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Charles La Bella honored by trial lawyers

Got Moores free from charges in Padres bribing

Charles La Bella and John Moores
Charles La Bella and John Moores

San Diego attorney Charles “Chuck” La Bella has become a fellow of the American Colllege of Trial Lawyers, which only admits one percent of the total lawyer population in a state or province. According to a press release, members are admitted “by invitation only and only after careful investigation.” (Italics mine.)

All councilmembers except Juan Vargas attended, including Valerie Stallings, who had reaped thousands of dollars by selling stock obtained in an offering by Neon Systems, a Texas company controlled by Moores.

When John Moores was trying to get San Diego taxpayers to subsidize his Padres stadium, he was caught showering gifts on Valerie Stallings, a councilmember. Among the gifts, Moores cut her in on a hot stock and told her when to sell it (near the peak.) La Bella was Moores’s lawyer, and got his client off completely. Stallings got a wrist slap that was later expunged.

Moores was the long-time chairman of Peregrine Systems, which in the early part of this century became the biggest corporate fraud in San Diego’s history. Moores, long-time chairman of the company who had recruited many of its top officials, dumped $650 million worth of Peregrine stock, almost all he controlled, in the life of the company, and $487 million during the fraud period. (He had paid 33 to 59 cents for each share he had.) As the company was collapsing, Moores suggested that Peregrine should bring in his personal attorney, La Bella. It happened.

Peregrine was basically an accounting fraud. Civil suits clearly showed that board members, including Moores, knew of accounting irregularities. As it turned out, sales had been inflated through various ruses by half a billion dollars from 1999 through early 2002. The Board of Directors, published by The New York Times, declares, “When sales figures are inflated, the board has ultimate responsibility.” That goes for profits, too, and Peregrine’s earnings were also grossly inflated. The board of directors is responsible for corporate accounting. That’s well established. But during the fall, with La Bella heading the legal work, Peregrine sued its accounting firm, claiming, “Peregrine’s board of directors and audit committee were completely unaware (italics mine) of the accounting irregularities.”

I asked La Bella about that at the time. After some prodding, he finally condeded, “The board does have responsibility. The audit committee does have responsibility.”

In 2005, a new Peregrine chief executive told the New York Times, “When I joined the company there was no accounting system.” The reporter was incredulous. The executive explained, “The company was organized in a very complex labyrinth of international subsidiaries…organized clearly to to optimize the tax issues for the company.” Five of those so-called foreign operations were in the tax havens of Barbados, the Cayman Islands, and Switzerland.

But La Bella quarterbacked a study by the law firm of Latham & Watkins that exonerated the Peregrine board. It was denounced as a whitewash by creditors and stockholders. As Peregrine executives who had sold small amounts of stock were sentenced to prison, a judge would not permit defense lawyers to bring up Moores’s half-billion-dollar windfall in court. In the end, board members collectively only paid $55 million — a drop in the bucket.

The Securities and Exchange Commission lawyer in charge of the Peregrine case embraced the Latham & Watkins study. Not long after that, this government lawyer took a high-paying job with…you guessed it…Latham & Watkins.

And that brings us to another question about La Bella: the revolving door. Investigative reporters have long questioned this practice: lawyers go to work for a government agency, and learn the tricks of the trade. Then they take a job with a white shoes law firm for a salary of about $2 million a year. La Bella started out in the U.S. Attorney’s office (eventually heading the San Diego office), then went into private practice and took on the lucrative John Moores account, then went back with the government, and is now back in private practice in San Diego.

I asked San Bernardino’s Robert Warford, the trial lawyers' regent from Southern California, about La Bella. Warford explained that any candidate is assessed by numerous other lawyers — opposing lawyers, judges, those who have worked with him. La Bella got a supermajority of the voters. “A lawyer is ethically bound to give clients ethical representation,” says Warford, noting that Johnnie Cochran, who represented O.J. Simpson in the murder case, was a member of the college.

