Fordham Law


Legislators Hire Counsel to Guide Response to Potential Ethics Probe

Bruce Green in The New York Law Journal, September 20, 2013

Media Source

ALBANY - Both houses of the Legislature have enlisted high-profile outside counsel to represent the chambers in an ethics investigation, a possible indication of an impending challenge to the Moreland Commission's probe, observers say.

Assembly Democrats retained Marc Kasowitz of Kasowitz, Benson, Torres & Friedman and Senate Republicans have brought in former Southern District U.S. Attorney Michael Garcia, now a partner at Kirkland & Ellis. Kasowitz and Garcia have capped their fee at $50,000.

It is unclear exactly what position the attorneys will take, but Kasowitz and Garcia were hired after the commission created by Governor Andrew Cuomo to investigate public corruption demanded information on lawmakers' outside income, including the identity of attorneys' clients, and legislators raised questions about the separation of powers doctrine, the speech and debate clause of the Constitution and attorney ethics rules.

The role of Kasowitz and Garcia will become clearer today, the due date for the requested information.

Cuomo in July announced a new Commission to Investigate Public Corruption, created under Executive Law §63(8) and the Moreland Act in the wake of several cases in which legislators have been charged with corruption or misconduct. The commission, which held its first public hearing Tuesday (NYLJ, Sept. 19), has the power to subpoena records and examine witnesses under oath.

In a recent letter to lawmakers, Danya Perry, chief of investigations for the Moreland Commission, asked officials to reveal the source of outside income exceeding $20,000, according to published reports.

The request seeks information from attorney-lawmakers about their clients that is more expansive than what they are required to provide in their annual public financial disclosure statement.

Now, lawyer-legislators generally have to identify clients, but they do not have to identify those under criminal investigation, in bankruptcy or involved in a domestic relations matter. Additionally, attorneys in the Legislature can request an exemption from the yearly reporting requirement "where disclosure of a client's identity is likely to cause harm."

But the Moreland Commission's request for information, which could result in a subpoena or even litigation if lawmakers do not comply, is broader and does not contain the caveats in the annual ethics form.

"The letter from the commission asks for detailed information on who their clients are, what the billing arrangements are and what the substance of their representation is, without regard to whether the client has already been identified in a publicly filed action," according to one attorney close to the investigation. "On one level, it could breach the Code of Professional Responsibility. On another, it could have a chilling effect on the lawyer-client relationship."

Generally, client information is not privileged, although it may be confidential under Disciplinary Rule 1.6, according to Patrick Connors, a professor at Albany Law School and Law Journal columnist. Connors questioned whether it is "going to serve anyone's benefit" to force attorneys to reveal their clients.

Mark Ochs, former counsel to the Third Department disciplinary committee and now of counsel to Tully Rinckey in Albany, noted that 20 other states require lawyer-legislators to reveal the names of clients.

But Ochs said there are generally exceptions similar to the one in New York's disclosure rule when the attorney can "show the representation itself is privileged, embarrassing" or otherwise injurious to the client.

"It has been established that while [Disciplinary] Rule 1.6, which provides for confidentiality, doesn't cover the identity of a client, there are circumstances where the identity can be considered a secret," Ochs said.

In a 2011 report, the State Bar's Task Force on Government Ethics cited the need for transparency in government and said attorney-lawmakers should be required to disclose some client information. But it also said the public interest in an open government needs to be balanced with a lawyer's professional obligations.

"In some circumstances, the disclosure of the attorney-client relationship is absolutely detrimental to the client," the task force said.

The report called for disclosure of most clients who paid an attorney $10,000 or more, with caveats.

"Because confidentiality is at the core of the attorney-client relationship, there will be circumstances where the need for client confidentiality outweighs the need for public disclosure," according to the report. "The need for public disclosure is outweighed where the disclosure of the client's identity would cause the client harm."

It said harm is most likely to occur "where the client is under civil or criminal investigation, for some domestic relation clients, and for pre-filing bankruptcy clients. In these circumstances, disclosure should not be required."

Assemblyman Phillip Steck, D-Colonie, a practicing litigator with Cooper Erving & Savage in Albany, said most of his clients have already been publicly identified. Regardless, he is not affected since the commission requested information on lawmakers' 2012 clients, the year before Steck took office.

"When I file my cases, whether they are federal or state, there is a public record as to who my clients are," said Steck, a civil rights and commercial litigator who has championed a full-time Legislature where lawmakers cannot have outside law practices. "The problem comes more for lawyers who have confidential client relationships. The client may not want to make it known they are consulting with a particular counsel. Or they may be consulting about a legal problem of a sensitive nature and don't want it known they are consulting with a lawyer at all."

Fordham Law School Professor Bruce Green said attorneys who reveal client information, without the permission of the client and without a subpoena, may be at risk of an ethical violation.

"If you are not subpoenaed, I don't know how you can turn over much of anything," Green said. "You can't do it if the client asks you not to do it, or disclosure would be embarrassing or detrimental to the client. There are some people who probably had an expectation that their name would not be disclosed."

Green said the issue is likely to come to a head if some lawyer-legislators ignore Perry's letter and get served with a subpoena.

"I don't know there is a legal argument to be made that the disclosure rule should trump the commission's subpoena authority, but it is an interesting issue that is worth thinking about," Green said.

Aside from the lawyer ethics issue, lawmakers have questioned whether the broad 1907 Moreland Act, which permits a governor to examine the management of state government, reaches to a separate and independent branch and, if so, to what extent.

Kasowitz declined comment. Garcia was not immediately available.