Government lawyers who suspect wrongdoing within
their agency can blow the whistle without violating client
confidentiality rules under an amendment to ethics rules approved by
the State Bar Board of Governors. The proposal goes to the Supreme
Court for action.
The amendment to rule 3-600 of the Rules of
Professional Conduct offers a mechanism for government lawyers to go
outside their agency to report serious misconduct while protecting
them from discipline by the bar for violating their ethical duties.
The knotty issue has been under consideration
since Department of Insurance lawyer Cindy Ossias leaked documents to
the Assembly Insurance Committee that contributed to the downfall of
former Insurance Commissioner Chuck Quackenbush.
Ossias provided information about secret
settlements Quackenbush had reached with six insurance companies after
the 1994 Northridge earthquake. The settlements allowed the companies
to donate money to private foundations that Quackenbush created rather
than face possible fines for mishandling claims.
Ossias subsequently was investigated and
exonerated by the bar, which found that her actions not only were
protected by California's Whistleblower Act but, more importantly,
"advanced . . . public policy considerations bearing on the
responsibilities of the office of insurance commissioner."
The California Attorney General later issued a
differing opinion that the state's whistleblower law does not
supercede the attorney-client privilege, putting government lawyers in
The bar's Committee on Professional
Responsibility and Competence wrestled with the issue for more than a
year, revising the rule several times with input from municipal
attorneys, the bar's Public Law Section, the County Counsels'
Association of California and Assemblyman Darrell Steinberg, who
authored a bill - AB 363 - to address the problem.
One proposal, which was returned to the drawing
board, drew 19 letters of comment which reflected deeply divided
The final version, while not universally
accepted, seemed to draw a good deal of support. At the bar board's
January meeting, former attorney general John Van de Kamp, who now
represents Los Angeles, said, "Public protection is important, and
this offers an escape valve to make sure the public is protected."
Santa Clara County Counsel Ann Ravel, who is
sitting on the board temporarily, also offered support for the rule
change. "This rule, we think, is the best possible rule," she
said. "It has gone further than the Cindy Ossias situation and will
be helpful to public lawyers."
The proposed change specifies what a lawyer
should do when faced with different types of misconduct. For example,
when the wrongdoing appears serious (involves a crime, fraud, misuse
of public funds, breach of fiduciary duty or "is likely to result in
substantial injury to the organization), or if the suspected
individual is the agency's top executive, the lawyer may refer the
matter to law enforcement or "any other governmental agency or
official" charged with oversight.
Less serious misconduct, such as political policy
making disagreements, can be referred to the "next higher" or
highest internal authority within the organization.
The amendment does not create a duty for
government attorneys to report wrongdoing or authorize public
attorneys to go public with their concerns.
It does, however, clarify somewhat the confusion
over who is the client of a government lawyer. First, it says the
client is the organization, not the individuals who make up the
organization. But it allows significant wiggle room in allowing the
attorney to determine who exercises ultimate oversight. In government,
where the chain of command is elusive, it could range from the top
executive to a legislative committee to the governor. The rule
therefore allows flexibility in determining the client.
It also offers a safe harbor to a lawyer who
reports misconduct in good faith to the wrong person or entity. The
possibility of being disciplined under those circumstances otherwise
poses a chilling effect on any lawyer considering approaching an
oversight group or law enforcement.
Steinberg's bill, ABA 363, which originally
would have created an exception to the confidentiality rule for
government lawyers wanting to blow the whistle, is on hold, pending
his consideration of the Supreme Court's action. Steinberg expressed
support for the proposed amendment, but retains the option to pursue
his own statutory reforms.