Accusations fly as State Bar of California leader Joe Dunn fights ouster

By Maura DolanStaff Writer

Dec. 6, 2014 5:20 PM PT

Reporting from SAN FRANCISCO — The agency that regulates California’s lawyers is once again beset with conflict, riddled by accusations involving expense accounts and ethics.

The turmoil became public last month when the board of the State Bar of California fired its executive director, Joe Dunn, a former state senator from Orange County.

Dunn did not go quietly.

He hired high-profile Los Angeles lawyer Mark J. Geragos and filed a lawsuit charging the bar with “egregious improprieties.”

Dunn’s critics fired back by revealing that a confidential report commissioned by the board found Dunn had spent $5,600 for a party at a Los Angeles restaurant and that a former bar president had filed an expense account report for $1,000 at Tiffany & Co.

The acrimony threatens to further diminish the reputation of the bar, an arm of the California Supreme Court that oversees nearly 250,000 lawyers and is charged with rooting out corrupt attorneys and upholding high moral standards.

Some lawyers and lawmakers have long criticized the bar as bloated, political and lenient on errant lawyers. Upheaval in the 1990s almost led to the organization’s demise, and there have been various efforts to make it less a trade organization and more a regulatory agency.

“The bar is just further descending into a banana republic,” said Golden Gate University law professor Peter Keane, who tried unsuccessfully decades ago to overhaul the association. “It is totally dysfunctional and should be unraveled.”

Funded largely by mandatory lawyers’ dues, the bar is a public corporation that regulates, disciplines and licenses attorneys, subject to the approval of the state high court. Becoming a bar leader is considered a steppingstone to a judgeship and a way to enhance a resume or attract clients.

Dunn, a former trial lawyer hired four years ago, was earning $259,000 a year when he lost his job, overseeing 500 employees and an organization with a $138.6-milllion budget.

Shortly before Dunn was fired, he filed an anonymous “whistle-blower” complaint alleging, among other things, that a bar official was manipulating records to hide a huge backlog in untended complaints against lawyers. Dunn later identified himself as the whistle-blower and said he was fired in retaliation for the complaint.

The bar suggested in a prepared statement that Dunn knew he was going to be fired before filing the complaint, a charge Geragos called “totally untrue.” The statement said Dunn was being investigated because of a complaint by a high-level executive — the same bar official Dunn had accused of misconduct.

The highly public fight is expected to cost the bar hundreds of thousands of dollars in legal fees and could lead to efforts to restructure the organization. The Legislature must pass bills each year authorizing the bar to collect dues, and two governors have vetoed such bills, calling the bar wasteful, partisan and racked by “chronic disharmony.”

“I think there are going to have to be major changes,” said Arthur L. Margolis, who defends lawyers before the bar and advises other attorneys on legal ethics, “to protect whatever credibility” the bar has left.

Dunn’s lawsuit alleged “ethical breaches, prosecutorial lapses and fiscal improprieties” within the bar.

He accused the bar of paying a private law firm $300,000 — with three law partners each billing $800 an hour — to investigate him even though a former judge had offered to do it for free. The purported hourly fee galled many lawyers, who must pay bar dues. Most earn far less than $800 an hour. The bar has refused to confirm the amount spent on the investigation.

The target of Dunn’s wrath was Craig Holden, a partner at Lewis Brisbois Bisgaard & Smith, one of L.A.’s largest law firms, who became bar president in September in an uncontested election. Dunn, who reported to the bar’s board, accused Holden of orchestrating his ouster, possibly because Holden wanted the job himself.

Holden, whose bar position is volunteer, said he laughed at that charge. The bar said Dunn’s lawsuit was “baseless.”

After Dunn filed his lawsuit, details of the outside law firm’s confidential investigation into Dunn became public. People with access to the report shared its contents with The Times and two legal newspapers.

The investigation, ordered by the bar’s trustees, found that Dunn had submitted an expense report for $5,600 for an event in July at 10e, a Los Angeles restaurant owned by Geragos. Geragos said the expense was for a going-away event for former bar President Luis Rodriguez, a Los Angeles deputy public defender whose one-year term ended in September.

The report also said Rodriguez submitted an expense for $1,000 at Tiffany. Rodriguez, asked about the expense, said any suggestion of impropriety was “maddening.”

Rodriguez said bar presidents are given $30,000 annual stipends, and he used part of that to buy gifts for the bar’s trustees as a gesture of appreciation as he was leaving. He said the gift giving was a tradition.

“Every president before me has given a gift, and he or she is free to use that money,” Rodriguez said.

Rodriguez presented the trustees with pens from Tiffany. He referred further questions to his lawyer.

A bar spokeswoman said presidents have been given up to $30,000 a year since 2006 for “secretarial assistance, miscellaneous expense and travel expense.”

The money for the stipend and the going-away party came from mandatory bar dues, which this year cost most practicing lawyers $420 each.

Under a 1990 U.S. Supreme Court ruling, mandatory bar dues may be spent only on regulating the profession and improving legal services to the public. A spokeswoman for the bar said expenses such as gifts and dinners will be paid from other revenues in the future — a policy instigated by Holden when he became president.

Disclosures from the confidential report infuriated Dunn’s supporters. Geragos described the ouster of Dunn as “a power play” and said Dunn was never allowed to hear or respond to the charges, which included cronyism and misleading the board.

Geragos blamed the bar board for revealing the contents of the report on Dunn to journalists, and warned that any lawyer who divulged the findings could face legal discipline.

The feud is drawing attention in legal circles in California and elsewhere.

“Lawyers in California and legal ethicists around the country are wondering if there is something systematically problematic with the state bar,” said John Steele, who teaches legal ethics at UC Berkeley’s law school.

Or, Steele added, the internal squabbling may amount to just another particularly bad bout of turbulence.

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Twitter: @mauradolan