TRUMP AND THE MORGAN LEWIS MESS — CONTINUED

On March 7, 2016, Sheri Dillon and William Nelson put their firm, Morgan, Lewis & Bcckius, on a slippery slope with their letter purporting to justify Trump’s refusal to release his tax returns. It’s been downhill ever since. Confirming that the IRS had closed its audits through 2008, they reinforced Trump’s “under audit” excuse for not releasing any returns at all. His returns for 2009 forward, they said, “are continuations of prior, closed examinations.” On January 22, Kellyanne Conway confirmed that Trump was never going to produce those returns. Period.

As I wrote on April 12, 2017, the descent continued with the Trump/Dillon press conference on January 11. “President-elect Trump wants there to be no doubt in the minds of the American public that he is completely isolating himself from his business interests,” Dillon explained amid a mountain of paper. Some of the documents appeared to be blank and some of the folders lacked labels. Why the esteemed Fred Fielding lent his name to the cause is a mystery. Substantively, attorneys knew immediately that the Dillon/Nelson/Fielding/Morgan Lewis plan was a joke.

Farce Turns to Tragedy

To recap the failures of the plan itself, Dillon said that Trump would put his business holdings in a revocable trust—meaningless window dressing. He would continue to own and benefit from every Trump asset in his portfolio. And he wasn’t selling any of the most valuable ones involving the family business. Still, she explained, no one should worry because his sons, Eric and Donald Jr., would run the company.

Six weeks later, Eric Trump told Forbes that he would continue to update his father on the family business: “’Yeah, on the bottom line, profitability reports and stuff like that, but you know, that’s about it.’ How often will those reports be, every quarter? ‘Depending, yeah, depending.’ Could be more, could be less? ‘Yeah, probably quarterly.’ One thing is clear: ‘My father and I are very close. I talk to him a lot. We’re pretty inseparable.’”

Meanwhile, Donald Jr. has been campaigning for Montana GOP congressional candidate Greg Gianforte—who stands accused of assaulting a reporter.

Fallout

Shortly after Dillon’s press conference, H. Scott Wallace, co-chair of the Wallace Global Fund, sent a blistering termination letter to Morgan Lewis chair Jami Wintz McKeon. My previous post reviewed it in detail. Suffice it to say that Wallace was not pleased with Morgan Lewis’ willingness to help Trump sell democracy in return for billable hours.

“We believe that the legal advice given to [Trump] by your partner Sheri Dillon, in the January 11 press conference and background ‘white paper,’ is not just simplistic and ill-founded,” Wallace wrote, “but that it empowers and even encourages impeachable offenses and undetectable conflicts of interest by America’s highest official, and thus is an unprecedented invitation to corruption and an assault on our democracy.”

“It is painfully obvious that Trump is using his office for personal gain,” Wallace continued. “And Morgan Lewis is enabling and legitimizing this… Americans deserve a president of undivided loyalty. Your firm has denied them that.”

From Mar-a-Lago initiation fees to the travel ban to China trademarks, Wallace observed that “the ethical carnage is mounting.” It still is.

Meanwhile, the Kushner family was trading on Trump ties to woo Chinese investors “into wealthy luxury developments” with $500,000 “investor visas.” So it’s not just the presidency that’s for sale, it’s America itself.

Bottoming Out

On May 12, the White House released another Dillon/Nelson letter that was supposed to take the heat off Trump’s financial connections to Russia. But it became fodder for another round of jokes—just as Dillon’s January 11 press conference had.

Then on May 20, the Associated Press reported that Dillon “initially wanted [Trump] to submit an updated financial disclosure without certifying the information as true” because he was filing voluntarily this year. After discussions with the director of the Office of Government Ethics, Walter Shaub, Dillon evidently agreed that Trump would sign and file by mid-June. Let’s see if that happens.

On May 24, The New York Times reported on another January 11 promise that Dillon made and Trump isn’t keeping: to give the U.S. Treasury all profits from Trump hotels and similar businesses derived from foreign governments. In response to a House Oversight Committee request, the Trump Organization produced a slick brochure explaining why it was impractical to comply “fully and completely” with that promise.

Here is my next prediction: In corporate boardrooms and law school campuses, the damage to the Morgan Lewis brand will continue. Business leaders will act on the belief that preserving critical norms of democracy should outweigh a firm’s desire to do almost anything for a client’s billable hour. But the most discerning of general counsels will leave Morgan Lewis for an entirely different reason that has nothing to do with Trump, politics, the appropriate limits of a lawyer’s role as client advocate, or every attorney’s sworn duty to protect the U.S. Constitution. Substantively, the Trump conflicts plan and the related disasters that have followed constitute embarrassingly bad lawyering.

One more note of interest to leaders of big law firms obsessed with growth for the sake of growth: Sheri Dillon and William Nelson are recent lateral hires. Both were at Bingham McCutchen until a few months before it collapsed in 2014.

TRUMP AND THE MORGAN LEWIS MESS

On January 11, 2017, Sheri Dillon and Fred Fielding sullied themselves and imperiled the reputation of their firm, Morgan, Lewis & Bockius. They shilled for a plainly insufficient plan to deal with Donald Trump’s massive business conflicts of interest. In doing so, they traversed far beyond the principle that an attorney should advocate zealously on a client’s behalf. I predicted that Dillon, Fielding, and the firm would regret their roles in the charade. If they haven’t seen the light by now, they never will.

