IN THE MATTER OF KERRY J
IN THE MATTER OF KERRY J. KATSORHIS
COIB Case No. 94-351
Oath Index No. 1531/97
September 17, 1998
SUMMARY: The Board fined Kerry Katsorhis, former Sheriff of the City of New York, $84,000 for numerous ethics violations. This is the largest fine ever imposed by the Board. The Office of Administrative Trials and Hearings Administrative Law Judge (“ALJ”) found that it was appropriate for the former Sheriff to forfeit 80% of the $103,000 salary the City had paid him for the year he was Sheriff because his “improper activities cost the City money, in personnel time (his own and his secretaries’) and in supplies.” The ALJ found: “The full extent of respondent’s abuse of his office, and the consequent financial cost to the City cannot be determined because of respondent’s failure to cooperate with the investigation. However, the record of court appearances, phone calls, meetings, correspondence and court submissions shows a considerable amount of respondent’s time was devoted to his private employment activities during what are normal City working hours.” The fine was collected in full in December 2000. Katsorhis habitually used City letterhead, supplies, equipment, and personnel to conduct an outside law practice. He had correspondence to private clients typed by City personnel on City letterhead during City time and mailed or faxed using City postage meters and fax machines. Katsorhis also endorsed a political candidate using City letterhead and attempted to have the Sheriff’s office repair his son’s personal laptop computer at City expense. Katsorhis also attempted to have a City attorney represent one of Katsorhis’ private clients at a court appearance. In 2000, the New York State Supreme Court Appellate Division, First Department, twice dismissed as untimely perfected a petition to review the Board’s decision, and the New York Court of Appeals dismissed as untimely a motion seeking leave to appeal the Appellate Division’s orders. Accordingly, all appeals have been exhausted and the Board decision stands. The record in this case exceeded 6,000 pages. COIB v. Kerry J. Katsorhis, COIB Case No. 94-351 (1998), appeal dismissed, M-1723/M-1904 (1st Dep’t April 13, 2000), appeal dismissed, 95 N.Y.2d 918, 719 N.Y.S.2d 645 (Nov. 21, 2000).
STIPULATION AND DISPOSITION
Final Findings of Fact, Conclusions of Law, and Order
Upon consideration of all the evidence presented in this matter, and of the full record herein, including the trial transcript and exhibits and all other papers submitted to the Office of Administrative Trials and Hearings ("OATH"), as well as all rulings of the OATH Administrative Law Judge (the "ALJ") Suzanne P. Christen, the records in a related proceeding commenced by Respondent, including appellate records, and the Comments and all other post-trial submissions of counsel, the Conflicts of Interest Board (the "Board") hereby adopts the annexed Report and Recommendation of OATH dated February 12, 1998 (the "Report"), in the above-captioned matter, as herein modified on the law. Accordingly, the Board imposes a fine of $84,000 upon Respondent for violating Chapter 68 of the City Charter, the City's conflicts of interest law.
The Board modifies the Report in two respects: (1) The Board dismisses the Fourteenth Cause of Action in the Petition, but on grounds different from those stated in the Report; and (2) The Board imposes the fine based upon factors somewhat different from those stated in the Report.
In addition, Respondent has asked the Board to reconsider the annexed Memorandum Decision of OATH dated November 25, 1997 (the "Memorandum Decision"). The Board has done so, and the Board specifically adopts the Memorandum Decision.
1. The Memorandum Decision
Respondent asks the Board to reconsider the Memorandum Decision. The Respondent attempts to avoid liability under Chapter 68 for his actions by alleging that through the fault of others, he did not file required statements with the City Clerk within ten days of commencing his official duties. In the Memorandum Decision, the ALJ denied Respondent's Motion to Dismiss based upon his own inability to locate copies of these statements. In addition, in his Respondent's Comments to the Board, dated March 19, 1998, Respondent appears to argue that he cannot be found liable for violations of Chapter 68, because he did not file a statement with the Board that he had read and would conform to the provisions of Chapter 68.
Chapter 49, § 1136(a) of the City Charter requires all public servants to file a statement with the City Clerk that they have read and will conform to the provisions of Chapter 49 (which relates, inter alia, to the duties of City officers and employees). In addition, Chapter 49, § 1136(b) requires all agency heads, such as Respondent, to file with the City Clerk a statement that they have read and will conform to the provisions of Chapter 16 (which relates to heads of mayoral agencies). Likewise, Charter § 2603(b)(2) provides in pertinent part: "On or before the tenth day after an individual becomes a public servant, such public servant must file a written statement with the board that such public servant has read and shall conform with the provisions of this chapter [68]."
If Respondent were correct, an unprecedented and impossible burden upon enforcement of the conflicts of interest law would be placed on the Board. Chapter 68 does not provide that a conflicts of interest violation may be enforced only if a public servant has filed a statement that he or she has read Chapter 49, Chapter 16 and/or Chapter 68. Otherwise, public servants could readily insulate themselves from liability for their violations of the conflicts of interest law simply by avoiding or neglecting to file a statement. The obligation to file the Chapter 49, Chapter 16 and Chapter 68 statements with the City Clerk rested upon Respondent, not the Board.
In the Memorandum Decision, the ALJ ruled as follows:
The motion to dismiss dated November 12, 1997, is denied. Respondent is charged with violating Chapter 68 of the City Charter §§ 2604(b)(2) and (b)(3). Respondent cites no authority for the proposition that enforcement of Chapter 68 of the City Charter may not be undertaken if the Conflicts of Interest Board cannot prove that respondent fulfilled a requirement placed upon him by virtue of his taking up the position as Sheriff to file a certification with the City Clerk that he had read and would conform to Chapter 49 and 16 of the City Charter. There is no such requirement contained in Chapter 68. Absent such an express condition, respondent's motion is without merit, and the cases cited in support of the motion are inapposite.
(Memorandum Decision at p.2.)
The Board finds that the ALJ properly denied Respondent's motion and adopts the Memorandum Decision. In addition, the Board has determined that public servants can be found liable for violations of Chapter 68 even if the public servant has not filed a statement that he or she has read and will conform to the provisions of Chapter 68.
2. The Fourteenth Cause of Action
The Fourteenth Cause of Action (the "Cause of Action") in the Petition alleges that Respondent violated Charter § 2604(b)(2) [FNa1] when he refused to make a full production of documents in response to a Department of Investigation ("DOI") subpoena and gave false and deceptive statements to DOI, in conflict with certain of his official duties set forth in Charter §§ 1116 and 1128.
The Report dismissed this Cause of Action. One of the grounds for this dismissal was the ALJ's finding that the Cause of Action alleged that the Board had jurisdiction over violations of sections of the Charter not contained in Chapter 68, specifically Charter §§ 1116 and 1128. The Board, in reviewing the Petition, has determined that the Cause of Action does not allege that the Board has authority to enforce portions of the Charter which are not contained in Chapter 68. Rather, the Cause of Action relies upon Charter Sections to define the Respondent's official duties. In alleging a violation of Charter § 2604(b)(2), the Board may properly look at the provisions of other laws, rules or statutes to determine the scope of a public servant's official duties.
Although the Cause of Action properly charged that the official duties of the Respondent could be determined by statutes other than Chapter 68, the Board nevertheless dismisses the Cause of Action on other grounds.
To violate Charter § 2604(b)(2), Respondent must have engaged in a "business, transaction or private employment, or have [a] financial or other private interest, direct or indirect" (collectively, "Private Interests") which conflicts with the proper discharge of the Respondent's official duties. The Respondent's alleged refusal to make a full production of documents in response to the DOI subpoena and his allegedly false and deceptive statements to DOI do not constitute Private Interests. Therefore, the Cause of Action does not allege any Private Interests which were in conflict with Respondent's official duties. Accordingly, the Respondent's actions with respect to DOI did not violate Charter § 2604(b)(2), because no Private Interests were involved.
In addition, the Cause of Action alleged, in part, that Respondent's conduct after his resignation from City service violated Charter § 2604(b)(2). As the ALJ correctly observed:
[N]o conduct by respondent after he left office can form the basis of an independent violation of Charter § (b)(2). That subsection, by its terms, purports to regulate the conduct of public servants, and provides that no public servant shall engage in any business, transaction or private employment, or have any financial interest, direct or indirect, which is in conflict with the proper discharge of his or her official duties. However, nothing in that subsection purports to regulate the conduct of former public servants after they have left City service. A former public servant has no official duties.
Report at p.36.
The Board adopts this reasoning.
3. The Fine
In the Report, the ALJ recommends imposing on Respondent a fine of $84,000. The Board has determined that the amount of the fine is appropriate for the enumerated violations of Charter § 2604(b)(3). The Board, however, imposes this fine based on somewhat different factors than those used by the ALJ.
The ALJ recommended the assessment of penalties upon the Respondent with respect to twelve separate violations of Charter § 2604(b)(3) which arose from Respondent's misuse of City letterhead and his City title. The ALJ recommended differing fines based upon whether the misuse of City letterhead and his City title occurred before or after the Respondent was specifically advised by Laurence Levy, then a senior litigator at the Law Department, that he could not use City letterhead and his City title to carry on his private law practice.
Like all City employees, Respondent should have known, without being explicitly advised, that the use of City letterhead and his City title for private purposes was a violation of Chapter 68. Therefore, in determining the amount of a fine, the Board does not consider it appropriate to vary the fine amount based upon whether the misuse of City letterhead and/or title occurred before or after Respondent was specifically advised that such misuse violates Chapter 68. However, the Board has considered that Respondent acted in contempt of Chapter 68 when he willfully disregarded advice that his actions were a violation of the City's conflicts law. Such conduct is deserving of more severe penalties.
In determining the amount of the fine to be assessed against Respondent, the Board has considered a number of factors in addition to those discussed above. These factors include Respondent's lack of cooperation in the investigation of this matter and his efforts to mislead investigators and hinder discovery efforts. Also, Respondent defied a court order concerning discovery. Respondent's improper conduct cost the City money, both in supplies and personnel time, not only Respondent's, but other Sheriff's office employees. In addition, City employees, both at DOI and at the Board, had to expend major amounts of time in investigating Respondent's misconduct, in part because of Respondent's obstruction of this investigation.
WHEREFORE, IT IS HEREBY ORDERED, pursuant to Charter § 2606(c), that Respondent be assessed a civil penalty of $84,000 to be paid to the Conflicts of Interest Board within 30 days of service of this Order.
Respondent has the right to appeal this Order to the Supreme Court of the State of New York.
Conflicts of Interest Board
Benito Romano
Acting Chair
Bruce A. Green
Member of the Board
Dated: September 17, 1998
* Sheldon Oliensis, Former Chair, and Jane Parver, a member of the Board, took no part in the Board's consideration of this matter. For purposes of issuing a decision and final order, two members of the Board constitutes a quorum. Chapter 68, § 2602(h).
ATTACHMENT
REPORT AND RECOMMENDATION
PRESENT: SUZANNE P. CHRISTEN
Administrative Law Judge
TO: BENITO ROMANO
Acting Chair
APPEARANCES: JOAN R. SALZMAN, ESQ.
Attorney for Petitioner
Conflicts of Interest Board
2 Lafayette Street, Suite 1010
New York, New York 10007
GINSBERG, KATSORHIS & FEDRIZZI
Attorneys for Respondent
By: Linda Fedrizzi, Esq.
77-53 Main Street
Flushing, New York 11367
This is a proceeding referred by the Conflicts of Interest Board (the "Board"), petitioner, pursuant to Chapter 68, section 2603 of the New York City Charter (the "Charter") and title 53 of the Rules of the City of New York ("RCNY") section 2-03 (Sept. 30, 1997). [FN1] The petition alleges that respondent, Kerry Katsorhis, former Sheriff of the City of New York, violated the City Conflicts of Interest Law ("Conflicts Law") while serving as Sheriff during 1994 and 1995. Specifically, the petition, as amended, alleges that respondent used the Office of Sheriff to carry on the practice of law on behalf of private clients; that respondent caused and directed personnel from the Sheriff's Office to perform tasks outside their City employment tasks to support his private practice of law; that he attempted to have the Office of the Sheriff repair a personal laptop computer belonging to his son; that he used Sheriff's Office personnel and his official City letterhead to prepare and send out a political endorsement letter, and that he unlawfully obstructed an investigation of his activities.
