2019 Audit Report Confirming Judicial Corruption (CA)
In 2019, the State Auditor recommended a change to California’s constitution to implement a bicameral structure to the judicial commission. It appears that was never implemented.
Audit finds California Bar failed to efficiently reform its system to investigate and discipline bad lawyers
APR 29, 2021 | REPUBLISHED BY LIT: MAY 1, 2021
The State Bar of California inefficiently reorganized its discipline system, leading to a bigger backlog of cases and allowing bad lawyers to keep practicing longer while under investigation, a state audit said Thursday.
The regulatory arm of the courts responsible for licensing and disciplining lawyers took significantly longer to resolve complaints and disciplined fewer lawyers, the report said.
“The increase in the backlog and the time to complete investigations, despite the decline in discipline, indicate that the State Bar’s reorganization has not improved its efficiency or effectiveness,” Auditor Elaine Howle said.
The bar “strongly disagrees” with some findings but welcomed recommendations for improvement, interim Executive Director Donna Hershkowitz said.
The bar, which licenses more than 250,000 lawyers in the state, operates largely out of public view. But it was in the spotlight six years ago after it fired then-executive director Joseph Dunn for “serious, wide-ranging allegations” against him. Dunn turned around and filed a whistleblower lawsuit, alleging the bar’s chief prosecutor had understated the backlog of cases.
While Dunn lost his case in arbitration, the state auditor had criticized the bar in 2015 for drastically reducing its backlog and imposing less severe punishment on attorneys who cheated clients or violated their duty.
The bar, which has long struggled with clearing its cases, reorganized its discipline system in response to the audit.
Changes it put in place, however, have contributed to a new backlog in cases dragging on more than six months, the report found.
The audit said staff who investigate discipline had gone from being specialists in areas of the law to generalists and their caseloads doubled. Some of the most senior attorneys were promoted into supervisory positions.
The backlog increased 87% — from nearly 1,500 cases at the end of December 2015 to almost 2,800 cases at the end of June 2020, the audit found. During that same period, the time to investigate cases increased 56%.
“These delays allow attorneys under investigation to continue practicing law while their cases are pending, increasing the potential for harm to the public,” the auditor said.
The bar’s annual discipline report sent Tuesday to lawmakers said a drop in cases filed last year because of the pandemic allowed its staff to reduce the backlog by 5% before the end of last year.
The bar also said it had made greater improvements in closing cases it prioritized where a bad lawyer — or someone masquerading as an attorney — posed the greatest threat to the public.
The audit also found the Bar disciplined attorneys “at a dramatically lower rate for reasons it cannot adequately explain.” The total number of cases from 2015 through 2019 that led to discipline — ranging from a slap on the wrist admonishment up to disbarment — declined 54 percent, the audit said.
In 2015, 16,885 cases were closed with 864 lawyers — or 5% — disciplined. In 2019, only 399 lawyers — or 3% — were disciplined of the 15,738 cases closed.
The audit also found that the bar couldn’t assess the effectiveness of its changes because it abandoned a plan to evaluate the results of the reorganization.
Audit rips California’s state bar for shady finances and bloated salaries
MAY 13, 2016 | REPUBLISHED BY LIT: MAY 1, 2021
The 2017 CA State Auditor’s report would be focused on expenses and salaries, a year after the article below was published.
The agency charged with regulating California’s attorneys has failed to give a transparent view of its finances while its top tier of executives have enjoyed more generous salaries than the governor and attorney general, according to a scathing state audit released Thursday.
The review of the State Bar of California also questioned the spending by a special non-profit set up under a previous state bar executive, and the audit faulted the agency’s leadership for a years-long delay in the program that compensates those who are swindled by corrupt and dishonest lawyers.
At the end of 2015, the review found, the state bar had about 5,500 pending claims by the victims of attorney theft – with an estimated $16-million shortfall for the payments. Some victims of misconduct could wait up to five years before receiving reimbursement, the review stated.
