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D.C. Dispatches by Cynthia Dizikes

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    Update: Coleman seeks FEC’s OK to use campaign funds for legal fees in Kazeminy lawsuits, other complaints

    By Cynthia Dizikes | Published Tue, May 12 2009 5:05 pm

    WASHINGTON, D.C. -- Former Minnesota Republican Sen. Norm Coleman has filed a request to use campaign funds to pay for legal fees resulting from two lawsuits that make allegations against a campaign donor, according to Federal Election Commission documents.

    The lawsuits, one filed in Texas and the other in Delaware, both allege that Minnesota businessman Nasser Kazeminy had $75,000 sent to Coleman in the form of insurance payments made to a company employing Coleman's wife, Laurie.

    In the request submitted to the FEC, the Coleman team said, “Counsel has been preparing for the potential involvement of Senator Coleman as a witness in the matters, and pursuant to law, preserving documents that may prove relevant.”

    Coleman also requested the option to use campaign funds to cover expenses arising from other complaints, including those filed by liberal organizations Alliance for a Better Minnesota and Citizens for Responsibility and Ethics in Washington.

    Alliance for a Better Minnesota has filed a complaint with the Senate Ethics Committee and has sent a letter to the FBI requesting an investigation. Meanwhile, Citizens for Responsibility and Ethics here also filed a complaint with the Senate Ethics Committee asking for an investigation into allegations concerning whether Coleman violated the Senate gifts rule by accepting underpriced lodging from a consultant and friend.

    In a breakdown of expenses, Coleman’s request specified that a majority (about 63 percent) of Coleman’s legal fees resulting from these complaints and lawsuits have been incurred preparing for possible involvement in both the Texas and Delaware cases. Other expenses (rounded off) break down as follows: document preservation related to the Texas and Delaware lawsuits, 16 percent; media inquiries related to ethics complaints/letter to the FBI, 9 percent; review of Senate ethics complaints/letter to the FBI, 5 percent; monitoring Texas and Delaware lawsuits, 3 percent; media inquires related to Texas and Delaware lawsuits, 3 percent; other costs (copying, phone call, etc.), 0.27 percent.

    Coleman’s main legal argument is that these issues emerged from his role as a U.S. senator. Under Senate Ethics rules, senators can only spend campaign funds "to defend legal actions arising out of their campaign, election, or performance of their official duties."

    Brett Kappel, a lawyer for Vorys, Sater, Seymour, and Pease LLP here, told MinnPost in December, "There is a long line of FEC advisory opinions allowing members of Congress to use campaign funds to pay for legal fees.”

    “I think a lot will depend on what, specifically, he asks for,” Kappel said. “I would expect they would allow him to use campaign funds associated with the [personal finance forms] investigation but will have less success with other legal fees."

    At the time, Kappel referred to last year’s FEC advisory opinion for Sen. David Vitter, R-La., as an applicable precedent. In that case, the commission approved the use of campaign funds to pay for Vitter's legal fees associated with a Senate Ethics investigation into a prostitution allegation. They did not approve the use of campaign funds to pay legal fees associated with Vitter being called as a witness in a prostitution prosecution.

    In Coleman’s request, his team said that his case “differs significantly” from Vitter’s case, which “had little to do with his status as a federal officeholder.”

    In contrast, the Coleman team argued that the former senator “was targeted in the two lawsuits just before the 2008 election because of his position as a senator and candidate, and for no other reason whatsoever.”

    Whether the Commission will accept that rationale remains to be seen.

    In the Texas case, Paul McKim, the former chief executive officer of Deep Marine Technology Inc., claims that Kazeminy, who is a Deep Marine shareholder, pressured him to overlook the payments. The Delaware lawsuit, filed by other company shareholders, cites McKim as a defendant and basically makes the same allegations, relying on a "confidential informant."

    Both Coleman and Kazeminy, who is a longtime friend and donor to the former senator, have denied any wrongdoing. There has been no indication, either, that any funds actually were transferred to Coleman or his wife, and neither was named as a defendant in either lawsuit.

    Coleman submitted the request on April 3. The commission has 60 days to issue an opinion.

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    Illustration by Hugh Bennewitz

    minnpost.com/cynthiadizikes


    Cynthia Dizikes is MinnPost's Washington, D.C., correspondent and covers Minnesota's congressional delegation and reports on developments out of Washington that are important to Minnesota readers. She received her master's degree in journalism from UC Berkeley and has worked as an intern in the Los Angeles Times' Washington bureau, reporting on a variety of topics, and as a reporter for the Anniston Star in Alabama. Her work has also appeared in the San Francisco Chronicle, the Oakland Tribune, Congress Daily and on National Public Radio. She can be reached at cdizikes [at] minnpost [dot] com.

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