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Florida AG Pam Bondi Pressured By Targets Of Investigations To Soften Approach, Critics Say

Pam Bondi

Posted: 10/12/11 06:34 PM ET

FORT LAUDERDALE, Fla. -- Last December, when she was still investigating foreclosure fraud as a top lawyer in the Florida attorney general's office, June Clarkson gave a PowerPoint presentation to a legal association.

Her presentation amounted to an indictment of Lender Processing Services, or LPS, a company near the center of ongoing state investigations into claims that foreclosures have been rushed en masse through the legal machinery, without proper documentation. She flashed images of paperwork on a screen under the heading "forgeries," asserting that LPS' former subsidiary, Docx, had produced phony documents to justify unlawful foreclosures.

The legal association later sent Clarkson a thank-you note, calling her tutorial "invaluable." Word of her presentation reached New York, where a state Supreme Court judge cited it in a harshly-worded ruling that a bank lacked the right to foreclose on a Brooklyn home.

But the Jacksonville-based LPS was furious, particularly about one slide in the presentation: an image of the children's board game Candyland, a satirical reference to the mortgage securitization process. The following month, a lawyer for LPS sent a letter to Clarkson and Theresa Edwards -- a colleague who co-authored the presentation -- calling their PowerPoint display "irresponsible" and "inflammatory," adding: "The legitimate question at this point is whether you are still capable of conducting this investigation."

Upper management in the attorney general's office, which also received a copy of the LPS complaint, ultimately answered that question in the negative. The incoming director of the division of economic crimes admonished the two assistant state attorneys general, they say. In May, Clarkson and Edwards resigned under threat of being fired, according to the attorney general's office.

Florida has some of the highest rates of foreclosure in the country, and is home to many of the companies accused of improper document handling, yet the state's enforcement apparatus has treated many of these companies with striking lenience, according to former state prosecutors and lawyers who represent Florida homeowners.

Many cite the forced departure of Clarkson and Edwards as a vivid example of how mortgage companies and law firms successfully exploit connections to Florida's attorney general to soften legal probes, insulating themselves against the consequences of alleged law-breaking.

"The division of economic crimes has long fostered an atmosphere in which, as Clarkson and Edwards found out, and as I have found out in seven-and-half years of having one effort after another squelched, bold action is rare," declared Andrew Spark, a former assistant attorney general in Florida, in a blistering memo he released publicly before resigning in August. "The people of the State of Florida have the right to better, but under its current management, the situation can only get worse."

"Like the Securities and Exchange Commission ignoring Bernard Madoff's scams, our office -- like so many agencies -- was asleep at the wheel while the future of the state's economy was being ravaged by mortgage fraud -- when it really mattered," Spark continued.

Florida Attorney General Pam Bondi, through spokeswoman Jennifer Meale, declined repeated requests for comment. But Meale dismissed assertions that the agency has softened its enforcement against improper foreclosure practices. "We aggressively prosecute wrongdoing regardless of the subject of the investigation," Meale said in an email.

Bondi has drawn criticism from local lawyers for accepting campaign contributions from companies the attorney general is investigating. LPS and its former parent Fidelity National Financial -- which is under investigation by the attorney general, as part of the LPS probe -- together contributed at least $2,000 to Bondi's campaign last year, according to the National Institute on Money in State Politics.

Executives of ProVest, a Tampa-based company that notifies homeowners of a foreclosure, and which is being investigated by the state attorney general, also made personal contributions to Bondi's campaign. Chief executive and founder Scott Strady, president James Ward and executive vice president Victor Draper each contributed $500 to Bondi's campaign, according to the National Institute on Money in State Politics.

"No amount of campaign contributions" affects Bondi's commitment to fulfilling her duties, Meale said in an email.

As the news of Clarkson and Edward's forced departures spread through Florida this summer via local blogs and newspaper reports, the resulting public outcry challenged the notion that the state was really looking out for homeowners. Official explanations from the attorney general that the pair had been ousted for poor job performance did not appear to win over many skeptics.

"It felt like finally someone was listening," said attorney Matthew Weidner, who represents homeowners in foreclosure. "That's why the announcement of the firings was such a punch to the gut."

State Sen. Eleanor Sobel, a Hollywood, Fla., Democrat, along with another state lawmaker, wrote to U.S. Attorney General Eric Holder, asking that the terminations of Clarkson and Edwards be "reviewed by an investigatory agency not directly associated with the State of Florida in an effort to get the most neutral review."

As pressure mounted, Bondi herself called for an investigation into the ouster, even as her office maintained the personnel decision was "mundane." A Florida agency, the Department of Financial Services, opened an investigation in August. DFS Inspector General Ned Luczynski, who is conducting the probe, declined to comment on it.

"Here we finally have two superstars, and they get the axe," Sobel said. "They got fired for doing a good job."


Among some of those who have recently worked in the state attorney general's office, such complaints seemed only to confirm the ways of the institution as they knew it -- one vulnerable to the influence of politically-connected outsiders.

"They don't want to be aggressive toward corporations," said a former assistant state attorney general who asked not to be named because of concerns about his current job. "If they were as aggressive as they could be, or wanted to be, they would double the size of the economic crimes division,” he added, noting that the division is funded by recoveries from its cases.

The office seems to be guided by an attitude of "don't push too much," this former employee said.

Spark, the former assistant attorney general who penned the critical memo, worked in the Tampa bureau. He said the office suffered from what he termed "litigation-phobia," describing several cases in which top-ranking officials pushed for what he viewed as premature resolutions, before a full investigation could take place.

In one case, Spark opened an investigation into an auto dealership that was using deceptive advertising, he said. It turned out that a lawyer who represented the auto dealership, Robert Shimberg, had served on Bondi's transition team. According to Spark, his superiors noted that Shimberg was the dealership’s counsel as they urged Spark not to pursue a full investigation.

In his memo, Spark cites an email he received from Richard Lawson, director of the division of economic crimes, which said that Shimberg was a lawyer for the "very prominent" business. "You should be aware of this in case the [attorney general] has any questions," Lawson said in that email, according to Spark's memo.

Meale, the attorney general's spokeswoman, declined to comment on Spark's memo, citing the existence of an internal investigation into the former employee. Shimberg called Spark's portrayal "ridiculous."

Other developments at the attorney general's office have provoked charges that the agency is often intertwined with companies it ought to be aggressively prosecuting. Two high-ranking employees recently left their posts for jobs at companies under investigation. Joe Jacquot, former deputy attorney general, left government service for a job as senior vice president of government affairs at LPS, the company announced in June.

Jacquot recused himself from discussions and actions involving LPS, as of late October of last year. He told a reporter from the News Service of Florida that he had nothing to do with the investigations of foreclosure firms initiated under the previous attorney general, Bill McCollum.

Mary Leontakianakos, formerly director of the division of economic crimes, this year went to work for the Fort Lauderdale-based foreclosure law firm Marshall C. Watson, which the state attorney general was investigating. Edwards, who was working the Marshall Watson case with Clarkson, said the $2 million settlement with the company in March was less than the $7 million she had wanted.

Leontakianakos, now chief counsel at Marshall Watson, said through a spokeswoman that she was not at all involved with the settlement with the law firm.

“I am very proud of my service at the Florida Attorney General's office," she said through the spokeswoman.

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