Girardi Probe Shows Internally Corrupt California State Bar (1)

California’s mandatory-membership state bar faces increased criticism and scrutiny in the wake of a pair of independent reports detailing how the now-disbarred and indicted plaintiffs’ attorney Thomas Girardi infiltrated and corrupted an agency that was supposed to be protecting the public from people like him.

The redacted reports released Friday paint a picture of a state regulator compromised by workers, allegedly influenced by Girardi’s bestowal of gifts, who blocked and buried complaints against the famed attorney and his now-bankrupt Girardi Keese law firm. The white papers likely precede even more uncomfortable hours for bar executives before legislative leaders and jurists.

What the reports show “is that the Bar was systematically bought off by a mafioso like lawyer,” Carol Langford, a University of San Francisco adjunct law professor who defends attorneys before the bar, said in a Friday email. “What makes it sickening is the Bar itself—the ruling body—was self serving and self dealing all while prosecuting solo practitioners.”

“Even worse, they allowed the bad players to jump out with golden parachutes and so far pay no price for their actions,” Langford said.

Leaders of the quarter-million member organization met with reporters on Monday to discuss the reports, the results of separate probes conducted by the law firm of Halpern May Ybarra Gelberg LLP, and by attorney Alyse M. Lazar.

At least nine former bar employees or board members had connections to Girardi or accepted items of value, travel, or meals from him while working for the bar or as board members, the Halpern May report said. Many of Girardi’s relationships with bar insiders and gifts weren’t appropriately divulged as part of their conflicts-of-interest disclosures, the firm’s study said.

“Mr. Girardi is sort of the poster child for a system that was having a hard time doing its main job of regulating and disciplining attorneys, and there are, we suspect, many reasons for that situation to have occurred really going back to the founding of the organization more than 90 years ago,” bar board of trustees Chairman Ruben Duran told reporters on Monday.

The agency received the investigators’ reports Feb. 4 but delayed their release “because we were cooperating with a law enforcement agency and we were not able” to publicly share the report, Ellin Davtyan, bar general counsel, said during the same press conference. Bar officials declined to name who was being investigated either in the Girardi Keese firm or within the bar.

Imperfect System

The reports are the latest to reveal the culture within the bar that allowed Girardi to rack up 205 disciplinary cases against him over four decades. The bar used nonpublic private reprovals, closed complaints at intake, after investigation, and before the complaints were filed to dispatch the grievances filed against the famed Southern California plaintiffs’ attorney.

“I know there are lot of people who are very upset right now. And I can understand how there would be calls for tearing it down and starting over again,” Duran said. The job of regulating attorneys is a huge one, “and it’s not going to be perfect. And what we’re doing is a very hard look at ways that we can and should improve our system both in response to the legislature and the state auditor” and the public, he said.

Senate Judiciary Committee Chairman Thomas Umberg told Bloomberg Law on Friday he found the reports “shocking in the lack of transparency and oversight and conflicts of interest that were not addressed” by the bar.

Lawmakers will hold a bar oversight hearing in the coming months, which will “be an opportunity to demonstrate that they have taken the appropriate corrective action and that they’ve addressed the issues of accountability and transparency,” Umberg said.

Lazar was hired to review 115 of 130 complaints filed against Girardi from 1982 to January 2021. Forty-four raised possible client trust account issues, and 38 alleged failures to competently or diligently perform legal services, to communicate with the client, or to take appropriate actions when withdrawing from employment, according to her separate report. The remainder complained about other ethics violations including dishonesty, failing to comply with conflicts rules, violating reporting requirements of Business and Professions Code §6068(o), and interfering with other attorneys’ representation of their clients.

“Girardi’s fame and fortune may have impacted the decision to erroneously close” at least 19 cases when they warranted “at the very least a warning letter and in some cases pursuit of actual discipline in the State Bar Court,” her report said. Nine other cases were insufficiently investigated.

Girardi has been disbarred and declared incompetent. He is charged in two federal courts with wire fraud for allegedly stealing from clients, and has entered pleas of not guilty. Both Girardi Keese and Girardi individually were involuntarily forced into bankruptcy.

Shared Oversight

The California Supreme Court oversees licensing and discipline of lawyers while the California Legislature regulates attorneys under the Business & Professions Code. That legislative oversight includes setting licensing fees.

Umberg in 2021 introduced an annual fee bill with zero licensing fees to push the agency to hire a permanent chief trial counsel. He again threatened a zero-fee bill this year.

“The legislature does not have exclusive authority concerning bar oversight, but we do have the ability through a fee mechanism to provide some consumer protection,” Umberg said.

In a statement sent late Friday, the state’s Supreme Court said separating the bar’s regulatory and professional association functions and eliminating elected board members in 2018 “were important reforms designed to reduce undue influence and to better focus the agency’s mission to protect the public and regulate the profession.”

The court said it will closely study the report and work with the bar “to consider whether the reform measures already taken by the agency are adequate to prevent similar failings in the future.”