Tuesday, June 28, 2016
Page 8
PERSPECTIVES (Column)
LACBA Chief Margaret Stevens: Does She Fail to Grasp the Mandate for Reform?
By ROGER M. GRACE
In taking office as president of the Los Angeles Bar Association on Feb. 26, 1948, Walter L. Nossaman reflected that there was a “gracious and immemorial custom which has decreed that candidates for executive positions in the Association have no opposition.”
That custom was generally observed in the years that followed.
This year, the organization—known for about 60 years, now, as the Los Angeles County Bar Association—did have a contested election, the first one in a quarter of a century. With respect to each of the three officer positions, the Nominating Committee’s choice was trounced by a “reform” candidate, backed by the “Council of Sections.” (The council was formed late last year in response to an effort to wrest from sections any control of their own finances, as well as “LACBA Central” dictating high prices for section events and providing diminished staff support).
Two of the reform-ticket candidates for office positions—incoming President-Elect Michael Meyer and soon-to-be Senior Vice President Philip Lam—bagged 74 percent of the vote, and one, Tamila Jensen, drew 69 percent in the race for vice president.
There were openings for nine trustees. The council put up five candidates, and endorsed two of the selections by the Nominating Committee. Those seven persons won by decisive majorities.
Plainly, there was a mandate.
And it is near-certain that President-Elect Margaret Stevens, had it been possible for a challenger to vie with her for the presidency, would have lost. She was part of the hierarchy that was being repudiated…that had put LACBA in financial straits, was hiding information from the membership about the group’s squandering of funds, and was attempting to regiment the organization’s sections.
Under the bylaws, Stevens automatically succeeded to the presidency. She took the oath of office Thursday night, and will actually assume the post on Friday.
Regrettably, she is off to a bad start.
The president has the power, under the bylaws, to appoint—subject to approval of the trustees—three “assistant vice presidents” and a treasurer, all of whom become members of the Executive Committee (along with the three elected officers, the president, the previous year’s president, the president of the Barristers, and the Barristers’ president-elect).
Stevens had the opportunity to mend fences through her selection of appointees.
My wife, Jo-Ann W. Grace, is a trustee, elected last year. She was queried by the Council of Sections as to how many of the old guard would be on the board and how many new folk. Jo-Ann prefaced her response by saying:
“I refer below to ‘them’ and ‘us.’ This is in the context of a ‘worst case scenario.’ If Margaret Stevens will recognize that the election reflects widespread discontent among LACBA members, and that rationalizing the status quo won’t do, and will join in effecting reforms, there will not be a schism within the group, and reference to ‘them’ and ‘us’ will not be apt. She can make a good start by dropping an effort to undermine the Council of Sections by starting up a rival committee, and appointing as assistant vice president one or two of ‘us’ [specifying three persons, as examples]. I truly hope she will take such an ecumenical approach.”
She didn’t.
Stevens chose as assistant vice presidents two of the Nominating Committee candidates who were rejected by the membership: her chum, Annaluisa Padilla, an Orange County immigration attorney and political activist—who lost to Jensen by a vote of 1,180 to 535—and Roxanne M. Wilson, who drew only 15 percent of the vote in a four-way race for three spots on the board (as representatives of sections).
It was inordinate, if not audacious, for Stevens to appoint Wilson to a higher post than that she sought through election, and was denied by the membership.
Both Padilla and Wilson are current trustees who have gone along with all the craziness.
I’m reliably told that outgoing president Paul Kiesel, at last week’s Board of Trustees’ meeting, scoffed at the contention that these two “losers” should not be appointed, asserting that Padilla and Wilson cannot be so denominated because only about 10 percent of the membership voted. That is, of course, a non sequitur. The fact that there was only about a 10 percent “turnout” of voters does not negate there having been a landslide victory for the alternative slate in the balloting. A huge majority of the members who truly care about the organization, and voted, made clear their displeasure with the way it is being run. I would suspect that the percentage of those with a keen concern as to the governance of LACBA and the course it is to take was quite close to 100 percent.
