AGO 1973 No. 1 - Jan 3 1973
OFFICES AND OFFICERS ‑- PUBLIC ‑- ATTORNEYS ‑- FINANCIAL REPORTING
Under § 24 of Initiative No. 276, requiring periodic reports of the financial interests of candidates and elected officials (except President, Vice‑President and precinct committeemen), a candidate or elected official who is an attorney must include in his report:
(a) The names of all clients from whom he received any compensation during the reporting period for preparing, promoting, or opposing legislation, rules, rates, or standards, together with the amounts of such compensation; and
(b) The names of all of his own governmental, corporate or other business clients from whom he received compensation of $500 or more during the reporting period, together with the approximate amount of such compensation (as described in § 24 (2)) and the consideration therefor; and
(c) If a member of a law firm, the names of all of the firm's governmental, corporate or other business clients from whom the firm received $500 or more during the reporting period ‑ and the consideration therefor; and
(d) The name of any "clients" by which the candidate or elected official-attorney was actually employed as a salaried employee during the reporting period.
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January 3, 1973
Honorable R. Frank Atwood
State Senator, 42nd District
220 Bellingham National Bank Bldg.
Bellingham, Washington 98225
Cite as: AGO 1973 No. 1
By letter previously acknowledged you have requested our opinion on a question which we paraphrase as follows:
To what extent does § 24 of Initiative No. 276, relating to reports of the financial affairs of certain elected officials and candidates, require a candidate or an elected official who is an attorney to report the names of his clients and the fees paid to him by such clients?
[[Orig. Op. Page 2]]
We answer this question in the manner set forth in our analysis.
As noted in AGO 1972 No. 29 [[to Irving Newhouse, State Representative on December 22, 1972]], copy enclosed, Initiative No. 276 (as approved by the voters at the November 7, 1972 general election) consists of four major substantive chapters. The first of these relates to electoral campaign financing and requires the disclosure of all sources of campaign contributions and of the objects of all such expenditures.1/ The second is designed to regulate the activities of lobbyists and to require reports of their expenditures.2/ Part three, as fully set forth in § 24 of the initiative, requires both candidates for office (except President, Vice‑President and precinct committeemen) and elected officials to file periodic reports of a number of designated matters relating to their financial and business affairs; and, finally, part four3/ governs access to the various records of state and local governmental agencies.
Your question (like those considered in AGO 1972 No. 29) pertains to the third of these four parts of the initiative ‑ as set forth in § 24. Although this section lists some twelve different categories of information which are to be included in the reports of candidates and elected officials, it will not be necessary, for present purposes, to quote the section in full.4/ Instead, we will quote only so much of it as is at all germane to your immediate inquiry ‑ and then divide our consideration of this question into the following two parts:
(a) To what extent does § 24 of Initiative No. 276, on its face, require candidates or elected officials who are attorneys to report the names of their clients and the amounts of compensation received from such clients?
(b) To what extent, if at all, may a candidate or an elected official who is an attorney invoke the attorney-client privilege or the code of professional responsibility as a basis for declining to disclose such information in his report?
[[Orig. Op. Page 3]]
Section 24 of the initiative begins with a statement of its over-all mandate, as follows:
"(1) Every elected official (except President, Vice President and precinct committeemen) shall on or before January 31st of each year, and every candidate (except for the offices of President, Vice President and precinct committeeman) shall, within two weeks of becoming a candidate, file with the commission a written statement sworn as to its truth and accuracy stating for himself and his immediate family for the preceding twelve months: . . ."
After this statement there appear a total of twelve separate reporting requirements (denominated subparts (a) through (l)), of which we will here need to consider only four. As explained in AGO 1972 No. 29 at pages 6-8, the "commission" referred to in this provision is the "Public Disclosure Commission" which is provided for in § 35 of the initiative and the duties and functions of which are set forth in §§ 36 through 38 thereof. The terms "candidate" and "elected official" are defined in § 2 as follows:
"(5) 'Candidate' means any individual who seeks election to public office. . . .
