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Citing 'Potential Conflicts,' Greenberg Traurig Says Giuliani on Unpaid Leave

[caption id="attachment_29988" align="alignnone" width="620"] Rudy Giuliani[/caption] Rudolph Giuliani has spent days on newspaper front pages and dominating cable news this week, with some suggesting he has placed his own client, the president of the United States, in fresh legal jeopardy. Among those closely watching Giuliani's performance, it's certain, are his fellow shareholders at Greenberg Traurig. In a move that legal ethics experts suggest is uncommon, Giuliani has remained with the firm but taken a leave of absence to represent President Donald Trump. After joining Trump's legal team last month, the former New York City mayor initially remained on Greenberg Traurig's website as senior adviser to Greenberg’s executive chairman and as the firm's cybersecurity practice chair. His firm profile was taken offline this week, amid the furor sparked by his comments on Fox News about payments to the woman known as Stormy Daniels, and after ALM sent Greenberg questions on Wednesday about the affiliation. Several legal ethics experts said they couldn’t recall another law firm partner “leave” arrangement quite like Giuliani’s. Firms are paid to take on client cases and when there’s a conflict, the client usually finds a different law firm, as one lawyer put it. Some close to Greenberg have suggested Giuliani’s absence was related to the firm's business image. The current head of the American Bar Association, Hilarie Bass, a co-president of Greenberg, has issued statements about her concerns over some Trump administration actions and has called for no interference in special Robert Mueller’s Russia investigation. Greenberg shareholder Barry Richard, without taking a leave, represented George W. Bush in the Florida litigation that determined the presidency. But in a statement about the arrangement, a Greenberg spokeswoman pointed to potential conflicts and noted Giuliani is not being paid during the leave. “The opportunity for Mr. Giuliani arose suddenly and, due to potential conflicts and the need for a quick decision, an unpaid leave of absence made sense to both Mr. Giuliani and the firm, rather than making a long-term decision,” the Greenberg spokeswoman said. She added that other Greenberg attorneys have taken leaves of absence “for many different reasons on a case-by-case basis.”

Taking 'a Hiatus'

Even though Greenberg has represented Trump entities in the past, the leave of absence effectively means Greenberg is not taking on Trump as a client for the Mueller investigation, confirmed several legal ethical experts. That’s apart from any public relations headaches or business and recruitment concerns—reasons why other firms may have turned down representing the president. “A leave,” said New York University legal ethics professor Stephen Gillers, “can achieve the same level of separation, for conflict purposes, as a resignation so long as the lawyer on leave has no access to the database of the firm’s matters and the lawyer gives up any financial interest in the firm’s income during the leave.” If an absence is due to a conflict, Gillers said the lawyer on a leave can receive money to which the lawyer is already entitled but has to be excluded from future income. “It would seem you would have to structure it so he doesn’t get paid for the period there’s the conflict,” said Ronald Minkoff, a partner at Frankfurt Kurnit Klein & Selz who focused on professional responsibility and who spoke generally on leave situations as a result of conflicts. The former mayor also took a leave of absence from the firm in October 2016, during the late stages of the campaign. Even after he had apparently returned by early 2017, firm leadership distanced itself from his work on Trump’s executive order on immigration. Greenberg executive chairman Richard Rosenbaum issued a firm letter making clear that the firm was not retained to advise Trump on this executive order and that the firm values diversity. When asked about Giuliani’s leave and whether the firm was concerned about an association with the president, a Greenberg spokeswoman said the firm has “a long history of representing high-profile clients without regard to their political views which have covered a wide spectrum.” Greenberg hired Giuliani in early 2016, after the former mayor left Bracewell, taking his name off the door from that firm. Giuliani became chair of the firm's cybersecurity, privacy and crisis management practice at Greenberg, while still leading a security and consulting business under Giuliani Partners. But Giuliani’s work for foreign governments and his role as Trump's television and political rally supporter has overshadowed any recent legal work. Marc Mukasey, who said he is not following Giuliani on the president’s legal team, acknowledged in a newspaper interview that Giuliani is "not often in the courtroom these days.” Still, Giuliani’s Rolodex, his political and consulting experience and his business experience around the world boost Greenberg, which has an extensive lobbying practice. Greenberg, a Florida-founded firm that now has 38 offices across the world, earned $1.48 billion gross revenue in 2017, making it the 14th highest-grossing law firm in the United States, according to ALM affiliate The American Lawyer. “We don’t comment on individual attorneys' performance, even high-profile figures like Mr. Giuliani,” a firm spokeswoman said. At the beginning of his second leave of absence, Giuliani said in interviews he was hoping for a resolution in a matter of weeks. He also said in interviews that his role on Trump’s legal team will be “limited”—remarks that now appear contradictory to his May 2 television interview that set off a new round of questions and controversy about payments to Stormy Daniels. Ethics experts said leaves of absence from firms are typically taken when the lawyer has health issues to address, is helping with a campaign, or when there is misconduct that needs to be investigated. “I’ve heard of this happening when family matters or illness, not a client representation, is the cause of the leave,” Gillers aid. As some legal ethics experts said in interviews, a leave indicates the attorney still has “keys to the office” and is welcome back after the commitment is over. Two lawyers close to the firm said Giuliani is a “sui generis” situation. “It’s a unique circumstance. For whatever reason, Rudy Giuliani and the firm have not decided to permanently part ways,” said one attorney. “It’s a hiatus.”

