Risk Update

Conflicts and PR — Disclosure Rule Reviewed, State Legislator Conflict Considered, Crisis Communication PR Advice Perhaps Proves Problematic

More from David Kluft: “Can the federal government order government contractors to disclose whether they hired a law firm the President doesn’t like?

  • “A portion of an executive order required government contractors to disclose if they did business with a certain law firm, with the aim of punishing and intimidating the firm and its clients to satisfy the President’s personal grudge.”
  • “D.D.C. Judge Beryl Howell found that this order impinged the firm clients’ First Amendment right to engage in private association, and thus needed to be narrowly tailored to support a substantial government interest.”
  • “Judge Howell found that the government attorneys ‘misrepresented’ the scope of this provision, ‘confusingly … ignored’ the government’s burden, and made “zero effort” to explain a substantial interest. The provision was enjoined.”
  • Decision: here.

Conflict of interest – State legislator – Attorney” —

  • “Where an attorney who is a member of the Rhode Island House of Representatives has asked whether he is prohibited by the Code of Ethics from participating in General Assembly discussions and voting on proposed legislation that seeks to establish procedures that would make certain larger parcels of land available for subdivision, he may do so even though he previously represented a client for whom the legislation, if passed, could potentially create opportunities for development.”
  • “‘It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a legislator serving as a member of the Rhode Island House of Representatives, a state elected position, who in his private capacity is an attorney licensed to practice law in Rhode Island, is not prohibited by the Code of Ethics from participating in General Assembly discussions and voting on proposed legislation that seeks to establish procedures that would make certain larger parcels of land available for subdivision in order to increase the availability of housing in Rhode Island, subject to conformance with applicable local municipal requirements, notwithstanding that he previously represented a client for whom the legislation, if passed, could potentially create opportunities for development on land owned by the former client…”
  • “‘Here, the business associate relationship between the Petitioner and his former law client has ended for purposes of the Code of Ethics. The Petitioner states that he represented the former client in 2021 for about one year, that the former client paid his legal fees in full, and that there is no future business relationship anticipated between them. Accordingly, based on the facts as represented, the applicable provisions of the Code of Ethics, and prior advisory opinions issued, it is the opinion of the Ethics Commission that the Petitioner is not prohibited by the Code of Ethics from participating in General Assembly discussions and voting on the proposed legislation described herein, notwithstanding that his former client could potentially be impacted by the passage of the legislation.'”
  • Text of full opinion: here.

Jackson Walker Rejected PR Firm’s Advice on ‘Highest Standards’” —

  • “Jackson Walker LLP pushed back on a crisis public relations firm’s advice to tout its ethical standards following allegations that one of its lawyers was in a secret relationship with a top bankruptcy judge, according to an updated complaint.”
  • “The previously undisclosed communications between the Texas law firm and Androvett Legal Media & Marketing were made public in an amended complaint Thursday by the plan administrator for JCPenney’s 2020 bankruptcy. The complaint, filed in the US Bankruptcy Court for the Southern District of Texas, accuses Jackson Walker of a deliberate cover-up of the romance between its onetime partner, Elizabeth Freeman, and ex-bankruptcy judge David R. Jones, who oversaw many of the firm’s bankruptcy cases.”
  • “The Androvett communications show Jackson Walker resisted suggestions that it publicly affirm adherence to the ‘highest’ ethical standards and that it sought to support Freeman against March 2021 allegations that she was in a live-in relationship with Jones.”
  • “‘I would avoid holding us to higher than applicable standards and requirements (i.e., no ‘highest standards’),’ Jackson Walker’s then-general counsel Patrick Cowlishaw told Androvett at the time. ‘Maybe something along the lines of ‘For more than 100 years, Jackson Walker has served its clients with skill, commitment, and in compliance with ethical and professional requirements.’'”
  • “The relationship was eventually revealed publicly in October 2023, prompting Jones’ resignation and sparking civil litigation and a criminal investigation. Jackson Walker is battling litigation from the government’s bankruptcy watchdog, the US Trustee, over millions in fees it earned in cases involving Jones.”
  • “Cowlishaw’s objections came in the days following the initial allegations that Freeman was romantically involved with Jones, which arrived on March 6, 2021, from Michael Van Deelen, a shareholder of then-bankrupt engineering firm McDermott International. Facing a March 10 court hearing on Van Deelen’s motion for Jones to recuse himself from the McDermott case, the firm moved quickly.”
  • “By March 8, Jackson Walker marketing director Barbara Malin emailed Androvett’s Mark Annick seeking advice, according to the complaint. The firm needed talking points and statements for two scenarios: whether a relationship was found to exist or not.”
  • “Annick prepared a draft statement by the next day saying Jackson Walker and its lawyers adhered to ‘the highest standards of ethics and professionalism’ and noted an internal investigation was underway. It added that the firm would take necessary steps to maintain those standards as facts emerged.”
  • “But Cowlishaw balked at language about ‘highest standards’ and an ‘internal probe,’ according to the complaint. He also wanted to support Freeman, suggesting Jackson Walker say it knew her to be ‘an extraordinary lawyer and a person of integrity’ without commenting on the propriety of her conduct.”
  • “Malin, however, had concerns about supporting Freeman, saying it ‘might be a strategic mistake.’ But she also worried the firm may be ‘perceived as throwing Liz to the sharks at the first opportunity.'”
  • “Cowlishaw also wanted to avoid the word ‘investigation,’ instead framing it as a review to ensure court filings complied with legal and ethical standards, according to the complaint.”
  • “Annick warned Jackson Walker that if it couldn’t ‘affirm a commitment to the highest ethical standards, an outside observer or reader may wonder what sort of mid-level standards we do follow.'”
  • “‘We also feel an obligation—as your advocates in the PR and media space—to say that reporters and others encountering this are bound to see it as a clear conflict of interest, at the very least,’ Annick said.”
  • “Cowlishaw acknowledged Androvett’s advice, but said its ‘judgment, for better or worse, is that we need to stay away from that or like phrases.'”