The Firms

October 26, 2009 5:10 PM

Report: K&L Gates Tied to Scandal-Plagued Congressman

Posted by Brian Baxter

A few weeks ago The Am Law Daily reported on the legal troubles of Democratic Rep. Peter Visclosky from Indiana, served with Justice Department subpoenas related to his alleged ties to a now-defunct lobbying group raided by federal agents earlier this year.

According to this story in Monday's Washington Post, Visclosky's ethically dubious conduct has now dragged K&L Gates into the morass. Federal investigators are now looking into possible links between earmarks supported by Visclosky and the congressman's campaign fund-raising efforts, the WaPo reports.

Visclosky signed off on at least $44 million in earmarks over the past two years for 15 technology companies that hired K&L Gates for lobbying work, according to the paper, noting that none of them operated in Indiana. K&L clients receiving support from Visclosky also happened to donate $200,000 to his campaign and an additional $130,000 to a House Democratic campaign committee since 2005.

Just coincidence, right? Not necessarily, the WaPo suggests.

David Rosenberg, a founder of Hycrete, a Carlstadt, N.J.-based waterproofing firm, told the paper that he hired K&L in August 2007 and has since paid the firm $190,000 to help obtain defense appropriations and other funds. Hycrete had developed a moisture-control additive that would improve the strength of concrete, and Rosenberg wanted the U.S. Army Corps of Engineers to start using his product.

Rosenberg said K&L suggested he donate to Visclosky's campaign in order to build a relationship with a sitting congressman. After Visclosky requested a $2 million Army Corps earmark to evaluate Hycrete's technology, Rosenberg donated $20,000 to Visclosky and the Democratic Congressional Campaign Committee.

"I'm a fan of earmarks," Rosenberg told the paper. "None of that would have happened without this funding--there was no light at the end of the tunnel."

Another executive who also had hired K&L, when contacted by the paper, stressed that obtaining government earmarks was the only way his business could survive. "I understand how this can look from the outside," said Sean Murdock, CEO of NanoSonix (the Skokie, Ill.-based company makes night-vision goggles). "My belief was we had to pursue government funding if this technology was going to see the light of day."

The same situation played out with Genocea Biosciences, a 2006 start-up specializing in vaccines. Within weeks of K&L lobbying for the company in 2007, Genocea donated $18,000 to Visclosky. The WaPo reports Visclosky eventually succeeded in securing $1.6 million in funding for the Cambridge, Mass.-based company, which has used the funds to position itself for a sale.

"There's absolutely nothing wrong with giving campaign contributions to establish relationships," says McKenna Long & Aldridge partner Stefan Passantino, author of the Pay to Play Law Blog. "But when you get into anything where it looks like there's a direct link between official actions and those contributions, it's a cause for concern."

Asked to comment on the WaPo report, K&L Gates spokesman Michael Rick says the firm has a strong nanotechnology practice but shouldn't be held responsible for third-party actions outside of its control.

"Our clients have interesting, real, cutting-edge technologies, and we help them to find federal research funding through contracts, loans, and appropriations, with a clear view to both ethical and legal requirements," Ricks says. "The [WaPo] article does not state that we have done otherwise . . . and we don't control the timing of either markups or fund-raisers."

Many of K&L's nanotechnology lobbying contracts originated with predecessor firm Preston Gates & Ellis. (The firm merged with Kirkpatrick & Lockhart Nicholson Graham in December 2006. The WaPo notes that Preston Gates was looking to rebuild its lobbying practice following the departure of rainmaker Jack Abramoff to Greenberg Traurig in 2001.)

Federal campaign disclosure forms show that Visclosky made two payments totaling $100,000 to Steptoe & Johnson in July and August of this year. Steptoe litigation heavyweight Reid Weingarten and litigation partner Brian Heberlig are representing Visclosky in the unfolding federal investigation.

Visclosky stepped down as chairman of a House appropriations energy panel in June after Justice Department subpoenas linked him to their lobbying inquiry. He continues to sit on an appropriations defense subcommittee.

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Rep. Viscloskey is a twelfth-term Congressman, not first-term. Also, why is it that Viscloskey's conduct has "dragged K&L Gates into the morass"? Isn't it possible that they rolled up their pant legs and waded right into it?

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