2004 Year in Review
Innovative Solutions. Exceptional Service. Extraordinary Results.
Chairman’s Letter
To Our Clients and Friends:
On the following pages, you will find a number of stories that illustrate why 2004 was an outstanding year for Preston Gates Ellis &
Rouvelas Meeds LLP, the Washington, D.C. office of Preston Gates & Ellis LLP. Working alongside our colleagues on the West Coast
and in Asia, we have accomplished much over the past year. These achievements and successes are not ours alone, but belong
to our valued clients. It is an honor to work with them. We are fortunate to have clients who have been exceptionally loyal to us
over the years. In 2004, we also added more than 100 new clients ranging from leading companies in technology, manufacturing,
finance, retail and telecommunications to major philanthropic foundations, trade associations and local governments. It is a
privilege to have the opportunity to provide the highest level of legal and legislative counsel to all of them.
Over the past year, we added new professionals to strengthen our position as a top tier law and lobbying firm. Focus areas of
this growth included Asia, international trade, and intellectual property. We also added talent to our federal policy and litigation
practices. Global business environments and demands may change from year to year, but our core values—integrity, service,
teamwork—remain constant.
As we continue to expand into new areas of practice, welcome new colleagues with exceptional and varied experience, serve our
many long-standing clients and reach out to support the visions and values of new clients, we thank you for the opportunity to do
the work we love here in the nation’s capital.
Thank you for adding to our story in 2004, and for letting us be a part of yours. We look forward to an even brighter future, and the
opportunity to serve you in the years ahead.
Sincerely,
Emanuel L. Rouvelas
Chairman
Scoring Tax Wins
In 2004, our tax policy team provided extraordinary coverage of
the JOBS tax bill, the most significant corporate tax reform bill in
20 years, and saved millions of dollars for several of our clients.
Working with Members and senior staff of the Ways and Means,
Finance, and Joint Tax Committees, as well as the Senate and
House leadership, the firm’s professionals not only blocked tax
provisions that would have cost clients millions of dollars, but
also helped clarify language that ensured tax benefits for
industries that employ thousands of American workers. These
successes were based on our substantive understanding of
the tax bill and our track record in working the issues through
Congress—we were able to pinpoint the areas of concern, define
and implement strategies, and make our clients’ positions known
to key decision-makers.
• The initial version of the corporate tax bill would have
unfairly denied tax benefits for work done at the three
U.S. coffee-roasting plants operated by STARBUCKS. Our
team helped secure language that makes it clear that work
done at the roasting plants qualifies for the benefit. The
change had a significant financial impact for Starbucks.
• Preston Gates worked on behalf of THE AMERICAN
INSTITUTE OF ARCHITECTS to add architectural and
engineering services to a classification of work that
qualifies for an exemption under the tax bill. Our team
helped spearhead the amendment on the Senate floor,
drafting language to garner support and directly lobbying
Members with influence over the bill. The changes are
worth millions of dollars for the two industries.
• Preston Gates helped the BURLINGTON NORTHERN AND
SANTA FE RAILWAY COMPANY obtain the repeal of the special
diesel fuel tax that the railroad and barge industries have
been required to pay towards “deficit reduction” since 1990.
Repeal of the excise tax will free up more than $180 million
a year that the rail industry can use for new investments
in track, equipment and facilities. These investments will
benefit customers, employees, and shareholders, as well as
the economy as a whole.
• Our team also represented BROWN-FORMAN CORPORATION, one
of the largest American-owned companies in the wine and
spirits business, in securing a beneficial base period for the
phase-out of export tax incentives. This kind of consideration
will help companies like Brown-Forman that are major
exporters of U.S. products.
The firm’s professionals not only blocked tax provisions that
would have cost clients millions of dollars, but also helped
clarify language that ensured tax benefits for industries that
employ thousands of American workers.
Finding Funding
We are proud
of the nationally
recognized grants and
appropriations team
at Preston Gates.
Our team works
hard to find funding
opportunities for our
clients, to help them
meet and exceed
their goals. In 2004,
we assisted clients in
securing hundreds of
millions of dollars in
federal appropriations
for a variety of
projects, including:
$109 million for a Midwest automotive supplier specializing in
technologically advanced systems, modules and components
for manufacturers of light vehicle, commercial truck, trailer and
specialty original equipment for multiple projects related to
development of a family of medium tactical vehicles and armored
security vehicles.
