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Hathaway to step down

by: Eric B.

Tue Jan 08, 2013 at 09:37:38 AM EST

Good news for Andy Dillon!

Lansing — Michigan Supreme Court Justice Hathaway will retire Jan. 21 from the bench amid allegations she defrauded a bank to escape $600,000 in mortgage debt on a Lake St. Clair home.

Hathaway attorney Steve Fishman told The Detroit News on Monday that Hathaway submitted her retirement paperwork to the state Dec. 20 and will leave the high court on Jan. 21, Martin Luther King Jr. Day, a state holiday.

The development comes as the state Judicial Tenure Commission on Monday petitioned the Michigan Supreme Court to immediately suspend Hathaway and accused her of committing bank fraud, tax fraud, money laundering and misleading investigators in a blistering complaint revealed Monday.

I'm not sure how she was vetted, only that it was apparently done very poorly.

Eric B. :: Hathaway to step down
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not a vetting issue
the short sale of the home occurred in 2011 after being elected. Unless there was a pattern of behavior, vetting would not have caught it.  

Also, the FreePress article indicated that the short sale negotiations were handled by law firm specializing in short sales.  While she likely signed her name to what ever documents were ultimately filed by the law firm, she might have some plausible deniability if criminal charges are filed.  

wrong Freep link
Here's the version of the article that mentions the short sale negotiations with the bank... http://www.freep.com/article/2...

The Judicial Tenure Commission complaint says Hathaway first began discussing a possible short sale with ING Bank in December 2008, shortly after she was elected to the Supreme Court.

The complaint alleges she and Kingsley did not fill out financial worksheets ING sent them and in 2010 retained a law firm to represent them in the short sale negotiations.

In a 2010 telephone conversation, Hathaway's attorney told ING that Hathaway planned to retire in 2011, the complaint says. Hathaway participated in the call and did not dispute the erroneous statement, the complaint alleges.

Given that she and her husband are both lawyers, they likely won't get much sympathy even if the did receive bad advice.  

[ Parent ]
I fail to see what vetting has to do with this.  

[ Parent ]
It has to do with trying to pin this fiasco on Mark Brewer
Just another thing he should have to answer for before Michigan Democrats crown him yet again.

But that just brings us back to the previous question: Who else WANTS the job of MDP Chairman, and is capable of DOING the job if chosen?

"The two most common elements in the universe are hydrogen and stupidity." ~ Harlan Ellison

[ Parent ]
This shit doesn't happen in a vacuum
When someone engages in this kind of behavior, there are always clues that they may have a loose grasp of ethics.

Among the Trees

[ Parent ]
What About Butch?
Melvin Butch Hollowell for chair.

Brewer was has been chair for 18 years (first elected 1995).

He's been "active" for over 30 years in the state party.

The only party leaders that should serve that long should come from the Soviet Union, like Leonid Brezhnev.

[ Parent ]
Not Butch Hollowell, how about Kevin Hrit?
I would not recommend Melvin Butch Hollowell for chair.

Even in his short time in the position last time, he went through staff like water through a sieve. Rather full of himself.

Yes, I've been deeply disappointed in Brewer from time to time. A manipulator more than a doer. But let's find somebody who is actually better with a track record.

Previously, I've suggested Kevin Hrit. Is he ready for the job? He has good ideas, is more in tune with the deep on-the-ground campaign style, and seems solid on follow through.

[ Parent ]
Possibly the worst idea ever
If this suggestion were a game it would be called "jump to conclusions."

Let me be somewhat kind - Kevin Hrit lacks the basic intelligence necessary to be chair of the state party.  He's an average campaign worker but he's not leadership material in any way, shape or form.

I'd prefer sticking with Mark Brewer if the next best choice was Hrit.

[ Parent ]
Proper financial and personal disclosure would have revealed that the Hathaways' were already facing financial issues before 2008.

