Since yesterday’s post about the Kazeminy-Deep Marine-lawsuit-Coleman question, there have been a few developments, but none that answer any of the critical questions. In this update, we’ll review the developments but focus on identifying the questions that can’t be answered yet.
For good and valid reasons, news organizations are traditionally leery of late-breaking and impossible-to-confirm scandals on the eve of an election. Former U.S. senator (and experienced retailer) Rudy Boschwitz used to remark that being in politics was like being in a business where you had to make all your sales on one day (that day being Election Day). Boschwitz didn’t say this, but to build on his observation, suppose that just before the big day, a rumor circulated that your merchandise was tainted. You would soon be out of business. And if the rumor was false, a great injustice would have been done. With that in mind:
Development 1: Paul McKim’s lawsuit (alleging that Nasser Kazeminy used the Texas underwater oil and gas services firm Deep Marine Technologies to funnel an improper gift of $75,000 to Sen. Norm Coleman and his wife, Laurie) has been reinstated.
This is a blow to the Coleman campaign, which had been arguing that since the suit had been withdrawn, it was a non-issue. Coleman himself had said that the withdrawal indicated that the facts in the suit were invalid. On the contrary, McKim’s attorney Casey Wallace is explicitly stating to every inquiring reporter (including me) that McKim stands behind his version of the facts alleged in the complaint.
But the reinstatement doesn’t prove a thing either. There is nothing very impressive, other than McKim’s statements in the lawsuit, to suggest that the Colemans have benefitted from a shady deal. In fact, Wallace has explicitly stated to me that McKim makes no claim that the Colemans got the money, only that Kazeminy intended for them to get it. And Coleman’s campaign manager, Cullen Sheehan, has stated flatly that the Coleman’s never got a dime.
Development 2: Wallace also gave at least a reasonable-sounding explanation for why the suit was withdrawn. It’s a business suit over money. After it was filed, the parties entered into settlement negotiations. As a show of good faith during the negotiations, the plaintiffs pulled the suit down, noting that they did so without prejudice (meaning they reserved the right to refile it if the case wasn’t settled). When the negotiations broke down, they reinstated it.
This is a further blow (but not proof of anything) to the Coleman claim that the withdrawal of the suit meant there was nothing to it.
Wallace is also asserting quite forcefully that the suit was not motivated by politics. Coleman says it was. Of course both sides would say what they are saying. We don’t have any basis to know who is right. Coleman’s best evidence is simply timing: Why is this coming out in the final days of the election campaign?
Wallace does have an answer on the timing question. He says McKim and Deep Marine are facing demands for answers from other shareholders about whether the company is being run properly. He also says that Kazeminy (I haven’t mentioned that he is the controlling shareholder of DMT) had told McKim, the founder and long-time CEO of the company, to remove himself from the operation of the company for 90 days, and the 90 days was about to expire. If true, those are non-political explanations for why the suit is surfacing this week. The biggest demand that McKim is making in the case so far is to have a receiver appointed to run the company while these issues are litigated and sorted out.
It’s altogether possible to believe that the Wallace/McKim side is using the timing of the election to gain leverage in the belief that Kazeminy will give them what they want in order to keep them quiet until Kazeminy’s friend Coleman is past the election. (But if that’s true, it seems they would have gained more leverage by merely threatening to file it publicly.)
It’s also entirely possible that some political opponents of Coleman are deeply involved in encouraging the action. But no evidence of that has surfaced.
Development 3: Coleman faced the media on the issue this morning. But he did it in Moorhead, where many of the reporters following the story couldn’t be in time, and he didn’t say anything new.
Coleman called the allegations in the suit “false and defamatory.” He said his wife was “devastated.” But he brought nothing forward that would shed light on any of the questions raised by the suit, except for those who are willing to simply take his word for it against McKim’s.
Development 4: New documents, attached as exhibits to the refiled suit, do show money flowing from Deep Marine to Hays in amounts and at times that are consistent with McKim’s allegations. The documents also show that Hays Companies (the Minneapolis insurance firm that employed Laurie Coleman) submitted invoices for payment. But there is nothing in the new documents that advances the hypothesis that the money was intended to pay Laurie Coleman for work she didn’t do. Again, we have nothing but McKim’s (sworn) statement that this is what was going on.
That doesn’t prove anything either way. If there was a scheme such as McKim alleges, it would presumably be easy enough for Hays to generate invoices, although the number of parties that would have to have knowledge of and participation in the scheme grows with each such step.
Development 5: The AP reports that: Hays Companies said in a statement that it provides risk management consultation to Deep Marine Technology, adding, “We stand by our reputation as leaders in our industry and will not engage in empty speculation that is clearly meant to interfere with the election.”
This is helpful to the Coleman/Kazeminy side of the dispute (Kazeminy seems never to talk to anyone), but it also doesn’t prove much.
Not being in the business of servicing the underwater needs of the offshore oil and gas industry, I have no clue how credible it is that a Texas company in that business could credibly spend $75,000 in a single year to a Minneapolis insurance firm not for insurance itself but for consulting work about insurance.
If the suit proceeds to the discovery phase, it seems likely that documents will show pretty clearly whether Hays was actually doing work for Deep Marine that could justify the payments. But it seems extremely unlikely that any of these clarifications could occur before Election Day.