$5 million for a client in the South for research and development
related to hypersonic vehicle electric power systems; agricultural
research programs focused on alternative domestic energy
resources; expansion of a law enforcement innovation system;
and horticulture research and development focused on gene
resistance and rapid deployment techniques.
$60 million for expansion and improvements of the Los Angeles
Metro Transit Authority’s gold line metro system.
$3.5 million for the locomotive research and development program
for one of the largest rail carriers in North America.
$24.7 million for a Northwest economic development organization
and local small businesses for multiple projects, including
environmental programs; fuel cell technology for an energy
conversion project; hazardous materials management and
emergency response; broadband infrastructure projects related
to electronic data interchange initiatives; and research and
development for remote-based power demonstrations.
$3.4 million for an economic development organization in
the Pacific Northwest for programs including funding for an
environmental aquifer study from two different sources; rail
projects; and construction of training facilities at a local
military base.
$21.2 million for a manufacturer of high-tech fabrics for
defense-related projects including development of an extended
cold weather clothing system; multi-climate protective clothing
system; mountain cold weather clothing and equipment program
of integrated clothing for expeditionary operations; and rugged
textile electronic garments with integrated sensor technology for
combat apparel.
$10.1 million for a nonprofit alternative energy technology
group to fund a mobile microgrid project and a biodiesel
demonstration project.
$7.5 million for a client in the Pacific Northwest for construction
of a new agricultural research facility; defense advanced research
projects including development of a P3 power system; and porous
materials research and soldier systems and combat feeding
research and development for two branches of the U.S. military.
$7.5 million for the positive train control research and
development program for a major rail equipment manufacturer
and major rail carrier.
$2.8 million for an industry leading nanotechnology company
for development of nanotechnology-based white LEDs, which
increase luminosity, and research and development of mesh
fabric to protect soldiers from biological and chemical threats.
$2 million for an alternative energy company focused on
commercialization of reliable, cost-effective power sources, for
research and development related to integrated fuel processors
and fuel cell systems.
$2 million for a nonprofit engineering organization serving the
water and sanitation needs of developing countries and disaster
areas for clean water demonstration projects in Africa and
South America.
$2 million for a nonprofit research and development institution for
projects related to defense supply chain practices; a conservation
program; and a health technology center.
$950,000 to support a math and science center for a small,
private university that had never before sought an earmark.
Achieving Results
Environmental Policy Group Guides Team to $4.8 Billion Contract
Supporting a group of major federal contractors, Preston Gates’
policy team helped develop a successful proposal to operate
the Department of Energy’s nuclear energy laboratory in Idaho,
a contract valued at $4.8 billion over ten years. Secretary of
Energy Spencer Abraham announced the award in November
2004, indicating that the group had been selected with the
goal of establishing the Idaho National Laboratory as the
premier laboratory for nuclear energy research, development,
demonstration, and education in the United States.
Drawing on our deep experience providing public policy and
regulatory advice and litigation services, members of our team
also have significant experience counseling clients on how
to enhance their performance through dealings with federal
agencies, including the Department of Energy, the Environmental
Protection Agency, and the Small Business Administration.
Government Contracts Lawyers
Secure $700 Million Contract Extension
We don’t just help our clients do business—we help them do
it better. In 2004, we assisted a contract team in negotiations
for a five-year contract extension for managing the Department
of Energy’s Waste Isolation Pilot Plant (WIPP), the nation’s first
operating geological repository for permanent disposal of
defense-generated transuranic waste. The facility includes
surface and underground facilities that are a half mile below
the earth’s surface. The contract extension is valued at over
$704 million through 2010.
Energy & Utilities Group Obtains $200 Million Savings for Industry
Lawyers in the firm’s energy and utilities group bring valuable
private and public sector experience that enhances our ability to
effectively address the legal issues of clients in this sector. This
depth and breadth of knowledge enables us to assist clients in
identifying and resolving a broad spectrum of issues.
In 2004, our energy lawyers helped to organize and lead
a coalition of regional transmission owners and customers
located in the PJM Interconnection, L.L.C. (PJM) and Midwest
Independent System Operator, Inc. (MISO) regions in a historic
effort to preserve the transmission pricing structure in the
combined PJM and MISO region.
