A former general counsel for one of the world’s leading law firms is to be subpoenaed over how much the firm’s chiefs knew about the activities of its disgraced former head of white-collar crime in London.
Dechert LLP is one of the largest, most profitable law firms in the world, representing corporate powerhouses Microsoft, Apple, JP Morgan, Comcast, American Airlines and Verizon. Dechert advised Donald Trump on his pursuit of recounts in the 2020 US presidential election and acts for Fox News. Toyota, DHL, Universal. Pfizer and financial giant, Apollo, are also on its client roster. The Philadelphia-based firm has offices around the world, including a substantial presence in London.
This week, the 150-year-old partnership unveiled record annual revenues of $1.511 billion and a 47 per cent rise in net income. Revenue per lawyer was $1.732 million and profits per equity partner, $4.868 million.
A US federal judge has granted permission for Arthur Newbold, Dechert’s ex-general counsel, to be questioned over the detention, and alleged torture of Karam Al Sadeq, a former employee of the sovereign wealth fund of Ras Al Khaimah, one of the emirates in the UAE. He also maintains his computer was hacked.
Al Sadeq, who served as general counsel of the fund, known as RAKIA, became caught up in infighting between members of the emirate’s ruling family. The Jordanian lawyer has been in prison since 2014. Al Sadeq maintains he was treated as ‘collateral damage’ in the internal feuding.
Al Sadeq is suing Dechert and its ex-head of fraud in London, Neil Gerrard. The High Court action claims he was the victim of kidnapping and torture in a campaign orchestrated by Gerrard on behalf of RAKIA.
In another, unrelated case, a High Court judge issued a damning finding against Gerrard, concluding in May 2022 that he was a ‘highly unreliable and at times dishonest witness’ who had committed ‘serious and serial wrongdoing’.
Gerrard quit Dechert in 2020 but litigation regarding the work he did for two of his clients is ongoing. One involves his activities on behalf of Ras Al Khaimah and the other, subject of that withering May 2022 assessment by Mr Justice Waksman, relates to the international mining giant, ENRC.
When the judge made his statement, Dechert presented Gerrard as a single bad apple. At the time a Dechert spokesperson said: ‘The court has now found Mr Gerrard to have committed conduct, which is completely at odds, not only with our values, ethos, and culture as a firm, but also with the high ethical and professional standards adhered to on a daily basis by our lawyers the world over.’
A study of the papers submitted in the Ras Al Khaimah and ENRC litigation reveals Newbold is one of 22 current and former staff members at Dechert named as working with or managing Gerrard. They vary in seniority, from members of Dechert’s Policy Committee and the partnership’s former chair to executive assistants. Many are still practising law at Dechert or at other leading law firms, corporates and regulators.
ENRC instructed Gerrard and his firm in 2011 to lead an investigation into one of its subsidiaries. News stories about the probe then appeared in the UK press. As a result, the SFO wrote to ENRC seeking more information. The miner’s legal advisor, Gerrard, recommended it should engage with the fraud-busting agency. Stories about the SFO’s interest also appeared in the press.
Dechert’s billing of ENRC subsequently soared and over the next two years the firm charged ENRC almost £17 million.
ENRC ended Dechert’s retainer in March 2013. Soon after, the SFO placed the miner under formal investigation over allegations of fraud, bribery and corruption.
The mining company hit back, suing both the SFO as well as Dechert and Gerrard. It accused him and the firm of deliberately ramping up millions of pounds in extra fees.
In the subsequent trial, Gerrard was alleged to have said he was in ‘rape mode’, chasing fees from ENRC and intended to ‘screw those fuckers’ – allegations he denied.
But Justice Waksman concluded that Gerrard was ‘the instigator’ of the leaks to the press.
The judge said Gerrard was ‘negligent and for the most part reckless’ for providing the wrong advice to ENRC about potential criminal liabilities as well as the risk of raids by the SFO. He also ruled that Gerrard failed to protect ENRC’s legally privileged information by leaking it to both the SFO and the press, breaching his legal duties to the company.
In a later judgment, the court ruled that the SFO would not have launched its criminal scrutiny of ENRC but for Gerrard’s leaks of confidential information to the bureau.
Gerrard was referred by the court to the Attorney-General for possible contempt, after he was found to have ‘plainly’ lied in a cross-examination about ENRC’s then-global head of compliance being interviewed by the SFO and ‘lied continuously’ about a leak to a newspaper. That referral is still with the Attorney-General.
ENRC is seeking a total of $299 million (£240 million) in damages from the firm and the SFO. The court has reduced that amount by £80 million but ENRC is appealing. How the eventual sum is split between the pair is still to be determined. The SFO has set aside the same amount in UK taxpayers’ money to cover the claim - nearly three times the bureau’s annual budget.
Meanwhile, Al Sadeq is suing Dechert, Gerrard and others, claiming unlawful abduction, detention, torture, interrogation, and being denied proper legal representation during an investigation conducted by Gerrard and the firm for RAKIA.
Jihad Abdul Quzmar, a former legal advisor to Ras Al Khaimah, who is also in prison, is suing Dechert and Gerrard over similar allegations.
Separately, US aviation entrepreneur Farhad Azima has been locked in a long-running dispute with RAKIA since 2016, after the investment fund filed a fraud lawsuit against him. In that case, Gerrard was accused, alongside Dechert and RAKIA, of ‘dishonestly concocting false evidence’ and ‘coaching witnesses to give perjured evidence’ as well as hacking Azima’s emails and other confidential material. Dechert denied the claims but the firm has since settled with Azima for more than £3 million.
Dechert refused to comment on the Newbold subpoena and the involvement of the other 21 current and former staffers. A request for Newbold to comment was not met.
