Woman brings Supreme Court case to ‘heart of civil rights movement’

Published 12:00 am Sunday, September 15, 2002

George &uot;Cap&uot; Swift is accustomed to fielding unusual questions from the people who stop by Selma’s Visitor’s Information Center.

Most want to know where the Voting Rights Museum is located. Or Brown Chapel AME Church. And, of course, everybody wants to know about the bridge.

But even he doesn’t get many requests for legal advice on cases pending before the U.S. Supreme Court.

Still, it’s pretty hard to stump Cap.

So when Yvonne Liebel spilled her story of having driven here from her home in Connecticut because &uot;this is the heart of the civil rights movement&uot; and she didn’t know where else to turn, the imperturbable Cap had an answer for that, too.

The story of how Liebel, a former Israeli paratrooper, came to find herself in J.L. Chestnut’s law office is as fantastic as it is improbable. It revolves around the intricacies of investment banking, two of the world’s largest legal and accounting firms, the IRS, and an idea that could have significant economic implications for the entire Black Belt.

Even Liebel, who is not given to exaggeration, suggests, &uot;It’s unbelievable. I really think it’s an act of God.&uot;

Liebel is the founder of the Alliance Foundation Inc., a philanthropic organization that provides capital and hands-on technical and marketing expertise to start-up companies in under-developed areas of the world.

The company has provided seed capital for a number of companies in Israel and Portugal.

Liebel grew up in Israel and has experienced first-hand the insecurity and despair that come from living under the constant threat of war. &uot;I’m a child of a country of war,&uot; Liebel says, &uot;and I’ve seen what war can do to people. Even if it doesn’t kill you physically, it can kill your spirit.

As are all Israelis, Liebel was required to spend two years serving in the Israeli Defense Force. Women are not assigned to combat duty, but serve in support capacities. Liebel was assigned to a paratrooper unit where, she recalls, &uot;I packed a lot of parachutes.&uot;

At 21, Liebel left Israel to come to the United States. She studied business and finance at the University of California at Los Angeles and eventually become the senior investment officer at American Saving & Loan Association, managing a portfolio of more than $100 million.

She saw how difficult it was for young companies to secure start-up capital, even in the most highly developed industrial nation in the world. And she realized how much more difficult it must be for companies in a country facing the economic uncertainties of her native Israel.

That’s when Liebel conceived the idea that was to become the Alliance Foundation.

Over a period of eight years, working with pro bono legal assistance from Weil, Gotshal and Manges, LLP, one of the largest law firms in the world, and the giant accounting firm of PriceWaterhouseCoopers, Liebel secured two breakthrough IRS private letter tax rulings.

The rulings, in essence, confer IRS approval for a new kind of charitable tax deduction. Donors contribute money to the Alliance Foundation, a non-profit organization, and receive an immediate tax deduction. The foundation then takes the money and invests it in profit-making ventures in undeveloped areas – the sort of areas, Liebel knew from her own investment and banking experience, that rarely see much investment capital.

(&uot;You couldn’t do it in Manhattan,&uot; Chestnut adds by way of explanation, &uot;but you could do it in Harlem.&uot;)

In addition to their initial deduction, donors also receive shares in the profit-making ventures. If the foundation is successful in helping the new company become profitable, donors can then realize a further return on their initial contribution from the sale of their shares in the new company.

The foundation already has succeeded in &uot;growing&uot; a number of companies in Israel and Portugal. Liebel is now looking to focus the foundation’s efforts on starting new companies in economically struggling areas of the United States – where, she points out, some 40 million people currently live below the poverty level.

Chestnut is equally enthusiastic about the foundation’s economic possibilities. &uot;It’s moving like wild fire,&uot; he says.

The foundation held such promise, in fact, that Liebel now claims Weil, Gotshal and Manges and PriceWaterhouseCoopers co-opted her idea for their own benefit.

Explains Chestnut, &uot;It’s her allegation that these two firms took her plan, re-named it and are now operating it under their own auspices.&uot;

Liebel further contends that the two firms conspired to supplant the foundation’s contributors, start-up companies and other assets and even had her evicted from the foundation’s offices.

She also has been unable to find an attorney willing to pursue the case against her powerful former partners – until now. Frustrated with her inability to secure counsel after two and a half years, Liebel took up the case herself. And, although she is not a lawyer, she has propelled the case all the way to the Supreme Court.

But because Liebel is not a lawyer, the court has ruled that, while she may represent herself, she cannot represent the foundation she founded.

What she needed is a lawyer who was admitted to practice before the Supreme Court and one who was willing to take on a law firm with virtually limitless legal resources. In J.L. Chestnut, she found both.

Whether Liebel’s chance meeting with Cap Swift and Chestnut is viewed as coincidence or divine guidance – Liebel prefers the latter – it has breathed new life into her claims against her former partners.

Still, Chestnut admits it’s a longshot. The Supreme Court receives more than 7,000 cases for review each year. Only those with substantial constitutional impact are even considered.

And, too, Chestnut realizes he faces a David-and-Goliath struggle in taking on one of the world’s largest and most powerful law firms.

So, in addition to pursuing the case currently before the Supreme Court, Chestnut says his strategy includes filing a formal complaint with the New York Bar Association, where both PriceWaterhouseCoopers and the law firm have offices.

He hopes to bring enough pressure and public scrutiny to bear on the case that the firms will feel compelled to make concessions.

Liebel may have found the solution to her legal dilemma when when she came to Selma. But she found something else, as well.

It was to combat just such economic blight, Liebel says, that she developed the idea of the Alliance Foundation.

Liebel contends that the strain of living in economic deprivation on a daily basis is not unlike that of living with the constant threat of war, as the people of the Middle East do. That strain, she adds, often drives extreme behavior.

When Chestnut agreed to take the case, he exacted a pledge from Liebel. If her foundation is successful in prosecuting its claims, she will make Selma the organization’s leading redevelopment project in the United States.