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Charles La Bella and John Moores
Charles La Bella and John Moores

San Diego attorney Charles “Chuck” La Bella has become a fellow of the American Colllege of Trial Lawyers, which only admits one percent of the total lawyer population in a state or province. According to a press release, members are admitted “by invitation only and only after careful investigation.” (Italics mine.)

All councilmembers except Juan Vargas attended, including Valerie Stallings, who had reaped thousands of dollars by selling stock obtained in an offering by Neon Systems, a Texas company controlled by Moores.

When John Moores was trying to get San Diego taxpayers to subsidize his Padres stadium, he was caught showering gifts on Valerie Stallings, a councilmember. Among the gifts, Moores cut her in on a hot stock and told her when to sell it (near the peak.) La Bella was Moores’s lawyer, and got his client off completely. Stallings got a wrist slap that was later expunged.

Moores was the long-time chairman of Peregrine Systems, which in the early part of this century became the biggest corporate fraud in San Diego’s history. Moores, long-time chairman of the company who had recruited many of its top officials, dumped $650 million worth of Peregrine stock, almost all he controlled, in the life of the company, and $487 million during the fraud period. (He had paid 33 to 59 cents for each share he had.) As the company was collapsing, Moores suggested that Peregrine should bring in his personal attorney, La Bella. It happened.

Peregrine was basically an accounting fraud. Civil suits clearly showed that board members, including Moores, knew of accounting irregularities. As it turned out, sales had been inflated through various ruses by half a billion dollars from 1999 through early 2002. The Board of Directors, published by The New York Times, declares, “When sales figures are inflated, the board has ultimate responsibility.” That goes for profits, too, and Peregrine’s earnings were also grossly inflated. The board of directors is responsible for corporate accounting. That’s well established. But during the fall, with La Bella heading the legal work, Peregrine sued its accounting firm, claiming, “Peregrine’s board of directors and audit committee were completely unaware (italics mine) of the accounting irregularities.”

I asked La Bella about that at the time. After some prodding, he finally condeded, “The board does have responsibility. The audit committee does have responsibility.”

In 2005, a new Peregrine chief executive told the New York Times, “When I joined the company there was no accounting system.” The reporter was incredulous. The executive explained, “The company was organized in a very complex labyrinth of international subsidiaries…organized clearly to to optimize the tax issues for the company.” Five of those so-called foreign operations were in the tax havens of Barbados, the Cayman Islands, and Switzerland.

But La Bella quarterbacked a study by the law firm of Latham & Watkins that exonerated the Peregrine board. It was denounced as a whitewash by creditors and stockholders. As Peregrine executives who had sold small amounts of stock were sentenced to prison, a judge would not permit defense lawyers to bring up Moores’s half-billion-dollar windfall in court. In the end, board members collectively only paid $55 million — a drop in the bucket.

The Securities and Exchange Commission lawyer in charge of the Peregrine case embraced the Latham & Watkins study. Not long after that, this government lawyer took a high-paying job with…you guessed it…Latham & Watkins.

And that brings us to another question about La Bella: the revolving door. Investigative reporters have long questioned this practice: lawyers go to work for a government agency, and learn the tricks of the trade. Then they take a job with a white shoes law firm for a salary of about $2 million a year. La Bella started out in the U.S. Attorney’s office (eventually heading the San Diego office), then went into private practice and took on the lucrative John Moores account, then went back with the government, and is now back in private practice in San Diego.

I asked San Bernardino’s Robert Warford, the trial lawyers' regent from Southern California, about La Bella. Warford explained that any candidate is assessed by numerous other lawyers — opposing lawyers, judges, those who have worked with him. La Bella got a supermajority of the voters. “A lawyer is ethically bound to give clients ethical representation,” says Warford, noting that Johnnie Cochran, who represented O.J. Simpson in the murder case, was a member of the college.

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Comments
42

What you or I might think is "ethical representation" by a defense attorney is undoubtedly much different from what a career trial attorney thinks it is. Sounds more like bulldog representation that has a no-holds-barred philosophy, if La Bella and Cochran are in this prestige group.

March 19, 2018

Cochran is not in the group, since he passed away in 2005.

