Coleman Likely to Get FEC Nod on Legal Fees

Posted June 19, 2009 at 4:44pm

The Federal Election Commission appears poised to allow former Sen. Norm Coleman (R-Minn.) to use campaign funds to pay some but not all of his legal fees related to allegations that a supporter funneled payoffs through Coleman’s wife.

In two June 18 draft opinions that the commission will consider Thursday, the FEC’s lawyers offer two alternate versions of the same general principle: that Coleman’s campaign fund can pay for legal expenses that relate to his position as an officeholder but not legal expenses that are unrelated to his official duties.

Just prior to last year’s election for Coleman’s Senate seat — the outcome of which is still contested — Paul McKim alleged that longtime Coleman friend and supporter Nasser Kazeminy funneled a $75,000 payment to Coleman through Deep Marine Technology, a company primarily owned by Kazeminy. McKim is the former CEO of the company.

McKim alleged that at Kazeminy’s direction, the company made payments to an insurance broker in Minneapolis that employed Coleman’s wife, Laurie, despite the fact that the insurance company never provided any services to Deep Marine. McKim alleged that the only purpose of the payment was to provide cash assistance to the Colemans.

A second suit among shareholders in Delaware contains essentially the same allegations.

Coleman is not charged with any wrongdoing — the cases are disputes between shareholders — but Coleman’s campaign asked the FEC in April to allow the campaign to cover the costs of monitoring the “baseless complaints— because the allegations arise solely because of Coleman’s former position as a U.S. Senator.

The FEC drafts say essentially that the campaign can pay for legal fees associated with responding to an ethics complaint against Coleman filed by Citizens for Responsibility and Ethics in Washington, handling an FBI investigation about alleged improper gifts and responding to media inquiries.

One of the drafts concludes that the campaign should not pay for Coleman’s legal fees related to the two court cases because he would be a witness in those cases, not a party to the suit, and his role as a witness is not affected by his office. Nevertheless, under this version of the opinion, the campaign could pay 50 percent of the costs of monitoring the suits.

The other version of the opinion concludes that legal expenses incurred in the Texas and Delaware cases are related to Coleman’s office because the allegations of paying off a Senator would not have arisen had he not been in office. Under this reading, the campaign could pay those costs.

If any of the allegations veer off into areas not related to Coleman’s office, the campaign could not foot those bills, both versions of the opinion conclude.