As a result of the expansion of PJM and the organization of MISO,
the Federal Energy Regulatory Commission (FERC) ruled that
transmission charges for delivery of electricity throughout the
PJM and MISO region are unjust and unreasonable. FERC also
ordered that certain charges be instituted to make up for the
revenue lost when these transmission charges are eliminated.
Working with the coalition, Preston Gates attorneys achieved
a settlement that postponed the lost revenue charges while all
transmission owners and customers worked on an evaluation
of the transmission pricing structure in the combined PJM and
MISO region.
During the next phase of this process, Preston Gates attorneys
facilitated a diverse set of interested stakeholders, ranging
from independent transmission companies, large transmissiondependent utilities, municipalities and cooperative entities,
large retail customers, consumer advocates, and state utility
commissions, in efforts to develop a long-term transmission
pricing plan in the combined PJM and MISO region. The core
elements of the long-term pricing plan submitted by the coalition
were adopted by FERC in November 2004 for implementation on
December 1, 2004. The savings associated with this negotiated
resolution are estimated at over $200 million annually.
GWF Energy Wins Settlement of More than $10.7 Million
Our client, GWF Energy LLC (GWF), is an independent power
producer that responded to the California energy crisis by
building three generating stations in the state. In order to deliver
power from the plants, it entered into an interconnection
agreement with Pacific Gas & Electric Company (PG&E). A
dispute developed regarding PG&E’s obligation under the contract
to reimburse GWF for upgrades to the PG&E transmission system
that GWF funded to interconnect the plants. Preston Gates
represented GWF before FERC, which had jurisdiction to resolve
disputes pursuant to the contract. FERC set the contract dispute
for hearing but held the hearing in abeyance in order to permit
the parties to pursue settlement discussions.
After several rounds of discovery and months of negotiations
in Washington, D.C. and California, GWF and PG&E reached
a settlement requiring PG&E to reimburse GWF more than
$10.7 million for these upgrades to the transmission network.
After receiving the concurrence of the FERC Staff and an
Administrative Law Judge to the settlement agreement, GWF and
PG&E obtained FERC approval of the settlement in August 2004.
Justice Department Approves Airline Merger
Creating World’s Largest Carrier
In 2004, the U.S. Department of Justice (DOJ) and the European
Commission approved a merger between Air France and KLM
in the first major cross-border merger in decades. The new Air
France-KLM will be the world’s largest carrier by revenue. Under
the new structure outlined by the airlines, Air France and KLM
will retain their corporate identities and together serve 226
destinations worldwide and operate a fleet of about 540 aircraft.
Preston Gates assisted Air France in navigating the DOJ’s merger
review process. Notwithstanding its size and scope, the merger
was cleared without the issuance of a Second Request.
U.S. Flag Returns to the Cruise Ship Industry
The introduction of the 2,000-passenger Pride of Aloha in
2004 marks the return of the U.S. flag to the oceangoing cruise
industry. This is the first of three modern U.S.-flag cruise ships
that NCL America, an affiliate of Norwegian Cruise Line, will be
bringing to the Hawaiian Islands. Preston Gates assisted in the
political and regulatory logistics of NCL America’s unprecedented
entry into the U.S. flag cruise ship industry.
“Reflagging this ship is far more than symbolic,” said U.S.
Secretary of Transportation Norman Mineta, of the Pride of
Aloha. “Raising the Stars and Stripes over more ships raises our
maritime strength and raises jobs.” The ship is projected annually
to generate $199 million in direct and indirect wages and
salaries, $42 million in federal tax revenues, and nearly 7,000
jobs. According to an independent study, once NCL America’s
plans are fully implemented, their U.S.-flag ships are expected to
generate more than $828 million in U.S. economic activity and
more than 20,000 jobs.
Making the International Connection
Today’s global
economy has only
expanded the need
for representation in
the nation’s capital.
“Virtually all companies are involved in international trade now,”
says Jeff Winton, a new partner in Preston Gates’ Washington,
D.C. office focused on international trade. “Companies are either
selling or purchasing abroad, or outsourcing, or contending
with foreign competition, and they are looking to legislation
or litigation to address their trade issues. Foreign companies
seeking to maintain their position in the U.S. market have to be
able to respond in kind.” This synergy between public policy and
international trade issues was the driving force behind Winton’s
decision to join Preston Gates in July 2004. Since that time, the
firm has raised the profile of its multi-dimensional international
trade practice.