March 19, 2018

Deleted

March 20, 2018

Visduh: As the college's Warford says, a lawyer is ethically bound to give ethical representation to his client. La Bella certainly got Moores out of legal jams. He gave gifts to a councilwoman who would vote on the ballpark. Included was cutting her in on a hot stock and telling her to sell at the peak. Moores got off completely. More interestingly, it is well established that a corporate board is basically responsible for riding herd on accounting. A buddy of Moores headed the audit committee. But Peregrine dared to say in a suit that the board knew nothing about the phony accounting that ballooned sales and earnings. Actually, evidence in civil suits showed that Moores and other board members knew of the hanky-panky that was going on. La Bella quarterbacked the study concluding that the board was not responsible for the fraud. A professor specializing in corporate ethics told me that claims of non-knowledge of phony accounting are "the craziest thing I have ever heard of."

Did La Bella cross the ethics line? Did the judges? Was this just another case of San Diego justice -- letting the richest guy in town off the hook? Best, Don Bauder

March 19, 2018

dwbat: I said he "was" in the group. I knew he was dead. Maybe I should have prefaced his name with "the late". Best, Don Bauder

March 19, 2018

My comment was to Visduh. It was indented below his comment. Remember?

March 19, 2018

dwbat: My apologies then. Best, Don Bauder

March 19, 2018

Oops, I was going to say something about shady lawyers, instead it turns out I was thinking of Melvin Mouron Belli. But that guy has already gone on to his reward. I wonder how St. Peter rewards clever San Diego attorneys with questionable morals.

March 19, 2018

swell: Do San Diego lawyers make it to St. Peter? Might they go in another direction? F. Lee Bailey was one of Simpson's legal team. He was more than a bit shady in his day. I had the impression that Shapiro, who knew O.J. had flunked a lie detector test, sat there quietly in the courtroom, knowing full well that O.J. was guilty. Best, Don Bauder

March 19, 2018

I worked with trial lawyers most of my adult life as a private investigator specializing in homicide, which tended to be the most difficult trials and attracted the best litigators, defense and prosecution. I worked for dozens of them through the years, men and women, and came to know many more. The trial lawyers are like the surgeons in medicine, the special breed. High stakes work with potential catastrophic outcomes. Clients could lose everything including their lives.

I also worked with many doctors on the death penalty cases, we always hired at least 2 of them. These doctors tended to be professional witnesses not always having active practices because if they were good they had to be on the road a lot. Just a note to comment above about ethical representation. Between the attorneys and the doctors there was no contest here. I would trust the lawyers much more. Ethics mattered because if they really crossed the line they could lose their ticket to practice. Doctors were practically invulnerable there so they didn't always worry about ethics that much, as long as the check cashed. I'm not alleging they were criminal doctors. They were just much less attentive to ethics because most of them had no ethical training in medical school. Attorneys did. Just one of those urban legends that is not true. Lawyers were much more worried about being brought up before the bar and getting disbarred because they had opponents watching who wouldn't stand to be cheated. Medicine isn't like that. Just my personal experience, I'n not claiming that is how the whole world operates. But it was clear to me.

March 19, 2018

A great comment. I have always believed having a good lawyer when you need one is incredibly important.

March 19, 2018

monaghan: This statement is worth repeating: Good lawyers know the law. Great lawyers know the judge. Best, Don Bauder

March 20, 2018

People have misinterpreted Shakespeare's line from Henry VI: "The first thing we do, let's kill all the lawyers." The modern understanding of this is that Shakespeare knew well that lawyers are so valuable because they help prevent tyranny. We are seeing this right now in the US.

March 20, 2018

dwbat: It is accepted that Shakespeare meant those words to be favorable to lawyers. But it doesn't seem to be used that way in most writing. Best, Don Bauder

March 20, 2018

Hilarious. There are a lot of lawyers in my family, so I have never heard this. Thank you. Do read the Toobin book on Patty Hearst. It's marvelous.

March 20, 2018

monaghan: Since I bought the book on Patty Hearst, I know I should read it. But first must come the book by Corn and Isikoff, Russian Roulette. Best, Don Bauder

March 21, 2018

shamus: One thing doctors learn in medical school is that they are perfect. That may explain your experience with them in a courtroom. Best, Don Bauder

March 20, 2018

My personal experience with doctors in recent years has shown that docs are far from perfect. I think you would agree.

