Morris, Sheinkopf, Old Campaign Pals, Battling in Court

They were old friends whose relationship survived the ruthless world of political consulting, two ambitious strategists who admired each other’s work and occasionally dined together with their wives. But now Dick Morris and Hank Sheinkopf are squabbling over money, have dragged each other into court and only speak when forced to exchange strained pleasantries on political chat shows.

According to papers filed in New York Supreme Court in Manhattan, Mr. Sheinkopf’s advertising company, Sheinkopf Ltd., alleges that Mr. Morris has skipped out on more than $800,000 worth of fees he owes for ads placed for Mr. Morris’ Web site, Vote.com. Mr. Morris, in a counterclaim, charges that Sheinkopf Ltd. secretly took an unauthorized commission from funds allotted for Vote.com’s advertising. Another indirect victim of the dot-com economy’s meltdown, their friendship has collapsed.

“It’s very sad,” Mr. Sheinkopf, who is now chief media adviser to Public Advocate and Mayoral candidate Mark Green, told The Observer . “Dick Morris has destroyed a 20-year relationship. This was someone I trusted. My wife and I never thought he would do this to me. If you had told me we would end up in court like this, I would never have believed it.”

Mr. Morris declined to comment, except to say: “The parties to this lawsuit have been discussing settlement, and I am very optimistic that in a short period of time it will be fully resolved.”

The two men were once so comfortable around each other that Mr. Sheinkopf could crack a joke during Mr. Morris’ darkest moment. Mr. Sheinkopf recalls, for instance, an emergency meeting of top advisers to Bill Clinton’s 1996 reelection campaign, just hours before Mr. Morris’ pillow talk with a prostitute became international news. As Mr. Morris tapped out a letter of resignation on a laptop, Mr. Sheinkopf tried to lighten the mood.

“He started reading from his letter,” recalled Mr. Sheinkopf. “Something like, ‘I won’t be thrown to the lions like the Christians.’ And I said, ‘Dick, cut out the Christian crap. You’re a Jew.’”

In following months, Mr. Sheinkopf said, he called his despondent friend almost daily and, on one occasion, accompanied him to a synagogue to pray.

Now the two men communicate via legal briefs.

The dispute dates back to October 1999. At the time, Vote.com, which is run by Mr. Morris and his wife, Eileen McGann, retained Mr. Sheinkopf to buy Web ads with various media outlets to promote it. Vote.com is a wide-ranging Web site that combines political gossip, opinion and Internet surveys on issues of the day.

The 1999 arrangement between the two men was a standard one in the advertising industry: Sheinkopf Ltd. would place the ads with various outlets, which would then bill his company. Sheinkopf Ltd. would pay the media outlets. Vote.com would pay Sheinkopf Ltd. to cover those costs, plus a commission–the amount of which is now in dispute.

The agreement had been sealed by a handshake; the two men, after all, had known each other for two decades. Both New Yorkers, they had taken dramatically different paths to the present.

Mr. Morris, an Upper West Sider, the son of a prominent real-estate lawyer, had helped get Bill Clinton to the White House and enjoyed a stellar international reputation before the 1996 sex scandal. The ensuing media firestorm, which broke during the 1996 Democratic convention, forced him to take his political-consulting talents out of the country and to reinvent himself as a pundit, New York Post columnist and all-around Internet pitch man.

Mr. Sheinkopf had a lower profile. A gruff former police officer and meat cutter from the Bronx, he found his way into political consulting via his work as a union organizer.

Over the years, however, the two men became friends, worked on various campaigns together and steered consulting work in each other’s direction. Mr. Morris brought Mr. Sheinkopf in to do TV spots for Mr. Clinton’s 1996 campaign; Mr. Sheinkopf quietly sent polling work to Mr. Morris during his grimmest post-scandal months.

But their friendship quickly broke down amid a dispute over their latest business dealings together.

Sheinkopf Ltd. claims that Vote.com asked it to place $1.3 million worth of ads, and that it placed this agreed-upon number of ads with 31 media outlets, among them The New York Times , Salon.com, Washingtonpost.com, the Los Angeles Times and National Review . The ads, Sheinkopf Ltd. says, ran from November 1999 into early 2000. They were mostly banner advertisements promoting Vote.com and highlighting the Web site’s content of the moment.

In the lawsuit, Sheinkopf Ltd. alleges that Vote.com has not made good on its $1.3 million debt. The company charges that Vote.com sent only two checks–for a total of slightly more than $500,000. That money, minus Sheinkopf Ltd.’s commission, has been paid to the outlets. But the providers are still owed a balance of more than $800,000. They are demanding payment, in increasingly unfriendly tones, from Sheinkopf Ltd.–payment which, the company charges, is actually owed by Mr. Morris.

So Mr. Sheinkopf is suing to force Mr. Morris to pay the balance, either to Sheinkopf Ltd., so it can pay off the outlets in turn, or to the outlets directly, which would, of course, get them to stop hounding Sheinkopf Ltd.

“Thanks to Dick Morris, the outlets are coming after my company,” Mr. Sheinkopf said. “Dick Morris put my business at risk.”

Mr. Sheinkopf says he went out of his way to avoid dragging his old friend into court. He charges that he repeatedly tried to contact Mr. Morris when the outlets began demanding their fees–but, he says, Mr. Morris stopped returning his pages. Mr. Sheinkopf says he even set up a meeting with Mr. Morris at a midtown restaurant, but Mr. Morris stood him up.

Mr. Morris, for his part, tells a dramatically different tale. Vote.com denies all the charges, and it filed a countersuit against Sheinkopf Ltd. in April.

The countersuit describes Mr. Sheinkopf as “a trusted friend” of Mr. Morris. But, the papers allege, Sheinkopf Ltd. entered into a “scheme to defraud” Mr. Morris and Vote.com.

In the papers, Vote.com claims that it only agreed to spend a bit more than $500,000 on ads–not $1.3 million. Those ads have been paid for, Vote.com claims, adding that Mr. Sheinkopf’s company went ahead and spent an additional $800,000 without Vote.com’s authorization. What’s more, the papers allege, Sheinkopf Ltd. secretly deducted a larger commission from Vote.com’s payments than Mr. Sheinkopf had led Mr. Morris to believe.

Mr. Sheinkopf’s lawyer, Fred Isquith, told The Observer that e-mails and letters would indicate that the two companies had in fact agreed on a 15 percent commission for Sheinkopf Ltd. He added that the e-mails and letters would unequivocally show that Vote.com had requested a buy of $1.3 million.

“We provided them with written confirmation all along of what ads we had ordered for them,” Mr. Isquith said. “At no time did Vote.com even question it, let alone ask that it be stopped. None of this was a surprise.”

Whoever is telling the truth, it seems unlikely that the dispute would have ended up in court if Vote.com–like virtually all of the shiny dot-com plans people came up with in the flush days of get-rich-quick I.P.O.’s–hadn’t entered tough times.

Traffic at the site, which in turn determines how much advertising the site can sell, has plummeted over the past year. In March 2000, Vote.com logged 1.1 million unique visitors, according to Internet research firm Jupiter Media Metrix. Unlike other political Web sites that enjoyed a bump heading into the November elections, however, those numbers stayed flat for November. And many of those visitors don’t seem to have stuck around into the spring. This March, according to Jupiter, unique visitors were down to 648,000–a 41 percent decrease.

For Mr. Sheinkopf, the fight is about a friendship gone sour. “You don’t make that many friends in the political-consulting business,” he said. “It’s a dog-eat-dog activity. Mr. Morris was a friend. The whole incident is very sad.”