". . .
"(9) 'Elected official' means any person elected at a general or special election to any public office, and any person appointed to fill a vacancy in any such office."
Finally, before proceeding further we should also reiterate here, in accordance with our answer to the second question considered in the foregoing December 22, 1972, opinion, that:
"The first reports of the financial interests of elected officials reporting as such (and not as candidates) under § 24 of Initiative No. 276 will not be due until January 31, 1974, and these reports will cover the twelve‑month period beginning on January 1, 1973, and ending on December 31, 1973."
[[Orig. Op. Page 4]]
Likewise, although persons becoming candidates during 1973 will be required to filetheir reports within two weeks of acquiring this status, these initial reports will only be required to cover transactions occurring during completed calendar months between January 1, 1973, and the date upon which the particular report becomes due, together with any reportable financial interests or property ownerships held during such periods.
We turn, now, to subpart (a) of § 24, which requires the subject reports to include the candidate's or elected official's "Occupation, name of employer, and business address."
The issue raised by this subpart is whether a lawyer's client is to be regarded as an "employer" of his attorney. For the reasons set forth in AGO 65-66 No. 44 [[to Martin J. Durkan, State Senator on October 5, 1965]], copy enclosed, our answer to this question is, for the most part, in the negative.
In this 1965 opinion we were concerned with a similar issue arising under the financial disclosure requirements of this state's 1965 public officials' conflict of interest law (chapter 150, Laws of 1965, Ex. Sess.). Under that law5/ an attorney holding public office was required to report the name of any person, corporation, firm or partnership from which he had received compensation in excess of a specified amount during the preceding twelve‑month period by virtue of his being, among other things, an employee of such entity; however, we concluded that such an attorney was not thereby required to report the names of his individual clients
". . . because he is not, in the ordinary sense, an 'employee' of such persons. The attorney-client relationship is ordinarily more like that of an independent contractor than that of employer-employee, in the usual sense of the term. See,Buehman v. Smelker, 50 Ariz. 18, 68 P.2d 946 (1937); also, 5 Am.Jur., Attorneys at Law, § 6."
[[Orig. Op. Page 5]]
In so concluding we also indicated that a different result would prevail if the attorney was actually serving as a regular salaried employee of, for example, a corporation or other business association, either in a nonlegal capacity or as "house counsel." We adhere both to the basic conclusion and to this exception ‑ and therefore now advise that, in our opinion, subpart (a) of § 24 (1), supra, does not require an elected official who is an attorney to report the names of his clients, except where he is a regular salaried employee of the client.
Passing over subparts (b) through (d), which deal with bank accounts and other financial interests, the creditors of a candidate or elected official, and the various offices or positions of trust held by him or members of his immediate family, we look next at subpart (e) of § 24 (1), which requires the subject reports of financial affairs to list ‑
"All persons for whom actual or proposed legislation, rules, rates, or standards has been prepared, promoted, or opposed for current or deferred compensation; the description of such actual or proposed legislation, rules, rates or standards; and the amount of current or deferred compensation paid or promised to be paid; . . ."
Here, obviously, the initiative does call for the reporting by a candidate or elected official who is an attorney both of the names and of certain other designated information (including compensation) respecting any of his clients for whom he has drafted, promoted or opposed legislation ‑ including administrative rules or standards, and rates.
Likewise, under subpart (f) of § 24 a candidate or elected official who is an attorney will be required to report the names of, and compensation received from at least certain of his clients, depending upon the nature of his practice. This subpart requires the subject reports to include:
"The name and address of each governmental entity, corporation, partnership, joint venture, sole proprietorship, association, union, or other business or commercial entity from whom compensation has been received in any form of a total value of five hundred dollars or more; the value of such compensation; and the consideration given or performed in exchange for such compensation;"
Under this provision it will be seen that the initiative calls upon a candidate or elected official who is an [[Orig. Op. Page 6]] attorney to report the names of any of hisgovernmental, corporate, or other business clients from whom he has received compensation of $500 or more during the reporting period ‑ together with the approximate value6/ of such compensation and the consideration given or performed in exchange for such compensation.
