Election

WASHINGTON (AP) ― Sen. Norm Coleman lashed out Friday at a lawsuit claiming a friend funneled $75,000 to an insurance company that employs his wife, calling it "false and defamatory" and "sleazy politics" aimed at derailing his campaign.

But a lawyer for the man who filed the suit said it didn't defame Coleman, noting that the suit didn't allege that Coleman or his wife knew about or benefited from the alleged scheme.

Coleman addressed the lawsuit at a brief news conference in Moorhead, Minn., where he was campaigning for re-election. Coleman said he believes Minnesotans will "see it for what it is -- sleazy politics -- and reject it out of hand."

Coleman said his wife, Laurie, "has been devastated by this." News of the lawsuit broke just days before the election, where Coleman, a Republican, has been in a hard fight for a second term with Democrat Al Franken.

The lawsuit alleges that Coleman friend and campaign donor Nasser Kazeminy engineered the payments in an attempt to help the senator financially. It was filed Monday in Harris County, Texas, withdrawn soon after, and then refiled on Thursday -- after settlement talks broke down, according to the plaintiff's lawyer.

Paul McKim, founder and former CEO of Houston-based Deep Marine Technology, claims that Kazeminy pressured the company to make payments to Minneapolis-based Hays Companies, which employs Laurie Coleman, who is a licensed insurance broker. Kazeminy and his companies are the single largest shareholder in Deep Marine Technology, the suit says.

In a statement Friday, Hays Companies called the suit "libelous and defamatory." The company said that it provides risk management consulting services to Deep Marine Technology, but that Laurie Coleman received no money related to those services.

"We are pleased with her work, and we find any allegations that she accepted money for work she was not responsible for to be outrageous and contemptible," the statement said.

But McKim's lawsuit alleges that no one at Hays has ever provided any services or products to Deep Marine Technology, which provides subsea services to the offshore oil and gas industry.

McKim's lawsuit claims Kazeminy told the company's chief financial officer that "U.S. senators don't make (expletive deleted)," and that he was going to use Deep Marine Technology to get money to Coleman. McKim said that when he objected, Kazeminy threatened to fire him, saying "this is my company," and forced him to approve the first payment of $25,000 to Hays Companies.

McKim said he refused to approve any other payments, but that two additional $25,000 payments were made without his approval. He said he found out about the fourth one as it was being processed and stopped it.

The lawsuit includes as an exhibit a "disclosure of service fee" on Hays stationery, listing Deep Marine Technology as the insured, with the amount listed as $100,000. There are also a couple of $25,000 invoices, one of which includes the handwritten words, "Paul needs to approve."

Another exhibit, a ledger of "past due" payments, includes $25,000 to Hays Companies, an entry that is circled with the words "Please pull this detail and delete..."

Messages left with Kazeminy at his Minneapolis company, NJK Holding Corp., were not returned Thursday and Friday; a woman answering the phone there said he was traveling. A woman who answered the door at his Edina home on Thursday said he was in Florida. A woman who answered the phone at his Florida residence, after inquiring who was calling, said that Kazeminy was not there and hung up.

McKim's lawyer, Casey Wallace, noted that the lawsuit doesn't make a claim against either the Colemans or Hays Companies.

"We do not blame them, we do not describe them, and we do not tell the court that they committed any wrongful acts," he said. "We have never said one word about Norm Coleman, or Laurie Coleman, or that they did anything nefarious. We have not defamed Norm Coleman."

Wallace said that the claim centered on Kazeminy calling on payments to be made in certain ways, and that minority shareholders were wronged.

"Does that mean Norm Coleman knew about it?" he said. "I have no idea. Did Norm Coleman or Laurie Coleman ever take any personal benefit of the payments that were made from DMT to Hays? I have no idea."

He added: "This has absolutely nothing to do with the election." Wallace said that McKim describes himself as a Republican.

Asked if it was possible that payments were made without either Norm or Laurie Coleman knowing about it, Coleman campaign manager Cullen Sheehan responded, "I guess anything is possible, but as it relates to Norm and Laurie, they're not true. She hasn't received a single dime, she was not a producer on the account." He said Norm Coleman has not talked to Kazeminy about the suit.

Coleman, in personal financial disclosure forms filed in 2006 and 2005, has listed receiving gifts of travel from Kazeminy valued at $3,960 and $2,870, respectively. Kazeminy has also been a generous donor to Coleman's political campaigns.

McKim is no longer the CEO at Deep Marine Technology. The company's chairman and interim CEO, Bruce Gilman, said in a statement that the company takes the allegations seriously, and has hired outside counsel to help with its own investigation.

"To date, we have not found any evidence of wrongdoing," Gilman said. "However, due to the nature of the ongoing investigation we cannot comment further at this time."

Geoffrey Harrison, a lawyer representing Deep Marine Technology in the lawsuit, called McKim's decision to file, withdraw and then refile the suit "highly unusual and borderline irrational. It's hard to explain that kind of behavior."

Harrison said there have been no settlement negotiations this week.

"It appears to me that Mr. McKim's lawsuit may very well be politically motivated," he said.

At the stop in Moorhead, Coleman suggested of the lawsuit that "the Franken campaign and its allies are trying to use it for political advantage." He said Franken "has attacked my family -- my wife -- and my reputation."

Franken spokeswoman Colleen Murray accused Coleman of trying to "deflect attention" from the lawsuit, and said he needed to answer the allegations.

"This is a lawsuit brought by the CEO of a Texas company alleging serious wrongdoing on the part of one of Norm Coleman's biggest donors to financially benefit Coleman," she said. "The first we heard of this was when Norm Coleman refused to answer questions about it when asked by reporters in St. Cloud."

Deep Marine's deepwater rovers have been used in the exploration of ship wrecks and underwater oil deposits. The firm won a federal Interior Department award in 2003 for helping the agency examine shipwreck sites in the Gulf of Mexico.

In 2007, Entrepreneur Magazine listed the company sixth on its Hot 500 rundown of the fastest-growing businesses in America, showing that it went from $691,000 in sales in 2002 to more than $54 million five years later.

According to public records, McKim has been the subject of a tax lien and civil judgments. The most recent was in 2002, when the IRS filed a $15,321 lien against him; records show it was released in 2005.

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Norm Coleman was born in New York City in 1949. Al Franken was born in New York City in 1951.

(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)