Steinberg’s side job raises ethics questions
Senate President Pro Tem Darrell Steinberg, D-Sacramento, has tried in vain to distance himself from the FBI’s ongoing investigation into corruption at the State Capitol. Earlier this month, as a part of that effort, Steinberg resigned his position with a law firm that represents Michael R. Drobot, a medical executive whose father is named in the FBI affidavit obtained by Al Jazeera America.
As first reported by the Sacramento Bee, until November 14, Steinberg worked as “of counsel” for the law firm Roxborough, Pomerance, Nye & Adreani. According to annual conflict of interest disclosure filings filed this year with the state’s political watchdog, the President Pro Tem made between $10,001 and $100,000 in salary from the firm.
“I of course have had nothing to do with any of your legal clients in these areas,” Steinberg wrote in his resignation email to partner Nick Roxborough. “You told me just recently that the firm represents the son of Mr. Drobot. Today, you told me that the firm was retained by Drobot Jr. in July 2013.”
But Steinberg’s story doesn’t line up with standard legal practices, and perhaps more damning, may put the top ranking Senate Democrat in an ethics bind: either he knew earlier that Drobot was a client of his law firm, or he was derelict in complying with his duties as a lawyer.
By claiming he first knew of Drobot’s connection in November, Steinberg is acknowledging that he failed to review his law firm’s clients and whether those clients posed any potential conflicts with his role as leader of the state Senate. Alternatively, if Steinberg, in fact, participated in a routine “conflicts check,” it would contradict Steinberg’s timeline of when he first learned that Drobot was represented by his law firm.
Conflicts check: Standard operating procedure
As a routine procedure, when a law firm retains a new client, it performs a conflicts check to ensure that all attorneys are operating in an ethical manner and representing their clients’ best interests. Although the procedure varies by law firm, the conflicts check can routinely involve system-wide emails to other lawyers notifying them of new clients.
“The purpose of conflicts checking is to learn in advance of any present and past representations that would either conflict with proposed representation or make a proposed representation unattractive to the firm for business reasons,” writes Thomas P. Sukowicz, director of Lawyers’ Risk Management Services at Hinshaw & Culbertson, LLP, in an article for the Los Angeles County Bar Association. “As conflicts of interest pose serious threats to the firm, the firm should have a written policy that no client or matter will be accepted or handled by the firm or its attorneys without a thorough check for conflicts of interest.”
Legal experts say that “all lawyers know they are supposed to do a conflicts check” and that a check should be done before a client is formally retained.
“The conflicts check should be performed immediately, before you receive any confidential information from a prospective client,” according to Lawyerist.com. “Therefore the check should be part of your intake process, even before a file is formally opened.”
In Drobot’s case, that should have occurred in July 2013, when Steinberg claims the firm was first retained. CalWatchdog.com surveyed a half dozen California attorneys, all of whom said that a conflicts check is an important and routine practice for law firms of all sizes.
“A conflicts check is fairly standard,” Jessica Levinson, a professor at Loyola Law School, who specializes in ethics and governance issues, said of the practice.
Of counsel: “Close, regular, personal and continuous”
According to his Form 700 filed with the Fair Political Practices Commission, Steinberg identified himself as “of counsel” for Roxborough, Pomerance, Nye & Adreani. As “of counsel,” Steinberg was expected, according to the American Bar Association, to maintain a “close, regular, personal relationship” with the firm.
In California, the ABA’s recommendation was affirmed as law in a 1999 California State Supreme Court case. In “Department of Corrections vs. Speedee Oil Change Systems,” the state’s highest court concluded that those “of counsel” share client confidences as a part of this close, personal relationship.
“In order to designate themselves as of counsel, attorneys must have close, personal, continuous, and regular relationships with their affiliated firms,” the California Supreme Court ruled. “Consequently, the attorneys brought together in these relationships frequently will have occasion to share client confidences in the course of exchanging advice and performing legal services for those clients.”
However, Steinberg’s description of his work contradicts this legal requirement for of counsel.
“The Pro Tem was not involved in any litigation, nor was he representing any clients,” said Steinberg’s spokesman Mark Hedlund. “During a phone call with Mr. Roxborough this month is when the Pro Tem first learned the firm had been retained by Mr. Drobot Jr.”
When asked directly whether Steinberg participated in a conflicts check for the law firm’s clients, Hedlund refused to answer the question. He repeated, “The Senator was not involved in any litigation, did not represent clients.” This account would conflict with the California Supreme Court’s requirement that “to designate themselves as of counsel, attorneys must have close, personal, continuous, and regular relationships with their affiliated firms.”
That raises the question: if Steinberg “was not involved in any litigation, did not represent clients,” why was he paid up to $100,000 in salary by the law firm?
Steinberg’s spokesman said only, “He was working with the firm on setting-up a mediation practice.”
Ethics expert: Potential conflict from 2 positions
Levinson, a law professor and ethics expert, says that Steinberg’s association with the firm raises legitimate ethical concerns.
“Steinberg holds a very powerful position and wields tremendous influence over legislation and policy,” said Levinson, one of the state’s foremost ethics experts and a member of the Los Angeles Ethics Commission. “It’s important for him to know who those clients were.”
She added that, while the public doesn’t have a right to know everything about an elected official, “This is a situation where it is totally fair to raise questions about two positions. It’s fair to say he needed to be aware of who were the clients of the firm that he was associating himself with.”
Even if Steinberg wasn’t directly using his powerful position to influence legislation, there’s also the potential for abuse by other members of his law firm, who potentially would be able to use their ties to Steinberg on behalf of their clients. On its website, the firm’s pitch to prospective clients references its expertise in “policy and legislation.”
“Recognized for his expertise and influence on policy and legislation, Mr. Roxborough is frequently asked to address trade associations, California State Bar organizations, private employers, as well as the California Legislature,” according to the firm’s website.
A representative for Mr. Roxborough said that he was on vacation for the Thanksgiving holiday and would not return until December.
Last month, State Senator Ron Calderon, D-Montebello, the central figure in the FBI case who allegedly accepted $88,000 in bribes, claimed in a civil filing that the FBI asked him to wear a wire and supply information on Steinberg’s ties to Michael D. Drobot, a Southern California hospital executive.
“The FBI was specifically interested in Senator Steinberg’s financial activities with Michael Drobot, the former chief executive officer of Pacific Hospital of Long Beach,” Calderon’s civil action filed in federal court on Nov. 13 states. “High level FBI agents met with Senator Calderon on six occasions and AUSA Miller met with Senator Calderon on two separate occasions to try and convince the Senator to participate in the sting operation targeting the financial dealings between Senator Steinberg and Michael Drobot and other donors to the Senate pro Tem’s political action committees.”
Steinberg has claimed, according to the Los Angeles Times, that he has “no relationship with Michael Drobot.” However, state campaign finance records show that the older Drobot, Michael D., has donated more than $1.3 million in campaign contributions since 2000, including $110,000 in contributions to attend the 2011 and 2012 Pro Tem Cup fundraising golf tournaments.
During the Watergate scandal, Sen. Howard H. Baker Jr., R-Tenn., vice chairman of the Senate Watergate Committee, famously asked of President Nixon, “What did the President know and when did he know it?”
The same could be asked of President Pro Tem Steinberg.
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