Former Orange County state senator Joe Dunn was fired as executive director of the California State Bar in 2014, sparking a series of conflicts for the nation’s largest state bar. (Robert Lachman / Los Angeles Times)
“The State Bar’s long delays in paying claims harm the people who are waiting and who may be counting on these resources to meet basic needs,” according to the report released by State Auditor Elaine Howle.
The 68-page report is the latest setback for the nation’s largest state bar, which oversees more than 250,000 attorneys and is funded mostly by annual dues. The quasi-public agency, considered an arm of the state Supreme Court, oversees the licensing of attorneys, imposes a continuing education on active lawyers, and intervenes when people have disputes with their legal counsel. The bar also metes out discipline for misconduct, subject to the approval of the state supreme court.
The organization has long been bedeviled by conflict and controversy, with lawmakers publicly excoriating the agency for being inefficient and overly political. In recent years, internal strife has grabbed headlines beyond legal trade papers.
The recent saga erupted around 2014, when the bar’s board of trustees fired executive director Joe Dunn, a former state senator from Orange County and current congressional candidate. Dunn filed a whistle-blower lawsuit, alleging that the bar was altering records to conceal a backlog in complaints against attorneys.
Acrimony escalated when parts of a confidential investigative report into Dunn’s tenure were released to journalists. An arbitrator later tossed out Dunn’s lawsuit, but gave him the option of amending some of his complaint.
Last month, Jayne Kim, a former federal prosecutor and the bar’s chief trial counsel, announced her resignation, months after the bar’s employees gave her a vote of “no confidence.”
The recent audit faulted the bar for paying its top 13 executives with salaries exceeding that of Gov. Jerry Brown, who annually receives about $183,000. Auditors noted that the state bar’s executive director has an annual salary of $267,000, while the directors of larger state agencies like the Department of Social Services, which has about 4,000 employees, receives about $220,000. The state bar has less than 600 employees between offices in L.A. and San Francisco.
The bar’s accounting practices were also criticized, with auditors knocking the bar for violating its own financial control policies and mis-classifying funds that have restrictions in how they are spent. Such errors distort how lawmakers and bureaucrats assess the organization’s financial status, the audit stated.
Much of the criticism centered on the fund that compensates legal clients that are the victim of theft, which rose precipitously in 2009 amid the recession. Auditors noted that to process the 5,500 pending applications for compensation, the bar has 11 staff members, including three attorneys.
As the backlog stood, however, the bar began in 2012 to omit from its financial reports the estimates of the cost of the victim compensation program. Instead, the financial statements showed only the fund’s overall balance, which improved; the omission had the effect of masking the looming financial trouble, according to the audit.
Many of the difficulties in the compensation program owe to the roughly $91 million in outstanding debts since 2003 from attorney misconduct cases, according to the audit. State reviewers acknowledged it is difficult to collect money from resigned or disbarred attorneys, who may have little incentive or resources to pay. The bar’s top lawyer has filed hundreds of money judgments to recover the funds, the audit stated.
Elizabeth Rindskopf Parker, the executive director who succeeded Dunn, accepted the vast majority of the audit’s recommendations but faulted the report for using “highly critical” headlines that overstate the organization’s issues and for not distinguishing between recent changes.
During the past few months, the bar’s new leadership has taken a “reform-minded” approach to resolving “longstanding organizational, operational and fiscal challenges,” Parker wrote.
“We believe a close look at the audit findings shows we have made significant progress,” Parker said in a separate statement.
Parker did take issue with criticism of her salary, noting that it is within the range of similar positions at other state bars. And she was clear about her view on the nonprofit that was set up in 2013 by Dunn, calling its operations “highly unusual,” according to her statement.
The non-profit was established to allow tax-deductible donations to support niche legal programs and legal aid to the indigent, according to the audit.
But the nonprofit ended up spending two-thirds of its funds on expenses unrelated to its stated purpose, including a $4,800 Sacramento hotel bill and a $17,000 state fair exhibit, according to the audit. The latter expenses occurred months before the non-profit was actually established, but it paid the bills anyway.
