To Hell and Back
Derek Gilman dodged bullets in Baghdad, you think figuring out tax policy worries him?
Published in 2006 Connecticut Super Lawyers magazine
By Hank Bordowitz on January 23, 2006
It’s not easy to run through Baghdad’s “Green Zone.” The air contains the fine grit of sand, pollution from the refineries fouls the air, and the dry heat feels like an oven. But none of that deterred Derek Gilman from getting in his daily four miles along the Tigris River. Not even gunfire.
“Fortunately, the river is very wide at that place and the AK-47 is not a very accurate weapon over those distances, so that was OK,” says Gilman, a 44-year-old attorney with Day, Berry & Howard and an Army Reserve lieutenant colonel. “You get used to the other stuff. It’s weird when you get to the point where you’re saying, ‘Oh, wow! The temperature has gone down to 120 degrees. I can go running.’”
He became accustomed to coming under fire during his year and a half in Iraq. “We were under indirect fire from mortars and rockets, particularly during Ramadan,” he says. “We had attacks almost daily. The worst was right after I got to Iraq. I’d been in the country for about two weeks, and I was staying at the Al Rashid Hotel. My alarm clock had just gone off, and I was just about to get out of bed, and all of a sudden we started taking rocket fire. We were hit by 27 rounds of rocket fire from a multiple rocket launcher. So we just lay down on the ground next to the bed until it was over. There was some small-arms fire after that. We had to evacuate the building.
“I don’t want to be too specific,” he says, suddenly stopping. “The bad guys read this stuff and I don’t want to tell them how effective or ineffective their tactics are.”
This is pretty exotic stuff for a guy who, in civilian life, spends most of his day dealing with tax law. As counsel in the company’s business department, Gilman focuses on business transactions, more than three-quarters of them in the international arena. “I get drawn into a wide variety of transactions, and everything has a tax aspect to it,” he explains. “That gives me exposure to a number of areas of economic activity, working on complex strategic issues.”
Makes sense. If one guy at the firm is experienced in executing complex strategies, it is Lt. Col. Gilman.
The robust Gilman of today does not much resemble the Gilman of his childhood. “I had chronic asthma growing up, as well as other medical problems,” he says. “Dealing with these issues helped me develop a sense of determination. I ultimately overcame the asthma and by my senior year of high school I was on the varsity track and cross-country teams.” He also excelled in the classroom, finishing in the top 10 in his class at the Milton Academy in Massachusetts.
Upon graduation he set his sights on the U.S. Army Military Academy at West Point, N.Y. He adapted to the discipline and the academic rigors, obtaining Dean’s List honors.
For the next five years he served as a field artillery officer in the Army. He started in Fort Sill, Okla., before being shipped to South Korea. “I was selected to help deploy a new rocket system. I was in the DMZ for about 15 months, at the outer range of North Korean artillery.” He finished his active duty at Fort Ord in California, where he worked on counter-insurgency tactics.
After his active-duty service ended, he pursued higher education. That is, he really pursued higher education. He tackled not one, not two, but three advanced degrees. “I went to Cambridge to study international law. After that I came back to the University of Connecticut to get the J.D. so I could practice law wherever I wanted to in the U.S. Then, the first law firm I worked for — Curtis, Brinkerhoff & Barrett in Stamford — paid for my LL.M. in taxation from New York University.”
And in 2000 he took all this experience and education to Day, Berry & Howard.
As a reservist, the longest he had been called up was his two-month stint during the Gulf War in Kuwait. In March 2003 he got called up again for Gulf War II. Mobilized as a major in the U.S. Army, Gilman spent his first months in Iraq as part of the Iraqi Special Tribunal, the court officers who would try Saddam Hussein and his cohorts for crimes against the Iraqi people. During this time he learned things that continue to haunt him.
“When I first arrived in Iraq, I had been on a number of trips, including one to the Kurdish territory to meet with Iraqis, to talk about how we were going to bring to justice the perpetrators of various crimes against humanity,” he says. “In one case, up in the Kurdish Territory, there was a village in which all the men had been taken away, and then [Saddam’s soldiers] came for the women and the children and the elderly. The soldiers told them they were being relocated, to go grab their things and to get on these trucks and buses. They were driven out into the middle of nowhere and lined up in the middle of the desert, kneeling. Then the soldiers shot each person there in the back of the head. Even the babies were shot. After that, a bulldozer came and bulldozed all the dead bodies under the ground. That was one of the mass graves. There are about 150 mass graves in Iraq.”
