Why wasn't the public informed?
MLB - Covington & Burling - DC Sports and Entertainment Commision

From The Common Denominator

http://www.thecommondenominator.com/010906_op-ed.html

Why wasn't the public informed?
(Published January 9, 2006)

By JOHN HANRAHAN

The law firm of W. Andrew Jack, one of the city's top negotiators in the deal to bring Major League Baseball (MLB) to the District of Columbia, has MLB itself and at least one baseball franchise, the Boston Red Sox, as clients. Jack, a partner in Covington & Burling, is outside general counsel to the D.C. Sports and Entertainment Commission, which led the effort to bring the Montreal Expos franchise to D.C.

The information that Covington & Burling represents MLB and the Red Sox is contained on the law firm's Web site. It has not heretofore been reported in the press, or publicized by the sports commission and Mayor Anthony A. Williams, even though to a lay person it raises the appearance of a conflict of interest.

Given the year-long concern of many D.C. City Council members and citizens that the city's negotiators obtained a terrible deal with Major League Baseball – and with the estimated South Capitol stadium cost, now pegged at $667 million (up from $535 million a year ago) – one can wonder about the appropriateness of Jack being on one side of the table negotiating on behalf of the city, while on the other side of the table is his law firm's own client, Major League Baseball. At the very least, isn't this information which the public should have been told going into the city's talks with MLB? This matter should be referred to the Office of D.C. Bar Counsel for a ruling on the conflicts issue.

It should be noted that the law firm's Web site does not show Jack having done any work himself for MLB or its teams, but I didn't get a chance to ask him if this were the case. Jack did not return my phone call or answer my request for an interview, forwarded through the Sports and Entertainment Commission.

Mitchell F. Dolin, a Covington attorney, called me back after I attempted to contact Jack and two Covington partners who have done work for MLB. Dolin said he would try to get answers to my questions. Instead, the Sports and Entertainment Commission, in consultation with Dolin and various individuals I had called, issued -- just before The Common Denominator's deadline -- a statement that reads in its entirety:

"The DC Sports & Entertainment Commission (Sports Commission) works diligently to ensure that its staff, Board and consultants work to provide services that are in the best interest of the District of Columbia. The Sports Commission regularly obtains all appropriate disclosures with regard to potential conflicts of interest among prospective consultants and Board members and staff. With regard to negotiations with Major League Baseball, appropriate review has determined that there are no conflicts of interest by any Commission members, counsel and consultants retained by the Sports Commission or their respective firms. Indeed, the Sports Commission is benefiting from the able and zealous advocacy they are providing. With respect to counsel, we note that law firms that have recognized expertise with particular industry sectors representing multiple clients typically deal with such circumstance by making disclosures to their clients and securing appropriate consents. Counsel followed this procedure in this case."

The mayor's press spokesman, Vince Morris, voiced a similar view. "My impression is that none of them [the negotiators] have done hands-on work for [MLB] or any teams," he said. "They're very talented lawyers, and when you're in a big firm there is often going to be overlap" between areas of expertise that various members of the firm are engaged in. The mayor "has great faith" in his negotiators and "in general, we feel pretty psyched to have such talented lawyers as [William N.] Hall and [Mark H.] Tuohey working for the city for free. It saves taxpayers big bucks."

If – despite the commission's vague and generally unresponsive statement – all appropriate steps were followed by Jack, Covington, the sports commission and MLB, then Jack and Covington are likely to be technically in compliance with the conflict of interest rules under D.C.'s rules of professional conduct for attorneys.

Perhaps. But if so, this shows the weakness of the conflict rules when it comes to public bodies – especially one as secretive as the Sports and Entertainment Commission. In the case of a public agency, the citizens – not the agency – should be considered the ultimate clients, and we certainly were not informed that one of our chief negotiators was negotiating with his law firm's own client. Would we want this if we were, say, negotiating with the tobacco industry?

