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Clinton lawyer Kendall accused of filing false statement

Posted By Art Moore On 09/23/2006 @ 1:00 am In Front Page | Comments Disabled

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Clinton attorney David Kendall (PBS.org)

Bill Clinton’s longtime attorney David Kendall is accused of filing a fabricated statement in a court brief to quash a multi-million-dollar lawsuit against the former president.

In legal pleadings filed this week with Los Angeles Superior Court, business mogul Peter Franklin Paul claims Kendall cobbled together two unrelated quotes from a March 2005 federal court hearing in an attempt to pin on Paul the very charge Paul is making against Clinton.

As WND has reported, Paul claims Clinton destroyed his entertainment company, Stan Lee Media, to get out of a $17 million deal in which the former president promised to promote the firm in exchange for Paul’s massive contributions to Sen. Hillary Clinton’s 2000 campaign. Paul alleges specifically that Bill Clinton’s agent diverted a key investment away from Stan Lee Media – a partnership with the creator of Marvel Comics’ Spiderman – causing it to fold amid the dot-com meltdown in December 2000.

A hearing on Paul’s second amended complaint in the lawsuit is scheduled Monday morning in Los Angeles.

Paul alleges that after he donated $1.9 million of cash and in-kind contributions for Hillary Clinton’s Senate campaign, Bill Clinton directed his associate, Jim Levin, to convince Paul’s Japanese partner – in violation of a confidentiality agreement – to incorporate a new company instead of investing another $5 million with Paul. The loss of that badly needed capital ultimately caused Stan Lee Media to fold, Paul maintains.

In legal pleadings filed ahead of Monday’s court session, Paul claims Kendall manipulated quotes from the March 2005 hearing to make it sound as if Paul admitted personal responsibility for the collapse of Stan Lee Media. If Kendall’s argument were to succeed, it would undermine the basis of Paul’s case, which asserts Clinton was the cause of his company’s demise.

Kendall did not reply to WND’s request for a response to Paul’s charges. Previously, he told WND he would not comment on the case. Kendall stopped commenting to the media last December when Sen. Hillary Clinton’s campaign fund-raising group, New York Senate 2000, was fined for filing false reports. Kendall had maintained consistently since 2001 he had filed “proper reports” and that Paul was not credible.

The protest by Paul’s attorney, Colette Wilson of the United States Justice Foundation, asserts Kendall misled the court in his opposition brief.

Wilson says Kendall pieced together a sentence from Paul’s allocution – a defendant’s formal explanation of his actions to the judge before sentencing – and another from final comments to the judge to make it sound as if Paul were apologizing for the collapse of his company.

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Peter Paul says this photo shows him discussing his business deal with President Clinton in 2000

In the March 2005 hearing, Paul pled guilty to a 10(b)5 violation of the Securities and Exchange Commission for not publicly disclosing his control of Merrill Lynch margin accounts that held Stan Lee Media stocks and for certain transactions in mid-November 2000 to keep the stock from losing value.

Paul points out Federal Judge Gary Feess ruled in his dismissal of a civil lawsuit brought by Stan Lee Media against him and Merrill Lynch in July 2003 that the “collapse of the margin scheme did not cause SLM’s stock to decline in value” and therefore was not responsible for the demise of the company. Paul says the judge’s ruling supports his case, by determining it was the financial condition of the company that caused the collapse. The purpose of the margin scheme, the judge determined, was to benefit Stan Lee Media.

“I did everything humanly possible to save the company after Clinton did everything possible to destroy it,” Paul contended in an interview with WND.

But on page five of Kendall’s opposition brief, the Clinton attorney inserted a footnote that suggests Paul admitted causing the collapse of Stan Lee Media:

Plaintiff’s version of events is markedly different than what he described in his March 7, 2005, plea allocution (Plaintiff pled guilty to securities fraud in the Eastern Division of New York and a true and correct copy of the allocution transcript is attached as Exhibit A). In his plea allocution, Plaintiff stated – referring to the collapse of SLM – that “I and other borrowed money on margin … using my stock … as collateral. In this way, I concealed from the investing public that I was leveraging and in effect, liquidating a substantial part of my holdings … I am extremely sorry for the harm my actions have caused.”

Paul calls Kendall’s notation “a contrived effort to deceive the court into believing that I admitted to collapsing my company – which is the exact charge I’m leveling against Bill Clinton.”

Wilson told WND she believes Kendall’s footnote is “either a deliberate lie or a very cavalier and irresponsible” handling of the facts.

Kendall has no basis for making the assertion that Paul’s actions caused the downfall of his company, let alone that Paul takes claim for it, Wilson insists.

Kendall says in his opposition brief President Clinton “strongly objects” to Paul’s “attempt to blame” (Clinton) – for the first time – for the collapse of Stan Lee Media, Inc. and to increase the alleged damages over fifteen-fold.”

Kendall asserts Paul has been constantly changing his story – and his legal claims – for over five years.”

The first complaint, June 19, 2001, Kendall argues, contained only one cause of action against Clinton, for unjust enrichment, and mentioned the Japanese partner, Tendo Oto, only briefly.

“The original complaint did not allege an employment agreement between Paul and Clinton, that President Clinton committed fraud and that he interfered with Paul’s relationship with Oto or that former President Clinton was responsible for the collapse of SLM,” Kendall stated in his brief.

Paul says Kendall’s claims are “patently false,” pointing out the assertions were included in the original 2001 complaint, which attributed the damages done to his company to Clinton directing Levin to interfere with Oto.

Regarding the damage amount, Paul says the previous two complaints have had enough facts from which to infer the figure, but the new amended complaint states it explicitly, although there is no obligation to do so.

“I was worth $50 million when I met the Clintons, I was worth zero after the frauds they perpetrated on me,” Paul said. “Those facts never change.”

The reason the complaint was amended again, Paul said, was because in an April 7 hearing in which Sen. Clinton was released as a defendant, the court said it believed the case to be a political vendetta between two families. The pleadings, therefore, were changed to emphasize that Paul sees himself not as an aggrieved political contributor but as a victim of fraud in the loss of his business.

Paul said he hopes the lawyers’ code of professional responsibility is applied to Kendall.

“This is an egregious violation of the responsibility of an officer of the court,” Paul said. “It’s on a par with the violations that President Clinton committed in the Paul Jones suit which cost him his license to practice law.”



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