Petitioner claims that these activities violated Chapter 68 of the City Charter, sections 2604 (b) (2) and 2604 (b)(3), which, respectively, provide that:
“2604 (b)(2) No public servant shall engage in any business, transaction or private employment, or have any financial or other private interest, direct or indirect, which is in conflict with the proper discharge of his or her official duties.”
“2604 (b)(3) No public servant shall use or attempt to use his or her position as a public servant to obtain any financial gain, contract, license, privilege or other private or personal advantage, direct or indirect, for the public servant or any person or firm associated with the public servant.”
PROCEDURAL HISTORY
A petition was served on respondent on March 18, 1997. Respondent's verified answer was served on April 24, 1997. The petition and verified answer were filed at the Office of Administrative Trials and Hearings on April 24, 1997, together with respondent's notice of motion, dated April 23, 1997, to take the deposition of Laurence Levy, a non-party witness. On May 2, 1997, petitioner filed a notice of cross-motion to compel production of documents and for a protective order.
Oral argument on the discovery motions was held before me on May 15, 1997. On that day, respondent also served a motion to dismiss 13 of the 14 causes of action in the petition, and requested that decision on the discovery motions be reserved until the motion to dismiss was decided. Petitioner and respondent agreed to a briefing schedule for submission of memoranda in opposition and reply with respect to the motion to dismiss. Pursuant to agreement, petitioner's memorandum in opposition was filed on June 12 and respondent's reply was filed June 20.
Respondent's motions to dismiss the first 13 causes of action from the petition and to take the deposition of Laurence Levy were denied in a memorandum decision issued on June 27, 1997. On that same date, petitioner's cross-motion to compel production of documents was granted, with provision for in camera review for those documents claimed to be protected from disclosure by privilege. Petitioner's cross-motion for a protective order was denied, except to the extent outlined in the June 27 memorandum decision.
By agreement and at the request of the parties, discovery deadlines were extended into August and September 1997. Outstanding discovery matters, related to petitioner's motion to compel, petitioner's motion for a protective order and respondent's privilege claims were resolved by memorandum decision dated September 25, 1997.
The petition was amended on September 19, 1997 by adding a fifteenth cause of action. It was amended a second time, on October 10, 1997, by the addition of the sixteenth and seventeenth causes of action.
Respondent's answer to the second amendment to the petition was dated October 23, 1997. On November 18, 1997, respondent requested and was granted an extension of time to answer the first amendment to the petition. Respondent's answer to the first amendment was served on November 19, 1997.
On November 12, 1997, respondent filed a second motion to dismiss. Petitioner's memorandum in opposition to the second motion to dismiss was filed November 20, respondent's reply was filed November 20, and petitioner's sur-reply was filed November 21. A memorandum decision denying respondent's second motion to dismiss was issued November 25, 1997.
A hearing date of December 9, 1997 was scheduled in November, then adjourned, to accommodate the schedules of the parties, to December 17, 18 and 19, 1997. On December 12, 1997, this tribunal received notification that respondent planned to appear in Supreme Court, Queens County, on Monday December 15, 1997, to seek a stay of the hearing. A preliminary injunction staying the December 17 hearing was signed by Justice Polizzi on December 15, 1997 (Pet. Ex. 1). On Tuesday, December 16, upon appeal to the Appellate Division, Second Department, the order of Justice Polizzi was vacated, by Justice Altman (Pet. Ex. 2). The hearing then went forward on December 17, 18 and 19, 1997.
ANALYSIS OF THE EVIDENCE
It is undisputed that respondent was Sheriff of the City of New York from June 2, 1994 through June 2, 1995. As Sheriff, Mr. Katsorhis's law enforcement responsibilities included the execution of court orders and mandates, particularly those of the Supreme Court, the Civil Court, and the Surrogates' Courts. His powers as Sheriff extended to making arrests of persons in civil actions or proceedings, as well as the seizure, safe custody and eventual disbursement of real and personal property (Pet. Ex. 29A, 29 at Bates No. 0616).
The petition, as amended, alleges that while he was Sheriff, respondent was actively practicing law for private clients and using City resources and personnel to do personal errands for him. Petitioner introduced substantial evidence in support of the petition, including more than 2,000 pages of exhibits, as well as audiotapes, most of which were admitted pursuant to stipulation. Petitioner also called several witnesses, including former and present City employees, who testified about events that occurred while respondent was Sheriff, as well as matters concerning the Department of Investigation's investigation of respondent's conduct in office and rebuttal testimony concerning respondent's pre-appointment discussions with a senior member of the legal staff of the Law Department. Respondent testified in his own behalf, and called one of his law partners as a witness. The various causes of action are discussed below. The first three causes of action, arising out of an incident involving a personal laptop computer, the endorsement of a candidate for political office, and the use of a member of the legal staff of the Sheriff's Office to file a document related to a private lawsuit in court, respectively, are discussed individually. The fourth through twelfth, fifteenth, sixteenth and seventeenth causes of action, arising out of respondent's use of his City letterhead and personnel for his private law practice, are discussed together. The thirteenth cause of action concerns respondent's dispatching of his secretary on personal and client-related errands to Federal Express. Respondent's alleged obstruction of the investigation of these matters, charged in the fourteenth cause of action, is discussed last. A separate discussion of respondent's defenses, which I find unavailing, follows discussion of the individual causes of action.
1. The Laptop Computer Repair Request
The first cause of action, charging violations of Charter §§ 1118, and 2604 (b)(2) and (b)(3), arises out of respondent's alleged attempt to have the Sheriff's Office's Director of General Services, Michael Attisano, have respondent's son's personal laptop computer repaired. The evidence introduced by petitioner in support of this claim included testimony from Mr. Attisano, and Janice English, former Deputy Commissioner for Administration at the Office of the Sheriff.
Michael Attisano testified that he was Director of General Services at the New York City Sheriff's Office while respondent was Sheriff (Tr. 184-185). As Director of General Services, Mr. Attisano was responsible for certain support functions of the agency, such as supplies, equipment maintenance, and motor vehicle fleet. He also had some responsibility for accounts payable (Tr. 185).
Mr. Attisano testified that one day, while he was at the 31 Chambers Street office, respondent pulled me over, you know, called me in and said to me 'I have a laptop [computer] here, do you think you can get this fixed?'
(Tr. 186).
Mr. Attisano, "not questioning the Sheriff" and under the impression that it was a city-owned computer, took the laptop back to his office at 253 Broadway. He mentioned the request, and showed the laptop to Janice English, his direct supervisor, who informed him that it did not belong to the Sheriff's Office (Tr. 188). Mr. Attisano was subsequently informed by Ms. English that she had spoken to respondent about the laptop, had been told by respondent that it belonged to respondent's son and that respondent wanted to get it fixed. She informed respondent that that could not be done (Tr. 188). Mr. Attisano was relieved of any further responsibility with respect to the laptop computer (Tr. 188).
Mr. Attisano's former supervisor, Ms. English, testified that she recalled seeing Mr. Attisano carrying a laptop computer into the office one day. Ms. English, thinking that the laptop was Mr. Attisano's personal property, asked if she could look at it.
I had asked him if I could see the computer, and said, 'oh this is a nice toy that you bought,' and he was like 'oh no, this is not mine, it's the Sheriff's. I'm having it repaired.' I said, and it was 'what do you mean you're having it repaired?' 'The Sheriff asked me to have it repaired' ....
(Tr. 129).
Ms. English instructed Mr. Attisano that he could not have the laptop repaired for the Sheriff; she also spoke to respondent about it, suggesting that he bring it to a local electronics store, J&R. According to Ms. English respondent's answer was "yeah, its my son's computer, I wanted to, you know, get it done" (Tr.130).
Respondent's testimony about this incident was that "I said to [Mr. Attisano] 'See if you can get this fixed. How much would it cost?' He further testified that
I don't like people paying things for me, and I wanted to know what the price was, because if it would cost more to repair than to buy a new one, I'd rather buy a new one.
(Tr. 368).
Mr. Attisano did not endorse respondent's testimony. According to Mr. Attisano, at no time did respondent discuss the cost of fixing the laptop with him. In response to a question on cross-examination suggesting that respondent had merely consulted him about what it would cost to repair, Mr. Attisano testified:
The way it was said to me was 'could you see if you could get this fixed?' That's the way it was said.
(Tr. 194).
Nor, according to both Mr. Attisano and Ms. English, did respondent indicate, at any time, that he was going to use the laptop to try to learn how to use computers, or that he was going to donate it to the Sheriff's Office (Tr. 196, Tr. 131).
I found both Mr. Attisano and Ms. English to be credible witnesses. Each appeared to be testifying truthfully, based on clear and independent recollections of their interactions with respondent concerning the laptop. Both were articulate and intelligent, and I credit their testimony as to what respondent said to each of them about the laptop. I find that Mr. Attisano would reasonably have interpreted what was said to him by respondent as an assignment to have the computer repaired. It should have been clear to respondent that Mr. Attisano did so interpret it and when he left respondent's office carrying the laptop with him he was not instructed otherwise by respondent. Ms. English's testimony as to respondent's later statement to her that "I wanted to, you know, get it done" forecloses any other interpretation. Had respondent intended only to ascertain the cost of having the computer repaired, he could have and should have said so to Ms. English when she told him that the office could not have it done. I find that petitioner established the factual allegations of the first cause of action by a fair preponderance of the credible evidence.
I further find that the conduct proved constituted an attempt by respondent to use his position as Sheriff to obtain a financial gain, privilege or other private or personal advantage, for himself or for his son (with whom he is associated under Charter § 2601 (5)). As such, respondent's conduct violated § 2604 (b)(3).
Because this proceeding was referred pursuant to the Board's powers under Chapter 68 of the Charter, which does not confer upon the Board jurisdiction over violations of other sections of the Charter, I conclude that I do not have jurisdiction to make any finding with respect to the separate charge that respondent is liable for a violation of § 1118 of the Charter, which provides that "[n]o officer or employee of the City or of any of the counties within its limits shall detail or cause any officer of the City or of any such counties to do or perform any service or work outside of the public office, work or employment of such officer or employee" (N.Y.C. Charter § 1118 (N.Y. Legal Publ. Corp. 1990)) and which, if proved in a court of competent jurisdiction would constitute a misdemeanor. See Board of Ethics Opinion, No. 519 (Aug. 7, 1979) ("The Board of Ethics does not here deal with the question of whether the Commissioner's refusal to respond to the questions of the Department of Investigation, after being offered immunity, is grounds for his dismissal in as much as this question is not within the Board's jurisdiction").
2. The Castro Endorsement Letter
The second cause of action against respondent relates to his admitted use of City letterhead to write an endorsement letter on behalf of Bernadette Castro, dated October 24, 1994, in violation of Charter § 2604 (b)(2). The evidence in support of this charge includes a copy of the letter, admitted pursuant to stipulation, and testimony from several witnesses. Donna Spooner, a secretary employed by the Sheriff's Office throughout respondent's term as Sheriff, identified the political endorsement letter she typed at the instruction of respondent, which was signed by him and sent to Bernadette Castro, a candidate for U.S. Senate, in October 1994, on Sheriff's Office letterhead (Pet. Ex. 10; Tr. 71). Janice English, Deputy Commissioner in the Sheriff's Office from the summer of 1994 until after respondent's departure in June 1995 (Tr. 118-119) also testified about the letter, stating that she recalled a conversation in October or November 1994, around election time, in which respondent mentioned to her that he had been informed that he should not have sent the letter out on letterhead (Tr. 141-142). The letter itself was admitted into evidence by stipulation (Pet. Ex. 10).
Steven Lubin, an attorney in the Office of the Sheriff in 1994 and 1995, also recalled the incident. He testified that the Office of the General Counsel received a letter of complaint after respondent's Bernadette Castro endorsement letter had been sent to each of the county sheriffs in the state. According to Mr. Lubin, the general counsel spoke to respondent at the time of the letter, which was sent out in late October 1994 (Tr. 207).
