An investigator for the State Bar of California and his wife received over $1 million in undisclosed gifts and payments from disgraced former attorney Tom Girardi and dozens of client complaints against the high-profile attorney were closed without any action taken, according to reports issued Friday.
Two reports reveal the extent of Girardi’s alleged decades-long efforts to corrupt those at the State Bar who handle discipline complaints, likely impacting the handling and eventual improper closing of those grievances. The corruption attempts extended to at least nine former State Bar employees or board members who accepted items of value, travel or meals from the then-attorney who is currently facing federal charges, the bar association found.
Girardi’s relationship with then-State Bar investigator Tom Layton and his wife, Rose, was described in one report as “particularly remarkable.” Layton, who was fired from the association in 2015, received gifts and payments estimated at over $1 million from Girardi, through his firm, while Layton was employed at the bar, according to a report, which said the handouts were never properly disclosed.
Investigators found that Girardi is the godfather to Layton’s daughter and the two were close friends and had what was described by one witness as a “father-son” type of relationship. According to records from Girardi’s law firm, Girardi Keese, Layton, his wife and a business entity they ran together received over $600,000 in payments from the law firm while Layton was employed at the State Bar, according to the report.
The probe determined that Girardi Keese also leased Layton multiple cars over the years and gave Layton a firm credit card, which he used to pay for routine expenses. Layton also received a large bank loan that Girardi guaranteed, and for which Girardi Keese made repayments. Girardi’s firm also employed two of Layton’s children while their father was employed at the State Bar, according to the report.
“Even though we did not find evidence that Layton was assigned to or made discretionary decisions in any Girardi case, there is evidence suggesting that he assisted Girardi in disciplinary matters in other ways,” the report states.
Girardi, co-founder of the defunct Los Angeles law firm Girardi Keese, is facing federal charges of embezzling more than $15 million from several of his legal clients. The 83-year-old Girardi — estranged husband of “Real Housewives of Beverly Hills” star Erika Jayne — has Alzheimer’s disease and in June 2021 was deemed incompetent to manage his own affairs. He was disbarred a year later and is currently living in an Orange County assisted living facility.
A Los Angeles federal court judge will determine his competency to stand trial.
The reports issued Friday, March 10, by the State Bar describe how Girardi’s “unethical and unacceptable behavior went unchecked for so long and reveal systemic organizational dysfunction that persisted for many years and through many changes of leadership.”
The first of the two reports was prepared by attorney Alyse Lazar, who in 2021 was retained by the State Bar to review 115 files of past complaints against Girardi. Her review, limited to documents in investigative files, identified numerous instances in which complaints were closed without complete investigations or despite the development of facts warranting discipline.
The second report was completed by an outside law firm hired by the State Bar to conduct a probe that included interviews of 74 witnesses. That report details instances where Girardi’s efforts to buy relationships and exercise influence at the State Bar at all levels likely impacted the handling of some complaints against him, causing those complaints to be shut down improperly.
The bar association stated that none of the individuals whose unethical behavior is alleged are still affiliated with or employed by the agency in any capacity.
The State Bar said it had received 205 complaints against Girardi, after he was disbarred, alleging he misappropriated settlement money, abandoned clients and committed other serious ethical violations over the course of his four-decade career.
Ruben Duran, chair of the State Bar Board of Trustees, said the “magnitude and duration of the transgressions reveal persistent institutional failure and a shocking past culture of unethical and unacceptable behavior” at the association. He said safeguards have been put in place to prevent unethical or corrupt behavior and address it quickly if it does occur.
Other findings show that eight Girardi cases were closed by individuals who had conflicts of interest at the time they worked on the cases. The report found that their conflicts tainted their decisions to close the cases.
Also, between 2013 and 2015, both the executive director and general counsel’s offices received reports about Girardi’s influence at the State Bar and connection to Layton and others — but failed to investigate, one of the reports showed. On at least one occasion, Girardi successfully deployed his connections at the bar to discourage people from making complaints against him.
Girardi Keese, famous for representing plaintiffs in large-scale civil litigation against major corporations, collapsed in late 2020 after Girardi was accused in a Chicago lawsuit of embezzling money meant for clients the firm was representing in litigation over an airline crash in Indonesia. The lawsuit brought by plaintiffs’ firm Edelson PC has since been transferred to Los Angeles.
Girardi is in Chapter 7 bankruptcy proceedings, as is the now-shuttered Wilshire Boulevard law firm that bore his name, which faces more than $500 million in claims.