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Monday, May 31, 2010

Lawyer, Executive Charged With Stealing $60 Million

Lawyer, Executive Charged With Stealing $60 Million
The New York Law Journal by Noeleen G. Walder - May 26, 2010

A Florida executive and an Ohio-based lawyer were indicted yesterday on charges of stealing more than $60 million from a Manhattan public holding corporation and its investors. Between 2004 and 2008, John D. Mazzuto, a corporate executive from Palm Beach Gardens, Fla., and attorney James W. Margulies of Cleveland allegedly sold tens of millions of dollars of shares of stock in Industrial Enterprises of America Inc., to family, friends and business associates and then used various fraudulent means to artificially inflate the shares' value, according to Manhattan District Attorney Cyrus R. Vance Jr. Some 3.5 million shares allegedly were placed in an attorney trust account opened by Mr. Margulies, who then liquidated the shares for approximately $18 million and sent the bulk of this money back to the company to pump up the share price. Prosecutors maintain the pair attempted to cover up the fraud by using bogus consultant agreements, structuring phony private stock transactions, illegally recording stock proceeds as revenue, and lying to auditors and regulators. Each defendant, charged with dozens of counts, including two counts of first-degree grand larceny and violating the Martin Act, faces up to 25 years in prison on the top count. The pair pleaded not guilty yesterday before Acting Supreme Court Justice Edward McLaughlin in Manhattan.

Lawyer accused Of Trying To Blackmail Ex-Lover Into Sending Nude Pixs

Lawyer accused of trying to blackmail ex-lover into sending nude photos may avoid jail
The New York Daily News by ALISON GENDAR - May 25, 2010

A disgraced lawyer could escape jail time despite allegations he tried to blackmail a former lover into sending him nude photos of herself. Steven Klig, a 46-year-old married father of two, pleaded guilty to a misdemeanor charge of unauthorized use of a computer, a charge Manhattan prosecutors agreed could carry six months or less behind bars. Klig allegedly threatened to send an X-rated DVD to his ex's family if she didn't cough up more photos. He was accused of e-mailing some of his threats while on a family vacation to Walt Disney World. Klig's wife sat in court yesterday as he told a federal judge he was "truly sorry for my conduct." He is due for sentencing in September.


The New York Post by Bruce Golding - January 7, 2009

A hotshot tax attorney was busted for allegedly trying to blackmail a former lover into sending him nude photos by threatening to give her husband, neighbors and relatives what he claimed was a raunchy DVD of their past sexcapades. Steven Klig, a partner at finance giant Deloitte, allegedly sent the woman extortionate e-mails from such locations as Disney World, where the 44-year-old married father of two was on vacation last week. "Just to give you a head's up. I've been doing a little editing on our video. Mostly some blurring of myself so that I won't be recognized," he wrote in one e-mail, according to the criminal complaint. "You, on the other hand, can be seen very clearly having the time of your life being f---ed by me." Klig, of Great Neck, LI, allegedly claimed to have secretly recorded the footage during "one of our sessions," which the woman told the feds took place "a number of years ago." Klig, who was arrested Monday on federal extortion and harassment charges, allegedly began his salacious shenanigans with a letter mailed to the unidentified woman's home last Oct. 20. In it, he allegedly said he would turn over the DVD in exchange for a "one-time reunion" and "a couple of recent nude pictures of you." The woman didn't respond, but instead went to the FBI after Klig allegedly e-mailed her husband on Nov. 10, using the address robertgibbons1967 and saying he was an "old friend" looking for the woman's e-mail address. The feds then began a computerized cat-and-mouse game with Klig after they say he e-mailed the woman on Dec. 11. The next day, an agent posing as the woman wrote Klig back, asking what he wanted and pleading, "I want to keep my family out of this." He allegedly responded, "I don't need money. What I really want is something new to look at." Klig then allegedly detailed his preferences for the "first installment" as: "(1) fully clothed; (2) without your shirt; (3) without your shirt and pants (in just a bra and panties); (4) without the bra and (5) fully nude." The e-mail exchange continued through Jan. 3, with the agent offering various excuses for failing to provide the photos and Klig ultimately threatening to post the video on the Internet, investigators said. Klig apparently tried to cover his tracks by using public computers and free or hijacked wireless Internet access to contact his victim, sources said. Klig, free on $200,000 bond, is currently "on leave" from Deloitte, a spokeswoman said. His lawyer did not return a phone call yesterday, and a woman who spoke from behind the door at Klig's home said, "There's no one here by that name." Additional reporting by Kieran Crowley and Julia Dahl

Sunday, May 30, 2010

Daily News EDITORIAL On Greedy 9/11 Lawyers

Shave ’em closer: Lawyers for WTC responders need to cut their fees even more
The New York Daily News - EDITORIAL - May 30, 2010

Lawyers representing 10,000 World Trade Center rescue and recovery workers have offered to cut their legal fees by $85 million. They have millions more to go. Calculations based on numbers provided to Manhattan Federal Judge Alvin Hellerstein indicate that even after shaving off the $85 mil, the attorneys would snag somewhere between $150 million and $180 million. That's way too much to take from Ground Zero responders whose shares of a proposed settlement could average as little as $40,000 to $60,000 each. Envisioning an enormous payday, the lead attorneys in the case, a firm called Worby Groner Edelman & Napoli Bern, signed up sickened 9/11 workers when few others paid any mind to their epidemic illnesses. Retainer agreements set the legal fees at 33% of any recoveries. However standard such a slice is in your run-of-the-mill negligence suit, this high-volume litigation is anything but routine. The claimants are owed as much compensation as possible - and the settlement on the table would wrap things up on a mass-production basis. Hellerstein is defending the interests of the responders against their own lawyers. The attorneys took great umbrage at his suggestion of overbilling, but their top man, Paul Napoli, came around to offering to accept 25% and forgo substantial additional monies. This remains well above the 15% Hellerstein had cited as a benchmark in other Trade Center-related cases. At that level, the lawyers would still be swimming in well over $100 million. Even that borders on the indecent. Hellerstein is fighting the good fight. He must keep up the pressure on every legal, uh, eagle involved in the matter, including those who are draining an insurance pool controlled by the city and other defendants. Never mind boilerplate agreements or standard operating procedures, it's time for the lawyers to do what is right. They seek justice, don't they?

Thursday, May 27, 2010

Former New York Senator Gets 7 Years for Corruption

A Former Bronx Senator Gets 7 Years for Corruption
The New York Times by BENJAMIN WEISER - May 25, 2010

Efrain González Jr., a once-powerful Bronx politician convicted of corruption, was sentenced to seven years in prison on Tuesday by a federal judge who called his story “an American tragedy.” Mr. González, 62, who was in the New York State Senate for nearly two decades, pleaded guilty a year ago to charges of conspiracy and fraud. Prosecutors said he had stolen hundreds of thousands of dollars from nonprofit groups to cover personal expenses. On Tuesday, the judge, William H. Pauley III of Federal District Court in Manhattan, said that while Mr. González had “undoubtedly performed some good and generous acts,” he had “brought public disgrace onto himself and the New York State Senate.” Mr. González sat quietly beside his lawyer during the proceeding, at times smiling at supporters in the packed spectator section. He said only a few words, telling the judge he wanted to apologize to “my family, my friends and to my communities.” Mr. González, who is free on bond, was ordered to surrender to prison authorities by June 30. He was also ordered to forfeit more than $700,000 as proceeds of his crimes, prosecutors said.

Preet Bharara, the United States attorney in Manhattan, said Mr. González would have “years to contemplate his betrayal of the people he was elected to represent.” Rose Gill Hearn, the commissioner of the city’s Department of Investigation, called the sentence “a just result.” Prosecutors had sought a term of 11 to 14 years; Mr. González’s lawyer asked for 3 years. The sentencing came after a tortured legal battle in which Mr. González, after admitting guilt, sought to withdraw his guilty plea, saying he wanted to go to trial. In a sworn affidavit, he claimed that a lawyer had pressured him into pleading guilty, and that he also felt pressured by the judge when he admitted guilt in court. Prosecutors described his affidavit as “a near-total fabrication.” Judge Pauley, in refusing last month to allow him to withdraw his plea, called his claims of being pressured “preposterous.”

On Tuesday, Mr. González’s current lawyer, Lance Croffoot-Suede, described his client’s rise from grocery store stock clerk to founder of a security business and, in 1989, to state senator. “It is an American story,” Mr. Croffoot-Suede said. “It is a story of incredible grit, determination, success despite the odds.” He cited the two-year sentence recently imposed on the former Senate majority leader, Joseph L. Bruno, in a corruption case as another reason for leniency. The prosecutor, Michael Levy, said Mr. González’s case “has nothing to do with Senator Bruno’s case,” and he suggested Mr. González was arguing that senators should “get a break.” “The defense talks about how his story is an American story, and sadly that’s all too true,” Mr. Levy said. “It’s an American crime story, and an American corruption story, your honor, and it’s one that does get played out over and over again.” Prosecutors had said Mr. González used his position as a state senator to favor a nonprofit group called Pathways for Youth with about $200,000 in state grants, known as member items. They said Pathways directed more than $400,000 to another nonprofit group, the West Bronx Neighborhood Association, which Mr. González founded, and which also solicited money from individual and corporate donors. Prosecutors said that Mr. González misappropriated more than $500,000 from West Bronx to pay expenses like membership fees in a vacation club in the Dominican Republic, rent for a luxury apartment there, jewelry, Yankees tickets and college tuition for his daughter. They called the group a “phony charity” and said Mr. González had used it as “his personal piggy bank.” Judge Pauley noted that Mr. González had neither accepted responsibility for his crimes nor shown any remorse. “You undermined the public’s confidence in the integrity and altruism of their elected officials,” he said.


Ex-state Sen. Efrain Gonzalez gets 7 years for corruption scheme
The New York Post by BRUCE GOLDING - May 25, 2010

Crooked ex-pol Efrain Gonzalez Jr. was slapped with a seven-year prison term today by a judge who slammed him for failing to show any remorse for the "venal acts" of looting two charities in a pork-barrel corruption scheme. Manhattan federal Judge William Pauley III rejected defense arguments that the former Bronx Democratic state senator deserved the same sort of leniency shown onetime Senate Majority Leader Joe Bruno, who got just two years for peddling his influence through a private consulting firm. "You deprived your constituents of the scarce resources that could be allocated to help those in need," said the judge, who also ordered Gonzalez to forfeit nearly $738,000 netted by his five-year scam. The portly 62-year-old -- who blew the cash on luxuries including an upstate vacation home and an apartment in the Dominican Republic -- rolled his eyes after being made to stand up and accept his punishment. In a brief statement, the disgraced ex-lawmaker said only: "Your Honor, I want to take this opportunity to apologize to my family, my friends and my communities. Thank you." Afterward, Gonzalez -- who in February blamed his former attorney for making him plead guilty -- refused to speak to reporters in English, but insisted in Spanish that he wanted a trial to prove his innocence. "We Hispanics, we have to unite. It's not fair what they're doing to us. I feel like an illegal immigrant," he said, according to a Spanish-speaking observer. Prosecutor Michael Levy argued in court for up to 14 years in the slammer for Gonzales, saying he "continues to deny that he has done anything wrong," and wanted a "Senatorial discount" for his crimes.


Ex-Bronx state Sen. Efrain Gonzalez latest in string of convicted politicians
The New York Daily News by Bob Kappstatter and Greg B. Smith - May 27, 2010

This week's sentencing of ex-Bronx state Sen. Efrain Gonzalez was the latest in a string of convictions involving corrupt politicians not only in the Bronx but across the city - with more investigations underway. Gonzalez, a Democrat, was sentenced Tuesday to seven years in federal prison after his guilty plea to stealing funding from a Bronx nonprofit. His misdeeds led to an expanding investigation of politicians' misuse of nonprofits that spread from Albany to City Hall, investigators say. The probe began in 2006 after the city Department of Investigation, examining the nonprofit Gloria Wise Boys & Girls Club, discovered Gonzalez siphoning money out of a related nonprofit he'd funded with taxpayer dollars. In late 2006, DOI formed a special unit to look at dozens of such groups with ties to politicians. What they discovered was shocking: politicians and their cronies using nonprofits as piggy banks to fly to exotic destinations, buy clothes, eat at top-notch restaurants and attend Yankees games. Soon the investigation revealed the City Council was parking taxpayer funds in fictional nonprofits, while some members were steering it to nonprofits that employed relatives.

