GOP faces lawsuit if it doesn’t pay legal fees

02/07/2006

Former GOP Chairman Ron Eibensteiner and his lawyer are pushing for the party to finish paying $230,000 in legal bills.

Dane Smith, Star Tribune
Last update: February 07, 2006 – 1:06 AM

A dispute between a former Republican Party chairman and the party’s current leadership over the former chairman’s hefty legal defense bill could end up in court.

Former Chairman Ron Eibensteiner said Monday that party leaders will be facing a lawsuit if they don’t pay about $230,000 owed to attorney William Mauzy for his successful defense of Eibensteiner on criminal charges that he arranged an illegal corporate political contribution. The party already has paid about $140,000 to Mauzy.

“He did an outstanding job defending me and the party, and it absolutely flabbergasts me why [current Chairman] Ron Carey has not made a reasonable attempt to fulfill the party’s obligations,” Eibensteiner said.

Mauzy, through the firm of Robins, Kaplan, Miller & Ciresi, has served a lawsuit on the party and will officially file it if he is not paid by Feb. 20, his attorney said.

Carey, who ended Eibensteiner’s bid for a fourth term in June, called the lawsuit threat “a business tactic.” He said the party’s executive board wants to take more time and exercise its “due diligence” to ensure the bill is not excessive.

“We have never said we won’t pay it,” Carey said. “We’re trying to settle on a legitimate amount, and hopefully we’ll have it settled in a few days.”

One reason for the delay is that the party is checking with its insurance company to see if some of the expense might be covered, Carey said.

Case was lengthy, complex

Eibensteiner said little has been paid on the bill since Carey ousted him. Carey won in part because some party members were worried about how the charges that were then pending might reflect on the party.

An Olmsted County jury in November acquitted Eibensteiner of charges that he arranged for an illegal corporate contribution from a Florida insurance company. Carey said the party has paid $15,000 in three $5,000 installments since September.

The party actually paid more on the bill under Carey than in the first five months of 2005 under Eibensteiner, Carey said.

Carey said the agreement that Eibensteiner and the party made with Mauzy had no stipulation about the timing of the payments.

Mauzy’s attorney, Chris Madel, said that Mauzy “did outstanding work and, in return, the Minnesota Republican Party should honor its written contract and accept individual responsibility for its obligation.”

The case dragged on for two years, involved four appeals to higher courts, moved between two venues (Mower County and Olmsted County) and required many hours of research, Madel said.

“This just shows that no good deed goes unpunished,” Eibensteiner said. “I served as chairman for six years without a salary and now Ron Carey is having a problem paying a legal fee that the party is obligated by law to pay.”

Eibensteiner, a venture capitalist, has offered to pay the interest on a loan so that the party can pay Mauzy and take a longer time to cover the cost, but party officials refused that offer, Eibensteiner said.

Both mad at Hatch

Eibensteiner and Carey are in complete agreement on one issue: They angrily accuse Attorney General Mike Hatch, a DFL candidate for governor, of initiating and allegedly orchestrating the charges against Eibensteiner, thus costing the party hundreds of thousands of dollars even though Eibensteiner prevailed.

Carey accused Hatch of “legal terrorism” and said that Hatch “used his office and state resources to attack his political opponents and to drive this.”

Hatch issued a statement saying that “at no time” was his office involved in the prosecution.

“The charges in this case were brought pursuant to an indictment by a grand jury. When the case was dismissed, the Court of Appeals ordered the matter be reinstated and brought to trial.”

Mower County Attorney Patrick Flanagan, who brought the case before a grand jury when a citizen complained, said the accusations of Hatch’s involvement were “a joke.” Flanagan said he never spoke to Hatch until he was subpoenaed.

Flanagan said the total cost of the prosecution amounted to about $155,000, with about $140,000 going to Earl Gray, an attorney hired by the county for his expertise in the case, and about $15,000 in miscellaneous expenses.

However, there was no actual cost to Minnesota or county taxpayers, Flanagan said. All the expenses for the prosecution were covered by a $1 million settlement by the Florida insurance company, American Bankers, specifically for prosecution expenses.

Mower County still has $800,000 left from that settlement and has used part of it to hire a full-time “victim-witness coordinator,” Flanagan said.