Federal Government Takes 2nd. Look at Morial's Records

Marc Morial, President of the National Urban League and former Mayor of New Orleans is once again, under the federal governemtent's microscope in New Orleans. The Times Picayune reported the following news story:

In a sign that federal investigators are still interested in former Mayor Marc Morial, U.S. Attorney Jim Letten's office recently issued a second grand jury subpoena to the law firm that hired Morial after he left City Hall, seeking files showing the work performed for Morial's clients.

Chuck Adams, the managing partner for Adams and Reese, where Morial worked after leaving the mayor's office in 2002, confirmed that the firm has been gathering documents at the government's request.

"Several years ago, a subpoena was issued for records of Mr. Morial, and we cooperated fully at that point," Adams said. "I know the government believes there were some additional things they need. They have issued another subpoena, and we're cooperating fully with that one as well."

About five years ago, federal investigators launched a series of interconnected probes involving contracts awarded during Morial's eight years in office. The inquiries have yielded several high-profile convictions, including that of Morial's uncle, Glenn Haydel, who admitted to stealing from the Regional Transit Authority, and Morial confidant Stan "Pampy" Barre, who confessed to helping skim more than $1 million from a City Hall energy-efficiency contract.

Given the focus on Morial's administration, there has long been speculation regarding the feds' interest in the former mayor, although Letten and other federal officials have consistently discouraged such talk.

'Very long memory'

Three and a half years ago, Letten's office subpoenaed billing records for Morial's clients during his stint at Adams and Reese. The significance of the new subpoena is unclear. Letten said in a brief interview that Justice Department guidelines bar him from confirming or denying the existence of a subpoena. He declined to discuss what direction the federal investigation is taking.

James Bernazzani, the FBI's special agent in charge, likewise could not comment directly. Last week, in response to a reporter's inquiry about whether the government is still examining Morial, Bernazzani offered a cryptic answer: "The FBI has a very long memory."

For his part, Morial's lawyer Pat Fanning said he "cannot imagine" why prosecutors would be subpoenaing legal records. He characterized the latest subpoena, which he said he was not aware of until receiving a call from a reporter, as another "bewildering" turn in a senseless investigation.

"I cannot imagine why they would be subpoenaing Adams and Reese's records," he said. "I can't imagine they would think those lawyers over there are going to participate in a deal to help Marc get some illegal money. That's a big business over there.

"My read on all this is that somebody either at the FBI or the IRS got a bug up their ass and said, 'Let's send a subpoena over there.' I never have been able to figure out what they're investigating about Marc. I guess it's just the government being the government."

Shaun Clarke, a defense lawyer and former federal prosecutor, said the latest subpoena "suggests they are looking into whether the former mayor received some sort of deferred payback in the form of legal work after he left office. It may be the government thinks that in return for having steered contracts, Morial received legal work after leaving office."

Brought clients to law firm

Morial's stint at Adams and Reese, which has offices in nine cities, began shortly after he left the mayor's office in May 2002 and lasted about a year. In May 2003, Morial left the firm, and New Orleans, to become president of the National Urban League, a post he still holds.

He was hired to serve "of counsel" to the firm, an arrangement that is particularly common when politicians or well-known lawyers join a firm. Such celebrities typically serve as "rainmakers" who help bring new business to the firm rather than litigate cases.

Adams of Adams and Reese said that under the terms of the deal, Morial was essentially an "independent contractor" to the firm. Any clients he brought to the firm would have paid Adams and Reese; Morial was paid a flat salary, Adams said. When the contract was announced, both sides said Morial would be required to put in at least 30 hours of work a week for the firm.

As an independent contractor, Morial would not have been eligible to share in the firm's profits or receive benefits such as health insurance and participation in the 401(k) plan. Adams said the firm's contract with Morial was vetted by the state ethics commission and has been used as a template for similar deals.

Adams said he's not sure whether the firm has already produced all the records sought by the government. Responding to the subpoena took "some effort," he said -- among other things, the firm had to seek permission from Morial's clients to turn files over to the government.

There was "not a lot of very sensitive stuff" in the files turned over to the government, Adams said.

Adams said he could not discuss Morial's client list.