To date ex-City Councilman Miguel Martinez and two aides to ex-City Councilman Kendall Stewart have pleaded guilty to corruption charges, while current Bronx City Councilman Larry Seabrook is under indictment for allegedly funneling more than $500,000 in city monies to shaky Bronx nonrofits, with his girlfriend and relatives on their payrolls. Highlighted among the charges was Seabrook allegedly doctoring a $7 bill for a bagel and soda into a $177 reimbursable expense. Among those under investigation are Rep. Gregory Meeks (D-Queens), along with former Rep. Floyd Flake, state Senate President Malcolm Smith (D-Queens), state Senate Majority Leader Pedro Espada Jr. (D-Bronx), Assemblyman Peter Rivera (D-Bronx), Assemblywoman Carmen Arroyo (D-Bronx) and Queens Borough President Helen Marshall. Former state Controller Alan Hevesi is being eyed in a "pay-to-play" scandal unrelated to the crime for which he has already been convicted. Richard Izquierdo Arroyo, nephew of Councilwoman Maria del Carmen Arroyo, has pleaded guilty to milking a nonprofit linked to the Arroyo family's South Bronx fiefdom, including flying Arroyo and her mother, Assemblywoman Carmen Arroyo, to Caribbean locales. Meanwhile, the city, state and federal investigations into crooked politicians continue.

Wednesday, May 26, 2010

The Big National Problem: Oversight Conflicts

Our view on the BP oil spill: Gulf pays price for laxity at minerals oversight agency
USA TODAY by Patrick Semansky, AP - May 25, 2010

"This is a sad but familiar story. Nearly every recent national debacle has featured what's known as "regulatory capture" — agencies that become too cozy with industries they're supposed to oversee."


Opinions expressed in USA TODAY's editorials are decided by its Editorial Board, a demographically and ideologically diverse group that is separate from USA TODAY's news staff. Most editorials are accompanied by an opposing view — a unique USA TODAY feature that allows readers to reach conclusions based on both sides of an argument rather than just the Editorial Board's point of view. Before BP's disastrous oil spill, the last time the obscure federal Minerals Management Service made news was in 2008, when investigators uncovered old-fashioned sleaze at an MMS office in Denver. Workers there accepted football tickets, golf games and ski outings from energy companies. They partied with oil and gas representatives, drank their booze, took illegal drugs and even had sexual relations with some. The scandal gave new meaning to the old expression about regulators being "in bed with the industry," but the juicy details obscured deeper problems within the agency, which, as part of the Interior Department, is supposed to regulate and oversee oil drilling. Instead, the agency ceded much of its role to the very companies it was supposed to watch. Now, the nation — the Gulf Coast in particular — is paying the price.

This is a sad but familiar story. Nearly every recent national debacle has featured what's known as "regulatory capture" — agencies that become too cozy with industries they're supposed to oversee. The financial meltdown? Regulators twiddled while banks developed products so complex the government didn't know how to police them. Toyota's sticky gas pedals? Regulators let the automaker downplay the issue for years — until the deaths of a California family in a runaway Lexus forced them to act. Tainted food from abroad? Holes in oversight of imports. Lax airline inspections? George W. Bush's aviation administrator saw the companies she regulated as "customers." We could go on, but you get the idea. In drilling regulation, the lax culture goes back years. MMS was charged with both collecting royalties from oil production and enforcing safety rules that might impede oil production. It was a conflict from the get-go. During the Bush and Obama administrations, MMS repeatedly tossed aside warnings from government scientists about environmental risks of drilling, pushing instead to approve energy exploration quickly. Beyond that, regulators relied on the industry's word that accidents and environmental damage were unlikely, that the industry had backup systems if an accident occurred and that, if all else failed, the industry could contain the damage. The catastrophic April 20 explosion of BP's Deepwater Horizon drilling rig put the lie to all these assumptions. Regulatory lapses, failures of imagination and complacency have put BP in the position of a fire department trying to build trucks on the way to a five-alarm blaze. It's unclear how much fault lies with the Obama administration, which inherited the lax and conflicted MMS and is moving to separate its missions. Even so, the Deepwater drilling permit was approved last May, on the watch of President Obama and his Interior secretary, Ken Salazar. And it was Obama who, on March 31, moved to allow more offshore drilling in areas previously off limits. Such a policy still makes sense as a way to reduce America's disastrous dependence on foreign oil while it develops alternative energy sources. Before more exploration begins, though, the nation has to be assured that drilling is safe and overseen by a real watchdog, not a trusting friend to the oil industry.

Monday, May 24, 2010

Make This Judge Chief Judge of New York

NY Lawyer Locked Up for Not Turning Over $100,000 From Escrow
The New York Law Journal - May 19, 2010

A lawyer was sentenced up to six months in jail for contempt in Brooklyn Supreme Court yesterday for disobeying court orders requiring him to surrender $100,000 that he had been holding in escrow. Justice Arthur M. Schack ordered Samuel Racer jailed for failing to turn over the $100,000 that the Manhattan-based attorney had been holding in a failed real estate deal that was the subject of litigation before the judge, said Kali Holloway, a spokeswoman for the Office of Court Administration. In April, Justice Schack found Mr. Racer in contempt for failing to turn over the money and issued an order for his arrest. Yesterday, a sheriff apprehended Mr. Racer and brought him before the judge. When Mr. Racer informed Justice Schack that he needed several days to get the money, the judge sentenced him to jail for civil contempt for six months unless he produced the funds before then, Ms. Holloway said. Mr. Racer was remanded to the custody of the sheriff, and another court date was set for tomorrow at which Mr. Racer will have another opportunity to purge himself of the contempt, Ms. Holloway said.

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A "Judges' Union" in New York?

Labor pain for Albany: A 'judges union'
The New York Post by JOSEPH GOLDSTEIN - May 23, 2010

State judges are trying to join forces with the state's largest teachers union in a campaign to get raises, The Post has learned. Maverick Brooklyn Supreme Court Justice Arthur Schack is leading a faction of angry jurists talking to the United Federation of Teachers about putting judges under the umbrella of the local union or its Albany County-based parent, New York State United Teachers. "One option is having judges affiliate with a union for political clout," Schack told The Post. "We're exploring our options." Schack -- a card-carrying member of the UFT who was once a teacher -- has been joined by another Brooklyn judge, Wayne Saitta, in recruiting colleagues to unionize in recent weeks, court sources said. Such a coalition of state judges and a highly politicized labor union would be unprecedented in the country and would open a Pandora's box of ethical issues. The teachers union has had more than a dozen cases before the state bench in the last two years. Only two months ago, a Manhattan judge ruled in the UFT's favor to stop the mayor from closing 19 schools. The state's 1,300 judges currently make $136,700 a year and haven't received a raise in 11 years. They are asking to be paid on par with federal judges, who make $174,000. The judges have tried suing Assembly Speaker Sheldon Silver, Gov. Paterson and others for a raise. They've hired the lobbying firm Hinman Straub Advisors to push the issue. Some judges have even recused themselves from cases involving law firms that employ Silver and other lawmakers.

Taking matters into their own hands, some judges have billed their state expense accounts of $10,000 for frivolous expenditures like trips to Cuba and to a California meditation retreat, The Post revealed last year. The decision to seek union help at the bargaining table is seen as a sign of mounting desperation and a controversial foray into politics. Judges normally avoid contact with political groups so they can appear impartial when deciding cases. The state's judicial ethics code says a judge can't be "a member of a political organization" other than a political party. But the UFT and NYSUT are highly political, pouring $5 million a year into lobbying and campaigns to influence lawmakers. Some judges are worried by the plan. "The idea of judges participating in union activities or walking a picket line might be demeaning to the judiciary," said one judge. "Whether it's lawful is one thing, and whether it's appropriate is another thing." Schack, who has a reputation as a populist, has been active in agitating for a pay raise. He attends UFT events and has an acquaintance with the union's president, Michael Mulgrew. Schack's faction has already talked to Howard Schoor, the Brooklyn representative of the UFT, about joining the union, sources say. But because the judges' fight is with Albany, the UFT pointed them to the 600,000-member parent union. Union officials declined to discuss the matter. "Certainly, we're not advocating striking or rebelling," Schack said. The state's Taylor Law prohibits public servants, including judges, from striking. But the law is frequently challenged in court -- in cases that unions bring before judges.

Sunday, May 23, 2010

'Outsider' To Run For Governor, Wil Clean Up Corruption

Attorney General Andrew Cuomo running for governor; New York Dem on corruption, 'Enough is enough'
The New York Daily News bY Adam Lisberg, Kenneth Lovett and Larry Mcshane - May 23, 2010

Like father, like son - but nothing like the last two governors.

Andrew Cuomo, following in the footsteps of dad Mario and two scandal-scarred predecessors, announced his long-expected campaign for governor by promising a crackdown on corruption. "I don't work for the lobbyists," Cuomo told his supporters Saturday afternoon in lower Manhattan. "I don't work for the politicians. I don't work for special interests. I work for the people of New York. Period." The attorney general, considered political roadkill after a disastrous 2002 gubernatorial run, stood beaming and blowing kisses before confirming the worst-kept secret in New York politics. He immediately becomes the prohibitive favorite to win the November election over any of the three possible GOP challengers. Polls last month showed Cuomo trouncing any of the other hopefuls by a better than 2-1 margin. Cuomo stood in the sunshine outside the Tweed Courthouse, an enduring symbol of New York corruption. The 52-year-old made it clear that cleaning house on crooked politicians was a top priority. "The government is part of the problem," he said. "The chronic dysfunction of Albany metastasized into the chronic corruption of Albany...Albany's antics today could make Boss Tweed blush. "Our message today is simple: Enough is enough." Cuomo mentioned no names, but incumbent Gov. Paterson is under investigation for interfering in a domestic violence case involving one of his top aides. And Paterson predecessor Eliot Spitzer was forced to resign two years ago over his pricey trysts with hookers. "It's time the people of the Empire State strike back, and that's what today is about," Cuomo said. "And in that effort, my friends, I think I can help." The son of former Gov. Mario Cuomo threw his hat in the ring eight years after his first try for the governor's job ended in bitter defeat. A beaming Cuomo, in a suit and red tie, blew kisses to the crowd and made a point of thanking his father and mother for their support. His dad held the job from 1983-1994. "Andrew! Andrew!" about 125 backers shouted. Cuomo, after delivering his remarks, left without taking questions. The state Republican Party, in a release, blasted Cuomo as the obvious and uninspired choice for their opposition. "Political nepotism and the Democrats' royal line of succession long ago determined the crowning of Prince Andrew that will ensue in Westchester this week," said GOP chairman Edward Cox, referring to the site of the state Democratic convention that begins Tuesday. Cuomo, the lone Democratic candidate for governor, will receive the nomination on Thursday. "If Andrew Cuomo wanted truly to lead and turn this state's government around, he could have started by rooting out corruption at the top of his own party," Cox said. Cuomo has already amassed $16 million in campaign funds to face one of three Republicans: upstate businessman Carl Paladino, former GOP Senate hopeful Rick Lazio or Suffolk County Executive Steve Levy. Cuomo, entering to the sounds of Bon Jovi's "Work For the Working Man," stressed his commitment to representing average New Yorkers. "This campaign is not going to be about me, but we," said Cuomo, who promised to visit all of New York's 62 counties before Election Day. He focused on reforming Albany's ethical cesspool and fixing its fiscal mess. He pledged to cap state spending and local property taxes, while freezing state income and corporate taxes and salary increases for state employees. He also vowed to eliminate at least 20% of state agencies, and said he opposes additional state borrowing to fix the budget. Cuomo also promised comprehensive reform requiring full disclosure of outside income, independent ethics watchdogs and campaign finance reform. "New York was not always like this," he said. "This is not New York at its best. I'm old enough to remember when it was better than this."


Cuomo Opens Campaign for New York Governor
The New York Times by DANNY HAKIM and NICHOLAS CONFESSORE - May 22, 2010

Attorney General Andrew M. Cuomo announced his candidacy for governor on Saturday, saying he was seeking not only to lead New York but to remake a state mired in political scandal and paralyzed by financial crisis. In a direct confrontation with a Legislature controlled by his own party, Mr. Cuomo, a Democrat, said he would pressure lawmakers this fall to state publicly whether they would embrace essential ethics changes, including disclosing their outside income, ceding control of redistricting to an independent panel and submitting to an outside ethics monitor. Appearing in front of the former Manhattan courthouse named for Boss Tweed, the corrupt political boss of Tammany Hall, Mr. Cuomo told a crowd of supporters: “Unfortunately, Albany’s antics today could make Boss Tweed blush. Our message today is simple. Enough is enough.”

