Complaint could roil DOJ foreign-agent prosecutions

Jon Elswick/AP Photo
·7 min read

A new legal ethics complaint from a businesswoman charged in a prosecution involving unregistered foreign lobbying threatens to roil two major cases in the Justice Department’s high-profile effort to crack down on foreign influence in the U.S. political system.

The complaint was filed with the Justice Department last month on behalf of Nickie Lum Davis, a Hawaii- and California-based businesswoman. The submission alleges that Public Integrity Section Principal Deputy Chief John Keller acted unethically by negotiating a plea deal for her last year with Davis’ attorney at the time, Abbe Lowell, while Keller was investigating Lowell in a separate inquiry into what a judge called a “bribery for pardon” probe.

“At no point in time did Mr. Keller alert Ms. Davis that he was investigating Mr. Lowell, nor did Ms. Davis even become aware until much later that Mr. Lowell knew of Mr. Keller’s investigation while simultaneously negotiating the plea on her behalf with Mr. Keller,” Davis’ new attorney, James Bryant, wrote in the complaint filed with the Justice Department’s Office of Professional Responsibility and obtained by POLITICO.

The allegations in the complaint raise questions about whether Davis understood important aspects of her predicament in August 2020 when she pleaded guilty in a Hawaii federal court to aiding and abetting violations of the Foreign Agents Registration Act by failing to publicly disclose a campaign to persuade the Trump administration to end a probe into the looting of a massive Malaysian investment fund, 1MDB.

The unregistered lobbying effort also involved Elliott Broidy, a former Republican National Committee deputy finance chair, who pleaded guilty to a similar charge two months later. But Broidy scored a pardon from his longtime friend President Donald Trump just before Trump left office in January.

Davis hired a lobbying firm to seek a pardon, but no clemency grant for her was forthcoming. She is currently set to be sentenced in April, but that could be impacted by the new complaint, which asserts that her guilty plea was “coerced.”

Complaints filed with Justice’s Office of Professional Responsibility, which oversees the conduct of department attorneys, often take months or years to resolve. But the more immediate question is whether U.S. District Court Judge Leslie Kobayashi, an appointee of former President Barack Obama based in Honolulu, proceeds with the sentencing of Davis despite claims in the new complaint that a key aspect of her admissions at the August 2020 hearing was false.

During that plea hearing, held by video conference, Davis said she pressed on with the lobbying work even after concluding that she was obligated to register under the Foreign Agents Registration Act.

“As the work continued on, I realized that the contacts being made required registration under FARA, but I deliberately avoided taking the steps necessary that might confirm what I had suspected, that registration was required,” the businesswoman told Kobayashi.

However, the new complaint says Davis wasn’t actually aware of the obligation to register and had some indication that it wasn’t required because others involved with greater experience had also not registered.

“Mr. Keller coerced Ms. Davis into making a false admission,” the complaint says. “Nowhere in the thousands of pages of communications is there any evidence that Ms. Davis even *suspected* that she had an obligation to register under FARA, let alone that she believed Mr. Broidy thought that he needed to register.”

Spokespeople for Justice’s Public Integrity Section and for OPR declined to comment on the new complaint. Keller did not respond to a message seeking comment.

Davis’ new attorney, Bryant, declined to comment on the complaint or whether his client intended to seek to withdraw her guilty plea.

“We do plan on filing a motion to address this issue with the court,” Bryant said Thursday, without elaborating.

Whatever the impact in the case against Davis, her apparent change of heart may also pose complications for a related, higher-profile prosecution against Prakazrel “Pras” Michel — a well-known rapper and member of the Fugees, a legendary hip-hop trio.

Michel was indicted in May 2019 on charges of funneling about $865,000 in foreign funds into Obama’s 2012 reelection campaign. Last June, a grand jury in Washington returned a new indictment against Michel, accusing him of taking part in the same unregistered lobbying effort that Davis and Broidy mounted on behalf of 1MDB and a Malaysian businessman, Jho Low.

Davis was expected to be a key witness against Michel. Indeed, weeks before the expanded indictment was returned, a POLITICO reporter observed Davis and Bryant emerging from the federal courthouse in Washington where a grand jury was scheduled to be meeting, according to a court filing.

Michel has pleaded not guilty. The next hearing in his case is set for Jan. 10 before a judge in Washington. No trial has been scheduled.

The alleged conflict of interest at the heart of the complaint began to emerge publicly last December when the chief judge of the U.S. District Court for the District of Columbia, Beryl Howell, unsealed an opinion she’d issued in August authorizing prosecutors to examine emails involving an attorney as part of an investigation into what she called an alleged “bribery-for-pardon scheme.”

All names were redacted from the opinion Howell released, but the New York Times and other outlets soon identified Lowell as one of the attorneys involved. The “scheme” Howell described included an alleged effort by Sanford Diller, a California billionaire, to donate more than $300,000 to Republican Party causes in a bid to secure a pardon from Trump for Hugh Baras, an associate serving prison time for tax evasion, according to people familiar with the investigation.

Broidy and Lowell were also part of the back-and-forth about a pardon for Baras, they said.

No pardon for Baras was ever issued, and no charges ever emerged from the “bribery-for-pardon” probe. Diller, the funder of the effort, died in 2018.

Davis’ doubts about the interactions between Keller and Lowell were fueled by an email exchange that the complaint says was “accidentally forwarded” to her that showed the pair interacting privately during the August 2020 video hearing where Davis’ guilty plea was entered.

During the hearing, Keller raised with the judge that the government and the defense had filed a sealed addendum to the plea agreement, a transcript of the session shows. That addendum, which the judge later released, said Davis had waived any concerns about a potential conflict of interest that wasn’t further described.

According to the email exchange quoted in Davis’ complaint, Lowell seemed concerned when Keller mentioned the addendum.

“Why Did You Raise That,” Lowell wrote to the prosecutor while the hearing was still underway, the complaint says.

“It needed to at least be acknowledged in some capacity. I avoided any details that could reveal the substance,” Keller replied, according to the complaint.

Lowell has insisted that all his actions related to Davis were appropriate.

“While I am unable at this time to respond as I would like, the assertions regarding any inappropriate conduct on my part are no more accurate or fair now than when made earlier in the year,” Lowell said in an email responding to a request for comment. “I complied with my ethical obligations in advising Ms. Davis.”

Davis’ complaint also says the law required that any potential conflict in the case be discussed directly with her by the judge.

“The court needed to be fully informed, and then, in turn, the judge needed to personally ensure that Ms. Davis understood the nature and extent of the conflict before waiver could become effective,” the complaint says.

Kobayashi did have questions about the conflict waiver during the August 2020 hearing, but only about why it was being kept from the public. There was never any public discussion or any exchange by the judge with Davis about the nature of the conflict now complicating her case and, potentially, others.

“I just want to point out that that’s a concern with regard to the fact that it’s filed under seal,” the judge said at the time. “But that may be another thing for us to address at another day.”

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