Fidler’s Supposed Ethical Problems Aren’t

(Published 2/21/2012)

In an earlier column, I addressed some of the “character issues” raised by Republican State Senate candidate David Storobin at his press conference where he asserted that  his opponent, the well respected City Councilman, Lew Fidler was “…unfit to serve in the State Senate….”

The prior article, dealt with about half of Storobin’s purported assertions of “fact,” and found them to be entirely in the realm of masturbation fantasy.

By contrast, this article deals with those assertions of Mr. Storobin which have at least some small basis in fact, and analyzes their merits.

Let’s examine them one by one. .

1)  Mr. Storobin says that Mr. Fidler had once forwarded the City Council Speaker the resume of a disbarred lawyer, who was subsequently hired.

First of all, please be assured that not everyone whose resume has been dropped on a Council Speaker by Mr. Fidler has even ended up getting interviewed.

I can make that assertion personally.


In a rare display of decency, Mr. Storobin does not name the gentlemen in question, and neither will I. The gentleman had been disbarred over a decade before his hiring for malpractice like blowing deadlines and other general incompetence. He should never have been a solo practitioner.

But the public record indicates that his case never involved any question of dishonesty, venality, corruption or moral turpitude, and that he never subsequently hid his bar status to any potential employer.

Further, it was unquestioned that the gentleman had, at the time he was hired by the Council, functioned competently for over two decades as a legislative program analyst. Fidler himself has employed him and he’d proven up to the job. 

I’m not sure I would have hired the guy, but there is no cognizable ethical issue here as to Mr. Fidler, and to call this disqualifying to Mr. Fidler’s fitness to hold office is certainly over the top.

The real question here raised by Mr. Storobin’s statement is about Mr. Storobin:

“Mr. Fidler even arranged patronage jobs for his political cronies at City Hall including a man who was disbarred by the New York Bar Association but was put in charge of legislative work.

Mr. Storobin is a law school graduate and is admitted to the NYS Bar, which as he must know, is a status that has no relationship whatsoever to being a member of The Bar Association, a private group. Since he went through the admission process, He must also know that it is the Appellate Division of the State Supreme Court, and not a private associate, that determines the ability to practice law (or not) in the State of New York.

A layman could make such an error, but a lawyer, even the stupidest one, would not.

 Therefore, I must conclude that Mr. Storobin never read the statement calling Fidler unfit before he put his name upon it.

I understand that it is possible for a candidate to allow his name to be put on something he never read.

But it impossible for a candidate for public office, who is also an officer of the court, to, without reading it,  put his name on a statement which makes such charges, unless he is totally devoid of either sense, scruples, or both.

3) Mr. Storobin has issues with Mr. Fidler’s private employment. Mr. Fidler has, for many years, been on the payroll as chief counsel to a company named LawCash. This is a company that advances money at extremely high interest rates to people who are suing corporations including the corporation of the City of New York.

“There are two problems with this.

“One, Mr. Fidler thinks it’s okay — in fact he’s said he’s “proud” of his association with (those are HIS words) — proud of his job at LawCash, a company that makes its living poaching low income people with little hope, and then bleeding them of large chunks of settlements…

…And second, Mr. Fidler is under the employ of this company while he is a sitting City Councilman. This is an outrageous conflict of interest!

“This is a man who was elected by the people of New York to protect their interests, their tax dollars, and to be a good steward of the public trust. How can Mr. Fidler protect the interests if the taxpayers of New York City when, at the SAME time, he is the chief lawyer for a company that takes money from people who are suing this city?

 “He cannot!

While I think it’s ironic that Storobin has accused of being a predator, the one elected official who sounded the alarm about predatory lending three years ahead of anyone else (and introduced legislation to address it), I’ll let Mr. Fidler answer Mr. Storobin for himself, using some comments he posted a few years ago:

“… the company in question is ENDORSED by the likes of ACORN, for the very reason that it levels the playing field in litigation for poor people against insurers who rely on the economic distress of struggling people. Over 80% of the funds advanced by this NATIONAL industry goes to keep people in their homes. Try to go to a bank and ask for a loan against your contingent interest in a lawsuit. See what reply you get.

…the company in question is a leader in the association in the industry for better business practices. Under its leadership, the association entered into an agreement with then Attorney General Spitzer, codifying the good business practices. This model has since been replicated in other states.

… the company in its documents tells people that if they have any other option for funding they should avail themselves of it. Since the company is engaging in a high risk transaction, rates are higher than for say credit cards, banks or your favorite uncle—though each of those will require that you re-pay them even if you lose.

For those of you who are confused, here is how this industry works. By the way, it is a nationwide industry with hundreds of companies and a billion dollars out in advances. The practices have been upheld by the courts repeatedly. Please do not get the impression that this is some sinister guy loan sharking on a corner.

You have a personal injury case, say worth about $100,000. Nevertheless, out of work, perhaps, stuck with big bills, you are having difficulty paying your rent for the next month. You have tapped out on credit cards etc. The insurance company offers you $10k to settle. Your lawyer recommends against it, saying your case, if you are patient, will go for 10 times that. You say you will be homeless before then, you want to take the offer. Your lawyer, by the way, is prohibited from lending you money as well. The bank surely isn't interested, and Uncle Mo is tapped out.

