Abbe Lowell Represents Starr, Asks SEC Not to Be `Heartless' to Family

Lawyer Abbe Lowell may once again be fighting over the actions of Kenneth Starr.

In 1998, Lowell served as counsel to the Congressional Democrats during impeachment proceedings against then-President Bill Clinton after a probe by Independent Counsel Kenneth Starr. Today, Lowell appeared in Manhattan federal court to at least temporarily represent the jailed money manager of the same name in a lawsuit by the U.S. Securities and Exchange Commission.

Again, Lowell was outspoken in his defense of his client.

After court, Lowell urged the agency not to be unfeeling and deny Starr’s wife, former stripper Diane Passage, access to funds she needs to survive. “They couldn’t be that heartless,” Lowell said in an elevator that he shared with Aurora Cassirer, the receiver for Starr’s firms.

“I don’t think it’s being heartless,” Cassirer responded, adding that the agency has an obligation to recover the money people invested with Starr.

“I don’t think the SEC wants Ms. Passage and her son to starve,” Lowell replied as the elevator descended to the courthouse cafeteria, where the parties conferred. Passage had no comment.

Money manager Starr, 66, was arrested and charged May 27 with orchestrating a fraud scheme that prosecutors said may exceed $30 million as more victims come forward. The SEC filed its civil lawsuit the same day against Starr, Passage and New York-based Starr Investment Advisors and Starr & Co. At issue in today’s proceeding in the SEC case was whether the judge would extend a freeze on the Starrs’ assets, which he did for four weeks.

Former Federal Prosecutor

A former federal prosecutor, Lowell, 58, was Chief Investigative Counsel to Democratic Party members of the House Judiciary Committee during impeachment proceedings in 1998 and 1999 into statements made by Clinton about his affair with a staffer.

A partner at McDermott Will & Emery, Lowell said in an interview after court that his continued representation of the Starrs may depend on whether the judge releases assets to pay legal fees. He also wants to represent Kenneth Starr, who has been jailed since his arrest, in his criminal case.

He “should be released on conditions,” Lowell said after court. Asked whether Passage, 34, would resume her prior career if she needs resources, Lowell said “she’s going to do what she needs to do to support herself.”

Cooperation

In court, Lowell agreed to a four-week extension of the freeze while he prepares legal papers seeking to lift at least a portion of it. Cassirer asked for Starr’s cooperation as she hunts for his bank accounts and assets. After court, SEC lawyer Todd Brody said the agency’s investigation is continuing.

Starr, who is accused of stealing client funds, is being held in a federal jail because a judge fears he might flee. He once managed more than $700 million for about 175 wealthy clients, including heiress Rachel “Bunny” Mellon.

In a report last week to U.S. District Judge Sidney Stein, Cassirer, then acting as monitor of the Starr firms, said there was $40,000 left in the firms’ bank accounts. The firms have from 30 to 40 clients, down from about 140 a month or two ago, she wrote.

The civil suit is SEC v. Starr, 1:10-cv-04270, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: David Glovin in New York federal court at dglovin@bloomberg.net.

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