The approach underscores Mr. Cuomo’s determination to avoid the fate of the current governor, David A. Paterson, and the previous one, Eliot Spitzer, who both promised change but were quickly stymied by an obstinate Legislature, and later fell victim to their own scandals. In a year in which incumbents everywhere are under attack, Mr. Cuomo is trying to run against Albany, which could be difficult to sell, given his history. He is the son of former Gov. Mario M. Cuomo, for whom he served as political director, and he has deep connections in state and national politics. But Andrew Cuomo is hoping to exploit his broad popularity and his status as the overwhelming favorite in the governor’s race to begin overhauling the state before next year. His words could be a jolt to rank-and-file Democrats, who consider him a savior capable of restoring their party after several years of embarrassment and disappointment. And the comments could antagonize the Assembly speaker, Sheldon Silver, a legendarily shrewd strategist who has outmaneuvered many a governor and has fiercely defended the Legislature’s authority to police itself and set its own rules. Mr. Cuomo said that “politicians of both parties, Democrats and Republicans, share the blame” for Albany’s rash of scandals and corruption. Further, he said, the state government, which is controlled by fellow Democrats, “has failed and the people have the right, indeed the people have the obligation, to act.”

In addition to making the appearance in Manhattan, Mr. Cuomo released two videos on Saturday, one introducing himself and a longer one detailing his policy positions. Wading for the first time into the budget impasse, he said he opposed a plan being pushed by Lt. Gov. Richard Ravitch to borrow $6 billion over the next three years in exchange for a series of fiscal controls, including the creation of a financial review board. He also spoke directly to New York’s powerful public employee unions, saying he would freeze salaries of state workers. And he said he opposed raising taxes. He proposed capping state spending and limiting local property tax increases to no more than 2 percent annually. But his announcement did not grapple with what will be the next governor’s greatest challenge: plugging a yawning budget deficit next year. Mr. Cuomo made his bid official as Democrats prepared to open their state convention in Rye Brook on Tuesday. He had spent months privately plotting the campaign. His release of the videos, including a 21-minute segment in which he describes his policy positions, is in part a response to criticism that he has ducked questions about what he would do as governor. That criticism has grown louder as the state’s economic condition has worsened.

In the longer video, Mr. Cuomo described his philosophy as “fiscally prudent and socially progressive,” and focused mostly on his plans to reshape the government and rein in legislative excesses. Those plans include a proposal to eliminate 20 percent of the state’s more than 1,000 agencies, authorities, commissions and the like, part of a broad reorganization effort. He has approached former Vice President Al Gore, who presided over an effort to reinvent government during the Clinton administration, to serve on a reorganization commission in New York. Mr. Cuomo also laid out components of an economic agenda, including a plan to create a $3,000-a-head tax credit for businesses that hire unemployed New Yorkers. He described his positions on social issues: He said he supported same-sex marriage, opposed the death penalty and supported increasing the number of charter schools. He pledged to fight discrimination and to further women’s rights in the workplace. The Republican primary for governor is expected to come down to a battle between two men: former Representative Rick A. Lazio of Long Island and the Suffolk County executive, Steve Levy, who switched his party affiliation in March. Republicans will hold their state convention early next month. Mr. Cuomo begins his campaign bolstered by his popularity, at a time when few political figures in the state have much to cheer about in their poll numbers. In a Marist poll this month, 64 percent of voters said they believed Mr. Cuomo was doing either an excellent or a good job. Still, it is not clear how much voters know about Mr. Cuomo beyond his family name. In the longer video, he struck a personal note. Appearing in an office, flanked by shelves of law books and photographs of his father, he linked the state’s need for revival to his own political and personal rebound.

Mr. Cuomo suffered a bruising setback in his abortive run for governor in 2002, when he dropped out of the race after it became clear he would not prevail against H. Carl McCall in a Democratic primary. That loss was followed by a bitter divorce from Kerry Kennedy, the mother of his three daughters. “Sure it’s hard to come back,” Mr. Cuomo said. “I saw it in my own life. A few years ago, I ran for governor and I lost. And I then went through a very difficult time in my personal life. It was a public humiliation. “People said it was over for me; they said my public service career was finished — there was no way I could come back,” he said. “Some days even I thought they were right.” He added, “With the compassion and empathy of New Yorkers, you gave me a second chance.” While Mr. Cuomo’s supporters were enthusiastic about his entry into the race, others were more circumspect. Labor leaders had no immediate reaction to his call for austerity, though New York State United Teachers, which has bristled at proposals to increase the number of charter schools or limit property taxes, has indicated it may decline to endorse him. Many Democrats see Mr. Cuomo’s election as inevitable and are planning for his ascension. Mr. Paterson, who said he had spoken with Mr. Cuomo on Saturday morning, said he would be making some modifications to the sports facilities at the governor’s mansion. “I’m adjusting the basketball rim at the mansion a little lower so he can dunk on it,” Mr. Paterson joked.

Saturday, May 22, 2010

Good Attempt to Mend Truth, Justice and the BigLaw Way

Truth, Justice and the Big Law Way
The American Lawyer by Ben W. Heineman Jr. and William F. Lee - May 20, 2010

Law firms have been moving from loosely managed associations of professionals to disciplined business organizations for more than a generation. This shift has caused an erosion of professional values (lawyers' traditional commitment to enhancing society) and has increased the focus on economic return (firms' relentless quest for escalating profits per partner).
But it is now time for a new paradigm for law firm leaders, as past fissures in firms, caused by relentless business pressures, begin to crack open from the earthquake of the Great Recession.
Put simply, managing partners -- working with the partnership -- should seek to forge a better, healthier balance between the firm as professional association and the firm as business organization. Doing this will help increase associate and partner loyalty and morale, improve productivity, create new win-win alliances with clients, better serve society, and enhance the firm's reputation in the profession and in the community. There is, of course, no turning back: Law firms must be run in a businesslike manner. But they should not just be run for the greatest possible economic return. Law firm leaders must emphasize other values as they reorient their firms with respect to their clients, their partners and their associates. And they should redefine their own personal responsibilities and commitments. At the end of the day, they and their partners should restate, for the younger generation, the historic concept of what it means to be a legal professional, which has generally meant that private lawyers have public responsibilities beyond their immediate self-interest and beyond the needs of their immediate clients. We do not underestimate the difficulty of modifying profits per partner relative to other firms as a driving ethos. We do not underestimate the lunar pull of extraordinary absolute compensation in financial services institutions or venture capital firms where envied friends from college earn many multiples of lawyers' pay. We do not underestimate the complex discussion with the star partner about whether she is willing to forgo the free agent draft and give loyalty and community effort to the firm, which provides her with significant compensation, but not necessarily absolute top dollar. But this new leadership mandate is necessary given the secular changes at many firms -- a dramatic end to unceasing growth in associate hiring, leverage, revenues and profits. Additionally, some pillars of practice, such as pyramidal associate structures and the billable hour, are under attack. This new model is necessary even if conditions for economic growth return, because the multiple issues regarding clients, partners, associates and society stemming from the "business model" law firm have been starkly highlighted in the downturn and need to be addressed. Here are our priorities for this new model. (We recognize, of course, that some firms are already addressing these issues.)


• Law firms should change their inward-looking economics (more hours, more leverage, more
profits, regardless of value) and align their economic incentives with the incentives of their clients (through alternative fees in particular matters, or strategic alliances for a broader book of business). Firms should redefine "productivity" in a fashion that serves their clients (doing more with less), not, as some too often presently do, in "leveraging" more billable resources per matter.

• Law firms should focus rigorously on value and quality and not allow billable hours for mediocre work, which results from huge, poorly managed teams.

• Firms should, at the outset of important engagements, seek a related and reciprocal commitment from the client that the job of the firm is not just to provide astute lawyering (what is "the law"), but also wise counseling (expressing views about what is right for the institution in the particular setting and taking factors beyond technical law into consideration).


• The partnership must regain a sense of common community, with shared values and aspirations, instead of existing as balkanized practition ers, practice groups or geographies intent on their own narrow self-advancement. Creating a common culture based on professional values of service, collegiality, loyalty, quality, integration, and cooperation is probably the greatest challenge for today's law firm leader.

• The partnership must, therefore, be more explicit in recognizing the different ways in which lawyers and partners can add value: bringing in business, being expert in client relations, being adept at project management (as firms move to alternative fee arrangements), being a mentor and leader for associates, or contributing to community or society. Treating older, still productive partners with grace, not harshness, is another challenge.

• The partnership should reinforce, through its compensation system, these collaborative and differentiated values and move away from the mechanistic compensation that proceeds from an "eat-what-you-kill" mentality, which rewards only the top business getters. In many great firms we know (both past and present), the top lawyers have taken out less money than they could have in order to set an example. Individual partners have a reciprocal obligation to assume duties in the community, not just to focus on solo contributions.


• Firms should address the striking discontent and disconnection of many starting asso ciates, which historically had led to a dramatic exodus after only a few years as a result of the associates,' not the firms,' choice.

• In good economic times and bad, firms should not hire fodder -- but, rather, fewer young lawyers who can be given clear, sequential, systematic and organized competency training, who can have real responsibility and accountability at an early stage in their careers (through pro bono work, if necessary), and who can be part of the firm community (understanding its financial situation and its broad footprint), rather than being fed a steady diet of nonchallenging work in isolation. That also means leavening the loaf of specialization with broader assignments, too. Taking these steps will ultimately involve real mentoring, counseling, and commitment from partners who actually care about the development of young professionals, and who are willing to spend real time evaluating work and discussing, in some detail, strengths and areas for improvement. Meaningful merit-based evaluation, compensation and promotion of associates -- turning away from lockstep treatment -- is based on such a commitment.

• Law firms are, importantly, educational institutions with a duty to train outstanding young people for a broad-gauged career in the law, even if not a lifetime in the firm -- training in the critical roles of astute lawyer, wise counselor and lawyer as leader. Personal friendships and mentoring can continue, even if the lawyer goes to a business, the government or a nonlegal position. Retaining these professional connections has its own value for the firm. There is a corollary: an obligation to treat associates as respected colleagues critical to the advancement of the profession and not as line items in the annual budget (y hours times z rates), as if they were Charlie Chaplin in Modern Times.


• One of the great failures of American society is the inequality in the provision of legal services -- the unequal access to equal justice under law. Firms should address this issue (and many do), even if it means less revenue, through meaningful commitments, in terms of real time devoted to pro bono activities. This mission has to be at the core of professional obligations.

• For the associates, pro bono work, under proper supervision, provides a significant opportunity to lead important matters. But so too senior lawyers, with the most developed skills, should devote a defined, discrete part of their year to providing services for the "un-" or "under-" represented, especially on matters of precedential consequence.

• Beyond that, law firms have a special obligation to support improvements in the provision of legal services through other organizations: public defenders, legal aid societies, legal services and public interest firms.


By their personal behavior and the allocation of their own time, law firm leaders should demonstrate the necessary rebalancing between the firm as professional partnership and the firm as business organization. Of course, they (or their top managers) must improve technology, firm and client support, financial management, cost discipline, the human resources function, etc. But the leaders of law firms must show in their own lives the importance of the client, partner, associate, professional and societal issues described above. Heads of firms should be both professional and business leaders.


A positive view of the profession as embodying an ethos of service important to a democratic society -- beyond a lawyer's self-interest and beyond immediate, paying clients -- has been articulated throughout our nation's history: from Alexis de Tocqueville in the nineteenth century to Roscoe Pound and Louis Brandeis in the progressive era to the leaders of great law firms following World War II. As the Carnegie Foundation for the Advancement of Teaching said in its 2007 report on legal education, the "profession of law is fundamental to the flourishing of American democracy. ... [There is] an historic community of practitioners ... carrying on the traditions of craft, judgment, and public responsibility." Each generation of lawyers will take these grand concepts and develop their own concept of professionalism, of service beyond firm-paying business. Ultimately, rethinking what it means to be a professional, as opposed to just a mere profit generator, must be a project for firm leaders and the partnership. This should not be a nice "to do," but a "must do." Although individual lawyers will make personal choices about professional service, the firm as a whole might agree on a certain theme, such as building institutional infrastructure and rule of law in developing nations for global law firms and their global clients. A new paradigm for law firm leaders -- and a new balance between professional values and business returns -- can only happen, of course, if firm leaders, in an extended discussion with firm partners, explicitly address the issue of money. But raising this issue is the beginning, not the end, of the discussion, because firm decision structure -- and a new consensus and an altered culture -- ultimately rests on the will of the partnership (however much power may be delegated to an executive or management committee). And some partners will certainly view the ideas expressed here as quaint or, worse, a threat to their autonomy or markets, or civilization as we know it. This task is difficult in a medium-size firm. But the task is especially challenging in the geographically dispersed megafirm where substantially greater effort is necessary to unite far-flung, culturally diverse offices, and where involving the partnership in shaping the culture (rather than its imposition by firm managers) is a very complex task. Nor, as noted above, do we underestimate the difficulty of addressing the profits-per-partner ethos, the envy of financial sector compensation, and the problems that the star system poses for creation of a firm community. But we do deeply believe that a new legal model for law firm leaders is vital to address the discontent that is too prevalent in the profession today -- among clients, partners and associates. This discontent stems, in important part, from too many law firms having lost their way as a professional association of lawyers with broader vision and obligations than simply securing their own well being through the highest possible financial returns for their firm.

