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lawyers in love


lawyers in love

By Peter Huston


Charlie Cook Charley Cook

Karl Rove

Jackson Browne has a
great song called Lawyers
in Love
. This article is somewhat in that theme as it
is a story about how lawyers in love are screwing the sport. Every
entity has some sort of legal/political operation. Then there are
those lawyers who somehow get to be paid and who also take on a life
of their own inside an entity. Pictured left are Charley Cook, who
sometimes serves as an unpaid volunteer in the sport, and other times
is probably one of the highest paid people in the sport, as a lawyer.
Karl Rove needs no introduction. Use your imagination to draw the
parallels between the two.

This article is going
to detail some of the major losses that Charley Cook as been involved
with in the sport, the Hall/USOC v US Sailing case being the largest
and most significant. Immediately after the Justice For All article
ran last week, US Sailing President Gary Jobson called me and
promised to deliver an accounting of the money that US Sailing spent
in that losing battle. On Friday, Gary delivered that accounting,
the numbers which will appear below. You will likely be astounded at
the legal fees in this case, all for a losing cause.

Let’s start with a
review of Charley’s advice to US Sailing with this bit of history
that was sent to me last week by a former US Sailing Board member who
thanked me for writing the Justice for All article:

He (meaning
Cook) was on the US Sailing board when we had a grievance over the
denial of the right to compete.  He took a “club’s rights”
position, asserting that the club could do whatever it wanted with
regard to a sailor that it didn’t like.  The then President
told the board that if it followed Charley’s advice, it would
violate the Amateur Sports Act.  Fortunately, the board followed
the President’s guidance, and ultimately the matter was favorably
resolved.  I have never understood why Charley couldn’t see
the bigger picture, but I guess we have always simply had divergent
opinions about what the “good of the sport” really is.  

In 1996, just weeks
prior to the start of the Olympics, Cook walked off as the PRO,
leaving the regatta organizers in the lurch. Cook sited new work
responsibilities, which can happen from time to time. But seriously,
he couldn’t anticipate this?

In more recent times,
Cook represented US Sailing in the Natalie Salk case, which he lost
to Ed Williams. I am told Cook represented US Sailing in the Salk
case without financial compensation. But, Cook lost an athlete’s
right case. Literally as I was writing this article Ed Williams
called me to tell me that there was just an award made in another
case last week in which the Arbitrator ruled in his favor, and cited
all the things that Cook lost on in the past. The Arbitrator in this
recent ruling was Jeff Benz, who was hired to replace Cook in the
Hall case last summer. More about Benz in a moment.

Then, during the 2008
Olympics, while serving as PRO, Cook had his Olympic blog shut down
because he was violating IOC blogging guidelines.

We all know that Cook
lost when representing US Sailing against the USOC in the Hall
matter. Now comes the money part. Hold on to your wallet.

Expense Category 2007 2008 2009 TOTAL
Hearing Panel Expenses $7,164.22      
Legal fees and Expenses $130,734.95 $851.64    
Arbitration Fees/Expenses $24,854.58      
Meetings with USOC/ISAF     $2,391.12  
Settlement Expenses     $4,688.11  
TOTALS $162,753.75 $851.64 $7,079.23 $170,684.62

Some explanations per
Jobson:

The total bill was
split in half – half paid by US Sailing, half paid by the US
Olympic Sailing Committee. (my comment now: The part about the US
Olympic Sailing Committee paying half is interesting, because US
Olympic Sailing Committee Chairman Dean Brenner really did not have
any input into the Hall/USOC matter at all. He was not allowed to
offer any input into the response to the USOC – that came from
Capron, Jerome Pels, and Carol Cronin. It is not clear to me who
muscled Brenner aside, whether it was Capron or Cook.)

The expenses for
settlement relate to some travel costs for US Sailing people to
travel to Annapolis for the settlement conference, including travel,
hotel, meals and meeting room expenses.

The Arbitration fees
were part of that process, paid mostly to the Arbitrator.

Legal fees – well,
that’s the big one, isn’t it. There were only two lawyers
involved in this equation for US Sailing, Cook, and Jeff Benz. Benz
is the former General Counsel for the USOC, and he was hired in a
Hail Mary attempt at the last minute after the USOC directive was
issued to US Sailing. I was not provided with a line item breakdown,
but it is safe to assume that given Benz’s credentials, he didn’t
come cheap. Benz wasn’t ineffective; he just didn’t have a
winnable case. So say his retainer was $25,000. That still leaves
more than $100,000 for Cook, some of which of course was for
expenses.

