Loan on Me: Schwartz personally supplied nearly a third of her campaign bankroll.
Loan on Me: Schwartz personally supplied nearly a third of her campaign bankroll. Credit: Darrow Montgomery

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Lawyer and lobbyist Andrew J. Kline has, by most accounts, had a pretty damn good couple of weeks.

Earlier this month, Kline masterminded the effort to extend operating hours for restaurants, bars, and nightclubs in the days surrounding the inauguration, a fine holiday gift for his biggest client, the Restaurant Association Metropolitan Washington.

In a less-noticed move, the liquor lobby scored another big victory by getting Ward 1 councilmember and booze sheriff Jim ­Graham to consider easing underage drinking penalties for restaurant and bar owners, a big Kline constituency. It’s an issue dear to proprietors sick of getting dragged through the mud every time one of their bouncers or bartenders does a less-than-zealous job vetting a college student’s ID.

But LL’s got some bad news for the District’s food-and-drink-purveyors: You will likely soon be deprived of Kline’s services.

That’s because he’s gotten himself into some deep legal troubles of his own. Late last month, a hearing panel convened by the D.C. Court of Appeals’ Board of Professional Responsibility—the body charged with adjudicating matters of legal discipline in the District—issued a report [PDF] finding that Kline violated nearly a dozen rules of professional conduct, including committing criminal forgery and engaging in behavior “involving dishonesty, fraud, deceit, or misrepresentation.”

The board recommends that Kline be suspended from the practice of law for 18 months.

Now that’s not the final word on the matter—Kline is disputing the sanction (more on that later), and the D.C. Court of Appeals is free to ignore the hearing panel’s recommendation and issue a more severe or more lenient sentence. In any case, Kline is looking at a lengthy hiatus from a job he’s done very, very well.

How did one of D.C.’s most effective attorneys and in-demand lobbyists bring himself down?

The whole deal started in the summer of 2004, when Kline was hired by a local ad agency called, um, the Ad Agency. That outfit had as a client a Dupont Circle restaurant, Savino’s, which allegedly hadn’t paid a $7,500 bill. Kline took the case, expecting “a pretty simple collections matter,” according to documents, and he filed a lawsuit less than a month later. Then things started to get unsimple: The restaurant and its owner filed a countersuit, alleging various misdeeds on the part of Kline’s client.

Kline would later say to the hearing panel that the case became “far removed from anything that I had dealt with in my office on a day-to-day basis.” But he didn’t refer the matter to another lawyer more up to the task. He answered initial claims in court, but when 2005 came, Kline basically stopped working on the case. He didn’t respond to discovery requests or various other pleadings. By May, the court entered a default judgment against Kline’s client. And during all of this, Kline didn’t tell his client a thing.

How to get out of the pickle? After the judgment, Kline finally sat down with the restaurant and negotiated a $50,000 settlement to resolve the counterclaim against the Ad Agency. But Kline didn’t tell the Ad Agency folks he’d settled for a price, only that the two parties had “mutually” agreed to dismiss their legal claims.

So where did the $50,000 come from?

Kline cut a check for the secret settlement from his “trust account”—a type of account set up by virtually every legal practice to hold client money completely separate from the funds belonging to lawyers or their firms. (In other words, the money shouldn’t have been Kline’s.) After paying off Savino’s, Kline then turned around and prepared a fake settlement agreement for the Ad Agency omitting any mention of the $50,000.

The Ad Agency still didn’t want to sign—they wanted other changes. Kline didn’t want to make them, so he forged his client’s signature onto the genuine settlement agreement.

Then things unraveled: In late 2005, the Ad Agency got new lawyers, who discovered the “secret settlement” and reported Kline for ethical violations. Meanwhile, Kline had to cover his ass on the $50,000; his other clients needed their money—the money he’d used to pay the secret settlement. So Kline made a series of small deposits into the trust account, just enough to cover the disbursements to his clients.

Then the Office of Bar Counsel, which essentially prosecutes ethical violations, started asking questions. Kline told the office that he’d used his own personal money to pay the secret settlement, and when asked to prove it, he stalled for months before telling investigators in November 2006 that the records were missing.

What happened? Nearly two years later, in summer 2008, Kline finally gave an answer: My computer crashed. He’d kept all his books himself, on a laptop computer, and the hard drive had died sometime in 2005, he said. After trying to recover or recompile the data for a spell, “I finally just sort of threw up my hands,” he would later say.

Kline claimed that he’d had about $50,000 of his own funds—money he had earned in legal fees—sitting in the trust account, so he didn’t steal from his clients, precisely. But keeping client and attorney funds in such proximity without clear records is still a serious ethical violation, called “commingling.”

The hearing panel judged Kline’s explanation about the loss of his records “not credible.” But, in a move that will probably save Kline from disbarment, the panel gave him the benefit of the doubt and declined to find him guilty of “intentional or reckless” misappropriation of his clients’ funds. They were swayed by his explanation that he thought he’d had $50,000 of his own money in the trust account.

That determination, the panel’s report says, was certainly helped by a trio of “character witnesses” who showed up to a hearing earlier this year on Kline’s behalf. They included some big names in the local law community—Dimitri Mallios, the self-styled “dean” of the District’s alcoholic-beverage bar; Fred Cooke, the extremely well-connected former D.C. corporation counsel; and Mark London, a trial lawyer who shares office space with Kline above the Palm restaurant in Dupont Circle.

