.S. invaded Iraq and the decision was made to wait until the war was over and conditions were more favorable in Congress. Before that happened, FN Aviation broke up their company so we never pursued the humanitarian exemption.

9. Other than traveling to London to meet with our clients, we never asked Mr. Ney to do anything in his official capacity. Reports in Newsweek that we asked him to call Secretary of State Colin Powell are innacurate. The Administration’s view of Iran – “Axis of Evil” – was well known and without first securing Congressional support, we knew that there was no way to get the Administration to grant an exemption. While Mr. Ney has spoken repeatedly with Administration officials regarding Iran through the years, he has made it clear to the press that he never took any action with regards to FN Aviation.

10. Locke Liddell and our clients have been terrific during this time. Most of them are not complete strangers to a press that casts as negative a light as possible on certain stories. My inability to comment on our client’s actions in detail only helped to produce a much more negative piece than would have been written otherwise.

Longer Narrative (much longer):

FN Aviation through Nigel Winfield approached Dave and I in January of 2003. FN Aviation was a Middle East based company with offices in London and Cyprus. It’s business was the sale and leasing of aircraft for both commercial use and private jets for wealthy clients. Nigel told us his partner, Fouad al-Zayat, was a former Middle East representative for Boeing for more than 20 years. They were interested in obtaining a humanitarian exemption to the Iran-Libyan Sanctions Act for spare parts for civilian commercial aircraft and possibly the sale of commercial aircraft. Iran Air’s fleet is mostly made up of US built planes – generally Boeing planes. Since the sanctions act, Iran Air was only able to obtain secondary spare parts or spare parts on the black market, but were not allowed to buy spare parts directly from Boeing or any other US manufacturer. With a now aging fleet, Iran Air was in critical shape. In the 2 years from 2000 to 2002, Iran Air had experienced 6 aircraft accidents killing more than 200 civilians. We then approached Chairman Bob Ney of Ohio, Dave’s former boss. Mr. Ney lived in Iran before the Iranian Revolution teaching english, then lived in Saudi Arabia and is the only Congressman that speaks Farsi. He has maintained a long interest in US-Iran policy. In fact, after the Clinton Administration approved an exemption for civil aviation in Iran in 1995, Chairman Ney wrote to President Clinton in 1999 asking that the Office of Foreign Asset Control (OFAC) grant a license for Boeing to work with Iran Air. Even though President Clinton had recognized the need for an exemption, from what we can tell, OFAC never granted a license to Boeing or any other US company to work with Iran Air. From a “Dear Colleague” letter to other Members of Congress dated December 22, 1999, Mr. Ney writes, “A few weeks ago, the Administration agreed to allow Boeing Co. to provide Iran’s national airline with parts to ensure the safety of its Boeing 747 passenger aircraft. Under Section 560.528 (Aircraft Safety) of the embargo on Iran, there is an exception for the export goods and services to ensure the safety of civil aviation in general, and the safe operation of U.S. commercial passenger aircraft. I commend the decision of the Administration to ensure the safety of all travelers and urge that the license be issued as soon as possible so the upgrade process may begin.” (the italics were in Mr. Ney’s original letter) From what we can tell, no license was ever granted. And as you can tell, this exact issue has been of interest to Chairman Ney for many years.

The reason our relationship with FN Aviation has come into focus is because of the ongoing probe into the dealings of former lobbyist Jack Abramoff. Among other things, press reports have focused on trips that Abramoff took with lawmakers, including several overseas trips. In February of 2003, at the request of our client, we took Mr. Ney to London to meet with Nigel and Fouad. We left on a Thursday night arriving Friday morning and had a series of meetings at the FN Aviation offices in London that day. We had 2 more meetings on Saturday and left Sunday – a very quick trip. After strategizing with our clients, the decision was to try to secure strong Congressional support for a humanitarian exemption in hopes that this would persuade the Bush Administration to grant an exemption. As you can see, this was no end run around the sanctions – we were going to make a frontal assault emphasizing the humanitarian aspect as well as the commercial aspect – Boeing at the time was getting killed by the French company Airbus and laying people off around the country which also resulted in many Boeing suppliers laying people off in many Congressional districts. In addition, through our contacts in the Administration, on the Hill and in the Diplomatic community, we were aware of behind the scenes meetings between officials of Iran and the US in the run up to and during the invasion of Afghanistan. Our understanding was the Iranians were being very helpful and there may be an opportunity for a breakthrough with the Bush Administration. However, in March the US invaded Iraq and the decision was made to shelve the plan until the war was over and conditions stabilized. By the summer of 2003, before we could revisit the issue, Foaud and Nigel broke their company up. It was during this time that we first learned of Nigel’s criminal convictions for tax evasion in the mid 1980’s.

