Bill Proposes Protections for State Lawyers

The plight of a whistle-blower who risked her law license by exposing misdeeds at the Department of Insurance prompted legislation Wednesday to protect government attorneys who report wrongdoing.

Assemblyman Darrell Steinberg (D-Sacramento) said he was introducing the measure, AB 363, to fulfill a commitment to push for reforms that would help avoid a repeat of the scandal that involved former Insurance Commissioner Chuck Quackenbush and forced him from office last July.

Steinberg, who handled much of the questioning during legislative hearings into Quackenbush’s activities, said he learned firsthand from that investigation of the risks that government attorneys take in reporting wrongdoing.

He said insurance department lawyer Cindy Ossias jeopardized both her job and her right to practice law when she leaked documents to the Assembly Insurance Committee about secret settlements that Quackenbush had reached with insurance companies after the Northridge earthquake. The settlements allowed the companies to donate to private foundations created by Quackenbush rather than face heavy fines for mishandling claims.

When her role in the investigation became public, Quackenbush put Ossias on administrative leave and took steps to fire her. The State Bar of California later investigated to determine if she had violated the attorney-client privilege that requires lawyers to keep confidential information divulged by clients.

“My loyalties were at war last year--loyalty to my boss, loyalty to the agency, loyalty to the public and loyalty to the rules of professional conduct,” Ossias said.

She was eventually reinstated by Quackenbush’s successor, Clark Kelso, and exonerated by the bar, which licenses and disciplines lawyers in California.

But Steinberg said the bar specifically limited its decision to Ossias’ case so it would not become precedent for other government lawyers in similar circumstances.

He said his bill would remedy that by protecting all government lawyers in California, including those who work for state and federal agencies, from losing their jobs or their bar licenses when they expose wrongdoing.

“We want to protect attorneys who act in the public interest and we want to create incentives for them to come forward when they see wrongdoing,” Steinberg said.

Jeffrey Ruch, executive director of Public Employees for Environmental Responsibility, said he expects the measure will be copied by other states if it is passed by the Legislature. Ruch’s group is a national organization created to protect government employees who report environmental abuse.

“Almost no states make any distinction between a government lawyer and a private lawyer,” he said. “Attorneys are supposed to take their secrets to the grave. You see wrongdoing and the only recourse is to resign and forever keep silent.”

The measure is also being supported by California Attorneys in State Employment, a group that represents government lawyers.

“While we are state lawyers, we are also public servants who should never be put in the place of having to choose between serving the public by exposing official misconduct and our license to practice law,” said Mark D. Ginsberg, the organization’s director.

A spokesman for the State Bar of California said it has not taken a position on the proposal.