Date: October 1, 1987
This Disposition Agreement (Agreement) is entered into between the State Ethics Commission (Commission) and the Honorable William Highgas, Jr. (Judge Highgas), pursuant to Section 11 of the Commission's Enforcement Procedures. This Agreement constitutes a consented to final Commission Order enforceable in the Superior Court pursuant to G.L. c. 268B, s.4(j).
On December 8,1986, the Commission initiated a preliminary inquiry into possible violations of sections.3, 6, 23 and other related sections of the conflict of interest law, G.L. c. 268A, and section.7 of the financial disclosure law, G.L. c. 268B, involving Judge Highgas, an associate justice of the Middlesex County Division of the Probate and Family Court Department of the Trial Court. The Commission concluded its inquiry and, on April 27,1987, found
reasonable cause to believe that Judge Highgas violated G.L. c. 268B, s.7 by failing to identify Anthony R. Rizzo (Attorney Rizzo) in Judge Highgas' 1983 and 1984 Statements of Financial Interests as the transferor and record owner of real property in which Judge Highgas had a financial interest. The Commission also found reasonable cause to believe that Judge Highgas had violated s.23(b)(3) of G.L. c. 268A. At the same time, the Commission found
no reasonable cause to believe that Judge Highgas had violated s.s.3,6, or 23(b)(2) of G.L.c. 268A. In addition, the Commission found no reasonable cause to believe that Judge Highgas violated G.L. c. 268B, s.7 in his reporting of compensation he received as trustee of a realty trust having a corporation, of which Attorney Rizzo was president, as its beneficiary.
Judge Highgas has agreed to enter into this Disposition Agreement concerning the violations of G.L. c. 268B, s.7. Judge Highgas has declined to enter into a Disposition Agreement concerning his alleged violations of G.L. c. 268A, s.23(b)(3), as to which an Order to Show Cause is being issued contemporaneously with this Agreement.
The Commission and Judge Highgas now agree to the following findings of fact and conclusions of law:
1. Judge Highgas is an associate justice of the Middlesex County Division of the Probate and Family Court Department of the Trial Court. Judge Highgas has held his judicial position since January 6,1983.
2. As an associate justice, Judge Highgas is a designated public employee holding a major policymaking position, who is required annually to file a Statement of Financial Interests (SFI) with the Commission, pursuant to G.L. c. 268B, s.5. Prior to becoming an associate justice, Judge Highgas, as Executive Director of the Commission on Criminal Justice, Chairman of the Criminal History Systems Board and Chief Legal Counsel to the Governor, had filed
SFIs for calendar years 1980,1981 and 1982.
3. In 1982,Judge Highgas lived with his family in Woburn and was seeking to relocate the family residence. In August or September, 1982, Judge Highgas and his wife toured several lots in a residential subdivision being developed in Lynnfield by Wildewood Realty Trust (Wildewood) with one of the Wildewood trustees, Frank Cremarosa (Cremarosa). The meeting between the Highgases and Cremarosa had been arranged by Attorney Rizzo. Judge Highgas had been friends for over ten years with Attorney Rizzo, who had built his own family's residence on a lot in the Wildewood subdivision.
4. Cremarosa told the Highgases that they could purchase any of the available lots for $60,000. Although Judge Highgas and his wife particularly liked Lot 66 of the subdivision located on Driftwood Lane, they took no action in the Fall of 1982 to purchase it.
5. Sometime in December, 1982, Attorney Rizzo informed Judge Highgas that, for tax reasons, the Wildewood trustees (Trustees) wanted to sell Lot 66 before the end of 1982 and asked Judge Highgas if he wanted to purchase it. Judge Highgas told Attorney Rizzo that he would be unable to raise the $60,000 purchase price before January, 1983. During the same conversation or during a conversation after, Attorney Rizzo suggested to Judge Highgas that
he (Attorney Rizzo) would purchase the lot and that, if Judge Highgas were
able to raise the money by the end of January 1983, he would transfer the lot to Judge Highgas, but that otherwise he would keep the lot. Judge Highgas assented to the arrangement Attorney Rizzo proposed.
