RTC Report: Lawyer Faces Ethics Trouble : Workplace: The attorney at the agency’s Newport Beach office denies allegations and seeks reimbursement.

A Resolution Trust Corp. lawyer based in Newport Beach is trying to bill the government $41,000 for defending himself in a disbarment proceeding that an agency ethics officer concluded was unrelated to his job.

In addition, William Elsbury, the second-ranking attorney in the agency’s Newport Beach office, hired for his defense a law firm that was doing business with the RTC, an inspector general’s report found.

Elsbury has denied all wrongdoing and continues to press the agency for payment of his legal bills. Agency sources, speaking on condition of anonymity, said Tuesday that Elsbury has been told he will be fired if he does not resign his $83,000-a-year post.

The inspector general reported April 14 that the RTC’s chief ethics officer in California concluded that Elsbury violated conflict-of-interest rules by dealing with the San Francisco law firm of Brobeck, Phleger & Harrison on contracts worth nearly $300,000 in the year after he hired them to represent him.

The internal report, a copy of which was obtained by the Associated Press, details how Elsbury submitted legal bills to the agency resulting from disbarment proceedings initiated against him in California. It concludes that he wrongly tried to bill the agency for travel related to those court sessions.

The IG also said Elsbury failed to disclose two alcohol-related driving convictions on his RTC job application, an omission that is grounds for immediate dismissal and possible criminal prosecution under federal employment guidelines. According to the report, Elsbury bases his claim for payment on the assumption that former RTC attorney Evelyn Davidson provided tips that initiated the California State Bar proceedings.

California officials declined to disbar Elsbury during a hearing last January.