Thursday, January 22, 2015

Will the Charges Against Sheldon Silver Hold Up?

Sheldon Silver, in custody
The Times reports today that the asbestos-related cancer physician at the center of the federal charges against New York Assembly speaker Sheldon Silver is Robert N. Taub.  Columbia University on Friday closed the mesothelioma center he has directed. Accepting the allegations in the complaint the U.S. could well persuade a jury that Taub bribed Silver by offering to refer potentially lucrative asbestos cancer cases to Silver's law firm- in anticipation of favorable action by Silver in his capacity as speaker.  But Silver was the U.S. target.  Taub was promised immunity in exchange for his cooperation.

The United States Attorney in New York has indicted State Assembly Speaker Sheldon Silver.  He is charged with depriving the people of the state of his honest services - i.e. using his official position for personal gain.  Federal jurisdiction is obtained under the wire fraud act 18 USC 1343 which former prosecutor, now Senior Judge Jed Rakoff once called "our stradivarius".

There are two sets of transactions addressed in the complaint (above) is that Silver received income from a law firm that handled certain real estate matters regarding which Silver did no work.  Those appear to be referral fees for tax appeal work he steered to attorney Jay Arthur Goldberg - not charged but named as a co-conspirator. Silver got 25% of the contingent fee, according to the Times report.

The other claim is that Taube - named as "Doctor 1" in the complaint  - referred asbestos product liability cases to Silver who was "of counsel" to Weitz Luxenberg - a leading firm in the field.  It alleges that Silver reciprocated by directing two grants of $250,000 to Taub's research program.

The Complaint refers to the income in both categories as "referral fees".  But it seems to me that though the characterization appears to fit the undisclosed real estate fees, it does not accurately describe Silver's income from Weitz Luxenberg.

Behind the Weitz Luxenberg fees according to the complaint are the demands of the physician who heads up the asbestos-related mesothelioma treatment program at the giant Columbia Presbyterian Medical Center.  "Doctor 1" reported to be Robert N. Taub, who serves as director of the Columbia University Mesothelioma Center.  He could steer his fatally ill patients and their families to lawyers but did not include among the beneficiaries of his referrals Weitz Luxenberg - leading practitioners in the field - because Weitz did not contribute to mesothelioma research projects.

In 2003  Doctor 1 began referring cases to Weitz.  He soon applied to Silver who was then associated with the Weitz firm.   Silver as Speaker controlled a discretionary health fund.  In 2005 Silver approved a $250,000 research gran to study the effects of release of asbestos dust in the 2001 World Trade Center catastrophe.  In 2007 a second $250,000 grant to the University was issued, allegedly at Silver's initiative.  No further grants were made, though Silver helped direct $25,000 in state funding to a non-profit on which a relative of Doctor 1 served.  Referrals to Silver's firm continued though diminished into 2010.
The New York Joint Appellate Rules Governing Professional Conduct of lawyers like ABA Model Rules, RPC 1.5 (c) (1) permits division of lawyers between lawyers "who are not associated in the same firm" only "in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation", and (2) the client agrees to the arrangement, including the share each lawyer will receive and the agreement is confirmed in writing".  The undisclosed real estate fee income apparently does not meet the RPC requirements.
But the personal injury contingent fees appear to be a different matter because Silver is a salaried lawyer "associated" as of counsel in the firm.  It is a commonplace for lawyers to divide fees within a firm giving substantial weight to the lawyer who introduced the source of business to the firm.  According to the complaint that appears to be the case here.
- gwc

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