Edwards gave loan to a federal judge-Conflict issue arose as senator’s spouse played role in case

The HILL ^ | March 2, 2004 | Geoff Earle

[pittsburgh gop guy]

Edwards gave loan to a federal judge Conflict issue arose as senator’s spouse played role in case By Geoff Earle
In 1994, when Sen. John Edwards (D-N.C.) was still the biggest tort lawyer in North Carolina, he lent $30,000 to a federal bankruptcy judge who was then overseeing a case on which Edwards’s wife, Elizabeth, did much of the legal work. The judge, J. Rich Leonard, is a longtime friend of Edwards’s. Edwards, who won election to the Senate in 1998, did no business in Leonard’s courtroom. But in 1999, Leonard approved a $1 million contingency fee for Nicholls & Crampton, the law firm where Elizabeth Edwards was an associate and working on the case. She had left the firm in 1996, three years before the parties settled and the fee was actually awarded. She has said she received no benefits from the award. Subsequently, Edwards supported Leonard’s unsuccessful efforts to move up the federal judicial ladder.	patrick g. ryan Sen. John Edwards (D-N.C.)
Leonard denied that the loan posed any kind of a conflict of interest. “I couldn’t imagine a circumstance under which he [Edwards] would have come into a bankruptcy court,” he said. But Jonathan Turley, a professor of law at George Washington University who has brought ethics charges against judges before, said the arrangement presented a “compelling case of conflict of interest.” “It is hard to imagine a judge could rationalize presiding in a case where he holds a loan from a couple,” he said. “It’s generally inappropriate for a judge to preside in a case with an attorney who has a financial arrangement, or loan, with the judge. The problems aren’t dramatically reduced by the fact that the loan was signed by the husband, as opposed to the wife,” he said. “The underlying concerns remain the same: If a judge has both a personal and a pecuniary association with a couple, the judge should recuse himself from cases affecting the couple.” Another law professor who teaches ethics at a major university said judges should never be soliciting money — including loans — from lawyers who might represent clients in their courtroom. “Personal loans are verboten from anyone who is or might have business before a judge,” said the law professor, who asked not to be quoted by name. Such conduct could create an appearance of favoritism, and is considered improper both for the giver and recipient of the loan. “Anything a lawyer can’t do with a judge, a judge can’t do with a lawyer.” The federal Code of Judicial Conduct states, “A judge should refrain from financial and business dealings that tend to reflect adversely on the judge’s impartiality” and should avoid the appearance of conflicts. Turley said the judge would have had a responsibility to disclose the potential conflict to the defense counsel in the case. Elizabeth Edwards’s name was listed as counsel for the plaintiff on court documents. It is one of the main cases she worked on during 12 years at the firm, the Edwards campaign disclosed. Both Edwards and Leonard have cited the loan on their financial disclosure forms. Kim Rubey, a spokeswoman for Edwards’s presidential campaign, said Edwards made the loan to help Leonard while he was going through a divorce. She said Leonard needed the loan because his assets were tied up in joint accounts. “The senator made the loan to help him with his finances during a tough time,” she said. “He was trying to help a friend who was in need of financial assistance to help get his kids through college.” Nicholls & Crampton represented Conner Home Sales, a North Carolina mobile home company, in a Chapter 11 bankruptcy suit involving numerous creditors. Elizabeth Edwards had done much of the work in that case over a period of years, although she told the Raleigh News & Observer that she had no financial interest in the case when it was eventually decided. “I never got any of it myself,” she told the paper in August, adding that she had “zero financial interest” in