All three testified they’d still refer their own clients to Kline.

Kline does not dispute the panel’s findings regarding his treatment of his clients; what he is challenging is how he should be punished. There things take a somewhat bizarre turn. Under established precedent in the District, a disciplined lawyer can be granted leniency if he can show that (1) he suffers from a condition that might have caused his ethical misconduct and that (2) he’s taken steps to cure said condition. For instance, you can argue that alcoholism caused you to steal your clients’ money and since you’re now in AA, you shouldn’t be disbarred.

Kline argues that his misdeeds are due to the fact that he’s hyperactive.

Or, as the report reads, “Respondent claims he suffers from adult ADHD,” referring to attention-deficit/hyperactivity disorder. Kline hired a psychiatrist, who made the diagnosis after seven visits, citing such evidence as “a history of procrastination,” which includes once failing to file a law school paper on time and not filing tax returns for several years. During the discipline proceeding, bar counsel hired its own shrink, who made this point: “The fact that [Kline] was able to be successful academically during his grade school years, college and law school and successfully run his own law practice is inconsistent with a diagnosis of ADHD.”

In the end, the hearing panel decided not to grant Kline any leniency.

The news is likely to be greeted with some degree of schadenfreude by the advisory neighborhood commissioners and other civic activists Kline regularly drums into submission during ABC Board proceedings. (At least two wouldn’t talk to LL on the record in fear of a future frenzy of filings.) And there’s probably some excitement among the members of the D.C. liquor-control bar, who will be happy to grab Kline’s business during his hiatus.

That may not come for months—Kline is disputing the 18-month recommendation and another hearing is scheduled for March.

Cooke, in an interview with LL, says he was “surprised” by the revelations about his friend. “It’s inconsistent with the person I know,” he says. “It’s really unfortunate. I think Andrew’s a good person and a good lawyer. I feel badly about the way this played out for him…I do see him as fundamentally a good person.”

Kline did not return calls for comment.

Carol’s in the Hole

Days before losing the Nov. 4 general election, At-Large Councilmember Carol Schwartz pumped more than $23,000 of her own cash into her foundering campaign.

In a somewhat unorthodox manner, Schwartz wrote a personal check directly to LSG Strategies—the political consulting firm of Tom Lindenfeld, the top political adviser to Mayor Adrian M. Fenty and the mastermind behind his runaway 2006 victory.

Schwartz hired Lindenfeld to whip her quixotic write-in campaign into shape. But he wasn’t able to work a miracle for Schwartz, who hired the big gun less than three weeks before the general election that she soundly lost to Michael A. Brown. Lindenfeld did get a nice payday for his efforts, it seems: The check totals $23,704 and appears to be dated Oct. 30, though in her financial reports, the check is dated Nov. 3.

Asked if it was money well spent, Schwartz says, “I didn’t win, but I can’t blame Tom.”

In all, Schwartz says she sunk about $78,000 of her own funds into her campaign (that includes $40,000 in start-up cash). That accounts for almost one-third of Schwartz’s fundraising total thus far of $247,519.

Any regrets? “Of course I regret that I had to spend $78,000 to lose,” she says.

Shark Fight Goes On

LL news flash: Mary Cheh and Peter Nickles still aren’t getting along.

Nickles may now be attorney general-for-real, and law professor Cheh might be settling quite nicely into the second half of her first council term, but the two continue to butt heads over principle and personality.

The two legal eagles most recently came to rhetorical blows last Thursday, in a meeting convened in Cheh’s office to discuss Nickles’ concerns over amendments she had made to the District’s gun bill. LL ended up finding himself caught in the middle.

Nickles had posted a letter to Cheh explaining his objections—essentially that the amendments, instituting tougher training and registration requirements, would leave the District vulnerable to further litigation from the gun-rights crowd.

But that’s not what set Cheh off. Rather, atop the letter appeared the label “Privileged and Confidential/Deliberative Process,” and that seemed to Cheh to be a preemptive attempt to invoke the legal privilege ensuring the confidentiality of internal deliberations. You might remember that particular legal maneuver from such previous Cheh-Nickles snipes as the Grayce Wiggins inquest.

In any case, there’s nothing internal or privileged about a letter sent on official letterhead between branches of government, and Cheh took the label as an unwarranted invocation of secrecy (cf. Dick Cheney’s custom “Treated As: SECRET/SCI” stamp). At the meeting, Cheh laid into Nickles over the verbiage. Nickles, somewhat in jest, told Cheh he’d be glad to take the letter back.

Later that day, Cheh told LL about the exchange, and being a good reporter, he trudged up to Nickles’ fourth-floor office and recounted the story to the AG.

Said Nickles, “I’m absolutely shocked that she would share that with you.”

The purpose of the label, he says, is that “I wanted to be assured that my communication would not be in the Washington Post.” (NB: Preventing publication in Washington City Paper requires invoking somewhat stronger privileges.)

“Here I am trying to reach out by writing a letter and assuring her that I’m not going to beat on her till she has a chance to resolve it,” he continued, calling the letter “an effort to treat her with dignity and respect..…The fact she would talk to you about it really reveals a troublesome pattern of behavior recently.…Quite frankly, I don’t understand it.”

Says Cheh, “The inappropriate and legally unfounded use of privilege is a troublesome pattern of behavior. Government shouldn’t operate in the shadows.…Our government is strong enough to withstand openness.”

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