ATTORNEYS OFTEN PREACH ONE THING -- BUT PRACTICE ANOTHER!

An Opinion By Jan Bergemann
President, Cyber Citizens For Justice, Inc.

Published September 11, 2009

Every time some new embezzlement is discovered in one of Florida's community associations we hear one of the specialized association attorneys giving some great advice why it happened and what could be done to prevent it!

In the latest article about some relatively small -- small compared to lots of other cases -- embezzlement in the PALM BEACH LEISUREVILLE COMMUNITY ASSOCIATION, INC. in Boynton Beach, Ryan Poliakoff, son of Gary Poliakoff from the law firm of Becker & Poliakoff, is quoted: "Residents who scrutinize their board's practices are acting as responsible members of a shared ownership community. But it is unfortunately rare to find members of governing boards who have business or accounting expertise."

If you look into the history of this specific community, the association attorney was always one of the members of the well-known association law firms -- all members of the Community Associations Institute, the trade organization of the service providers for community associations. Until 2002 it was Peter Mollengarden from the law firm of Becker & Poliakoff. Then it was Michael Gelfand, until it changed in 2009 back to Peter Mollengarden, who is now working for the law firm of Katzmann Garfinkel Rosenbaum.

Did anyone of them tell the board members how to deal with this issue? There are not only a very few owners willing to serve as board members who have business or accounting expertise, there are as well only a few who have legal expertise. That's why these people hire high-priced attorneys hoping to get the right advice! Whatever advice they got, it surely didn't help!

A member of the same law firm told condo owners at a meeting, where the embezzlement of about $1.2 million was discussed, that a special assessment has to be levied to cover the cost of the investigation -- and that the owners shall not -- under no circumstances -- talk to the media. The special assessment was levied immediately, but more than a year after the embezzlement was discovered nothing really has happened. Please read the minutes of the last meeting of this association -- and read about the "progress" that was made in about one (1) year! The manager, accused of taking the money, has been arrested a few times for DUI -- but in the embezzlement case nothing has been done! The management company, the employer of the alleged thief, is still in business. In my opinion no single manager could have embezzled this amount of money without the firm realizing it. Gross negligence should be the minimum charge brought against the management firm. But the attorney insists that the owners shouldn't talk about it publicly! See: 9 MONTHS -- AND STILL NOTHING!

In Boca Raton owners tried desperately to get the financial records of an association because they suspected that something was seriously wrong. Guess what? The association attorney sued some of the owners and thereby bought the board president more than one year’s time to embezzle even more money. In the end it was an estimated $650,000. See: BOCA RIO SAGA - AND HERE GOES YOUR MONEY! MORE THAN $500,000 EMBEZZLED? The owners are still hoping that they recover some of the money someday!

But instead of trying to help the association members stop these financial shenanigans, the attorneys are only too often helping the bad guys. Boards, who don't like to show their records, are advised to create rules that make record requests really expensive. "Add all kinds of charges to the allowed photocopying fees" is the advice. "Charge to the max for record requests and these nosy owners will think twice before asking for records!"

And if that doesn't deter owners, there is always the possibility to let them sue. Attorneys will defend the indefensible denial of records -- at a huge cost! It will allow the board members to either cover up their wrongdoing or to shred all the records. According to the DBPR, not having the required records is an excellent defense and makes the record request moot, especially if the excuse comes in writing in a letter with the letterhead of one of the big law firms.

It's obvious: These law firms are preaching one thing but are doing more or less the opposite.

For many years State Representative Julio Robaina has been trying to enact owner-friendly laws that would bring transparency to our community associations, enforce the laws and would hold the violators responsible.

His biggest opponents: These same law firms who are publicly claiming that they are there to help the associations. The law firm of Becker & Poliakoff is now even using their own lobbyist to oppose Julio Robaina in his bid for the Senate seat for District 36. See: BECKER & POLIAKOFF WANTS TO "BUY" STATE SENATE SEAT How more obvious can it get that these law firms are not interested in finding solutions that help owners to fight crime and abuse in their communities?

The latest example in 2009 for attorneys fighting owner-friendly bills: Condo Bill H 1397, a bill co-sponsored by no less than 9 House Representatives! Among other language it carried the provision to create the positions for four DBPR employees with enforcement powers, serving as a law enforcement officer for the division, paid for by money from the condo trust fund [SEE EXACT WORDING OF PROPOSAL].

This proposal was immediately blasted by Donna Berger in a CAN ALERT [CAN: COMMUNITY ADVOCACY NETWORK of the law firm of Katzmann Garfinkel Rosenbaum]. Remember, Donna Berger was before the spokesperson of CALL [COMMUNITY ASSOCIATION LEADERSHIP LOBBY] -- the Becker & Poliakoff "advocacy" group. In her alerts she is ranting and raging against this provision, calling it a violation of due process and constitutional rights. Constitutional rights? Don't forget, these attorneys claim that constitutional rights don't apply in community associations [Please see: BATTLE AT TWIN RIVERS]. Now -- what is it?

All these so-called advocacy groups of the law firms only serve one purpose: To promote better earnings for the service providers -- especially the attorneys. CAN states in its header: "An Advocacy initiative for those who live, serve and work in common interest ownership communities." I think CAN leaves out OWN PROPERTY on purpose. Because the property owners pay their high bills!

We all know that our local police departments are ill equipped to investigate fraud and embezzlement in associations. Don't forget, all the convictions so far [THE SUCCESS STORIES] were made possible by owners who supplied the whole case with all the necessary proof on a silver platter to the investigating officers. Many cases are not being prosecuted because owners don't have the needed accounting knowledge -- or the money to pay for a forensic audit. And the detectives don't have the necessary financial background to find through the maze of records. This proposal, if enacted, surely would have been the ultimate weapon against financial crimes in our associations, crimes that cost owners millions of dollars each year!

How much more proof is needed that the attorneys are preaching one thing, but are actively lobbying behind closed doors against any laws that would protect owners against these crimes?

If attorneys really mean what they say they should stop:

advising boards on how to circumvent existing laws.
helping boards to violate the laws by fighting record requests.
writing amendments to governing documents that create dictatorial powers for board members.
sending threatening letters (libel) to owners who scrutinize their board's practices. Don't forget: These owners -- according to Ryan Poliakoff -- are acting as responsible members of a shared ownership community.
acting as board members' defense attorneys. They are employed as association attorneys, not as attorneys for the board. Their bill gets paid by the whole community, not by a selected few. They should represent the interest of the whole community, not just the few who are signing the checks to pay their bills.
doing what the board members want, even if they know it's against the interest of the membership.
lobbying against owner-friendly bills that would help to rein in the perpetrators of outrageous crimes committed in our associations that cost owners millions of dollars a year.

The only explanation I can find for attorneys to act as described above is GREED. They should definitely know better. Often enough we see attorneys act in a way that possibly crosses the borderline of ethics. Is it for some of these attorneys only about billing hours -- or is there still a little bit of professional pride left?

In that case: PLEASE STOP PREACHING ONE THING BUT DOING THE OTHER!