IN THE MATTER OF THE
REINSTATEMENT OF KENNETH L. HIRD, TO MEMBERSHIP IN THE OKLAHOMA BAR ASSOCIATION AND TO THE
ROLL OF ATTORNEYS.
SCBD # 4397
SUPREME COURT OF OKLAHOMA
2001 OK 28;
21 P.3d 1043;
2001 Okla. LEXIS 29;
72 O.B.A.J. 845
March 20, 2001, Filed
PRIOR HISTORY:
[***1] ORIGINAL PROCEEDING FOR ATTORNEY
REINSTATEMENT.
DISPOSITION: PETITION FOR
REINSTATEMENT DENIED; ORDERED TO PAY COSTS.
SYLLABUS:
[*0] Attorney seeks
reinstatement to the practice of law after resigning from membership in the Oklahoma Bar
Association and imprisonment for money laundering and bank fraud. Professional
Responsibility Tribunal reluctantly recommended that attorney be reinstated.
COUNSEL: Phil R. Richards, Gwendolyn L. Clegg, Richards
& Connor, Tulsa, Oklahoma, for Petitioner, Kenneth L. Hird.
Loraine Dillinder Farabow, Assistant General Counsel, Oklahoma Bar Association,
for Respondent, Oklahoma Bar Association.
JUDGES: Hodges, J. Hargrave, C.J., Hodges, Lavender, Opala, Summers, Boudreau,
Winchester, JJ., concur. Kauger, J., concurs in result. Watt, V.C.J., dissents.
OPINIONBY: Hodges
OPINION:
[**1043]
Hodges, J.
[*1] Petitioner Kenneth L. Hird (Hird) is seeking
reinstatement to membership in the Oklahoma Bar Association (OBA) after resigning in 1992.
The 1992
resignation was based on his guilty plea to felony charges for
money laundering and bank fraud. The OBA opposes Hird's
reinstatement. After conducting a hearing, the Professional Responsibility
[**1044] Tribunal (PRT) reluctantly
recommended that
[***2] Hird be reinstated.
I. FACTS
[*2] Hird was admitted to the
practice of law in Oklahoma in 1980. After being admitted, Hird was in private practice for
about three years, was
general counsel for a corporation for about two years, and then returned to private practice.
When he was about 30 years of age, Hird was employed by Caprock Savings and
Loan (Caprock). At Caprock, he simultaneously held the titles of executive
vice-president,
general counsel,
chief lending officer, and secretary of the board.
[*3] While Hird was employed at Caprock, the real estate market took a downward
turn. In order to bolster the financial status of Caprock during this period,
Hird became involved in a
fraudulent scheme to make Caprock appear to be better capitalized than it actually was. Because
of the scheme, Caprock's precarious financial situation was not apparent or
easily discoverable causing the Federal Examiners to be misled about Caprock's
financial condition. The loss to Caprock as a result of the scheme was in the
tens of millions of
dollars. When Caprock became insolvent, the Federal Savings and Loan Insurance
Corporation made payments to Caprock's depositors of millions of
dollars.
[***3]
[*4] Hird admits that he personally profited about $ 260,000.00 through the
transactions related to the
fraudulent scheme. After he left Caprock and returned to private practice, Hird received $
150,000.00 retainer from one of the other
parties to the scheme. He did not perform any work for the party. In 1995, Hird
filed for bankruptcy, and his debts were discharged in 1996.
[*5] Prior to Caprock's collapse, Hird resigned from Caprock and returned to
private practice. In April of 1991, an indictment was filed against Hird and
several other defendants. In May of 1992, Hird pled guilty to one count of bank
fraud and one count of
money laundering. Based on Hird's cooperation he was sentenced to 45 months
incarceration rather than the 63 to 78 months under the federal sentencing guidelines. Under
the guidelines, Hird was subject to a fine ranging from $ 203,062.00 to $
500,000.00. The fine and restitution were waived based on Hird's cooperation
with the federal government.
[*6] In June 1992, Hird
notified the OBA of his conviction and tendered his
resignation. A few days later, Hird surrendered himself to the custody of the Federal
Bureau of
Prisons. On September 28, 1993, this
[***4] Court approved Hird's
resignation pending disciplinary proceedings.
State ex rel. Oklahoma Bar Ass'n v. Hird, 1993 OK 120, 863 P.2d 1160.
