Background Information for Jim Sharpe Although most lawyers are ethical, dedicated to their profession and are

highly motivated to assist the public in their legal affairs and in their quest for justice, there are growing areas of corruption in the profession as a result of unethical and perhaps illegal practices on the part of of a number of large and powerful law firms in our state. One area of corruption involves large law firms taking over the governing boards, and in some cases, the chief executive office of their public utility clients so that their clients will have no control over the law firms legal bills, the need for particular legal services or even whether they wish to have the law firm continue to represent them at all. In short, the two largest public utilities in the state, SRP and APS have become captive clients of the Jennings Strauss and Salmon law firm and the Snell and Wilmer law firm, respectively. There is no way to accurately measure how much this arrangement has cost the ratepayers of the state in terms of excess charges on their utility bills over the past 50+ years that this arrangement has been in existence because this information is largely in control of the public utilities and their respective law firms. However, it could possibly amount to billions of dollars. A similar problem exists with respect to a number of large law firms buying influence with those who control our State, County and Municipal governments, obtaining legal business and charging uncontrolled fees, which, in the final analysis, are paid for by the taxpayer. This arises as a result of large amounts of money in the form of bundled campaign contributions being donated to candidates for public office, who, when elected, head up our governmental agencies. When this occurs, the head of the governmental agency returns the favor by a permitting the law firm to provide legal services to the governmental agency and to bill for such services without any effective controls. This practice has been reported in the news media from time to time, but no action has ever been taken to correct this unethical (or perhaps illegal) practices.. The principal offenders in this regard have typically been the law firms of Jones, Skelton & Hochuli, Burch & Cracchiolo, Gallagher & Kennedy. Again, the cost to the taxpaying public in terms of excessive legal fees charged by these law firms could amount to billions of dollars over the many years that these practices have been going on.

Questions and Answers: Q. Are there areas of corruption in the legal profession.? A. Although most Arizona lawyers are honest and ethical, there are areas of corruption that that have developed over the years that have become deeply ingrained and difficult to root out.

Q. What exactly are these areas of corruption. A. One area involves the large law firms taking over control of our public utilities by electing their firm members, relatives and friends to the governing boards of the public utilities so that there is no scrutiny or review of the law firms legal bills or what legal services are required. Another area involves the large law firms bundling campaign contributions from firm members, relatives and friends and donating funds to public officials who are running for office.

Q. What public officials are involved? A. They are the governing officers of the State, the Counties, the Municipalities, as well as other elected officials such as the Attorney General, the County Attorneys, the Sheriff and any other officeholders and that are elected.

Q. Isn't this illegal? A. That is a very difficult and involved question. It involves not only the interpretation of our Constitution but of our campaign finance laws. It is a very murky area. However, if it isn't illegal, it is certainly unethical for lawyers or law firms to engage in this type of conduct because it amounts to lawyers paying public officials to refer legal business to them. If an individual lawyer did this he or she would be severely sanctioned and perhaps disbarred.

Q. Why hasnt something been done to clean up this corruption?

A. The large law firms represent the business and financial communities, including our large corporations, the banks, the insurance companies, the health care industry, as well as other important segments of our economy. They also have powerful friends in the Legislature and in many other places. As a result it is difficult to challenge these law firms or their practices.