Ben W. Heineman Jr., former General Electric Company senior vice president-general counsel, is currently senior fellow at Harvard Law School's Program on the Legal Profession and Program on Corporate Governance, and senior fellow at Harvard Kennedy School's Belfer Center for Science and International Affairs ( William F. Lee is co-managing partner of Wilmer Cutler Pickering Hale and Dorr and teaches at Harvard Law School ( Heineman is a contributing editor to The American Lawyer.

Friday, May 21, 2010

Short Circuiting Justice

Slow learners at the 9th Circuit
The Washington Post by George F. Will - May 19, 2010

The 9th U.S. Circuit Court of Appeals is a stimulus package for the Supreme Court, which would rather not have one. The 9th Circuit, often in error but never in doubt, provides the Supreme Court with steady work: Over the past half-century, the 9th has been reversed almost 11 times per Supreme Court term, more than any other circuit court. This week, the Supreme Court should spank it again and ask: Is it too much to ask that you pay some attention to our precedents? On Thursday at 9:30 a.m., the justices are expected to meet to decide whether to dignify the 9th's latest misadventure -- an impertinence, actually -- with a full hearing, including additional briefing and oral arguments, or whether to summarily reverse it. They should do the latter by 9:35 a.m. The case concerns an Arizona school choice program that has been serving low- and middle-income families for 13 years. The state grants a tax credit to individuals who donate to nonprofit entities that award scholarships for children to attend private schools -- including religious schools. Yes, here we go again.

The question -- if a question that has been redundantly answered remains a real question -- is whether this violates the First Amendment proscription of any measure amounting to government "establishment of religion." The incorrigible 9th Circuit has declared Arizona's program unconstitutional, even though there is no government involvement in any parent's decision to use a scholarship at a religious school. Surely this question was settled eight years ago in a decision that was the seventh consecutive defeat for the disgustingly determined people who are implacably opposed to any policies that enable parents who are not affluent to exercise the right of school choice that is routinely exercised by more fortunate Americans. It sometimes takes time for news of the outside world to penetrate San Francisco, where the 9th Circuit is headquartered, but surely by now that court has heard that in 2002, in a case coming from Cleveland, the Supreme Court upheld a program quite like Arizona's but arguably more problematic. It was created after Cleveland's school district flunked 27 -- out of 27 -- standards measuring student performance, and the state declared the district an "academic emergency." The program empowered parents to redeem publicly funded vouchers at religious as well as nonreligious private schools. In an opinion written by Chief Justice Rehnquist and joined by Justices O'Connor, Scalia, Kennedy and Thomas, the court held that Cleveland's program has the "valid secular purpose" of helping children who are trapped in the failing schools for which Cleveland is responsible. The court also held that the program satisfied the court's previously enunciated standard of "true private choice" because government aid goes directly to parents, who use it at their unfettered discretion. So, Rehnquist wrote, public money "reaches religious schools only as a result of the genuine and independent choices of private individuals." Therefore any "advancement of a religious mission" is merely "incidental" and confers "no imprimatur of state approval . . . on any particular religion, or on religion generally." These standards had been developed in various prior cases.

The Supreme Court has been splitting and re-splitting constitutional hairs about this for decades, holding, for example, that it is constitutional for public funds to provide parochial school pupils with transportation to classes -- but not to field trips. To provide parochial schools with nurses -- but not guidance counselors. To provide religious schools with books -- but not maps. This last split hair caused the late Sen. Pat Moynihan to wonder: What about atlases, which are books of maps? The court has ruled that public funds can provide a sign language interpreter to a deaf child at a religious school and can provide rehabilitation assistance at a religious college. The court has held that a state can offer tax deductions to parents paying tuition to religious schools. Can the 9th Circuit see a pattern here? Scores of thousands of children have benefited from Arizona's scholarship program, which, unlike Cleveland's, does not involve any government funds that might otherwise go to public schools. Rather, Arizona's program infuses substantial additional funds into the state's K-through-12 educational offerings. Democracy demands patience. In its political discourse, repetition is required because persuasion takes time. But the Supreme Court should not have to cajole lower courts into acknowledging its rulings. This term, the court has issued 11 summary reversals. Thursday morning it should use its 12th on the 9th Circuit, a slow learner.

Wednesday, May 19, 2010

Federal Magistrate Scoffs at Higher Court, Continues Court Corruption Cover-Up

In Carvel v. New York State (08-4576), The United States Court of Appeals for the 2nd Circuit, in a Summary Order dated March 12, 2010, REMANDED in part, writing: "Finally, however, we cannot affirm the District Court's dismissal of plaintiff's conspiracy allegations under § 1983. Plaintiff alleges a "strong appearance of bribery" surrounding $400,000 in loans given to Justice Scarpino. App. 26 (Compl. para 69-70). Although Justice Scarpino enjoys the benefit of absolute judicial immunity from that claim, the other defendants involved in the alleged "bribery" scheme to not..."

Magistrate Judge Suggests Curbing Carvel Niece’s Litigation ‘Vortex’

The New York Law Journal by Joel Stashenko May 17, 2010

A Niece of Tom Carvel, the pioneer of soft ice cream who died almost 20 years ago, should be barred from filing further suits against the Carvel estate in the Southern District of New York without prior judicial approval, a magistrate judge has recommended. Any “rational litigant” in Ms. Carvel’s position would have come to realize that many of her claims against the estate are “legally meritless both because they have been rejected by numerous other courts and because they are grounded on provably false statements or omissions of fact by her,” Magistrate Judge Michael H. Dollinger held. “Her course of conduct has imposed extensive and entirely unjustified burdens on the targets of her campaign, and has equally saddled the courts with a healthy crop of frivolous litigation,” he wrote in Thomas and Agnes Carvel Foundation v. Pamela Carvel and the Carvel Foundation Inc., 09 Civ. 5083. Ms. Carvel should be required to receive prior judicial approval before filing further claims in the Southern District involving the trust established by Thomas and Agnes Carvel or against a foundation that has controlled their assets since their deaths, the magistrate judge said in a report and recommendations to Southern District Judge Jed S. Rakoff. Ms. Carvel should also be penalized, but Magistrate Judge Dolinger said her financial resources are unclear from the record. Penalties against pro se litigants should be meted out after their ability to pay has been determined, he said.

The magistrate judge said in appeared is “inappropriate and unnecessary” to extend a Southern District injunctive order to state courts. Under In re Martin-Trigona, 737 F.2d 1263 (1993), the U.S. Court of Appeals for the Second Circuit ruled that a district court had erred in extending a blanket injunction against a plaintiff’s filing of actions to include state courts. Magistrate Judge Dolinger recommended the course adopted in Martin-Trigona, in which the plaintiff was required to append federal court injunctions to any future filings in state courts. In addition, the magistrate judge said it appears Ms. Carvel may already be barred from filing new actions in state courts related to the Carvel estate and trust. A temporary restraining order, apparently still in effect, was issued by the Westchester County Surrogate’s Court in late 2005 barring Ms. Carvel from “taking any action in another court” in the state in which she asserted control over the Carvel estate or assets. Violations of an injunctive order could bring sanctions and a contempt of court citation in the Southern District, Magistrate Judge Dolinger noted in a draft injunctive order. The Southern District case concerns the Carvel estate’s attempt to hold Ms. Carvel liable in New York for two judgments made by the High Court in London against Ms. Carvel based on her earlier attempts in England to gain control of Carvel family assets. The London court eventually blocked the effort and later awarded the Carvel estate £185,000 or about $276,000, in costs stemming from the litigation, plus interest. Magistrate Judge Dolinger rejected Ms. Carvel’s counterclaim that federal court in New York does not have jurisdiction because she lived in London or Delaware, not New York, and because the London rulings are not enforceable in New York. “Challenges to the merits of a foreign-court decision do not provided a basis under the New York stature or comity standards to justify denying recognition of a foreign judgment,” Magistrate Judge Dollinger wrote. As to whether Ms. Carvel lived for significant periods in New York, the magistrate judge ruled that even if she did not, the Southern District court has jurisdiction in the case by virtue of the fact that the Carvel estate was probated in Westchester County.

Tom Carvel, A Greek immigrant, became famous in the Northeast as he promoted the ice cream products he marketed under the Carvel name. He died in 1990, leaving his assets in trust to his wife, Agnes, with the proviso that the rest of his estate would go to a Thomas and Agnes Carvel Foundation upon her death. Their niece, Pamela, contends Agnes Carvel never saw money from the trust before her death in 1998 and that the Yonkers-based foundation has looted the Carvel estate with the help of local judges and lawyers. Ms. Carvel was once one of seven executors of the estate, but was removed as her dispute with the foundation escalated. She estimates that the Carvel estate was worth $250 million when Mr. Carvel died and $50 million or less today.

Litigation ‘Vortex’

Ms. Carvel has commenced a flurry of court actions over the Carvel trust and foundation. Magistrate Judge Dolinger likened the litigation to a “vortex.” At various times, cases filed in state and federal court in New York, Delaware and Florida and in England have challenged in one way or another the disposition of Carvel assets since Mr. Carvel’s death. In one case, Carvel v. Cuomo, 1:07-cv-1034, Ms. Carvel failed to persuade Northern District Judge Lawrence E. Kahn that Attorney General Andrew M. Cuomo was obligated by state law to investigate the Carvel Foundation in his role as watchdog of charities in New York (NYLJ, July, 2008). Her claim of racketeering, fraud and conspiracy against Agnes Carvel’s one-time attorney in Carvel Estate ex rel. Carvel v. Ross, Civil Action 07-238 (D. Del 2007), was ultimately dismissed in Delaware, as was Carvel v. Ferncliff Cemetery, 07 Civ. 605 (S.D. Fla. 2007), which sought to exhume Thomas Carvel’s body for possible evidence of a homicide. In another case, Carvel v. State of New York, 08-4576-cv, Ms. Carvel claims lawyers and a surrogate have conspired to steal hundreds of millions from the Carvel fortune. The circuit threw out the claims against the state and the surrogate on immunity grounds, but remanded to Southern District Judge Shira Scheindlin one cause of action for conspiracy against private attorneys handling Carvel assets. Ms. Carvel has since filed an amended complaint in the case, seeking to expand the number of defendants.