[*7] During his
incarceration, Hird volunteered as a tutor for Graduate Equivalence Degree (GED) classes and
teaching Bible classes. In February of 1994, the United States Attorney filed a
motion to reduce Hird's sentence by 17 months. As a result of the United States
Attorney's motion being granted, Hird's sentence was further reduced to 27
months imprisonment. Hird was placed on three years
probation which he successfully completed after serving 24 1/2 months
incarceration.
[*8] After his release from
prison, Hird returned to Tulsa and worked as a
law clerk for his former law partner
for about one year. Then he worked at Transvoc, Inc., an employment placement
service for the developmentally disabled, where he became a program
coordinator. Hird resigned from his job at Transvoc in anticipation of a state
job. When the state job did not materialize, Hird registered with a temporary
employment agency. He was placed with Oklahoma Fixture Company as a glass
packer. In March 1997, Oklahoma Fixture Company offered Hird a
[***5] permanent job as the
human resource director. Then in August of 1998, Hird was promoted to
human resource director of the parent company.
[*9] Hird admits his responsibility for the bank fraud and
money laundering. His witnesses testified that he understands what he did was wrong and that he
accepts responsibility for his actions. They also testified that Hird has been
humbled by the consequences resulting from his actions.
[*10] According to the record, particularly the testimony of the witnesses, Hird has
been a model citizen since his
release from
prison. He has been open about his conviction
[**1045] and
incarceration with his employers and volunteer organizations. As trustee for the Carpenters
and Millworkers Joint Apprenticeship Program, he is responsible for the
oversight of funds and activities of the apprenticeship program. Hird has also
been on the Board of Directors of Wright Christian Academy for the last five
years and holds a leadership position in his church. Hird has not been arrested
or cited for any violations of the law since his release from
prison. Duane Walker, Executive
Vice-President of Oklahoma Fixtures; Jeff Brown, Administrator of Wright Christian Academy;
[***6] Stephen Andrew, a lawyer who represents Oklahoma Fixture in labor relation
matters; Richard Wright, a lawyer for whom Hird worked as a
law clerk; and, by affidavit, Ronnie Line, Chairman and President of Oklahoma Fixture
testified to Hird's
trustworthiness, his honesty, his fairness, and the respect in which they hold him. All the
witnesses
testifying in his behalf think highly of Hird, even knowing of this conviction
and believe that he should be
readmitted to the
practice of law.
[*11] At the time of Hird's
resignation from the OBA, he did not have any clients and had not practiced law for a
year. Hird did not file an affidavit within the twenty-day limit as required by
rule 9.1 of the
Rules Governing Disciplinary Proceedings stating that he had
notified all his clients, listing the clients, and listing the courts and agencies
before which he was admitted to practice. The affidavit was not filed until
October 22, 1998, less than one month before Hird filed his petition for
reinstatement on November 16, 1998.
II. PRT
RECOMMENDATIONS
[*12] The PRT
recommended that Hird be
readmitted to the
practice of law. The PRT noted that Hird and his witnesses portrayed him at the
[***7] time of the
misconduct as a man who was young, made too much money too fast, and lost his sense of
values. The PRT was concerned that the description of
Hird's current good character and exemplary behavior were no different than the
character and behavior that he exhibited before being convicted.
III. ANALYSIS
[*13] This Court's review of the record is
de novo.
State ex rel. Oklahoma Bar Ass'n v. Wilkins, 1995 OK 59, P12, 898 P.2d 147, 150. Even though this Court is not bound by the PRT's
recommendations, they are noted.
[*14] Under rule 11.4 of the Rules Governing Disciplinary Proceeding, an applicant
seeking
reinstatement must show by
clear-and-convincing evidence
"the applicant's conduct will conform to the high standards required of a member
of the Bar." The
seriousness of and the circumstances surrounding the original offense and restitution are
factors in evaluating whether
reinstatement is appropriate.
Rule 11.4, Rules Governing Disciplinary Proceeding, Okla. Stat. tit. 5, ch. 1, app. 1-A (1991).
Other factors are: (1) moral
fitness at the time of the
reinstatement proceedings, (2) abstinence from the
practice of law since the time of
disbarment
[***8] or
resignation, (3) consciousness of and remorse for the wrongful conduct, (4) the extent of
rehabilitation, (5) conduct subsequent to
discipline, (6) time period since
discipline, (6) character, maturity, and experience at the time of
discipline, and (7) competence and learning in legal skills.
