Legal Problems Remain for Norm Coleman

The recount in Minnesota's deadlocked Senate race has yet to begin, but Norm Coleman's legal problems aren't likely to fade anytime soon.

A few days before the election, a lawsuit filed in a Texas district court alleged that one of Coleman's biggest donors and closest friends, Nasser Kazeminy, had routed $75,000 to Coleman's wife, Laurie. The suit was filed against Kazeminy by Paul McKim, a self-described diehard Republican and CEO of Deep Marine Technologies, a deep sea energy exploration company in Houston in which Kazeminy is controlling shareholder.

A second lawsuit, filed by minority shareholders of DMT in Delaware a few days later, alleged that Kazeminy ordered the payments directly to Coleman. According to the lawsuit, Kazeminy told a confidential source: "We have to get some money to Senator Coleman" because the Senator "needs the money." When McKim and DMT's CFO objected, three payments of $25,000 were then sent to Coleman's wife at a Minneapolis-based insurance firm, the Hays Insurance Co, even though Hays did no work for DMT and is not a licensed insurance broker in Texas, according to the lawsuits. Laurie Coleman is best known as an actress who's lived in Los Angeles, not an insurance broker. "These fraudulent and grossly improper payments cost DMT at least $75,000 and brought absolutely no value to the company," the second lawsuit stated. "These payments expose the Company to serious potential criminal and civil liability."

McKim told the Minneapolis Star-Tribune that Kazeminy ordered him to funnel $100,000 of DMT's money to Coleman via Hays. "He said that the senator's wife worked there and she could get the money to him," McKim told the paper. "I was kind of stunned. I was really shocked he would come out and say that so nonchalantly." McKim approved three payments of $25,000 but blocked the fourth payment and was later removed as CEO.

Coleman, Kazeminy and Hays have all strongly denied the allegations; Coleman ran a last-minute TV ad accusing Democratic challenger Al Franken of launching "a vicious personal attack on my wife."

Nevertheless, if the money from Kazeminy was intended for Coleman, he was required to report it on his Senate personal disclosure form. Failure to do so would expose Coleman to the same sort of omissions that recently led to the conviction of Alaska Senator Ted Stevens by a federal grand jury in Washington. Furthermore, on his disclosure form Coleman listed his wife's income from Hays as "salary," meaning she was a formal employee, rather than an "independent contractor," the more flexible terminology that Hays used in its statement.

There are four possible scenarios at work here, with differing legal ramifications.

1. Coleman and his wife participated in Kazeminy's scheme and Laurie used her position at Hays to accept money from Kazeminy, which then went to her husband.

2. Laurie knew about the payments but Coleman did not.

3. Coleman knew about the payments and kept his wife in the dark.

4. The lawsuits are all lies and neither Coleman, his wife and Kazeminy did anything wrong.

The grassroots group, The Alliance for a Better Minnesota, sent letters to the Senate Ethics Committee and FBI office in Minneapolis today, asking them to investigates. The letter to the FBI, released at a press conference this afternoon, states:

If the allegations of the complaint are true, there is federal jurisdiction under the mail fraud, wire fraud and money laundering statutes. Further the alleged scheme was purportedly to provide an unlawful benefit to a United States Senator. Obviously, it is an important matter to determine whether Senator Coleman had knowledge of the alleged scheme received benefits from it, and properly disclosed and accounted for what might be a substantial gift.

Finally, there have been publishing reports that Senator Coleman or his family received undisclosed gifts of clothing airfare, and other items of value from Mr. Kazeminy. I do not know whether such gifts were made and, if they were, they were made at a time when Senator Coleman was obligated to disclose them. We request that these matters be investigated also.

Coleman is himself a former prosecutor, so he should be well-versed in the potential ramifications of these lawsuits. Even if he wins the Minnesota recount and returns to the US Senate, any victory could be short-lived.

UPDATE: Coleman released a statement this afternoon calling on the appropriate authorities to investigate the lawsuits. "I want to be clear that I not only welcome such an investigation, but I am eager to have it move forward immediately," Coleman said. "I reiterate that none of the allegations which attempt to besmirch my family's good name and reputation are true." He blamed the allegations, made by plaintiffs under oath, on his "political opponents."

