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Secret report rips DiFrancesco ethics

Originally appeared in the Star Ledger on 04/18/01

"An egregious ethical breach." "Highly improper." "Replete with conflicts."

Those were some of the words used to describe acting Gov. Donald DiFrancesco's actions as the attorney for Scotch Plains in a secret, scathing 1998 report prepared by two lawyers hired by the Republican-controlled township council.

The withering seven-page document, which called for DiFrancesco's immediate resignation or firing, examined his actions as township attorney in a prolonged dispute over a parcel of land owned by members of his family that the township had foreclosed on for $85,000 in back taxes in 1996.

Under the professional rules that govern lawyers, the report asserted, DiFrancesco was prohibited from representing the township because of his own interest in the property.

But in a series of actions that the two lawyers said were "clearly improper and replete with conflicts that cannot be ignored or waived," the attorneys accused DiFrancesco of keeping his stake in the property secret while taking actions to benefit himself, his family and a major developer who had paid off a $225,000 debt on his behalf.

DiFrancesco, a Republican who served as township attorney in his hometown for 16 years, was ousted from that post after Democrats took control of the council in January 1999. When Republicans recaptured control of the council later that year, they did not rehire DiFrancesco, then Senate president and one of the most powerful public officials in the state.

The acting governor yesterday labeled the leaking of the report to the media a "political attack" by Democrats. DiFrancesco denied the allegations in the report and insisted he did nothing illegal or unethical because he recused himself from the issue "years ago."

"I think people will recognize this for what it is -- a partisan political attack during the campaign season," DiFrancesco said. "It was designed to get me to back off, to get me to leave. It was designed to really hurt my chances to run for office."

Geri Samuel, a Democratic township councilwoman, said Democrats were not responsible for releasing the report.

The document was prepared by special counsel hired by the Republican-controlled township council. Lewis Markowitz, a Democrat, drafted the report, which also was signed by Douglas Hansen, a Republican. The lawyers said their conclusions were backed by two other attorneys for the township.

At issue is a piece of property at 2435 Plainfield Ave. owned by members of the DiFrancesco family. The township, arguing that it was owed $85,000 in back taxes, foreclosed on the property and won a judgment on Aug. 30, 1996.

Late that same year, the state's largest home builder, K. Hovnanian Companies, paid Donald DiFrancesco $225,000 to help settle a debt. The payment by Hovnanian was described by DiFrancesco as a down payment for the builder to step in and develop the property with the DiFrancesco family.

But the special counsel said the payment -- which was not disclosed to Scotch Plains officials -- was "clearly improper" because the back taxes to the township should have been paid first. And they suggested the payment was made by the builder to curry favor with DiFrancesco as the township's lawyer.

"Mr. DiFrancesco's acceptance of the money and failure to advise Council of same was an egregious ethical breach," the lawyers wrote. "The reason for the payment from Hovnanian to Mr. DiFrancesco is obvious. The payment was made at a time when Hovnanian had an interest in three (3) separate parcels in Scotch Plains, two of which were before land use boards."

The DiFrancescos sought to overturn the foreclosure, and on Jan. 15, 1997, Donald DiFrancesco signed a sworn certification accusing the township -- which he represented as its lawyer -- of acting in bad faith. Markowitz said that move was outrageous.

"No attorney can serve two masters," he wrote, in the only portion of the report in which Hansen did not concur. "He cannot act as the township's chief legal officer at the same time that he is accusing his client of failing to act in good faith."

Both lawyers alleged that "despite being beholden to Hovnanian, Mr. DiFrancesco as Township Attorney continue to be involved on other projects in the Township" involving the builder. The report cited a piece of property known as the "Donato property" that Hovnanian was seeking to develop. According to minutes of the March 25, 1997, township council meeting, DiFrancesco improperly participated in a discussion about rezoning the property.

DiFrancesco, who said he recused himself years ago from matters relating to his family's tract, also denied that he had ever lobbied for a zoning change on behalf of his relatives.

"It's absolutely a lie," said DiFrancesco.

The report also accused DiFrancesco of thwarting an attempt by township officials to convert the troubled property into a park at one point. The township council had planned to apply for a recreation grant to develop a field on the property, according to the report. In what the report described as a "blatant conflict of interest," DiFrancesco had a telephone conversation about the property with Joan Papen, then mayor, a week later. The park proposal was killed as a result, the report said.

In all, the township hired six different attorneys to deal with the property because of Donald DiFrancesco's conflicts, according to the report. The township paid more than $250,000 in legal fees on the property. Meanwhile, DiFrancesco stayed on as township attorney and was paid "substantial sums" to represent the municipality.

"I believe this would be very difficult for Council to explain to its citizens," the report said.

William McClintock, a member of the council at the time and a political consultant who had worked for DiFrancesco, said yesterday that the council ultimately decided DiFrancesco did not act improperly.

"We researched it and spent a lot of time looking at it," he said. "Don responded to some of the questions. It never got to the point where it came to the level where the council thought we needed to dismiss him."

Scotch Plains Mayor Martin Marks, who was a councilman at the time, said the council's decision to keep DiFrancesco on as township attorney was evidence that it did not agree with the report's conclusions that DiFrancesco's actions warranted his firing.

"We would have taken further action, and we didn't do it," he said.

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