Wednesday, April 19, 2017

Columbia University's Boies Schiller Flexner and U.S. Senator Gillibrand Connection

Should Boies Schiller Flexner managing partner and Gillibrand campaign contributor also chair the tax-exempt Columbia University board of trustees?


Boies Schiller and Flexner [BSF] announced today that partner Kirsten Gillibrand was elected…She raised some $3 million in campaign contributions, including substantial support from colleagues at BSF…The Firm issued the following statement: `We are extremely proud of our partner…’ Ms. Gillibrand…is on leave while she serves in Washington.’…”

--from a Nov. 8, 2006 Boies Schiller Flexner [BSF] press release 

“Jonathan is a co-founder and managing partner of Boies Schiller Flexner…He has served as lead counsel…for clients including Barclays, Goldman Sachs, the New York Yankees, and the fantasy sports website DraftKings….He has represented global corporations based in the United States, France, the Netherlands, Germany, Kuwait, and Singapore… Jonathan serves as Chair of Columbia University’s Board of Trustees...”

--from the Boies Schiller Flexner website

“…Endowment fund earnings are exempt from federal income tax….Changing the tax treatment of college and university endowments…could be modified to increase federal revenues...”

--from a Dec. 2015 Congressional Research Services Report

Columbia University’s Boies Schiller Flexner and U.S. Senator Gillibrand Connection

Most people in the United States don’t think private U.S. universities owning valuable real estate property and billions of dollars’ worth of corporate stocks and bonds in their endowment portfolio—like Columbia University, Harvard University and NYU—should be exempt from paying their fair share of federal, state and city corporate and property taxes.

Yet since being named by former Democratic New York Governor David Paterson in 2009 to replace Hillary Clinton as one of New York State’s representatives in the U.S. Senate, a former Boies Schiller Flexner [BSF] corporate law firm partner, Kirsten Gillibrand, has apparently not been eager to introduce much federal legislation to require private U.S. universities like Columbia University to pay their fair share of federal taxes.

One reason might be because the current chair of tax-exempt Columbia University’s board of trustees, Jonathan Schiller, is, coincidentally, a co-founder and  managing partner of the same BSF law firm in which U.S. Senator Gillibrand previously worked, prior to being first elected in 2006 to just represent New York’s 20thCongressional District in the U.S. House of Representatives.

Also coincidentally, prior to former New York Governor Paterson naming former BSF partner Gillibrand to fill the U.S. Senate seat vacated by Hillary Clinton, the election campaign fund of Paterson was given two campaign contributions, totaling $50,000, by two BSF law firm partners on Dec. 23, 2008. As Zack Lowe observed in an article, titled “Former Boies Schiller Partner Will Fill Clinton Senate Seat,” that appeared in the Jan. 23, 2009 issue of The American Lawyer:

“Kirsten Gillibrand, the upstate Democratic congresswoman and former Boies Schiller Flexner partner…will replace Hillary Rodham Clinton in the U.S. Senate…The Village Voice…posted a nice bio of Gillibrand, outlining her father’s ties to New York’s most powerful Republicans…Gillibrand is a favorite of the National Rifle Association…

“The most interesting tidbit in the Voice piece for our purposes is the fact that David Boies (name partner at Boies Schiller Flexner) contributed $25,000 to Paterson’s campaign fund on Dec. 23, 2008. Boies’s son, Christopher, also a partner at the firm, wrote a $25,000 check to the governor’s campaign the same day…”

The law firm of Columbia University Board of Trustees Chair Schiller, not surprisingly, has also been the number one source of campaign contributions to former BSF partner-turned U.S. Representative/U.S. Senator Gillibrand since she began her federal office-seeking career, according to the Center for Responsive Politics’ Open Secrets website data. Over $668,000 in campaign contributions from individuals employed at Schiller’s BSF law firm have been accepted by Gillibrand’s election campaign committees during her political career.

Schiller, for example, contributed over $9,500 to Gillibrand’s campaign committee between Jan. 30, 2009 and March 3, 2011; and, on May 12, 2014, Schiller made a $5,000 campaign contribution to Gillibrand’s Off The Sidelines PAC. The Open Secrets website data also indicates that during the 2015-2016 campaign cycle Gillibrand’s Off The Sidelines PAC was given $27,800 by individuals employed at Schiller’s law firm, making BSF the 5th-largest source of money for Gillibrand’s Off The Sidelines PAC during the 2015-2016 period.

