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Appointed Apple Monitor Doesn’t Like Being Called Out on His BS

Bromwich

Following the farce of a trial over the alleged e-book price-fixing by Apple in its iBooks Store, U.S. District Judge Denise Cote ordered that her friend and relatively new monitor Michael Bromwich oversee e-book pricing reform and regulatory compliance.

However, the acrimony between Bromwich and Apple’s upper management began upon the disclosure of Bromwich’s exorbitant fees.

Bromwich charged Apple $138,432 for his first two weeks on the job.

According to Bloomberg:

Bromwich justified the administrative fee on the grounds that he’s handling the assignment through his consultancy, the Bromwich Group, rather than through his law firm, Goodwin Procter LLP, according to Apple’s filing.

The distinction “seems slippery at best” given that Goodwin Procter issued a press release “clearly meant to drum up more business” announcing Bromwich’s appointment as Apple’s antitrust monitor, Apple’s lawyers wrote.

Bromwich’s invoice for his first two weeks of work was $138,432, the equivalent of 75 percent of a federal judge’s annual salary, Apple said in its filing, which described the administrative surcharge as “unprecedented in Apple’s experience.”

The Wall Street Journal exposed the overly-friendly past of Judge Denise Cote and her appointee, Michael Bromwich:

Readers may recall Mr. Bromwich as the political fixer President Obama brought in after the BP deepwater oil spill. He worked for Iran-Contra independent counsel Lawrence Walsh in the Reagan era and as inspector general for the Justice Department in the Clinton years.

He was confirmed for the latter job despite conflicts of interest; his mentor Philip Heymann was Deputy Attorney General and inspectors general are supposed to be impartial watchdogs. In 1994, Judge Cote wrote Mr. Bromwich an effusive endorsement letter to help push him over the Senate hump.

Hon Denise Cote

Furthermore, WSJ addresses Bromwich’s experience in compliance monitoring:

While he has great political connections, Mr. Bromwich has no experience in antitrust law. The greenhorn is billing Apple at an $1,100 hourly rate and he was forced to hire the law firm Fried Frank to make up for his lack of expertise, at $1,025 a hour. He racked up $138,432.40 in charges for his first two weeks. A spokesman for Mr. Bromwich’s firm, the Bromwich Group, declined to comment on matters currently before the court.

So that’s the backstory. How does Bromwich defend the accusations?

AllthingsD quoted Bromwich’s response to the fees:

My fees are reasonable, and you have no idea what a reasonable fee looks like. Also, it doesn’t matter if you think my fees are reasonable, because you don’t get to negotiate them: You just pay them. The court will approve them.

Apple complained that Bromwich conducted a “roving investigation”, seeking to interview Apple board member Al Gore, and SVP of Design, Jony Ive.

Bromwich’s responded:

Apple’s characterization of his team’s activities as a “roving investigation” in fact “bear no relation whatsoever to the activities we have attempted to conduct.”

And:

“This is far less access than I have ever received during a comparable period of time in the three other monitorships I have conducted.”

In other words, if Apple won’t roll over for Bromwich like in his previous couple of investigations, then they’re not giving him access.

[button url=’#’ size=’small’ style=’blue’]Source: WSJ[/button]