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The Missing Case of Ronald Machen, Holder's DC Lieutenant

The Missing Case of Ronald Machen, Holder's DC Lieutenant

Ronald Machen, the United States Attorney for the District of Columbia, omitted relevant information from his legal career in written testimony before the United States Senate during his confirmation process in 2009 and 2010, Breitbart News has learned.

While in private practice, court documents show Machen was the “lead attorney” in defending a top executive of billion-dollar company McAfee, Inc., from charges of securities fraud. It was one of Machen’s last cases at powerful law firm Wilmer Cutler Pickering Hale (WilmerHale) before he was nominated by President Barack Obama to be D.C.’s U.S. Attorney.

Since his February 2010 confirmation, Machen has gone on to become one of Obama’s and Attorney General EricHolder’s top Department of Justice (DOJ) lieutenants. When Congress voted on a bipartisan basislast summer to hold Holder in both criminal and civil contempt for his refusal to cooperate in the Operation Fast and Furiouscongressional investigation, Machen decided officially to ignore thecriminal contempt resolution and refused to prosecute Holder for it.That cleared the way for President Obama to assert executive privilegeover the Fast and Furious documents, forcing the House ofRepresentatives to fight for the documents via the civil contempt ofCongress resolution in federal court. That fight is ongoing. 

SenateJudiciary Committee ranking member Sen. Chuck Grassley (R-IA) questioned Machen’s decision,and wondered, via a letter to Machen whether politics were at play. “Itdoes not appear possible that you could have undertaken any suchindependent assessment,” Grassley wrote.

Machen has played a similarly high profile in President Obama’s andAttorney General Holder’s investigations of journalists, such as Fox News’James Rosen and the Associated Press.

Sen. John Cornyn (R-TX), a senior member of the Senate Judiciary Committee, told Fox Newsthat Machen’s political activities should preclude him from beinginvolved in any type of investigation like the ones involvingjournalists. “As a former volunteer for Obama for America, contributorto the president’s election campaign, and having assisted with thevetting of vice presidential candidates, Machen is a far cry from thebeacon of independence and impartiality that something as sensitive asthis investigation demands,” Cornyn said.

Yet before Machen moved up into that high-level position of influence in the Obama DOJ, he was a white collar criminal defense attorney and represented McAfee’s now former Chief Financial Officer Prabhat Goyal in a case where Goyal faced various securities fraud charges.

Federal prosecutors had alleged that Goyal’s actions led to McAfee improperly recording more than $470 million in revenue and underestimating losses by more than $330 million. A jury ultimately convicted Goyal in 2007 of one count of securities fraud and fourteen counts of knowingly filing false company sales statements. Later, in 2010, a federal appeals court overturned that jury’s convictions.

Machen chose not to include his representation of Goyal in his U.S. Senate questionnaire for his nomination that he needed tofill out before his confirmation as U.S. Attorney for D.C.

When asked to provide adetailed account of the 10 “most significant litigated matters” that heattorney of record on the case, Machen chose to include drug dealerbusts and homicide cases over his lead representation of a CFO of abillion-dollar company. The Goyal case’s absence also stands out because Machen did include several other smaller-scalewhite-collar cases he has been involved in throughout his career. Machen even included cases he lost on the list, too.

While it remains unclear why Machen omitted that case from the record, the move to withhold that information from Congress did end up serving one purpose: U.S. Senators did not pressure Machen on an alleged overbilling scheme that McAfee ended up claiming WilmerHale engaged in under Machen’s leadership on the Goyal case.

After the original trial was over, and Goyal had been convicted, McAfee turned around to sue WilmerHale, alleging it had overbilled for its work on the case. Ultimately, WilmerHale charged about $12 million of McAfee to represent Goyal. “The 12 Million dollar fee bonanza was generated in this single defendant criminal action without parallel civil litigation with its attendant discovery fees and expenses,” McAfee alleged in lawsuit against WilmerHale, which was filed in May 2008 in the U.S. District Court in the Eastern District of Texas.

“Invoking the notion that Plaintiff [McAfee] could not question the necessity of actions taken to ‘ensure Goyal’s freedom,’ Defendant [WilmerHale] intentionally over worked and churned the representation of Goyal; shamelessly employing 100 WilmerHale timekeepers in the feeding frenzy,” McAfee added. “Defendant’s bills reflect at least 16 partners, 34 associate attorneys, 10 legal assistants and 49 staff personnel–how else could they amass this enormous trove of cash?”

Later in the suit, McAfee added that WilmerHale’s “unreasonable expenses include almost $200,000 in expenses for luxury hotel rooms, limousines and charges for room service and bar tabs.”

A court hearing transcript from July 2008 shows Martin Rose, an attorney with the law firm Rose Walker which represented McAfee in its suit against WilmerHale, said that lawyers on the Goyal case had billed 21 hours per day for just “one line entry” of a description of their activity. Those descriptions of what specifically they were doing were redacted from the documents Rose obtained, he said. Rose also said the lawyers had all billed for 44 straight days without taking any days off, which he argued was hard to believe. Rose also noted that the bills show Machen’s WilmerHale claimed it had spent “30, 40, 50, a hundred hours per document” reviewing them.

A separate court transcript in a different proceeding between McAfee and Goyal in a Delaware court shows that McAfee counsel, Kenneth Nachbar of Morris, Nichols, Arsht & Tunnell, said that McAfee believes WilmerHale’s activity “is an extraordinary circumstance, where there was actually fraud by the law firm.”

“It’s not that the law firm, you know, should have billed $8 million and they billed $12 million because they weren’t as efficient as they might have been,” Nachbar said. “I think the allegations are that there was actual fraud, that there were people who billed things who didn’t work on the case.”

Specifically, more court documents show that McAfee had alleged WilmerHale’s total overbilling was about $6.8 million. In a later amended complaint, McAfee alleged WilmerHale had committed fraud, theft and negligence and was in potential violation of the Texas Theft Liability Act.

The court docket shows that WilmerHale settled the case with McAfee for an undisclosed amount on or around October 1, 2009, as President Obama’s team was vetting Machen for his U.S. Attorney nomination. While the settlement amount was not disclosed, McAfee’s next quarterly filing showed that the company “recorded a benefit of $6.5 million related to reimbursements from insurance for legal fees we incurred related to the cost of defense incurred with our stock option investigation that commenced in May 2006.”

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