“Two components of the firm’s international trade practice
really appealed to me,” said Winton. “First, there’s the firm’s
commitment to Asia, where extraordinarily rapid economic
growth is creating complex trade issues. Preston Gates’ strength
in Asia gives us unique insight and a base to help our clients
deal with these issues creatively and effectively.” The firm
has offices in Beijing, Hong Kong and Taipei, where more
than 50 legal professionals are serving diverse clients such as
manufacturers, importers and exporters, local and international
banks, securities firms and insurance companies, and energy and
telecommunications companies.
“The other component was the firm’s strong standing in
Washington, D.C. I have a lot of experience working on complex
trade litigation issues. But the combination of a sophisticated
federal policy practice with the global reach really sets Preston
Gates apart.” Citing the national reputation of the firm’s policy
group, Winton says that clients with trade issues need the help of
professionals who can work their issues through Congress and the
Executive Agencies.
“At Preston Gates, you’ve got lawyers on the ground in Asia with
Western legal training, native language skills and the cultural
background to really understand the issues in context, and then
you have 30 years of experience and relationships in Washington,
D.C., where the policy team can work directly with the key
players, develop effective political strategies, mobilize lobbying
efforts and build coalitions.”
In early 2005, the international trade policy team was further
enhanced with the addition of Timothy Punke, former Chief
International Trade Counsel to the Senate Finance Committee.
With his deep experience in Asia-related trade issues and
public policy, Punke strengthens the interplay between the
trade litigation and policy components of the practice. Also new
to the team are Sam Yoon, an associate, and Alek Sellers, an
international trade specialist, both of whom have significant
experience assisting clients in finding solutions to their
competitive problems.
Looking forward, Winton sees the firm playing a leading role in
major international trade issues and continuing to assist clients
with innovative strategies. Such involvement suits Winton just
fine, given his focus on helping global clients who do business
internationally with their cross-border issues. Such a practice
relies on extensive contacts, relationships and knowledge of the
processes themselves, which the new partner likens to navigating
the tax code, another area where the firm has considerable talent.
“There are complex rules in international trade. If you don’t
plan for them, you can easily be caught. It’s crucial to do your
homework, and set a strategy ahead of time. In trade matters, as
in public policy work, being a step ahead on key issues is critical
to success.”
Creating Innovative Solutions
Winning for Maersk Line, Limited
Preston Gates helped secure an award of 19 operating agreements
under the Maritime Security Program (MSP) pursuant to which
Maersk Line, Ltd. will receive payments in excess of $550 million
over the life of the program. The MSP is a U.S. government
program first enacted in 1996 and re-authorized for an additional
10 years in November 2003. Under MSP, the United States pays
program participants an annual stipend to operate privatelyowned, commercial vessels under the U.S. flag to guarantee their
availability for use by the U.S. military and to maintain a U.S. flag
presence in international shipping.In return, the participant enters
into an agreement with the U.S. Departments of Transportation
and Defense to make the vessel and its associated worldwide
intermodal systems available for U.S. defense needs. Although
Maersk Line, Ltd. has participated in the program since 1996, the
re-authorized program enabled the company to operate enrolled
vessels in its own name, thus eliminating duplicative management
arrangements and facilitating the guaranteed immediate access
and global reach essential to the U.S. military.
Finding Innovative Safeguards for Client Resources
In 2004, our team lobbied successfully to insert a provision in
the Medicare Prescription Drug and Reform Bill, allowing our
client, a New York hospital, to appeal an adverse decision of
the Secretary of the Department of Health and Human Services
(HHS). More importantly, the provision required that the Secretary
approve the appeal, and also explicitly precluded any further
administrative or judicial review of the appeal. However, an
apparent clerical error resulted in HHS erroneously denying the
appeal filed by our client.
Although the agency admitted the error, it refused to correct
it. Subsequently, Preston Gates spearheaded a lobbying effort
that included intervention by the White House and Members of
Congress on behalf of the hospital. After the White House became
involved, HHS asked Preston Gates for a legal justification to
support reversing its decision in this circumstance. Our team
provided the agency with a legal memorandum literally overnight,
demonstrating that this particular case fell within applicable
precedent. The Secretary accepted Preston Gates’ position and
reflected the clarification in proposed regulations. As a result,
our client obtained the millions of dollars it would otherwise have
been denied.