In addition, if the attorney is a member of a law firm the next subpart of § 24 comes into play as well ‑ by requiring the attorney-candidate or elected official to report:
"(g) The name of any corporation, partnership, joint venture, association, union or other entity in which is held any office, directorship or any general partnership interest, or an ownership interest of ten percent or more; the name or title of that office, directorship or partnership; the nature of ownership interest; and with respect to each such entity the name of each governmental entity, corporation, partnership, joint venture, sole proprietorship, association, union or other business or commercial entity from which such entity has received compensation in any form in the amount of five hundred dollars or more during the preceding twelve months and the consideration given or performed in exchange for such compensation;"
Here, however, it will be sufficient for the reporting attorney to list the governmental, corporate, or other business clients of the firm of which he is a member and from which compensation of $500 or more was received during the reporting period ‑ together with the consideration given or performed in exchange for such compensation. Unlike subpart (f),supra, this subpart does not require even an approximation of the amount of such compensation. And finally, neither of these subparts of § 24 require any listing of either the attorneys' or the firms' other (i.e., nongovernmental, noncorporate, or other nonbusiness) clients.
[[Orig. Op. Page 7]]
None of the remaining subparts of § 24 are at all in point, inasmuch as they deal, essentially, with a candidate's or an elected official's real property holdings and transactions. Thus, the answer to this first part of your question is that Initiative 276, on its face, requires a candidate or elected official-attorney to report the names of his clients and his compensation received from them only to the extent called for in subparts (a), (e), (f) and (k), as above discussed. However, before summarizing these requirements, let us now turn to, and consider the relationship, if any, between this law and either the attorney-client privilege or the code of professional responsibility.
We can find no basis in the privilege itself for a refusal by a candidate or elected official who is an attorney to report the names of, and compensation received from, his clients to the extent required by the initiative. As you know, this privilege is merely a rule of evidence under which an attorney is barred from testifying in court or other judicial or quasi-judicial proceedings as to certain communications between him and his client without the client's consent. 97 C.J.S., Witnesses, § 252, et seq. Accord, RCW 5.60.060 (2), which codifies the common law attorney-client privilege in this state as follows:
"An attorney or counselor shall not, without the consent of his client, be examined as to any communication made by the client to him, or his advice given thereon in the course of professional employment."
Moreover, neither the name of a client nor the amount of a fee received by an attorney from a client are in any event ordinarily held by the courts to come within the purview of this privilege, perse. See,Collins v. Hoffman, 62 Wash. [[Orig. Op. Page 8]] 278, 113 Pac. 625 (1911), and cases cited therein; also, 97 C.J.S., Witnesses, § 283 (c) and (f), and numerous authorities cited.7/
On the other hand, when we look to the code of professional responsibility which presently governs the conduct of attorneys in this state we find, in part, that it picks up and broadens the applicability of the privilege to some extent. As adopted by the state supreme court on August 26, 1971, effective December 7, 1971, DR 4-101 of this code states that:
"Except when permitted under DR 4-101 (C) and (D), a lawyer shall not knowingly during or after termination of the professional relationship to his client:
"(1) Reveal a confidence or secret of his client. . . ."
The terms "confidence" and "secret" are defined, for the purposes of this rule as follows:
"(A) 'Confidence' refers to information protected by the attorney-client privilege under applicable law, and 'secret' refers to other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would be likely to be detrimental to the client."
Thus, even though the name of a client and the fee received from him are ordinarily not protected by the privilege itself ‑ and thus would not generally come under the [[Orig. Op. Page 9]] definition of a "confidence" for the purposes of this rule ‑ this information could become a "secret" under the rule if the client were to request that his identity and/or fees not be disclosed by the attorney. Query, however: If this were to occur in a case involving an attorney who is required, as either a candidate or an elected official, to file a report under § 24 of Initiative 276,supra, would the ban against disclosure appearing in the code of professional responsibility justify a refusal by this attorney to include in his "financial disclosure" report under § 24 of the initiative, the name of his client and/or the amount of the fee received from him under circumstances rendering § 24 otherwise applicable?
