Risk Update

Whistleblower Allegations — PR Risk/Positional Conflicts Allegations, Airport Monopoly DQ

Posted Dan Bressler

“Clark Partington Facing DQ Bid In Fla. Whistleblower Case” —

  • “A former client of Clark Partington Hart Larry Bond & Stackhouse PA has asked a federal judge to disqualify the firm from representing a commercial pilot in a whistleblower case against him over his alleged illegal monopoly control of a northwest Florida airport.”
  • “Clark Partington currently represents commercial pilot Robert Smith in a False Claims Act suit accusing businessman Jay Odom of using a strawman scheme to take full control of the Destin Executive Airport in violation of laws prohibiting monopolies at airports that receive state and federal funds.”
  • “But Odom argued in a brief Wednesday that Clark Partington’s work on his behalf in 2011 in the negotiation of a loan and the creation of entities to hold assets at issue in Smith’s suit meant the firm should be barred from handling the case.”
  • “‘Given the law firm’s prior role as counsel in facilitating one of the schemes cited in the amended complaint as evidence of the fraud alleged as to the Destin airport, disqualification is proper,’ Odom said.”
  • “The request to disqualify Clark Patington in the federal False Claim Acts suit notes that a judge in a related state court case in the First Judicial Circuit Court of Okaloosa County granted a motion to disqualify on Sept. 23 based on the same arguments about the firm’s prior representation of Odom and his companies.”
  • “In reaching that decision, Circuit Judge John T. Brown found that Odom and Clark Partington had an attorney-client relationship and that the law firm’s prior work for Odom was ‘substantially related’ to Smith’s claims of wrongdoing in the current case.”
  • “Smith, representing the federal government and the state of Florida as relator, claims Odom used a group of strawman LLCs he controls to take control of both fixed-base operators at the airport in 2012, and that Okaloosa County officials have been aware of the situation since at least 2014 while accepting millions in state and federal grants.”

Clearly from a source with an agenda. And they do not appear to cite examples of actual conflict or adversity, focusing on appearances. Still, interesting reading in the context of PR and positional risk: “WNN Exclusive: SEC FOIA Documents Reveal Big Law Defense Firms are Confidentially Representing Dodd-Frank Whistleblowers” —

  • “Documents obtained under the Freedom of Information Act (FOIA) from the U.S. Securities and Exchange Commission (SEC) reveal that large “Big Law” corporate law firms are confidentially or quietly representing whistleblowers in whistleblower reward cases filed under the highly successful Dodd-Frank Act.”
  • “‘The revelation that the most notorious anti-whistleblower law firms are quietly representing whistleblowers in SEC enforcement cases came as a shock,’said Stephen M. Kohn. Kohn is a whistleblower attorney who filed the FOIA request on behalf of Whistleblower Network News (WNN) and the National Whistleblower Center (NWC). ‘The potential for massive conflicts of interest is obvious,” Kohn said, “as these firms base their practices on defending corporations accused by whistleblowers of engaging in bribery, money laundering, and securities frauds.'”
  • “WNN reviewed the 1034 pages of FOIA documents released by the SEC and carefully compiled a list of the 64 law firms that successfully obtained a reward on behalf of a whistleblower. Among those firms were six that primarily represent corporations and individuals accused of corporate crimes.”
  • “‘Whistleblowers need to know that corporate firms that make millions of dollars by defending corporate criminals are also trying to represent them. Whistleblowers’ interests may conflict with big law’s major client base. It appears as if some of the defense firms have tried to take advantage of Dodd-Frank’s confidentiality rules in order to hide their representation of whistleblowers from their corporate clients. I hope this is not the case,’ Nelson said.”
  • “The number of defense firms now representing whistleblowers may be significantly larger than the six firms identified in the SEC FOIA documents. The vast majority of Dodd-Frank cases are still under review by the SEC, and the corporate defense firms involved in those cases were not revealed in the FOIA responses.”
  • “All of the cases handled by the corporate defense firms resulted in significant sanctions leveled against companies or individuals who violated the Securities and Exchange Act. The Dodd-Frank Act only permits a reward to be paid if sanctions ordered to be paid exceed $1 million.”
  • “‘It is hard to understand how a corporate defense firm can have ‘undivided loyalty’ to whistleblowers who disclose large corporate frauds. When a whistleblower files a case, it is often impossible to determine how far the frauds may go and what companies may be involved in a conspiracy. Whistleblowers need lawyers who do not fear following the facts wherever they may lead,’ Kohn said.”