‘A Lot of Tentacles’

Meanwhile, Giuliani’s former colleague at Greenberg, Manhattan federal prosecutor Geoffrey Berman, has recused himself from perhaps the most high-profile matter in the Southern District of New York U.S. Attorney’s Office: the criminal investigation of Trump’s longtime personal attorney, Michael Cohen. A conflict relating back to Berman’s time at Greenberg may have given rise to his recusal, according to several former federal prosecutors and white-collar defense experts who did not have direct knowledge of the circumstances. The recusal has been reported as occurring soon after Berman assumed the Southern District position. His deputy, Robert Khuzami, is now overseeing the matter. “It seems like the source of the conflict predated his arrival to the U.S. Attorney’s Office, which leads me to continue to believe the most likely explanation is something to do with his prior law firm,” said Paul Krieger, a former federal prosecutor who now leads a white-collar defense boutique, Krieger Kim & Lewin. The Mueller investigation and likely the Southern District’s probe into Cohen’s business dealings have “a lot of tentacles, and it seems like there’s a lot of areas and therefore a lot of entities and individuals that are in need of legal services as a result of those investigations,” Krieger said. The New York Times and Washington Post have reported that Cohen is being investigated for possible bank fraud. According to court filings, Greenberg represents several banks in various regulatory, litigation and corporate matters. “It seems that a U.S. attorney who in his prior life,” Krieger said, “worked at a major international law firm” with “a significant roster of institutional or individual clients, could run into conflicts.” Greenberg has represented both Trump in litigation and Kushner Cos. in real estate. For instance, the firm represented Trump’s company in suing a Florida city over enforcement of noise regulations in 2015. And a year later, Greenberg represented Kushner Cos. in a Brooklyn real estate deal. Public records do not show Berman was involved in those matters. Other personal factors may be at play in the recusal. According to media reports, Berman volunteered for the Trump transition team, donated to the Trump campaign and at one point was interviewed by the president for the U.S. attorney job. It’s not inconceivable he crossed paths with Cohen as another supporter of Trump, one source said. Also, Berman hasn’t been nominated by the president, but was appointed by U.S. Attorney General Jeff Sessions, meaning that "one might question his decisions as being potentially influenced by the desire to be nominated, even if at all not true,” said Harry Sandick, a former federal prosecutor and now a partner at Patterson Belknap Webb & Tyler. Any recusal by the U.S. attorney, no matter how unusual, could stem from an abundance of caution. “The appearance is almost as important as the actual bias issue,” Sandick said. Longtime colleagues in the New Jersey bar praised Berman’s integrity. Berman is “a completely straightforward and honorable person,” said Kevin Marino, of Marino, Tortorella & Boyle. William Palatucci, an attorney at Gibbons and former general counsel to Trump’s presidential transition committee, said, "I’ve known Geoff Berman for many years. He's a person of the highest integrity and so I trust his judgment completely." Contributing to all the speculation surrounding Berman’s recusal is that he and Giuliani shared the same firm. Several members of the bar have privately wondered the extent of any communications between Giuliani and Berman when they were still at Greenberg. “Was he [Giuliani] giving advice to Trump throughout this whole process, maybe not public, and did Berman have some part in that advice?” Sandick said about the speculation. “We don’t know.” A spokesman for the Southern District U.S. Attorney's Office declined to comment, stating "the reason for recusals in this or any other case are not public information."