the case. Sen. Edwards’s spokeswoman said Elizabeth Edwards began working on the case in 1987. Leonard, who is now the chief U.S. bankruptcy judge for the Eastern District of North Carolina, cited the loan on his financial disclosure form from 1999. He disclosed receiving an “unsecured loan” of less than $15,000 from “J.R. Edwards.” Edwards’ spokeswoman and Leonard both confirmed that the total amount of the loan was $30,000. Edwards made the loan at the end of 1994, and it was paid off at the end of 1998, they both said. Leonard also lists himself on the form as director of the Wade Edwards Foundation, named for Sen. Edwards’s son, under the heading of “positions” on the same 1999 disclosure form, although he apparently did not draw a salary, since it was not listed on a separate line for “non-investment income.” Edwards established the foundation after Wade’s tragic death. Edwards and Wade once hiked Mount Kilimanjaro with Leonard and his son, not long before Wade’s death. On Edwards’s financial disclosure report for 1998, Edwards listed as an asset the “repayment of loan to Richard Leonard” as being valued at less than $1,001 — an amount his spokeswoman said accounted for interest received on the loan. Leonard, who has known Edwards since the two of them clerked for the same judge after graduating from law school, said in an interview that he needed the loan because all of his assets were held jointly with his former wife, making it harder to obtain a loan by other means. “We were running one day, and I just said, ‘I need to borrow some money to pay this tuition so I can get all this stuff settled,’” he told The Hill. Leonard said that the loan was at a market rate of 8 percent interest and that he had paid it back. Leonard said that even in the highly unlikely event that Edwards or his firm were to participate in a case before him, he would have recused himself. “I would have thought that we were too close friends,” he said. As to the Conner case, Leonard noted that in 1995 he ruled against Nicholls & Crampton, who represented Conner Home Sales as the plaintiff, on an important motion for partial summary judgment. His ruling was reversed on appeal. The case eventually settled for about $5 million damages in Leonard’s courtroom before trial. Leonard said he knocked down the attorneys’ fees in the case from about $1.2 million to $1 million, or 20 percent of the $5 million award — a percentage he said was lower than the industry standard of about a third. “I know the recusal principles very well, and apply them every day, he said. “Friendship with the spouse of a lawyer is not a per se disqualifying, and it’s my judgment call.” A search of Leonard’s docket did not reveal any instances where John Edwards’s firm, Edwards and Kirby, argued a case before him. Edwards, who was elected in 1998 and is seeking his party’s presidential nomination in today’s Super Tuesday primaries, also worked to get Leonard nominated to a federal judgeship, although Leonard was never confirmed. President Clinton had nominated Leonard for the U.S. Court of Appeals for the 4th Circuit in 1995, but then Sen. Jesse Helms (R-N.C.) blocked the nomination. Republicans and Democrats have been able to sort through some of their differences to get other judges through the confirmation process for the 4th Circuit, however. President Bush’s White House counsel’s office subsequently interviewed Leonard about a seat on the 4th Circuit Court of Appeals or the District Court, at Edwards’s urging. Leonard said he disclosed the loan transaction every year on his disclosure forms, and twice disclosed it to the Judiciary Committee. “This is not a secret,” he said. “It was internally vetted at the White House and by the Justice Department when I was nominated. They wouldn’t have nominated me if they thought they were walking into a land mine.” In a statement of biographical information presented to the Judiciary Committee when he was seeking confirmation as a District Court judge, Leonard listed the Conner case as one of 10 significant opinions he handed down from the bench.

