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State narrows legal search
By JULIE HAUSERMAN, Times Staff Writer TALLAHASSEE -- A law firm that includes Al Cardenas, chairman of the Florida Republican Party, is among the top contenders for a state legal contract that could be worth millions in the wake of the Enron collapse. At Gov. Jeb Bush's request, the state is hiring lawyers to handle a possible lawsuit against Alliance Capital Management Corp., the money management company that lost more than $300-million worth of Florida pension funds in the Enron collapse. Four legal teams are being considered. The state's top choice is a combination of Naples lawyer Tom Grady of Grady & Associates and Guy Burns, senior partner in the Tampa office of Blakely, Pope, Bokor, Ruppel & Burns. The second choice is the law firm of Tew, Cardenas, Rebak, Kellogg, Lehman, DeMaria, Tague, Raymond & Levine -- which includes the GOP chairman. "This is not about politics. This is about trying to recover losses," said Coleman Stipanovich, deputy executive director of the State Board of Administration, the three-member board that sets Florida's investment policies. Florida Attorney General Bob Butterworth, the only elected Democrat holding statewide office, also had input in picking the top lawyers to consider for the Alliance contract. Cardenas said Tuesday he had nothing to do with his firm's decision to seek the state contract in the Alliance case. "This is a matter that has been handled by my partners without my involvement," he said. "This is the kind of work my firm had historically done for the state in the past. I made a pledge, when I became chairman of the Republican Party of Florida, that I wouldn't get involved with advocacy matters with state government." Cardenas, 54, is a Miami attorney who represented developers before he became chairman of the Republican Party of Florida in 1999. Cardenas said his law partner, Thomas Tew, is handling most of the negotiations with the state. Tew is an expert in securities and insurance litigation. "This is the kind of work my partners do," Cardenas said. "'I don't think they should be rewarded or penalized by my being chairman of the Republican Party of Florida." Tuesday, the State Board of Administration -- which is made up of Republicans Bush, State Treasurer Tom Gallagher and Comptroller Bob Milligan -- decided to start negotiating with the top-choice legal team: that of Grady and Tampa lawyer Burns. If a contract can't be reached, the state would move on to the second choice, which is Cardenas' firm. The legal contract has yet to be written, but state officials said Tuesday that the lawyers would likely work on a contingency basis, which means they would collect a portion of the money they recover for state pensioners. How much money? It's hard to say now. Alliance Capital Management bought 7.6-million shares of Enron Corp. for the state's pension fund portfolio, then sold it at a $283-million loss. Most of the purchases were made on a buying spree last summer and fall while Enron spiraled toward bankruptcy. Florida's pension fund losses from Enron stock totaled $322-million, which makes up a relatively small percentage of the $94-billion fund. Fund managers waited until the Friday before Enron declared bankruptcy to pull out of the Houston energy giant's stock. The fund also lost another $11-million on investments in Enron bonds. "We're going to go into this and try to recover as much as we can," said Stipanovich, the State Board of Administration's deputy director. "How much that is remains to be seen."
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From the Times Business report Robert Trigaux
From the AP
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