In an interview Friday, Ms. Carvel alleged that Magistrate Judge Dolinger was accepting as fact statements made by her adversaries that she disputes. “This thing is horrendous,” she said. “To me, it is just a complete violation of my rights.” She contended that her suits have never been dismissed a frivolous, but “because I am pro se and I don’t know how to write for a federal court.” Ms. Carvel said she had asked Magistrate Judge Dolinger to extend a May 21 deadline for commenting on his repot and recommendations to June 10. She estimated the trust and foundation have spent more than $30 million in legal fees and other costs since Tom Carvel’s death “just to keep me silent.” She said she is seeking $!5 million in legal fees and expenses spent trying to recover trust money for her aunt and asserting her position as an executor of the Carvel estate. In his report, the magistrate judge said he knew of a least four cases now before district courts in New York or the Second Circuit and said they would not be affected by his recommendation. Kevin Stevens of Suffern and Joan Magoolaghan of Koob & Magoolaghan in Yonkers represented the Carvel Foundation. Both attorneys declined to comment. Joel Stashenko can be reached at


Monday, May 17, 2010

From Coast to Coast, Judicial Corruption Stinks

Odor in the Court
The Seattle Weekly by Rick Anderson - January 12, 2009

A few years back, Pierce County had cornered the market on judicial corruption. The list included Superior Court Judge Grant Anderson, who swapped favors in return for a new Cadillac; Sumner muni Judge Gene "Hammerin' Man" Hammermaster who threatened traffic offenders with life sentences; and kind-hearted Ralph Baldwin, the Lakewood municipal judge who invited lawyers and jurors into chambers for a cold beer at the end of a drunk-driving case - then, tipsy himself, drove home. So is anyone surprised to learn prosecutors are reviewing allegations - even before he takes the bench - that Pierce County Superior Court judge-elect Michael Hecht (left) patronized a male prostitute several years ago and recently threatened to kill the man? The TNT says the allegations were raised by supporters of outgoing Judge Sergio Armijo, claiming Hecht picks up male prostitutes near Tacoma's Antique Row. In an interview, the prostitute confirmed what he told Armijo's supporters, "saying that as a teenager he exchanged money for sex with Hecht on multiple occasions beginning in the late 1990s." The man, Joseph John Hesketh IV, introduced a News Tribune reporter to another man, 39-year-old Edward Smith, who said he had sex with Hecht in exchange for cash in the recent past. Both men are now homeless and have criminal records. Hecht, 58, married with three grown children and the grandfather of one, denies the allegations. He will be sworn in today. Memorably, on his campaign website, Hecht says: Judge Armijo's record is an embarrassment to the judiciary in our county...It is time for change and I say to the voters you will not be embarrassed by my decisions or my judicial temperament.

Saturday, May 15, 2010

PJ Prudenti: Lawyer Ethics Guided By Core Principles

Lawyer Ethics Guided By Core Principles
The New York Law Journal by Appellate Division, 2nd Department Presiding Justice A. Gail Prudenti - May 03, 2010

Our constitutional democracy flourishes when our society continues to believe in the rule of law and the viability of its judicial system.As attorneys, we play a vital role in fostering trust and confidence in our legal institutions through interactions with participants in the legal process with the public at large. This trust and confidence is enhanced by our adherence to the core principles that have guided our professional ethics, including competence, loyalty, professional judgment, fairness to participants in the judicial process, and truthfulness in dealing with others. The vast majority of New York's attorneys have a tradition of practicing ethically and honorably. However, as the modern practice of law continues to present new challenges, we must ensure that our system of lawyer regulation continues to adapt to the changing legal environment, while remaining faithful to these core principles. By virtue of Judiciary Law §90, the Legislature has entrusted lawyer regulation to the Appellate Division in each of the four judicial departments. Under the guidance of the Administrative Board of the Courts, and in cooperation with bar associations and individual practitioners throughout the state, the disciplinary rules that ensure compliance with our core ethical principles have been revised to meet the needs of modern day practice.

Beginning in June 2005, the Administrative Board initiated a study of the disciplinary rules governing lawyer advertising, resulting in significant changes and improvements. In all, the Administrative Board adopted nearly 50 new or amended rules, which became effective Feb. 1, 2007.1 Many of these provisions were designed to keep pace with the explosive advances in modern communications technology, extending the realm of advertising and solicitation to "computer accessed communications" such as Web sites, blogs, e-mail, chat rooms, meta tags, domain names and other Internet presences.2 As a further step toward modernizing our lawyer regulatory system, the Administrative Board recently authorized a complete restructuring of the disciplinary rules into the Model Rules format of the American Bar Association. This initiative, effective April 1, 2009, brings New York into harmony with the standardized format now followed in 48 other states.3 The change not only provides New York practitioners, prosecutors and judges with access to a nationwide source of ethics law, but will serve to integrate New York with emerging trends in the profession that transcend state and national boundaries. Consistent with the practice followed by all other model rules states, New York's version of the Rules of Professional Conduct (Rules) is unique to our state's needs, striking a balance between the implementation of new approaches and the preservation of the trust-based nature of the traditional lawyer-client relationship. For example, in the area of conflicts of interest, the New York version of the Rules adopts the model rules approach for identifying and organizing various categories of conflicts, including an entirely new category addressed to conflicts involving "prospective clients."4 At the same time, the Rules retain the existing "differing interests" standard for assessing concurrent conflicts, preserving the mandate that New York lawyers exhibit the highest degree of loyalty to their clients.5 Similarly, the Rules adopt, in part, the model rules approach governing lawyer candor before a tribunal, offering greater guidance for lawyers confronted with issues involving false evidence. However, the model rules provision governing lawyer candor toward third parties was not adopted since it applies only when a lawyer knowingly makes a "material" false statement. Instead, the prohibition against knowingly making a false statement, regardless of materiality, was retained, requiring New York lawyers to adhere to the core principle that they exercise the highest degree of truthfulness in the course of representing their clients.6

Enforcement Also Crucial

The recognition of our need to adapt and modernize applies equally to enforcement procedures. When lawyer conduct is called into question, the legal profession is permitted great independence and the privilege to self-regulate. Effective regulation requires attorneys and complainants to have trust and confidence in a fair and just attorney disciplinary system. With nearly 50,000 lawyers now registered to practice, the Second Department alone has disciplinary jurisdiction over a lawyer population larger than that of 40 states. To meet the challenges of this ever-growing constituency, the system of lawyer regulation in the Second Department has undergone a substantive review over the last eight years, resulting in meaningful revision. Early in my tenure as Presiding Justice, I established a committee under the leadership of former Associate Justice Gabriel M. Krausman to review the practices and procedures of the Second Department relating to attorney admission, discipline and reinstatement. The Krausman Committee was comprised of a wide array of judges, court personnel, disciplinary staff counsel, bar leaders, grievance committee members and private practitioners. As a result of the Committee's work, numerous recommendations for improvement were implemented.7 Among these was the adoption of a rule permitting "diversion" in certain grievance matters involving lawyers impaired by substance abuse or the disease of addiction. Similar to rules in place in the Third and Fourth departments, the new diversion rule is designed to foster early identification of, and treatment for, impaired lawyers before they cross the line into serious misconduct.8

The implementation of this rule reflects the growing awareness of the need to address the challenges of substance abuse among the members of the bar and their families, and to enhance the dedicated efforts of the network of lawyer assistance programs and other related support groups. Also in accordance with the report of the Krausman Committee, the Second Department has been engaged in an ongoing effort to improve and streamline the practices and procedures of its three departmental grievance committees with a view toward achieving departmental uniformity wherever possible. In pursuing this goal, the Second Department will continue to ensure that every participant in the lawyer disciplinary process is treated with dignity and respect, and that our grievance committees carry out their mission fairly, expeditiously, and with departmental consistency. A hallmark of this approach has been the practice of ensuring that every attorney accused of misconduct is afforded a full and fair opportunity to be heard, on both the merits and the issue of sanctions, before a final determination is made. In the case of private discipline issued by a grievance committee, the attorney may exercise the right to a hearing, at which the grievance committee bears the burden of establishing the charges, and the attorney is afforded a full opportunity to address all issues. Another opportunity to be fully heard may be afforded yet again, should the attorney choose to seek further review before the court. Likewise, in formal disciplinary proceedings, the attorney is afforded a full, plenary hearing before a special referee appointed by the court to hear and report. At the conclusion of the hearing, both the special referee and the grievance committee refrain from making any recommendation as to sanctions, leaving the accused attorney the widest latitude to address this issue, virtually unfettered, in written submissions to the court. Only then does the court deliberate and render its determination, judging every disciplinary case individually, each according to its own unique facts and circumstances. As the Second Department fulfills its mandate in these matters, it will continue to be guided by this enduring tradition of fairness. New challenges no doubt will arise as the practice of law continues to evolve in an ever-changing world, and we must remain vigilant in our efforts to adapt our lawyer regulatory system accordingly. In confronting these challenges, it is wise that we remain rooted in the core principles that have so nobly served our profession. A. Gail Prudenti is Presiding Justice of the Appellate Division, Second Department


Four of these new or amended rules, and part of a fifth, have since been adjudged unconstitutional under the First Amendment (see Alexander v. Cahill, 2010 WL 842711, 2010 US App LEXIS 5253 [2d Cir 2010]). The remaining rule changes are unaffected by this decision, and remain viable.
2. 22 NYCRR Part 1200, sections formerly designated as 1200.1(L), 1200.6(f), 1200.6(g)(2), 1200.6(k), 1200.7(a)(e) and (f), 1200.8(a)(1), and 1200.8(c)(5)(ii); now designated respectively as rules 1.09(c), 7.1(f), 7.1(g)(2), 7.1(k), 7.5(a)(e) and (f), 7.3(a)(1), and 7.3(c)(5)(ii).
3. Rules of Professional Conduct (22 NYCRR 1200.0), Rules 1.0 through 8.5.
4. Id. Rules 1.7 through 1.12, and 1.18.
5. Id. Rules 1.0(f) and 1.7.
6. Id. Rules 3.3 and 4.1.
7. "Report to Public and Bar on Admission, Discipline, and Reinstatement of Attorneys," (July 27, 2005).
8. 22 NYCRR 691.4(m).

Friday, May 14, 2010

Explanation of Non-Existent Attorney Ethics: Missed That Class

Lawyer accused of stalking wife
The New York Post - May 5, 2010

Maybe Dominic Barbara cut class when they discussed orders of protection. The high-profile Long Island lawyer was charged yesterday with violating a court order to stay away from his ex-wife, Leslie. Barbara walked into a Glen Cove bagel shop Sunday morning -- with a police escort -- and sat down with his ex, who was having coffee with a friend. Glen Cove Police Detective Lt. Thomas Fitzpatrick told The Post's Kieran Crowley she filed a complaint later in the day. "He came in with police and threatened to have me arrested," she said. "Having been falsely arrested previously, this was very disconcerting." In 2008 Barbara accused his wife of beaning him with a plate of spaghetti. He later dropped the charges. "I brought the police with me because she's stalking me," he told The Post after his court apperarance.


Long Island's Flashy Lawyer Dominic Barbara Arrested Over Divorce Spat
Police say he approached his ex-wife violating order of protection
WPIX by MIKE GRAHAM and ROB HOELL - May 5, 2010

GLEN COVE, N.Y. (WPIX) - Matrimonial attorney Dominic Barbara, who made headlines for representing infamous clients like Joey Buttafuoco, is now the subject of a scandal himself. The flamboyant lawyer was arrested Tuesday after he approached his ex-wife in a bagel shop in Glen Cove Sunday morning, violating an order of protection, police said. Barbara, 64, has been charged with criminal contempt after he allegedly sat down with his ex-wife Leslie while she was having coffee with a friend. Leslie Barbara told Newsday that her ex-husband brought a police officer with him and demanded she be arrested for stalking him. But the tables were turned two days later when Barbara was taken into custody. While in Glen Cove court Wednesday to finalize living arrangements over a posh home the two share, Barbara became agitated. At one point Judge Richard McCord ordered Barbara to stop staring at his ex-wife. "Stop staring at her, you are making me nervous," said McCord. "This is a sensitive matter, you're expressing emotions. I don't want it to explode into anything more than that." This is not the first public tête-à-tête between the two. Back in November 2008, Leslie was charged with second-degree menacing after Dominic claimed she threw a plate of spaghetti at his head. Those charges were later dropped. Late Wednesday both parties issued the following statement: "Dominic Barbara and Leslie Barbara reached an agreement. We feel this ends any issues between us, and the courts will not have to hear from us again." However, criminal charges are pending regarding the order of protection.


Infamous LI Lawyer Arrested
The by Jen Chung

Dominic Barbara, the flamboyant Long Island attorney who has represented Joey Buttafuoco, the guy who sued his wife for a kidney, and Diane Schuler's husband and is known for his appearances on the Howard Stern show, was arrested yesterday for allegedly violating an order of protection his ex-wife has against him. According to Newsday, he violated the order by "sitting down with his ex-wife Leslie, 45, while she was having coffee about 10:30 a.m. Sunday with a man at the Glen Cove Bagel Cafe." Barbara apparently had accused her of stalking him and actually wanted the cops to arrest her. Back in 2008, Howard Stern said that Barbara and his ex-wife wanted him on their side of the divorce dispute, "Let me explain to you and your wife: No one cares!"

