scandal of his own to handle
By Al Lewis,
Friday, February 10, 2006
Renowned litigator David Boies is a corporate cleanup artist
who has helped scandalized companies including Denver's
Qwest and Greenwood Village's Adelphia Communications.
Amid high-profile cases, Boies has become a visible champion
of corporate ethics. But lately, this white knight has been
under an ethics investigation himself.
Adelphia asked Boies to resign in August when it learned
that two document-management companies that his firm
recommended -- Amici and Echelon Group -- are partly owned
by Boies' children.
Adelphia said it also was surprised to learn that one of the
firms, Amici, was founded by William Duker, a lawyer and
former Boies associate. In 1997, Duker served 33 months in
prison after admitting he fraudulently overbilled the
federal government for legal services. Then he went on to
run a company that bills clients by the page.
Boies' Armonk, N.Y.-based law firm, Boies Schiller &
Flexner, never disclosed its ties to these companies, which
Adelphia used for three years, racking up more than $7
million in bills.
That's a hefty tab for Adelphia, a company that was so
mismanaged and looted by its previous management that it was
forced to file for bankruptcy in 2002. Even heftier is the
$31.7 million Boies' firm has billed Adelphia over the past
This week, U.S. Bankruptcy Judge Robert E. Gerber of
Manhattan ruled that an ethics investigation into the matter
could proceed. The judge stopped short of naming an
examiner. But given the size of these bills, it's a safe
bet Adelphia and its creditors will investigate on their
own. An Adelphia spokesman declined to comment Thursday.
For his part, Boies has admitted that his firm should have
disclosed its ties as a matter of good business practice,
but he denies violating laws or codes of ethics.
Boies will remain under the microscope largely because of
who he is. He represented presidential candidate Al Gore in
the dispute over the 2000 Florida election results. He
defended IBM in its fight against antitrust charges. And he
represented the U.S. government in its antitrust case
More recently, his firm has represented Tyco International,
which was looted by its former corporate officers, and it
has defended Maurice "Hank" Greenberg, the former chief
executive of insurance giant American International Group
Boies has marshaled ethics experts who've said he did not
violate any specific ethics rules in the Adelphia case. But
The Wall Street Journal, in its long coverage of the
dispute, has quoted experts who say his firm, if nothing
else, failed to avoid the appearance of impropriety.
"I don't think Mr. Boies' firm has a sign on the door that
says, 'We do only the minimum that's required. ... We're the
minimally ethical firm,"' Gregory Taxin, CEO of San
Francisco-based Glass Lewis & Co., told me. "This is
rightly an embarrassment to an otherwise reputable and
John Holcomb, a business ethics professor at the University
of Denver's Daniels College of Business, agrees.
"To me, anything that smacks of nepotism, without disclosing
that fact, raises questions," he said. "Nepotism alone
triggers the duty of disclosure."
Adelphia has complained that Amici's bills are too high.
And in October, attorneys representing Adelphia's former
auditor said Amici buried them in useless documents, such as
copies of telephone books and cookbooks.
"Using Amici has been a disaster," wrote attorney Max
Shulman on behalf of client Deloitte & Touche.
Also in October, lawyers suing Tyco on behalf of investors
complained that Tyco shipped them 77 million irrelevant
documents "compounded by the previously undisclosed
ownership relationship between the family of David Boies ...
Anyone who has been involved in complex litigation is
familiar with the old document dump. Lawyers bill not only
by the hour but by the page.
Boies may argue that these alleged conflicts arise from a
gray area. But before this dispute, Boies frequently
championed the idea of operating in the white.
Said Holcomb: "It's kind of a joke among law firms that the
great David Boies has stumbled."
Al Lewis' column appears
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