Several points to be made. Obviously, we made a mistake in not doing a background check on our clients. Before this situation, I had never experienced any problems with clients and had never done a background check. That will change. Would we have taken on FN Aviation if we had known of Nigel’s criminal record? Honestly, that is a hypothetical I can’t answer. I know we would have asked many more questions, done some more checking, etc. but if we had decided to continue, we would never have introduced him to any Member of Congress without providing them with that information first, and allowing them to make the decision as to whether they wanted to continue with the meeting. Second, we learned a lot more about Nigel’s past in the Dallas Morning News article than we had ever heard or read before. We were only aware of a conviction for tax evasion in the mid 80’s, but it sounds like there was much more. Third, with regards to Foaud, while the press likes to emphazise his gambling to jazz up their stories, that is a non-issue to me. Gambling is legal in Great Britain, the man is enormously wealthy and how he spends his money is his business. The News article referenced that he made his fortune in arms deals. That was the first time either of us had heard that and I have no way of knowing if that is true. Fourth, everything about this trip was legal and ethical. The reason the press knows about the trip is because all the proper filings were completed and filed appropriately. While the press has focused on the backgrounds of our clients and the intrigue with Iran, there has never been a question about the appropriateness of the trip itself. Finally, while each press article and the blogs try to tie us to Jack Abramoff in guilt by association articles, he never worked on this client and neither Dave nor I have ever met Jack Abramoff (Thankfully).

Now a few other details. Back in the spring or summer of 2002, a good friend of mine from law school, Darius Baghai, had just returned from visiting relatives in Iran for the first time since his family left before the revolution. He spoke with me about how the economy of Iran was humming and that the US was missing out because we were the only country imposing sanctions on Iran since 1979. In addition, he said the Iranian people love everything about America, would like to normalize relations with America and that the Mullah’s were using the sanctions as a way to keep hammering us as the great Satan. He felt strongly that the Iranian people knew better. In any of President Bush’s comments on Iran, he always makes a point to speak directly to the Iranian people about his hopes that they will someday enjoy greater freedom – as he did tonight in the State of the Union. From this, I took Darius into visit with Mr. Ney. What was to be a 15 minute meeting became a 1 1/2 hour meeting as they spoke passionately about their hopes for the Iranian people. They also spoke in Farsi a great deal – I’m sure talking smack about me. From that meeting, Darius, Dave and I began to work with Trita Parsi, another Iranian-American to try to form a political action committee of Iranian-Americans to pursue a strategy of normalization of relations between the two countries. My belief is the best way to loosen the Mullah’s grip on the people of Iran is through a free market system. If we believe that works for China and Vietnam, I do not understand why we don’t believe it will work with Iran. The President even acknowledged last year that due to the sanctions, we have very little control over Iranian decisions and that is why we are leaning so hard on our European allies during this current crisis over nuclear fuel/weapons. The 4 of us worked very hard for about 9 months to form this committee, but we found that most Iranians do not want to get involved in politics because of their experiences in Iran during and after the revolution. They have come to this country to make a better life for themselves and their children and don’t want to get involved. Most have succeeded as many of the Iranian-Americans I have met have been very successful professionals. The few Iranians that are involved in politics seem to be strong supporters of the Shah who advocate the overthrow of the current government and the installation of the Shah’s son as a new Monarch. The Shah’s son lives in surburban Virginia and actively supports these groups. From everything I can tell, this is a pipe dream. In fact, if you google my name, after all the articles on this trip and Sheriff Roy Coffee from Bonanza and the blogs ripping me, you will see an article from November of 2002 where Dave and I addressed the National Iranian American Council (NAIC) on getting involved in the political process – 2 months before we had heard or met Nigel Winfield and FN Aviation. I include all of this so you know that taking on this client was not just a commercial exercise for us. We believed that a humanitarian exemption was warranted, and our hope was that if we were successful, it may lead to further relations between the countries. Quite frankly, we were and still are pretty passionate about it and proud of what we tried to do for FN Aviation. Unfortunately, no breakthrough came, and the more moderate President Khatami has been replaced by the firebrand President Ahmadinejad and the Administration is quite right not to deal with him directly.

If you’ve read this far, thanks for your time. A couple of final notes. Locke Liddell has been terrific through all of this and very supportive. In addition, we have proactively spoken to our clients and they understand that in these feeding frenzies like the Abramoff scandal, a lot is written that is not accurate and we appreciate the fact that all of our clients have stood by us. In addition, under much more trying times than Dave and I are experiencing, Mr. Ney and his staff have been absolutely great. Finally, thanks for the calls and emails, but let me assure you, Dave and I are fine – we believe in what we did on behalf of FN Aviation and are proud of what we have done in Washington to build a great base of clients and to open the first office in DC for a great firm like Locke Liddell with our third partner, Phil Rivers.

Now one final very ironic note from today – Senate Banking Committee Chairman Richard Shelby announced today that as part of his legislative schedule for this year, the Banking Committee will need to take up the Iran-Libyan Sanctions Act (ILSA) which is set to expire at the end of 2006. Because the sanctions no longer apply to Libya, the Act will have to be changed. Eighteen months ago, who among us would have bet that Libya would no longer be a terrorist nation and no longer subject to ILSA. These things can happen. If you have any further questions, don’t hesitate to ask.

Roy

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