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Washington, D.C.’s Hogan & Hartson likes to say it practices law at the intersection of business and government. But sometimes the signs along that route can get a little confusing. In late September the Federal Election Commission released a unanimous decision finding probable cause to believe that the firm had violated federal election law. The case involved campaign contributions made by Greek businessman Georgios Psaltis to the Democratic National Committee in the summer of 1996. The FEC found that Psaltis had used Hogan to help set up a Delaware corporation as a sole proprietorship on June 14, 1996. That same day the corporation cut a check to the DNC for $10,000. Five weeks later Psaltis made an individual contribution to the DNC of $40,000. Whoops! That’s a no-no for a foreign national. Worse for Hogan, the FEC found probable cause to believe that both contributions were solicited, accepted, or received by Christine Warnke, a governmental affairs adviser for Hogan and Washington networker extraordinare. Warnke denied that she actively solicited funds from Psaltis and told the commission that, as a nonlawyer, she assumed the legality of the contributions had been cleared by Michael Cheroutes, the Hogan partner who helped Psaltis set up the corporation. Cheroutes works in the firm’s Denver and London offices and specializes in international finance. Neither Warnke nor Cheroutes responded to calls seeking comment. Psaltis could not be reached for comment. According to an FEC conciliation agreement entered into by the parties, Cheroutes says that he wasn’t aware that the initial Psaltis contribution violated election laws and that no other Hogan partners knew of the contribution prior to its being made. The agreement indicates that Cheroutes was not directly involved in the handling of the second contribution, which Psaltis sent to Warnke, who in turn passed it on to an unnamed Democratic fund-raiser. Cheroutes told the FEC that once he read press accounts in October 1996 about the controversy surrounding improper campaign contributions by foreign nationals, he consulted Hogan partners with expertise in election law. They advised that the DNC give the contributions back, which it did the following month. John Keeney, Jr., an election law specialist at the firm, confirms that Cheroutes spoke to him about the matter and says he immediately advised that the contributions be returned. Warnke, Cheroutes, and Hogan all settled with the commission. They were collectively fined $67,500, but the settlement notes that the fine would be paid by Warnke and Cheroutes. Keeney says that, though Hogan decided not to dispute the FEC’s findings, it still believes the firm did nothing wrong. “The entire concept that a law firm is responsible for things its employees do in a personal capacity is not the law,” Keeney maintains, “nor is a law firm liable if a corporate client makes an illegal contribution.” Keeney adds that, but for Hogan alerting the FEC, the agency would not have known about the firm’s involvement.

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