Along the way to becoming one of the city's most influential figures, politically wired attorney Willie Shepherd bullied, belittled, lied, and then some. And his fellow partners at Kamlet Shepherd & Reichert failed to stop him until two junior attorneys took a stand.
X. PUBLIC CENSURE
OARC spent nine months investigating the allegations contained in the Staks and Almon complaint. On January 29, 2010, the OARC investigation was officially closed and Frankel and Layne typed up their findings in the "Combined Report of Investigation." They determined that there was probable cause for the accusation that Shepherd had deceived DuPont with the e-mails, which had been "self-reported." The OARC also concluded that Shepherd had misrepresented himself with a fraudulent biography and e-mail, specifically to Ray Rivera of Obama's team. Both of these charges of misconduct violated Rule 8.4: The OARC believed there was clear and convincing evidence that Shepherd "engaged in conduct involving dishonesty, fraud, deceit or misrepresentation." Furthermore, the investigators determined "these matters are not appropriate for diversion because of respondent's dishonesty and the likely outcome is greater than a public censure." The investigators recommended the "filing of formal proceedings" against Shepherd. In laymen's terms, the investigators believed that at trial Shepherd would be found guilty of this misconduct and could be suspended or disbarred.
As far as the other allegations went, the OARC concluded it "did not believe it could prove them by clear and convincing evidence and/or did not believe they warranted formal proceedings." The regulation counsel provided a written explanation to Staks and Almon. The OARC stated that there were only two people involved in the alleged "stir-the-pot" exchange, Shepherd had denied making the statement, and, even if he had made the statement, the OARC would need to prove Shepherd's intent was to "generate business for the firm at the expense of his client, or that he actually took some action against his client."
On the conflict of interest allegation, Staks and Almon told the investigators that, shortly after they quit, they had informed Dan Scherer and Chuck Morris why they were leaving the firm. They said both men, especially Scherer, were livid when they heard the scope of the representation matrix Shepherd had involved them in. Both clients promptly cancelled their business with KSR and took their work elsewhere. Scherer, according to the complaint, went so far as to demand "tens of thousands of dollars from the firm due to overbilling." According to OARC, however, by the time it conducted its interviews with Morris, Scherer, and city attorney David Fine—the would-be victims were fine with the multiple-party arrangement, provided, as Morris put it to the investigators, "the representation was not adverse to his goals." OARC added that, although Shepherd "did not get the written waiver from AEG, no harm was caused by this conduct."
Shepherd's former assistant, Stephanie Estabrook, told OARC investigators she believed Shepherd overbilled. Coupled with Staks and Almon, who provided the OARC with examples of where they believed billing misconduct had occurred, the OARC had at least three former employees, including two attorneys, alleging that Shepherd had engaged in fraudulent billing. Staks, Almon, and Estabrook comprised half of Shepherd's small environmental division.
Shepherd denied the allegation that he knowingly engaged in fraudulent billing. In a response he submitted to the OARC, he wrote: "Although I have many strengths as a practicing lawyer—especially with client development work and relationships—my administrative tasks such as time keeping and billing need improvement. In retrospect I memorialized my billable time too sporadically. I billed weekly, biweekly, or even once a month. With the help of my administrative assistant Stephanie Wilson I reconstructed my time by using my calendar. That system was inappropriate. It was neither in my clients' interest nor my firm's interest." In her interview with the OARC, Wilson echoed her boss' explanation. The OARC found that Shepherd could have engaged in better billing practices by recording his time on a daily basis, but, the investigators concluded, they could not prove by clear and convincing evidence that Shepherd fraudulently billed clients.
Although Shepherd admitted to the OARC that he directed an assistant to "create two invoices, for $7500" from the Colorado Symphony, the OARC determined it could not prove that Shepherd's purpose was to collect reimbursement for his own personal use or that he did collect reimbursement from these invoices. Mueller indicated in writing to investigators that "the first invoice was paid directly to the non-profit entity and that KSR was waiting to pay the second invoice directly to the non-profit entity." [Mueller] assured investigators that KSR "did not reimburse respondent on either of these invoices."
