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DiFrancesco's laws often let clients thrive

Originally appeared in the Star Ledger on 03/25/01


For nine years, acting Gov. Donald DiFrancesco has been one of New Jersey's most powerful politicians.

As Senate president since 1992, he has controlled the fate of legislation, raised millions in campaign cash for GOP colleagues, influenced hundreds of state appointments and shaped government policy from taxes to spending.

During that same time, DiFrancesco also prospered as a lawyer, moving from a firm in Westfield with three members to a Warren Township firm staffed by 33 lawyers, with affiliate offices in New York, Philadelphia, Boca Raton, Fla., Los Angeles and London.

Records released by DiFrancesco Friday show his firm was retained by dozens of public entities across the state and earned as much as $2 million annually in legal fees just from those clients. They included municipalities throughout Somerset and Union counties, the Union County Utilities Authority and the Somerset County Joint Insurance Fund.

Last year, the firm reported $1.2 million in billings to municipalities and other public clients, ranging from $193,640 to Bernards Township to $122.84 to the Bedminster Zoning Board.

All told, it earned $10.9 million from those public entities from 1994 through 2000.

The firm -- known until he resigned in January as DiFrancesco, Kunzman, Coley, Yospin, Bernstein & Bateman -- also counted among its clients some of the state's largest insurers and other regulated industries, including Allstate New Jersey, American International Group, Chubb and Liberty Mutual, and Public Service Electric & Gas.

DiFrancesco, who left the practice when he became acting governor, has declined to identify the firm's private clients, saying it would violate their right to confidentiality.

But, he insisted in a recent interview, his political influence has not been a major benefit to his law firm's earnings, and he has never used his position as Senate president to benefit his clients.

"The issue really is whether you have in any way gone over the line, in soliciting in any way that's inappropriate, or used your office to bring in extra business or influence by these clients. I could heartily say I've never done any of that," DiFrancesco said.

As a partner at the firm, DiFrancesco's income rose steadily between 1994 and 1997, from $261,890 to $382,259, according to tax records he released Friday, records that go back to 1994. In 1998, his legal income fell to $250,401, rising the following year to $273,949.

DiFrancesco acknowledged that some clients undoubtedly have benefited by what the New Jersey Legislature has done. But he said that is the nature of a citizens' legislature.

He also made the point that his firm has had to give up clients because of a state law that prohibits lawyer-legislators and their firms from representing companies before state agencies. "There were quite often cases in which they had to reject business because of my situation," he said.

An examination of Senate legislation shows several instances in which DiFrancesco's legislative actions intersected with the interests of his firm's clients:

Bivona & Cohen, the New York firm affiliated with DiFrancesco's firm, also represented at least two clients that benefited from state legislation while DiFrancesco was Senate president.

In one case, DiFrancesco sponsored a 1996 ballot question that provided $300 million to help dredge silt-clogged shipping channels in the New Jersey-New York harbor area. One of the companies that benefited is Maersk Line, a shipping company that was a Bivona client. When Maersk threatened to move its operations to Baltimore, Gov. Christie Whitman, with DiFrancesco's support, committed $100 million in 1999 to cut deeper channels in Port Newark, and the company agreed to stay.

In the other case, in 1994, the Senate approved a measure that gave Atlantic City's 12 casinos more freedom from state controls and made it legal for Donald Trump, a longtime Bivona client, to own a fourth casino. DiFrancesco voted for the bill.

DiFrancesco said he was unaware Bivona represented Maersk, and that neither he nor his New Jersey partners has ever done any work for Trump.

Bivona & Cohen lists DiFrancesco's Warren Township firm as one of its branches, and lawyers from DiFrancesco's firm are listed as New Jersey counsel for Bivona & Cohen. Bivona's lawyers are also included on the letterhead of DiFrancesco's old firm. When the firms affiliated in 1992, the action was described in the New Jersey Law Journal as a merger.

But one of DiFrancesco's former partners, John Coley, said the arrangement between the two firms was an affiliation, not a partnership. He said it worked like this: If a Bivona & Cohen client was sued in New Jersey, DiFrancesco's firm would represent the client. If a client of DiFrancesco's firm was sued in New York, Bivona would handle the case there.

"I've never been to Bivona & Cohen," DiFrancesco said. "They didn't pay our bills. We didn't pay their bills. There was no sharing of income."

And John Bivona, a partner in the New York affiliate, said, "Not one piece of business in this office has come in as a result of Don." He said he has met DiFrancesco only once in nine years

DiFrancesco contends business came to his firm because his colleagues were good attorneys, not because he was Senate president.

Harry Yospin, who handled much of the firm's insurance business, said most of its 20 to 25 insurance clients predated the merger of his own firm with DiFrancesco's in 1992.

"I would say most of the companies we do work for now, we did work for prior to Don's arrival. Those that are here now, as far as I know, are not here because of Don," Yospin said.

DiFrancesco said he has never used his position to solicit legal work.

"I know what you are saying is if you are Senate president, you are going to attract more clients. I can't really relate to that. Maybe that's true. But I don't know that I can pinpoint it," DiFrancesco said.

But that did not prevent other lawyers with his firm from trading on DiFrancesco's cache. Chris Neal, a State Farm spokesman, said he was approached by two lawyers from DiFrancesco's firm last year on the annual Chamber of Commerce train ride to Washington. He said they made it clear who their colleague was when they asked Neal if State Farm could send business to their firm. He declined to identify the lawyers.

Lobbyists in Trenton would not speak on the record about DiFrancesco's dual role as lawyer and Senate president. But one, who asked not to be identified, made this point: "If you are an insurance executive and you have a choice between two firms of equal ability offering equal prices, one of which is politically connected and one isn't, you'll go with the politically connected firm. It won't hurt you."

DiFrancesco, one of 41 lawyers in the 120-member Legislature, is far from the only legislator with clients that have interest in what happens at the Statehouse.

Among the other lawyer-legislators whose firms represent insurance companies, for instance, are: Sens. John Lynch (D-Middlesex), Raymond Lesniak (D-Union) and William Gormley (R-Atlantic) and Assemblyman Scott Garrett (R-Sussex), who is a member of the Assembly's Banking and Insurance Committee.

The acting governor made a point of singling out Lesniak and Lynch, both advisers to Woodbridge Mayor James McGreevey, who is seeking the Democratic nomination for governor.

"If you compare me to Ray Lesniak, I'm a piker. Or John Lynch, of course," he said, referring to the insurance work their firms do.

In the end, DiFrancesco said he probably would have made more money as a lawyer if he had never gone to Trenton. "It's a damned detriment to be in the Legislature," he said. "My law practice perhaps would be better if I wasn't in the Legislature. But that's okay. I don't care about that. Ask my wife."

Staff writers Robert Schwaneberg, Ron Marsico and Ted Sherman contributed to this report.

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