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A clear ruling on the ethics law of finders’ fees — affecting some 13 still-secret cases — was placed in doubt during oral arguments before the Connecticut Supreme Court March 21. Because a settlement exists between the state Ethics Commission and two politically prominent law firm name partners, Peter G. Kelly and John F. Droney, the justices hearing ABC, LLC v. Ethics Commission openly wondered whether the case is now moot. At stake is an estimated $3 million in potential fee forfeitures in the pending ethics cases against other alleged finders’ fee recipients. The case began in 1999 as an anonymous, hypothetical case intended to be sealed. Since then, ABC has produced inventive strategies designed to speed its disappearance from both newspapers and law books alike, in the wake of the 1999 state treasury scandal that toppled former state Treasurer Paul Silvester. To pre-empt charges of unregistered lobbying in 1999, the plaintiffs — Kelly of Hartford, Conn.’s Updike, Kelly & Spellacy, Droney of Farmington, Conn.’s Levy & Droney, and West Hartford, Conn., businessman Charles Finley — sought a declaratory ruling on the Ethics Commission rule concerning finders’ fees, suing as “John Does.” They sought to prove the ethics law only called for forfeiture of fees if lobbyists knew they were breaking the law. In 2002, the legislature passed strongly worded law to clearly prohibit finders’ fees for state investment business. After that, New Britain Superior Court Judge Julia L. Aurigemma utterly deflated the Ethics Commission’s position, ruling that mere “door opening” was not a violation of the ethics laws at the time. The accused finders swore they knew nothing about the financial products their companies sold, and insisted they did not tout them. Despite Aurigemma’s blessing, the trio settled, forfeiting $1.9 million in finders’ fee payments to the Ethics Commission. All three agreed not to oppose a Connecticut Supreme Court appeal to reverse Aurigemma’s ruling. Assistant Attorney General Elliot D. Prescott argued the commission’s case before Chief Justice William J. Sullivan, Justices Joette Katz, Christine S. Vertefeuille and Peter T. Zarella, and Superior Court Judge John W. Moran. Prescott asked, “Based on the existing record, was there lobbying? What did the clients think they were paying millions of dollars for, if not to influence the treasurer’s decision? … Communication can be made subtly,” Prescott noted, rejecting the idea that “all they had to do was sit in a chair, like a potted plant, and not exert influence over a decision.” The justices, however, wrestled with whether the case was actually a real controversy, now that the parties had settled. Zarella noted with surprise that the settlement agreement was not part of the record. As Sullivan put it, questioning Levy & Droney’s Jeffrey T. Mirman, for the appellants, “It seems like you’re on the same side of the railroad, coming up here.” Katz, questioning Prescott on the mootness issue, asked why the 13 outstanding cases couldn’t be allowed to “percolate up and come to us by appeal — and then you can have an opportunity to vindicate your views at that point?” Prescott replied that those cases might not be appealable on grounds that the same issues already had their day in court — under res judicata or collateral estoppel. “It’s a strange procedural posture we find ourselves in,” he admitted. The record contains affidavits from top ethics lawyer Ralph G. Elliot and former Connecticut Supreme Court Justice John A. Speziale, commenting on the case’s ultimate legal and financial issue — that the accused can only be fined millions if the Ethics Commission proves they knew they were breaking the law. In rebuttal, Prescott said upholding such a construction would reward the defendants “for remaining ignorant of what the law is. That makes no sense.”

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