Respondent does not deny that he wrote the Castro endorsement letter or that he signed it and had it mailed out on letterhead of the Office of the Sheriff. At an interview conducted by the Department of Investigation on August 8, 1995, respondent acknowledged that he dictated the endorsement to his secretary, Donna Spooner, and that he was told shortly thereafter that he should not have sent it out on City letterhead (Pet. Ex. 44 at 9-10).
I find that petitioner established the factual allegations of the second cause of action by a preponderance of the credible evidence, and that respondent's use of City letterhead to make a political endorsement of a candidate for United State's Senate was in conflict with the proper discharge of his official duties as Sheriff, in violation of § 2604 (b)(2).
3. The Supreme Court Calendar Call Incident
The third cause of action, charging violations of Charter §§ 1118, and 2604 (b)(2) and (b)(3), arises out of respondent's alleged use of his City title, position, personnel and office to direct a subordinate attorney, Steven Lubin, a member of the legal staff of the Sheriff's Office, to appear in State Supreme Court, and file a stipulation in a private lawsuit on behalf of private clients of respondent's law firm. The record before me includes documentary exhibits (Pet. Exs. 31, 40), testimony from Mr. Lubin, who was a counsel to the City Sheriff from August 1993 through October 1996, including the entirety of respondent's term as Sheriff (Tr. 201), as well as transcripts of respondent's sworn statements about this incident, given on April 12, 1995, and August 8, 1995, and respondent's hearing testimony.
On one occasion, during the time that respondent was Sheriff, according to Mr. Lubin, respondent telephoned from his car phone to one of his secretaries asking that Mr. Lubin meet him in the downstairs lobby of the Sheriff's Office at about 9:30 a.m. When Mr. Lubin arrived in the lobby, respondent handed him a blueback and asked Mr. Lubin to do him a favor and take it over to the Supreme Court building at 60 Centre Street (Tr. 202-203; Pet. Ex. 40). Because respondent was his boss, and Mr. Lubin found it awkward to refuse, Mr. Lubin took the document and started walking to 60 Centre Street (Tr. 205). When he arrived, he realized that he hadn't been asked simply to drop off the document, but to appear at a calendar call, and present a stipulation of adjournment in a private lawsuit.
Obviously as a City attorney, I couldn't answer the calendar call in another matter, so I handed it to the clerk, was rather irate at the time, and walked back to the office.
(Tr. 204).
Mr. Lubin testified that when he got back to the Sheriff's Office:
I saw Kerry in the hall, told him I wouldn't do anything like that again. He said fine, and then I went to see the First Deputy Commissioner at the time, Robert Avaltroni, and informed him of the incident.
(Tr. 204).
In an interview on April 12, 1995, respondent refused to tell the Department of Investigation the identity of the person he had asked to file the stipulation of adjournment. In a second set of statements to DOI about this matter, at his August 8, 1995 interview, respondent again declined to identify Mr. Lubin, but acknowledged that respondent had acted improperly in asking Mr. Lubin to file the document (Pet. Ex. 44 at 47). The transcript of the August 8, 1995 DOI interview also reflects the following exchange between DOI investigators and respondent:
Q. Did the person say anything to you afterwards?
A. I asked him, any problems, he said, no.
Q. Did he say anything else?
A. No. I said, thank you to him.
Q. Did the person say whether he would be willing to do this again?
A. I would not ask anybody. You know I am a person, if I can't do things myself I will not have somebody else do them. I never should have called upon him. But I figured it was like one lawyer helping another lawyer. In this instance, it was me as a Sheriff, I guess, but I didn't look at myself as a Sheriff asking, I looked at it as one lawyer to another lawyer helping another lawyer out.
Q. The lawyer from the Sheriff's Office, you don't recall him expressing any concern or reluctance after the paper was filed?
A. Any reluctance?
Q. Any concern?
A. Not at all.
Q. The person expressed no concern, never said in substance, look never put me in that position again?
A. I don't recall him saying that. I have a pretty good relationship with people. I don't beat people. I'm not onerous in my tasks that I ask people to do. It certainly was not to hurt anybody by doing it. I looked at it as one lawyer helping another lawyer out. Especially when I didn't think it was a big deal to do so.
(Pet. Ex. 44 at 47-49).
The above statements were given by respondent prior to hearing Mr. Lubin testify about the incident, at the hearing of this matter. Respondent did not rebut Mr. Lubin's testimony after hearing it, and did not challenge him on cross-examination with respect to Mr. Lubin's account of their conversation when Mr. Lubin returned from 60 Centre Street.
I found Mr. Lubin to be a reliable witness. In particular, I credit his account of his conversation with respondent upon his return from court, which is consistent with what he described was his follow-up to that conversation -- reporting the incident to Deputy Commission Avaltroni, who in turn reported it to the Commissioner of the Department of Finance.
I find that petitioner established the factual allegations of the third cause of action by a preponderance of the credible evidence, and I find that the conduct proved constitutes an instance of engaging in private employment in conflict with the proper discharge of respondent's official duties, in violation of § 2604 (b)(2). I further find that the use by respondent of his position as Sheriff to direct a subordinate City employee to perform this task, at no cost to respondent or his law firm, benefitted respondent's law firm financially because the firm did not have to incur the expense of paying for an attorney to make the court appearance on behalf of the firm's client. The evidence in the record before me establishing respondent's continuing relationship with and ownership interest in his firm, is discussed at length, below, at pages 16 through 24, and is incorporated here by reference. Given respondent's association with the firm (under § 2601(5)), his use of his position to provide a financial benefit to the firm constitutes a violation of § 2604 (b)(3).
As noted with respect to the first cause of action, because this proceeding was referred pursuant to Chapter 68 of the Charter, I find that I do not have jurisdiction to make any finding with respect to a separate charge that respondent is liable for a violation of § 1118 of the Charter.
4. Use of City Resources on Behalf of Private Law Clients
The fourth, fifth, sixth, seventh, eighth, ninth, tenth, eleventh, twelfth, fifteenth, sixteenth and seventeenth causes of action, charging violations of Charter §§2604 (b)(2) and (b)(3), arise out of respondent's alleged use of City resources and personnel, title, position and office to write letters on City letterhead, on behalf of private law clients.
Among the exhibits related to these charges that were accepted into evidence by stipulation, is a letter on Sheriff's letterhead from respondent to Judge John S. Martin, dated July 15, 1994 (Pet. Ex. 11), seeking permission from the court for Mr. Mastro, respondent's client in a criminal matter, to travel to Greece. This letter is referred to in petitioner's fourth cause of action. Two other letters, referred to, respectively, in petitioner's fifth and sixth causes of action, are one dated July 13, 1994 (Pet. Ex. 15), from respondent to Tom Cullen, Esq., attorney for defendant in a civil litigation matter Patel v. Blimpies of Long Island, in which respondent represented the plaintiff, and one dated July 11, 1994 (Pet. Ex. 14), from respondent to a United States Attorney in Brooklyn, concerning a criminal matter, United States v. Stratidis in which respondent represented defendants Mike and Maria Stratidis.
Other documents accepted into evidence by stipulation, are several letters and faxes, from respondent to an attorney named Marc Kahn, who represented the landlord in a commercial lease litigation known as Boehm v. 2M Realty, in which respondent represented the tenant. The dates of these letters and faxes are July 6, 1994 (Pet. Ex. 19), October 27, 1994 (Pet. Ex. 16), November 18, 1994 (Pet. Ex. 13), December 1, 1994 (Pet. Ex. 17), February 1, 1995 (Pet. Ex. 18), and March 6, 1995 (Pet. Ex. 21). In addition to the letters and faxes to Mr. Kahn about this litigation matter, there is also a fax transmission from respondent to Ms. Fedrizzi dated February 22, 1995, (Pet. Ex. 20) and a letter from respondent to his client, Mr. Lambrakis (Pet. Ex. 21). These faxes and letters are referred to in petitioner's seventh, eighth, ninth, tenth, eleventh, fifteenth, sixteenth, and seventeenth causes of action.
All of these letters and faxes are on Sheriff's letterhead or fax paper, as is a letter dated June 29, 1994 (Pet. Ex. 12), from respondent to Justice John J. Clabby, on behalf of respondent's client, criminal defendant Chris Dileo, referred to in petitioner's twelfth cause of action. All appear to have been prepared at the Sheriff's Office, and mailed or faxed from the Sheriff's Office, to their respective recipients.
Ms. Spooner testified that she worked for respondent from June 1994 during his term as Sheriff, typing letters, answering telephone calls and making coffee (Tr. 75). Throughout that time, she typed letters for respondent that related to his law clients' matters, of which Petitioner's Exhibits 11, 12, 13, 14, 16 and 19 are some examples (Tr. 76-82,86). According to Ms. Spooner, there were a lot more letters like them (Tr. 94-95). The letters Ms. Spooner typed for respondent were dictated by him to her, typed by her, given back to respondent for his review and signature, then copied by her, placed in Sheriff's Office letterhead envelopes, put through the Sheriff's office postage meter and sent out in the mail (Tr. 71-72).
Ms. Spooner also testified that she took messages, on a daily basis, from callers whom she understood to be respondent's clients (Tr. 101). She appeared to be familiar with the names of various individuals who were respondent's law clients, such as Emmanuel Lambrakis, Jennifer Moore and Michael Mastro (Tr. 77, 113, 115). According to Ms. Spooner, Mr. Mastro called the Sheriff's Office frequently while respondent was Sheriff (Tr. 77).
Ms. Spooner identified Petitioner's Exhibit 15 as having been typed by another secretary in the office, Veronica Martinez Garcia, whose initials appear at the bottom (Tr. 82). The letter bears respondent's name and Sheriff's title. Ms. Spooner identified Petitioner's Exhibits 17 and 21 as having been prepared by Anna Novack, yet another secretary in the office, whose initials appear on each of those letters. According to Ms. Spooner, Ms. Novack's handwriting also appears on the cover sheet of a February 1, 1995, Sheriff's Office facsimile transmission from Kerry Katsorhis to Marc Kahn, containing the message "please start 3:00 p.m. meeting without me. I will be there as soon as I possibly can" (Tr. 83-89; Pet. Ex.18).
Ms. Spooner was aware at the time that respondent was Sheriff that Linda Fedrizzi was his law partner. Ms. Spooner took telephone messages from Ms. Fedrizzi for respondent every day, or almost every day, and sometimes more than once a day (Tr. 100). A facsimile transmission from the Sheriff's Office to Ms. Fedrizzi was identified by Ms. Spooner as being in respondent's handwriting (Pet. Ex. 20; Tr. 86-87).
At one point during respondent's term as Sheriff, respondent criticized Ms. Spooner for sending out a political endorsement letter that he had dictated, reviewed and signed, on Office of the Sheriff letterhead (Tr. 74-75). One of the other secretaries, Veronica Martinez Garcia, came up with the idea of placing the phrase personal and unofficial on those letters that respondent told Ms. Spooner to type that did not concern Sheriff's Office business (Tr. 104). No one ever told Ms. Spooner that the letters that she marked personal and unofficial, and that respondent reviewed and signed, should not be typed on letterhead (Tr. 104).
Ms. Spooner's recollection about these matters was clear, and her testimony candid. She demonstrated familiarity with the workings of the Sheriff's Office, as well as the ability to discern non-Sheriff's Office business from Sheriff's Office business, as evidenced by the appearance of the phrase personal and unofficial on correspondence relating to respondent's private law work, after the date of the Castro endorsement letter. Indeed, a review of these exhibits shows them all to be related to respondent's private clients' affairs and not to the official business of the Sheriff's Office. Moreover, Ms. Spooner's recollection about the frequency of communications between respondent and his law firm, which was challenged on cross-examination (Tr. 110), was certain and is independently corroborated by an itemized listing of respondent's cellular telephone calls during the year that he was Sheriff (Pet. Ex. 27). A review of these cellular telephone records shows that respondent was in daily telephonic communication with his law firm, on his mobile phones, throughout his twelve- month tenure as Sheriff. In fact, respondent made 297 calls just from his mobile phones to one number at the firm that respondent identified in his official personnel record as Mr. Ginsberg's office telephone (Pet. Exs. 27, 29A, 29 at Bates No. 0578). The cellular telephone records reflect many other calls made by him throughout the year to the firm's main number, which is listed on the firm's letterhead and bluebacks, and appears in it's Martindale- Hubbell listing and elsewhere throughout the record (see e.g. Pet. Exs. 31, 34, 36, 50; Resp. Ex. C).
