Money and past bond Coleman, Kazeminy

The Iranian-born entrepreneur, whose patronage of the senator is under scrutiny, is a self-made tycoon who denies wrongdoing.

Silda and Eliot Spitzer, Michael Falk, Nasser Kazeminy, Annie Falk Yvonne Kazeminy at a party honoring Elliot Spitzer at the Southampton, N.Y. residence of Annie and Michael Falk on 7-16-05.

Photo: Rob Rich, Star Tribune

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It was unlikely that Nasser Kazeminy had ever laced up hockey skates when then-St. Paul Mayor Norm Coleman turned to the Iranian-born businessman in 1996 while trying to bring NHL hockey back to Minnesota.

Kazeminy was obscure but rich -- a visionary entrepreneur in technology and finance. He was already acquainted with Coleman, an ambitious mayor eager to stamp his political signature across the state as someone who got things done.

Kazeminy listened to Coleman's pitch that day, but declined to invest in hockey. Still, their friendship flourished. That same year, Coleman switched from the DFL to the Republican Party. Soon, Kazeminy was investing in Coleman's political aspirations.

To Coleman, their bond became as true as family. Here was a man, Coleman recalls, at his side through joys and sorrows, Thanksgivings and Christmases, campaign defeats and victories.

Coleman became a U.S. senator. Kazeminy became a major GOP campaign donor.

Now their friendship is attracting public scrutiny neither man welcomes.

Twelve years after the two talked hockey, Coleman awaits word of whether he has won a second term in the Senate after a cliffhanger election between him and DFL challenger Al Franken that's still so close it has triggered a statewide recount.

Coleman, 59, spent the waning days of the campaign defending himself against allegations in two lawsuits that his longtime friend used Houston-based Deep Marine Technology to steer $75,000 last year to the Minneapolis-based Hays insurance company, where the senator's wife, Laurie Coleman, is an independent contractor.

The suit alleges that Kazeminy wanted the money funneled to the Colemans. In a statement issued Saturday, a Kazeminy spokeswoman vehemently denied the allegations. Coleman also says no such payment was ever made. And Jim Hays has said in a statement that the allegations about his company are "libelous and defamatory."

Kazeminy, 66, has remained out of sight since the allegations emerged in lawsuits filed in Texas and Delaware over corporate practices at the deep-sea diving company, where Kazeminy holds a controlling financial interest. The Colemans are not a party to either lawsuit, but are mentioned in both.

Amy Rotenberg, a spokesperson for Kazeminy, said Saturday that he is "deeply offended" by the lawsuits.

"Mr. Kazeminy vehemently denies the false and baseless claims made against him in recent weeks," Rotenberg said in a statement. "He declined to comment publicly on these attacks and lawsuits prior to Tuesday's election out of profound respect for the election process."

Rotenberg said that independent counsel has been retained by the independent directors of Deep Marine Technologies to investigate the claims, but that effort is being hampered by the refusal of some minority shareholders to cooperate with the investigation.

The Delaware suit was filed by a group of minority shareholders at Deep Marine. The Texas suit was brought by Deep Marine founder Paul McKim, a self-described die-hard Republican, who said in an interview that he has no animosity toward Coleman.

McKim said Kazeminy ordered him to make three $25,000 payments to the Hays companies. In a sworn statement on which the suit is based, McKim said he grew angry with the arrangement and blocked a fourth, final payment because Deep Marine was getting nothing in return from the Hays. McKim said in an interview that he left the company over the summer in his dispute with Kazeminy. He said he doesn't know what the Hays companies did with the alleged money.

Powerful friends

Coleman hasn't discussed the details of his relationship with Kazeminy since the suits were filed, but in an April interview, the senator described his 14-year friendship with Kazeminy as rare and "very dear."

When Jesse Ventura stunned Coleman by besting him for the governorship in 1998, Kazeminy was in the room to help ease his friend's pain. He was at Coleman's side as he fought his way to the U.S. Senate in 2002. From 1998 to 2008, Kazeminy gave $88,200 to Coleman's political committees, making him a top contributor. In the same period, Kazeminy gave $642,000 to Republican Party committees in Minnesota and Washington, campaign finance records show.

Ron Eibensteiner, the Minnesota Republican Party chairman from 1999 through 2005, said he remembered Kazeminy during those years as a donor who gave money without meddling in party politics. "The only thing he did as far as I can remember is write out checks," Eibensteiner said. "He never once called me about what the party should do or what any individual should do.''