March 21, 2018

dwbat: I have had good doctors through the years but none was perfect. One was horrible. Best, Don Bauder

March 21, 2018

I worked for one of the world's most powerful law firms in Chicago, around 1966. Just a docket clerk at the time. Part of my job was carrying envelopes of cash to the offices of federal judges. Local judges are always under suspicion, but the general belief has been that federal judges can't be bribed. Not always so.

March 20, 2018

swell: Of course, you were working in Chicago, where bribery is a way of life. But I do think it happens in most cities and probably some small towns. Best, Don Bauder

March 20, 2018

Since we're tripping down memory lane, another infamous and rich defense lawyer is F. Lee Bailey who defended kidnapped Patty Hearst who became gun-toting "Tania" of the Symbionese Liberation Army back in crazy 1970's California. Bailey is described fully (if unflatteringly) by Jeffrey Toobin in his wonderful book "American Heiress." Also, Chuck La Bella was great pals with Alan Bersin, also a former U.S. Attorney here.

March 19, 2018

Bailey was a disgrace to the law profession. He was disbarred, and even served six weeks in jail for contempt. Slimeballs like him make people get so disgusted with lawyers. Fortunately, he was an exception, just like crooked cops.

March 20, 2018

dwbat: Crooked cops are the rule, not an exception, in some places. Tijuana is one, I understand. Chicago was one 60 years ago, but I am not sure it is now, although the press carries a lot of stories about dubious Chicago cops these days. Best, Don Bauder

March 21, 2018

monaghan: As mentioned above, Bailey was on the Simpson defense team. I have a copy of the Hearst book but have read little of it. I should at least read Toobin's description of Bailey.

I am not surprised that La Bella and Bersin are great pals. Best, Don Bauder

March 20, 2018

Mike Murphy: Ah, Trevor Pinnock. He sued thousands of small companies over alleged instances of ignoring the Americans with Disabilities Act. Best, Don Bauder

March 20, 2018

Trevor Pinnock is a well-known harpsichordist and conductor. Mike said the ADA lawsuit abuse guy was Theodore Pinnock.

March 20, 2018

Visduh: You are right. We have several CDs with Trevor Pinnock at the harpsichord. When I thought of the name "Pinnock," I immediately thought of Trevor, not Theodore as Mike correctly said. Best, Don Bauder

March 20, 2018

F Lee Bailey was, at one time, one of the top Trial Lawyers in the entire country with a sterling reputation.. I was wondering what caused Bailey to go "off the rails" cross over the double yellow lines and get himself into a heap of trouble.?!?!

Gerry Spence was also a legend in his time..

Didn't LaBella, Moores and some local Judges gave San Diego a bad name with their "cowtown justice"..?!!?!

Shouldn't Moores be in Federal Prison?!?!

Did cash changed hands?!?! OR was cash wired to a few key peoples' offshore accounts to wash their hands of the outrageous Moores actions?!?!

Would have been very interesting to be a fly on the wall in some of those meetings and discussions...to find out for sure...

March 21, 2018

SportsFan0000: I was with the U-T when the story broke: Moores would get off completely after showering gifts on the councilwoman. I remember a San Francisco lawyer saying about San Diego justice: "They should be ashamed of themselves."

Yes, Moores getting off completely on the Stallings payments. San Diego was criticized in legal circles, and among the public. But the Peregrine case was worse. Corporate boards are responsible for accounting. The Peregrine fraud was an accounting fraud. But the board, which had knowledge of the phony ledger-demain, got off with a wrist slap. Moores got away with something sinister again. San Diego is still considered a Chicago with one difference: an ocean. Best, Don Bauder

March 21, 2018

Is it true that Larry Luchino "had it out" with Moores about Moore's alleged illegal activities and that that was the real reason that Lucchino left town/the Padres and resurfaced in Boston...with the Red Sox?!