Reading further into DR 4-101 itself, our answer to this question must be in the negative. Noting that the prohibition against disclosures of "confidences" or "secrets" is preceded in the rule by a clause reading "Except as permitted under DR 4-101 (C) or (D)," we find in subsection (C) the following:
"(C) A lawyer may reveal:
". . .
"(2) Confidences or secrets when permitted under Disciplinary Rules orrequired by law or court order." (Emphasis supplied.)
Thus, it will be seen that where the provisions of the initiative (clearly, a law) require an attorney who is a candidate or elected official to report the names of his clients and the compensation received from them, he is permitted by this rule to do so ‑ even though this information, under the circumstances, might constitute either a "confidence" or a "secret." Accordingly, it must be concluded that such an attorney may not invoke this code of professional responsibility as a justification for refusing to supply this information where required by § 24 of the initiative, supra.8/
[[Orig. Op. Page 10]]
Having so determined this point, we return, now, to this section of the initiative for the purpose of summarizing its requirements insofar as they relate to the matter at hand. In our opinion, for the reasons earlier above stated, this section of the initiative requires a candidate or elected official who is an attorney and to whom the section applies to report:
(a) the names of all clients from whom he received any compensation during the reporting period for preparing, promoting, or opposing legislation, rules, rates, or standards, together with the amounts of such compensation; and
(b) the names of all of his own governmental, corporate or other business clients from whom he received compensation of $500 or more, during the reporting period, together with the approximate amount of such compensation (as described in § 24 (2)) and the consideration therefor; and
(c) if a member of a law firm, the names of all of the firm's governmental, corporate or other business clients from whom the firm received $500 or more during the reporting period ‑ and the consideration therefor; and
(d) the name of any "clients" by which the candidate or elected official-attorney was actually employed as a salaried employee during the reporting period.
[[Orig. Op. Page 11]]
We trust that the foregoing will be of assistance to you.
Very truly yours,
PHILIP H. AUSTIN
Deputy Attorney General
*** FOOTNOTES ***
1/See, §§ 3-14.
2/See, §§ 15-23.
3/See, §§ 25-34.
4/Section 24 is quoted in full on pages 3-5 of AGO 1972 No. 29 which we have enclosed for your immediate reference.
5/We note in passing that this 1965 act remains in effect and continues to require the reports specified therein from certain "public officials" as defined in the act. Under § 24 of Initiative 276, however, persons who file reports under that section are excused from having also to file reports under the 1965 law.
6/See subsection (2) of § 24 which provides that:
"Where an amount is required to be reported under subsection (1), paragraphs (a) through (k) of this section, it shall be sufficient to comply with such requirement to report whether the amount is less than one thousand dollars, at least one thousand dollars but less than five thousand dollars, at least five thousand dollars but less than ten thousand dollars, at least ten thousand dollars but less than twenty five thousand dollars, or twenty five thousand dollars or more. An amount of stock may be reported by number of shares instead of by market value. No provision of this subsection shall be interpreted to prevent any person from filing more information or more detailed information than required."
7/Furthermore, we note that as far as this statutory codification of the common-law privilege is concerned, § 47 of Initiative No. 276 expressly states that:
"The provisions of this act are to be liberally construed to effectuate the policies and purposes of this act. In the event of conflict between the provisions of this act and any other act, the provisions of this act shall govern." (Emphasis supplied.)
8/In thus concluding we, of course, acknowledge the authority of the board of governors of the State Bar Association, with the approval of the supreme court, to amend DR 4-101 (C) (2), supra, so as to delete the language upon which our present conclusion is based. See, RCW 2.48.060. In addition, we reserve judgment at this time upon the extent to which either the attorney-client privilege or the Code of Professional Responsibility may be involved in connection with access to public records under Chapter IV (§§ 25-34) of this initiative.