You go to a personal injury advance company. They evaluate your case for both liability and value based upon the information provided by your attorney. Most companies will give you an advance of no more than 10% of what they believe your case is worth. So in this example, they will offer you say 10k. Since the money is at risk—meaning that if you lose the case you owe them nothing—the interest rate is high. Often more than 2% per month.

However, you are able to pay your rent and stay the course of your litigation. At the end, you get the 100k that your lawyer says it was worth. Depending on how long it takes, the 10k that you got earlier and had unfettered use of, may cost you 5-8k. BUT, you wind up with your 2/3 share of 100k, not 2/3 of 10k. Like I said, everyone is happy except the insurance company that was trying to lowball your fair payment based upon your economic duress.

The company that I do legal work for is one of the largest and least expensive in terms of rates. I will not mention it, as I do not want to appear to be "advertising". But as I said, it is endorsed by ACORN because of its role HELPING poor people leverage powerful insurers. Far from predatory.

Anyway, I hope this clarifies things for anyone who has the patience to read it all.

While I do not think that such operations, if run in a lawful manner raise any ethical questions, I happen to think that operations like Law Cash do raise some legitimate public policy issues, and it would be nice if someone intelligent discussed their actual pros and cons, instead of doing a hit job. Fidler has made a very articulate presentation in the affirmative; there are arguments to be made to the contrary, and it would be nice to see them discussed in a manner other than as a vehicle for character assassination.  Clearly, Storobin has no interest in such things

Unfortunately, the contrary arguments are usually supplied by vested interests like “The Lawsuit Reform Alliance of New York” (LRANY). LRANY’s members include the New York Business Council, the National Federation of Independent Businesses, Unshackle Upstate (itself a collection of special interests). The Farm Bureau of New York, The American Congrees of Obstetrician and Gynecologists, and the Association of General Contractors.

In other words, those oppposing what is called "Non-recourse civil litigation financing," or “lawsuit lending” are people who get sued and would like to get sued less.

There is no doubt that the courts see much in the way of frivolous litigation. What groups like LRANY refuse to admit is that frivolous litigation is a two way street. Litigation results and drags on longer because insurance companies often refuse to settle insurance claims reasonably. Dragging out the process is often a tactic used to apply pressure upon poor litigants to close cases more economically. Companies like Law Cash put a crimp in the ability of insurance companies to squeeze poor litigants.  

Much of what LRANY says about “lawsuit lending” is in the realm of crocodile tears:  

They seek out consumers who have filed lawsuits and offer to pay them up-front money in exchange for a percentage of whatever award they may later receive in their lawsuit – a percentage which increases over time. Litigation companies prey on vulnerable consumers – people who are often injured and unable to work, with no financial support, and desperate for cash. These companies force the consumer to agree to unfair terms that ultimately result in the consumers giving up a big piece, if not all, of any award they may receive for their injuries.”

The question is “compared to what?”

Insurance companies also prey on the vulnerable—vulnerable victims–people who are often injured and unable to work, with no financial support, and desperate for cash. These companies force the victim to agree to unfair terms that ultimately result in the victims giving up a big piece, if not all, of what they would have gotten if they’d received a just award for their injuries.

Sadly, operations like Law Cash exist because of our society's great economic inequality. Restoration of the sort of free-legal services gutted in the early 80s by Reagan would not even begin to address the problems which compelled the creation of operations like Law Cash. But the question remains, in the absence of societal transformation, what alternatives exist to such operations? Until something similar is created on a not-for-profit mode, Law Cash is at worst a necessary evil, and arguably something quite positive and laudable.

What proves to me that Storobin could care less about the policy questions, even from a pro-insurance company viewpoint, is that he by take his complaint on a side trip through red herring-land into the question of Fidler’s non-existent conflicts of interest.

Since Fidler is not providing legal representation to Law Cash's clients, whether they are suing the city or someone else would seem besides the point; and how Fidler is trading on his position, as Storobin implies, remains a mystery to me after reading the Storobin’s whine three different times. 

Fidler also addressed this point a few years ago:

Now, the nonsense about the City. The company I work for does business in 48 states of this country. Within that massive portfolio, I am sure that there are a few cases in which we have advanced money to persons who may be suing the City of New York. No doubt. So what? I refer you to the other entry for an explanation of how this business works. Once money is advanced to a litigant, the company has absolutely NO role whatsoever—as specified in the contract—in the conduct of the case. The company does not advise, does not appear in Court. Nothing. If the case is lost, nobody pays the company back. Period. If you win, when the defendant pays, the company's lien is satisfied from the proceeds through the litigant's personal attorney. If the company is defrauded, and not paid, it is the personal attorney and/or the litigant who are liable. So the defendant is not an issue. Ever. In 7-8 years of doing over 100 million dollars in business, a defendant has not been sued ONCE.

So much for taxpayer's coffers and conflict of interest. Got it?