Donated Kidney is Center of Divorce Dispute
The by Jen Chung

A Long Island doctor is demanding that his estranged wife give him back the kidney he donated to her seven years ago. Dr. Richard Batista's lawyer Dominic Barbara says his client would also be satisfied with the value of the kidney: $1.5 million. Newsday reports that Batista married wife Dawnell in 1990 and that he donated the kidney in 2001. According to Batista, their marriage was on the rocks then, but "My first priority was to save her life. The second bonus was to turn the marriage around." Dawnell Batista filed for divorce in 2005. Dr. Batista told WCBS 880, "She had an affair, then would not reconcile, then handed me divorce papers as I was going into surgery trying to save another person's life. Medical ethicists tells Newsday "the case is a nonstarter."Arthur Caplan at the University of Pennsylvania's Center for Bioethics said Batista's chances of getting his kidney or money back is "somewhere between impossible and completely impossible." And Georgetown University's Kennedy Institute of Ethics medical ethicist Robert Veatch said, "it's illegal for an organ to be exchanged for anything of value" and organ donation is legally a gift.

Thursday, May 13, 2010

More Manipulation of New York State 'Justice'

New 'Hybrid' Judges Split Time to Attack Burgeoning Caseloads
The New York Law Journal by Daniel Wise - May 13, 2010

Seeking flexibility to deal with burgeoning foreclosure and consumer debt caseloads, court administrators have promoted 13 New York City Civil Court judges to Acting Supreme Court justices. The new "hybrid" judges—four in Manhattan, three each in Brooklyn and Queens, two in the Bronx and one on Staten Island—are splitting time between the courts. They are being paid at the Supreme Court rate, $136,700, compared to $125,600 for Civil Court, whether or not they are handling Supreme or Civil court cases. "We designed this to balance the needs of the Supreme and Civil courts," said Justice Fern Fisher, the deputy administrative judge for New York City courts. "It splits the baby to give both courts assistance." Two of the hybrid judges were appointed at the beginning of the year, two in February and the remaining nine last month. They are in addition to 13 full-time acting Supreme Court justices who were appointed effective Jan. 1.

David Bookstaver, a court system spokesman, said the number of appointments this year have been "unusually high" because "we were hit by a number of retirements last year." The 26 lower court judges elevated to Supreme Court status since the first of the year make up nearly 18 percent of the 146 acting Supreme Court justices currently designated in New York City. In the previous five years, the most acting Supreme Court justices appointed in any one year was 11 in 2009, and the least was five appointed in 2006. The hybrid justices, while continuing their pre-existing Civil Court duties, have been assigned to a number of different Supreme Court tasks, including handling mandatory settlement conferences in foreclosure cases, presiding over consumer credit lawsuits where more than $25,000—the Supreme Court jurisdictional threshold—is at stake and handling Article 78 proceedings and summary jury trials. Throughout New York City, the number of annual mortgage foreclosure filings in Supreme Court has nearly tripled since 2005, to 15,111 last year from 5,158. Queens had the most filings in 2009 at 5,784; followed by Brooklyn, 5,228; the Bronx, 1,903; Staten Island, 1,634; and Manhattan, 562. The Civil Court also is stretched, with citywide filings, excluding housing matters, reaching 566,000 in 2009 and projected to rise to 700,000, this year. The 26 justices were selected based on their performance and seniority, Justice Fisher said. Maura Vann, law secretary to Judge Charles S. Lopresto, the supervising judge of the Queens Civil Court, said the hybrid approach helps the Supreme Court while "allowing us to continue to have the benefit of our most experienced judges and not lose them entirely."

Different Approaches

The hybrid justices are being deployed differently depending on the needs of each borough. For instance, the two Bronx judges are maintaining the same duties while weaving mortgage foreclosures and summary jury trials into their workload. The foreclosures are cases that are not resolved at the statutorily mandated settlement conferences. Only about 10 percent to 12 percent of the conferences result in settlements, said Justice Barry Salman, the Bronx administrative judge. Supreme Court Justice Laura Douglas, who is the supervising judge of the Civil Court in the Bronx, said that the two new justices—Nelida Malave-Gonzalez and Fernando Tapia — have "the exact same case loads they had previously but adjustments may be made in the future." In Manhattan, Administrative Judge Sherry Klein Heitler said all post-conference foreclosures and Supreme Court consumer debt cases are being sent to Civil Court, where they will be handled by the four hybrid acting justices, Kibbie Payne, Manuel Mendez, Peter Moutlon and Anil Singh. Justice Heitler said the four justices' Civil Court schedules will not be adjusted until there is more experience with their Supreme Court caseloads. The Supreme Court has about 900 foreclosure cases pending, she said, but it is not possible to break out the number of contract matters seeking more than $25,000 in damages that are consumer debt actions. Two of the three hybrid justices in Queens, Anna Culley and Joseph Esposito, are traveling roughly two miles to the Supreme Court one afternoon a week to handle foreclosure settlement conferences, said Tracy Catapano, law clerk to Queens Administrative Judge Jeremy S. Weinstein. The third Queens justice, Timothy Dufficy, will remain in Civil Court but handle Article 78 proceedings involving challenges to rent rulings made by the state Division of Housing and Community Renewal.

The three Brooklyn justices are integrating foreclosure conferences into their Civil Court schedules, said Brooklyn Administrative Judge Sylvia O. Hines-Radix. The three are Acting Justices Johnny Lee Baynes, Noach Dear and Wavny Toussaint. On Staten Island, Acting Justice Mary Kim Dollard is spending about half her time on Supreme Court matters that are being reassigned to her, said Administrative Judge Philip G. Minardo. Of the 13 judges promoted to full-time acting status, five have been assigned to the Supreme Court in the Bronx, four to Manhattan, three to Brooklyn and one to Queens. The Manhattan justices, all of whom have been assigned to hear civil cases in Supreme Court, are Barbara Jaffe, Joan Kenney, Saliann Scarpulla and George Silver. In the Bronx, Justice Diane Lebedeff has been assigned to hear civil cases, and Justices Julia Rodriguez, Doris Gonzalez, Ruth Smith and Alvin Yearwood are handling criminal cases.In Brooklyn, Justices Loren Baily-Schiffman, Kathy King and Kenneth Sherman all are hearing civil matters. In Queens, Justice William Harrington is handling criminal cases. Daniel Wise can be reached at

Wednesday, May 12, 2010

Attorney General Cuomo Sues Attorney Nicolia

Cuomo’s Office Sued Williamsville-Based Attorney John P. Nicolia
The Buffalo News - May 6, 2010

BUFFALO, NY - Attorney General Andrew M. Cuomo today announced his office has sued a Western New York lawyer who sold debt collectors the use of his name, which the debt collectors then used to intimidate consumers by threatening bogus legal action. The action is the latest in Attorney General Cuomo’s ongoing probe into unlawful debt collection practices. Cuomo’s office sued Williamsville-based attorney John P. Nicolia after an investigation determined that he collected $141,000 in fees in return for allowing debt collectors to threaten consumers across the country by using his name and his law firm’s name. In reality, Nicolia never provided any actual legal services for the debt collection company, Eastern Asset Management. “The lawsuit alleges that this attorney knowingly allowed a debt collection firm to use his name to threaten, intimidate, and harass consumers, while he sat back and profited without having to do any actual work,” said Attorney General Cuomo. “Our investigation into illegal debt collection practices has uncovered layer upon layer of abusive acts, and we will continue to root out the bad players in this industry.” An investigation by Attorney General Cuomo’s Office determined that Nicolia, despite being paid $69,000 in 2008 and $72,000 in 2009, has no records to show that he provided any legal services to the debt collection companies. However, the collectors employed his name repeatedly - with Nicolia’s knowledge - in attempts to collect debts:

* Collectors who called the consumers to collect on the debts claimed that they were calling from, or working with, “the Law Office of John Nicolia.”
* Collectors sent standardized “settlement” letters citing non-existent judgments to consumers believed to owe debts, claiming “…our legal counsel, John Nicolia, Esq. may review the status of your particular case at anytime.”

The debt collection company, after invoking Nicolia’s name, often falsely stated that the consumers:

* Had lawsuits filed against them
* Would have their driver’s licenses suspended
* Would be charged with a crime
* Would be imprisoned or lose their property if they didn’t pay

Attorney General Cuomo’s lawsuit seeks a court order barring Nicolia from allowing debt collection companies to use his name, as well as imposing significant civil penalties against Nicolia for the violations. The federal Fair Debt Collection Practices Act and the New York State debt collection and consumer protection laws prohibit the following conduct: posing as an attorney, threatening lawsuits or other legal action which cannot be taken, saying a consumer committed a crime or will be arrested, and talking with third parties except to get location information. The law further requires collection agencies to send a written notice within five days of initial communication with the consumer explaining how he or she can dispute the debt. If properly disputed, the collection agency must stop all collection attempts and send verification. Since commencing the statewide initiative in May 2009, Cuomo has shut down 14 debt collection and affiliated process serving companies and required others to reform their deceptive practices. His office has also garnered criminal convictions against 10 collectors who engaged in especially egregious and threatening actions against consumers. The investigation is ongoing and lawsuits against several other collection companies are pending. Cuomo urges consumers to visit to learn their rights. The site allows victims of debt collection and debt settlement companies quick access to the Attorney General’s office to file complaints, and outlines the stages of the Attorney General’s investigation. The matters are being handled by Assistant Attorney General James Morrissey under the supervision of Deputy Attorney General for Regional Affairs J. David Sampson and Special Deputy Chief of Staff Mitra Hormozi.

Thursday, May 6, 2010

'Gamblin' Bronx Judge Is Back

'Gamblin' Bronx judge is back
The New York Post by KIRSTAN CONLEY - May 5, 2010

The Bronx judge sued for not paying off loans he incurred because of an alleged gambling addiction is back on the bench -- assuring druggies they're sick and "relapse is part of the recovery process." George Villegas resumed his duties Monday after being sued by a lawyer who says he owes her $500,000. Villegas' former classmate, Janet Cohen, claims the judge borrowed money off her for 18 years, saying he needed it keep loan sharks from breaking his legs or hurting his kids. Drug defendant Lawrence Mudd -- who has a record of 42 misdemeanors and a felony -- was before Villegas seeking a reduced sentence for skipping out on rehab. "Taking off our legal hats for a moment, and just looking at human nature and how it is, wouldn't you agree that relapse is part of the recovery process?" Villegas asked prosecutors. Waxing poetic, he added Mudd "has gone through the sea of a drug-addicted life, and he's landed on the shores of our judicial system." The judge deferred his decision.

Tuesday, May 4, 2010

NY Surrogate Calls for Shifting of Power

Estate of Alayon

Trusts and Estates
New York Law Journal - May 04, 2010
Surrogate Margarita López Torres
Decided: April 30; 2000-80

In 2003, the State Commission on Judicial Conduct filed a disciplinary complaint against Michael Feinberg, the then-Surrogate for Kings County, concerning his conduct in awarding some $8,613,009.35 in legal fees to Louis R. Rosenthal (Rosenthal), the then-counsel to the Public Administrator for Kings County, which resulted in a determination that Surrogate Feinberg be removed from office, a decision subsequently upheld by the Court of Appeals. In re Feinberg, 5 N.Y.3d 206 (2005). Subsequent disciplinary proceedings arising from their conduct in this regard resulted in the disbarment of the former surrogate and the suspension of the former counsel from the practice of law. Matter of Feinberg, 57 A.D.3d 1087 (3d Dep't 2008); In re Rosenthal, 57 A.D.3C1 1085 (3d Dep't 2008). The Attorney General of the State of New York (Attorney General) now moves, pursuant to CPLR 5015, to vacate those portions of the final decrees issued in the above-captioned eighty-eight proceedings which set and determined the legal fees for Rosenthal while he was counsel to the Public Administrator.1 The motions have been consolidated for decision and order. The decrees in these proceedings were issued at various times between January 1, 1997 and May 31, 2002. The Attorney General asserts that in each of these cases the legal fees paid to Rosenthal equaled approximately eight percent of the value of the estate, regardless of the legal services actually performed by Rosenthal. The Attorney General asserts that in setting the legal fees to be paid to Rosenthal, then-Surrogate Feinberg failed to abide by the requirements of SCPA 1108(2)(c). That section states:

Any legal fees allowed by the court pursuant to (SCPA 1108 (2)(b)] shall be supported by an affidavit of legal services setting forth in detail the services rendered, the time spent, and the method or basis by which requested compensation was determined. In fixing the legal fees, the court shall consider the time and labor required, the difficulty of the questions involved, the skill required to handle the problems presented, the lawyer's experience, ability and reputation, the amount involved and benefit resulting to the estate from the services, the customary fee charged by the bar for similar services, the contingency or certainty of compensation, the results obtained, and the responsibility involved. (emphasis added).

