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Posted on 08/02/2006 8:16:32 AM PDT by proudpapa
A prominent Seattle lawyer and a scion of a prominent Seattle family are suing a prominent politician -- U.S. Senate candidate Mike McGavick -- over his lucrative retirement package from a prominent Seattle company, Safeco.
The intriguing cast of characters came together Tuesday in a shareholder lawsuit, heavy with political overtones, against Safeco's board of directors and McGavick, a Republican who was its chief executive. It was filed in federal court in Seattle.
The complaint said Safeco paid the candidate $28.4 million in early 2006 in an illegal "waste of corporate assets" after he resigned to run against Democratic Sen. Maria Cantwell. It said, "McGavick thus looted Safeco on his way out the door, breaching his fiduciary duties to Safeco and its shareholders."
The plaintiff, Emma Schwartzman, 27, is a waitress, University of Washington student and a member of the Bullitt family, a wealthy business and political dynasty that gives generously to liberal crusades and candidates. She owns what was said to be "40 to 50" Safeco shares, which would have a total value of between $2,126 and $2,658.
Her great-great-grandfather, C.D. Stimson, co-founded General Insurance Co., which later became Safeco. Her grandfather is Stimson Bullitt, a prominent Seattle lawyer and businessman.
One of Schwartzman's attorneys is Steve Berman, a nationally renowned litigator of securities, antitrust and shareholder lawsuits whose name strikes fear in corporate boardrooms.
Knoll Lowney, another of Schwartzman's lawyers and a prominent backer of local liberal causes, denied the suit was politically motivated. But it was the second time McGavick's Safeco compensation has emerged as a potential campaign issue.
The state Democratic Party filed a complaint with the Federal Election Commission in April, alleging that the compensation package, coming after McGavick became a candidate, constituted an illegal corporate campaign contribution from Safeco.
Lowney said McGavick and Safeco agreed to "an illegal giveaway of Safeco assets" in an agreement last Dec. 6, after McGavick became a candidate, for him to provide transition services for the first two months of 2006, resulting in $28.4 million in Safeco income for 2006.
Lowney said it violated a contract McGavick negotiated when he became chief executive in 2001 that "clearly stated that if he resigned he would ... forfeit all compensation, including bonuses and stock options, and would get only his last paycheck."
The McGavick campaign released a statement calling the lawsuit a meritless, "politically motivated character attack." State Republican Chairwoman Diane Tebelius said it showed "the Cantwell campaign knows that they can't win on substance, so they're using character assassination as their main strategy."
McGavick campaign spokesman Elliott Bundy said the $28.4 million "was a combination of his compensation for leaving the company." He said $17,000 was earnings for the two-month transition period, $2.3 million was McGavick's bonus for 2005 "and the rest was (exercising of) stock options previously granted" over the course of his Safeco tenure.
State Democratic Chairman Dwight Pelz and Cantwell campaign spokeswoman Linda Mahnke both declined comment, saying neither of their camps had anything to do with what Mahnke called "a matter that is between Mr. McGavick and the shareholders of Safeco."
Lowney and Schwartzman spoke at a carefully orchestrated news conference across the street from Safeco's University District headquarters. Lowney refused to let reporters question the woman after she read a statement.
Lowney said Schwartzman and her mother, Ashley Bullitt of Port Townsend, contacted him about bringing the lawsuit. Although Schwartzman's prominent relatives have been big donors to Democratic and liberal causes, Lowney said she isn't politically active.
According to Federal Election Commission records, Stimson Bullitt has donated $1,500 to the Cantwell campaign this year, and his sister, Harriet Bullitt, of Leavenworth, has given Cantwell $4,000 since 2001 as well as $25,000 last year to Washington Senate 2006, a Democratic fund-raising committee.
Harriet Bullitt said she was unaware of her grand-niece's lawsuit, and Stimson Bullitt said he didn't know about it until his granddaughter e-mailed him a copy. "I think her mother probably encouraged her," he said.
Ashley Bullitt couldn't be reached for comment. But on his liberal Seattle political blog www.horsesass.org June 16, David Goldstein wrote: "Are you a Safeco shareholder? Are you (upset) by the $17 million golden parachute Safeco gave Mike McGavick after he announced his resignation? If you're both, send me an e-mail." Goldstein didn't return phone calls Tuesday.
"I am not an activist and I have never filed a lawsuit," Schwartzman said in her statement. "In bringing this suit, I represent the interests of all Safeco shareholders in saying no to Mike McGavick's style of corruption."
GOP Chairwoman Tebelius, in a statement, scoffed, "Does anyone believe that this woman woke up one morning a couple weeks ago and ON HER OWN decided to file a lawsuit? No."
In arguing that the suit wasn't politically motivated, attorney Lowney noted that two of the 10 Safeco directors named as defendants with McGavick are prominent Democrats: former Gov. Gary Locke and Judith Runstad, a Seattle business and civic leader
Most Safeco stockholders/employees are thrilled with the job Mike McGavick did in making Safeco a profitable company once again.
Emma owns between $2,126 and $2,658 worth of stock, and before McGavick took over as CEO in 2001 it was worth about $1000.
If this wasn't political, Emma would simply take her sweet profit and move on.
Mike McGavick gives republicans a terrific opportunity to win against Maria Cantwell:
http://www.freerepublic.com/focus/f-news/1653679/posts
http://www.mikemcgavick.com/donate.asp
Hmmmm.....this is a little early for the libs to be throwing their dirt at McGavick....I would have thought they would wait until about 2 weeks before the election....when he didn't have any more time to defend himself.....wonder if they have anything else up their sleeves.
Yeah, I've had the same thought.
I think they're getting desperate.
This lawsuit will be thrown out before the election.
I knew the democrats in Washington would pull this now that McGavick is within 4 points of Cantdowell.
Maria Cantwell's campaign so far has all been about how "The evil oil and electricity corporations and executives are out to get you!"
politcal persecution
I couldn't care less what kind of payout McGavick got when he left Safeco. That's between him and the corporation.
Besides, the Marines are winning at SAFECO Field, so lets not rock the boat. :-)
Cantwell must be desperate.
Amazing the scummy lengths the Socialists in Washington State will go to perpetuate their power over the peoole!
I'm rather for the Marines winning wherever they are...
...oh, you probably meant Mariners.
Super! Thanks a million for your "PROMINENT" work.
Super! Thanks a million for your "PROMINENT" work.
Oops...
I'm still in favor of having the Marines win....
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