A member of the US
Sailing staff added this:

Over the weekend, I was
thinking about the schedule I sent you.  It doesn’t make any
mention of the hours/expenses that Charley Cook incurred on a
pro-bono basis.  I don’t have any real accounting of that, but
for instance, the May billing was discounted by about $3,000 for
associate attorney research time not billed, travel and lodging
expenses not charged, and discounted hourly rates.  I know that
he didn’t bill most travel time throughout the case, and he also
didn’t charge anything for the USOC portion of the matter
(essentially most work done in 2009).   I thought it might
soften the impact of Charley’s fees somewhat to see that he
contributed pro-bono time and expense as well, so wanted you to be
aware of that as you respond to Peter Huston’s inquiry.

Does anyone else see a
pattern here? There are three examples of sailor’s rights where
Cook has argued the other side, and lost. Some will say he was just
the lawyer acting for his client, but with the amount of money at
stake in the Hall case for US Sailing, and the potential for serious
damage, his advice could have been for then President Capron to stand
down. Or to quit the case.

Now, Cook is a central
figure in the America’s Cup Race Committee fiasco in Race 2, you
know, the one where Erne$to Bertarelli ordered the SNG members of the
Race Committee to go on strike moments before the race. When Harold
Bennett filed his post race report with ISAF, it was sent down to the
Race Officials Committee for review. Guess who is Chairman of the
Race Officials Committee? Yup – Charley Cook.

I had previously asked
ISAF Secretary General Jerome Pels, who is also a lawyer, if there
had been provisions made for Cook to recuse himself from any
deliberations in the SNG matter. Pels never replied. Isn’t it
just common sense that someone from the US, or Switzerland for that
matter, should not have anything to do with any sort of protest or
proceeding in the America’s Cup, where both the US and Switzerland
took part?

So, on Friday, I asked
Cook directly. You will see the full exchange below.

From: Peter Huston
Sent: Friday, April 23, 2010 9:02 AM
To: Cook, Charles
Cc: Goran Petersson; Jerome Pels; Gary Jobson
Subject: Bennett report re SNG

Charlie,

I have asked Jerome
Pels if you, in your capacity as Chair of the ISAF Race Officials
Committee, have recused yourself from any discussion regarding Harold
Bennett’s report on the way the SNG sailors and race committee
members behaved during the prestart of race 2 in the 33rd America’s Cup.

Jerome has refused to
answer my question.

So now I am asking you
directly.  Do you have any involvement at all in this matter?

If so, in what capacity
is your involvement?

If you are involved in
this matter, are you being paid by ISAF for any services?

I am writing an article
for Sailing Anarchy, and if you do not respond I will include the
fact that you have also not responded.

Peter Huston

From: Cook, Charles
Sent: Friday, April 23, 2010 9:22 AM
To: PeterHuston
Cc: Goran Petersson; Jerome Pels; Gary Jobson
Subject: RE: Bennett report re SNG

Peter:

My role as
Chairman of the ISAF Race Officials Committee is as an unpaid
volunteer.

Regarding my
involvement in the reports concerning race 2 in the 33rd America’s
Cup:  ISAF has publicly announced that it has forwarded
those reports to the ROC.  My involvement in this matter
is, and will continue to be, as the unpaid volunteer
Chairman of the ISAF Race Officials Committee.

Regarding your question
concerning recusing myself:  I know of no circumstances
suggesting that I should do so.  If you are aware any facts
suggesting otherwise, please let me know.

Charley Cook

From: Peter Huston
Sent: Friday, April 23, 2010 9:31 AM
To: ‘Cook, Charles’
Cc: ‘Goran Petersson’; Jerome Pels’; ‘Gary Jobson
Subject: RE: Bennett report re SNG

Charlie,

An application of
common sense would suggest that you should have recused yourself from
any matters involving the America’s Cup, because one of the
contestants was from the USA.

This will now just give
Ernesto Bertarelli another chance to cry foul, if in fact ISAF has
any balls and actually does the right thing and goes after him.

Peter Huston

While some might think
that it doesn’t matter if ISAF does anything to SNG because of the
race committee mutiny given that they lost, really, what sort of
message will that send to the rest of the sailing community, if not
the entire sports world if ISAF does nothing with this case? That
sailing is a lot like figure skating. That ISAF only enforces the
rules of fair play when they want to.