Rule 11.5, Rules Governing Disciplinary Proceeding, Okla. Stat. tit. 5, ch. 1, app. 1-A (1991);
In re Reinstatement of Kamins, 1988 OK 32, P20, 752 P.2d 1125, 1130.
[*15] The applicant seeking
reinstatement must present stronger proof than required for first time admission.
Rule 11.4, Rules Governing Disciplinary Proceeding, Okla. Stat. tit. 5, ch. 1, app.
1-A (1991).
"The more severe the offense leading to
resignation, the heavier the burden an applicant must overcome to be
readmitted."
In re Pierce, 1996 OK 65, P18, 919 P.2d 422, 425. In considering
readmission of a convicted felon,
"the evidence must support a finding that the Applicant would not commit any
serious crime if
readmitted. Foremost consideration must be given to protecting the public welfare."
In re Reinstatement of Cantrell, 1989 OK 165, P2, 785 P.2d 312, 313. Further
[***9]
reinstatement must not adversely effect the Bar. Id.
[*16]
[**1046] The OBA opposes Hird's
reinstatement based on the
seriousness of the offense, the inadequate amount of time that has elapsed, and
disrepute brought to the
legal profession. Hird's
misconduct involved the misappropriation of money. The losses resulting from the scheme
were in the tens of millions of
dollars. At the time of the bank
fraud and
money laundering scheme, Hird held a
position of trust. Not only was he an officer of Caprock, he was also
general counsel. As
general counsel, he was obligated to advise the other Caprock officers about the legality of
the scheme. Hird not only failed to advise the other officers, but he
participated in the schemes, abused his position, and personally benefitted.
Hird violated his
position of trust both as lawyer and as an officer of Caprock and brought
disrepute to the profession.
[*17] Hird's
resignation was approved in 1993. He was released from
prison in 1994. The evidence indicates that he did not complete his
probation until 1997. He filed his petition for
reinstatement in November of 1998, only about one year after completing his
probation. Given the
seriousness of
[***10] Hird's conduct, we agree with the OBA that insufficient time has elapsed since
his conviction, his
resignation, and the end of his
probation.
[*18] Further, Hird has failed to present
clear-and-convincing evidence of his current good
moral character.
"Good
moral character," as the phrase is used for bar admission, is synonymous with a person's ethical
fitness. As evidence of his current
moral character, Hird presented several witnesses that testified to Hird's involvement in his
community and church and his
trustworthiness. These are the same characteristics that Hird possessed before his conviction.
Hird has failed to show that under pressures and circumstances similar to those
which led to his past
misconduct, he would now act differently. Hird has presented insufficient evidence to show
a change in
moral character since his
resignation.
[*19] Hird has not met his burden of showing that he should be
readmitted. The
seriousness of his conviction, the
disrepute on the
legal profession, the short period of time since the completion of his
probation and since his
resignation, and his failure to show a change in his
moral character outweigh the evidence supporting his
reinstatement.
[***11] Having found that Hird has not met his burden as to these
factors, we need not address the other factors to be considered for
reinstatement. Hird's petition for
reinstatement is denied.
IV. COSTS
[*20] The OBA has filed its application to access costs. Section 11.1(c) of the
Rules Governing Disciplinary Proceedings requires an applicant seeking
reinstatement to pay the expenses of the investigation, the expenses of processing the
application, and the cost of the original and one copy of the transcript. The
OBA has applied for reimbursement of costs of $ 1,972.04, including the $
500.00 advanced by Hird and $ 1,574.85 for the costs of the original and three
copies of the 249-page transcript. Because the OBA has not included an itemized
statement for the original and the copies of the transcript, this Court reduces
the costs of two copies of the transcripts by $ 124.50 which amount is
estimated to be $ .25 a page for the two extra copies. Thus, Hird is
ordered to pay the remaining costs of $ 1,347.54.
PETITION FOR
REINSTATEMENT DENIED;
ORDERED TO
PAY COSTS.
[*21] Hargrave, C.J., Hodges, Lavender, Opala, Summers, Boudreau, Winchester, JJ.,
concur.
[*22] Kauger, J.,
[***12] concurs in result.
DISSENTBY: Watt
DISSENT:
[*23] Watt, V.C.J., dissents.
"I would follow the
recommendation of the Professional Responsibility Tribunal and reinstate this petitioner."