Unfortunately, there is no formal disclosure required by the party to get nominated for supreme court.

"Plausible deny-ability" is a sucko place to be for a lawyer and a supreme court justice.

[ Parent ]
they were not in financial distress
the real estate market took an abrupt turn in 2008.  While the loan amount seems high in hindsight, it was probably at a fair loan-to-value ratio at the time it was made.  This whole scandal revolves around the fact that they were not eligible for a short sale because the were not in financial distress.  They probably could have kept paying on their original mortgage, they just didn't want to because the value of the house had fallen so low.  Rather than a short sale, they should have just sold the home and brought cash to closing to pay off the note.  They could have sold one of their other properties to come up with the cash if needed or taken a loan from a retirement account, which they almost certainly have.  

From a vetting standpoint, I don't see how having one underwater mortgage makes you unqualified for office.  Their overall net worth was likely significantly higher than the amount that they were underwater.

I agree that plausible denyability only goes so far.  But getting legal advice from a specialist in short sales and speaking through the attorney when communicating with the bank might be enough to raise questions about willful intent to commit fraud.  I don't know much about criminal law or fraud, but typically there is an intent requirement.  As of right now the feds have only initiated a civil forfeiture case.  Given that civil cases typically have a lower burden of proof than criminal cases, it could be in indication that  gov is not sure it can prove any criminal charges.  Alternatively, leading with the civil case might be a way of weakening the defendants financially and morally so they will have less means to fight any criminal charges.

[ Parent ]
They Were
Read the Judicial Tenure Commission complaint and the DOJ complaint. Its alleged that Hathaway and her husband were already under some financial distress at the time Hathaway was elected to the MSC.

Starting in 2005 they were sued for a "seven figure" "loan" and sometime between 2008 and 2011 Kingsley lost a major client. According to the JTC complaint Hathaway and Kingsley claimed that they used up their savings, at least partially, in defending the lawsuit.

They apparently owned four high-end residential properties at that time. Four. Huh?

Financial and personal disclosure would have disclosed all of this.

Of course an underwater mortgage does not make one unqualified for office, but she was running for the supreme court, not some village council seat. The Judicial Canons require more from judges, even stating that they should stay away from the appearance of impropriety.

And, BTW, Diane Hathaway has been a licensed real estate agent since 1987. AHEM. I'm assuming she would have known something about short sales.

[ Parent ]
the were dumb not poor
any vetting would have occurred in 2007-2008 before the full extent of the real estate meltdown was known.  The JTC complaint details the statements they made to their mortgage company in 2011.  It is not surprising that they would try to make themselves appear to be in financial distress.  And apparently they were successful because the short sale was approved.  But the simple fact that she is now being investigated on ethics and legal grounds shows that the financial distress was all a ruse.  If they really were in financial distress, then there would have been no issue with the short sale.  They would not have had to try to hide their assets through questionable transfers to relatives.  I really don't see how vetting of financial issues would have raised red flags.

as Eric mentioned, this whole scandal demonstrates remarkable bad judgement, and one would think that this bad judgement would have manifested itself earlier.  Maybe interviews with past colleagues or business partners would have turned something up, assuming you could sort through any biases and credibility issues.

[ Parent ]
This kind of thing never just comes out of the blue
You don't get into this kind of trouble without giving off signs over the years that you have a slippery sense of ethics, for the same reasons why people usually don't just start at horrible, pre-planned, mutilating serial murder sprees without having started by torturing puppies.

Someone in the Democratic Party had to know that Diane Hathaway was capable of getting into bank fraud trouble.

Among the Trees

[ Parent ]
(1) Hathaway and Kingsley were already looking into the short sale in 2008 (finally selling short in 2011).

(2) Both were sued in 2005 for loans in excess of $1,000,000. The lawsuit had been pending for years, apparently past 2008. (The only major reason I know of for suing over a loan is if a person did not pay it back).