I have been told by
very well placed sources that ISAF, led by President Petersson who is
a lawyer, are trying to bury this whole issue with SNG. The abject
lack of specific statutory process in this review process is
problematic in and of itself, but, this is something the whole world
witnessed. Further to the point, there is a lengthy video floating
around of what happened on board the SNG race committee boat. I know
two people who have seen this video, people of impeccable
credentials, who say that what went on is just beyond belief. I am
attempting to get a copy of that video, and if successful, will post
it here. ISAF President Goran Petersson was just made a member of
the International Olympic Committee, and yet, he doesn’t want to
enforce the fundamental rules of fair play within his own sport.
This is the kind of guy who becomes a member of the IOC?

Consider for a moment
that Cook is to be the PRO for the 2012 Olympics. If he as Chairman
of the Race Officials Committee does nothing with the Bennett report,
what does that mean for Olympic competition? Can it mean that the
rules will be selectively applied by Cook? That he does not see the
inherit conflict of interest here with his being from the USA along
with GGYC, and does not understand that if ISAF rules against SNG,
the very first thing that SNG will do is run to the Court of
Arbitration for Sport and try to get this ruling undone because of
bias. Erne$to tried every trick in the book in the NY Courts, so for
sure he will do whatever he can think of in CAS, but, the difference
is, this time, he’d probably have a case. All because Cook won’t
recuse himself.

ISAF President Goran
Petersson, a lawyer, and ISAF Secretary General Jerome Pels, a
lawyer, have to have idiots as a client (themselves) if they are
going to allow ISAF Race Officials Committee Chairman Charley Cook, a
lawyer, to have any involvement in the Bennett report about SNG. It
is a prescription for disaster, if of course, the assumption is that
ISAF wants to uphold the concept of fair play. Maybe they don’t
want to see anything happen to SNG. Maybe they want to have the CAS
overturn their ruling. Maybe they want to stick it to GGYC/Larry
Ellison that way. Maybe that is their way of showing GGYC/Larry
Ellison who is the boss. Keeping Cook involved in any way with the
Bennett report defies logic, but so too did the Jerome Pels authored
“keel yacht letter” the secret agreement ISAF Treasurer David
Kellett made with SNG.

Cook is placing his own
interests ahead of those of his own country. If he does that to his
own country, what might he do to yours in the UK, or Spain, or tell
me where ever. I’m not sure who Cook is selling out more by not
recusing himself: GGYC, US Sailing, the United States of America, or
simply, the sport of yacht racing.

We’ve all heard
lawyer jokes – starting with “how do you know when a lawyer is
lying? Their lips are moving”. Like in most things in life,
there’s only a few bad apples who spoil the bunch. But here’s a
good lawyer story to consider for a moment that was, ironically, sent
to me on Friday afternoon;

BEST LAWYER/ INSURANCE
STORY OF THE YEAR, DECADE, AND POSSIBLY THE CENTURY.

This took place in
Charlotte, North Carolina.

A lawyer purchased a
box of very rare and expensive cigars, then insured them against,
among other things, fire.

Within a month, having
smoked his entire stockpile of these great cigars, the lawyer
filed a claim against the insurance company.  In his claim, the
lawyer stated the cigars were lost ‘in a series of small
fires..’ The insurance company refused to pay, citing the
obvious reason, that the man had consumed the cigars in the
normal fashion.

The lawyer sued and
WON! (Stay with me.)

Delivering the ruling,
the judge agreed with the insurance company that the claim was
frivolous. The judge stated nevertheless, that  the
lawyer held a policy from the company, in which it had
warranted that  the cigars were insurable and also
guaranteed that it would insure them against fire, without
defining what is considered to be unacceptable ‘fire’ and was
obligated to pay the claim.

Rather than endure
lengthy and costly appeal process, the insurance company
accepted the ruling and paid $15,000 to the lawyer for his loss
of the cigars that perished in the ‘fires’.

NOW FOR THE BEST
PART…

After the lawyer cashed
the check, the insurance company had him arrested on 24 counts
of ARSON!!!  With his own insurance claim and testimony from the
previous case being used against him, the lawyer was convicted
of intentionally burning his insured property and was sentenced
to 24 months in jail and a $24,000 fine.

This true story won
First Place in last year’s Criminal Lawyer Award contest.

Even if ISAF does the
right thing and takes SNG/Bertarelli to task for what happened prior
to Race 2 of the America’s Cup, there is risk in this equation of
any ruling against SNG or Bertarelli standing because Charley Cook
will not recuse himself from this matter. When the lawyers are in
love with protecting their personal interests within the sport, how
does that benefit the sport? When will someone within ISAF
understand that it is better to be generally correct than precisely
wrong? Anyone have some cigars for Goran Petersson, Jerome Pels and
Charley Cook?