THOMAS W. KELTY, Chief Counsel,
Illinois Municipal League

"NO MAN CAN SERVE TWO MASTERS"

The Bible admonishes that "no man can serve two masters." Whether one's religious persuasion subscribes to the teachings of the Bible, many tenets set forth in the Bible apply to everyday life. This tenet is no exception. In a recent opinion pertaining to the discipline of a lawyer, the Illinois Supreme Court has adopted a form of this rule and applied it to lawyers who are members of public bodies. Edward Robert Vrdolyak is well-known in Chicago and throughout the state for his tenure as a member of the Chicago City Council and served a high profile and colorful tenure on the Chicago City Council. Mr. Vrdolyak's activities on the council were well chronicled by the Chicago media, however, it was not those activities as a legislator that brought him before the court as the subject of attorney discipline, but rather, his activities as a lawyer while a member of the Chicago City Council.

Alderman Vrdolyak served from 1971 until 1987 as a member of the Chicago City Council. During that period, he was appointed as a member of the Finance Committee of the Council. The Chairman of the finance Committee was responsible for the appointment of the members of the Bureau of Workmen's Compensation. This body reviewed worker's compensation claims made against the City of Chicago and made recommendations for the payment of worker's compensation benefits to injured employees. Besides Alderman Vrdolyak's work as a member of the city council and the committee on finance, he was employed as a lawyer in approximately thirty-five worker's compensation cases in which city employees asserted claims against the City of Chicago for injuries. Vrdolyak corresponded with Corporation Counsel, City Clerk and Chairman of the Committee on Finance advising them he wanted no vote pertaining to the settlement of worker's compensation cases recorded by him because of his representation of worker's compensation claimants. Notwithstanding Vrdolyak's attempt to recuse himself from any vote pertaining to worker's compensation matters, the Attorney Registration and Disciplinary Commission (ARDC) filed a complaint against Vrdolyak stating a variety of allegations against him arising out of his representation of worker's compensation claimants. In addition, a second count was filed by ARDC against Vrdolyak for matters not pertaining directly to his representation of these claimants.

The subject of general conflicts of interest by legislators is addressed by a number of statutory references and has been the subject of litigation which has arisen in different contexts. For example, Paragraph 3-14-4 of the Municipal Code (Ill.Rev.Stat., Ch. 24, para. 3-14-4) prohibits interest by municipal officers in any "contract work or business of the municipality . . ."In addition to this statute. Chapter 102, Paragraphs 2 and 3, prohibit similar activities as that addressed by the municipal code provision. In addition, Paragraph 2 prohibits dual office holding by an alderman or member of the Board of Trustees. The Vrdolyak opinion by the Supreme Court squarely addresses the conflict which exists for a lawyer-legislator when as a lawyer, representation of a client having an interest in a matter involving the City is undertaken. The short rule can be reduced to the biblical rule: "no man can serve two masters."

The last pronouncement of the Supreme Court on this subject was in a 1959 opinion In Re: Becker, 16 Ill.2d 488 (1959). As in this case, a Chicago alderman, who was also a lawyer, undertook representation of clients whose interests were adverse to that of the City of Chicago. Becker held that "nothing [was] unethical in a [lawyer-legislator] appearing in litigation wherein his governmental unit is a party." However, in Becker the court carved out an exception to this type of representation by saying "[the lawyer-legislator] should not appear as counsel where the matter is subject to review by the legislative body of which he is a member. . . ." The Becker court concluded that a representation in which review by the legislative body could occur created a conflict of interest for the lawyer-legislature which was unresolvable.

According to Vrdolyak, it was upon Becker that he relied in undertaking the representation of the worker's

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compensation clients. He reasoned that because the matters in which he was representing clients were subject to review by the Bureau of Worker's Compensation and the Committee on Claims and Liabilities that he fell within the Becker exception rather than the prohibited area in which his actions as a lawyer would be subject to review by the body of which he was a member.

The briefs of both parties relied heavily on the Becker opinion. Vrdolyak asserted that he was within the exception; ARDC asserted that he was not within the exception. The opinion of the Supreme Court ignored the exception distinction created by Becker and instead, relied upon the Code of Professional Responsibility adopted by the Supreme Court to resolve the complaint against Vrdolyak.

The opinion of the court was a per curiam opinion in which no individual author is identified. In addition, Justices Ward, Clark and Stamos recused themselves from consideration of the case most probably because they are Supreme Court Justices from the First District which includes Cook County.

The question addressed by the Court in resolving the complaint was reduced to a single sentence by the court: "Did respondent engage in unethical conduct by representing city employees in worker's compensation claims against the city while serving as an alderman?" The answer supplied by the court is equally succinct: "We conclude that respondent engaged in a conflict of interest when he represented city employees in their worker's compensation cases against the city while serving as an alderman." But the simplicity of the statement of issue and the holding of the court does not tell the whole story. The breadth of the holding of the court has a sweeping impact on all lawyer-legislators through the State of Illinois.

