A potentially sensational lawsuit filed Monday in Texas — later withdrawn (PDF) and then refiled — is generating a tremendous cloud of speculation over the last days of the Senate campaign in Minnesota.
A copy of the lawsuit was posted this afternoon on The Nation website (PDF). The key allegation is that a wealthy supporter of Sen. Norm Coleman used fraudulent means to steer $75,000 through a Texas firm he controlled to Coleman through Coleman’s wife’s job with a Minnesota insurance firm.
The Coleman campaign categorically denies that the Colemans received any money from any such arrangement and suggests there may be a political motive behind the filing of the suit so close to the election.
MinnPost has not verified any of the facts, other than that a lawsuit alleging them was filed Monday, withdrawn sometime after and then refiled Thursday. The lawsuit was based on a sworn statement by the plaintiff, Paul McKim. The document withdrawing the suit does not state the reasons it was withdrawn. But McKim’s lawyer, Casey Wallace, told MinnPost Thursday evening that the suit was withdrawn Monday during settlement negotiations but was refiled after those talks broke down.
McKim was until recently the CEO of Deep Marine Technologies, a Texas-based firm that provides underwater services to the offshore oil and gas industries. The controlling stockholder of DMT is Nasser Kazeminy, a wealthy Minnesota businessman and longtime supporter of Coleman. Kazeminy is the first-named and key defendant in the withdrawn lawsuit.
In the lawsuit, McKim alleges that he became aware of a plan, by Kazeminy, to funnel money for the purpose of benefiting Coleman through DMT to the Hays Cos., a Minneapolis insurance firm where Coleman’s wife, Laurie, is employed. (Again, Coleman’s campaign manager, Cullen Sheehan, told MinnPost that the Colemans had no involvement in any such arrangement.)
McKim says the chief financial officer of DMT told him of a conversation with Kazeminy in which Kazeminy said that “U.S. senators don’t make [expletive deleted]” and that he was going to find a way to funnel money to Coleman through DMT. McKim alleged that he tried to stop the scheme, and Kazeminy threatened to fire him. According to the lawsuit:
“Kazeminy informed Messrs. McKim and [B.J.] Thomas [the CFO] that Hays would funnel the money from DMT to Sen. Coleman through the payment of compensation to his wife, Laurie, and that there was nothing to worry about.”
The alleged plan was for DMT to send $25,000 a month to Hays, even though McKim says Hays provided no services to DMT. McKim says that under Kazeminy’s pressure, he signed off on the first $25,000 payment and then refused to go along with any more. He says he later learned that two more monthly payments of $25,000 had been sent to Hays in May and June of 2007.
In December, when he found out about a fourth such payment, he put a stop to it. In his suit, he is asking that a receiver be appointed to oversee the two companies until the matter is resolved.
Without making any allegation that the Al Franken campaign or anyone else was behind it, Sheehan denounced the allegations in the strongest terms. “Totally false.” “Baseless.” He said he has not spoken to Kazeminy about it, but he knows that the Colemans have “not received one dime” from any such scheme. He suggested the timing of the suit, a week before Election Day, was politically motivated.
McKim’s lawsuit itself does suggest a possible nonpolitical explanation for the timing. McKim says the lawsuit is in response to claims made Oct. 10 by Deep Marine shareholders.
Sheehan also asserted that the withdrawal of the lawsuit made it a non-story and that other news organizations decided not to publish the story because the suit had been withdrawn. However, the document withdrawing the lawsuit specified that the action was “without prejudice,” meaning that McKim reserved the right to refile the suit. A story in the Huffington Post quotes a source in the office of McKim’s lawyer stating that the facts in the lawsuit are valid.
Kazeminy is a longtime and major financial supporter of Coleman’s campaigns. Coleman has disclosed on Senate ethics forms in the past that he has received gifts from Kazeminy in the form of overseas flights for Coleman and family members on Kazeminy’s private jet.
MinnPost will continue to seek interviews with other players in the action.