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January 8, 2009 12:26 PM

It's Always Shady in Philadelphia?

Posted by Zach Lowe

The Legal Intelligencer, an Am Law Daily sibling publication, brings us up to speed on a crazy story involving a corrupt former state senator, a company on the wrong end of a lawsuit (Verizon), and the law firms used in an alleged blackmail scheme against that company.

It's a great story, and we'll only summarize it here. It starts with Vincent Fumo, a former state senator on trial for various corruption charges. Some of the testimony in the case came form Daniel Whelan, former president of Verizon, the telecommunications giant Fumo and other state officials wanted broken up into separate units. Whelan testified that Fumo claimed he could have legal action against Verizon dropped if the company steered $50 million to Fumo's friends--a group that included the Philly law firm Obermayer Rebmann Maxwell & Hippel (among others, including the Philly Pops!). Fumo and Thomas Leonard, chair of Obermayer's litigation committee (and a prominent Democrat who served as the city's controller in the 1990s), attended law school together at Temple University in the 1970s and have remained friends since, according to this story in the Philadelphia Inquirer.

Verizon paid $3 million to Obermayer starting in 2002, but it's unclear what, if anything, they got for it, the story says. Obermayer lawyers, including Leonard, didn't return the Intelligencer's calls. 

Fumo first tried to get Verizon to pay other law firms, including Dilworth Paxson (Fumo's old firm) and Sprague & Sprague; Fumo is close friends with firm head Richard Sprague, the Intelligencer said. 

Verizon also sent work to Cozen O'Connor, but lawyers there told the Intelligencer they knew nothing about any back room deals and that the firm was doing work for Verizon before Fumo allegedly started pressuring the company. 

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