Staks and Almon presented the OARC with an e-mail sent to DuPont, which by then had been "self-reported" by Gurr and Shepherd. This accusation, in effect, had already been proven. However, in the complaint Staks and Almon filed, they reported that in addition to the e-mails, Shepherd had instructed that Almon create the "dummy corporation," which she insisted Shepherd had done to legitimize his lie. The OARC's position was that the "dummy corporation" was "a sub-firm," and although Shepherd "agrees that KSR had discussions about setting up a sub-firm" that "alone, does not violate the Colorado Rules of Professional Conduct." Because Shepherd and KSR never actually created "the sub-firm," the OARC wrote, "we cannot speculate whether a particular sub-firm respondent and the KSR firm might have created would have complied with the Colorado Rules of Professional Conduct."
For the two allegations OARC sustained, the clear and convincing evidence was based on easily obtained, undeniable documentary evidence. Yet in its attempt to obtain evidence for the other allegations, according to what Gleason told me in a recent interview, his investigation stopped with the information supplied by Mueller's internal "investigation" and witness statements. Gleason, who said he was involved with the Shepherd investigation "every step of the way," told me that his office did not issue a single subpoena for financial, billing, or any other kind of records from Shepherd or from the firm. The OARC did not subpoena a single witness.
The Shepherd matter never reached a point where witnesses would have testified under oath and been cross-examined, because, in the end, the OARC didn't abide by its own—committee-approved—recommendation for a trial on the two allegations of misrepresentation. Before the proceedings were initiated, Shepherd and his attorneys entered into mediation with the OARC. Citing attorney regulation protocol, Gleason said he was not able to disclose the nature of those discussions, but this much is certain: On the other side of that meeting, the OARC imposed the sort of punishment that the investigators, according to their report, did not think would be sufficient. The OARC issued a public censure against Shepherd for the two offenses, fined him $127.50 for administrative costs, and allowed him to maintain his law license and practice in Colorado.
In a recent interview, Gleason said that all of what his office did in its investigation was by the book. He told me, "Our presumption is that people tell us the truth. Do I believe they tell us the truth all the time? When I was in private practice, I don't know that I ever had a client that told me the whole truth, but the bottom line is we have to rely on that."
So on whom did Gleason and the OARC rely for the "truth"? Dan Scherer and Chuck Morris, a couple of would-be victims? If in their interviews with the OARC, Morris could not recall certain information, and if Scherer held a different opinion of his business at Kamlet Shepherd & Reichert, might it have been because the law firm that he (and Morris) took their business to was Brownstein Hyatt Farber Schreck, which is run by Farber and Brownstein, who consider the Kamlets to be family? Farber recently told me that he advised Scherer to put the KSR experience behind him and move on.
Did the OARC rely on Norman Mueller, whose investigation found merit in one of the allegations? He became Lee Reichert's counsel and accompanied Reichert to his interview with the OARC.
Did the OARC rely on Reichert? According to OARC documents, Reichert told investigators the discussions KSR had about forming an alleged dummy corporation were discussions about how to form an "entity," and that those discussions didn't amount to much.
Did the OARC rely on Shepherd himself? That would be odd, because OARC was already on its way to publicly censuring him—twice—for lying.
Did the OARC rely on Staks and Almon? Gleason viewed their complaint with a certain perspective almost from the start. In Staks and Almon's allegations, Gleason saw something that led him to believe they were motivated by some kind of vendetta. "Kind of the reality of it is," Gleason told me, "the nature of the allegations made in this case were extraordinarily personal. I don't know why. I suspect I know why." Gleason went on to liken Staks and Almon's parting with KSR, and Shepherd, to a marriage gone bad: "You have this horrible work environment created by maybe the respondent lawyer, maybe by the complainants, or maybe by [both parties]. They have a horrible breakup, and now we have all of these allegations flying back and forth, and the truth is somewhere in between."