ALBANY - Veteran lawyers in the Attorney General’s Office and the Office of the State Comptroller were provided with draft copies of a settlement agreement barring victims of Assemblyman Vito Lopez’s alleged sexual improprieties from criticizing either the politician or the state Assembly, records show.
The unusual confidentiality provision, in which the victims promised, at the risk of a $10,000 penalty, not to make “any disparaging remarks, comments or statements in any form concerning any aspect, circumstance or incident” involving Lopez, was included in settlement drafts reviewed by the offices of the attorney general and the comptroller, as well as the final agreement, which was not reviewed by those agencies.
Those drafts were sent by William Collins, counsel to the Assembly’s Democratic majority, to Assistant Attorney General Arlene Smoler and Nancy Groenwegen, general counsel to the comptroller, for review, records show.
Neither lawyer raised any concern or brought the matter to the attention of their respective bosses, Attorney General Eric Schneiderman and Comptroller Thomas DiNapoli, apparently because of their limited role in the matter.
Smoler, an employment law expert who has worked for three attorneys general, was asked for an informal consultation and not a legal opinion. She sent Collins a model “settlement agreement and general release” that did not include a confidentiality clause, but did not comment on the draft language shielding Lopez and the Assembly from public criticism.
Groenwegen’s office was involved only to review the financial aspects of the proposed settlement, not the merits of the draft proposal, officials said.
The final version—which neither the Attorney General’s Office nor the Comptroller’s Office saw until it was completed and signed—added a “secrecy” clause designed to ensure that any proceedings resulting from the settlement would take place in a non-public forum, according to sources who have seen the document. That document has not been released.
Despite the secrecy and confidentiality provisions, details of the June 6 settlement emerged after two additional Assembly staff members came forward with similar complaints against Lopez, resulting in a censure of the Brooklyn Democrat.
In the past several days, Assembly Speaker Sheldon Silver, D-Manhattan, has come under withering criticism for approving the final settlement with its secrecy clause.
But the earlier drafts, circulated among several lawyers, would also have shielded Lopez and the Assembly and prevented the public from learning of a deal resulting in a $103,080 expenditure of public funds. Under the final settlement, the two women shared a total of $135,080, with $103,080 coming from the Assembly and $32,000 coming from Lopez.
The Collins emails were released by Schneiderman last week along with a statement from his communications director, James Freedland.
Freedland stressed that Schneiderman had no role in the settlement negotiations since there was no pending litigation, and never saw the final agreement that included the secrecy provision, let alone the proposed drafts.
The attorney general has an official role in representing state agencies and entities only when they are sued and does not serve in a general counsel capacity to those offices and institutions.
Similarly, the Comptroller Office’s only role in settlements is to review financial stipulations. The counsel’s office does not provide general legal advice to other state offices.
Groenwegen said in an interview that her office is frequently consulted about settlement agreements involving payments to state employees. She said her office was not a party to the settlement negotiations and was not asked to opine on the merits of the agreement.
“In employment-related settlements, we need to know whether or not the dollars are treated as damages or salary,” Groenwegen said, commenting on the limited role of the comptroller’s office in the Lopez matter. “If it is damages, we have a reporting-only obligation to the IRS. If it is salary, we have a reporting and a withholding obligation.”
Last week, Schneiderman issued a statement blasting Lopez “and the decision of the Assembly to keep secret the provision of—and even the existence of—a settlement agreement.” He said the secrecy provision was “wholly inappropriate and contrary to the public interest.”
Yet the emails show a confidentiality provision—if not the broader secrecy provision—was included in all three drafts reviewed by Schneiderman’s office.
Here is a chronology of the emails provided by Schneiderman’s office:
• May 29, 5:08 p.m. Collins sends a draft settlement to Smoler and Groenwegen along with an email asking “for any thoughts either of you might have on this draft.”
The draft includes a confidentiality provision stating that neither party “will discuss or make any statement of any sort concerning the underlying circumstances of the dispute.” It also provided for liquidated damages of $5,000 to the Assembly if the victims breach the confidentiality agreement.
In the accompanying email, Collins observes that the draft does not include liquidated damages if the Assembly, rather than the victims, discloses the agreement, but predicts that counsel for the victims will insist on such a provision.
Additionally, Collins refers to “several conversations with both of you [referring to Smoler and Groenwegen] and extensive mediation/negotiations” and an agreement that would cost the Assembly $103,080 and Lopez $32,000.
“Note that complainants initially sought $1.2M and reduced their settlement number only once (to $600,000) before we drew a hard-and-fast line at salary/benefits from their continuing employment to May 30,” Collins said in the email.