(3) In addition to financial disclosure, see my previous posts, I also suggested that H & K also provide personal disclosures.

(4) Its seemingly obvious that the only way H & K could have afforded to stay in their home was to eventually sell one of their four high-end residences.  They chose not to. The financial disclosures, especially if someone calculated their cash-flow, would have seen this coming. Hathaway saw this in 2008, if not earlier.

(5) And finally, the JTC is also charging Hathaway with lying to the JTC investigators - multiple times. In other words, a cover-up, lying about lying in the past...

[ Parent ]
Was any of this brought out by the GOP in 2008?
If yes, it didn't stick.  If not, then they suffered from a complete failure of opposition research.  The criticism from 2008 I've found so far suggests the latter.

From an excerpt of a Detroit News article quoted elsewhere:

Judge Hathaway [Taylor's opponent] ... favored the ill-advised Reform Michigan Government Now! ballot proposal, which was ruled off this fall's ballot by both the appellate and Supreme Court.  The plan's backers admitted in their own presentations, after all, that the proposal was designed to tilt state government in favor of one political party.
From a Michigan Daily article on Hathaway's victory;
Taylor said he didn't believe Hathaway deserved to have her name on the ballot and only got this far in the electoral process because of her last name, which is the same as several previous Wayne County judges. Hathaway's ex-husband is former Wayne County Circuit Judge Richard Hathaway.
On Oct. 20, a televised attack sponsored by the Michigan Democratic Party accused Taylor of falling asleep at the bench when hearing a case involving the deaths of six children in a Detroit home fire.

Taylor claimed the attack is a lie and that Judge Hathaway has run "a campaign full of misinterpretations and falsehoods."
The Chamber of Commerce aired televised advertisements objecting to the accusations against Taylor, calling Hathaway "desperate" and "not qualified" for the high court.

Not a bad summary of attacks, although it shows that I have to be digging to use a student newspaper for the second quote.  That's OK, I can dig even deeper and get dirty by quoting what RightMichigan had to say during the campaign.
The Michigan Citizen could have simply endorsed Diane Hathaway, a white Wayne Circuit Court judge running against Michigan Supreme Court Chief Justice Cliff Taylor -- the man whose very name drives Brewer into fits. But the Citizen did not endorse Hathaway and, instead, went after the former counsel for the Grand Dragon, citing Brewer's complete indifference to Deb Thomas, a black Wayne Circuit Court judge who had been campaigning for the nomination for at least a year. Brewer decided instead to back Hathaway, who had only declared her interest in the nomination a few days before the state Democrat convention.
Thank you, Right Michigan, for yet another demonstration of how projection is the Right's favorite defense mechanism.  That written, if anyone in the GOP had a clue about Hathaway's problems back then, I'm sure it would have come out at Right Michigan.  Instead, they attacked Mark Brewer, not Hathaway.

So, it looks like the Michigan GOP had no idea.  Like I said already, a complete failure of opposition research.

Greetings from Detroit, Ground Zero of the post-industrial future!

[ Parent ]
More criticism of Hathaway from 2008
I found some more attacks on Hathaway, none of which give off a whiff of any of what LH wrote.  First, the Detroit Free Press article on Hathway's victory:
The race exploded in the last two weeks when the Michigan Democratic Party funded scathing ads labeling Taylor "the Sleeping Judge," claiming he fell asleep during a case -- a charge Taylor and Republicans denounced as a lie.

Taylor said Democrats turned the race into a partisan contest, one his campaign staff said allowed President-elect Barack Obama's landslide to have a spillover effect.
Republicans countered the assault by attacking Hathaway's record on crime and claiming that she once told a newspaper she only wanted to serve on the state Court of Appeals to enhance her vacation time.

That's as close as anyone's come, and that just makes her look lazy.

Speaking of the Free Press, here is an excerpt of their endorsement quoted elsewhere that elaborated on the charge that she was "not qualified."

