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Dec 25, 2005, 7:12:17 PM12/25/05

Jewish Forward
December 23, 2005

Indicted Officials Consider Suing Israeli Lobby

Bad blood spills over in AIPAC spy scandal

By Ori Nir
letters[AT]forward.com

Washington — Two former employees of the nation's main Israeli lobby, who are facing
trial for receiving classified information and relaying it to foreign diplomats and
the press, are considering lawsuits against the lobbying powerhouse.

Steven Rosen, former director of foreign policy at the American Israel Public Affairs
Committee (http://en.wikipedia.org/wiki/AIPAC), and Keith Weissman, AIPAC's former
Iran analyst, are considering suing AIPAC over its stopping payments of legal fees to
their attorneys, sources close to the two said. They are also considering a
defamation suit against AIPAC, if they are exonerated, for accusing them of
unbecoming conduct.

Indications that Steven Rosen (http://www.thejewishweek.com/upload/kkkn.gif) and
Keith Weissman (http://www.washingtonlife.com/backissues/archives/02apr/norooz2.htm)
were preparing to sue AIPAC have caused the collapse of negotiations between their
attorneys and AIPAC's attorneys over the lobby's coverage of the two men's legal
fees, sources close to both sides said.

To the dismay of many AIPAC members and supporters, relations between AIPAC's
leadership and its two former employees have deteriorated sharply in recent months,
to the point of bitter exchanges of accusations and threats of legal action.

The hostility between the two dismissed officials and AIPAC's leadership is expected
to peak at the two men's trial, scheduled to start in late April 2006. Defense
attorneys will try to establish that the men were following the organization's
routine practice and that AIPAC's top officials were fully aware of their actions.
"The evidence in this case will show that Steven Rosen and Keith Weissman always
acted in AIPAC's interests, never were on their own and acted with the knowledge and
approval of their superiors", Rosen's lawyer, Abbe Lowell, told the Forward.

AIPAC's top officials, by contrast, are attempting vigorously to distance the agency
from its ex-employees, maintaining that the reason Steven Rosen and Keith Weissman
were fired in March was "conduct that was not part of their job, and beneath the
standards required of AIPAC employees", said Patrick Dorton, a spokesman for AIPAC

The quarrel over paying Rosen's and Weissman's legal fees is the latest manifestation
of this escalating adversarial relationship, although it is not clear whether bad
blood was the reason AIPAC first halted the lawyers' fees last spring.

What is clear is that the two sides' conflicting arguments regarding the Israeli
lobby's routine working norms are likely to collide in court. Defense attorneys are
expected to argue that receiving information from administration officials was
something the two were paid and encouraged to do, and something Aipac routinely
does — as do many other lobbying groups in Washington. AIPAC is expected to try to
portray the actions of the two as contradictory to AIPAC's norms and conduct.

"It is very possible" that attorneys for Steven Rosen and Keith Weissman will call
senior AIPAC officials to testify in court, sources familiar with the case told the
Forward. Such testimony would undoubtedly be embarrassing to Aipac, according to
several sources familiar with the case.

"There is a clear collision course here", said a former AIPAC official who maintains
close contacts with the organization. "AIPAC understands that by firing Steven and
Keith it cannot avoid being dragged into this scandal". The former staffer said that
AIPAC officials are grinding their teeth at the thought that "they are paying the
fees of lawyers who will trash them in court". A spokesman for AIPAC declined to
comment on the mood within the organization.

Since Steven Rosen and Keith Weissman were fired, their lawyers have been exploring
defense strategies, many of which could be damaging to AIPAC. Attorneys for the two
are exploring AIPAC's legal responsibility for informing employees what the law says
regarding the handling of sensitive information. Rosen and Weissman maintain that
they had no idea that receiving information from administration officials could be
illegal, said sources close to the defense. The two argue that the organization
should have alerted them that such a possibility exists, the sources said.

Lawyers for Steven Rosen and Keith Weissman, seeking to establish that they were not
involved in a rogue operation, also intend to discuss AIPAC's employee procedures for
reporting to superiors. These will be pivotal themes in defense arguments, sources
close to the case said, both because they are key to demonstrating that the two acted
in good faith, unaware of any legal wrongdoing, and because the defense has limited
access to key witnesses and evidence.

The defense's intention to bring AIPAC into the courtroom — both physically and
figuratively — is causing concern and resentment within the organization, sources
close to AIPAC said. Steven Rosen and Keith Weissman, said one former AIPAC employee
with connections to the organization's current leadership, are perceived as acting
"like Samson, trying to bring the house down on everybody". Rosen and Weissman, on
the other hand, in conversations with confidants in recent months, have been fiercely
critical of AIPAC's leadership for withdrawing moral support for the two, for
accusing them of wrongdoing and for suspending payment of lawyers' fees.

Last week, the Jewish Telegraphic Agency (JTA) reported that AIPAC had stopped
payments to Rosen's and Weissman's lawyers since the spring. The report, confirmed by
sources close to both sides, said that Abbe Lowell, Rosen's attorney, had incurred
some $993,000 in fees in the first year of representing Rosen, through August 2005.
He has written off $300,000 and was still owed $476,000 by AIPAC, which means that
AIPAC had paid him only $217,000. AIPAC's bylaws obligate the organization to cover
legal fees in such situations, except in cases of "gross negligence, bad faith,
fraud, willful misconduct or willful breach of such person's duties and
responsibilities in any material respect".