When the nonprofit developed a nearly $15,000 deficit in late 2015, the bar used general funds to cover the bill – without the state bar’s oversight board knowing or approving of the expenditure, according to the audit.
State auditors feared what may befall the agency if such lax financial controls go unchecked: “Lacking proper oversight, the State Bar could create a similar nonprofit in the future and use it for questionable purposes.”
Auditor blasts State Bar for inconsistent discipline of bad lawyers, shoddy finances
JUN 18, 2015 | REPUBLISHED BY LIT: MAY 1, 2021
The State Bar of California does not consistently protect the public from bad lawyers and lacks financial accountability, according to a state audit released Thursday.
Instead of focusing resources on enforcement, the bar spent more than $76 million to purchase and renovate a building in Los Angeles, the audit says.
The agency struggles to resolve complaints in a timely way, potentially delaying discipline, the audit concludes. Efforts to reduce a backlog that topped 5,000 cases in 2010 included a rush of settlements, some of them “inadequate.” Efforts to reduce the backlog prompted settlements in 1,500 cases — more than in any of the other four years assessed in the audit.
In fact, the California Supreme Court returned 27 cases the State Bar settled in 2011 for re-examination due to the appearance of insufficient discipline. Upon further consideration by the bar, 21 or the 27 cases resulting in recommendation of further discipline, including five disbarments.
“To reduce its backlog, the State Bar allowed some attorneys whom it otherwise might have disciplined more severely — or even disbarred — to continue practicing law, placing the public at risk,” State Auditor Elaine Howle wrote in a letter to the governor and legislative leaders enclosed in the audit.
Information the bar reports annually to the legislature remains “problematic” because the organization continues to report fewer cases than the law permits, the audit concludes.
In surprising spin on the document, state bar officials released a statement Thursday saying the audit “confirmed the integrity of the State Bar of California’s discipline case data.” Also acknowledging areas identified for improvement, State Bar president Craig Holden said the organization embraces the recommendations, “many of which we began addressing late last year.”
One problem is the current reporting structure of the audit-and-review unit “creates a risk that the chief trial counsel may be able to minimize or fail to act upon findings resulting from an audit or review,” the audit says. Auditors allege former chief trial counsel, without notifying the state bar’s board of trustees, disbanded the second-look review function of the audit-and-review unit in 2010 and redirected unit staff to help reduce its discipline case backlog.
Among recommendations to fix widespread problems at the bar, the audit says the organization should adhere to its own quality-control processes to ensure consistent enforcement — and “take steps to prevent its management or staff from circumventing those processes.” The audit further recommends the audit-and-review unit report to the executive director rather than the chief trial counsel to ensure independent oversight.
Auditors point to a lack of financial accountability and urge a policy “that requires accurate cost-benefit analysis.” The bar underestimated the cost of its Los Angeles building by $50 million, the audit says.
Noting the bar has, for six years, collected annual membership fees that exceed its operational costs, the audit recommends the Legislature limit how much the bar can accumulate in fund balances and establish a different approval process for bar membership fees.
In its official response included in the audit, the State Bar generally agreed with the recommendations but said having the chief trial counsel’s audit-and-review unit report to the executive director and including authority to conduct “second looks” at closed complaints is “problematic.” A separate, bar-wide audit unit that can audit the chief trial counsel and other bar operations may be a better idea, the bar contends.
Among recent initiatives, the board has launched a strategic planning process and increased board oversight over and transparency of bar finances, Holden said in the news release. A special meeting is scheduled Monday to focus further on response measures.
Officials agree too many bar resources were focused on reducing the backlog in 2011 at the expense of the discipline system — but that policy changed in 2012, bar officials said in the release.
The state bar’s new Los Angeles office was overseen by former executive director Joe Dunn, the bar statement adds.
Dunn was fired in November. He contends in a lawsuit he was fired for trying to expose improprieties by members of the board and staff.
A search for a new executive director is underway. Holden says the audit will provide good feedback for the new executive director. A hiring announcement is expected soon.