In addition to contributing funds to Gillibrand’s campaign committee and Off The Sidelines PAC, Columbia University’s board of trustees chair also contributed over $67,000 to the politically partisan campaign committees of other Democratic Party politicians’ campaigns (including over $7,300 to Hillary Clinton’s campaign committees and over $11,00 to U.S. Senator Chuck Schumer’s campaign committees) and over $152,000 to the Democratic Senatorial Campaign Committee between Apr. 30, 2001 and June 1, 2016 (including a $33,400 campaign contribution on March 23, 2015). Schiller also made a $10,000 campaign contribution to Minnesota’s Democratic Farmer Labor Party state organization on Oct. 2, 2014.

BSF Chairman David Boies, who co-founded the BSF law firm with Schiller, has, however, contributed much more money than Schiller to fund the election campaigns of Democratic Party politicians on both the federal and state level between 1999 and 2017, according to the Open Secrets website’s data. Between Oct. 28, 2004 and Oct. 25, 2016, the BSF chairman and co-founder made 49 campaign contributions, totalling over $388,000, to help bankroll the Democratic State Party organizations in 34 different states.

On Sept. 13, 2016, for example, Boies gave a separate $10,000 campaign contribution to the state Democratic Party organization in each of the following states: Maine, Missouri, Rhode Island, New Jersey, Texas, New Mexico, Virginia, Colorado, Florida, Mississippi, Wisconsin, Oregon, West Virginia, Wyoming, Louisiana, Massachusetts, Georgia, Nevada, Montana, South Dakota, Pennsylvania, Michigan, Minnesota, North Carolina, Delaware, Tennessee and Alaska; and on that same day, the state Democratic Party organization in Kentucky was given two campaign contributions, totaling $20,000, by Schiller’s law firm business partner.

The following month, Boies also gave a $10,000  campaign contribution to Iowa’s state Democratic Party organization on Oct. 11, 2016 and his second 2016 campaign contribution of $10,000 to Nevada’s state Democratic Party organization on Oct. 26, 2016. In addition, on June 30, 2016 the Democratic Committee of New York State was also given a $10,000 campaign contribution by the chairman and co-founder of the Columbia University-linked BSF.

On the national level, Boies gave five campaign contributions, totaling $278,000, to the Democratic National Committee [DNC] Services Corporation between June 22, 2011 and Sept. 26, 2016; and, between Dec. 31, 2007 and March 23, 2015, over $183,000 was contributed by Schiller’s BSF co-founder to the Democratic Party’s Senatorial Campaign Committee. In addition, Boies gave a $500,000 campaign contribution to the House Majority PAC Super-PAC on Oct. 24, 2013 and two campaign contributions, totalling another $500,000 to the Senate Majority Super PAC, between Oct. 28, 2013 and Oct. 25, 2016.

Over $232,000 in direct money contributions to the individual campaign committees of at least 44 Democratic Party politicians other than former BSF law firm partner Gillibrand have also been made by Schiller’s BSF business partner between 1999 and 2017 (including over $13,000 to Rep. Charles Rangel’s campaign committee, over $13,000 to Rep. Nita Lowey’s campaign committee, over $11,000 to U.S. Senator Al Franken and over $6,000 to U.S. Senator Chuck Schumer).

According to David A. Kaplan’s Oct. 20, 2010Fortune magazine article, Schiller and Boies’s BSF firm of 240 lawyers “revolutionized the economics of corporate law practice” and, coincidentally, had “the nation’s third-highest profits per equity partner-$2.9 million” among large corporate law firms. The same article also noted that “Boies Schiller…has regular corporate clients to maintain a stream of revenue,” but Schiller and Boies’ firm also “imitates investment banks by charging flat fees,” so that a firm client’s “signing bonus, for example, can be $10 million -- regardless of how much lawyer time actually gets put in.” The Fortune magazine article also indicated that in 2010, about half of BSF’s revenue “came from flat fees and contingency arrangements,” while BSF’s regular corporate clients were apparently being billed for a BSF lawyer’s time at a $960 per hour rate in 2010.

One reason Boies has apparently been able to contribute so much money in recent years to bankroll the election campaigns of Democratic Party politicians like former BSF law firm partner Gillibrand is that BSF apparently was paid a $150 million fee “on top of an annual $5 million fee” in 2008 for representing American Express in a legal case; and “a law firm source” told Fortunemagazine that Boies was personally taking “north of $10 million” annually from his legal work, thus “probably making him the highest-paid lawyer in the country” in 2010.