The unavoidable fact is that Padilla and Wilson were rejected by those who voted. Stevens thwarted the will of the electorate. She failed to listen to the “vox populi” of the association—or, as a highly prominent member of the bar commented to me in an email, showed herself to be “totally tone deaf and supremely arrogant” which, the correspondent observed, “is what incited the insurrection in the first place.”
Stevens also appointed Sarah Luppen Fowler as an assistant vice president and Duncan Crabtree-Ireland as treasurer. Both were supporters of the Nominating Committee’s candidates.
Ordinarily, a new president of any organization or political entity can be expected to appoint those of like mind, and doing so does not constitute cronyism. But ordinary circumstances do not here prevail. Stevens steps into the role of president as a member of a disfavored faction.
In remarks she offered Thursday night after taking the oath of office, she said:
“We…face internal challenges in our bar: challenges of transparency, of support, of communication and—you may have heard—we had an election.”
Stevens called for cohesiveness, and asked that “trust” be vested in her.
By failing to extend an olive branch, declining to appoint at least one reform-minded person to a post in her administration, she signaled that the year will be one in which there will, unfortunately, be “them” and “us” factions.
One person suggested as an appointee was Sheri Bluebond, chief judge of the Bankruptcy Court for the Central District of California. Bluebond had gathered well beyond the 100 signatures required for nomination-by-petition, but backed out of the race for a position as a trustee when an ethical canon was brought to her attention which she construed as precluding her candidacy. The only factor precluding an appointment of her was Stevens’ unwillingness to be accommodating.
In appointing Fowler, Stevens made a particularly unfortunate choice.
LACBA Central imperiously forbade discussion of the election on section listservs, but did set up a listserv exclusively dedicated to such discourses. One of those commenting on it was Fowler, who declared, in ipse dixit fashion:
“I am very disappointed and upset that some of the emails on this listserv in veiled, and sometimes not-so-veiled, ways attempt to accuse the nominated slate of corruption, insular practices, hiding information, and more. That is wrong information and it is not the way we should treat our fellow members of this organization and colleagues.”
Fowler failed to draw attention to any particular allegation put forth on the listserv concerning secrecy within the organization that was “wrong.” The reader was expected to simply accept her representation that unspecified tommyrot had been propagated by the dissidents.
The truth is that financial information that clearly ought to be made public has been, and is being, withheld.
Last year, former LACBA President John Carson (now chair of the Council of Sections) requested information on LACBA’s finances, acting in his capacity as chair of the Senior Lawyers Section (a post he holds through Thursday). He was told that he had failed to demonstrate a need to know.
The County Bar is a mutual benefit nonprofit corporation. The right of LACBA members to financial information is, under the Corporations Code, conditional. Legitimacy of the interest of a LACBA section in how section dues (as well as general membership dues) are being spent should not be subject to debate.
Be that as it may, what there can be no possible quibbling over is that, under code, the right of directors of a corporation—denominated by LACBA as “trustees”—have an absolute right to access financial reports. Jo-Ann, as trustee, requested the organization’s “990” tax returns. They were not immediately provided.
LACBA Central has trumpeted that it posted recent 990s on its website. That posting came a matter of days after Jo-Ann had obtained the 990s from the Internal Revenue Service, to a limited extent disseminated them, and advised LACBA’s general counsel that she had obtained them on her own.
During the campaign, selected portions of a recent audit were cited by Nominating Committee candidates, while the audit in its entirety were not provided to the reform candidates, let alone to the membership.
I’m told that Chief Executive Officer Sally Suchil’s contract, when she was initially hired as executive director, was not made available to the Board of Trustees. It is not available now—though it has emerged that she arrives at the office around 4 p.m. and receives, with benefits, in the neighborhood of $400,000 a year.
As a member of LACBA (and of a section executive committee), I could not obtain from LACBA a copy of its bylaws.
Secrecy in LACBA is pervasive. Unavailability of information was chronicled on the election listserv. Yet, Fowler blithely challenged the verity of recitations of that which is so, and portrayed as a breach of collegiality the criticism, in the course of an election, of those who have fostered concealment of critical information from the membership.
The appointment of Padilla and Wilson was offensive; the appointment of Fowler was yet fouler.