The Attorney General asserts that during the five-and-one-half-years dining which these decrees were issued, Rosenthal never submitted—and then-Surrogate Feinberg never required—affidavits of legal services to support any of the legal fees Rosenthal charged to the subject estates. Based on these alleged facts, the Attorney General seeks i) the issuance of amended decrees in each of these matters consistent with the criteria set forth in SCPA 1108 (2)(c), and ii) the return to such estates of all amounts that Rosenthal received in excess of the value of the legal services he rendered. The submission and consideration of an affidavit of legal services when setting legal fees of the counsel to the Public Administrator is mandatory. SCPA 1108 (2)(b). "The statutory requirements of an affidavit and specification of factors the surrogate must consider when fixing the fee offer assurance that the amount paid out of an estate—and therefore not available as a distribution to beneficiaries—reflects the true and reasonable cost of the services rendered." In re Feinberg, 5 N.Y.3d at 210. During the period in which the subject decrees were issued, then-Surrogate Feinberg "never required Rosenthal to submit an affidavit of legal services before approving a fee request, nor did he determine fees based on consideration of the statutory factors specified in SCPA 1108 (2)(c)." Id. at 212. Instead, at the conclusion of the accounting in each estate Rosenthal was awarded a fee which was "generally eight percent of the total value of the estate."2 Id. Clearly, then-Surrogate Feinberg did not apply SCPA 1108 (2)(c) in initially setting Rosenthal's fees in these estates during the relevant time period. Rosenthal subsequently submitted purported affidavits of legal services for his work on the subject estates, but only after the decrees had already been issued. "In the spring of 2002, when [then-Surrogate Feinberg] learned of an impending newspaper expose of his office, he directed Rosenthal to submit affidavits of legal services, mine pro tunc, all of which [he] approved without [adjusting any of the previously fixed fees]." Matter of Feinberg, 57 A.D.3d at 1088. Thus, while the Court's files on the subject estates now contain papers designated as affidavits of legal services, these filings were nothing more than an attempt to comply retroactively with the form of the statute. Yet the intent and purpose of the statute—to allow only those fees which are reasonable, based on an individualized consideration of the actual work performed, to fees being awarded—remains unrealized. The Attorney General concedes that while it appeared in each of the proceedings at issue, it never filed objections with regard to Rosenthal's fees. This is indeed troubling, since it appears that, as early as 1988, the Attorney General was aware that the Public Administrator's counsel may have been receiving more legal fees than were appropriate. "[T]he Attorney General twice in the past attempted to rein in counsel fees approved by the Kings County Surrogate, reaching agreements in 1988 and 1994 with then-counsel to limit fee awards to six percent of an estate's value, with additional payment only in special cases." In re Feinberg, 5 N.Y.3d at 210.

Clearly, the Attorney General was well aware of troubling issues relating to compensation paid to the Public Administrator's counsel for the administration of estates prior to the period during which the relevant decrees were issued. Indeed, in at least four cases, the Attorney General filed objections regarding legal fees and arrived at compensation agreements with Rosenthal's predecessor. However, when Rosenthal became counsel to the Public Administrator only two years after the last such agreement, the Attorney General continued to appear in the proceedings at issue but failed to object to the approximately eight percent legal fees being paid to Rosenthal from the subject estates. Notably, Rosenthal asserts—and the Attorney General does not deny—that even after he filed the nunc pro tunc affidavits, the Attorney General, upon whom such affidavits were served, met with the then-Surrogate and Rosenthal yet filed no objection to the fees which bad been paid in the subject estates. Now, the Attorney General seeks to vacate those portions of the subject decrees that set Rosenthal's legal fees some thirteen years after the earliest, and eight years after the most recent, of these decrees were issued, and four years after then-Surrogate Feinberg was removed from the bench. The motion is predicated on, inter alia, CPLR 5015(a)(3) and the court's inherent authority to modify or vacate its own decrees. As such, it may be entertained despite the Attorney General's failure to file objections when the subject decrees were issued.

CPLR 5015 (a)(3) allows a court to vacate a decree if the record reflects "fraud, misrepresentation, or other misconduct of an adverse party." Additionally, it is well established that a court "has the inherent authority to vacate its own order 'for sufficient reason, in the furtherance of justice.'" Bellevue-Santiago v. City Ready Mix, inc., 270 A.112d 441, 441 (2d Dep't 2000) (quoting Ladd v. Stevenson, 112 N.Y. 325, 332 (1889)). While the Attorney General may have tacitly consented to the submission of the nunc pro tunc affidavits, this Court retains the authority to review the propriety of such submissions. The presumption that the nunc pro tunc affidavits were in fact considered by then-Surrogate Feinberg when approving all of Rosenthal's fees unchanged, is untenable, particularly given the circumstances in which such affidavits were flied. Such actions will not be condoned. Indeed, despite the filing of the affidavits after the fees had been fixed, the Appellate Division found that Rosenthal "charged excessive fees over a five-year period, collected the fees in violation of a clear statutory mandate designed to protect the funds of estates he was representing, and the total fees collected were substantial." In re Rosenthal, 57 A.D.3d at 1086. The facts as set forth in the decisions of the Court of Appeals and the Appellate Division of the Third Department militate against according the nunc pro tunc affidavits any legitimacy. The record establishes—and the Court of Appeals has already ruled—that Rosenthal's fees were initially fixed by then-Surrogate Feinberg without the consideration of any affidavits of legal services. Rosenthal asserts that this defect was cured by the subsequent filing of affidavits of legal services mine pro tunc, which affidavits were accepted by then-Surrogate Feinberg. Although after the submission of these affidavits, "not a single fee was adjusted by the Surrogate," In re Rosenthal, 57 A.D.3d at 1086, Rosenthal nonetheless proffers the "presumption of regularity"3 and asserts that "there can be no implication that Judge Feinberg did not review [the nunc pro tunc affidavits] or review them properly." Aff. in Opposition at ¶42. However, the decisions in In re Feinberg, 5 N.Y.3d 206 (accepting the recommendation of the Commission on Judicial Conduct that then-Surrogate Feinberg should be removed from office) and Matter of Feinberg, 57 A.D.3d 1087 (disbarring then-Surrogate Feinberg for his conduct), delineate and are founded upon the very irregularities and omissions of the surrogate in setting the subject fees during the relevant time period. Indeed, the Court of Appeals found that the record in the underlying proceeding "reflect[ed] not mere lapses or errors in judgment but a wholesale failure of [then-Surrogate Feinberg's] duty." In re Feinberg, 5 N.Y.3d at 216.

Furthermore, a review of the nunc pro tune affidavits reveals that none contain any particularized description of the legal services performed in each estate. Instead, the language in each affidavit is essentially identical—a boilerplate description of the duties of the public administrator's counsel—and thus could not have aided the required individualized consideration of the propriety of the fees to be awarded in each case, even if, hypothetically, the affidavits had been submitted properly before the initial fee decrees. Any assertion that SCPA 1108 was ever applied is further undermined by Rosenthal's claim that no affidavits were submitted initially and the fees were set at the eight percent figure because that had been the historical pattern and practice in Kings County. A court may vacate a decree upon the application of any person, if in its discretion, such relief is necessary to further justice. McMahon v. City of New York, 105 A.D.2d 101 (1st Dep't 1984); Jericho Union Free School District v. Bd of Assessors of the County of Nassau, 131 A.D.2d 482 (2d Dep't 1987). That an estate not be diminished to the detriment of distributees is foremost among the concerns of this Court and there is "no assurance that the [subject] estates benefitted in proportion to the amounts they were charged [in violation of] the clear legal requirement and legislative intent of SCPA 1108 (2)(c)." In re Feinberg, 5 N.Y.3d at 214. The Court is not foreclosed, as Rosenthal argues, from vacating decrees in which next-of-kin were located. While the Attorney General may have appeared in such proceedings pursuant to SCPA 316 because at some time during administration of such estates no distributees had been identified, the Attorney General's standing is not limited by SCPA 316. Both the language of CPLR 5015 and related precedent regarding the vacatur of judgments allows "any person" to move a court to modify or vacate a judgment in the interests ofjustice.4 Such concerns are particularly apt here, since "[t]he purpose of the statutory affidavit and individualized consideration requirements is to ensure that beneficiaries of estates that by definition, lack interested parties capable of offering independent review are paying only for the actual cost of administering the estates." In re Feinberg, 5 N.Y.3d at 214. Thus, "[t]o seek relief from a judgment or order, all that is necessary is that some legitimate interest of the moving party will be served and that judicial assistance will avoid injustice." Oppenheimer v. Westcott, 47 N.Y.2d 595, 602 (1979). It is well established that CPLR 5015 "was intended to assure that a broad class of persons, not limited to parties in the formal sense, could move in the original action on grounds vastly broader than permitted at common law or under prior practice…" Id Here, if legal fees are not fixed based on the actual work performed, there is no question that an injustice results, as the subject estates have been diminished without regard to the benefits conferred upon them by Rosenthal's legal services. Additionally, the Court may assert its authority over a decree if it is demonstrated that irregularities existed in its issuance. That standard is satisfied under the facts presented.

Based on the foregoing, the Attorney General's motion is granted to the following extent. The portions of each decree in the above-captioned estates which fixed the Legal fees for Louis It Rosenthal are vacated. Louis It Rosenthal shall file affidavits detailing the legal services he provided in each of the respective subject estates within 90 days of the service upon his counsel of a copy of this decision and order with Notice of Entry. Pursuant to SCPA 1108(2)(c), the affidavits shall set "forth in detail the services rendered, the time spent, and the method or basis by which [the] requested compensation was determined." Upon due consideration of such affidavits, the Court shall issue decisions and orders as necessary in each of the subject estates, and shall direct the settlement of any amended decrees. The foregoing constitutes the decision and order of the Court.

It should be evident from the foregoing that, unfortunately, the final resolution of the fee issues arising from these eighty-eight cases will remain pending for some time to come. Indeed, the problems generated by the conduct of Rosenthal and then-Surrogate Feinberg have already consumed an enormous amount of time and resources of this Court, as well as that of the appellate courts, the Attorney General's office, and other agencies. Moreover, and more significantly, these events "eroded public confidence in the integrity of the Judiciary." In re Feinberg, 57 A.D.3d at 1088. This Court would be remiss if it failed to note that the issues concerning not just the fees paid to private counsel to the public administrator, but also concerning the fundamental lack of oversight of such process, arising from the inherent structural problems which contributed to this debacle, have been present and known for quite some time.

As a threshold matter, it should be stressed that the public administrators of the five counties of the City of New York (City) are commissioners of the City; they are employees of the courts. Pursuant to SCPA 1105 (3), their salaries are paid by the City, and such expenses must be included in the City's annual budget. The public administrators' staff are also City employees whose salaries are paid by the City. All commissions received by each commissioner must be deposited in the City's treasury each month and the City Comptroller may demand that each commissioner produce all bank statements, vouchers, and any other documents of the public administrators' offices at any time. SCPA 1107. Additionally, until 1993, each commissioner was required to file monthly reports only with the City's mayor and comptroller. In 1993, SCPA 1109 was amended to also require the filing of such reports with the surrogate of the county in which a public administrator was located. 1993 N.Y. Laws 655, Pursuant to SCPA 1110, the City is answerable for each commissioner's faithful execution of his office, the City has complete authority to make any lawful deductions from the public administrator's commissions, and it is the City that is financially liable for the any misconduct or negligence by its commissioners.

Despite the foregoing, the City's public administrator in each county is appointed by the surrogate or surrogates of that county pursuant to SCPA 1102, and only the surrogate or surrogates may remove the City's public administrator. The City, therefore, although liable for all of her or his acts, may not appoint or remove any public administrator. Additionally, while other City agencies are represented In court proceedings by the City's own Corporation Counsel, in Surrogate's Court the City's public administrators are represented by private counsel appointed by the Court pursuant to SCPA 1108 (2)(a). And while attorneys for Corporation Counsel are salaried employees of the City, each Commissioner's counsel in Surrogate's proceedings are paid by the estates of decedents in such amounts as are determined appropriate by the surrogates.

Thus, there exists the anomaly of a surrogate, a member of the State's judiciary branch, appointing a public administrator, a member of the City's executive branch, rather than the Mayor, who appoints all other City commissioners. This statutory scheme has resulted in a an untenable system of diffused accountability that has, time and again, been proven to ill-serve the public interest. While the public administrator is an agency of the City, the City has never committed to any ongoing routine oversight over its own commissioners.5 Indeed, not many years ago, in a Title VII action alleging sexual harassment by a deputy public administrator, the City moved to dismiss the complaint, asserting that an employee of its own deputy commissioner should not be considered a City employee, as the deputy public administrator is appointed by the surrogate. Gryga v. Ganzman, 991 F. Supp 105 (E.D.N.Y. 1998). That court, finding that the City was indeed the employer of the public administrator's staff as a matter of law, denied the motion. Id. at 111.