[pittsburgh gop guy]

“compelling case of conflict of interest.”

But aw, shucks - he does speak with a twang.

I think it unfortunate that Kerry did not destroy Edwards with negative ads. They hate each other, but if (and I pray...) Kerry loses, look for Edwards to be Chair of the DNC and then run for prez in 2008.

[Peach]

one ringey dingey

[jwalsh07]

LOL, the democrat politics of personal destruction machine in full flight.

[Dog]

Someone just did a a number on Edwards..

[Dog]

fyi..

[Howlin]

Right after he said he wasn't getting out even if he lost all ten states tomorrow.

[Swanks]

Almost as vile as Cheaney sitting in a duck blind with Scalia. The NY Times had a filed day with that; but Edwards will be burined on page 23 / E section I am sure.

[cynicom]

The unwashed masses have to understand that lawyers have "professional ethics". Plumbers and truck drivers have no ethics, so they are expected to do unethical things.

[Congressman Billybob]

No, the "number on Edwards has NOT been done." It will take some digging, that is already going on. But expect to see in the press, and maybe in the FEC, for a clear expose of multiple felonies under the election laws for contributions falsely made in the names of straw donors.

This subject is way below the radar right now. I've seen only two minor references to it in the lamestream media (and took time to call and talk with one of the reporters). Keep your eyes open for this.

Congressman Billybob

Click here, then click the blue CFR button, to join the anti-CFR effort (or visit the "Hugh & Series, Critical & Pulled by JimRob" thread). Please do it now.

[southernnorthcarolina]

Do you see anything wrong here?

I don't see nuffin' wrong here...

[pittsburgh gop guy]

hit him hard. I hope he stays in and Kerry goes super-negative on him.

I am telling you - he will be bad news down the road if he is not removed from the political scene this year. He will be out of the Senate, and do nothing but build up for the next 4 years. That is why he has not gone negative on Kerry.

The whole "John Edwards is the candidate that really scares Bush/ROVE" attitude is mostly media created and designed to prop up Edwards. The lib media know that Kerry should get destroyed because his liberal record is too long. Edwards is just as liberal, but his record is shorter.

And he has millions.

[Lancey Howard]

This disgusting slip 'n fall lawyer, Edwards, is so hypocritical and so corrupt that it's beginning to make my head swim. Check out Bob Novak's column today. It's another eye-opener about this scumbag Edwards.

Until recently, I figured Edwards was just another overambitious empty suit but I now believe that the man is simply unprincipled beyond any measure of normal human decency. A real scumbag.

[pittsburgh gop guy]

"...I now believe that the man is simply unprincipled beyond any measure of normal human decency"

Sound like anyone we know?

[jocon307]

"I don't see nuffin' wrong here..."

Well, I'm not sure if you're being sarcastic or not, but I for one don't. It was a loan with a reasonable (between friendly party) interest rates, it was disclosed and re-paid. Mrs. Edwards was gone from the firm for 3 years before the case was settled.

I don't want Edwards to be Prez, but I have no reason to think he's a crook. not from this article anyway.

[Lancey Howard]

Yeah, like that.
One thing, though - - I don't think Clinton would choke in a crisis. He would probably do the wrong thing, the sleazy thing, the unprincipled thing, the self-serving thing, but he wouldn't choke. Edwards as President would be in so far over his head it's scary.

[NautiNurse]

Nothing wrong with a bankruptcy judge taking a $30K loan from the Edwards clan when Elizabeth Edwards’s name was listed as counsel for the plaintiff on court documents...Edwards listed as an asset the “repayment of loan to Richard Leonard” as being valued at less than $1,001?

I see problems here, and no sarcasm intended.

[Lancey Howard]

I don't want Edwards to be Prez, but I have no reason to think he's a crook. not from this article anyway.

Agreed. The article makes it pretty clear that Edwards is a greasy scumbag who does "favors" for federal judges in order to help out his wife (and therefore, of course, himself) but it doesn't mean he did anything "illegal".

But anybody who tiptoes that close to the line has probably crossed it more than once. Slip 'n fall lawyers are not exactly paragons of virtue to begin with, and rich ones like Edwards don't get rich by having integrity and morals. They ply their craft in a toilet where the stinkiest turd wins the lawsuit "jackpot".

[hershey]

Clinton did nothing but choke. It got so bad, he avoided hard choices by going golfing. Not that he didn't do sleazy, unprincipled, self-serving stuff, too. But he also choked where military force might be involved. (After Somalia, which happened when...Jan?...right after he took office, so he choked for eight long years.)

[JohnnyZ]

“Personal loans are verboten from anyone who is or might have business before a judge,” said the law professor, who asked not to be quoted by name.

