Candidates for the 7th Congressional District sparred Wednesday over Democrat Ed Perlmutter’s legal role in the bankruptcy of a controversial insurance firm.
Republican Rick O’Donnell’s campaign accused Perlmutter of profiting “from one of the worst corporate interests in America at the expense of elderly and disabled policyholders.”
Perlmutter cried foul, saying his role in the case was to recover money for the policyholders.
“Rick’s attack is completely false, and he needs to publicly retract this pathetic assertion immediately,” Perlmutter said.
The clash came over Perlmutter’s role as a lawyer in the outcome of Los Angeles-based Executive Life Insurance Co., which collapsed in 1991 because of steep losses in what had been a $7 billion junk-bond portfolio.
The scandal left more than 300,000 policyholders fighting for years to recover the losses.
O’Donnell’s campaign, which for weeks has been attacking Perlmutter for declining to disclose his client base, put out a news release saying court documents reveal Perlmutter represented and “profited from the collapse of” Executive Life.
“For weeks, Ed has refused to tell the voters who his clients are. Now we know why,” said O’Donnell’s campaign manager, K.C. Jones, in a prepared statement. “If Executive Life is any indication, Ed’s clients are some of the most unsavory folks in America who hurt hundreds of thousands of people while Ed profited, pocketing his lawyer fees.”
The Perlmutter campaign says it got involved at the request of the New York and California insurance commissioners to preserve assets for policyholders during the bankruptcy case.
Another Denver lawyer involved in the case, Larry Bass, who was lead counsel for a creditors’ committee trying to recover the losses, said O’Donnell had distorted Perlmutter’s role.
“To represent that he (Perlmutter) profited by representing Executive Life is far afield from the truth,” Bass said.
The insurance commissioner for New York could not be reached, and the office of the California insurance commissioner said it would need more time to research the issue to determine Perlmutter’s role in the case.
O’Donnell has criticized Perl mutter for refusing to divulge his legal clients during his years as a part-time state senator from 1994 to 2002. O’Donnell has said those records should be available so the public can determine if Perlmutter had conflicts of interest.
Perlmutter has said he can’t divulge those records because of attorney-client privilege. He has said those who want to review the records can go through public channels to find them.
Staff writer Christopher N. Osher can be reached at 303-954-1747 or cosher@denverpost.com.