After helping to draft the Special Tribunal Legislation, along with both Iraqi and other coalition international-law specialists, Gilman says, “the general counsel’s office wanted me to stay. I told them I’d be happy to stay, but I have to go home and take care of some personal affairs, and then I’ll come back.”
One of those personal affairs was getting hitched. “I got married 10 days before I went back to Iraq,” he recalls. “There was no honeymoon. I got married, got all my personal matters taken care of, went to a deployment center and got deployed to Iraq. It was difficult for my wife, but she was extremely supportive. Her dad was a Bataan Death March survivor, so she grew up with a lot of stories about the military. I think that was helpful to her.”
Gilman was reassigned to help write the new commercial code for Iraq. Under Hussein, Iraq operated under a “planned” economy, similar to those in communist countries, not unlike the former Soviet Union’s economic system. Gilman helped nudge the country toward a market system. “Iraq had an economy that was just not functioning,” he says. “There was around 60 percent unemployment and significant corruption within the government.
“It was critical, for a number of reasons, to help Iraq’s economy prosper. Iraq had, at that time, $120 billion worth of sovereign debt. Its budget was $18 billion, and that includes the oil revenues, so it was critical for Iraq to have a significant portion of this debt forgiven. In order to do that, the country had to go to the Paris Club, a group of major lending nations, and ask them for forgiveness of debt, but in order to do that, they had to get what’s called a program from the World Bank or the International Monetary Fund. In order to do that it would have to meet certain economic targets. Those economic targets involved, to a large extent, reforms related to growth of the economy in the free market.”
Gilman worked on these issues during his 10 months in Iraq, writing law with a combat helmet on much of the time. He spent the first six and last two months of his call-up at the Pentagon, where he was promoted to lieutenant colonel. “The Judge Advocate General of the Army promoted me at the ceremony,” he says proudly. “That was quite nice.”
Today Gilman and his wife live in Easton, Conn. It has been a little more than a year since he rejoined the firm. “The reforms we helped institute in Iraq, and seeing that these laws were observed and still are being observed and making a difference, will help the country in the long term to really build economic prosperity,” he says.
He believes his experience in Iraq made him a better lawyer. His colleagues think so too. “He spent his time working on developing the legal system for post-war Iraq,” says David Swerdloff, chairman of the firm’s business department. “So when he came back, he had more expertise than ever.”
Swerdloff recounts how alarming it was to follow coverage of the war while his colleague was serving, and how Gilman from half a world away would do his best to reassure everyone. “He would email us while he was there and say, ‘If you hear about the giant explosion, don’t worry. We’re all fine.’
“We’re all tremendously proud of Derek and what he did.”
The Laws Gilman Wrote in Iraq
During his time in Iraq, Derek Gilman worked on some 30 different laws with compatriots from Iraq and the coalition.These include: Promoting the trade liberalization order, which helped stop looting, particularly of scrap metal for export, by creating criteria for licensing companies to export such materials and addressing the smuggling problem.
Making the Central Bank of Iraq independent of the Iraqi Ministry of Finance in order to stabilize the currency. “In the early ’80s, the currency, the dinar, was worth three U.S. dollars. By 2003, there were 2,000 dinar to the dollar.The currency has now stabilized at about 1,428 dinar to the dollar,” Gilman says.
Giving the Central Bank oversight over both private banks and state-owned banks.
Instituting a trade bank of Iraq, allowing international letters of credit to take place to facilitate international trade and allow funds and reconstruction aid to come into Iraq.
Modifying the tax law. “The tax law on corporations had an effective rate of 78 percent,” Gilman explains. “Individuals in the private sector were subject to tax rates of around 45 percent. Individuals who were employed by state-owned companies did not have to pay any taxes at all. So,we simplified the tax system, provided one low rate of 15 percent in order to encourage voluntary compliance with the law and in order to allow those in the private sector to improve their lot in life.”
Enacting a law governing the private banks as well as the state-owned banks. “There are 17 private banks in Iraq,” Gilman says. “They were extremely undercapitalized, in that the average capitalization of each bank was about $1 million and 95 percent of the banking went through state-owned banks that had essentially been used as pocketbooks, if you will, by Saddam Hussein and his sons. So there was a real history of corruption in the two state-owned banks.”
Creating a context for not-for-profit organizations. “There are thousands of new Iraqi nonprofit organizations springing up,” he notes of the law’s upshot, “including a number of women’s groups. That’s a new concept in Iraq. Previously, there could be charities, but the charities had to conform to the socialist goals. If you violated the charity laws, you were liable for imprisonment for up to three years.”
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