• May 30, 1:02 p.m. Collins sends a second draft to Smoler, and Groenwegen, with copies to James Yates, counsel to Silver, and Carolyn Kearns, a counsel to the Assembly. The second draft also includes the confidentiality provision.
Under that provision, the victims “agree, individually and collectively, that they shall not communicate or publish, or cause to be communicated or published, any disparaging remarks, comments or statements in any form concerning any aspect, circumstance or incident involving their employment in the office of Member of the Assembly Vito Lopez or any office(s) of the New York State Assembly.”
Additionally, it provides for liquidated damages of $10,000 or actual damages, “whichever is greater,” if either the Assembly or the victims breach the secrecy provision.
• May 30, 2:31 p.m. Smoler sends an email to Collins and Groenwegen, copying Yates and Kearns, commenting on the second draft.
The assistant attorney general notes that she modified the agreement to make clear that the Assembly and not Lopez is the employer and attached a “sample pre-litigation settlement agreement which contains most of the provisions that I would include if I had negotiated a pre-litigation agreement.” That document does not include a confidentiality or secrecy provision.
• May 30, 3:13 p.m. Collins sends a third draft agreement to Smoler, Groenwegen and John Dalton, an attorney in Groenwegen’s office, again copying Yates and Kearns. The third draft contains the confidentiality provision, but not the secrecy provision.
Observers said it is highly unusual for a settlement with the state to include a confidentiality/secrecy provision and unheard of for such a provision to include liquidated damages.
Silver’s office did not respond to multiple inquiries on why the Assembly counsel would have circulated three drafts of the proposed settlement and not the final version. Collins did not return a call from the Law Journal.
It is unclear why the confidentiality/secrecy provision was included and whether the alleged victims as well as Lopez sought to keep the matter out of the public light. One Lopez ally said the assemblyman was essentially “blackmailed,” with a threat that if he and the Assembly did not pay a settlement the complainants would go public.
Silver has suggested that the allegations could not be investigated internally by the Assembly’s ethics committee because of the confidentiality clause.
Gloria Allred, a Los Angeles attorney who represents one of the women, criticized the “leak” that resulted in disclosure of the settlement, but said in a statement that the confidentiality provision in no way precluded an Assembly investigation.
“We would urge a full airing of all the facts, through subpoenas being issued or otherwise, so that the facts can be fully aired,” Allred, of Allred Maroko & Goldberg, said in a statement. “Women who come forward with complaints of sexual harassment are entitled to protection and should not be attacked because they agree to a settlement in order to protect their privacy and reputation. They should be afforded the chance to find work where they are valued for their merit instead of their bodies. An investigation should be conducted ASAP.”
Mariann Wang of Cuti Hecker Wang in Manhattan represented the other victim.
Allred said yesterday that she and Wang have received subpoenas from the Joint Commission on Public Ethics “and are communicating with the commission to ensure our cooperation.”
Also yesterday, JCOPE formally told the Comptroller’s Office to retain records involving the secret settlement, a state spokeswoman confirmed.
The “information preservation” letter to the comptroller is not a letter to any target of a JCOPE probe, but a letter to make sure all records regarding the case are preserved, DiNapoli spokeswoman Kate Gurnett told The Associated Press.
Meanwhile, Staten Island District Attorney Daniel Donovan Jr., a Republican who ran for attorney general in 2010, is investigating Lopez’s alleged sexual misconduct.
“We have been notified by the chambers of Deputy Chief Administrative Judge Fern A. Fisher that Richmond County District Attorney Daniel M. Donovan Jr. has been appointed by the court as special prosecutor to investigate allegations surrounding Assemblyman Vito Lopez,” Donovan’s spokesman, Peter Spencer said in a statement. “D.A. Donovan will assign a team of prosecutors and investigators and discuss with them how to proceed with the investigation.”
The Associated Press reported that the Albany County district attorney, David Soares, a Democrat, has joined in Donovan’s investigation. Neither Donovan nor Soares would confirm that the Albany prosecutor is involved.
“As with all cases of public integrity we cannot comment on ongoing investigations,” said Cecilia Logue, a Soares spokeswoman.
Spencer said the Albany County District Attorney’s Office “reached out to us and offered their assistance, as did several other law enforcement agencies.” He would not say whether Donovan accepted Soares’ offer of assistance.
Gerald Lefcourt of Manhattan represents Lopez. Lefcourt declined to comment and would not say whether he represented the assemblyman during settlement negotiations.
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