COLUMN-Jeffrey Epstein gave her a $9,350 handbag, but did Goldman Sachs' departing top lawyer violate any rules?

By Jenna Greene

Feb 12 (Reuters) - Goldman Sachs top lawyer Kathryn Ruemmler faced fierce criticism on social media and calls for her ouster following revelations that she accepted thousands of dollars' worth of gifts from Jeffrey Epstein when she was previously a partner at a law firm.

As a matter of attorney ethics, her conduct didn't appear to violate any professional rules -- but it raised questions of judgment, some legal ethics experts told me.

Late Thursday, Ruemmler announced her resignation as Goldman's chief legal officer and general counsel effective June 30.

"My responsibility is to put Goldman Sachs' interests first," Ruemmler said in a statement. Goldman chief executive David Solomon, who had initially stood by Ruemmler, said in a statement that Ruemmler "has been an extraordinary general counsel" and "will be missed."

A spokesperson for Ruemmler, who served as White House counsel during the Obama administration, said earlier this week that she was never Epstein's lawyer and that she had done nothing wrong.

Ethics rules for lawyers offer few guardrails on the propriety of accepting gifts. Most state bars have adopted an American Bar Association rule that says a lawyer may not solicit a "substantial" gift from a client. But the rule doesn't prevent a lawyer from accepting an unsolicited client gift, no matter how valuable, said Fordham School of Law ethics professor Bruce Green. Nor are lawyers barred from soliciting or accepting substantial gifts from a former client or other non-client.

According to Ruemmler's spokesperson Jennifer Connelly, Ruemmler knew Epstein through her prior work as a criminal defense attorney, received referrals from him and was friendly with him in a "professional context."

Epstein also "occasionally sought her informal legal advice and she responded based on what she knew and often in ways designed to placate him without having to actually get involved," Connelly wrote in an email.

Goldman has a 39-page code of conduct that includes instructions on giving -- but not receiving -- gifts from clients. It also prohibits employees from engaging in outside activities that "create conflicts, reputational risks or any other negative impact to the firm or our clients."

It is unclear to what extent this rule would have obligated Ruemmler to disclose her prior association with the notorious financier, whose death in 2019 was front-page news, or if such a disclosure was made. Ruemmler was hired by Goldman in April 2020.

Goldman spokesperson Tony Fratto told Reuters last week that Epstein often offered unsolicited favors and gifts to many business contacts.

Ruemmler accepted the gifts between 2014 and 2019, when she was a partner at Latham & Watkins, according to emails recently released by the U.S. Department of Justice. The law firm says Epstein was not a client and declined further comment.

Law firm consultant Lisa Smith with Fairfax Associates said that while some firms place limits on gifts from vendors, she hasn't seen partnership agreements that address non-clients. It "would be difficult to define that, but it is possible that exists," she said via email.

Latham's partnership agreement is not publicly available, and the firm does not publish a code of ethics for its lawyers on its website.

Epstein pleaded guilty in Florida state court in 2008 to felony solicitation of prostitution and procuring a person under the age of 18 for prostitution. In July 2019, he was arrested on sex trafficking charges and died a month later in a Manhattan jail cell in what New York City's chief medical examiner called a suicide.

Based on my review of a sample of more than 9,000 emails from 2014 to 2019 that mention Ruemmler's name, the exchanges offer few indications of why the gifts were given or what, if anything, Epstein expected in return. A purse from Bloomingdales in 2017 was said to be a birthday present, and on Valentine's Day of 2018, Epstein treated Ruemmler to a "Glam Squad" hair and makeup appointment. At least twice he sent chicken soup when she was sick, the emails show.

"I adore him. It's like having another older brother," Ruemmler wrote in a 2015 email to Epstein's assistant.

Also buried in the DOJ's document release: A 2016 email from Epstein forwarding a flattering column I wrote for a legal publication about Ruemmler's work on behalf of a Dubai bank. The email appears to have been sent to executives at Swiss bank Edmond de Rothschild.

According to Connelly, the bank was a client of both Epstein and Ruemmler. From the emails, it appears that Epstein had facilitated her introduction to the client, emailing Ruemmler in 2014 that Edmond de Rothschild had a "doj problem" without elaborating. He asked if she was prohibited from involvement.

"No, no prohibition," she responded. A spokesperson for the bank did not immediately respond to a request for comment.

Reuters was unable to establish what issue Epstein was referring to or whether Ruemmler was ultimately retained to work on it.

Ruemmler's bounty from Epstein also included a Hermès purse priced at $9,350 in 2016 and a Fendi coat and bag costing $6,800 in August of 2018, according to emails released by the DOJ. Other gifts include wine, flowers and a massage at the Four Seasons in Washington, D.C., the emails show.

Should Ruemmler have known better than to accept? With the benefit of hindsight, it seems easy to say yes, and to see Epstein's campaign of largesse as a deliberate move to get a leading lawyer in his corner, even unofficially.

In late 2018, the Miami Herald and other news outlets reported in detail on allegations of sexual abuse by teen girls against Epstein.

Ruemmler's spokesperson said her views on Epstein were shaped by "his denials of any wrongdoing other than what he had pled guilty to years prior," and that "if she knew then what she knows now, she never would have dealt with him at all."

By the nature of their practice, criminal defense lawyers are going to have relationships with unsavory people. What lawyers need to keep in mind is whether such relationships could reflect poorly on their firm or company, said Downey Law Group founder Michael Downey, whose firm focuses on legal ethics and lawyer discipline defense, especially if gifts or favors are involved.

"The rules of professional conduct don't necessarily come into play," he said. Instead, it's ultimately a question of judgment.

(The opinions expressed here are those of the author, a columnist for Reuters.)