For those of you who don't know what I'm talking about, attorney/lobbyist Norman Powell is suing attorney/lobbyist Chris Korge, claiming that Korge is a lying cheat who stole hundreds of thousands of dollars from him. Korge denies the charge. Until a few weeks ago, the two men were friends working together in the law firm Korge & Powell. At issue is whether Powell was a partner in the law firm or a salaried employee.
Powell claims he was a partner.
Korge says he was an employee.
The distinction is important. As a partner Powell would be entitled to a share of the profits of the firm, which specialized in winning government contracts for its clients. Among their big-name customers: BellSouth Telecommunications, which was vying for the county's pay-telephone contract; Host-Marriott, which became one of the master developers for Miami International Airport; GFC Crane Consultants, which sought the lucrative gantry-crane operation at the Port of Miami; and Comsis Corp., which operates the county's special-needs transportation system. According to the lawsuit, during the 22 months Korge & Powell was in existence (from November 1998 through August 2000), the firm earned more than $2.5 million in profits. Powell's attorney, Scott Feder, says the firm had gross revenue of more then $4.5 million.
During the time they were together, however, Powell claims Korge consistently told him the firm either was operating in the red or barely breaking even. It was only after Powell stumbled upon the firm's ledgers -- and saw the numbers for himself -- that he realized the firm was doing better than he had been led to believe.
Whether Powell ultimately will succeed is hard to tell at this point. There are several large hurdles standing in his way. First and foremost, his assertion that Korge made him a partner in the firm is based solely on what he claims is a verbal agreement between the two. He has nothing in writing that says he was a partner.
Korge's attorney, Tom Tew, says the articles of incorporation for the firm make it clear that Korge is the sole stockholder. “Norman was a salaried employee who got a W-2 form every year,” Tew notes. “He received a paycheck every two weeks that had taxes taken out of it. How dumb does this kid expect the world to be? Is he just illiterate when it comes to tax matters?”
Feder argues that the verbal assurances Korge gave to Powell are binding and will hold up in court. Why, asks Feder, would 35-year-old Powell leave one firm -- where he was a partner -- and join Korge if Korge didn't promise him a partnership as well? “There was an agreement, a promise that was clearly broken,” he insists. In addition, placing Powell's name in the firm's name implies a partnership. Florida Bar rules state that if a lawyer's name is part of the firm's name, it is fair for the public to assume that person is a partner.
Tew says that if Powell wants to raise a complaint with the Florida Bar, then the Bar will deal with that issue when the time comes. In the meantime, he says, basing a lawsuit on letterhead and verbal assurances is ridiculous. “I hope Norman is a better lawyer for others than he is for himself,” Tew laughs.
Powell is angry, according to Tew, because he didn't think he was being treated fairly and wasn't given a big enough bonus. “It's a labor dispute,” Tew argues. “If he doesn't like the way he is being treated he is entitled, like anyone, to find another job. We maintain he was being compensated fairly.” When the firm started, Powell's annual compensation was $96,000. A few months later it was raised to $120,000. “Frankly, this whole thing is to squeeze Chris because he is a public figure,” Tew asserts. “I think it's a shakedown.”
Feder says Powell is only interested in an equitable resolution. “Norman made the mistake of trusting his mentor,” Feder says. “We don't deny that Mr. Korge was the main rainmaker at that firm and that most of the clients were there because of him. And Norman is not asking for a 50-50 partnership. But he worked like the proverbial dog on many of the firm's clients and matters, and as a result he expects a fair share of the profits.”
Tew says Powell got exactly what he had coming to him. “Ask the kid, who opened the doors for him and who mentored him,” Tew huffed. “The kid has made his bed, and now he is going to have to sleep in it.”
The stakes could grow dramatically. The longer the lawsuit stays alive, the more damaging it may be for Korge, even if he ultimately wins. As I noted earlier, the lawsuit already has raised questions as to whether Korge violated Florida Bar rules. Worse still for Korge, it could also provide a glimpse into his financial relationships. In the past ten years, the 45-year-old Korge has gone from being a virtual unknown at county hall to being its most powerful lobbyist. He's done so by exploiting his ties to Alex Penelas -- first when Penelas was a commissioner and later when he became mayor.
Feder says he is eager to explore the way Korge does business at the county. “There are a large number of deals I want to take depositions on,” he says. “I want to depose the company officials involved, and in some cases the subcontractors, particularly those at the airport, to attempt to trace the flow of money to Mr. Korge, his law firm, and to other entities. We are concerned that there may have been activities that Mr. Korge participated in that may not have been appropriate and would potentially impact the reputation of anyone who was affiliated with Mr. Korge.”
Asked to elaborate on what he means by activities “that may not have been appropriate,” Feder would only say, “If Mr. Korge has involved himself and the law firm in government lobbying without proper disclosure, that would be a breach of the law. If he obtained money from contracts in an improper way.” Feder adds that he has no evidence of wrongdoing by Korge, only “good-faith suspicions that are a serious concern.”
Another potential area of exposure for Korge is his fundraising activity on behalf of the Democratic Party. In recent years he has emerged as one of the biggest fundraisers in the nation for the Democrats and is a vice chairman for finance for the Democratic National Committee (DNC). Earlier this month he hosted a fundraiser for First Lady Hillary Clinton, and he has had the president to his house for private receptions on at least two occasions in the past year. He also has been a major fundraiser for Vice President Al Gore's campaign.
(Tew says Feder is trying to schedule Korge's deposition for the day after the presidential election. “It's just a cheap, second-grade trick to try and annoy us,” Tew grumbles. “They know that the day after the election Chris is either going to be celebrating or commiserating in Tennessee with Al Gore.”)
Powell's lawsuit contends some of the money that should have rightly gone to him was instead used to support Korge's political activities. Feder says Korge allocated a portion of the office for DNC officials to use on a regular basis. “The DNC was allowed to use office space, telephones, postage, and supplies of the law firm that were not an insignificant amount of money,” Feder alleges. “We're not talking about a few stamps here; we're talking about a lot of money, in excess of $10,000.”
According to Federal Election Commission (FEC) rules, if a person provides anything of value -- including office space, telephones, supplies -- to a campaign, it must be reported. Failure to do so could lead to a civil fine.
There is no record of Korge reporting to the FEC so-called in-kind contributions on behalf of the Democrats. Tew calls the issue of possible FEC violations “total bullshit -- it's only an attempt to embarrass Chris,” he says. (DNC officials declined to comment.)
Feder claims the firm's records show that Korge was trying to hide the DNC's long-distance phone bills by attributing them to Powell. He also says he recently learned that Korge was quietly trying to have the DNC reimburse him for the expenses, the theory being that reimbursement would indicate they were not contributions. Says Feder: “That indicates to me someone who is trying to cover his tracks after getting his hand caught in the cookie jar.”
Mixed metaphors aside, this lawsuit has the potential to become extremely messy, with all sorts of seemingly unrelated and potentially embarrassing issues being unearthed.
That is, if we're lucky.