In addition to the bylaws, a letter representing an agreement between AIPAC's and
Rosen's lawyers states that AIPAC has agreed to pay for the legal representation in
this case.

Nowhere does it explicitly say, however, that AIPAC must advance the payments on a
month-by-month basis. This week, attorneys for the two former employees received a
letter from AIPAC's attorney, making clear that the lobbying group does not intend to
pay the fees before the trial is over. The letter says that AIPAC "never committed to
advance the costs" of Rosen's and Weissman's defense on a regular basis, "and
certainly not irrespective of develops in the investigation and now prosecution". The
letter also points out that because the organization's bylaws stipulate that
indemnification of legal fees "depends in part on the nature of an employee's
conduct", the question of whether AIPAC would be required to indemnify the two
"cannot be addressed or resolved until current proceedings against them have been
concluded".

The letter was signed by Jamie Gorelick, a prominent Washington lawyer, who was
deputy attorney general in the Clinton administration and apparently was recently
hired by AIPAC to handle the dispute over the legal fees.

Steven Rosen and Keith Weissman, who also recently hired a labor-law specialist to
consider whether to sue AIPAC over the halting of legal fees, believe they have a
solid case, sources close to the two said. They are relying particularly on the fact
that AIPAC did make monthly payments between August 2004 and March 2005. That monthly
pattern, they argue, establishes a course of conduct known in contractual law as
"detrimental reliance", meaning that their attorneys have been relying on monthly
payments, and that cutting off payments would be to the defendants' detriment,
according to sources close to the two.

Sources close to Steven Rosen and Keith Weissman said that barring upfront payments
to their lawyers, the defense might not be able to afford expert witnesses and
advisors, such as experts on classified documentation or on jury selection.

AIPAC obviously has an interest in the full exoneration of the two, sources close to
the Israeli lobbying group confirmed. AIPAC also seems to have enough money to fund
the best defense possible. According to AIPAC's official filings, it raised more than
$59 million in 2004 in combined taxed and tax-exempt contributions, far more than any
previous year. The totals for the past four years is as follows: 2003 — $43 million;
2002 — $37 million; 2001 — $25 million; 2000 — $22 million. Numbers for 2005 are not
yet available but the total is expected to surpass last year's, AIPAC officials
confirmed.

Asked why they have stopped paying legal fees, AIPAC officials did not answer
directly. Dorton, the spokesman, told the Forward that AIPAC "made a very generous
offer" to cover the men's past and future defense costs. Rosen and Weissman rejected
the offer because they wanted to preserve their right to sue AIPAC in the future,
Dorton alleged, calling Rosen's and Weissman's decision "misfortunate".

Sources close to AIPAC said the offer was for a total of $1.625 million, to be split
equally between the two law firms.

Sources close to Steven Rosen and Keith Weissman confirmed the sum and the fact that
the two rejected the offer. They argued, however, that the proposed sum was less than
the accumulated arrears, leaving nothing for the critical period of the trial.
Moreover, they said that the upfront payment offer was conditioned on their making no
future claims, including coverage of fees of appeals procedures, if needed. The
sources charged that AIPAC seems more concerned about the money, despite its
flourishing fund raising, than with the requirements of a robust defense.

Conversations with sources close to AIPAC suggest that the organization is trying to
protect itself not only against financial damages but also against damage to its
reputation, while fending off ongoing pressure from the government.

AIPAC's decision, sources said, was motivated by several factors: mushrooming legal
fees; critics' suggestions that by paying the legal fees AIPAC has not fully
dissociated itself from the scandal, and pressure from the government to manifest its
rejection of Rosen and Weissman.

AIPAC, therefore, seems to have made the following calculation, say sources close to
the organization: By deferring the payments until the trial is over, AIPAC could both
protect its image and reduce its financial risks. If the two are found not guilty,
covering their legal fees after the fact would not be an embarrassment and would be a
worthwhile price to pay for the scandal to evaporate. If the two are convicted,
however, AIPAC could argue that it is exempt from covering the fees under the
exception in its bylaws, saving itself the financial risk of not being able to recoup
the money from Rosen and Weissman and avoiding the embarrassment of having paid the
legal expenses of convicted former employees.

Many members of AIPAC's staff and board of directors are reportedly uneasy with the
notion that AIPAC is not giving full backing to the two. Despite arguments by the
lobby's top leadership that the organization's reputation is more important than its
loyalty to two former staffers, some say that the organization's moral obligation to
Rosen and Weissman supersedes its financial and image concerns. A former AIPAC
staffer who is still close to the lobbying group said: "I hear many people saying
that they think the indictment is wrong, that Keith and Steve deserve AIPAC's
backing, that there is no way they could have been freelancing out on their own. But
most people trust that AIPAC's leaders are doing what's best for AIPAC".

http://www.forward.com/articles/7052