A senior federal judge has opened a consulting firm and begun marketing efforts that offer to put "a judge in the boardroom of a corporation" despite federal laws restricting commercial activities of judges and court rules banning the use of judicial titles for profit.
Eugene R. Sullivan, a senior judge of the U.S. Court of Appeals for the Armed Forces, has formed a firm called Gavel Consulting Group, which will advise corporations, law firms and foreign governments on how to handle or avoid "litigation and investigations." He said he had undertaken the venture with five prominent former federal judges, though one of those judges said Sullivan is the owner of the firm and the rest are "advisers" with no financial interest in the firm.
Until Friday afternoon, the firm's Web site promised to "bring a wealth of experience from the Federal bench and service at the highest levels of government. . . . Our concept literally puts a 'judge' in the boardroom of a corporation."
As a senior judge, a title that means he is retired but available to hear cases, Sullivan is subject to this court rule: "The title of Senior Judge may not be used in any way for personal gain or in connection with any business activity, advertisement, or solicitation of funds." The title may be used only in a resume, professional listing or in connection with official judicial duties, the rules state.
Contacted by Hearsay, Sullivan initially said he was doing nothing wrong. After further questions, Sullivan removed all content from his Web site and left a pitch-black home page. "You have a point," Sullivan said, "so I have pulled my Web site and I will fix this problem. I want to do this right. I am not trading on my name as a judge."
Sullivan said he intends to move ahead with his consulting firm and to remain a judge on senior status. He said that he would only be in violation of federal law if he actually heard cases while doing consulting work at the same time. So, Sullivan said, if he is assigned any matters by the Washington-based court, he will suspend his consulting work until those cases are concluded.
Hearsay learned of the venture from an e-mail publicizing the firm and apparently sent to a broad list of recipients from his home e-mail account. Shown the Web site and an e-mail, judicial ethics expert Steven Lubet, a Northwestern University law professor, said Sullivan appeared to be violating the rules. "The position of judge belongs to the people, not to the individual," Lubet said. "It is not meant to be commercially exploited."
Former federal judge Abner Mikva, now a law professor at the University of Chicago, said, "If he still is holding himself out as a judge, even as a senior judge, he is crowding the line," Mikva said. "You're not supposed to be a judge and a private party for profit at the same time."
Sullivan, a decorated Vietnam veteran, former Justice Department attorney and ex-general counsel for the Air Force who also occasionally teaches ethics classes, initially said of the firm and Web site, "I'm not violating the rules." Later, Sullivan said, "Maybe I just shouldn't ever use the phrase 'senior judge.' No one caught it. It is a glitch. I'm sorry and we'll fix it."
Unlike other federal judges appointed to life terms, judges in the armed forces courts are appointed to 15-year terms, at the end of which they are moved to senior status. Just as federal judges on senior status can hear cases, so can armed forces judges if they accept an assignment.
Two other senior judges on the court have been permitted to have affiliations with law firms, but they are prohibited from practicing on cases related to the Uniform Code of Military Justice. Those jurists informed the chief judge of their outside work., but a court official said on Friday that Sullivan "did not notify anybody here what he is doing." Sullivan declined to respond to that statement.
As a senior judge, Sullivan receives the usual retirement pay of 80 percent of a judge's salary, but would be fully compensated if he is brought in to hear cases. Sullivan went on senior status in October 2001 but continued to hear cases until last October, when President Bush filled a vacancy on the court.
Last September, just before he stopped actively hearing cases as a senior judge, Sullivan joined the board of a troubled California energy company that remains under investigation by the state attorney general for alleged securities-fraud violations and has faced regulatory action from the Public Utilities Commission for faulty billing practices. Sullivan said he thought the Commonwealth appointment would be made in October after he had finished hearing cases.
Tustin, Calif.-based Commonwealth Energy Corp., whose founder was forced by state utilities regulators to resign, described Sullivan in a news release as "a Federal Judge in Washington, DC," who would "further Commonwealth Energy's priorities of integrity and profitability." His appointment was part of a legal settlement over a contested board election. According to company filings with the Securities and Exchange Commission, Commonwealth directors are paid $6,250 per quarter, plus $500 for attending each full board meeting and $300 for each committee meeting. But SEC documents do not make clear how much, or even if, Sullivan was paid before resigning from the board in February.
Sullivan said he quit the Commonwealth board to form Gavel Consulting, which is a corporation chartered in Delaware. He said that the terminology used in the news release was "a mistake of Commonwealth." He said he does not recall if he ever pointed out the mistake to the company.
Sullivan told friends in an e-mail that he had undertaken the "establishment" of the consulting firm with former federal judges. One of the judges mentioned was Stanley Sporkin, a former Securities and Exchange Commission enforcement chief, now a partner at Weil, Gotshal & Manges LLP. "We are only advisers. We don't have an interest in this company," Sporkin said, adding that if needed the former judges would serve as consultants.
The American Bar Association also frowns on former judges using their former position or titles in the practice of law or to solicit legal business. Using the title of judge, according to the ABA's Standing Committee on Ethics and Professional Responsibility, can be "misleading because it may be misunderstood by the public as suggesting some type of special influence, and whether its use by a former judge practicing law serves any proper purpose."
On the www.gavelconsultinggroup.com Web site, until Sullivan pulled it down, the firm described itself as "an on-call group of former federal judges who can provide strategic advice to corporations and law firms on anticipated actions in business, litigation, and investigations."
"It is a step beyond jury consultants," the site said. "The Group is a unique purely independent advisor for the decision-maker -- an adviser with depth of experience and no stake in the outcome of the proposed action."
Before he took down his Web site, Sullivan compared the comment regarding putting "a judge in the boardroom" to an Exxon gas slogan, "putting at tiger in your tank by putting a judge in the boardroom, making boardroom decisions, advising on board decisions."
Sullivan was depicted on the Web site wearing a black robe, hands folded in a pensive posture and a gavel sitting in front of him on what appeared to be a court bench.
Sullivan operates the firm out of his Bethesda home. In an e-mail that begins "Dear Friends," Sullivan noted that as a judge on senior status, "I have elected to have my chambers at home."
Sullivan said Gavel Consulting, which already has one manufacturing client in Illinois and a potential client that is a global Internet firm, expects to provide corporate governance advice to companies, and this spring it is giving a pro bono presentation with the American Institute of Certified Public Accountants called "Corporate Fraud Prevention: A Briefing for Boards of Directors."
"We're looking to give people advice before they get in trouble," Sullivan said. "This is a very beneficial service. There hasn't been one like this before, where judges can solve problems upstream before a corporation crashes or litigation goes sour. It is a good idea."
Sullivan, 61, reported last year on his financial-disclosure form that he has no reportable assets, no liabilities, received no gifts and has only one investment, a money market valued at $50,000 to $100,000.
Lubet, the ethics professor, said he has no problem with former judges earning a living and profiting from their expertise, training and judgment. "He's dedicated his life to public service and I hope he makes a lot of money in his consulting practice," Lubet said. "I just don't think he should call himself 'judge.' "
Researcher Alice Crites contributed to this column.
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