Successes like this one demonstrate Preston Gates’ unique
ability to approach issues from all sides, ensuring that every
available avenue is being explored to ensure that our clients reach
their business goals. Not only did our policy team bring to bear
significant relationships with the Administration and Congress,
but our litigators crafted a thorough and persuasive legal
argument that sealed the victory for the hospital.
Energy Group Brokers $4 Million Deal for New England Markets
Preston Gates assisted in brokering a settlement agreement with
ISO New England Inc. and other key participants in the New
England energy markets that will, among other things, provide
refunds to energy suppliers in New England of approximately
$4 million. Preston Gates participated in the settlement talks on
behalf of clients PPL Wallingford Energy LLC and PPL EnergyPlus,
LLC, which will receive a share of the settlement proceeds upon
acceptance by the Federal Energy Regulatory Commission of
the November 2004 settlement package. An Administrative
Law Judge has certified the settlement, recommending that
it be implemented. The settlement amounts relate to charges
assessed on the suppliers based on bids that were superseded by
a contractual Reliability Must Run agreement.
Adding New Talent to Our Team
Larry Ayres, Government Affairs Counselor
Focuses practice on defense and appropriations issues with a special
emphasis on Michigan-based companies; two decades of experience in
the U.S. Army, including assignments in the Offices of the Secretaries
of Defense and the Department of the Army; former Director of
Government Affairs for Colt Industries, Inc.
James Cerven, Associate
2004 graduate of University of Michigan Law School and former
Summer Associate at Preston Gates; experience includes internships
for the Honorable Justin L. Quackenbush, Federal District Court for
Eastern Washington and the Honorable Kenneth H. Kato, Washington
State Court of Appeals.
Amy Flachbart, Government Affairs Analyst
Former Chief of Staff to Rep. George Nethercutt (R-WA); served as
Republican Staff Director for Northwest Energy Caucus; focuses on
Northwest policy issues, including energy and natural resources.
Timothy Punke, Partner
Former Chief International Trade Counsel to the Senate Finance
Committee, International Economic Policy Advisor at the White House,
and Law Clerk for Judge Sidney Thomas on the 9th Circuit Court of
Appeals; teaches international trade policy and dispute resolution
at Georgetown Law School; focuses on international trade, Asia, and
public policy.
Thomas Reed, Of Counsel
Former senior trial attorney at the U.S. Department of Justice, Civil
Rights Division; lead trial counsel in affirmative litigation related to
compliance with voting rights and voter registration laws; concentrates on
litigation related to civil rights, commercial litigation, telecommunications,
securities litigation, election law and antitrust defense.
Alekzander Sellers, International Trade Specialist
Focuses on trade and antidumping issues; specializes in proceedings
before the U.S. Department of Commerce and the U.S. International
Trade Commission; participates in actions before the U.S. Court of
International Trade and the U.S. Court of Appeals for the
Federal Circuit.
Julie Hopkins, Associate
2004 graduate of University of Maryland School of Law, former
patent law clerk and Summer Associate at Preston Gates; focuses
on intellectual property, including patent, copyright, and trademark
infringement issues.
Jennifer Sepic, Associate
2004 graduate of Georgetown University Law Center, former Summer
Associate at Preston Gates; former intern to the Honorable Gladys
Kessler, United States District Court for the District of Columbia.
William Kirk, Jr., Partner
Served as advisor to Congressman John Conyers (D-MI); former
professional staff member of the House Ways and Means Committee
and former Staff Director of the Subcommittee on Oversight under
Subcommittee Chairman Charles Rangel (D-NY); currently serves as
counsel to the Congressional Black Caucus PAC.
Jeffrey Winton, Partner
Focuses on international trade law; extensive experience in all aspects
of trade remedy proceedings; has represented clients in China, Japan,
Korea, France, Germany, Canada, Mexico, Russia, Kazakhstan and
Venezuela in more than three dozen U.S. antidumping cases.
Ellen Klann, Ph.D., Associate
Focuses on intellectual property, including patent prosecution and
litigation related to biotechnology products and clients; former
academic research scientist; holds inventor patent for method of
increasing sucrose content in tomato fruit.
Sam Yoon, Associate
Focuses on international trade law; experience includes assisting U.S.
and foreign companies in connection with antidumping investigations,
economic sanctions, export controls, and the Foreign Corrupt
Practices Act.
1735 New York Avenue, NW Suite 500 Washington, D.C. 20006
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