Opinion ID: 1820486
Heading Depth: 1
Heading Rank: 3

Heading: specification number threeduty to disqualify

Text: 1. The general allegations hereinabove recited are incorporated herein as if set forth verbatim; 2. On or about March 14, 1983, Paul L. Douglas in his capacity as Attorney General was notified by virtue of a letter received from the Federal Bureau of Investigation of certain transactions, which were possibly criminal in nature, occurring at Commonwealth Savings Company, and which were similar in nature to certain transactions in which he had engaged in at Commonwealth Savings Company; 3. In the spring of 1983, Paul L. Douglas was informed that Marvin Copple may be guilty of crimes involving Commonwealth Savings Company; 4. In July of 1983, Paul L. Douglas was informed that Marvin Copple may be guilty of crimes involving Commonwealth Savings Company; 5. That at all pertinent times, Paul L. Douglas was acting in his capacity as Attorney General of the State of Nebraska; 6. That notwithstanding Paul L. Douglas' previous business relationships with Marvin Copple and Commonwealth Savings Company, Paul L. Douglas acting in his capacity as Attorney General of the State of Nebraska, accepted employment from the State of Nebraska regarding possible criminal activities involving Marvin Copple or Commonwealth Savings Company without obtaining the consent of his client, the State of Nebraska, after full disclosure at a time when the exercise of his professional judgment on behalf of his client, the State of Nebraska, would be or reasonably might be affected by his financial, business, property, or personal interests; 7. Notwithstanding Paul L. Douglas' previous financial and business dealings with Marvin Copple or Commonwealth Savings Company, Paul L. Douglas failed to decline proffered employment from the State of Nebraska respecting the possible criminal activities regarding Marvin Copple or Commonwealth Savings Company at a time when the exercise of his independent professional judgment, in behalf of his client, the State of Nebraska, was or might likely be, adversely affected by the acceptance of the proffered employment; 8. As a consequence of such actions, Paul L. Douglas did violate: A. The Code of Professional Responsibility adopted by the Nebraska Supreme Court, specifically including, but not limited to, DR 5-101(A); or, B. The Code of Professional Responsibility adopted by the Nebraska Supreme Court, specifically including, but not limited to, DR 5-105(A). To attempt to prove this charge, the State does not point to any constitutional provision or statute, but rather relies solely on the claimed infractions of Canon 5, DR 5-101(A) and DR 5-105(A), of the Code of Professional Responsibility. DR 5-101(A) provides: Except with the consent of his client after full disclosure, a lawyer shall not accept employment if the exercise of his professional judgment on behalf of his client will be or reasonably may be affected by his own financial, business, property, or personal interests. The language of DR 5-105(A) is as follows: A lawyer shall decline proffered employment if the exercise of his independent professional judgment in behalf of his client will be or is likely to be adversely affected by the acceptance of the proffered employment, or if it would be likely to involve him in representing differing interest, except to the extent permitted under DR 5-105(C) [not applicable]. As we have pointed out earlier in this opinion, the violation of the Code of Professional Responsibility may form the basis for a disciplinary proceeding, but such violation does not, per se, constitute an impeachable offense. However, the same conduct which may constitute a violation of the disciplinary regulations may amount to such a breach of the defendant's official responsibilities as to constitute negligent conduct. We believe that the Attorney General had the duty of serving the public with undivided loyalty, uninfluenced in his official actions by any private interest or motive whatsoever. As stated by Chief Justice Vanderbilt of the Supreme Court of New Jersey, in Driscoll v. Burlington-Bristol Bridge Co., 8 N.J. 433, 474-76, 86 A.2d 201, 221-22 (1952): They [public officers] stand in a fiduciary relationship to the people whom they have been elected or appointed to serve.... As fiduciaries and trustees of the public weal they are under an inescapable obligation to serve the public with the highest fidelity. In discharging the duties of their office they are required to display such intelligence and skill as they are capable of, to be diligent and conscientious, to exercise their discretion not arbitrarily but reasonably, and above all to display good faith, honesty and integrity.... They must be impervious to corrupting influences and they must transact their business frankly and openly in the light of public scrutiny so that the public may know and be able to judge them and their work fairly.... These obligations are not mere theoretical concepts or idealistic abstractions of no practical force and effect; they are obligations imposed by the common law on public officers and assumed by them as a matter of law upon their entering public office. In Copple v. City of Lincoln, 202 Neb. 152, 167, 274 N.W.2d 520, 528 (1979), this court cited the following language from another New Jersey case: `The decision as to whether a particular interest is sufficient to disqualify is necessarily a factual one and depends on the circumstances of the particular case.' The substance of the third specification is that