It's worth noting, however, that the last two senators who landed in hot water for accepting gifts/cash from campaign donors, Bob Torricelli of New Jersey and Ted Stevens of Alaska, had much the same reaction when accused of crimes. In March 2002 Torricelli said he welcomed "the stepped-up federal investigation," that eventually put him in prison while last year Stevens said: "I continue to believe this investigation should proceed to its conclusion without any appearance that I have attempted to influence its outcome." What else are they supposed to say?

UPDATE II: I just sought the legal opinion of Andrew Birrell, one of the top criminal defense lawyers in Minneapolis, who's neutral in the Coleman-Franken race. "If these allegations are true, it might catch the interest of a federal prosecutor," Birrell says of the two lawsuits. "In my view the allegations and complaints could involve potential criminal issues that bare watching."

Comments (19)

1. "The recount in Minnesota's deadlocked Senate race has yet to begin, but Norm Coleman's legal problems aren't likely to fade anytime soon."

   Mr Berman, this seems to be a not-so-subtle hint that...

   you think Coleman is going to win the recount?

   Yes?

   Posted by Mask at 11/12/2008 @ 2:20pm

2. Warning - subject change!

   Does it not give one pause to consider that for one-tenth of the bail out, the US could move far in the direction of universal care?

   Obama health plan to cost $75 billion: analysis

   Posted by winyahn at 11/12/2008 @ 3:20pm

3. Warning - subject change! Does it not give one pause to consider that for one-tenth of the bail out, the US could move far in the direction of universal care? Obama health plan to cost $75 billion: analysis Posted by winyahn at 11/12/2008 @ 3:20pm

   The bailout is just good capitalism.

   Universal Healthcare is socialism!

   Posted by Cccomfo1 at 11/12/2008 @ 3:31pm

4. Posted by Cccomfo1 at 11/12/2008 @ 3:31pm

   Most right-wing bloggers (who still secretly support Dubya, maybe even the bail-out) will plead "libertarianism" and only attack Democrats for passing it.

   And (yes, heard it already) they'll blame HANK PAULSON for it....pretending Dubya never even knew of no "bail-out"!

   Posted by Mask at 11/12/2008 @ 4:04pm

5. << The bailout is just good capitalism. Universal Healthcare is socialism!>>

   The bailout is good for capitalists. Universal healthcare is just good for the society.

   Posted by Joe Kozak at 11/12/2008 @ 4:33pm

6. Posted by winyahn at 11/12/2008 @ 3:20pm | ignore this person | warn this person

   i say that if I THE TAXPAYING FOOL, am to have my tax money spent to assure that self paid buzillionaires don't end up in the gutter where the bastards belong...

   i want some ownership in the league of bailed out bastards, with commensurate oversight.

   and first time i hear of one of those tiffany cufflinked welfare queens charging ME for luxuray massages and caviar...

   Posted by ibbleblibble at 11/12/2008 @ 4:47pm

7. I WANT HEADS TO ROLL!!!!

   Posted by ibbleblibble at 11/12/2008 @ 4:48pm

8. Let's keep this on Coleman and his legal problems. There are lots of articles on the bailout. We may need to talk about bail for Coleman, that is the only link to this article.

   Posted by iver at 11/12/2008 @ 6:10pm

9. Actually universal healthcare is good for capitalists too. Ask the executives at GM, Ford, and Daimler who wrote a letter explaining how universal healthcare in Canada lowered their labor costs.

   If these executives cared about fiduciary duty they'd send the same letter to the US Congress.

   Posted by masussman at 11/12/2008 @ 7:46pm

10. If these executives cared about fiduciary duty they'd send the same letter to the US Congress.

    Posted by masussman at 11/12/2008

    You would have think they would have figured out that spreading the costs among a population would dramatically reduce health costs not only for their businesses but their employees as well. A friend surmised they wouldn't because they have too many associates in the health care industry. It sure took long enough to realize just how much they were being screwed over by these so-called "friends".

    Posted by yutsano at 11/12/2008 @ 8:06pm

11. This post is off the subject of this thread but I don't care.

    I came across an excellent article tonight that discusses the nature of the discourse in this country during the last 8 years, and contasts the transition to the Bush presidency 8 years ago with the transition to the Obama presidency now.

    I have already posted this on a different thread, and may post it on some others.

    It is written by a conservative, but I do not see how any of you on the left can refute it. I can only hope you will at least try to read it with an open mind and maybe think about what it says and what it describes about much of your own behavior.

    I can only hope.

    November 12, 2008 It's How You Play The Game By Sally Zelikovsky

    http://www.americanthinker.com/ 2008/11/ its_how_you_play_the_game.html

    Posted by sjchermak at 11/12/2008 @ 9:27pm

12. bonk!