According to Covington & Burling's Web site, the firm's Jeremy D. Spector's "representative clients in the sports world include" Major League Baseball and the Boston Red Sox. The Web site also said senior tax partner Andrew H. Friedman's clients included MLB and the Red Sox.

Spector's "practice involves tax planning, IRS controversy work, and the structuring of corporate transactions, with particular emphasis in advising sports leagues and teams. . . ." Additionally, Spector's "sports-related work encompasses such matters as the purchase and sale of sports franchises, public and private stadium financing, player compensation, and the treatment of sponsorship, licensing and broadcast agreements."

Spector and Friedman did not return my calls, so I had no chance to ask them about their specific tax and sports-related work for MLB and if any of it overlapped with Jack's work as a city negotiator with MLB.

Covington's representation of the Red Sox can be considered relevant to this discussion because that franchise is among the 30 teams that jointly own the Washington Nationals/Expos franchise. These 30 franchise owners stand to share in an estimated profit of $330 million from the sale of the team to a new owner. The better the deal MLB negotiated with the city, the more valuable the Expos franchise, and, therefore, the higher the payment for each of the 30 owners when the Nationals/Expos franchise is sold.

The law firms of two other key city negotiators – William N. Hall of Winston & Strawn and Mark H. Tuohey of Vinson & Elkins – have lesser connections to professional baseball, as neither firm has represented MLB itself, according to attorneys at both firms and a limited news search. Tuohey is chairman of the sports commission and the lead negotiator, and Hall is a board member and longtime chairman of the commission's baseball committee.

Both Hall and Tuohey are unpaid for their baseball negotiating work, while Covington & Burling was paid $340,000 for its commission work in fiscal 2002. Of this, $120,000 related to bringing baseball back to the city, according to a 2003 D.C. Auditor's report. Figures for the last three fiscal years – when baseball talks intensified – were not immediately available from the commission at deadline.

According to Winston & Strawn's Web site, attorney M. Carter DeLorme has "represented Major League Baseball franchises in both a consulting and lead trial counsel role with respect to their player salary arbitration concerns." In a brief telephone conversation, DeLorme said it would not be appropriate for him to name or discuss his baseball franchise clients. Also, the firm's M. Finley Maxson's experience "has included transactions involving a major league baseball club. . . ."

Hall said in a telephone interview that he had never personally represented MLB or any team, and that Winston & Strawn had never represented Major League Baseball. He also said his firm's representations of management in player salary arbitration matters did not constitute anything approaching a conflict of interest.

"There is no there there," Hall said. "The entity we were negotiating with was Major League Baseball" and not any of the individual franchises. Hall would not comment on Covington & Burling's representation of MLB.

The Web site of Tuohey's Vinson & Elkins law firm shows that attorney Christopher A. Knepp "represents management's interests in numerous major league baseball salary arbitration cases." News reports and the Web site also indicate Vinson & Elkins has represented former owners of the Texas Rangers baseball team and has assisted the city of Arlington, Texas, and the Rangers in developing Arlington Stadium. I found no indication the firm or Tuohey has represented MLB or any of its teams.

In a telephone interview, Knepp, who left Vinson & Elkins on Dec. 31, said he had not represented Major League Baseball franchises directly in player salary arbitration proceedings. Rather, he said, since 1981 he has had as a client Tal Smith Enterprises, a consulting firm owned by Tal Smith, who today is president of the Houston Astros baseball team. Knepp said the Smith firm, at one time, handled arbitration cases for 15 or so MLB teams and that he had assisted Smith in 100 to 150 of those cases over the years. Knepp said he is continuing to work for Tal Smith since leaving Vinson & Elkins last month.

Tuohey did not return a reporter's phone call or respond to requests through the sports commission for comment on Jack's involvement in the baseball talks. Commission spokesman Tony Robinson said Tuohey told him that because of the press of other business he would have no further comment beyond the commission's written statement.

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Hanrahan, a former newspaper reporter and former director of The Fund for Investigative Journalism, is opposed to public financing of the baseball stadium.