Respondent did not dispute that the letters and faxes identified by Ms. Spooner were prepared at his direction or sent out over his signature. Rather, at the hearing, and throughout these proceedings, respondent testified that he resigned from his law firm prior to becoming Sheriff, and that his various activities on behalf of his private clients cannot be considered practicing law.
Respondent's claim that he resigned from his law firm was echoed by his law partner, Jerome Ginsberg. According to Mr. Ginsberg, when respondent told him in 1994 that he was considering taking a job in city government, Mr. Ginsberg told respondent that he must say that he had to wind down so as not to abandon his clients (Tr. 254-255).
I says [sic] you've got to tell them that you've got to wind down. Now of course, if it was a full fledged case, then Mr. Katsorhis would have to find another lawyer to handle it, people that were more experienced. Certainly, we were mindful of the ethics opinion that said a noncompetent lawyer in a certain field is not like having any lawyer, and we can certainly violate the code of ethics on that.
(Tr. 255).
Mr. Ginsberg further testified that he believed that respondent transferred various cases to other attorneys during this period, such as Brian Levinson and Wallace Leinhardt (Tr. 255). Once respondent took office, Mr. Ginsberg told him that respondent could not come back into the firm to do any work.
I discouraged him using my office. I tried to change the names on the - we did change the names on the stationery, Ginsberg and Fedrizzi. As a matter of fact, you submitted Mr. Lubin's paper, it says Ginsberg and Fedrizzi there ...
We asked him to take his files and either disperse them, but I was under the impression when he came back from the meeting that he was under the impression that he had the leave of the city to wind down, because in the letter of Mr. Levy, it says he had certain matters such as real estate matters that he is holding money in escrow.
(Tr. 255).
The claim that respondent ended his association with his law firm is contradicted by the objective evidence. The record before me is replete with evidence of respondent's continuous activities on behalf of his clients, in concert with his law firm, throughout his term as Sheriff. There is an omnibus motion supported by an affirmation signed by "Kerry Katsorhis, Attorney for Defendant, Office and P.O. Address 77-53 Main Street Flushing, NY 11367", dated July 13, 1994, in the matter of People v. Stanley Norwalk, service of which was notarized by Jerome Ginsberg, respondent's law partner, on July 14, 1994, and submitted on Ginsberg, Katsorhis & Fedrizzi bluebacks, identifying the firm as attorneys for defendant (Pet. Ex. 39).
There are copies of letters, between respondent and opposing counsel, concerning negotiations and contract proposals for the purchase of the commercial property, at the center of the 2M Realty dispute, that further evidence respondent's continuing representation of this client, together with the firm throughout June, July, October, November and December 1994, and February and March 1995. Among these are letters to Marc Kahn, Esq., dated July 6, 1994, October 27, 1994, November 18, 1994, and December 1, 1994, on Office of the Sheriff letterhead. (Pet. Ex. 37 at Bates Nos. 1013, 1049, 1050-1052, 1054).
Another letter from Mr. Kahn to respondent, at the Office of the Sheriff, refers to respondent's personal appearance and representation of Mr. Lambrakis and his company, 2M Realty, at a meeting with opposing counsel in mid-afternoon on Wednesday February 1, 1995 (Pet. Ex. 37, at Bates No. 1216). A copy of a facsimile transmission on Office of the Sheriff letterhead, sent by respondent to Linda Fedrizzi, on February 22, 1995, which includes instructions to her to file an answer to a holdover petition and to interpose a counterclaim in the 2M Realty matter, is also in the record before me (Pet. Ex. 37 at Bates No. 1151). A submission to the court made by respondent's law firm in January 1995, includes an affirmation, under penalty of perjury, made by Ms. Fedrizzi, that respondent was actively engaged in the representation of the firm's client, 2M Realty, throughout the summer and fall of 1994 (Pet. Ex. 37 at Bates No. 1062).
There is also the filing of the adjournment of stipulation in the Meyers v. Radisson Hotels matter, which respondent undertook to have Mr. Lubin perform, on behalf of the law firm. And there is the testimony from Ms. Spooner, which I credit, that respondent was in daily communication with Ms. Fedrizzi, as well as respondent's cellular phone records showing that he was in daily communication with Mr. Ginsberg's office.
Further evidence that respondent did not resign from his law firm when he became Sheriff, as he stated he would, is his own attorney registration form, identifying his business name and address as:
“Law Offices Ginsberg, Katsorhis, Fedrizzi
77-53 Main Street
Flushing, New York 11367
Business Telephone (718) 591-6900”
(Pet. Ex. 32). An affirmation that this information was true was signed by respondent and dated June 21, 1994, approximately three weeks after he became Sheriff, and after his registration should have reflected his current business address (Pet. Ex. 32).
As part of respondent's argument that he resigned from his law firm, respondent maintained that from the date that he was sworn in as Sheriff, until he left the Sheriff's Office, "I received no additional compensation for doing that which I completed ...'' (Tr. 340). Given the paucity of records on this issue it is impossible to determine whether or not respondent received any monies taken in by the firm on respondent's matters. However, even if no new money was distributed to respondent, respondent may still be found to have a financial interest in or to have enjoyed a financial benefit from his activities.
"Interest" is defined in Chapter 68 of the Charter as:
an ownership interest in a firm or a position with a firm.
§ 2601 (12).
"Ownership interest" is defined in Chapter 68 of the Charter as:
“an interest in a firm held by a public servant, or the public servant's spouse or unemancipated child, which exceeds five percent of the firm or an investment of twenty-five thousand dollars in cash or other form of commitment, whichever is less, or five percent or twenty five thousand dollars of the firm's indebtedness, whichever is less, and any lesser interest in a firm when the public servant, or the public servant's spouse or unemancipated child exercises managerial control or responsibility regarding any such firm, but shall not include interests held in any pension plan, deferred compensation plan or mutual fund, the investments of which are not controlled by the public servant, the public servant's spouse or unemancipated child, or in any blind trust which holds or acquires an ownership interest. The amount of twenty-five thousand dollars specified herein shall be modified by the board pursuant to subdivision a of section twenty-six hundred three.”
§ 2601 (16).
To the extent that the firm received additional money, with respect to matters handled by respondent after becoming Sheriff, respondent had an interest in it by virtue of his continuing ownership in the firm, even if he did not share in the additional income received. Moreover, respondent had an immediate financial interest in not having to return monies that he had received from clients involved in criminal matters who, according to both Mr. Ginsberg and respondent, were required to pay for respondent's services in advance (Tr. 253; 326).
Respondent himself stated:
In criminal cases, people would come in and pay you, or they say please send me a bill, and pay me as either what I call a retainer, as up front money, until the case is completed
(Tr. 326)
For example, respondent testified that Chris Dileo paid him $10,000 before he became Sheriff (Tr. 326, 362). By continuing to represent clients, such as Mr. Dileo, who had paid in advance, after respondent became Sheriff, respondent and the firm avoided having to disgorge fees that had already been paid. Not having to return money is, obviously, just as much of a benefit or financial interest as receiving additional money.
The clear and unrefuted documentary evidence establishes that respondent's association with his law firm continued throughout the period in question, and was never severed, and that his ownership interest in the firm was never relinquished, contrary to his express undertaking and representations to Mr. Levy and the Conflicts of Interest Board in May, 1994. Thus, whether or not additional monies were paid into the firm, respondent had a financial interest in the private employment in which he engaged while Sheriff, as that term is used in § 2604 (b)(2).
Mr. Ginsberg described the firm as a partnership, in which respondent was a fifty-fifty partner with him. He also stated that in 1983 or 1984 it had become a professional corporation. However the firm was organized, respondent's account of having withdrawn from the firm by merely telling Mr. Ginsberg that he was going into government, and shaking hands (Tr. 328), did not effect a relinquishment of his ownership interest.
Although a partnership might have been dissolved in this manner, with no writing to memorialize it, a partnership cannot be wound up except through an accounting. Shandell v. Katz, 95 A.D. 2d 742, 743, 464 N.Y.S. 2d 177, 179 (1st Dep't 1983), citing Toeg v. Margolies, 280 A.D. 2d 319, 321, 113 N.Y.S. 2d 373, 375 (1st Dep't 1952), appeal dismissed, 305 N.Y. 568 (1953). Nor could a transfer of an ownership interest in a corporation be effected merely on a handshake. See generally, Bus. Corp. Law §§ 1511, 1516 (McKinney 1986 and Interim Supp. 1997-1998).
In the record before me, not only is there no indicia of a winding up of the partnership's affairs, or of a corporate dissolution, but there is an admission from respondent in the transcript of respondent's August 1995 DOI interview, that he never gave up his 50% ownership of the firm (Pet. Ex. 44, at 17-18). There is also evidence that respondent not only never closed his law practice bank account, but that he continued to use it. The reimbursement check made out to the City to cover the cellular telephone calls and Federal Express bills that respondent ran up while Sheriff was drawn on an account number at Marine Midland (009816143) not included as a personal bank account of his own or of his and his wife's, as those accounts were identified on a list submitted as part of his City financial disclosure filing (Pet. Ex. 44 at DOI Ex. 2). Further, the checks used to make these payments were pre-printed with the law firm's address, and the designation "regular account" (Pet. Exs. 6, 8, 22, 24, 28). The evidence submitted shows that a separately named Marine Midland "escrow account," (009816151) for which there were pre-printed checks bearing the firm's office address, and which was not identified as a personal account in respondent's financial disclosure filing, was the source of funds used at real estate closings in early summer 1994 (Pet. Ex. 45).
The overwhelming preponderance of the credible evidence indicates that respondent did not sever either his financial or his professional relationship with his law firm. Whatever name the firm had printed on bluebacks used from June 1994 through 1995, it is clear from the record before me, that private law client matters for the same clients, were actively being handled both by the firm and by respondent throughout that time. In effect, respondent simply moved his private legal work for the firm from his office in Queens into the Office of the Sheriff at 31 Chambers Street, and carried it on from there, allowing the City of New York to foot the bill for secretarial services, telephone service, postage, paper and computer services, as well as for respondent's time. Respondent himself testified that:
I was the Sheriff. My office was at 31 Chambers Street, in addition to the various other offices in the City that we had. When I had to respond to something, I used my offices, as I viewed it, in the wind down of what I was permitted to do and I used the office ...
(Tr. 358).
Common sense told me --I mean how am I going to do it if I don't use my office
(Tr. 359).
As to the claim that respondent's activities on behalf of clients did not constitute the practice of law, the documented record of court submissions, inter-attorney correspondence and appearances in courts of record that petitioner submitted into evidence, show that respondent was engaged in activities that could only have been undertaken by respondent in his capacity as an attorney and, therefore, constituted the practice of law. It is beyond dispute that respondent's practice of law on behalf of private clients, in both commercial and criminal matters, in various courts of record located within the City and State of New York continued throughout his tenure as Sheriff of the City of New York. It is also clear that his activities went far beyond attending real estate closings on evenings and weekends, for transactions that were in contract before he became Sheriff and for which he was holding money in escrow, as contemplated in letters sent to the Conflicts of Interest Board on respondent's behalf in May, 1994 (Resp. Exs. A, B).
It was as a lawyer, and only as a lawyer, duly admitted to practice in the state of New York, that for example, respondent was permitted to seek an order from the court to allow his client, Michael Mastro, to visit Greece in July 1994, or to consent to an adjournment of sentencing, as indicated in a letter from Assistant United States Attorney Jonathon Schwartz dated October 12, 1994, or to appear in court and speak on behalf of Mr. Mastro at his sentencing on February 3, 1995, before United States District Judge John S. Martin. People v. Rodriguez, 129 A.D. 2d 594, 514 N.Y.S. 2d 90 (2nd Dep't 1987). And it was only as an attorney that respondent was permitted to correspond with an Assistant United States Attorney, on behalf of Maria Stratidis, in July, 1994, in the then ongoing case of United States v. Maria Stratidis, No. 92 CR1291 (Pet. Ex. 33), or to appear on behalf of claimants in a telephone conference on August 2, 1994, in the Matter of United States v. Certain Real Property and Premises Known as 1016 Belmont Avenue, Brooklyn, New York et al., No. CV-92-1813 (Pet. Ex. 36).
