Punishment for Failing to Comply with Disclosure Laws? None

The substitute judge’s financial disclosure statement entered the public record seven months after the deadline, three months after a Freedom of Information Act request and after repeated phone calls from a reporter.

The form is rife with errors, including checked boxes that do not correspond to attached schedules, misreported investments and a blank page detailing client relationships.

The judge’s statement was slipped in among others – complete and incomplete, timely and tardy – housed in an office of the Virginia Secretary of the Commonwealth in Richmond.

Despite the deficiencies, it is unlikely that the judge will have to answer for them or file an amended statement.

That is because a regulatory void exists between the custodian of the statements and the enforcer of the law – a void that raises questions about how meaningful disclosures are without oversight.

The Virginia Attorney General’s Office examines disclosure statements only “if folks bring documents to our attention,” a spokesman said.

But the keepers of the documents, the staff at the Secretary of the Commonwealth’s office, will forward statements to the attorney general only if he requests them.

That cycle of inaction effectively means there are no consequences for certain officers who do not comply with disclosure requirements.

Similar voids exist at the local level, where according to the Virginia Code it is the duty of the commonwealth’s attorney in each county to prosecute violations of the disclosure law. Unclear, however, is whose job it is to identify those violations and bring them to the attention of the commonwealth’s attorney.

Lack of oversight

Virginia state lawmakers – who along with executive branch officials are held to a higher standard of disclosure – expressed surprise at the lack of oversight.

Legislators of both parties also said all local and state agencies could benefit from a structure similar to the one for the General Assembly, in which a bipartisan rules subcommittee in each chamber screens the disclosure statements for compliance.

“If issues like this are going on, it looks like we need to look at the legislation as a whole, and try to figure out who’s going to review those documents,” said Delegate Terry Kilgore, R-Gate City. “That’s what Virginia law is all about: We want to make sure you report it, and it’s out there.”

In Kilgore’s chamber, the state House of Representatives, Clerk Bruce Jamerson reviews members forms for completeness even before sending them to the rules subcommittee for scrutiny.

“I make sure all the ‘i’s are dotted and the ‘t’s are crossed,” Jamerson said.

In contrast, the Secretary of the Commonwealth considers itself a “file cabinet” for the thousands of disclosure statements it receives each year, with no responsibility for compliance beyond following up with those who have not filed.

The SOC “enjoys a good working relationship” with the Attorney General’s Office, but has “no established procedures” for cooperating with the state’s prosecutorial arm, a senior SOC official said.

“If they ask for anything, we’re going to do our utmost to provide it to them,” said Bernard Henderson, deputy secretary of the commonwealth.

Asked if his office notifies the attorney general when a someone improperly fills out a form, Henderson said, “No. I don’t think we have the ability to detect
irregularities.”

Limited authority

Only one SOC employee is tasked with collecting and filing disclosure statements – Conflict of Interest Director Matt Gross.

Not only does the SOC lack the resources to screen forms for compliance, Henderson said, “We also don’t have the legislative mandate to do it. We don’t have the statutory authority.”

Asked if his office has a policy on how long it waits to contact an official who has not filed, Henderson wrote in an e-mail, “There is no proscribed policy on this.”

In a follow-up interview, he said of outstanding statements, “We’re getting them in, we’re contacting people constantly.” When an official does not file, “we don’t assume that it is a criminal act as such.”

But the SOC has no authority to compel someone to file; that would require the involvement of the attorney general.

Legislators were incredulous that the SOC does not exercise broader authority.

“If they’re charged to be the repository, then they have the obligation to communicate to the executive secretary of the Supreme Court what officers have not complied,” opined Sen. William Wampler, R-Bristol. “If it’s not explicit [in the law], it certainly is implied.”

Kilgore, an attorney and vice chairman of the House Courts of Justice Committee, said: “It looks like we may have to give them the statutory authority, and the resources to go with that.”

Delinquent filers

Most judicial officers whose forms were examined by the Bristol Herald Courier, during a four-month review of disclosure documents in Virginia and Tennessee, filed on time. Some, however, filed months after the deadline. And some did not file at all.

Faith Dillow Esposito, a Bristol, Va., attorney who serves as a substitute judge in the 28th Circuit, is the one who filed her 2009 statement seven months late, on July 13. Curiously, the form is signed and notarized with a date of Jan. 10.

The form falls well short of compliance: The judge is inconsistent as to whether she has debt, improperly states her investments and leaves blank a schedule detailing what professional services she and her spouse perform at what compensation.

On the schedule for investments, Esposito listed her husband’s employer, the law firm PennStuart, and “various mutual funds” – even though the form requires filers to “name each entity and type of security individually.” In her 2008 disclosure, she identified 11 separate investments, including five mutual fund portfolios valued at between $50,000 and $250,000.

Also in 2008, Esposito checked 15 categories of businesses to which her husband furnished legal services, reporting at least $2.5 million of income in 12 months.

In 2009, the same schedule is blank.

Mark Esposito, who did not return a phone message seeking comment, is listed as an “officer” in the Bristol Tennessee office of PennStuart, according to the law firm’s Web site.

Faith Esposito would not comment on her statement, which the Herald Courier obtained from the SOC.

“It’s there for you to see. You can peruse it at your leisure,” she said.

The Herald Courier requested the 2008 disclosure statements for all judicial officials who filed late in 2009. Two substitute judges – David Scyphers, an Abingdon, Va., attorney, and George Maddux, a Gate City, Va., attorney – did not have statements on file for 2008.

Scyphers, a longtime substitute judge in the 28th Circuit who has served infrequently in recent years, chalked up his late filing in April to “oversight.” In an e-mail, he wrote that he was not aware that the SOC had no statement for him in 2008. “However, I do not believe I served as a substitute judge any in 2008,” he wrote.

Maddux, who was most recently appointed substitute judge in 2007, said he does not intend to file a disclosure statement; he is resigning.

“I’m giving it up,” he said when reached by a reporter in early July.

Asked if he had informed the judges of the 30th Circuit, he said he had been planning to “for three weeks.” He added, “I don’t have any conflicts.”

Maddux, 67, said he was resigning because he didn’t want to travel to other counties to serve as judge, that he loses money any time he serves, and that “there’s no future in it for me.”

Asked why he didn’t file last year, he said, “I thought I filed it last year. I guess I just didn’t then.”

dgilbert@bristolnews.com | (276) 645-2558