…As the company I do legal work for—like any of my other legal clients—does absolutely NO business with the City of New York, and does absolutely NO City lobbying on any issue of any kind…I don't understand what the conflict question is. If anyone can clearly articulate it for me, I will gladly ask the Conflict Of Interest Board for an opinion if it poses a legit question.

Once again, what amazes is that Storobin is a lawyer. He was required to pass an ethic exam to be admitted to practice in this state, so he knows what constitutes a conflict of interest. That there is no conflict here is not even a close question.   

Yet Storobin put his name on this statement regardless. In this case, one hopes that he did so without reading it, since the idea that he would put his name on such a statement knowing what it said implies a failure of intellect or character of astonishing dimensions. 

3) Storobin argues that Fidler abused the City Campaign Finance system.   

“Mr. Fidler has also accepted public money to crush political opponents. In 2009, despite knocking his Democrat opponents off the ballot, and despite a Republican opponent who raised less than $700, Mr. Fidler took more than $84,000 in public, taxpayer money to promote himself  across his City Council district and crush a non-existent opponent who refused public financing.

“This is an egregious and irresponsible waste of taxpayer money.”

 This is certainly one way of looking at it.

Another is that contests are rarely so predictable.  I happen to consider Fidler’s 2009 opponent, Gene Berardelli a pompous gasbag and a clown, but he was civically involved, and looked to be aggressive.

Berardelli was not a mere placeholder, but ran a really nasty, aggressive campaign which attracted the attention of Jewish Week, spurring one of the harshest articles they’ve ever published.  

Further, Bloomberg was up for re-election, spending oodles of money and ladling it thick and greasy, in unmarked bags, upon all manner of Republicans and other supporters and parasites.

Bloomberg looked like he would win Fidler’s district big (and he did).

Further, there was some reason to expect an October surprise of Bloomie cash. As I noted in 2009, outside of a few Council races of interest to State Senate Republicans (most of which they won), the Republican Party did squat for their Council candidates, because, in truth, outside of the Senate Republican/Bloomberg/IP Axis, the Republican Party in the City does not exist. No one gives their candidates money, and no one gives them help and no one gives then even the courtesy of even a pro forma endorsement. And most don‘t care, because they are on the ballot in name only.

But I noted an exception to that; Mike Bloomberg took the trouble to endorse Gene Berardelli against Bloomberg’s arch-City Council nemesis, Lew Fidler.

Given the fact that Bloomberg has been known to funnel a million dollars to a Republican operative through straw parties without batting an eye, and the fact that Berardelli was not a placeholder, and seemed extremely aggressive, and the fact that southern Brooklyn areas like Gerritsen Beach and Marine Park had been trending Republican, I submit that it was not unreasonable for Fidler to take and spend matching funds on his re-election.

Even though Berardelli is an obvious boob, there was no way for Fidler to know at the time he took and spent the money that Berardelli’s campaign was going to turn out to be such a bust. After all, it is not unprecedented for southern Brooklyn to elect a boob to public office.

I submit that the propaganda spin in recent years of Brooklyn Republicans is that turf like Fidler’s is ripe for the taking and that candidates like Berardelli are the type of people who will emerge victorious.

Now they want to hang Fidler for believing their own propaganda.

But this is the rare case where their propaganda is not so wrong.

As I’ve noted, back in the same general region of Brooklyn, in 2010, 45th Assembly District, incumbent Steven Cymbrowitz, was held to 57% by Joseph Hayon, a Sephardic Jew active in the Brooklyn Tea Party who spent $615 on his campaign. This might be called the $615 wake up call.

Berardelli may be a gasbag and a clown, but unlike Hayon, he’s not a certifiable loon. Plus Berardelli had 85 more dollars.

Further, one may have noticed just recently that in an area encompassing much of Fidler’s Councilmanic District, Republican Bob Turner just got elected to Congress, and that Anthony Weiner himself lost much of Fidler’s Council District in his 2010 re-election.

I submit the GOP can’t have it both ways. If they are a real forced to be reckoned with in Southern  Brooklyn they cannot complain when the Democrats treat them as such.

There is no ethical issue here for Fidler.

4) Mr. Storobin objects that Mr. Fidler has parked illegally.

The New York Post, which functions as Dean Skelos’ press office, has caught Mr. Fidler parking in a space near Brooklyn Borough Hall reserved for employees of the Borough President’s Office.

Fidler claims he was given permission to do so.

That Fidler parked there under color of authority is highly credible. Borough President Marty Markowitz wants access to budget money, and the Brooklyn delegation to the City Council (and to a lesser extent, the state legislature), is his access. I know that Markowitz has used every carrot and stick in his hands, including his ultimate control of who gets on community boards and work space in Borough Hall, to leverage such money. It would be no surprise if parking was another arrow in Markowitz’s quiver. It would also not surprise if Markowitz bent the rules.

I don’t believe Fidler parked there without permission. Since, elected officials are notorious for abusing their parking plaques in places where they lack permission, Fidler’s abuse of the rules (if that’s what it is) is actually low on the scale of such offenses (which, in any events, are violations, rather than misdemeanors).

I will give Storobin credit though—he finally found something Fidler did which might actually violate a law or ordinance.      

SUMMARY: Storobin’s charges are a lot of sound and fury signifying very little.