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FIRMS EYE IRAQ WORK AFTER SANCTIONS LIFT When the Treasury Department on May 27 lifted nearly all the remaining economic trade sanctions against Iraq, lawyers at many big firms had every reason to rejoice. For over a decade, those sanctions have made it illegal for firms in the United States to do business in Iraq or to advise clients on any venture that involves moving money into or out of the country. Now, most Iraq-related legal work is fair game. And several lawyers with international practices say there will soon be lots of it to go around. “Normalcy is coming to Iraq, and that means corporate lawyers will get involved for corporate clients, lawyers for banks will get involved, and all the normal legal issues of commercial dealing will have to be addressed,” says Covington & Burling partner Peter Trooboff, an expert on foreign asset controls. Trooboff says Covington has already received inquiries from several clients relating to the lifting of sanctions against Iraq. One U.S. company called to ask about registering its trademarks and patents in the still-unstable country. Other clients — Trooboff declines to identify them — are now hoping to recoup payment for goods or services, such as pharmaceuticals or building materials, provided to Iraq before Saddam Hussein’s invasion of Kuwait led to the first Gulf War and U.S. trade sanctions. Now that the U.S government is intent on promoting a viable market economy in Iraq, Trooboff notes, companies may be eager to parlay old claims against the country into new business deals there rather than just fight for cash repayment and then walk away. And that could mean more deal-related work for lawyers. Firms with expertise in sovereign debt restructuring, such as Cleary, Gottlieb, Steen & Hamilton and White & Case, are almost certain to get involved in any such effort in Iraq. Some experts have estimated that Saddam Hussein’s government racked up as much as $100 billion in debt. How to tackle that debt now is a thorny problem. For law firms, the array of potential clients who will want to be involved in sorting out Iraq’s finances is wide. Iraq’s creditors include many countries, banks, and other private sector businesses. And, of course, there is the inchoate government of Iraq itself. “There’s going to be an enormous amount of international work that will come out of this,” predicts Cleary’s New York-based managing partner Peter Karasz. “There are tremendous legal issues involved here,” agrees White & Case D.C. partner and international trade expert Carolyn Lamm. “It’s got to be solved for things to pick up economically in Iraq.” — Otis Bilodeau BARS SQUARE OFF AGAINST FTC Lawyers from the American Bar Association and New York State Bar Association square off in court June 2 against the Federal Trade Commission. At issue: whether lawyers who provide services such as tax advice or real estate settlements have to send out privacy policy notices to their clients, as banks and credit card companies do. The ABA, represented by David Roll of Steptoe & Johnson, and the N.Y. Bar Association, represented by Warren Dennis, a D.C.-based partner at Proskauer Rose, say no. The two groups filed suit against the FTC in U.S. District Court for the District of Columbia in September after the agency refused to exempt lawyers from the privacy provisions of the Gramm-Leach-Bliley Act. The FTC, represented by Michael Bergman from the agency’s general counsel’s office and Assistant U.S. Attorney Brian Sonfield, filed a motion to dismiss, arguing that because Congress didn’t specifically exempt lawyers from the law, they have to comply just like everyone else. Not so, says Dennis. “You need an unambiguous signal that Congress intended to cover lawyers,” he says. Judge Reggie Walton will decide whether or not to dismiss the case. — Jenna Greene CHERTOFF’S FAREWELL PERFORMANCE Justice Department Criminal Division chief Michael Chertoff, whose nomination to the U.S. Court of Appeals for the 3rd Circuit is on its way to the Senate floor, may be making his farewell performance as a prosecutor June 3. Chertoff is expected to argue before the 4th Circuit in the case against alleged terrorist conspirator Zacarias Moussaoui. The government is appealing a May 15 ruling related to Moussaoui’s attempts to gain access to a senior al Qaeda operative in U.S. custody. The hearing in Richmond, Va., is scheduled to last all morning and will be partly closed to the public. — Vanessa Blum ACLU GETS ITS MAN: ROBERT MUELLER Leaders of the American Civil Liberties Union don’t often see eye to eye with Federal Bureau of Investigation Director Robert Mueller III. So why did the ACLU invite Mueller to make the keynote address at its first-ever national conference in June? Emily Whitfield, an ACLU spokesperson, says the group was interested in hearing from government officials who have been part of crafting law enforcement policies in the wake of the Sept. 11 terrorist attacks. “We also think it’s important those people hear from us,” she says. Attorney General John Ashcroft declined an invitation to speak at the conference, which will be held June 11-15 