Similarly, respondent's appearance on July 27, 1994, in District Court, Nassau County, as attorney for criminal defendant Christopher Gellees a/k/a Chris Dileo (Pet. Ex. 38, at Bates Nos. 1275, 1280), and his appearance in State Supreme Court, Queens County, on June 6, 1994, and on August 1, 1994, as attorney on behalf of the same individual, constituted the practice of law, as did his June 29, 1994 letter to the judge on behalf of his client, and his oral representations to the Nassau County District Attorney on behalf of this client on June 23, 1994 (Pet. Ex. 38 at Bates Nos. 1232, 1238, 1246, 1248). And, at an appearance before Judge Seybert on June 30, 1994, respondent actually stated in response to her question about a civil lawsuit brought by Time-Warner against respondent's client, the criminal defendant in the proceeding before Judge Seybert, that "we are in litigation on that ...'' (Pet. Ex. 39, at Bates No. 1435).
Finally, during his testimony at the hearing, respondent described drafting and sending a satisfaction of judgment and release on behalf of his client Mr. Patel, with respect to Mr. Patel's claim against Blimpies of Long Island, after respondent obtained a civil judgment favorable to his client in Queens Civil Court (Tr. 352-353). In respondent's own words "the only person that could do it is the attorney or the plaintiff himself." (Tr. 353).
Each and every one of the actions described above constituted the practice of law. Had respondent engaged in any of these activities on behalf of his clients without being admitted to the bar, there is no doubt that he would have been liable for unauthorized practice of law. People v. Alfani, 227 N.Y. 334 (1919); In re Collins, 169 Misc. 234, 7 N.Y. Supp. 2d 188 (Sup. Ct. Queens Co. 1938).
I find that petitioner established the factual allegations of the fourth, fifth, sixth, seventh, eighth, ninth, tenth, eleventh, twelfth, fifteenth, sixteenth and seventeenth causes of action by a preponderance of the credible evidence. I further find that respondent's letters on behalf of clients, typed by City personnel on City time, on Sheriff's letterhead, and mailed out using City postage meters constituted engaging in private employment in conflict with his official duties as Sheriff of the City of New York, in violation of § 2604 (b)(2). See Advisory Opinion No. 95-9 at 4 (Apr. 10, 1995); Advisory Opinion No. 91-7, at 4 (Aug. 12, 1991) (outlining the prohibitions that would circumscribe the private practice of law by public servants who are attorneys); Advisory Opinion No. 95-2 (Feb. 1, 1995) (likeness and official title may not be used to promote book published by a not-for-profit entity under Charter Section 2604 (b)(2) because of conflict with official duties).
The prohibition on the use of City letterhead and title for non-city business is not new. It exists because of the danger that the recipient of such a letter might construe it as a "lure" or "pressure", and was enforced by the Conflicts of Interest Board's predecessor, the Board of Ethics. See Board of Ethics Opinion No. 185. The prohibition on use of letterhead applies whether or not the public servant is paid or is acting as an unpaid volunteer. See Advisory Opinion 91-1 (Feb. 8, 1991) (barring use of City title in a print advertisement for a for-profit entity, even if public servant does not accept payment from entity or donates payment to charity). The letters sent out to judges and prosecutors on behalf of criminal defendants also conflicted with respondent's official duties as a high-level law enforcement official. See Advisory Opinion No. 93-23, at 5 (Jul. 20, 1993) (representation of criminal defendants by a public servant employed by a City agency charged with certain law enforcement duties prohibited).
These activities also constituted a use of respondent's position as a public servant to obtain a "financial gain, contract license, privilege or other private or personal advantage, direct or indirect" for himself and his firm in violation of § 2604 (b)(3). See generally, Advisory Opinion No. 90-9 (Dec. 3, 1990) (use of City title on letterhead of advisory board of a for- profit trade association might create an advantage for the for-profit organization by implying an endorsement of its activities, creating an appearance inconsistent with Charter Section 2604 (b)(3)). Advisory Opinion No. 95-9, at 5 (Apr. 10, 1995) (use of City equipment and other City resources for private reasons is proscribed).
5. Federal Express Usage
The thirteenth cause of action, charging violations of §§ 1118, and 2604 (b)(2) and (b)(3), arises out of respondent's alleged use of his subordinate City personnel to send out personal packages via Federal Express. Included with other evidence presented in support of this charge was testimony from Donna Spooner and Janice English.
Ms. Spooner testified that in addition to typing and mailing letters relating to respondent's private law clients, she also prepared and sent out Federal Express packages at respondent's direction, including those reflected in copies of Federal Express labels introduced as Petitioner's Exhibit 22 (Tr. 85, 96). Ms. Spooner brought such packages, which did not concern Sheriff's Office business, to the Barclay Street Federal Express Office, a five or ten minute walk from the Sheriff's Office (Tr. 86, 105). Among the designated recipients of the packages referenced in these Federal Express bills, Ms. Spooner recognized the names of respondent's private clients, respondent's law partner and certain of respondent's family members (Pet. Ex. 22; Tr.113-115).
Ms. English testified that she was responsible for the payment of such things as the Sheriff's Office Federal Express account, which she described as an account not intended for regular use. She communicated in writing with respondent on two occasions about his use of that account while he was Sheriff (Tr. 127; Pet. Ex. 26). Both notes from Ms. English asked respondent to go through sets of Federal Express bills and indicate which were for personal use and provide her with a check to cover those costs. Each such note was prompted by her receipt from subordinates of bills that appeared to reflect non-official use of the account (Tr. 122). She also had a brief conversation with respondent about the Federal Express bills, in which she informed him that he really should not use the account for personal matters, and that if he did use it for personal matters, he should let her know (Tr. 127). Eventually, Ms. English closed the account down in order to keep costs down and to avoid having to worry about "checking bills out" (Tr. 126) ...
Respondent did not deny his use of the Federal Express account for personal business. Nor did he rebut the testimony of Ms. Spooner, that he directed her to prepare the labels for these packages and to deliver them to Federal Express for shipment. By using Ms. Spooner, a City employee, as his messenger on private errands, respondent and/or his firm did not have to incur the expense of paying for messenger services. Thus, on the record before me, I find that petitioner has established, by a preponderance of the credible evidence, that respondent violated Charter § 2604 (b)(3) in that he used his position as Sheriff to direct a subordinate to perform a task for the financial benefit of himself or of the law firm with which respondent was associated under § 2601 (5).
As noted, in the discussion of the first and third causes of action, because this proceeding was referred pursuant to the Board's powers under Chapter 68 of the Charter, I conclude that I do not have jurisdiction to make any finding with respect to a separate charge that respondent is liable for a violation of § 1118 of the Charter.
6. Obstructing the Investigation
The fourteenth cause of action charges respondent with violating Charter §§ 1116 and 1128 and thereby violating Charter § 2604 (b)(2), by virtue of his alleged refusal to produce documents called for in a lawful Department of Investigation subpoena, and by virtue of having made false and deceptive statements at two DOI interviews, thereby obstructing the investigation of this matter.
The record before me includes a substantial amount of evidence that respondent attempted to conceal the extent of his activities on behalf of clients at the DOI interviews. For example, letters on behalf of Mr. Mastro to the court, and testimony from Ms. Spooner that Mr. Mastro called frequently, are in sharp contrast to respondent's representations at the April 12, 1995, DOI interview (Pet. Exs. 3,4) that he did nothing on behalf of Mr. Mastro between respondent's appointment as Sheriff and Mr. Mastro's sentencing.
The minutes of the sentencing proceeding itself, conducted before Judge Martin at 9:40 a.m. on February 3, 1995, reveal that Mr. Katsorhis actively represented his client, Mr. Mastro, at the sentencing, and was not simply standing next to him as respondent claimed:
Mr. Katsorhis: I don't challenge the propriety or the accuracy of the report, your Honor, and neither do I challenge the accuracy of the statements as to my client's background, family background, and work history. For two years my client, at the time of his pleas agreement, has been trying to and is actively participating with the government, as your Honor is well aware. That does not in any way diminish his involvement in the crimes for which he pled guilty to or that he was originally charged with. You have an
individual who is extremely remorseful, enjoys his current employment. He's been a bus driver for some 18 years, has a daughter from a previous marriage. With your Honor's consent, my client was able to go for the past two years to Greece to see his ailing mother. There is no question in my mind, Judge from what I glean from the information in the report, that a supervised term is not warranted. And quite frankly, Judge, if he had the ability and capacity to pay, I'm sure he will pay, and if there is a program of civil means that he could arrange with the banks to pay back in terms of restitution, he's more than happy to do so. Other than that, Judge, all I may suggest to the Court is you have a 50 year-old individual who has a very minor blemish in his criminal past. For 20 years he had a law-abiding life. He is not the smartest man in the world, nor is he the dumbest. He's not cagey, and he's also not a fool. He took advantage of situations and is extremely sorry he got involved. And quite frankly, Judge, you have a report that accurately represents
his background, his present, and what the likelihood of his future prospects are.
(Pet. Ex. 34 at 5, 6).
Mr. Katsorhis: Judge, I must clarify something, if I may. While I recognize that no frivolous defenses will be imposed by the defendant should he be sued in a civil forum, be it the state, local, or federal forum, but as a debtor who is beyond his means, do I understand your Honor that the defendant is prohibited from taking advantage of other laws in order to discharge his obligations?
The Court: If he wants to declare bankruptcy to discharge his obligation, that's fine. I'm not trying to interfere with that at all.
Mr. Katsorhis: I just wanted to clarify that, Judge. Thank you very much.
(Pet. Ex. 34 at 8, 9).
The record before me also shows that, contrary to his representations to DOI on April 12, 1995, respondent did make court appearances on other matters while he was Sheriff. For example, according to the transcript of sentencing in United States of America v. Norwalk, respondent appeared before Judge Joanna Seybert on June 30, 1994 at 11:30 a.m., on behalf of the defendant in that case, Stanley Norwalk:
The Court Clerk: United States of America - vs - Stanley Norwalk, criminal cause for sentence.
Mr. Ressler: For the government, Mark Ressler. Good afternoon, Judge.
Mr. Katsorhis: Good afternoon, your Honor. For the defendant, Kerry Katsorhis.
The Court: Both sides ready for sentence?
Mr. Katsorhis: Yes, if your Honor pleases.
The Court: Have both counsel been afforded the opportunity to review the Pre-sentence Report?
Mr. Katsorhis: Yes, Judge.
Mr. Ressler: Yes, Judge.
The Court: Other than the objection you stated, Mr. Katsorhis, do you have any other objections to the Probation Report?
Mr. Katsorhis: No, Judge. I respectfully submit in reply, the Probation Department submitted an addendum with reference to their position as to my client. In speaking with the government, I don't think the government is going to take any position with respect to my comments as to the original Probation Report, as prepared by Mr. Cultures.
(Pet. Ex. 39, at Bates No. 1427)
The Court: Accepting that, I will, of course, not adopt the guidelines set forth, and will find a base offense level, unless there's something else counsel would like to add?
Mr. Katsorhis: If I may, I would ask the Court to take into consideration the letter which I had hand delivered.
The Court: Yes, I have the letters that indicate the charitable activities of the defendant.
Mr. Katsorhis: Correct, Judge.
(Pet. Ex. 39, at Bates No. 1434).
Also included among the answers given by respondent at the April 12, 1995 interview, were the following:
Ms. Sussman: Have you represented anyone aside from the two criminal cases?
Mr. Katsorhis: In court?
Ms. Sussman: In court.
Mr. Katsorhis: Well, I more or less walked away from everything, I think of the number of cases before I became the Sheriff, before I was appointed.
(Pet. Exs. 3, 4; Tr. 47-48)
Ms. Sussman: Sorry. Since you became the Sheriff, you have not made any court appearances?
Mr. Katsorhis: I have not appeared on behalf of anybody.