The result is a municipal agency whose relationship to the City is akin to that of a neglected step-child. The surrogates themselves, as judicial officers, should not and cannot become closely involved in the oversight of a litigant who frequently appears before them. For a judge to review the records and day-to-day affairs of the public administrator would necessarily require gaining extrajudicial personal knowledge of the facts of a case. To do so becomes ethically problematic where the judge is called upon to rule in cases of which she or he has prior personal knowledge of the estate's affairs and may have even directed the conduct of the fiduciary. See 22 NYCRR §100.3(e)(1)(a)(ii) (requiring a judge to disqualify herself if she has personal knowledge of disputed facts concerning the proceeding). When one considers that the public administrators' counsel are also appointed by the surrogate or surrogates, the matter becomes even more problematic.6 If the very judge who decides what legal fees shall be paid to the public administrator's counsel is also involved, directly or indirectly, in determining the actions of the litigant, then the impartial judicial role is further compromised.

That the present statutory scheme creates a structurally unworkable system that is open to abuse is certainly not mere conjecture. Leaving aside the events that resulted in the necessity of the instant motions, for almost a century the flaws of a system by which the surrogate appoints the public administrator and the public administrator's counsel has resulted—in all five counties of the City—in repeated incidents that have attained notoriety in the news media and surely have not enhanced the public's perceptions of either office. This Court's analysis of the structural problems of the current arrangement is hardly novel, however. As long ago as 1987, the Attorney General and the State Comptroller issued a report which summarized the problem with the current system:

…we believe that a Surrogate's direct involvement in the management of a [public administrator] office is extremely problematic. Any objections by interested parties challenging the methods and conduct of the [public administrator] in administering a particular estate are made before the local Surrogate, and it is the Surrogate who must ultimately pass upon these objections in the course of reviewing the [public administrator's] final accounting. Where the Surrogate has closely supervised the [public administrator] and has played a direct role in the formulation of office policy, his impartiality in assessing objections to the [public administrator's] procedures or conduct is inevitably open to question…The hint of a conflict of interest or the suggestion of a possible bias undermines public confidence in the fundamental fairness of the judicial process. At the very least, the present [public administrator] appointment scheme places the Surrogate in the dubious position of "hiring" a public official who is a frequent party before him and whose conduct—as the Surrogate's appointee and subordinate—may be the subject of legal proceedings that the Surrogate must determine.

New York City Public Administrators: An Operational Review, at 54 (November 1987) (on file with the New York State Library). That report urged the following remedial recommendations:

[T]he power to appoint the PM should be transferred from the local Surrogates to New York City government Because the PA frequently appears before the Surrogate of his county as a party to legal proceedings and because the Surrogate ultimately must pass upon challenges to the [public administrator's] fiduciary conduct and policies in any estate matter, it seems to us inappropriate for the Surrogate to appoint and supervise the [public administrator]. In addition to eliminating any appearance of a conflict in the Surrogate's roles under the present appointment scheme, the proposed transfer of appointing authority would squarely place the ultimate responsibility for a properly nm New York City system in the executive branch of the local government that controls the [public administrator] office budgets, ending the present bifurcation of appointing authority and funding responsibility. Furthermore, we believe that centralizing appointing authority and oversight in municipal government will enhance the likelihood that the [public administrators] adopt efficient and uniform procedures for the discharge of their responsibilities. Finally, we note that this transfer of appointing authority to the City will allow the City's Department of Investigations to investigate any allegations of misconduct. Id at ES-9.

Despite the issuance of this report nearly a quarter-century ago, and the significant disruption to the administration of justice as a result of the matters detailed in In re Feinberg and In re Rosenthal, there appears to have been no action at the municipal or state level to pursue the report's recommendation of vesting responsibility in the City for the actual oversight of its own offices.7 Yet there appears to be no compelling reason why City commissioners in this single instance need be appointed by someone other than the municipal government or why, in this single instance, private counsel are appointed to represent a City commissioner in court proceedings. Indeed, the Attorney General and Comptroller also recommended that the public administrators "be required to employ salaried staff counsel and staff accountants to provide these professional services more economically." Id at ES-9.

In sum, the unfortunate circumstances that have resulted in the necessity for the instant motions should be a clarion call for the City and the Legislature to give appropriate consideration now to reforming the current troubled system. It is this Court's view that the City needs to take responsibility for the oversight and operation of its own agency, in the same fashion as its other agencies. Additionally, a legislative change requiring the mayor to appoint the public administrator and designate either in-house counsel or the Corporation Counsel to perform that agency's legal work would not only enhance the independence and impartiality of the Surrogate's Courts in cases involving the public administrator, such a change would provide this vital City agency with appropriate supervision.

1. The Attorney General moved for the same relief in a number of other estates before Surrogate Diana A. Johnson. That court granted the motions to the extent discussed in the decision and order therein. See Matter of Adelson, 25 Misc.3d 1215(A) (Sur. Ct. Kings County 2009).

2. [I]n 1993, the Legislature created an administrative board empowered to 'establish guidelines and uniform fee schedules for the operation of the offices of public administrator.' (SCPA 1128(2)). While the board has no oversight responsibility with regard to the appointment of counsel or payment of fees for legal services, in October 2002 [the board issued guidelines for] a uniform fee schedule for the counsels to the New York City public administrators—setting a sliding scale of maximum legal fees based on six percent of the estate's value for the first $150,000, with decreasing percentages charged for estates in inverse proportion to the estate's size beyond the initial $750,000. In re Feinberg, 5 N.Y.3d at 211.

3. In the absence of any specific proof, the law presumes that the statutory requirements were satisfied. Under this "presumption of regularity" the law further presumes that no official or person acting under an oath of office will do anything contrary to his official duty, or omit anything which his official duty requires to be done. People v. Dominique, 90 N.Y.2d 880, 881 (1997).

4. The enormous time and effort entailed in the Attorney General's review of untold numbers of Public Administrator accountings over the five-and-one-half years at issue must be recognized.

5. While the City Comptroller does perform audits of the public administrator of each county every four years, there remains a systemic failure to supervise on the City's part.

6. This is entirely unlike the process utilized for the appointment of counsel for indigent or incompetent persons, where judges in each such case choose randomly from a panel of attorneys prequalified by the Appellate Division.

7. To its credit, the Office of Court Administration has sought to ameliorate the situation by requiring further reports from the Public Administrators and even, as a stop-gap measure, directly supervising the operations of the Kings County office during a vacancy in the position of Public Administrator in 2008. However, this cannot substitute for direct and regular supervision of this agency by the City itself.

Accounting Proceeding of the Public Administrator as Administrator of the Estates of:

JOSE ALAYON, Deceased, 2000-80
ISMAEL ALVARADO, Deceased, 1999-2508
LAWRENCE BAUERLIN, Deceased, 1998-401
DOROTHY BEHNKE, Deceased, 2000-1557
MARIA BERENSON, Deceased, 1997-4895
LEELAND BRAITHWAITE, Deceased, 1997-2391
AUNICA S. BYNUM, Deceased, 1997-3216
IDA CATO, Deceased, 1991-345
CARL COCORA, JR., Deceased, 1997-4361
SARAH CHURCH, Deceased, 1997-580
IDA COHEN, Deceased, 1999-4642
HENRY A. CONNOLLY, Deceased, 1998-2225
MARGARET CONNOR, Deceased, 1994-5703
JAMES COSTAL, Deceased, 1998-2019
VICTOR CRAWFORD, Deceased, 1997-5068
RITA CROWLEY, Deceased, 1997-1830
EDLYN DANIEL, Deceased, 1997, 1104
AGATHA DANISH, Deceased, 1997-3993
JOHN DATE, Deceased, 1999-3806
MAHMUT DEMIRHAN, Deceased, 1999-4558
ELEANOR EISNER, Deceased, 1997-786
HARRY EPSTEIN, Deceased, 1997-4547
JUAN D. ESCOTO, Deceased, 1996-3545
ANTHONY FAVATA, Deceased, 1997-1068
ESTELLE FITCH, Deceased, 10000809
MARGARET FRELEIGH, Deceased, 1996-5258
JEROME A. FRIEDMAN, Deceased, 1998-2244
BETHA L. GARRISON, Deceased, 1997-2656
ALICE GIDALY, Deceased, 1993-3046
IRENCE GNYP, Deceased, 1999-3524
ADOPLPHUS GREEN, Deceased, 1999-2475
MAGGIE GREENE, Deceased, 1998-2205
TINA HALPNER, Deceased, 1999-381
HENRY HAYS, Deceased, 1997-3942
GIOVANNA S. HINDY, Deceased, 1999-880
MAE HOPKINS, Deceased, 1998-3378
FOREST HUNTER, Deceased, 2000-3707
KETURAH JIMENEZ, Deceased, 1997-4724
DORIS JOHNSON, Deceased, 1999-1083
EMOGENE JOHNSON, Deceased, 1999-4494
MAY JOSEPH, Deceased, 1999-2215
ERIC KAPLAN, Deceased, 2000-2365
MARGARET KELLY, Deceased, 1997-2537
LILLIAN KOLBA, Deceased, 1998-2598
ALEKSANDER KULA, Deceased, 1998-4966
JOHN LEAL, Deceased, 1997-1023
KAREN LEE, Deceased, 1997-4716
ARTHUR LEWIS, Deceased, 1999-3252
MAYE LIPPMAN, Deceased, 1993-3961
ALBERT LIPTAK, Deceased, 1998-2122
EVA LUKSENBERG, Deceased, 1999-337
DORA MARCUS, Deceased, 1997-392
EVELYN MONKS, Deceased, 2000-2481
SAMITTAR NAGRA, Deceased, 1997-3096
JOAN NASTASA, Deceased, 1996-3542
SADESH NAZEMI, Deceased, 1995-5116
JOSEPH NESSMAN, Deceased, 1992-4385
JOSEPH NEWMAN, Deceased, 1997-3955
CHARLES NICHOLAS, Deceased, 1998-2121
HAROLD OLSEN, Deceased, 2000-3303
PAUL PEDERSEN, Deceased, 1998-4816
FRANK PRETOKA, Deceased, 1997-3270
HAROLD REIBSTEIN, Deceased, 1997-3995
MARINDA B. REID, Deceased, 1998-4793
FLORENTINO M. RIVERA, Deceased, 1997-2288
DOUGLAS VERNON ROBB, Deceased, 1995-5761
ISAEL RODRIGUEZ, Deceased, 1998-4869
ROSA RODRIGUEZ, Deceased, 1996-279
DOROTHY NICHOLS ROKKA, Deceased, 1000-1736
MARION RYAN, Deceased, 1996-2779
LOUISE SARJEANT, Deceased, 1997-1282
SAMUEL SCOTT, Deceased, 2000-2065
LAWRENCE SELBY, Deceased, 2000-1901
MARY SIEGEL, Deceased, 1997-3141
NATHAN SIROTA, Deceased, 1999-4396
IRVING SMITH, Deceased, 1996-5226
MILTON STERN, Deceased, 1997-4984
LUIS SUAREZ, Deceased, 1997-842
RUPERT TAYLOR, Deceased, 1997-3269
AARON THAW, Deceased, 1997-4985
MALKA TRZAN, Deceased, 1998-4435
JOSEPH TUCCIO, JR., Deceased, 1999-338
LEW WALLACE, Deceased, 1999-2743
JACOB WHITE, Deceased, 1996-666
LENNOX WILLIAMS, Deceased, 1993-2045
EARL WRIGHT, Deceased, 2000-4513
ARLENE ZIMMER, Deceased, 1996-1791
LORETTA ZIMMERMAN, Deceased, 1998-656

Decision of the Day -Trusts and Estates
Estate of Alayon - 2000-80

Surrogate's Court, Kings County
Surrogate Margarita López Torres
Decide: April 30
Page 45, column 1

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See Video of Senator John L. Sampson's 1st Hearing on Court 'Ethics' Corruption

The first hearing, held in Albany on June 8, 2009 hearing is on two videos:

               Video of 1st Hearing on Court 'Ethics' Corruption
               The June 8, 2009 hearing is on two videos:
               CLICK HERE TO SEE Part 1
               CLICK HERE TO SEE Part 2
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