at the Omni Shoreham Hotel in the District. FBI spokesperson Paul Bresson says Mueller “looks forward to explaining the FBI’s role in protecting national security while balancing privacy interests.” — Vanessa Blum D.C. LINKS TO BROWSER SETTLEMENT In putting together last week’s $750 million settlement of AOL Time Warner’s antitrust suit against the Microsoft Corp., the companies relied most heavily on their general counsel, Paul Cappuccio and Brad Smith, to hammer out the terms. But AOL’s trial team from the D.C. office of Kirkland & Ellis also provided advice. Among the lawyers involved were partners Jeffrey Rosen, Karen Walker, James Draughn, Michael Becker, and Brant Bishop. Also working on the case for AOL were lawyers from Cravath, Swaine & Moore, and James Ulwick of Kramon & Graham in Baltimore. Microsoft’s trial counsel included D.C.-based Sidley Austin Brown & Wood partners Karen Popp and James Bendernagel Jr. The ink was hardly dry on the settlement before criticism started flying. The American Antitrust Institute offered a pointed critique, calling Microsoft “a monopoly whose power is growing” and urging the Justice Department to investigate. A DOJ spokeswoman says the agency is “aware” of the settlement, but declines further comment. — Jenna Greene TAX LAWYERS LOOK FOR GAINS IN CUTS Corporate tax lawyers know they have something to shout about with President George W. Bush’s new tax package, which cuts the top tax rate on dividends paid to individual investors by more than half. They just aren’t sure how loud their cheering should be. Miller & Chevalier chairman Philip Mann says the plan’s new rules for dividends and capital gains will be significant for his firm’s multinational corporate clients — but, as yet, the full implications of the breaks aren’t clear. The Jobs and Growth Tax Relief Reconciliation Act of 2003 provides for a maximum 15 percent tax on long-term capital gains and on dividends paid by U.S. corporations or by foreign corporations that trade their stock in U.S. markets. The current top tax rate is 38.6 percent for dividends and 20 percent for capital gains. Leslie Samuels, a New York partner with Cleary, Gottlieb, Steen & Hamilton, says the new plan will probably mean shifts in capital markets. “Everybody is thinking about this issue,” he says, “but so far it’s brainstorming. People are just starting to absorb this.” — Lily Henning A DIFFERENT KIND OF DEATH-ROW CASE Death-row inmates in Mississippi won’t have to spend another summer in squalor due to the efforts of Stephen Hanlon, a D.C.-based partner at Holland & Knight, and Margaret Winter, associate director of the ACLU National PrisonProject. U.S. Magistrate Judge Jerry Davis of the Northern District of Mississippi ruled May 21 that the Parchman Farm state prison must meet “minimal standards of decency, health and well-being.” The lawsuit, filed in July 2002, is a subclass of a prisoners’ rights class action that began in 1972 and remains unresolved. Hanlon says the plaintiffs were anxious to go to court as soon as possible so that the 70-some inmates could avoid another summer exposed to the brutal Delta heat, mosquitoes, bad plumbing, human excrement, and psychotic inmates. He called Davis’ decision “courageous” because it comes at a time when prison-condition cases are becoming harder to win. — Alicia Upano SOME WELCOME BID TO IMPROVE CONTRACT RULES Government contracts lawyers are giving mixed reviews to revisions of the federal government’s new policy on public-private job competition. “They did an excellent job of moving the process in the right direction, but it’s definitely not without problems,” says Wiley Rein & Fielding partner William Roberts. The revamped guidelines, issued May 29 by the Office of Management and Budget, tighten bid deadlines, broaden the range of people who can appeal and protest bids, and take into consideration the best value, not only the lowest cost, when awarding bids. By squeezing the standard competition period to 12 months, the changes provide relief for private contractors, who might have waited up to four years under the old rules, says Reed Smith D.C. partner Stephen Sorett. The OMB declined to review service agreements between government agencies, which bypass bids by commercial vendors. “It would have been a major gain,” Roberts says. “It would have been a huge source of potential work for a lot of my clients.” — Lily Henning PITCHING IN AT THE PENTAGON The designers of a memorial to the victims of the Sept. 11 Pentagon attack are getting some pro bono legal assistance from Buchanan Ingersoll partner Mary Jane Augustine. With 27 years of experience as a construction attorney, Augustine says she is channeling her energies toward the memorial. Architects Julie Beckman and Keith Kaseman won the contest, which had 1,126 entries, and sought advice from a couple of their former Columbia University professors, who in turn referred them to Augustine. Augustine, who is based in the firm’s New York office, will work primarily on negotiations with contractors. The memorial is scheduled to be completed in August 2004. — Alicia Upano

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