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Commissioned Report:
Girardi Gave $1 Million-Plus to State Bar Investigator
Law Firm’s Probe Reveals Ties to Disciplinary Agency’s Employees
By a MetNews Staff Writer
The State Bar of California released a report yesterday prepared by an outside law firm detailing how staff members—including then-Executive Director Joe Dunn and then-Interim Executive Director Bob Hawley—acted to shield Tom Girardi, now disbarred, from discipline, and telling of gifts to an investigator for the agency’s disciplinary arm and his wife exceeding $1 million.
Ruben Duran, chair of the State Bar Board of Trustees, termed the employees’ conduct as “frankly shocking.” His comments came in an email to State Bar licensees with a link to a news release that, in turn, had links to the report prepared by the downtown Los Angeles law firm of Halpern May Ybarra Gelberg LLP (the “May Report”).
That firm was hired in January 2022 to look into why Girardi, who is now facing criminal prosecutions in two federal courts for alleged mail fraud and other crimes, had for decades enjoyed apparent impunity from disciplinary actions.
Also released was a heavily redacted report by Westlake Village attorney Alyse Lazar, who was retained by the State Bar in 2021 to go through 115 files relating to complaints against Girardi that led to no action.
Duran’s Email
Duran said in the email:
“The May report found that Girardi intentionally cultivated relationships at the State Bar and it spotlights nine individuals at all levels who accepted his largesse and failed to report it, creating conflicts of interest. The report details several instances in which the involvement in Girardi cases of conflicted individuals tainted the discretionary decisions they made on behalf of the State Bar, and as a result, the Girardi cases they worked on were improperly closed.
“Collectively, the reports provide a dear and comprehensive view of how Girardi’s unethical and unacceptable behavior went unchecked for so long. What happened was wrong, and the Board of Trustees does not condone it. A failure of this magnitude does tremendous damage to public trust, not only in the State Bar, but in the legal profession as a whole.”
He added that “none of the staff whose unethical…behavior is described in the May report are still at the State Bar, and most of the concerning conduct occurred before 2018.”
Gifts to Investigator
The report reveals that Tom Layton—a long-time State Bar investigator who became a public information officer and was fired in 2015—was, along with his wife, a beneficiary of the largesse of Girardi’s firm, Girardi | Keese (now defunct). Layton was frequently in the company of Girardi at events and at restaurants and functioned as his errand boy.
The report says:
“[W]e found evidence indicating that Girardi, through his law firm, gave Layton and his family cash and things of value that we estimate total over a million dollars. This includes cash as well as payment for Layton’s expenses, car payments, travel, legal representation, and meals. Many of these benefits were provided to Layton while he worked at the State Bar.”
Firm Credit Card
One benefit the firm conferred on Layton was giving him a Girardi | Keese American Express card in 2011, the report says, elaborating:
“…Layton told us that he used the credit card for expenses related to driving Girardi, such as gas and meals. Layton vacillated between telling us that the reason he had the card was to cover Girardi-related expenses, and that Girardi gave him the card to compensate him for the mishandling of several personal legal matters. Layton’s testimony on this point was difficult to understand.
“We were unable to determine how much Layton charged to his Girardi Keese credit card while he was employed by the State Bar. In the Girardi Keese Chapter 7 Trustee’s lawsuit against Layton. the Trustee alleges that Layton charged $315.114 on his Girardi Keese American Express card between December 18, 2013 and December 18, 2020, which is approximately $45,000 a year.”
The May report comes close to accusing Layton of perjury. It notes that in 2014, he filled out a Form 700 (a Fair Political Practices Commission “Statement of Economic Interest”) requiring disclosure of all “gifts, loans, and other payments received” from State Bar licensees and, though he executed the form under penalty of perjury, he said there was nothing to declare for the relevant period.
“[I]t appears that this was not accurate,” the report says.
Dunn’s Conduct
Dunn, a former state senator from Orange County, was fired by the State Bar as executive director in 2014 for allegedly misappropriating the agency’s funds. He is now facing disciplinary charges, though some of the allegations were dismissed by a State Bar Court judge last month.
Yesterday’s report from the law firm, which the State Bar terms the “May Report,” tells of the firing of four attorneys in the Office of Chief Trial Counsel (“OCTC”) by Dunn and by Hawley, then his deputy, saying:
“Considering all of the evidence, we believe that it is more likely than not that Dunn was the driving force behind the terminations. Further, there is reason to believe the firing may have been motivated by Dunn’s connections to Girardi. We understand that this was the first time the Executive Director’s Office directed the termination of OCTC employees, and that this has not happened again….When you combine these facts with Dunn’s connections to Girardi and the fact that two of the tired attorneys had recently advocated for discipline against Girardi, there is reason to believe the terminations were based, at least in part, on Girardi’s influence at the State Bar.”
