by Pam Martens and Russ Martens, Wall St On Parade:
According to the Center for Responsive Politics, which keeps meticulous tabs on political campaign flows, as of this morning, the law firm Paul, Weiss, Rifkind, Wharton & Garrison – which has represented Citigroup through more than two decades of serial fraud charges – is the number one campaign donor to the Democratic Presidential hopeful Senator Kamala Harris. As the Center notes, the money isn’t coming from the law firm itself, but from its “PACs; their individual members, employees or owners; and those individuals’ immediate families.”
The campaign ad for Harris reads like this: “Kamala Harris has spent her entire life defending our American values. From fighting to fix our broken criminal justice system to taking on the Wall Street banks for middle class homeowners, Kamala has always worked For The People.”
But here we are in the early days of the Democratic primary campaign, when the big money has not even yet entered the fray, and Harris has already collected $140,475 from the folks at Paul Weiss.
Paul Weiss has offices in New York, Wilmington, Washington D.C., London, Hong Kong, Beijing, Toronto, and Tokyo. Harris hails from California. Why are Paul Weiss lawyers so interested in financing her campaign?
As it turns out, they’re not all that interested. Numerous law partners at Paul Weiss are hedging their bets and contributing simultaneously to other Democratic Presidential candidates.
Donations from Paul Weiss also rank number one in the Presidential campaign of Senator Cory Booker of New Jersey; number three in the Presidential campaign of Senator Kirsten Gillibrand of New York; number six in the Presidential campaign of Mayor Pete Buttigieg of South Bend, Indiana; and number 9 in the Presidential campaign of Senator Amy Klobuchar of Minnesota.
The name Paul Weiss has become synonymous with getting serial miscreant mega banks on Wall Street off the hook or bargaining down the charges. In May of this year, we reported that the Chief Judge for the Federal District Court for the Southern District of New York wrote a decision finding that the U.S. Justice Department had outsourced a criminal investigation to the target of the investigation – Deutsche Bank – and Deutsche Bank’s outside law firm, Paul, Weiss, Rifkind, Wharton & Garrison.
Major heavy hitters in the Democratic campaign funding frenzy include the Chairman of Paul Weiss, Brad Karp. In 2012 we reported on Karp’s serial representation of Citigroup, writing as follows:
“When the London-based private equity firm, Terra Firma, claimed it had been lied to and defrauded by Citigroup, making it overpay for the purchase of EMI, a British music label, in 2007, Karp and colleagues wrung an 8-0 decision from the jury in favor of Citigroup. Karp was also on hand to witness victory when the trustee for the bankrupt Italian dairy giant, Parmalat, charged Citigroup with fraud. Then there were fraud charges connected to Citigroup’s involvement in the collapse of WorldCom and Enron – along with auction rate securities, rigged stock research and understating its exposure to subprime debt by $39 billion. Karp, Karp, and more Karp.
“The litany of fraud charges against Citigroup, accompanied by the perpetual get-out-of-jail-free card reliably delivered by Brad Karp, has become so ubiquitous that it raises the obvious question: is Citigroup the hapless target of a world-wide network of frivolous lawsuit filers, or does Brad Karp have some secret sauce for getting a serial miscreant off the hook?”
Citigroup’s stock ended up collapsing to 99 cents during the financial crisis and despite the mandate that the Federal Reserve cannot lend to insolvent banks, the Fed secretly funneled more than $2.5 trillion in revolving, below-market-rate loans to the bank from late 2007 through the middle of 2010, according to an audit by the Government Accountability Office. (See Table 8 in the audit report.) Citigroup’s Citicorp unit became a felon bank in 2015, pleading guilty to one count lodged by the Department of Justice for its role in rigging the foreign exchange market. It got a deferred prosecution agreement and a three-year probation.
Since January 1, Karp has made a $1,000 donation to Gillibrand’s campaign; a $2,800 donation to Booker’s campaign; and a $2,700 donation to the Harris campaign, which is called “Kamala Harris For the People,” according to records at the Federal Election Commission (FEC).
Another law partner at Paul Weiss who is hedging his bets is Brad Finkelstein, described by the firm as a “member of the Finance Practice,” focusing on “representing private equity funds and their portfolio companies, including affiliates of Apollo Global Management, in a wide variety of corporate finance transactions, including leveraged buyouts, debt restructurings, distressed debt purchases and portfolio company financings.”
Since January, Finkelstein has contributed $1,500 each to the campaigns of Booker, Gillibrand and Harris, according to FEC records.