Banner Graphic, Volume 21, Number 108, Greencastle, Putnam County, 10 January 1991 — Page 3

California lawyers fight ban on sex with clients

SACRAMENTO, Calif. (AP) Lawyers and lawmakers in the land of “L.A. Law” are hung up over proposed restrictions on sex between attorneys and clients. The rules governing sexual behavior of California’s 128,000 lawyers would be the first of their kind in the nation, said JoAnne Pitulla, an American Bar Association research attorney. BUT WHEN THEY might take effect is unclear because of the impasse between lawyers, who complain that the proposed rules are too tough, and legislators, who say attorneys shouldn’t be romantically involved with those they’re supposed to protect. The California State Bar missed the Legislature’s Jan. 1 deadline for submitting rules to the state Supreme Court for final approval. The bar plans to take up the issue again on Jan. 26. Democratic Assemblywoman Lucille Roybal-Allard sponsored 1989 legislation that required the bar to impose rules governing lawyer-client sex after two women in 1988 accused “palimony” lawyer Marvin Mitchelson of sexual assault PROSECUTORS decided not to bring charges against Mitchelson, who denied the allegations, but a state crime victims’ compensation board awarded the women $56,000 for medical and psychiatric care. The money comes from a state fund. Roybal-Allard said the allegations prompted many complaints against other lawyers. She supports a ban on all sexual contact between lawyers and clients except sexual tics that existed before the attorney-client relationship. Supporters of the tougher rules point to attorneys’ tarnished image. California, they point out, is the setting for TV’s “L.A. Law,” featuring legal lothario Arnie Becker, a divorce attorney with questionable ethics. ROYBAL-ALLARD complained that the governing board of the bar, which polices the profession on behalf of the state,

Bush may force taxpayers to bail out failed banks

WASHINGTON (AP) The Bush administration is considering forcing taxpayers for the first time to bear part of the cost of future large bank failures, a senior Treasury official says. Top administration policymakers have yet to approve the plan, “but we’re at the very final decisionmaking phase,” said the official, speaking Wednesday on condition of anonymity. THE POINT OF the proposal, which would need approval from Congress, is to make bailouts protecting uninsured deposits far less common. It would increase the political cost of such bailouts and elevate the decision to government’s highest levels. Banks then would be under pressure from large depositors to operate more safely since depositors would risk losing a portion of their funds over the SIOO,OOO-per-account insurance limit. One variant of the plan would spend tax money, in addition to insurance fees contributed by the banking industry, in the few rescues in which the government decides protecting all depositors is crucial to the economy. THE FEDERAL Deposit Insurance Corp, would pay up to SIOO,OOO per account for all banks. But for large banks whose failure could threaten a contagious run on the banking system, taxpayers would bear the cost of protecting greater amounts.

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has drafted a compromise allowing lawyer-client sex as long as the relationship doesn’t impair the attorney’s competence. “The problem with what they are proposing is it puts the burden of proof on the client,” she said. “It’s going to be the woman’s word against the man’s word the same thing we see in the courts all the time. I can’t see accepting anything which would put the client at a disadvantage.” The proposal would prohibit a lawyer from intimidating a client into having a sexual relationship or demanding sex from a client as a condition of professional representation. Violators could be disbarred. SOME ATTORNEYS say any controls are unnecessary because criminal laws prohibit sexual misconduct They say an outright ban on lawyer-client sex is especially inappropriate. “This blanket prohibition has the potential for significant and unwarranted intrusion into attorneys’ personal lives,” said San Francisco attorney Gail Hillebrand. At least one member of the bar association’s governing board disagrees. DOROTHY TUCKER, a psychologist and public member of the board, said the lawyerclient relationship is like the psychologist-patient relationship, and lawyers should be held to similar standards. She said she would oppose lawyerclient sex even if both parties consented. The bar does not compile statistics on sexual-assault complaints against lawyers and has no count of such complaints, spokeswoman Susan Scott said. But testimony on Roybal-Al-lard’s legislation included one woman’s complaint to the state bar accusing her attorney of acting too familiar with women clients, including hugging them to say goodbye. Another woman complained that her attorney recounted his weekend sexual exploits in graphic detail, then suggested she needed to have the same thing done to her.