    Posted by frosty zoom at 11/12/2008 @ 11:11pm

13. Regarding Zelikovsky...suggesting the left is like the right is just nonsense.Specifically, Rove's attacks on his own have no parallels on the left. Your sensibilities have been deadened. Pay attention for the next few years.

    Posted by wmsonvashon at 11/13/2008 @ 12:43am

14. Link doesn't work...

    In any case, I regret to inform you that the current crisis doesn't have anything to do with personal behavior. It is instead due almost completely to the greed and stupidity of an entire industry, the one that securitized any and all debt payment obligations.

    Their was a firestorm of demand created by the use of computing power to split mortgage bundles, as one example, into ever thinner slices and then repackage them as investments over and over again. The resulting fees and commissions were such a powerful inducement to supercharge the process that a multi-trillion dollar industry was created in a dozen years or so. Problem is that these paper geniuses didn't bother to design the data model or build the databases necessary to track the resulting shards of debt.

    All it took was a relatively small pile of foreclosures to bring down this house (these houses?) of cards. It eventually dawned on those who bought these toxic assets that there was no way to evaluate risk in a falling housing market. No one has any idea which "investment" contains which part of what set of mortgages. The domino effect has taken care of the rest as it usually does.

    It's time to get past the political on this. The crisis is not about a good side or a bad side, about liberals versus conservatives (pseudo or otherwise). There quite enough guilt to go around. Instead tt's about managing the global flow of money brought on by cheap networked computing power through carefully thought-out regulations. It will destroy us if we continue to persist in our ignorance. That's what it's doing right now.

    The so-called financial engineers (quants) who dreamed up these devices used models that were never meant to scale up as they were allowed to do. We're screwed unless we regulate.

    Posted by ncimon at 11/13/2008 @ 12:48am

15. Worm Coleman "welcomes the investigation" I'm glad, because it's coming whether he likes it or not. Old Worm's rally slogan should be...

    Bribes baby! Bribes!

    In re: Housing crisis

    I was just checking some reale estate listings in Akron, Ohio...Some of the prices are astonishing. Akron has about a 40% foreclosure rate.

    Posted by koroviev at 11/13/2008 @ 02:59am

16. some good discussion, finally.

    there are a few numbers we need to consider.

    the "instruments" are thirty times the number of mortgages they are based on.

    here's what happened. the financial institutions sold the suckers a bunch of magic beans, the derivatives. when the magic beans produced some profit, because of the housing bubble created the illusion of wealth, they too began to believe in the magic beans, and they too started to buy them too. end of housing bubble, end of magic beans. now they don't trust each other's balance sheets.

    another number to consider is that the toxic mortgages are mostly held by investors, not folks living in their own houses. by six to one. so spare me the tears

    Posted by emile duBois at 11/13/2008 @ 10:36am

17. I can't see how Franken could possibly have been in the loop to launch this "vicious attack on [Coleman's] wife." If so, it was a pretty weird vicious attack; there would be plenty of other vicious attack scenarios that would have been a lot more effective. It seems Norm's ethical lapses are piling up and getting bigger -- from suits to gifts to the wife to wads of cash for Norm. One has to hope that no matter the outcome of the election, the appropriate authorities will look into Coleman's possibly criminal dealings.

    Ari's & other stories about the Minnesota election (& other undecided contests) are featured on www.RealityChex.com

    Posted by marieburns at 11/13/2008 @ 11:13am

18. I'm not sure what the tears thing is about...

    The magic beans you refer to could easily serve as a metaphor for all that computing power. It really does cast a spell and give us the illusion of control. It's only an illusion because even a few simple transactions, replicated tens of thousands of times, can create a network of dynamic interactions that can't be modeled at all.

    In a world like the one we've built that courses through the world's computing networks, self-regulation is meaningless. Everything happens too quickly to be tweaked or tuned unless controls are put in before not after the fact. The situation is completely analogous to an engine who's centrifugal governor goes awry. The machinery can free-run till it rips itself apart.

    Do we want to continue down this path?

    Posted by ncimon at 11/13/2008 @ 11:27am

19. Do we want to continue down this path? Posted by ncimon at 11/13/2008 @ 11:27am | ignore this person | warn this person

    what do you suggest?

    Posted by emile duBois at 11/13/2008 @ 12:10pm