Ethics professor reviews celebrated case

From a legal-ethics perspective, they blew it.

That is the view of Villanova University law school ethics professor Catherine J. Lanctot of the actions of two of Philadelphia's most prominent lawyers in a now-notorious meeting with an alleged shakedown target of convicted former State Sen. Vincent J. Fumo.

Those two lawyers would be David L. Cohen, the executive vice president of Comcast Corp., and Arthur Makadon, chairman of Ballard, Spahr, Andrews & Ingersoll L.L.P., one of Philadelphia's larger law firms.

By now, the details are deeply embedded in the rich canon of the Fumo tale.

Daniel Whelan, the former Verizon Pennsylvania president, testified in the Fumo trial that during the May 10, 2000, meeting he told the lawyers that Fumo had made a number of improper demands in exchange for dropping his plan to break up the company. Whelan wanted to know whether he should go to federal prosecutors.

Their advice, Whelan testified, was "work it out with the senator."

Makadon and Cohen have said they do not recall that part of the conversation.

Although the incident should have been an embarrassment for the local bar, Philadelphia's legal community has had little to say publicly about it. Bar Association Chancellor Sayde Ladov declined to discuss the matter, saying that it wasn't part of her mission to weigh in on lawyer-ethics controversies like this and that she didn't have the facts.

One prominent Philadelphia lawyer said that, in addition to the case comprising conflicting accounts and legal gray areas, most lawyers in Philadelphia's sprawling legal community were reluctant to take on a powerful player like Cohen, a major Democratic Party fund-raiser, chairman of the Greater Philadelphia Chamber of Commerce, confidant of Gov. Rendell's, and incoming chairman of the University of Pennsylvania's board of trustees.

Lanctot, a former Justice Department lawyer, isn't so timid.

Quite apart from the lawyers apparently giving bad advice, Lanctot says, the meeting was poorly handled from a professional-ethics standpoint.

Lanctot said Cohen and Makadon should have laid out their firm's primary conflict - Cohen's friendship with Fumo - early on. Just as important, reprising a theme she regularly pounds into young law students, Lanctot says they should have dispensed no legal advice, since they were not representing Whelan.

And then they should have followed it up with a letter making those points.

Had there been such a letter, the issue might never have gained critical mass.

"I don't think it was handled well; I doubt in retrospect they think they handled it well," said Lanctot. "You don't want to be in a situation where you are giving someone advice who is not your client, especially, as it appears in this case, to have been very bad advice."

Yet, viewed from the perspective of prosecutors, the 30-minute meeting was emblematic of the way business gets done in Philadelphia.

Whelan says he and his general counsel, Julia Conover, came to the meeting to discuss an audacious plan by Fumo to extract $50 million from the company in exchange for dropping his effort to split it in two. Whelan said that when he tried to hand the lawyers a sheet listing the demands, they declined to look at it. Proponents of the breakup had argued it would foster competition and lower phone rates.

While some facts are in dispute, the things that are acknowledged in this sticky ex parte drama are revealing.

Cohen has described Fumo as a friend and has vacationed with him and his family, while Makadon, according to Whelan's testimony, seemed to minimize one of Fumo's demands: that Verizon bury its communications lines in the neighborhood around Fumo's home in the city's Spring Garden section.

Fumo was long known in Philadelphia for pushing the ethical and legal envelope. One prominent former member of Congress told me recently that he always disliked dealing with Fumo because the discussion never was on the merits, but rather about how unrelated agendas and third parties might be advanced.

Whelan credibly described himself as trying to delicately thread his way through a political and ethical minefield as he tried to save his company from being divided into wholesale and retail divisions at a cost of $2 billion or more.

One might reasonably ask, as Fumo defense lawyers did, why Whelan himself never went to prosecutors. His disturbing answer was that he believed the U.S. attorney at the time was close to Fumo associates and that word would leak back to Fumo that he had contacted law enforcement.

How very Philadelphia.

There was no basis for Whelan's fears; in fact, Michael Stiles, the U.S. attorney at the time, heatedly denies that word of the probe ever would have leaked.

But Fumo had a well-deserved reputation for ruthlessness and vengeance.

So why risk it?

Whelan has said that after he left the meeting with Makadon and Cohen, he had the sense that the two lawyers feared being on the wrong side of Fumo.

There is no doubt that prosecutors found Whelan's account of the meeting credible. After all, they had Whelan tell the story, under oath, on the witness stand.

Cohen has declined to speak publicly about the meeting but has said privately he had no recollection of a conversation about reporting the Fumo demands to prosecutors. Makadon has given only one interview, in which he said that he had no recollection of telling Whelan to "work it out with the senator."

There is no requirement that citizens go to the police when they have evidence of a crime. So even if Whelan's account is 100 percent accurate, Makadon and Cohen would have been within their rights.

But that's not really the point, says Lanctot.

Cohen, who was chairman of Ballard at the time of the meeting, and Makadon, who was then managing partner, had gotten sloppy and did not employ best practices that would have helped them avoid larger problems.

They should have disclosed the firm's conflict and ended the meeting there. And put it in writing.

"They didn't take the steps necessary to give someone a quality legal opinion," said Lanctot of Whelan's version of events. "You are either going to take on the full attorney-client relationship and do everything that comes with that or do nothing. But you don't give off-the-cuff comments."

Had they employed those practices, there would be no discussion today about whether Makadon and Cohen left Whelan with the impression that he should cooperate with Fumo.