6. Attorney Rizzo then entered into an agreement with the Trustees to purchase Lot 66. Pursuant to their agreement, on December 30,1982, the Trustees executed a quitclaim deed transferring ownership of Lot 66 to Attorney Rizzo in exchange for Attorney Rizzo's downpayment of $10,000 and his promise to pay the $50,000 purchase price balance by January 31,1983. The agreement between Attorney Rizzo and the Trustees was conditioned upon the
lot's passing a percolation test conducted at the Trustees' expense and provided that, if the percolation test were unsatisfactory, Lot 62 would be transferred to Attorney Rizzo in exchange for Lot 66.
7. On January 24,1983, Judge Highgas' broker, Fidelity Brokerage Services, Inc., having liquidated a portion of Judge Highgas' stock holdings, issued check no. 004307, payable to Judge Highgas' order in the amount of $60,000 and misdated "Jul 24 83."
8. Shortly thereafter, Judge Highgas endorsed the $60,000 check by signing his name on it (without indicating a payee) and gave it to Attorney Rizzo. Attorney Rizzo subsequently wrote on the check "Pay to the order of Wildewood Realty Trust by Anthony A. Rizzo" (underlining in the original) and gave the check to the Trustees. The check was then endorsed "Deposit Only Wildewood Realty Trust" and was processed on February 2,1983.
9. There was no written agreement of any kind between Judge Highgas and Attorney Rizzo concerning the purchase and sale of Lot 66.
10. Judge Highgas did not take legal title to Lot 66 when he paid the purchase price for it. Judge Highgas and Attorney Rizzo had agreed that the deed to Lot 66 would stay in Attorney Rizzo's name until the percolation tests were done and until Judge Highgas' architect had determined that the house that Judge Highgas and his wife wanted to build could be built on the lot.
11. The percolation tests were successfully concluded by the end of June, 1983. The home Judge Highgas wished to construct required an easement (for a driveway) over a neighboring lot (Lot 65) which had not yet been sold by the developers. On August 27,1983, the Trustees granted an easement to Attorney Rizzo, who still held title to Lot 66, for the use and benefit of Lot 66 over Lot 65. The recited consideration for the transfer was one dollar.
12. Title to Lot 66 was not transferred from Attorney Rizzo to Judge Highgas and his wife until December 29,1984, when a quitclaim deed was executed by Attorney Rizzo and recorded transferring title to the property (together with the easement) from Attorney Rizzo to the Highgases. During the period in which the title to the property was in Attorney Rizzo's name, Attorney Rizzo received and paid all but one of the bills for real estate taxes levied by the Town of Lynnfield on Lot 66. On each occasion, Attorney Rizzo was reimbursed by Judge Highgas in full for the amounts he paid.
13. Judge Highgas subsequently had his family residence constructed on Lot 66. Construction of the house began in October, 1983 and Judge Highgas and his family moved into the new house in June, 1985.
14. On or about April 24, 1984, Judge Highgas filed with the Commission his SFI for calendar year 1983 (1983 SFI). In response to Question G, "Real Property," Judge Highgas identified vacant land at Driftwood Lane Lynnfield, as real property in which he and his wife had a financial interest during 1983. Judge Highgas indicated that the land's value was $50,001 to $100,000, entered his name and his wife's name in the column under the heading "Person Holding Interest" and identified himself and his wife as the record owners of the property by entering the word "same" in the column under the heading "Record Owner(s)". It is Judge Highgas' position that he so identified himself and his wife as the record owners because he considered he and his wife to be the beneficial owners of the property. Judge Highgas did not provide the name and address of the transferor of the Driftwood Lane Property.
15. On December 3, 1984, Richard Reale of the Commission's staff wrote to Judge Highgas and informed him that, if the Driftwood Lane property were purchased in 1983, the name and address of the transferor must be disclosed on the SFI and invited Judge Highgas to amend his 1983 SFI.