Lawyers Without Boundaries; Clients Without Shame

When it comes to dealing with Trump, ignorance of his tendencies affords his attorneys no excuse. Throughout his life, he has destroyed reputations whenever it helped him fulfill an agenda item of the moment. Once his allies outlive their usefulness — or whenever Trump needs a scapegoat — they become expendable. Remember the rumors about cabinet positions for Chris Christie, Rudy Giuliani, and Newt Gingrich? And how quickly Mike Flynn went from loyal patriot to dishonest traitor!

Trump’s January 11, 2017 press conference made for great theater as he claimed yet another victim. “President-elect Trump wants there to be no doubt in the minds of the American public that he is completely isolating himself from his business interests,” Dillon explained amid a mountain of paper. Some of the documents appeared to be blank and some of the folders lacked labels. Substantively, attorneys knew immediately that the Dillon/Fielding/Morgan Lewis plan was a joke. Every day, it becomes less humorous.

Trump Still Owns Everything

Dillon assured the public that Trump would put his business holdings in a revocable trust — meaningless window dressing. She didn’t mention he still owned and benefited from every Trump asset in his portfolio. And he wasn’t selling any of his most valuable ones involving the family business. Still, she explained, no one should worry because his sons, Eric and Don Jr., would run the company. Trump even joked that he’d return to management in eight years, hoping that they’d done a good job and saying that he’d fire them if they didn’t.

Har-dee-har-har-har.

Six weeks later, Eric Trump told Forbes that he would continue to update his father on the family business: “’Yeah, on the bottom line, profitability reports and stuff like that, but you know, that’s about it.’ How often will those reports be, every quarter? ‘Depending, yeah, depending.’ Could be more, could be less? ‘Yeah, probably quarterly.’ One thing is clear: ‘My father and I are very close. I talk to him a lot. We’re pretty inseparable.’”

It Gets Worse

On April 4, ProPublica reported — and Trump Organization attorney Alan Garten confirmed — that a February 10 version of the revocable trust agreement states: “The Trustees shall distribute net income or principal to Donald J. Trump at his request, as the Trustees deem necessary for his maintenance, support or uninsured medical expenses, or as the Trustees otherwise deem appropriate.”

The Trustees are Don Jr. and Allen Weisselberg, who started his career working for Donald Trump’s father Fred in the 1970s. In other words, Trump can watch his wealth grow and get at his money whenever he wants.

Fallout

At the time of the press conference, self-proclaimed law firm public relations experts urged that mere proximity to Trump would make Morgan Lewis a client magnet. At least one prominent client went the other way. The co-chair of the Wallace Global Fund expressed outrage over the firm’s willingness to aid and abet Trump’s undermining of democracy.

On March 28, H. Scott Wallace sent a blistering termination letter to Morgan Lewis chair Jami Wintz McKeon: “We believe that the legal advice given to [Trump] by your partner Sheri Dillon, in the January 11 press conference and background ‘white paper,’ is not just simplistic and ill-founded, but that it empowers and even encourages impeachable offenses and undetectable conflicts of interest by America’s highest official, and thus is an unprecedented invitation to corruption and an assault on our democracy.”

Wallace, a Villanova Law grad, walked McKeon through the patent defects in the Dillon/Fielding/Morgan Lewis conflicts plan. In great detail, he covered issues that I outlined in my three-part series on the plan’s inadequacies. And he added a few zingers:

  • “Ms. Dillon has legitimized a complete non-solution to Trump’s manifold conflicts of interest….”
  • “She adds a few window-dressing safeguards….”
  • “She absolutely denied the existence of any Emoluments Clause problems….”
  • “The result is an illusion of protection against the President using his office for personal gain. Trump’s entire life has been devoted to personal gain, not a moment to public service.”

Presidential corruption matters, and the Dillon/Fielding/Morgan Lewis plan facilitates it. As Wallace observed, “the ethical carnage is mounting”:

  • Just days after Trump reaffirmed the “one China” policy, it granted 38 new Trump trademarks.
  • Trump’s newly hired director of diplomatic sales at his DC hotel has enjoyed tremendous success in foreign bookings, including Azerbaijan, Bahrain, and Kuwait.
  • Trump’s bans on Muslin-majority nations excluded countries where Trump has business interests.
  • China’s government-owned bank is the single largest tenant in Trump Tower and the lease will come up for renewal during Trump’s presidency.
  • Since Trump’s election, initiation fees at Mar-a-Lago have doubled to $200,000.

Wallace could have added that Trump has yet to make good on Dillon’s promise to donate all Trump hotel profits from foreign governments to the U.S. Treasury. And his organization’s post-election success in registering Trump trademarks around the world has been phenomenal.

“It is painfully obvious that Trump is using his office for personal gain,” Wallace continued. “And Morgan Lewis is enabling and legitimizing this… Americans deserve a president of undivided loyalty. Your firm has denied them that.”

What’s Next? Nothing Good for Morgan Lewis

Here is my next prediction: more clients will fire Morgan Lewis. Corporate boards and CEOs will shun a firm willing to tolerate Dillon’s unprofessional performance on January 11. They’ll act on their belief that preserving critical norms of democracy should outweigh a firm’s desire to do almost anything for a client’s billable hour.

But the most discerning of general counsels will leave Morgan Lewis for an entirely different reason that has nothing to do with Trump, politics, the appropriate limits of a lawyer’s role as client advocate, or every attorney’s sworn duty to protect the U.S. Constitution. Substantively, the Trump conflicts plan is embarrassingly bad lawyering.