(Pet. Exs. 3, 4; Tr. 48)
Ms. Sussman: In connection with your private- either your ex-clients, which you gave up having to see in the office, or any of these clients that we've discussed, have you ever used any member of your staff to assist you in any of that work?
Mr. Katsorhis: Assist me? What do you mean by assist?
Ms. Sussman: To do anything in connection with any of these cases.
Mr. Katsorhis: No.
Ms. Sussman: Have you ever asked any members of your secretarial staff to perform any functions which relate to the private practice of law?
Mr. Katsorhis: No.
(Pet. Exs. 3, 4; Tr. 49)
Unknown: With respect to Mr. Mastro, did you have any role in putting together a sentencing
memorandum to be presented to Judge Martin?
Mr. Katsorhis: No. Well you have to understand there was a 5K and --
Unknown: Yeah, I know but even so --
Mr. Katsorhis: No, no, no.
Unknown: -- sometimes (inaudible) whether or not --
Mr. Katsorhis: No, the AUSA was a pretty good guy --
Unknown: Did you do any substantive work between the time you took office as Sheriff and the sentencing?
Mr. Katsorhis: No, other than to hold his hand and take him there and assure him. That's about it.
(Pet. Exs. 3, 4; Tr. 56)
Unknown: With respect to the defendant you had in front of Judge Dearie, you didn't prepare any writing on his behalf?
Mr. Katsorhis: No. Their behalf.
(Pet. Exs. 3, 4; Tr. 57)
Unknown: And this other situation --
Mr. Katsorhis: That's what I'm saying, we didn't do anything.
Unknown: You did not have to provide any sentencing memorandum?
Mr. Katsorhis: No.
Unknown: There's nothing to work out with the AUSA?
Mr. Katsorhis: No. I think the fellow's name now is Cohen. I never met him.
Ms. Sussman: On either of these cases --
Mr. Katsorhis: I did nothing
(Pet. Exs. 3, 4; Tr. 58).
Respondent's statement at the April 12 DOI interview that he had not used anyone on his staff to assist in his representation of clients was also untrue, as evidenced by the letter dated July 15, 1994, typed on Office of the Sheriff letterhead, by Donna Spooner (Pet. Ex. 11). Respondent also used Ms. Spooner to type and mail letters to the U.S. Attorney's Office in Brooklyn, on July 11, 1994, (Pet. Ex. 14), and to the Honorable John Clabby, Justice of the Supreme Court, Queens, on June 29, 1994 (Pet. Ex. 12). In both these other criminal matters, respondent represented private clients while he was Sheriff.
Although former DOI investigator, now Judge Sussman, testified at the hearing that Mr. Katsorhis appeared to be cooperative at his April 12, 1995 interview, she also testified that she did not have the court records that would have allowed her to evaluate his statements at that time. She left DOI shortly thereafter, before the investigation of respondent was concluded. The fact that respondent appeared to be cooperative, in April 1995, does not alter the fact, established here by overwhelming and credible proof, that many of his answers were false and deceptive.
There are two different time periods encompassed by the factual allegations of the fourteenth cause of action. The factual allegations concerning respondent's statements at the April 12, 1995 DOI interview concern a period when respondent was still Sheriff. Other allegations concern respondent's answers to DOI questions during his August 8, 1995 interview and the response to a subpoena served by DOI upon respondent at an even later date. These allegations concern events that took place after the effective date of respondent's resignation. Petitioner submitted credible evidence that establishes the factual allegations of this cause of action with respect to this post employment period as well. For example, respondent's statements to DOI on August 8, 1995 denying that Mr. Lubin reacted negatively to the errand he was sent on, cannot be reconciled with Mr. Lubin's credible testimony about the incident, and his subsequent conversation with respondent.
Although I find that petitioner established, by a fair preponderance of the credible evidence, that respondent, while still holding the Office of Sheriff, made false and deceptive statements to the Department of Investigation, at a time when he was under an obligation, pursuant to Charter § 1116, to cooperate fully with the investigation, and that petitioner established that respondent provided false and misleading statements to investigators after his resignation, I do not conclude that these facts give rise to a separate violation of Charter § 2604 (b)(2).
First, insofar as post-resignation conduct is alleged, no conduct by respondent after he left office can form the basis of an independent violation of Charter § 2604 (b)(2). That subsection, by its terms, purports to regulate the conduct of public servants, and provides that no public servant shall engage in any business, transaction or private employment, or have any financial interest, direct or indirect, which is in conflict with the proper discharge of his or her official duties. However, nothing in that subsection purports to regulate the conduct of former public servants after they have left City service. A former public servant has no official duties. By contrast, other provisions of Chapter 68, and even other subsections of § 2604, do apply to former public servants. For example, this proceeding against respondent, for conduct he engaged in while he was a public servant, is expressly authorized in § 2603 (h)(7). In this respect, the reach of the Conflicts of Interest Board's authority under Chapter 68 differs from the State Ethics Commission's jurisdiction under Executive Law § 94 (12), which does not expressly provide for jurisdiction over former employees. See Flynn v. State Ethics Commission, 87 N.Y. 2d 199, 638 N.Y.S. 2d 418 (1995). However, the rationale of Flynn does extend to those charges of violations of § 2604 (b)(2) that are based on respondent's post-employment conduct. See Flynn, 87 N.Y. 2d at 202, 638 N.Y.S. 2d at 420. Giving § 2604 (b)(2) its ordinary meaning, violations of that provision can be committed only by public servants while they are in office, not by former public servants, who no longer have the official duties of the office they formerly held.
§ 2604 (b)(2) by its terms prohibits engaging in a business or transaction or private employment. It does not by its terms, prohibit "taking any action" or "making any statement" that may conflict with the duties of a former public servant to comply with an investigation or a subpoena. By contrast, § 2604 (d) by its terms, sets forth certain prohibitions on the conduct of former public servants. Under the canons of statutory construction, specifically, the doctrine of expressio unius est exclusio alterius, "where a law expressly describes a particular act, thing or person to which it shall apply, an irrefutable inference must be drawn that what is omitted or not included was intended to be omitted or excluded." Statues § 240 (McKinney 1971). I decline to read into Charter Section 2604 (b)(2) language which is not there. [FN2]
Second, I do not find that respondent's obligations under § 1116 provide an independent basis for finding a violation of § 2604 (b)(2) because petitioner did not establish that respondent's misrepresentations to DOI constituted engaging in a "business" or "transaction or private employment" or "financial or other private interest." Rather, the underlying subjects of the investigation were respondent's private employment and financial interests that were in conflict with his official duties.
To hold otherwise would be to read into the provisions of § 2604 (b)(2) language which simply is not there. The Charter does not make every violation of any duty of a public servant an automatic violation of § 2604 (b)(2). Nor does it confer upon the Conflicts of Interest Board jurisdiction over violations of other sections of the Charter, some of which provide for criminal penalties and others of which provide for disciplinary penalties. The fact that DOI was questioning respondent about suspected violations of the Conflicts Law does not convert misleading statements made by respondent into independent violations of the Conflicts Law.
Thus, I conclude that the fourteenth cause of action must be dismissed.
RESPONDENT'S DEFENSES
Throughout these proceedings, respondent attempted to justify his continued representation of private law clients while Sheriff upon his asserted lack of awareness of the Charter's conflicts of interest provisions; upon a permission which he claimed to have received from the City to continue his representation of private clients even after he became Sheriff, and upon his obligations to his private clients under the Code of Professional Responsibility. Although respondent's subjective belief that his conduct was permitted is not a defense to conflicts of interest charges under the Charter, which "requires that public officials exercise reasonable care in ascertaining all the relevant facts necessary for compliance with its ethics provisions" (COIB v. Holtzman, COIB Case No. 93-121, at 30 (Apr. 3, 1996)), his various asserted affirmative defenses are considered here in order to determine whether they provide a basis for mitigation of the penalty.
As to respondent's claim that he received no training on the City Charter provisions concerning conflicts of interest, and that he received permission to continue his activities on behalf of private clients on City time and using City resources, the preponderance of the credible evidence, particularly the testimony of Laurence Levy, establishes the contrary. Petitioner introduced ample evidence of its educational programs for City personnel conducted in 1994 (Pet. Ex. 52). Among these were training programs and workshops for agency heads and agency personnel, a videotape broadcast on the City's television channel and distributed to agencies, and monthly columns on ethics issues published in The Chief-Leader.
Moreover, respondent had the personal advice of Mr. Levy, whose function it was to explain Chapters 49 and 68 of the Charter, and to review with respondent potential problems so that conflicts could be worked out even before respondent's appointment took effect. There can be no doubt that these discussions, about which Mr. Levy testified, occurred, and that respondent was on notice of the conflicts issues that related to his law practice; and that are referred to in letters to the Conflicts of Interest Board sent on respondent's behalf on May 9 and May 25, 1994 (Resp. Exs. A, B). The existence of these letters alone suffices to establish that respondent was made aware of the Charter's conflicts provisions by Mr. Levy, particularly the mandates of Chapter 68.
Laurence Levy testified that in 1994, as part of his duties as a senior litigator for the Law Department, he met with candidates for mayoral appointments, interviewed them, advised them of what their obligations would be under the provisions of City Charter Chapters 49 and 68, if they did become public servants, and reviewed the individual's potential conflicts issues, background issues, residency issues and other matters that might bear on their appropriateness or fitness to serve in the administration or in any particular position (Tr. 443-444). In the event that potential conflicts of interest existed, Mr. Levy also acted as attorney for the candidates, within certain parameters, and drafted letters to the Conflicts of Interest Board seeking the Board's advice on such matters (Tr. 444). Respondent was among the candidates for mayoral appointment Mr. Levy met with in 1994.
With respect to respondent's appointment as Sheriff, and his relationship with his law firm, Mr. Levy testified that:
Initially Mr. Katsorhis indicated that it was a small firm, that he had started the firm and nurtured the firm and he wished to maintain an ownership interest. I advised him that he could not do that. We discussed the possibility of a blind trust to place his ownership interest in a trust whereby he could maintain that interest in sort of a protected status, which was one of the options available under the Conflicts of Interest Board to seek--to place holdings in a blind trust.
I advised him that I didn't think the Board would accept it .... But, nonetheless, Mr. Katsorhis wished that I seek to do that.
(Tr. 446-447) (emphasis added).
Mr. Levy did draft a letter to the Conflicts of Interest Board seeking to allow respondent to place his ownership interest in his law firm in a blind trust (Resp. Ex. A; Tr. 445). Mr. Levy was told that the Board would not approve the arrangement. He shared that information with Mr. Katsorhis, who then advised Mr. Levy that he would resign from the firm, whereupon Mr. Levy wrote the May 25, 1994 letter advising the Conflicts of Interest Board that Mr. Katsorhis would resign his interest in the firm (Resp. Ex. B; Tr. 447).
The letter that Laurence Levy sent to the Conflicts of Interest Board, on respondent's behalf, on May 9, 1994, referred to respondent's proposal to create a blind trust for his "ownership interest in the law firm of Ginsberg, Katsorhis & Fedrizzi" (Resp. Ex. A). That letter also specifically represented that respondent:
will not receive any income from cases accepted by the Firm after he leaves, (nor will he be involved in any litigation matters concerning the Firm) ...''
(Resp. Ex. A)(emphasis added). The letter further represented that:
In fact, as a result of Mr. Katsorhis' appointment, the revenue generated by the Firm will be diminished as cases which would be handled by Mr. Katsorhis will need to be referred to other firms or the Firm will have to hire another lawyer.
(Resp. Ex. A). (emphasis added).
Finally, the May 9 letter referred to: some minor pending business matters not involving the City, such as private real estate closings, for which Mr. Katsorhis maintains escrow funds pursuant to legal requirements, may require a minimal amount of his personal attention to finalize.
(Resp. Ex. A).
This letter, according to Mr. Levy's clear and unrebutted testimony, was reviewed and approved by respondent prior to being sent to the Conflicts of Interest Board.