"Taylor is enough of a problem on the high court to warrant endorsing nearly anyone as an alternative."

"Unfortunately, state Democrats have chosen Wayne County Circuit Judge Diane Hathaway as their candidate. Despite a solid record on the Circuit Court, Hathaway, 54, demonstrates no better grasp of the role of high court justice than Taylor, and can't even articulate a judicial philosophy that she'd bring to the court. ...

"What Hathaway says about how she would simply 'follow the law' is not unlike what Taylor says about his philosophy. But in an interview with the Free Press editorial board, Hathaway could not say why she would arrive at different decisions from Taylor, only that she would. She would likely be out of her depth on the high court, and not much more than a reliable, but unexplained, vote that's the opposite of Taylor's. That's not reason enough to put her there."

"It's one thing for Democrats, liberals and trial lawyers to complain about the state Supreme Court. It was quite another, apparently, for them to find a credible candidate to challenge its chief justice this year.

"Justice CLIFFORD TAYLOR should be retained Nov. 4 on the Michigan Supreme Court, but voters really deserved a better choice."

Again, nothing of what LH alleged was known in 2008 appears here.

Finally, I found more details on the "soft on crime attack" from the legal blog Gavel Grab.

According to an Associated Press report, a new ad by the state Republican Party accuses Hathaway of giving probation to a "terrorist sympathizer" who was armed and wearing combat fatigues when arrested.
Ads on both sides have been harshly negative, especially by independent groups. A Michigan Chamber of Commerce ad suggests that Hathaway gave a low sentence to a sex predator.
Oh, wow, terrorists and sex offenders--how lame.  Since the GOP was willing to go that low to scaremonger, it would certainly have gone low enough to bring up the lawsuit, about which I am finding nothing from before 2013.  It didn't.

Maybe there was no failure of opposition research after all, which means there may not have been a failure of vetting, either.  Besides which, if Brewer and the MDP are responsible for anything, it's finding winning candidates.  Hathaway did win, after all, and maybe Deborah Thomas, who ran in 2004 and lost, then failed to receive the nomination in 2008, would not have been able to win the second time, either.

Screw this.  It looks like hiding LH's comment might be a good idea after all, even if doing so hides my two responses as well.

Greetings from Detroit, Ground Zero of the post-industrial future!

[ Parent ]
Neon Neon Neon
Well, 'cause the GOP didn't use it means, ... what?
Well, it means exactly dick.

I was going to write a series of questions for you, but I realize they all boil down to this:

HOW would the GOP get (reliable) H & K financial data without the cooperation of the couple?

Remember that the national Democrats spent months if not years digging into Romney's and found little. Later they tried howling at Willard Mitt to release it on his own. He didn't, except of for one year or two years, an abridged version and that was that. Exactly dick.

Second, and I mean this, please read the JTC complaint on your own: http://jtc.courts.mi.gov/pendi... formal proceedings .

It is stunningly brutal in its allegations.

[ Parent ]
Are you suggesting Rick Snyder will appoint ANDY DILLON to the Court?

Is he even an attorney?

"The two most common elements in the universe are hydrogen and stupidity." ~ Harlan Ellison

Yep - he's an attorney
Dillon's a big Notre Dame guy - went to undergad and law school there. Yet another reason to smile about Alabama's big win.

I do sort of doubt that Snyder would appoint Dillon to the MSC.  Makes more sense for him to promote some hack on the MSCA and then appoint some hack from a circuit court to the SCA and then some district court hack to the circuit court and then some random party hack that happens to be an attorney to the district court.  That gets you four repub hack judges for the price of 1 resignation.  Any Governor that doesn't follow this practice is really limiting their power - it was a sometimes frustrating aspect of the Granholm admin (among others).

