Former FBI director Louis Freeh announced today that the Department of Justice has closed its investigation of former Minnesota senator Norm Coleman and businessman Nasser Kazeminy, who is a client of Freeh's law firm. The DOJ "advised both me and Doug Kelly, who is an attorney here representing Norm Coleman, that they had closed the case and that they were not bringing any charges with respect to the inquiry," Freeh told THE WEEKLY STANDARD during a phone interview.
In the closing days of the 2008 Minnesota Senate race, allegations surfaced that Kazeminy had funneled $100,000 to then-senator Norm Coleman through Coleman's wife's company. "Suit alleges ally funneled money to the Colemans," read one October 31, 2008 headline in the Minneapolis Star-Tribune. The press dogged Coleman for answers. Al Franken and Democrats hammered Coleman on the matter. "This is not about Norm Coleman's wife," Al Franken said during the final debate. "This is about Senator Coleman's political sugar daddy."
It's possible that the allegations against Coleman handed victory to Al Franken, who ended up winning the seat by a razor-thin margin of a few hundred votes during a contentious recount process.
On October 28, 2008, just before the election, Paul McKim, a former business partner of Kazeminy, filed a lawsuit in Texas court against Kazeminy and then went to the press with the allegations. As the Star Tribune reported on November 1:
McKim told the Star Tribune on Friday that he filed his lawsuit to seek justice over $22 million in damages to Deep Marine he alleges were largely caused by bad boat deals engineered by Kazeminy and his associates. Less than 1 percent of the damages listed in the suit are related to the $75,000 that Kazeminy allegedly directed to Coleman.
"I'm sorry it happened at this time,'' McKim said, "but I have to look myself in the eye. It's just the truth. It is what it is.'' McKim said he recalls how Kazeminy approached him and Deep Marine's chief financial officer in 2007 with a directive to channel $100,000 to the senator via Hays.
"He said that the senator's wife worked there and she could get the money to him,'' McKim said. "I was kind of stunned. I was really shocked he would come out and say that so nonchalantly.''
Freeh says that later McKim prepared an affidavit in which he would recant in exchange for a financial settlement. The affidavit stated in part:
- It now appears that I did not have a full understanding or appreciation of the scope of work being performed by Hays [Coleman's wife's employer].
- I now recall that Hays was involved with facilitating Deep Marine’s D&O, EPLI, fiduciary and crime coverage in 2006 and 2007.
- It now appears that I was not kept informed nor did I necessarily take it upon myself to inquire into, various decisions specifically involving Deep Marine and risk management consulting services provided by Hays.
- I have no personal knowledge that either Senator Norm Coleman, his wife, Nasser Kazeminy, Otto Candies or the Hays Companies engaged in any unlawful conduct.
"This was a person who had a clear motive to enrich himself by using this false allegation as leverage to get a monetary settlement," Freeh told me. Whether McKim's actions went beyond normal conduct settlement is "something that a government prosecutor would have to look at with all the evidence," Freeh said.
"When there's a settlement parties retract their claims, they modify their claims," Freeh continued. "I think hypothetically if you intentionally lie, use that to try that to extract a settlement, and then for the settlement withdraw that statement, that would be pretty close to the line of what would be tolerated from a criminal point of view."