The next letter that was sent by Mr. Levy, on behalf of respondent, to the Conflicts of Interest Board, "in furtherance of my letter dated May 9, 1994, on behalf of Kerry Katsorhis, the Mayor's designee for Sheriff ...'' is dated May 25, 1994 (Resp. Ex. B). That letter indicates that Mr. Levy and respondent had further discussions about the blind trust proposal and the mandates of Chapter 68:
Whereupon Mr. Katsorhis has agreed to resign from the firm.
(Resp. Ex. B).
That second letter also addressed two issues which: defy ready resolution but which should not pose conflicts of interest. For example, Mr. Katsorhis' payout cannot be determined presently because there are a number of pending negligence cases with contingency-based fees; when, after disposition, the value of these existing cases is ascertainable, Mr. Katsorhis will receive his proportionate share.
In addition, Mr. Katsorhis, who is the only attorney in the Firm experienced in real estate matters, is endeavoring to quickly complete several routine residential closings and commercial lease issues for which he is holding escrowed funds. He expects to resolve these matters, which do not involve the City, on his own time by the end of June.
(Resp. Ex. B) (emphasis added).
This letter was also sent to the Conflicts of Interest Board by Mr. Levy after respondent reviewed and approved it.
As to respondent's law practice, Mr. Levy testified that respondent was in the midst of a criminal trial at the time the letters to the Conflicts of Interest Board were written and that respondent and Mr. Levy discussed:
"when we thought the trial would end so that he could then sever his ties with the firm and move into his public position"
(Tr. 448).
Mr. Levy recalled that respondent's criminal trial lasted longer than expected, and that respondent, as a consequence, took a little longer to take office (Tr. 458).
As to what respondent told Mr. Levy about his law practice with respect to the period of his tenure as Sheriff, Mr. Levy stated:
He indicated to me that he would resign his firm and that he had a specific problem with a number of real estate matters. My recollection is the number was approximately six, and that those matters were either residential closings and that there was at least one, if not more, commercial closings, that they were all matters that were in contract and for which there were monies in escrow and that he was the escrow agent over those monies. I asked him if he could turn those over to his partner and he indicated to me that his partner was not experienced in real estate, that he didn't feel that his partner could adequately represent the clients, that it was, given the status of those cases and his role as escrow agent, that it would have been very, very difficult to turn them over and asked if he could close those out. He indicated that he would be able to do those in the evenings, on the weekend. It was all in, as he expected it and explained to me, rather routine paperwork matters to bring this to closure thus prompting the third paragraph in my May 25th letter, which were the matters I advised the Board of and asked permission for him to do. I believe he also told me he expected to wind them down by the end of June and my letter was drafted in the last week of May.
(Tr. 449-450)(emphasis added).
Mr. Levy testified that these were the only matters that respondent sought permission to conclude. There was no discussion of respondent's continuing to make court appearances or having any involvement in commercial litigation after he took office (Tr. 450, 453). According to Mr. Levy, had respondent advised him that respondent planned to appear in court on private matters while Sheriff, Mr. Levy would have advised him that he should not do that, and indicated a number of reasons why not, including the appearance of a public official appearing in court on private matters, violating a section of the Administrative Code, and interfering in his activities as Sheriff, which required him to be available during core working hours of 9:00 to 5:00. Mr. Levy stated that he would have had to reveal this potential problem to the Conflicts of Interest Board and would have also raised it with the Mayor's chief of staff (Tr. 451).
Further, according to Mr. Levy, respondent made no mention of planning to do any criminal work while Sheriff. Had he given any indication that he planned to continue doing anything as a defense attorney on a criminal case, Mr. Levy would have told him that as Sheriff he was a law enforcement official for the City of New York, and it would create, at the very least, an appearance of conflict to be appearing as a defense attorney while being a law enforcement official (Tr. 452).
Specifically, respondent did not advise Mr. Levy that he planned to appear at the sentencing of Michael Mastro before Judge Martin after he became Sheriff; nor that he planned to appear in court before Judge Seybert in the Eastern District, nor before any judge in any court.
I said I am not aware of him indicating any appearance before any judges after he became Sheriff. I understood that he was resigning from the firm with the limitation I indicated in my May 25th letter.
(Tr. 454-455).
Finally, Mr. Levy testified that:
There came a time after Mr. Katsorhis was Sheriff where I had a conversation with him regarding using City letterhead on a matter and advised him that he could not use City letterhead on anything that was not an official City matter.
(Tr. 456).
Mr. Levy explained that the event that triggered this conversation was his discovery that respondent had written an election-related letter on City letterhead.
None of the substance of Mr. Levy's testimony was called into question on cross-examination. In fact, cross-examination drew out the fact that Mr. Levy did not send either letter to the Conflicts of Interest Board until respondent had seen and approved what Mr. Levy wrote (Tr. 463). The only aspect of Mr. Levy's testimony disputed by respondent is Mr. Levy's denial that respondent informed him that he planned to continue his criminal client representations. In view of the absence of any mention of criminal work in the May 9 and May 25 letters, the inclusion therein of very limiting language to the effect that the only matters which respondent would close out would be real estate matters for which he was holding money in escrow, and which he would conclude on his own time, and Mr. Levy's unrebutted and definite recollection of the delay in respondent taking up the office of Sheriff because a criminal trial he was engaged in had not ended when he thought it would, I credit Mr. Levy's recollection of what respondent told him over respondent's testimony that Mr. Levy understood there were other matters, including other criminal matters in which respondent would continue to act as defense attorney (Tr. 327).
When respondent was asked directly whether he discussed with Mr. Levy any of the criminal matters in which he made appearances while he was Sheriff, respondent admitted that he had not (Tr. 324). He also admitted that he had no discussion with Mr. Levy about practicing law once he was Sheriff (Tr. 340).
The clear, credible and unrebutted testimony of Mr. Levy established that respondent was apprised, in advance of accepting the appointment as Sheriff, of the strictures imposed by Charter Chapter 68. Mr. Levy's testimony, together with the letters of May 9, 1994 and May 25, 1994, which were never modified or updated by respondent, make it impossible to conclude that respondent had any reasonable basis to believe that he had permission, from Mr. Levy or from anyone else, to carry on private law practice on City time and using City resources while he was Sheriff. Continuing to represent private clients, in court, was so far out of the realm of acceptability, that they did not even discuss it during their meetings, and a parenthetical sentence disclaiming any continued involvement in litigation was included in the May 9, 1994 letter to the Board. In fact, according to Mr. Levy's testimony, which I credit, respondent delayed his acceptance of the office of Sheriff in order to complete a criminal trial.
Nor is it a mitigating factor that respondent had to honor what he regarded as his professional responsibility to his private law clients, because he did so at the expense of his clear and known obligations as a public servant. The solution, if respondent was truly convinced that he could not withdraw from his private representations, was to decline the appointment as Sheriff. There could have been no mystery about what was required. Respondent was a former and experienced public prosecutor, as he testified and as is reflected in the 1995 Martindale-Hubbell entry that the firm paid to have published (Pet. Ex. 50; Tr. 365). In fact, he had been chief of several different bureaus within the Queens District Attorney's Office during his seven years there (Tr. 314). Thus, holding the Office of Sheriff was not respondent's first experience in the public sector. Nor was it his first experience in law enforcement.
Evidence of respondent's actual knowledge of the impropriety of his continuing to act as defense counsel for criminal defendants, may be inferred from the record of respondent's appearance at the sentencing of Stanley Norwalk, on June 30, 1994, which includes respondent's acknowledgment to a United States District Judge that his position as Sheriff meant that he could not represent his client Mr. Norwalk, in another criminal case in Queens (Pet. Ex. 39, at Bates No. 1436).
Finally, under section 473 of the Judiciary Law, respondent, as Sheriff, was prohibited from practicing law in any court in the counties in which he was appointed. Respondent was a former Assistant District Attorney, and a lawyer of more than 20 years' experience, who applied for and was awarded the public office of Sheriff based on such attributes as his "tremendous knowledge of law and law enforcement", (as announced in the press release that accompanied his appointment) (Pet. Ex. 29 at Bates No. 0655, 29A). As such, he should have known of this prohibition and of the impropriety created by his actions. See Conflicts of Interest Board v. Holtzman, COIB Case No. 94-121 (Apr. 3, 1996 (actual knowledge is not required to find a violation occurred if the public servant should have known of the impropriety created by his action). COIB Advisory Opinion No. 90-5 (April 16, 1990) (a high-level official has a special obligation to avoid even the appearance of impropriety).
Respondent's final defense to these charges is that the openness of his conduct shows that it was undertaken in the good faith belief that his continued representation of his former clients was permitted and that he was only required to refrain from taking on new matters. Although much of the conduct engaged in by respondent was open in the sense that court proceedings are public, the documented history of respondent's refusals to disclose information to the Department of Investigation about his activities on behalf of private clients, and his attempts to minimize his extensive contacts with his law firm at DOI interviews, and to mislead DOI as to the extent of his activities in pursuit of his private legal practice, belie the claim that he believed that his conduct was permitted. For example, on August 8, 1995, respondent gave sworn testimony to DOI that after he attempted to mediate the 2M Realty matter, in response to what he described as a request from the court, he referred the representation back to his law firm and had no further participation in the matter after the date of a Federal Express package addressed to Dr. Lambrakis, in July 1994 (Pet. Ex. 44 at 66-67 and DOI Exhibit 5). When asked to confirm that he took no part in the matter after that time, Mr. Katsorhis responded "Tabu [sic]'' (Pet. Ex. 44 at 67).
In fact, respondent remained actively involved in the Lambrakis/2M Realty matter throughout the remaining months of 1994, and into 1995, despite his knowledge that his conduct was taboo, and contrary to his representations to DOI. If respondent had believed his continued involvement in the 2M Realty litigation was authorized, there would have been no reason to characterize it as taboo, or pretend that it did not continue through 1995.
FINDINGS AND CONCLUSIONS
1. Respondent violated sections 2604 (b)(2) and 2604 (b)(3) of the City Charter by using his City position and office to request City personnel to have respondent's son's laptop computer repaired.
2. Respondent violated section 2604 (b)(2) of the City Charter by using City resources and his City title and office to write an October 24, 1994 letter endorsing the political candidacy of Bernadette Castro.
3. Respondent violated sections 2604 (b)(2) and 2604 (b)(3) of the City Charter by using his City position and office to direct his subordinate attorney, Steven Lubin, to appear in State Supreme Court, and file a stipulation in a private lawsuit.
4. Respondent violated sections 2604 (b)(2) and 2604 (b)(3) of the City Charter by using City resources and personnel, and his city title, position and office to write a letter on City letterhead dated July 15, 1994 to Judge John S. Martin, seeking relief on behalf of respondent's private client, Michael Mastro.
5. Respondent violated sections 2604 (b)(2) and 2604 (b)(3) of the City Charter by using City resources and personnel and his City title, position and office to write a letter dated July 13, 1994 to Tom Cullen, Esq., relating to a private lawsuit.
6. Respondent violated sections 2604 (b)(2) and 2604 (b)(3) of the City Charter by using City resources and personnel and his City title, position and office to write a letter on City letterhead dated July 11, 1994, on behalf of a private client to the U.S. Attorney's Office in Brooklyn.
7. Respondent violated sections 2604 (b)(2) and 2604 (b)(3) of the City Charter by using City resources and personnel and his City title, position, and office to write a letter on City letterhead to Marc Kahn, dated July 6, 1994 on behalf of private clients.
8. Respondent violated sections 2604 (b)(2) and 2604 (b)(3) of the City Charter by using City resources and personnel and his City title, position, and office to write a letter on City letterhead to Marc Kahn, dated October 27, 1994 on behalf of private clients.
9. Respondent violated sections 2604 (b)(2) and 2604 (b)(3) of the City Charter by using City resources and personnel and his City title, position, and office to write a letter to Marc Kahn, dated November 18, 1994, on City letterhead, on behalf of private clients.
10. Respondent violated sections 2604 (b)(2) and 2604 (b)(3) of the City Charter by using City resources and personnel and his City title, position, and office to write a letter dated December 1, 1994, to Marc Kahn on City letterhead on behalf of private clients.
11. Respondent violated sections 2604 (b)(2) and 2604 (b)(3) of the City Charter by using City resources and personnel and his City title, position, and office to send a facsimile transmission dated February 22, 1995, on behalf of private clients, to his law firm partner, Linda Fedrizzi, with directions as to the content of legal papers that should be prepared for the firm's clients.