Coleman describes his friendship with Kazeminy as devoid of any quid pro quos.

"In my business that's a pretty nice thing when you have a relationship with someone when you're not talking business," Coleman said in April. "I've never had a conversation with Nasser Kazeminy where he has asked something for a business. It's just kind of the nature of our friendship."

Coleman's connection with Kazeminy had drawn little attention in the past, but the two did create headlines in 2006 when the senator was criticized for taking trips hosted by special interests. The trips included family excursions on private jets to Paris, the Bahamas and Florida, paid for by Kazeminy. At the time, Coleman said of Kazeminy: "It's a friend with a plane."

Kazeminy has many friends, some in high places. His connections have included the former shah of Iran's family, Minnesota Twins owner Carl Pohlad and top officials at the White House and the Central Intelligence Agency. He has done business deals with former Chrysler Corp. Chairman Lee Iacocca, and he posed for pictures in 2005 at a party in Southampton, N.Y., honoring then-Attorney General Eliot Spitzer. In 2006, Kazeminy awarded the Ellis Island Medal of Honor to Minnesota Gov. Tim Pawlenty.

That same year, Kazeminy received the New York Albert Schweitzer Leadership Award from the Hugh O'Brian Youth Leadership organization. The citation said he supports more than 100 charities worldwide.

Eibensteiner, the former state GOP chairman, said that while Kazeminy clearly gave more to Republican causes, he also gave to Democrats such as U.S. Rep. Charles Rangel of New York. Records show he has also given to other Democrats, including Gov. Bill Richardson of New Mexico and former U.S. Sen. Bill Bradley of New Jersey. In 2000, Kazeminy contributed to Ralph Nader, then running for the Green Party.

Minneapolis financier Irwin Jacobs, a close family friend and business partner of Kazeminy, said Saturday that Kazeminy is "off the charts unusual" in his financial integrity and personal generosity.

"He's the best partner I've ever had," said Jacobs, whose current deals with Kazeminy include an investment in the Broadway musical "Jersey Boys."

Kazeminy's loyalty to friends is legendary -- including making regular weekend flights from Palm Beach to the Twin Cities to play gin rummy with Carl Pohlad, Jacobs said.

He said it's ludicrous to think Kazeminy would ever misappropriate company funds. Instead, Jacobs said, Kazeminy is the rare investor who has been known to write a personal check to cover someone else's losses when a deal goes sour.

In a visit last week to Kazeminy's Florida home, Jacobs said, Kazeminy teared up when describing his anguish over the Deep Marine lawsuits, their impact on the Senate race and possible damage to his reputation.

Coming to Minnesota

Schooled in England, Kazeminy began his business career as a computer specialist for Honeywell in London. He made a name for himself playing a major role in designing a worldwide logistics system. In 1969, he was recruited by another Minnesota company, Control Data Corp., to work in the United States.

In his 2007 book, "The Eye for Innovation," former Control Data CEO Robert Price said Kazeminy arrived as a computer programmer and left the company several years later as an enlightened entrepreneur. With Control Data's blessing, Price wrote, Kazeminy formed a computer peripherals company that successfully offered low-cost, tax-leveraged equipment leases to Control Data's customers.

From there, Kazeminy branched off into computer businesses related to court litigation, banking and educational testing. One of his companies merged with Sylvan Learning Systems and later sold for more than $775 million.

Another, Digital Insight, developed an Internet-based home banking platform for mid-sized banks that is used by more than five million people a day. In February 2007, Digital Insight was sold to Intuit for $1.35 billion.

"Over the course of 14 years," Price wrote, "over 46 multimillionaires were created by Nasser's companies.''

Kazeminy's addresses have ranged from a walk-up flat in London to his current mansion in Palm Beach. He also owns a residence in Edina, just doors down from Pohlad, and a luxury apartment along the Seine River in Paris.

Kazeminy's umbrella company is based in Bloomington, and bears his initials -- NJK Holding Corp. The private investment firm's brick headquarters is in a no-frills office park on a frontage road along Interstate 494.

Kazeminy added Deep Marine to his stable of companies after McKim founded it in 2001 as an underwater services provider to the offshore oil and gas industry. A sea diver himself, McKim had raised $5 million in start-up money and was looking for more cash when he was introduced to Kazeminy.

By 2004, Kazeminy controlled a majority of Deep Marine's stock. Four years later, that investment had spawned lawsuits and political headlines.

Tony Kennedy • 612-673-4213 Paul McEnroe • 612-673-1745

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