Fear of retribution, eh? Law prof doesn't want a pack of angry trial lawyers stuffing his head in a briefcase?

[southernnorthcarolina]

Yes, I was being sarcastic. I'm no attorney, so I don't know whether any laws were broken here. But it doesn't pass my "smell test."

[jocon307]

I don't know why I didn't get your responses in my list, but no matter.

I think if you read carefully you'll see that the $1001 amount was at the end of the loan, and it says in the article that it was the interest amount.

Look, I'm not trying to be the big defender of Edwards here, but I'm just thinking that if this was some kind of a bribe (or whatever the allegation/supposition is) that I doubt both guys would have declared it on their disclosure forms, I'm pretty sure it would be for more than 30K, and further, I don't see a motive.

And Lancey, I work for a law firm, and it does bother me, the supposition that all lawyers are crooks. Or I must assume that if you or a family member are ever harmed due to the negligence of another that you will do the "noble" thing, and not sue. Because otherwise, you'll be a crook too. I don't know if Edwards is an honest lawyer or not, obviously he's a successful one. And maybe I wouldn't agree with all, or any thing he's done. But people do get injured in society, and sometimes they get to recover $. And the lawyer gets a certain per centage. Part of that pays my salary, keeps me off welfare, and oh yeah, the last time I gave $ to FR, that's where it came from.

Some folks think it's ok to run down cops, some folks think it's ok to run down pols, some folks think it's ok to run down lawyers.

I, myself, think it's only ok to run down liberals. Not literally, they might sue!

[pittsburgh gop guy]

Let me make this real simple:

 

In 1994, when Sen. John Edwards was still the biggest tort lawyer in North Carolina, he lent $30,000 to a federal bankruptcy judge who was then overseeing a case on which Edwards’s wife, Elizabeth, did much of the legal work. 

Let's take that apart:

In 1994, when Sen. John Edwards was still the biggest tort lawyer in North Carolina, he lent $30,000 to a federal bankruptcy judge ...

wOw! That itself should raise all sorts of ETHICAL flags. A judge taking a loan from the "biggest tort lawyer" in the State.

...lent $30,000 to a federal bankruptcy judge who was then overseeing a case on which Edwards’s wife, Elizabeth, did much of the legal work.

hOLy WoW! Talk about a conflict of interest.....the biggest lawyer in the State makes a "loan" to a judge that is overseeing a case where the big lawyers wife is involved.

BUT IT GETS BETTER:

Leonard, who is now the chief U.S. bankruptcy judge for the Eastern District of North Carolina, cited the loan on his financial disclosure form from 1999. He disclosed receiving an “unsecured loan” of less than $15,000 from “J.R. Edwards.”

Edwards’ spokeswoman and Leonard both confirmed that the total amount of the loan was $30,000. Edwards made the loan at the end of 1994, and it was paid off at the end of 1998, they both said.

Like, HOLY CRAP!

Leonard ... cited the loan on his financial disclosure form from 1999.

Uh, what about citing it on his financial disclosure form for 1994, 1995, 1996, 1997 and 1998? That's five years that went by where there was no legal mention of it anywhere. ANYWHERE!!!!!!!!!!!!! What the hell? I don't know what the law requires as far as disclosure, but I can't believe that he could just ignore reporting it for FIVE YEARS!!!!!!!!

He disclosed receiving an “unsecured loan” of less than $15,000 from “J.R. Edwards.”

Ok, the loan was less than $15,0000. BUT - read on:

Edwards’ spokeswoman and Leonard both confirmed that the total amount of the loan was $30,000.

Uh - WHAT THE HELL? The judge reported a loan of $15,000, but the Edwards campaign and Leonard BOTH CONFIRMED it was $30,000. So which was it? The loan was for $30,000 - but the Judge said it was for $15,000. So - do the real numbers matter or can you provide ANY numbers on the disclosure? Did he pay back on 15k or the full 30k?

