How is Rep. Devin Nunes paying for his defamation lawsuits?

Rep. Devin Nunes’ critics have obsessed over how he is paying for the six lawsuits he filed this year, but there are no public records showing how he has paid his Virginia lawyer.

That means Nunes is either paying for the lawsuits out of his own pocket, promising to pay his lawyer a portion of any money they’re awarded in court at a later date, or flouting House Ethics rules that would require him to publicly disclose who is funding the legal work.

Nunes, R-Tulare, has filed lawsuits against Twitter, anonymous social media users known as Devin Nunes’ Cow and Devin Nunes’ Mom, a Republican political strategist, media companies, journalists, progressive watchdog groups, a political research firm that worked for Hillary Clinton’s 2016 campaign and a retired farmer in Nunes’ own district.

All but one of those lawsuits — the one filed in California by Nunes’ campaign against retired farmer Paul Buxman, who accused Nunes of being a fake farmer — is still active. Nunes filed most of the cases in Virginia.

All were filed by Virginia attorney Steven Biss, alleging the journalists, media companies and political operatives conspired to defame Nunes or undermine his ability to lead the House Intelligence Committee.

The only lawsuit with a public record indicating payment is the one against Buxman, which Nunes withdrew within weeks of filing it.

Nunes’ third quarter campaign finance report filed with the Federal Election Commission showed he paid a Fresno law firm representing him in that suit about $3,400.

Nunes campaign finance reports with the FEC do not have records of any payments that appear affiliated with Biss.

Nunes has also said he will “definitely” be filing a seventh lawsuit against AT&T, Verizon and House Democrats for releasing records of phone calls that showed Nunes communicated with allies of President Donald Trump who are now central figures in Democrats’ impeachment inquiry. Democrats published the records in a report summarizing evidence they collected at impeachment hearings.

Neither Nunes’ office nor his lawyer responded to requests for comment.

Nunes would have to set up a legal defense fund to accept free legal services or to receive money from a benefactor. Members of Congress have strict rules against receiving generous gifts, with some exceptions for family.

“It would be considered a gift from that benefactor, so the only way he could do it is through a legal defense fund,” said Kedric Payne, general counsel for the nonpartisan watchdog Campaign Legal Center, a former deputy chief counsel of the Office of Congressional Ethics.

Nunes has no such fund set up, according to a public records search by McClatchy. Even under the rules of that fund, set up by Congress, no one person could donate more than the $5,000 limit, according to Payne.

There are some exceptions that allow members to seek pro bono legal services without such a fund, but none of those exceptions would apply in Nunes’ lawsuits.

According to the House Ethics Manual, members would not need to set up a fund if they received free legal services in cases where they are directly involved if it is a civil suits challenging federal laws, regulations or the lawfulness of actions of a federal agency. But the matter must “concern a matter of public interest, rather than a matter that is personal in nature.”

Critics of Nunes who have speculated about whether Nunes has a benefactor have compared the congressman’s cases to billionaire venture capitalist Peter Thiel funding Hulk Hogan’s lawsuit against Gawker. Hogan sued Gawker alleging the media company invaded his privacy when it posted a video of Hogan having sex with a friend’s wife. Hogan won a jury trial in 2016 and eventually agreed to a settlement of $31 million. Gawker declared bankruptcy after the suit.

Hogan had filed suit in a Florida state court in 2013. While there was speculation as to Hogan’s funding, Thiel didn’t acknowledge he was financially backing the suit until 2016, telling the New York Times that Gawker “ruined people’s lives for no reason.” Thiel was outed as gay by Valleywag, one of Gawker’s now-defunct blogs, about a decade ago.

But the wealthy benefactor theory seems less probably than in the Gawker case with the wide range of entities Nunes is suing. Three of his five active lawsuits are against different media companies — McClatchy, Hearst and CNN — with the other two primarily against Twitter and political research firm Fusion GPS. Thiel only funded one case against Gawker.

And, unlike Hogan, Nunes would face penalties if he had a benefactor and did not disclose it. The House Ethics could impose fines on Nunes if it found he had improperly received gifts as a congressman, according to Payne.

Defamation lawsuits aren’t cheap. Virginia defamation attorney Lee Berlik, who is unaffiliated with any of Nunes’ suits, said each of Nunes’ lawsuits could cost “well into six figures” and even millions of dollars.

“For legitimate defamation cases involving actual damages of $1 million or more, plaintiffs will typically incur at least six figures in legal fees,” Berlik said. Each of Nunes’ five active lawsuits seeks hundreds of millions of dollars in damages.

Nunes’ main reported income, according to his latest financial disclosure covering 2018, is his congressional salary, which is $174,000 per year. His wife is an elementary school teacher in California, and her salary is his only other reported income besides a low interest payment on a savings account. He is also the father to three daughters.

So paying for five lawsuits all worth six figures or more in legal fees seems unlikely, unless he came into a huge source of income in 2019 that has not yet been reported.

There’s one explanation that could be more feasible, according to campaign finance and legal experts: Nunes could be paying for the cases by promising to award a contingency fee to Biss if they succeed.

A contingency fee is a percentage of whatever monetary damages Nunes would be awarded if he wins the lawsuits.

That would require Biss to front the costs of the lawsuits in exchange for a huge potential win down the line.

Berlik said using contingency fees to fund defamation suits would be “the exception, not the rule,” since most lawyers don’t want to front costly legal fees for the possibility of a win.

Berlik explained why in a personal example: In one a recent case where he represented the defendant, Berlik said the plaintiff was awarded $5,000 in compensatory damages but the case cost them $80,000 in legal fees. If that lawyer had been paid through contingency, he likely would have been paid less than $2,000 for a year of work.

House Ethics rules do not mention contingency fees, which means using them as a form of payment likely does not require disclosure under House rules. It would also explain how Nunes could afford to file so many lawsuits at once, all through the same lawyer.

“It would not surprise me if Nunes’ lawyer was handling these cases for free or on a contingency basis,” Berlik said. “He’s getting a lot of free publicity – people are learning his name.”