Besides providing legal services for American Express, Columbia Board of Trustees Chair Schiller and BSF Chairman Boies’ law firm has also provided legal services for tobacco companies like Philip Morris/Altria, R.J. Reynolds and Ligget’s and for other corporate clients like Goldman Sachs, DuPont, Apple, Barclays, CBS, Oracle and Sony.

After Wikileaks, in April 2015, published on its site the emails that a hacker had previously obtained from Sony’s server, BSF Chairman and Co-Founder Boies, for example, spent the following week “sending out a hyperbolic letter to various news organizations pressuring them to avert their eyes from the hacked email trove that WikiLeaks published” and “misleadingly claiming that journalists could be breaking US law by even looking at the emails,” according to Trevor Timm’s April 22, 2015 London Guardian column.

In the same column, Trevor Timm also noted that “New York Times reporter Eric Lipton” had previously “won a prize for his…investigative series on how private companies and their lobbyists are colluding with state attorneys general to pursue corporate agendas in secret, which prominently featured emails from the hacked Sony trove in one story;” and BSF lawyers for “Sony should not be able to tell journalists what to print,” since “news organizations have a First Amendment right to publish newsworthy information that they know was stolen, as long as they did not participate in the underlying crime.”

Coincidentally, Boies and Schiller’s BSF corporate law firm also includes the following ex-U.S. government officials: former Federal Communications Commission [FCC] Enforcement Chief Travis LeBlanc; former Clinton and Bush II White House National Security Council Director for Transnational Threats Leo Wolosky; and the Obama Administration’s former U.S. Ambassador to the UN for Special Political Affairs and Assistant Secretary of Homeland Security David Pressman.

According to a March 4, 2017 BSF press release, BSF law partner LeBlanc was “the chief law enforcement officer at the FCC” who “spearheaded hundreds of enforcement actions.” Yet now LeBlanc “will help clients manage their litigation, regulatory risk and direct strategic responses to government enforcement efforts,” despite an FCC rule that apparently only prohibits him for one year from working on the same issues he was working on at the FCC.

As the former chief FCC law enforcement officer told Big Law Business reporter Stephanie Russell Kraft in a March 9, 2017 interview:

“I’m going to be working on privacy and cybersecurity issues. It’s an area where, in the last few years in government, I’ve been very active, both on the state level in California and on the national level at the FCC. I’m going to spend a lot of time working on the issues that tech companies face when dealing with government regulatory bodies, the kinds of issues that say, an Uber faces when trying to enter a new city, or what Airbnb faces when trying to figure out how laws about public accommodation apply to them. As someone who’s had state experience and federal experience..., I believe I have a skill set that will be extremely valuable to a lot of tech companies, and being backed by the litigation powerhouse at Boies Schiller, should we need to go down that road, will be a huge asset.

“…I expect to be working on specific matters, like companies embroiled in investigations. Sometimes a federal enforcement action or a state action spawns a private class action or another private action. I expect to be advising companies on the front end to help avoid becoming ensnared in a federal or state legal issue, then advising them when there is an incident, then helping them should it turn into an actual enforcement action or litigation, so legal services for the full cycle of an issue….

“…The innovators that are trying to break in, that’s who I hope to continue to support in private practice. A lot of innovators, the companies that are disrupting the way we think about business, are in Silicon Valley. As they disrupt the marketplace they’re also in the position of disrupting the regulatory and legal structure that we’ve set up. Helping them deal with the problems that come from being disruptive is a space where I can offer them particular value….”

Given tax-exempt Columbia and Senator Gillibrand’s current and historic connection to BSF, it’s not likely that Columbia’s Journalism School or Gillibrand will examine very much whether or not it’s ethical for a former FCC enforcement officer to apparently walk through “the revolving door,” to “switch sides” and begin working as a “hired gun”-lawyer for corporate clients the FCC is purportedly regulating.

Nor is it likely that U.S. Senator Gillibrand will be eager to push for more federal legislation that would, for example, compel Columbia to pay a fair share of federal taxes or limit the amount of money that the co-founders, chairman and managing partner at Columbia Board of Trustees’ Chair Schiller’s BSF law firm are allowed to contribute each year to politically partisan Democratic Party or Republican Party campaign committees and organizations in the United States.

Yet is this “what democracy” is supposed to “look like” at Columbia “BSF” University in 2017?