By K. R. Klaviger
It looks like things are really starting to go downhill for Keith Raniere and his co-defendants.
The latest “bad news” came in the form of a letter from AUSAs Moira Kim Penza and Tonya Hajjar to U.S. District Court Judge Nicholas G. Garaufis in which they raised questions about…(pause for drumroll)…the potential conflicts of interest that are inherent in having all the defense attorneys for Clare’s co-defendants being paid out of the irrevocable Legal Defense Trust that she set up just before she herself got indicted.
To quote Ms. Penza and Ms. Hajjar: “The government respectfully submits this letter to notify the Court regarding a potential conflict involving counsel for each of the defendants in the above-captioned case, except for counsel for Clare Bronfman. This potential conflict arises from the fact that the legal fees of each of the defendants in this case, except for defendant Clare Bronfman, have been, and will be continue to be, paid from an irrevocable trust to which Clare Bronfman is the primary contributor” (This, by the way, is the first indication we’ve had that Clare is paying her own legal fees from a different pot of money).
The AUSAs go on to spell out exactly why they were obligated to tell the court about this potential conflict of interest “…so the Court may conduct the appropriate inquiry pursuant to United States v. Curcio, 680 F.2d 881, 888-90 (2d Cir. 1982). See, e.g., United States v. Stantini, 85 F.3d 9, 13 (2d Cir. 1996); United States v. Malpiedi, 62 F.3d 465, 467 (2d Cir. 1995).”
After listing the “Notices-of-Appearance” that have been filed by all the attorneys who are currently representing Raniere and Bronfman and their current co-defendants – Allison Mack, Lauren Salzman, Nancy Salzman, and Kathy Russell – Ms. Penza and Ms. Hajjar then go on to describe their interactions with James Q. Walker, Esq. and Andrew Podolin, Esq. of Richards Kibbe & Orbe, LLP, the two attorneys who serve as counsel to the Trustee of the irrevocable Legal Defense Trust.
And guess what? It turns out that while the Trust itself may be irrevocable, his tenure as Trustee is definitely not. Yep, he can be removed “for cause” at any time by Clare. And “cause” like “beauty” is in the eye of the beholder – or, in this case, in Clare’s sole and absolute determination.
And guess what else? Mr. Walker refused to turn over copies of the Trust documents to the government. Hmmm…if there’s nothing to hide, then why wouldn’t he…? Oh, never mind, I just figured that one out.
So, back to the filing…
Next, the AUSAs informed the judge that “…the legal fees of multiple witnesses and potential witnesses are also being paid by Bronfman or the Trust, and that there have been efforts to pay the legal fees of other witnesses.”
They then go on to cite an example that is so bizarre that it could only happen in a case involving NXIVM-related parties.
As it turns out, the government had a meeting within the past several months with a witness who had been served with a subpoena that would require her to testify before a grand jury (Although they refer to this person as Witness #1, they also indicate that the person is a female). According to Witness #1, shortly after she was served with the subpoena, one of the defendants gave her the contact information for an attorney who practices in the Eastern District of New York.
When Witness #1 met with the attorney, the attorney explained to her that his fees were being paid by Clare Bronfman. He then told her that he recommended she plead the Fifth Amendment when she was questioned by the government’s attorneys in front of the grand jury.
And here’s come the “are-you-fucking-kidding-me” part. The attorney went on to tell Witness #1 that if she wasn’t willing to plead the Fifth Amendment, she’d have to find another attorney to represent her (He even told her he’d give her a referral. What a stand-up guy!).
Conflict-of-interest for sure. And maybe a little witness intimidation and obstruction of justice thrown in for good measure. Where does NXIVM even find guys like this?
The rest of the filing goes through a detailed analysis of the applicable law on conflicts-of-interest – and cites numerous cases to show why the current fee-paying arrangement creates a potential conflict for every attorney who is representing one of Clare’s co-defendants.
And it concludes with a suggestion that Judge Garaufis hold an inquiry with each of Clare’s co-defendants to determine “…(i) whether the payment of his or her legal fees by Clare Bronfman presents a conflict; (ii) the nature and extent of that conflict; and (iii) whether each defendant is willing and able to make a knowing and voluntary waiver of the conflict. The defendants should also be reminded that, if they cannot afford counsel, they need not rely on a codefendant to pay their legal fees because counsel will be provided to them by the Court.”
Not wasting any time, Judge Garaufis issued the following order earlier today:
ORDER: Defendants Keith Raniere, Allison Mack, Kathy Russell, Lauren Salzman, and Nancy Salzman are DIRECTED to file individual and separate responses to the Government’s letter regarding a potential conflict involving counsel by no later than 3:00 PM on December 5, 2018. Ordered by Judge Nicholas G. Garaufis on 12/3/2018.
To be sure, the judge has to ensure that Raniere, the Salzmans, Mack, and Russell all know that their attorneys have serious potential conflicts-of-interest in this case. And he has to be sure that if they want to still be represented by those attorneys, they waive their rights concerning any such conflicts because otherwise, they might be able to use the conflicts as a reason to have their subsequent convictions overturned.
But shouldn’t the judge go a step further here – and ensure that each of Clare’s co-defendants is being treated equally and fairly?
If he doesn’t do that, then how he can be sure that their waivers will hold up under further scrutiny by an appellate court: i.e, if they don’t really know what’s going on, how can they make informed decisions?
So, shouldn’t Judge Garaufis require the Trustee to provide a full accounting of just how much money originally went into the Trust and where it came from; whether any more money has come in since the Trust was first established and where it came from; and how much was spent on each defendant to date? And he can always do this on an in camera basis to ensure that this information is not shared with the prosecution team.
Then if he sees any huge discrepancies – like if the Trust is spending 100 times as much to defend The Vanguard as it is on Kathy Russell – he can share that information with all of Clare’s co-defendants – which will let them make informed decisions in terms of waiving their rights.
If there’s nothing to hide, then such a full-accounting shouldn’t be a problem for anyone, right?