The ARDC alleged that Vrdolyak violated four disciplinary rules:

DR1-102(a)(vi) —Engaging in conduct prejudicial to the administration of justice;

DR5-101(a) — Accepting employment where the exercise of his professional judgment on behalf of a client may be affected by his own interests;

DR8-101 (a)(i) — Using his public position to obtain a special advantage in the legislative matter for a client;

DR8-101(a)(ii) — Using his public position to influ-

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ence a tribunal to act in favor of his client; and, DR8-101(a)(iv) — Representing a client in matters pending before the public body of which he is a member.

The court held that Vrdolyak violated DR5-101(a). According to the court, an alderman of a municipality owes an "undivided fidelity and a fiduciary duty to the city." Similarly, he owed the same duty to the clients which he was representing. And according to the court "by representing clients against the city, the competing fiduciary duties collided and the respondent became embroiled in a conflict of diverging interests and divided loyalties, which even full disclosure could not avoid." In reaching this result, the court relies on a number of ethics opinions of the Illinois State Bar Association to achieve its result. However, the most important facet of this holding to lawyer-legislators is that the Becker case, according to the court, has been overruled sub silentio. Since the Code was adopted in 1980, the court is effectively holding that all representations subsequent to 1980 which would have violated the standards set forth in Vrdolyak but been acceptable under Becker are subject to the dictates of Vrdolyak, not Becker.

For the violation of this disciplinary rule, the court determines that the appropriate sanction to be applied is that of censure. This sanction permits the violator to continue the practice of law, however, the censure amounts to a condemnation of the conduct of the attorney with respect to the matter. The court found that Vrdolyak's good faith reliance on Becker acted in mitigation of any punishment that the court might apply. Notwithstanding this mitigating effect by the court because of Vrdolyak's adherence to the dictates of Becker, the ruling should be of great concern to any attorney who serves on a legislative body in Illinois.

The broad outline painted by the Supreme Court appears to prohibit any representation by a lawyer who is a legislator in any manner in which the body of which he is a member has any interest. No longer is it sufficient that the matter not be reviewable by the legislative body of which he is a member, but rather, any interest held by that body is sufficient to maintain a conflict of interest action against the lawyer. The court admonishes all lawyers in its opinion to "carefully examine the circumstances to determine whether a conflict of inter-

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est exists; if so, [the lawyer] should decline employment in that case." In addition, the court suggests that the legislative body may adopt stricter standards for the determination of conflicts of interest than those imposed by the court in its Vrdolyak opinion. "It should also be noted that this opinion is not to be read as limiting a governmental unit's authority, if any, from imposing stricter conflict of interest standards on its member, including those who are attorneys."

Vrdolyak, by his attorney, responded to the opinion by filing a petition for rehearing before the court on June 20, 1990. In the petition, Vrdolyak raises a number of pertinent questions pertaining to the court's opinion. In effect, Vrdolyak is asking the court to provide additional delineation for the terms employed by the court in its opinion. In addition, the petition for rehearing raises factual scenarios which are of some merit. These scenarios suggest that the court has fashioned its standards which may be excessively broad in its application to legislature-lawyers. In addition, Vrdolyak argued that the application of the new rule stated in the opinion to him is unjust. He reasoned that since the court has fashioned a new rule, it is fundamentally unfair to apply that rule to him, rather, it should be applied prospectively from the date of the opinion forward. Because of the filing of the opinion late in the Spring term of the court, it is not expected that a ruling on the petition for rehearing will occur before October of this year.

Irrespective of the court's decision on the petition for rehearing, the Vrdolyak opinion illustrates the continuing difficulty that municipal legislators encounter with respect to conflicts of interest. Not only do those conflicts occur for lawyers-legislator, they have the potential to occur for any legislator. I would encourage any lawyer-legislator to carefully read the Vrdolyak opinion and assess those actions against the standards of Vrdolyak to determine if the conduct in the representation of any clients is consistent with Vrdolyak. In addition, I strongly encourage all municipal legislators and officials to re-read the conflict of interest sections discussed above and determine whether or not any of their actions are subject to sanction under any of the conflict provisions. As demonstrated by Vrdolyak, the penalties for engaging in a conflict of interest transaction can be severe and could have a long lasting impact on an individual occupying a public post. For example, Alderman Vrdolyak's previously unblemished disciplinary record will bear the stigma of the censure imposed by the court for the rest of his career. This holding will follow him, notwithstanding the fact that he believed, in good faith, that he was acting in accordance with the bounds of the law.

This opinion painfully illustrates that municipal officials must be continuously vigilant to potential conflicts that may arise during their tenure. Review of individual legislators activities to determine whether or not conflicts exist should not occur on an annual, semiannual or monthly basis. It should occur on a continuing basis with the municipal official being continuously aware of the provisions of Illinois law pertaining to conflicts of interest to assure that such a conflict does not occur. •

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