notwithstanding that the defendant had been advised in March of 1983 that certain transactions of a possible criminal nature had occurred in the operations of Commonwealth, similar in nature to [those] in which he [the defendant] had engaged, and notwithstanding that in July of 1983 the defendant had been advised of possible criminal actions of Marvin Copple, with whom the defendant had become involved in some rather bizarre business dealings, he nevertheless accepted employment from the State of Nebraska regarding those various activities without disclosing the nature of his previous relationship with Copple and Commonwealth, and he failed to decline proffered employment from the State of Nebraska. We feel compelled to state at this point that we were furnished with no details as to the time of occurrence or nature of the transactions, which were possibly criminal in nature, which prevents us from fully exploring the scope of the defendant's alleged conflict of interest. However, one of the problems with the charge as specified is that it really does not fit this situation. The defendant in this case was employed by the State of Nebraska before, during, and after his extracurricular dealings. There were no statutory provisions precluding outside employment on the part of the Attorney General in effect at the time. By case law, a public officer is not necessarily required to give every instant of his time to the public service in such a sense that he cannot, if wholly consistent with public duties, perform any other service or earn money from any other source. State v. Hinshaw, 197 Iowa 1265, 198 N.W. 634 (1924). Nevertheless, we believe that Douglas had a duty to avoid entanglements which potentially could cause a division of his loyalties. Because he did not choose to do so, we must examine his personal situation as of the spring of 1983. The defendant had engaged in a series of intricate real estate dealings with Marvin Copple, commencing in about 1977. These are set forth in considerable detail in other portions of this opinion. The conclusion of those transactions occurred on July 20, 1979, when Marvin Copple was paid for the last of the lots purchased by Douglas and Galter. In addition, the defendant did certain other work for Marvin Copple, during the years 1978, 1979, and 1980, for which he was paid the sum of $32,500. Altogether, Douglas devoted approximately 1,500 hours to his dealings with Copple. During this same period of time, the defendant had made several loans with Commonwealth. With the payoff of the final loan in the amount of $54,048.51 on September 7, 1982, his business relations with that institution apparently ceased. However, the source of funds used to repay that loan was a $55,000 loan from First Security Bank & Trust Co. of Beatrice, Nebraska, an institution with a management familial relationship with Commonwealth. That loan was paid in full on November 25, 1983. As nearly as can be determined from the record, no business relationship existed between Douglas on the one hand and Copple and Commonwealth on the other hand as of March 14, 1983. Therefore, it cannot be said that Douglas was at that point actively representing interests which conflicted with those of the State. The State would seem to argue, however, that the defendant's enthusiasm for investigation of, and judgment as to possible prosecution for, insider loans to Marvin Copple might very well be dimmed by the fact that the defendant's own personal interests and conduct may have been a link in the chain of alleged illegal activities. Certainly, such thoughts have occurred to a number of people. However, there is no evidence that Douglas acted in the discharge of the responsibilities of his office any differently than he would have, had the unfortunate prior dealings never occurred. According to the practices and procedures of that office, the Department of Banking and Finance would have remained primarily obligated to investigate the condition of Commonwealth and other financial institutions. An assistant attorney general would have been assigned full time for the general investigative and legal work required by the Department of Banking and Finance. That assistant attorney general would have been directed by the Department of Banking and Finance and would have been directly responsible to Deputy Attorney General Gerald Vitamvas. That is exactly how this case was handled; and the work performed by the assistant attorney general assigned to the Department of Banking and Finance to investigate many financial institutions, including Commonwealth, was done in a professional manner and was thoroughly acceptable to the department. The Attorney General did have the appearance of possessing a conflict of interest, and normally should have made a full public disclosure. However, when one considers that the Department of Banking and Finance was interested in avoiding prosecution, if possible, and even in avoiding adverse publicity so as not to cause the house of cards to come tumbling down, the defendant's reticence to rock the boat is understandable. These facts are set forth in great detail in our discussion of specification No. 5. In order to warrant a finding of guilty, we must conclude beyond a reasonable doubt that the defendant's conduct rose to the level of willful neglect with a corrupt intention or that it amounted to gross negligence accompanied by such a flagrant disregard of his duty as to warrant an inference that it was done willfully and corruptly. On the basis of the record before us, we cannot do so.