[ Parent ]
What about Colleen O'Brien, then?
She may have lost in November, but with two years and the "Incumbent" label on her ballot line -- plus the bizarre-but-true benefit from having the most generically Irish name imaginable -- Democrats would really be in a rough spot to defeat her in 2014 (or again in 2016 when Diane Hathaway's term would have ended).

"The two most common elements in the universe are hydrogen and stupidity." ~ Harlan Ellison

[ Parent ]
Geez, don't give them ideas.
The only one worse would be O'Brian's rival for the nomination at the MI GOP convention, Jane Markey.  Here's what I wrote about the contest between the two of them for Examiner.com.
Oakland Circuit Court Judge Colleen O'Brian won a narrow victory over Michigan Court of Appeals Judge Jane Markey on Saturday. As reported by MLive, the two women had waged a very aggressive campaign for an open seat on the Michigan Supreme Court. Markey had engaged in what could be considered extreme rhetoric, including was was interpreted as an anti-Semitic remark as well as campaigning against sharia law, while O'Brian had been more temperate in her remarks on the stump. Consequently, the contest between the two was cast as one between a grassroots insurgent (Markey) and an establishment choice.

Markey's conservative grassroots credentials were reinforced by the endorsement of the Michigan iCaucus, which favored her by a vote of 70% to O'Brian's 30%. O'Brian was able to overcome that endorsement by courting Republicans of all ideological stripes and from all parts of the state, as reported by the Detroit Free Press.

Markey's a wingnut loon, while O'Brian is merely a conservative.

Greetings from Detroit, Ground Zero of the post-industrial future!

[ Parent ]
Didn't the News already shill for O'Brien the other day in their editorial?  This isn't a new idea.

[ Parent ]
...when will Jase Bolger do the right thing and resign for a far worse offense, and offense directly connected to the carrying out of his job as a legislature?  

Come on, Judge Aquilina.  I know the Ingham County courts can be quite busy, but let's wrap this thing up for the sake of the citizens, already.

Seriously, every time Hathaway is brought up, I'm going to bring up Jase.  It's time to start playing the hardball they play with us.  Since they deny us our proper representation through their gerrymandering, it's time to use the courts and whatever muck we can find to dwindle their numbers.  

Oh, and yeah, this has nothing to do with vetting and I'm quite sad we're losing Hathaway.

Absolutely NOTHING
Absolutely has NOTHING to do with vetting a candidate to make sure your eventual successful supreme court candidate isn't a ... crook. No nothing. Not a damn thing. Why bother with 1040's or real estate records? Who's gonna look, the FBI? NAAAW...

[ Parent ]
That's a fair comparison...
Every Republican who is outraged over this ought to be just as outraged by their own House Speaker's conduct.  Will anyone have the guts to vote against the guy?

But, again, this stuff doesn't happen in a vacuum. Even if there wasn't any paper suggesting that she might do something shady, you can't hide a personality that might engage in behavior that lands you on the wrong side of a fraud investigation.

Among the Trees

[ Parent ]
I think you can
She sure fooled the hell out of me.  I thought of her as a star from the get-go, and the person we'd choose as Chief Justice when we got the court back.  Maybe, that just goes to show how personally repugnant Cliff Taylor was Chief Justice, I don't know, but this idea that you could see/smell corruption from Hathaway coming from a mile away is far fetched to say the very least.

[ Parent ]
Not at all...
This is my entire point with Jase Bolger's tax liens from the 90s. A normal person doesn't just try to rig an election out of the blue. There are signs, usually very obvious in hindsight, that someone has a loose enough grasp of ethics that they'd do something like that. Again, it's like a serial killer who starts out torturing puppies.

At some point before she got the nomination, she got the backing of Democratic Party players. You don't just parachute into a convention and get a nomination for supreme court justice (Sheila Jackson started campaigning for a nomination in 2010). You develop contacts and get to know people. At some point, someone had to have been smart enough to get an uncomfortable feeling about Diane Hathaway. Those people always give clues.

Among the Trees

[ Parent ]

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