They also could have to pay to cover deposits in foreign branches of American banks. Legally, these are uninsured, but they have always been protected because regulators fear shaking the world’s confidence in the U.S financial system. Another option would have the Federal Reserve pay the added expense of exceeding the insurance limit. However, because the central bank forwards its earnings to the Treasury each year, diverting that revenue also would increase the burden on taxpayers. A THIRD CHOICE would be to continue the practice having the industry-financed FDIC bear the entire cost. “The argument for doing it through the Fed or taxpayers is that the decision to protect all depositors is ... made for the benefit of the entire economy and not just the banks,” the Treasury official said. “The argument is that it’s only right that the entire financial system share the burden of such a decision.” “The other side of the argument is that the taxpayer has quite enough responsibilities as it is and that the banks ought to be responsible for insuring the activities of the banking industry,” the official said. THE ADMINISTRATION has rejected the notion of completely forbidding the bailout of uninsured depositors. That would put U.S. banks at a disadvantage with their foreign competitors.

Bayh to be bleak in annual address

INDIANAPOLIS (AP) Gov. Evan Bayh plans to give a blunt, realistic assessment of the state’s “very, very difficult” financial situation when he addresses Hoosier citizens and legislators tonight. The first-term Democratic governor also indicated he will try in his third State of the State address to rally public and legislative support for spending cuts that would help state government weather the fiscal crisis. “THIS IS A difficult situation. I have no illusions and I’m sure people of this state have no illusions that addressing difficult situations is not a pleasant task,” Bayh said. “All of us will be called upon to make some sacrifices, but I think the people of our state will understand that,” Bayh said. “Fiscally, it’s going to be very, very difficult, and I’m going to reflect that in what I’ll have to say.” Bayh’s State of the State address is scheduled for 7:30 p.m. before a joint session of the Indiana House and Senate and a statewide television audience. KEY LEGISLATORS agreed Wednesday that the state faces a major fiscal crisis and said they will look to Bayh for guidance in trying to solve the budgetary problems brought on by a slowing economy. “I think it’s a real challenge and it will take extraordinary leadership,” said Rep. Patrick J. Kiely, an Anderson Republican and former chairman of the Ways and Means Committee. “I hope tomorrow the governor says how he’s going to do this.” In a speech on the House floor, Kiely said he’s not sure many lawmakers or the administration fully grasp the scope of the state’s budget problems. HE OUTLINED A complex fiscal analysis that showed state government would have to lay off about 4,600 employees and eliminate all spending for some parts of government in order to close the budget gap. Such drastic steps would be needed if the Legislature is going to prevent cumulative deficits estimated at $854 million over the next two years and adhere to guidelines Bayh has set out previously. The governor has said he would like to avoid cutting basic support for public education, tapping into the state’s reserves in the rainy day and tuition reserve funds and raising taxes. IF LAWMAKERS followed those criteria and also exempted from cuts critical programs such as corrections, Medicaid and property tax control, the state would have to eliminate virtually all general government funding, all economic development programs and severely cut funding for other health and safety programs, Kiely said. “I don’t think many of the members understood the numbers you get when you cut this much out of this size budget,” Kiely said after his speech. “I’m not sure for everybody the reality of this has sunk in.” Ways and Means Chairman B. Patrick Bauer, D-South Bend, agreed with Kiely’s bleak assessment. “1 DON’T THINK people realize how serious this recession is,” he said. “There will be serious cuts.” However, Bauer maintained there may be other ways, besides only cutting spending, to address the crisis. The state could use some of its reserve money, could save money in other ways such as rewriting some Medicaid regulations and could postpone some expenses by issuing bonds, instead of paying cash, for needed prisons, he said. “WE WILL CONTINUE to try to get through this crisis without a tax increase,” said Bauer. Bayh agreed that a tax increase shouldn’t be considered.

“You won’t hear me talking about taxes,” he said. However, the governor appeared to indicate that some cuts or major changes in education funding could be among his recommendations. The administration won’t release its detailed plan for cutting spending until Friday morning.

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“WE’RE GOING TO DO our best to preserve as much as we can,” he said of education funding. But the way that money is spent could change, he said. “We have made major financial commitments to education in Indiana over the last decade. Real spending has gone up 26 or 27 oer-

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January 10,1991 THE BANNERGRAPHIC

cent over the last decade and yet test scores, graduation rates, other indices of improvement have hardly budged at all,” he said. “I think we need to start focusing on not only spending additional funds but making qualitative improvements in the process by which we spend those monies.”

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