Judge allows Barrack to fund Grimes’ defense for $2 million | AspenTimes.com

Judge allows Barrack to fund Grimes’ defense for $2 million

Former Aspen resident Matthew Grimes will have up to $2 million to mount his legal defense against federal criminal charges of foreign lobbying, and his former boss and co-defendant Thomas Barrack is footing the bill.

Judge Brian M. Cogan of the U.S. District Court for the Eastern District of New York approved the financial arrangement after a hearing Thursday. The hearing was prompted by a Dec. 23-dated letter from federal prosecutors in New York requesting the judge to query Grimes about the potential for a conflict of interest.

“The concerns are that subconsciously your lawyers might be influenced by the fact that they’re being paid by Mr. Barrack in order to call close calls that favor Mr. Barrack rather than you,” Cogan told Grimes during the virtual hearing. “So that’s the problem we’re dealing with today. Do you understand that?”

Replied Grimes: “Your honor, very respectfully, I don’t think there’s a conflict or risk whatsoever, but I understand what you are saying.”

Authorities arrested both Barrack, 74, and Grimes, 28, in California on July 20 following grand jury indictments. Both have pleaded not guilty to charges they covertly worked as agents on behalf of United Arab Emirates, from April 2016 to April 2018, to influence President Trump’s foreign policy. The third person indicted was Rashid al-Malik Alshahh, who reportedly fled the U.S.

Grimes worked as an assistant to Barrack at his real estate and private equity firm Colony Capital, while “bank records and telephone records reflect that, prior to his arrest, the defendant (Grimes) listed Barrack’s $15 million home in Aspen, Colorado, as his primary residence,” said a Nov. 2 pleading by U.S. Attorney Breon Peace. “Further, thousands of emails and text message communications obtained during the course of this investigation further confirm that the defendant and Barrack have a close, albeit asymmetrical, relationship.”

In November, the prosecution succeeded in having Grimes continue to wear an ankle monitor while he is free on $5 million bond. Yet Grimes prevailed in the latest dispute, after the judge asked him a battery of questions about the potential conflict given Barrack’s financial aid. Judge Cogan said he was “confident Mr. Grimes fully understands the nature of the potential conflict at issue.”

“He’s going into this with his eyes open,“ said the judge. “He understands the risk and possible consequences of the potential conflict and then he nevertheless wants to proceed with Mr. Lowell and his attorneys for his case.”

Tom Barrack, center, arrives at Brooklyn federal court, Monday, July 26, 2021 in New York. Barrack was among three men charged in New York federal court with trying to influence foreign policy while Donald Trump was running in 2016 and later while president. The chair of former President Donald Trump's 2017 inaugural committee allegedly conspired to influence U.S. policy to benefit the United Arab Emirates, even while he was seeking a position as an American diplomat. (AP Photo/Mark Lennihan)

Abbe David Lowell of Washington, D.C., the lead attorney for Grimes, also weighed in, saying the financial agreement would apply to whomever represents Grimes in his defense.

“This is not like I had represented Mr. Barrack in the past or whatever,” Lowell told the judge. “It is that Mr. Barrack and the company (Colony Capital), we believe, have either voluntarily, or pursuant to obligation, the need to reimburse Mr. Grimes for acts that were taken when he was employed by them and in Mr. Barrack’s case, by the agreement they made. It is not specific to me. … If I were to leave tomorrow, Mr. Grimes would still have the ability to pay his own counsel.”

Grimes told the judge that “nobody put any pressure on me to enter into this agreement,” which includes Lowell overseeing the funds

“So there’s a cap on the advance agreement and it is paid directly by Mr. Barrack himself individually,” Grimes said. “The cap is $2 million, which will be wired into an account that will be overseen by Mr. Lowell, my attorney. He will have full discretion over the funds and those funds will be used to reimburse him for attorneys’ fees and any other fees and what not in costs associated with the defense.”

“What happens if you go over $2 million?” the judge asked.

“There’s a provision in the agreement that in which both parties agree to negotiate in good faith to increase the amount, provided I need to do so although there’s no obligation by any party in the agreement to increase the amount,” responded Grimes.

In its Dec. 23 pleading, the prosecution said, “Specifically, the Fees Agreement, which was executed after the defendants were arrested has the potential to affect defense counsel’s advice, including (1) whether to seek possible leniency by cooperating with the government against Barrack (the party who is paying his legal fees), and (2) whether Grimes should testify in his own defense at trial, where such testimony might implicate Barrack.”

Barrack’s $250 million bond is partially supported by his 277 Eagle Park Drive home, which he put up as collateral in August, according to a filing in the Pitkin County Clerk & Recorder’s Office. Barrack bought the home for $15.5 million in November 2017, property records show.

A trial is set for both Grimes and Barrack in Brooklyn federal court on Sept. 7, which is when jury selection is scheduled to begin.