12. Respondent violated sections 2604 (b)(2) and 2604 (b)(3) of the City Charter by using City resources and personnel and his City title, position, and office, to write a letter dated June 29, 1994, on City letterhead, on behalf of his private client, to Justice John J. Clabby.
13. Respondent violated sections 2604 (b)(2) and 2604 (b)(3) of the City Charter by sending City Sheriff's Office secretarial staff to send out his personal packages via Federal Express.
14. Petitioner did not establish that a violation by respondent of his official duties to comply with City Charter §§ 1116 and 1128 would, without more, constitute a violation of Charter § 2604 (b)(2).
15. Respondent violated sections 2604 (b)(2) and 2604 (b)(3) of the City Charter by using City resources and personnel, and his City title, position and office to send a facsimile transmission on City letterhead on behalf of private clients, to Marc Kahn on February 1, 1995.
16. Respondent violated sections 2604 (b)(2) and 2604 (b)(3) of the City Charter by using City resources and personnel, and his City title, position and office to send a letter dated March 6, 1995 on City letterhead, on behalf of private clients, to Marc Kahn.
17. Respondent violated sections 2604 (b)(2) and 2604 (b)(3) of the City Charter by using City resources and personnel, and his City title, position and office to send a letter dated March 6, 1995 on City letterhead on behalf of private clients to his client, Dr. Emmanuel Lambrakis.
RECOMMENDATION
Pursuant to Charter § 2606 (b), the Board seeks to impose a penalty for each violation of Charter § 2604 (b)(3). Petitioner argues that the maximum penalty, $10,000, is appropriate for each of the fifteen violations found here, for a total of $150,000.
In two recently adjudicated conflicts of interest cases, the Board has imposed penalties for a single violation of Charter § 2604 (b)(3) ranging from $1,000 to $7,500. In COIB v. Elizabeth Holtzman, COIB Case No. 93-121 (Apr. 3, 1996), aff'd sub. nom. Holtzman v. Oliensis,___ A.D. 2d ___, 659 N.Y.S. 2d 732 (1st Dep't), leave to appeal granted, 90 N.Y. 2d 810, 665 N.Y.S. 2d 401 (1997), the Board, after finding that the former City Comptroller had participated improperly in the decision to award a co-manager position in a City bond issue to an affiliate of the lender to her United States Senate campaign, imposed a $7,500 fine for a single violation of Charter § 2604 (b)(3). By contrast, the Board imposed a fine of $1,000 for a violation of Charter § 2604 (b)(3) in its most recently adjudicated case, Conflicts of Interest Board v. Nancy Campbell Ross, COIB Case No. 97-76 (Dec. 22, 1997) adopting OATH Index No. 538/98 (Nov. 13, 1997). In percentage terms, these two penalties range from 75 percent of the maximum down to 10 percent of the maximum.
In both cases, the violations were viewed as very serious. The lesser amount of the penalty imposed in the Campbell Ross case hinged upon several enumerated factors. One of these was the fact that the respondent, a former assistant district attorney, acknowledged her improper conduct and was genuinely contrite, without attempting to excuse her conduct. Second, she had already lost her job. Third, she was at risk of losing her license to practice law. Fourth, she had been subject to a criminal investigation and had suffered such public embarrassment and humiliation that a pregnancy that was in its sixth month at the time of the events giving rise to the conflicts charge had been endangered.
None of the sort of circumstances found to constitute mitigating factors in the Campbell Ross case are present here. One of the most significant differences is respondent's lack of cooperation with the investigation of this matter and his efforts to mislead investigators and to block discovery of the extent of the private employment activities he conducted from the Sheriff's Office. A second difference is the existence of real financial advantage to respondent from his conduct.
The violations proved here are at least as serious in nature as those established in either the Holtzman or the Campbell Ross cases, but they are much more significant in duration and extent, constituting not just one instance of abuse of office but many separate and deliberate actions occurring over many months, from the time respondent took up his public position until he left it.
The bulk of the individual violations of Charter § 2604 (b)(3) relate to respondent's improper use of City letterhead. In another letterhead abuse case, COIB v. Kevin McAuliffe, COIB Case No. 91-214 (Jan. 14, 1994), the Board imposed a penalty of $2,500 upon a former press aide to the Mayor who admitted to using paper (that he had paid for himself) with the mayoral logo on it to fight a parking ticket, in violation of § 2604 (b)(3). The McAuliffe penalty was determined by agreement of the parties, with an acknowledgment by the respondent in that case of the improper nature of his actions. By contrast, here, respondent continued to send out letters for his private clients on City letterhead long after he was specifically told that the Castro letter was improper, and that he should not use City letterhead for non-City business.
One further consideration is that respondent's improper activities cost the City money, in personnel time (his own and his secretaries') and in supplies. Although the expenses of identifiable non-Sheriff's business cellular telephone calls and Federal Express delivery services were eventually reimbursed by respondent, after his conduct in office came under the scrutiny of the Department of Investigation, none of the expenses for the personnel services and materials identified above were ever reimbursed. Nor was any proper accounting of respondent's own time ever made. In order to collect his $ 103,000 salary (Pet. Exs. 29A, 29, at Bates No. 0608), respondent had to approve his official payroll time records. According to respondent's own admission, those records, an example of which was introduced into the record (Pet. Ex. 23), do not accurately reflect time spent by him on Sheriff's work (Tr. 337). Respondent claims that he viewed his responsibilities as Sheriff as requiring him to be on duty 24 hours a day, seven days a week (Tr. 337). Petitioner has shown otherwise. The full extent of respondent's abuse of his office, and the consequent financial cost to the City cannot be determined because of respondent's failure to cooperate with the investigation of this matter. However, the record of court appearances, phone calls, meetings, correspondence and court submissions shows a considerable amount of respondent's time was devoted to his private employment activities during what are normal City work hours.
In assessing the specific penalties that should be imposed with respect to the twelve separate violations of § 2604 (b)(3) that arise from respondent's misuse of City letterhead and his City title, the McAuliffe penalty of $2,500 is a guide. Mr. McAuliffe wrote three letters, relating to a single parking ticket he had received. Although according to Mr. McAuliffe, he did not realize at the time that his conduct violated the Conflicts Law, in the settlement he acknowledged that it was a violation and entered into a consensual penalty agreement of $2500. That works out to just over $833 per letter. A larger penalty seems appropriate in the present case given respondent's continuing refusal to acknowledge his violations of the Conflicts Law, the cost incurred pursuing the investigation and trial of these violations, as well as the real financial cost to the City of personnel time used by respondent in having Sheriff's Office secretarial staff prepare his private law practice letters on City paper and send them out with postage paid for by the City. In view of these factors, I recommend a penalty of $1,500 per letter for each of the five violations that are based on letters that pre-date the October 24, 1994 Castro endorsement letter.
For the seven violations that are based upon letters that post-date the Castro endorsement letter, a much more severe penalty is warranted. Those letters were sent out after respondent was specifically told by Mr. Levy that City letterhead should not be used for non-City matters. Their existence is stark evidence of respondent's deliberate exploitation and abuse of his public position to carry on a prohibited private law practice for his personal advantage. There is no room for any argument that respondent could have believed that he was permitted to use City letterhead to carry on his private law practice (or for any other non-official business purpose) after he was informed that the Castro endorsement was improper. Although one of the post- Castro letters is dated October 27, 1994, very close in time to October 24, because it bears the "personal and unofficial" marking that Ms. Spooner adopted after the Castro letter incident, it indicates that respondent had already had the conversation about which Mr. Levy testified. It is also appropriate to consider it in the second group of such letters in view of the fact that it relates to the 2M Realty litigation which respondent himself described as "taboo". For the seven violations of § 2604 (b)(3) that are based on post- October 24, 1994 letters, I recommend a penalty of $8,000 each, which represents 80 percent of the maximum penalty that could be imposed by the Board for each of these violations.
The remaining three violations include one based on respondent's use of his secretary as a private messenger service during his term as Sheriff. This violation does not relate to just one occasion, but was repeated even after Ms. English expressed concerns about respondent's actions that should have prompted respondent to question the appropriateness of his conduct and change it. For this abuse of respondent's office, I recommend a penalty of $7,500.
The attempt by respondent to have his son's laptop computer repaired is also a serious violation of the Conflicts Law. In that instance, no real financial loss to the City resulted. It is not as easy to measure the negative impact on the Sheriff's Office that resulted from the Sheriff trying to have the City pay his personal expenses. I recommend a penalty of $3,000 for this violation of § 2604 (b)(3).
Finally, there is the violation arising from respondent's having instructed a secretary to send a member of the legal staff of the Sheriff's's Office downstairs to meet the Sheriff in the lobby and then asking that lawyer to answer a calendar call and file a stipulation of adjournment in a private litigation in which respondent's firm represented one of the parties. This incident took place in the spring of 1995. Respondent's willingness at that late date to put his subordinate attorney in the untenable position of either violating his professional ethical obligations or refusing a direct request of his boss, suggests an attitude of indifference to respondent's obligations as a manager and as a law enforcement official; if not actual contempt for the Conflicts Law. For this violation of § 2604 (b)(3) the maximum penalty of $10,000 is appropriate, and I so recommend.
Under the penalty schedule outlined above, the total penalty for the fifteen violations of § 2604 (b)(3) established here would be $84,000. I recommend that the Board impose this penalty.
Suzanne P. Christen
Administrative Law Judge
Dated: February 12, 1998
MEMORANDUM DECISION
PRESENT: SUZANNE P. CHRISTEN
Administrative Law Judge
APPEARANCES: JOAN R. SALZMAN, ESQ.
Attorney for Petitioner
Conflicts of Interest Board
2 Lafayette Street, Suite 1010
New York, New York 10007
GINSBERG, KATSORHIS & FEDRIZZI
Attorney for Respondent
By: LINDA FEDRIZZI, ESQ.
77-53 Main Street
Flushing, New York 11367
The motion to dismiss dated November 12, 1997, is denied. Respondent is charged with violating Chapter 68 of the City Charter §§ 2604(b)(2) and (b)(3). Respondent cites no authority for the proposition that enforcement of Chapter 68 of the City Charter may not be undertaken if the Conflicts of Interest Board cannot prove that respondent fulfilled a requirement placed upon him by virtue of his taking up the position as Sheriff to file a certification with the City Clerk that he had read and would conform to Chapters 49 and 16 of the City Charter. There is no such requirement contained in Chapter 68. Absent such an express condition, respondent's motion is without merit, and the cases cited in support of the motion are inapposite.
Suzanne P. Christen
Dated: November 25, 1997
FNa1. Charter § 2604 (b)(2) provides that:
No public servant shall engage in any business, transaction or private employment, or have any financial or other private interest, direct or indirect, which is in conflict with the proper discharge of his or her official duties.
FN1. Pursuant to the confidentiality provisions of the Charter, Section 2603 (k), as well as Board rules, see 53 RCNY § 2-05 (Sept. 30, 1997), these proceedings, including this report and recommendation, are confidential and not subject to public disclosure, and can only become public in the event of an order by the Board adopting the report findings, as provided in section 2603 (h)(4) of the Charter, or upon a waiver of confidentiality by respondent.
FN2. This is not to suggest that DOI's subpoena was not properly served upon respondent after his departure from office. DOI's investigative reach under Charter § 1128, formerly Chapter 34, section 803, which provides, inter alia, that:
No person shall prevent, seek to prevent, interfere with, obstruct or otherwise hinder any study or investigation being conducted pursuant to the charter ...
has been held to apply to persons who are not city employees, provided there are grounds present to sustain a belief that such person has information relative to the subject matter of the investigation. See New York City Department of Investigation v. Passannante, 148 A.D. 2d 101, 104, 544 N.Y.S. 2d 1, 3 (1st Dep't 1989), citing Matter of Weintraub v. Fraiman, 30 A.D. 2d 784, 785, 291 N.Y.S. 2d 438, 439 (1st Dep't 1968), aff'd, 24 N.Y. 2d 918, 301 N.Y.S. 2d 983 (1969). In this case, respondent never challenged the subpoena.
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