Kirkland Can Stay on Defense Team for Iran Sanctions Case

By Joan C. Rogers

Kirkland & Ellis LLP lawyers may stay on a “dream team” of defense lawyers in a high-profile criminal case despite a potential conflict of interest with other Kirkland clients, a federal judge in Manhattan held Feb. 15 ( United States v. Zarrab , S.D.N.Y., No. 15 Cr 867 (RMB), 2/15/17 ).

The ruling is a blow to federal prosecutors who accuse wealthy Turkish national Reza Zarrab of plotting to evade U.S. sanctions against Iran, along with money laundering and bank fraud.

At issue was whether Kirkland & Ellis lawyers—including former Assistant Attorney General Viet D. Dinh and former Solicitor General Paul Clement—must be disqualified because other Kirkland lawyers represent eight banks through which prosecutors say Zarrab illegally channeled U.S. dollars to Iran.

Clement and Dinh, along with all their team at appellate litigation boutique Bancroft PLLC, joined Kirkland last fall.

Judge Richard M. Berman said Zarrab has a team of “very able defense lawyers.” He referred to an Aug. 2, 2016 New York Times article by Benjamin Weiser, “Turkish Gold Trader Builds a Dream Team of Defense Lawyers.”

Famed defense lawyer Benjamin Brafman is Zarrab’s primary defense counsel.

Expert’s Opinion

The government said the court should disqualify Kirkland because the firm’s concurrent representation of Zarrab and the banks would tie its lawyers’ hands as defense counsel and imperil his constitutional right to effective assistance of counsel.

However, New York University law professor Stephen Gillers provided a letter saying that in light of Zarrab’s informed consent, Kirkland’s continued representation of Zarrab and the banks is consistent with the firm’s obligations under the New York Rules of Professional Conduct.

Gillers also provided a supplemental letter saying it was nonsensical to posit that Zarrab would get effective counsel if Brafman worked alone but not if Kirkland lawyers provide assistance with limitations Zarrab accepted. “Arithmetically, it is like saying that 5+3 is less than 5 because it is not 5+5,” Gillers said.

‘Eyes Wide Open.’

The court found that Zarrab—with “eyes wide open”—knowingly and rationally waived the potential conflict posed by Kirkland’s concurrent representation of the banks.

It pointed out that Zarrab’s written waiver acknowledges multiple ways in which Kirkland’s representation of the bank clients gives the banks an advantage over Zarrab, such as the inability of the Kirkland & Ellis lawyers to argue that the banks were not victims and the lawyers’ unavailability to examine or cross-examine personnel of the bank clients.

The court noted that Dinh and Clement currently represent HSBC in a Second Circuit appeal involving charges that HSBC didn’t take precautions to ensure that these alleged illegal transactions benefiting Iran took place. The ethical wall that Kirkland established between its representation of its bank clients and Zarrab doesn’t apply in the HBSC case, Berman said.

However, Zarrab apparently accepts these limitations because he has confidence in the value of Kirkland’s representation and because he has qualified primary counsel who appear to be conflict free, the court said.

The U.S. Attorneys’ Office for the Southern District of New York represents the government. Zarrab’s defense counsel include Brafman & Associates P.C., Kirkland & Ellis, Sullivan & Worcester LLP, Quinn Emanuel Urquhart & Sullivan LLP, Ferrari & Associates P.C., and Clifford Chance US LLP.

To contact the reporter on this story: Joan C. Rogers in Washington at jrogers@bna.com

To contact the editor responsible for this story: S. Ethan Bowers at sbowers@bna.com

For More Information

Full text at http://src.bna.com/mna.Opinion letter from Stephen Gillers is at http://src.bna.com/mlp.Suppmental opinion letter from Gillers is at http://src.bna.com/mlr.

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