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The Washington, D.C., law firm of Wilmer, Cutler & Pickering gained new levels of prominence in the last three years as it became the go-to firm in seemingly every major corporate scandal. It led internal investigations at both Enron Corp. and WorldCom Inc. The firm’s role in events at Tyco International Ltd. has always been more complicated. Wilmer Cutler lawyers were hired by and worked closely with former Tyco general counsel Mark A. Belnick. They are now key witnesses in Belnick’s criminal trial — for both the prosecution and the defense. Last Thursday and this Tuesday, Lewis Liman took the stand at Belnick’s trial before Manhattan Supreme Court Justice Michael Obus. Liman and William McLucas were the Wilmer Cutler partners Belnick hired to represent Tyco in a Securities and Exchange Commission (SEC) inquiry into Tyco’s accounts beginning in the fall of 1999. After the inquiry ended without formal charges in July 2000, Belnick received a $17 million bonus from former Tyco Chairman L. Dennis Kozlowski. The Manhattan District Attorney’s Office says that bonus, as well as more than $14 million in interest-free loans, was stolen. In charging Belnick with grand larceny, securities fraud and several counts of falsifying business records, prosecutors allege that he received payments unauthorized by the board as a reward for helping Kozlowski conceal his own, much larger thefts from Tyco. Belnick’s lawyers, on the other hand, claim the bonus and loans were fully authorized based on his stellar performance at Tyco, the chief example being his successful handling of the 2000 SEC investigation on which he worked with Liman and McLucas. The Wilmer Cutler lawyers’ accounts of Belnick’s actions during that investigation are therefore crucial to both sides’ cases but they differ in the value they place on their contemporary accounts as opposed to their retrospective accounts. For the prosecution, e-mails sent four years ago by the two Wilmer Cutler lawyers to Belnick in the course of that investigation provide the proof that someone alerted the general counsel to the possibility that Kozlowski was abusing company loan programs and that other things might not be right at Tyco. It was largely to explain the background of some of these e-mails that prosecutors called Liman to the stand Thursday. Liman is now a partner at Cleary, Gottlieb, Steen & Hamilton. On March 23, 2000, Liman e-mailed Belnick to let him know that documents that were being readied for production to the SEC showed that $100,000 in vacation expenses for Kozlowski’s then-girlfriend and present wife, Karen Mayo, were being treated as part of a reserve meant to cover expenses relating to a recent merger. “[T]here are payments to a woman whom the folks in finance describe to be Dennis’ girlfriend,” Liman wrote to Belnick in a subsequent e-mail the same day. “I do not know Dennis’ situation, but this is the embarrassing fact.” Prosecutors claim Belnick failed to act on this information and instead acted to have it redacted. On Thursday, under direct examination by Assistant District Attorney John W. Moscow, Liman testified that Belnick never followed up with him about the payment to Mayo. The prosecution will similarly be looking to McLucas to testify in the coming weeks about his May 26, 2000, e-mail to Belnick, which has come to be called the “corporate culture e-mail” at trial. Reacting to earlier e-mail discussions of ways Tyco’s finance executives met cash flow forecasts by adjusting various cash reserves, McLucas told Belnick of his concern that there “seems to be a genuine feeling that this sort of thing is not necessarily inappropriate.” “[T]he frequency of this kind of thing, along with the attitude that its OK, can really get these guys into serious trouble,” McLucas wrote in the e-mail. “Hopefully we will have some luck on this one as well and the SEC will never hear this kind of story so bluntly presented as here. If we escape this without a crippling broadside, the toughest challenge here seems to me to involve how one changes the culture.” The e-mails are certainly strong statements but the prosecution is now contending with the fact that the actual trial testimony of the Wilmer Cutler lawyers will likely prove mostly helpful to the defense. Indeed, after Moscow’s relatively brief direct examination, defense lawyer Mark Hulkower embarked on a lengthy cross-examination of Liman in which the former Wilmer Cutler partner continually highlighted smart and difficult decisions Belnick made in the course of the SEC investigation. “He told us that he wanted to respond right away to the SEC,” Liman testified Thursday about Belnick’s “very active” participation in the investigation. “He thought this should be taken extremely seriously. He didn’t want to spare any expenses at all in terms of the resources we devoted to this … “ Liman particularly praised Belnick’s potentially risky decision to have former Tyco Chief Financial Officer Mark Swartz meet with the SEC. “It was my belief that the integrity of the company and therefore the likely progress of the investigation would turn to a substantial degree on what the SEC thought of the top financial officer,” he said Tuesday. The SEC publicly announced it was calling off its investigation shortly after a successful meeting with Swartz. Liman suggested this was also a major accomplishment, noting that the SEC often left companies in the lurch by failing to make such announcements, even when it had ceased pursuing investigations. Liman also provided some support to defense theories that Belnick was being targeted by duplicitous board members led by Joshua Berman, a former partner at Kramer, Levin, Naftalis & Frankel, who had frequently clashed with Belnick over Tyco’s choice of counsel. Liman testified Tuesday that he was concerned about Boies, Schiller & Flexner’s involvement in the internal investigation in the spring of 2002, following Tyco’s announcement of a $20 million “finder’s fee” payment to director Frank Walsh, in part because the firm had been hired by a group of four directors including Berman. Based on interactions with the district attorney’s office, Liman said he thought three of the four directors were guilty of crimes themselves and might be trying to influence the investigation. Moscow objected frequently throughout the cross-examination and said Thursday Liman was following a “script” in which he fed “eager answers” to Hulkower. He also expressed irritation Thursday with Liman’s testimony praising lawyers at his former firm, which he described as a “mini SEC.” Moscow said Liman’s opinions of Wilmer Cutler and other firms were not proper subjects for cross-examination. Though both sides have highlighted the strong reputation of Wilmer Cutler’s securities practice, the defense has a stronger interest in playing up the prestige of lawyers and firms specifically hired by Belnick. Reid Weingarten, Belnick’s attorney, noted in opening arguments that McLucas, the former head of the SEC’s enforcement division was the “gold standard” in securities matters and the last person someone would want around during a fraudulent scheme. Wilmer Cutler recently completed a merger with Boston’s Hale and Dorr, creating a 1,000-lawyer firm known as Wilmer, Cutler, Pickering, Hale and Dorr. PRIOR CONNECTIONS Liman had a connection to Belnick prior to his role in the Tyco investigation. Liman’s father was Arthur Liman, the famed litigator at Paul, Weiss, Rifkind, Wharton & Garrison, the same firm where Belnick was once a partner. In his opening statement, Belnick’s lawyer, Weingarten described Arthur Liman as his client’s mentor and said Belnick only considered leaving Paul Weiss after the death of the elder Liman in 1997. On the other hand, Liman also testified Thursday that he has known and respected Manhattan District Attorney Robert M. Morgenthau since he was “a very little kid.” Noting that the case involved several people Liman had known and respected for many years, Moscow asked him Thursday if he would rather not be there. “That is a fair statement,” replied Liman.

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