This has SCANDAL written all over it. I hope Kerry floats this and Edwards goes bye-bye (back to suing companies) after this year.

THIS NEEDS TO BE SPELLED OUT TO EVERYONE!!!! The Whitewater scandal never caught on because you had to think about it. Most of the Clinton scandals required a little thought - and the ones that didn't were crowded out by the sheer volume of other scandals. THIS SCANDAL IS ABOUT A LAWYER PAYING OFF A JUDGE.

 

 

 

 

 

[Lancey Howard]

There are a couple of other questions raised by this story about the "loan":

1. WHY?? Why would a federal judge not go to his bank or Household Finance (like the rest of us serfs have to) for a relatively small loan of $30,000? Why did this federal judge get his loan from Edwards?

2. HOW?? How did the "loan" get arranged? Did this federal judge give Edwards a call and ask for a loan of $30,000? (Think about that - - like Edwards would turn down such a request when he knows his wife is working on a case before this judge.) Were these two old friends? Casual acquaintances? What? Did this judge hit up any other lawyers for "loans"? Or did Edwards OFFER the federal judge a "loan" of $30,000 because he heard that, gee, this judge could really use a "loan" right now....

3. WHAT?? By the way, what, exactly, did this federal judge need $30,000? For what purpose? And why did he need it so desperately that he would take a $30,000 loan from a stinking, filthy slip 'n fall lawyer?

4. ABOUT THAT INTEREST.... "On Edwards’s financial disclosure report for 1998, Edwards listed as an asset the “repayment of loan to Richard Leonard” as being valued at less than $1,001 — an amount his spokeswoman said accounted for interest received on the loan."

Really? A $30,000 loan for 4 years carries an interest rate that yields "less than $1,001"?? (Sure. Try borrowing $30,000 for four years and see what the finance charges total.) This sounds like more than just a sweetheart deal to me. It's either a bribe by Edwards or it was extortion by Leonard. Whatever it was, it was NOT on the "up and up".

Somebody better start working on their story.

[NautiNurse]

Let's just say (for kicks and giggles) that the loan was for $30,000. 8% simple interest (skip APR for the four years) on $30K is $2400. If the loan really was only for $15K, then simple interest would be $1200. $1001 reflects 8% of 12,512.50.

The $1001 interest payment still doesn't make sense. This deal with the bankruptcy judge deserves further investigation.

[Future Useless Eater]

Man! this guy's a sleeze! All this, PLUS the tax evasion "loophole" where he created a corporation with himself the only stockholder, just so he could pay less taxes!

Everyone keeps calling him a "tort lawyer". Why don't they call him more correctly, a MEDICAL MALPRACTICE ATTORNEY? or AMBULANCE CHASER?

Ask people what professions they HATE the most and MEDICAL MALPRACTICE ATTORNEYS would rate down there with used car salesmen! Ask any OB/GYN in his state if they'd go into that specialty again if they could 'do-over', and they'd say NO! Edwards and his ilk, have destroyed these doctors, and DRIVEN UP ALL OF OUR MEDICAL insurance premiums.

What the heck were Freepers worried about? Edwards could have been a snap to defeat, if he had chance of winning the nomination (which he has absolutely no chance anymore).

[Tom D.]

I have known Rich Leonard for many years. He is a good judge and he did not take any bribe. It might not have been the smartest thing in the world for Leonard to accept a loan from Edwards, but it is not sinister.

Someone earlier in this thread compared this to Scalia's duck hunting trip. That is an apt comparison.

There is enough legitimate crap to beat Edwards on that there is no need to make a big deal out of a small deal.

[Lancey Howard]

Thanks for the post.
Edwards is starting to remind me of Clinton - - people who get involved with him in any way usually end up wishing they never heard of him.

[Tom D.]

I think you are right.

[pax_et_bonum]

ping