Stevens’ other appointee, Crabtee-Ireland, struck me at the Nov. 18 Board of Trustees’ meeting as Kiesel’s obsequious minion. However, my wife, who has worked with Crabtree-Ireland on the LACBA delegation to the Conference of California Bar Associations (she headed the delegation last year), speaks highly of him.
After 50 years of marriage, as of June 19, I have come to realize that my wife’s instincts are, with extremely rare exception, correct. I presume them to be so, in an overall sense, with regard to Crabtree-Ireland.
Yet, he did say, on the election listserv:
“In troubled times it can be tempting to vote for the protest, hoping that some unspecified plan can bring back the good old days. But the truth is that running a complicated organization like LACBA is hard, and involves hard choices. If and when I hear a compelling plan of action or a rationale other than protest for a particular candidacy, I’ll be there.”
I don’t know how he could have missed the plan of action that was clearly articulated. It was, in two prominent respects, to make information about LACBA’s finances readily available to members and to stop giving away money to causes when it is suffering a deficit.
More broadly, the plan is to cease doing all that has caused the financial crisis and the drastically diminished membership, and which has spawned a lack of confidence in the leadership and the upper echelon staff.
As of Dec. 31, 2014, Counsel for Justice—formerly a separate foundation, now a charitable arm of LACBA—owed the association $2.3 million (largely representing the value of services and resources). In that year, $546,375 in indebtedness was forgiven, and that year LACBA reported a loss of $949,121.
Charity is, in general, commendable, but giving away gobs of money and forgiving debts in times of financial peril is lunacy. Meyer, the successful reform candidate for president-elect, said in his candidate statement:
“Pro bono and charitable endeavors should continue to be priorities, but we need to ensure this is done on a fiscally sound basis and not duplicative of, but supplemental to, the fine efforts of other organizations, such as Public Counsel and Bet Tzedek.”
William L. Winslow, who won a seat on the Board of Trustees, remarked in his statement:
“The great question is whether LACBA will ruin itself financially, having finished in the red for many years. Reform must end outsized subsidies to pro bono programs.”
He went on to comment:
“LACBA donated millions to pro bono legal services. It has (a) appropriated Section reserves, (b) violated its by-laws requiring separate accounting for each Section, (c) understaffed Section activities, and (d) engaged in deceptive accounting by lopsided overhead allocations. For years LACBA has refused to provide accurate financial reports.”
Reform candidate Ronald F. Brot, who was elected as a trustee, declared:
“LACBA was created as an association of lawyers, by lawyers, for lawyers. Yet our members feel unheard, and our practice Sections feel marginalized. Section leaders are censored and barred from expressing views contrary to LACBA leadership. LACBA refuses to provide Section member contact information to Section Chairs. Cooperation has been replaced by cynicism and distrust. I will seek to address these challenges and others, such as years of deficit spending, a lack of financial transparency, and declining services by LACBA’s large staff….”
I do not think that Crabtree-Ireland can genuinely claim befuddlement as to just what the reform candidates were promising to do differently.
Not only is the wisdom of Stevens’ appointments questionable, but so is the legitimacy of her having made them when she did.
Outgoing trustee Jeff Westerman raised the point, at the June 21 board meeting, that confirmation of the appointees was a matter that should be put before the incoming board. The trustees rejected his contention…but it does appear to have merit.
A bylaw provides:
“The Association shall have a Treasurer, Secretary, Chief Executive Officer, Assistant Vice Presidents, and such other Officers as the President may from time to time appoint, subject to approval by the Board of Trustees.”
On June 21, Stevens was still president-elect. She was powerless to make the appointments, and will continue be so until Friday, when she takes office. The bylaw obviously envisions confirmation of the appointees by the board sitting in the year the appointments are to take effect.
Former LACBA President Harry L. Hathaway has this reaction to what Stevens did:
“The bylaws are clear. Her action was ultra vires. And she must make her appointments when she is legally in office subject to approval of Trustees.”
Stevens botched the opportunity for conciliation, through her appointments. Echoing my wife’s concern, I would hope that she does not antagonize those who spearheaded the election-upset by persisting in forming a panel comprised of trustees and section leaders in an effort to decelerate activities of the Council of Sections. From what I’ve seen of the resolve of the principal members of the council, such a ploy would fail, would provoke, and would be counter-productive.
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