Hawley’s Involvement
The report accuses Hawley of a “clear breach” of ethics in connection with a complaint that Girardi had misled a judge and testified falsely in a deposition. In light of a conflict, outside counsel had to be selected, and Hawley made the selection. A memorandum was prepared in that attorney’s name recommending that no disciplinary action be taken. It was actually Hawley who drafted the memorandum, the report relates, adding:
“In May 2015, and without telling the Board that he ghostwrote it, Hawley sent the memorandum to the Board, along with a memorandum in his own name recommending the Board approve the closure of the case and the Board accepted the recommendation.”
The report comments:
That this would happen for any case is troubling but it is especially concerning because the complaint implicated [REDACTION] and Hawley’s actions (whether or not this was the intention) helped protect the State Bar and [REDACTION].
Investigator’s Ties
Attorney Murray Greenberg, a State Bar investigator from 1989 until his retirement in 2019, “appears to have had a many-year relationship with Girardi,” the report sets forth, adding:
“While employed by the State Bar. Greenberg was invited to parties thrown by Girardi and Girardi Keese. such as Superbowl, Christmas, and Thanksgiving parties. He was also included on Girardi Keese’s guest lists for events such as the Jack Webb Award dinner and the National Italian American Foundation West Coast Gala. Emails also show that Greenberg accepted two tickets to an Adele concert in 2016. and an unknown quantity of Santana tickets in January 2019 from Girardi Keese.”
The May Report states:
“We have evidence that Greenberg was involved in closing six Girardi cases without public discipline.”
Others Mentioned
Sonja Oehler was Dunn’s executive assistant when Dunn was executive director and, like him, was fired in 2014. The report says she “received gifts and things of value from Girardi and Girardi Keese,” including being flown on Girardi’s private plane to the District of Columbia and fired staying at the St. Regis Hotel there at Girardi’s expense.
John Noonen was fired in 2015 as managing director of investigations for the OCTC. The report tells of his acceptance of gifts from Girardi—and stating on his Form 700 that he had nothing to report—and contends that in light of his “familial and personal connections to Girardi” he should have kept his hands off of two investigations of Girardi.
“We conclude that Noonen’s connections to Girardi taint the handling of these cases and the discretionary decisions to close them without public discipline.” The document says.
Others are also discussed.
Separate Report
Lazar said in her report:
“The vast majority of the complaints filed against Girardi alleged either violations of the State Bar’s trust account rules and/or performance and communication issues. In these areas, patterns of repeated conduct emerged over time, but appear to have been ignored by staff as well as some of the special deputy trial counsel. There was even a reticence to issue warning letters which would have put Girardi on notice that his conduct was violative of the Rules of Professional Conduct and/or State Bar Act.”
Both reports were critical of the determination by then-San Francisco lawyer Jerome Falk (now on inactive status), acting as outside counsel, that no discipline should be imposed on Girardi in connection with his effort to enforce a judgment against a non-party. Outside counsel was appointed because then-State Bar President Howard Miller was a law partner of Girardi.
Although Falk’s identity was a public matter, and his name appeared in news reports at the time, Lazar’s report refers to him as an “outside examiner” and the May Report terms him “OUTSIDE ATTORNEY C.”
Lazar’s Discussion
Lazar wrote:
“The Ninth Circuit formally reprimanded Girardi for his participation in bringing and pursuing a case before the court against the wrong defendant (The Dole Company) to enforce a foreign judgment from Nicaragua obtained by default after the foreign court barred Dole from participating in the case and explicitly holding that the judgment was not against The Dole Company. Girardi’s conduct was aggravated in that after he found out the true facts, he wilfully failed to take any action to dismiss the appeal and instead pursued further inappropriate actions by opposing defendant’s efforts to provide the court with the accurate documents to show a lack of jurisdiction.
“The outside examiner incorrectly concluded that the federal reprimand was sufficient, hi fact, had similar discipline in the form of a public reproval been imposed on Girardi, it would have necessarily contained additional standard conditions including but not limited to reporting requirements to The State Bar’s probation department, taking and passing the multistate professional responsibility exam, and possibly tailored provisions to address the misconduct. A public reproval would have been the lowest level of discipline that could have been imposed due to Girardi’s prior private reproval. The Slate Bar Court may have ordered suspension or at least stayed suspension especially in light of the fact that Girardi’s conduct in this matter negatively impacted hundreds of his clients involved in the litigation as well as being a significant burden on the court and opposing parties. Instead, Girardi’s record with the State Bar continued to be sheltered from public disclosure.”
Dissenter Fired
The May Report says that “[s]everal OCTC attorneys vehemently disagreed with OUTSIDE ATTORNEY C’s decision to close the case” and one, denominated, “OCTC ATTORNEY 2,” in June 2011 contacted the State Bar Board of Governors expressing that view. That lawyer was fired on July 6, 2011.
Girardi, 83, has been diagnosed with Alzheimer’s disease and dementia. U.S. Magistrate Judge Karen L. Stevenson of the Central District of California has ordered that a determination be made as to his competency to stand trial.
Accused of embezzling funds of multiple clients, he has been indicted here and in the Northern District of Illinois.
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