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As D.C. stared down a $722 million budget deficit in 1994, Congress directed it to pare $140 million from its budget or lose a big chunk of federal money. To make the necessary reductions, every city agency was told to reduce its budget by 5 percent for the next five years. Employees took pay cuts, agencies furloughed workers, and new projects were shelved. Everyone felt the pain of the city’s fiscal troubles. Everyone, that is, but the District’s courts.

According to a 1996 Washington City Paper report (“The Imperial Court,” 1/12/96), the courts went on to plan new courtroom construction, give judges a pay raise, and continue providing such amenities as private towel service and chauffeured cars for judges and the chief administrator. When pressed to slim down, court officials insisted that their services were indispensable, their caseloads “burgeoning,” and their management impeccable. Congress concurred, going so far as to exempt them from oversight by the new financial control board. After all, unlike Marion Barry’s city government, the courts had never had a major scandal.

That record ended last year, as a torrent of mismanagement allegations shook the courts. Federal auditors found millions in court accounts commingled and hopelessly out of balance. Reports surfaced of books done in pencil. And now, after years of thumbing their noses at the city government, the courts have discovered that not only are they broke, but they have no friends, either. “No one is really sorry to see them thrashing in the wind,” says a D.C. Council source.

For years, stories had been quietly circulating among court hands that the judges charged with piloting the ship—Superior Court Chief Judge Eugene Hamilton and Court of Appeals Chief Judge Annice Wagner—were asleep at the wheel on financial issues. While Hamilton was spending his time MC-ing feel-good events such as the annual Adoption Day at the courts, defense lawyers and others suspected that the judges left Executive Officer Ulysses Hammond to play a giant shell game with the courts’ finances in order to preserve their culture of prerogative amidst citywide budget cuts. But no one could ever prove it, since most of the judges were prevented from seeing the courts’ books.

Now, though, those stories are finally being backed up with dollars-and-cents figures as federal auditors try to interpret the courts’ not-so-judicious accounting procedures and figure out how the court incurred an $8 million budget deficit last year.

The latest courthouse financial news has been played as a brand-new scandal. In fact, it’s a tawdry chapter that has been inevitable since 1997, when the federal D.C. revitalization bill put the city’s courts under federal control. As part of the transition, the feds also moved the courts’ probation services—and $20 million of their budget—to the new D.C. office of offender supervision. Courts officials protested that probation services cost only $12 million, and that by taking $20 million from their budget, the feds were leaving them $8 million short.

Congress was sympathetic. Staffers told court officials that if they could document the cost of probation services, they’d get some money back. But when the numbers didn’t add up, Congress refused to hand over another dime. Of course, that didn’t stop courts officials from authorizing a

7 percent pay increase for nonjudicial staff last year. They apparently believed they would simply get more money when their allotment ran out.

With no more money forthcoming, D.C.’s courts in late summer quit paying court-appointed lawyers who represent the poor. It was an old trick that had worked reliably in years past—one that guaranteed that the lawyers would ask Congress for more money for the courts. This time, however, Congress checked the numbers and found that the courts had spent $4 million allocated for the lawyers on other, as yet unspecified, court operations.

“The lawyers were being used as pawns to force Congress to pay more,” explains one Hill source. “It just offended folks that they would use that tactic.”

When Congress ordered an audit this past fall, all hell finally broke loose. “The court really shot itself in the foot during the transition,” says Samuel Harahan, executive director of the Council for Court Excellence, an independant judicial watchdog group.

Examples of courthouse mismanagement and obfuscation are plentiful. You have only to look at the docket to see that the “burgeoning” caseloads court officials cited to preserve oversized budgets have actually been steadily declining. Today, Superior Court caseloads are at their lowest levels since the early ’80s. The number of new cases in the family court was lower in 1997 than in 1989 by nearly 2,000, according to the courts’ 1997 annual report, the most recent figures available. And Superior Court’s civil filings are down by 25,000.