Did Lucchino refuse to work with Moores anymore?!?!

Did Larry Lucchino not want his reputation ruined?! and did not want to be associated with Moores alleged "shady dealings"?!

March 21, 2018

SportsFan0000: Lucchino definitely had a dispute with Moores. I doubt that he objected to Moores's dubious activities. He may have objected to Moores getting caught. As I recall, the U-T steered coverage of the Lucchino departure to the sports section, which whitewashed it. And as I recall, Herb Klein, then the editor of Copley Newspapers, and in charge of the editorial page, wrote an op-ed lamenting that San Diegans were hurting Moores's spotless reputation. Klein, who believed that sports were all-important, looked the other way on team owners' dishonesty and organized crime connections.

I will check with a friend over that Klein op-ed, to see if my memory is on the right track. Best, Don Bauder

March 21, 2018

Is it just me OR does the American College of Trial Lawyers sound suspiciously like one of those online paid rating services for vendors....?!?!

Put your money on the table and buy referrals and ratings etc!!!?!?

I am not seeing what La Bella did to deserve this so called "honor"?!?!

If getting clients off that would appear to be guilty as sin and go completely unpunished gets you into this questionable club, then I guess Chas L is in?!?!

March 21, 2018

SportsFan0000: Obviously, I had the same suspicion as I was putting the piece together. I checked online and couldn't find anything to suggest it is anything like Who's Who. But I remain suspicious. Best, Don Bauder

March 21, 2018

Hey, people, I have a deceased brother who was very proud to be in the American Trial Lawyers and he never did a dishonest thing in his life, though I cannot speak for all his corporate clients. In America everyone is innocent until proven guilty and deserves the best legal defense they can buy. Getting elected to American Trial Lawyers is about being very good at your job and maybe includes your win-record. The organization used to have fancy annual gatherings at beautiful resorts and I know they spend money lobbying government for favorable regulation, whatever that means. If I were an on-the-take councilwoman, I would want someone like Chuck La Bella to defend me -- but I don't know if he was Valerie Stallings' lawyer. As for F. Lee Bailey's downfall, author Jeffrey Toobin describes him as a serious alcoholic.

March 21, 2018

Hey, monaghan. The American College of Trial Lawyers is not the same organization as the American Trial Lawyers Assn. (now called the American Association for Justice). ACTL is a fellowship, while the latter is indeed a lobbying group.

March 21, 2018

dwbat: I will take your word for it. I can't speak for Monaghan. Best, Don Bauder

March 22, 2018

Well, it's not my "word" that tells the tale. A Google search showed the separate websites for the two organizations, with their different HQ location, membership info, and overall purpose.

March 22, 2018

dwbat: OK, I take the words of those websites. But you found the websites. Best, Don Bauder

March 22, 2018

monaghan: Here, then, is one vote for American Trial Lawyers. La Bella was Moores's lawyer, not Stallings's lawyer. Best, Don Bauder

March 21, 2018

Herb Klein?! I read that he was formerly employed by that legendary crook Richard Nixon...How did he get this plum assignment as head of the local bird cage liner the UT?!

March 30, 2018

SportsFan0000: Herb Klein, with whom I battled for years, left the job as editor of the San Diego Union to become one of Nixon's first flacks. (Incidentally, Klein was a horrible writer.) When Nixon finally won the White House, Klein went with him, and brought along Gerald Warren, who had been an editor of the Union.

At one point, Nixon banished Klein to another building, saying, in effect, that his brain was scrambled. (It was.) Warren became the second-in-command PR man and handled press conferences about Watergate. This gave Warren national recognition. He continued under Ford after Nixon resigned. But Helen Copley named Warren editor of the Union. When she became unhappy with him, she brought in Klein as a superior.

Klein became the PR man touting the remake of the then-named Jack Murphy stadium, the seat guarantee, and the massive subsidy to the Padres. He never understood that this was a big conflict of interest, because his title was editor-in-chief of Copley Newspapers. Since I was the main opponent at the paper of the Chargers/Padres scam, Klein tried to get me fired, but failed. Best, Don Bauder

March 31, 2018

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