Over the past decade, D.C.’s courts have received millions for computer upgrades, but you’d be hard pressed to see where they went. The civil clerk’s computer system crashes regularly, and despite their leadership’s claims of having entered the information age, the courts don’t even have a Web site. The courts spent $26 million and more than five years to create a computerized system to process court-ordered child support payments. Not long after the system finally went online last year, hundreds of parents started getting stiffed on payments. Investigators later found boxes full of child-support checks at the courts that had been returned with incorrect addresses.

The 1996 City Paper story reported that in 1989, the courts convinced the D.C. Council to give them $3 million a year to provide legal representation for elderly people who need court-appointed guardians to make financial and health-care decisions. The courts claimed the program would require a staff of 15. In reality, the program costs less than $300,000 a year and has a staff of four, according to city budget documents. What happened to the $25 million extra dollars the courts have received over the past decade remains a mystery.

In D.C., responsibility for the courts’ day-to-day operations rests with a troika consisting of Hamilton, Wagner, and Hammond, who serves at the pleasure of the judges. Neither of the chief judges was picked for his or her management skills. Hamilton is most famous for having taken in more than 40 foster children over the years, and Wagner, well, she was best known for having the biggest backlog of cases of any judge on the appellate bench before she was picked as chief. But as courthouse mismanagement gets increasingly big play in the local news, the chief judges have proved as good as any government paper-pushers at that key piece of bureaucratic infighting—finding a fall guy. Hammond, on whom the judges have leaned heavily, makes a perfect candidate.

Hammond, who calls himself “doctor” after receiving an honorary doctorate of law from Kenyon College, has for years epitomized the court’s denial about its finances. In 1995, while the city was in the midst of a hiring freeze, Hammond spent precious court dollars to hire Margaret Summers as a flack for his office.

Hammond also makes a good target because he’s excelled at instilling paranoia in his staffers. A few years ago, he installed a new phone system that staffers are convinced was designed to spy on them. The phone story may be nothing more than folklore, but Hammond has done nothing to ease staffers’ fears.

In 1996, after the City Paper report, Hammond suspended deputy administrative officer Michael Lusby for a week because he believed Lusby had aired the courts’ dirty laundry in the press. “My suspension was unfair and unwarranted,” says Lusby, who had worked for the courts for 25 years. He protested the suspension to Wagner—who never responded—and left shortly thereafter. Lusby’s story was still fresh in the minds of court employees interviewed by auditors, according to one of those employees.

And unlike Lusby, Hammond won’t find too many defenders among the rank and file now that he’s on the ropes. On Feb. 3, when Hamilton met with members of Congress about the courts’ financial state, Hammond was pointedly not invited. After the meeting, Rep. Jim Moran (D-Va.) publicly questioned Hammond’s abilities. Veteran court-watchers began to wonder if the executive officer would be around in another year.

Hamilton’s recent orders reorganizing the court administration don’t bode well for Hammond’s future, either. The new orders, issued last week, place new responsibility for court finances with the judges who preside over various court departments, rather than with the executive office. One of the new duties assigned to presiding judges is to establish “a friendly, non-hostile environment” for the staff and the public.

Luckily for Hammond, he’s nearing his 10-year mark with the courts—which means that he will be eligible to retire on the courts’ generous pension plan. As executive officer, Hammond is treated to all the perks of the city’s judges. After only a decade of service, he’ll be able collect about 28 percent of his salary when he turns 55—about $37,000 a year plus cost-of-living increases—for as long as he lives, even though he’s only contributed 3 percent of his salary to a retirement fund annually. By comparison, most city and court employees have to work 25 years to get that kind of payoff.

Harahan, who has been watchdogging D.C.’s courts for years, says that no matter how bad things seem now, the same process that has landed Hammond on the ropes may wind up changing the courts for the better. “We’re going through the normal growing pains of change,” he says. “We’re going through a shakedown cruise. It’s something we shouldn’t be all that surprised about.” CP