16. On December 6, 1984, Judge Highgas responded to Mr. Reale's letter with an amended response to Question G and a cover letter in which Judge Highgas referred to the real property in question as "property which I purchased in 1983." The sole amendment to the response to Question G was the insertion, in the column under the heading "Name and Address of Transferor or Transferee," of the sentence "House lot purchased in 1983 from Frank Cremarosa, Anthony DeFilipis, Pasquale Santilli and Patrick De Salvatore, trustees of Wildewood [sic] Realty Trust of 551 Broadway, Malden, MA 02148." Neither the original 1983 SFI nor the 1984 amendment made any
reference to Attorney Rizzo being the record owner of, or the transferor to the Highgases of any interest in, the Driftwood Lane property during 1983.
17. On or about April 30, 1985, Judge Highgas filed with the Commission his SFI for calendar year 1984 (1984 SFI). At Question K.1. "Real Property Owned in Massachusetts,"Judge Highgas identified a single-family house under construction at Driftwood Lane, Lynnfield, as real property in which he and his wife had a financial interest during 1984. Judge Highgas indicated that the property's value was $50,001 to $100,000 and identified himself and his wife as its record owners. At Question K.3., "Real Property Transfers," in which Judge Highgas
was required to identify any property identified in Question K.1 .,which was "purchased, sold, or otherwise transferred to or from Judge Highgas and his wife) in 1984,"Judge Highgas checked the "not applicable" box and failed to identify the December 29,1984 transfer to him and his wife of the deed and legal title to the Driftwood Lane property from Attorney Rizzo.
18. At the time Judge Highgas filed his 1983 SFI, he was aware that Attorney Rizzo was the record owner of the Driftwood Lane property. At the time Judge Highgas filed his 1984 SFI, he was aware that Attorney Rizzo had been the record owner of the Driftwood Lane property during most of 1984 and that Attorney Rizzo had transferred legal title to the property to Judge Highgas and his wife on December 29,1984.
19. As a probate judge, Judge Highgas makes master, administrator, counsel and guardian ad litem (GAL) appointments. From 1983 through 1986; Judge Highgas made approximately 242 GAL appointments to 117 different persons. Of these appointments, 28 were made to Attorney Rizzo, during the period from November 2, 1983 to August 1, 1986. For the 28 GAL appointments Attorney Rizzo received from Judge Highgas, Attorney Rizzo received fees totaling over $20,000. Attorney Rizzo's sole master appointment by Judge Highgas led to Attorney Rizzo's receipt of an additional $2,750 fee.
20. Section 7 of G.L. c. 268B, in pertinent part, provides that any person"... who files a false Statement of Financial Interests under sections of [G.L. c. 268B] shall be punished by a fine of not more than one thousand dollars. . . . " It is well established that a SFI filing need not be intentionally false to be a false SFI within the purview of s.7. In the Matter of George A. Michael, 1981 SEC 59. It is the position of Judge Highgas that the misstatements contained in the SFI's in question were unintentional, since he considered himself and his wife to be the beneficial owners of the property.
21. Judge Highgas' 1983 SFI constituted a false Statement of Financial Interests within the meaning of G.L. c. 268B, s.7, in that his 1983 SFI identified himself and his wife as the record owners of the Driftwood Lane property, rather than Attorney Rizzo. Judge Highgas' 1984 amendment to his 1983 SFI constituted a false Statement of Financial Interests within the meaning of G.L. c.268B, s.7, in that it failed to identify Attorney Rizzo as the record owner of the Driftwood Lane property and listed the Wildewood Trustees, rather than Attorney Rizzo, as the transferor to the Highgases of the same property. Accordingly, in filing his 1983 SFI and his 1984 amendment thereto, Judge Highgas violated G.L. c. 268B, s.7.
22. Judge Highgas' 1984 SFI constituted a false Statement of Financial Interests within the meaning of G.L. c. 268B, s.7, in that his 1984 SFI failed to disclose that Judge Highgas and his wife had acquired the deed and legal title to the Driftwood Lane property from Attorney Rizzo on December 29,1984. Accordingly, in filing his 1984 SFI, Judge Highgas violated G.L. c. 268B, s.7.
23. Judge Highgas' violations of G.L.c. 268B, s.7, whether or not intentional, were detrimental to the public interests protected by G.L. c. 268A and 268B in that they concealed from public scrutiny the fact that Judge Highgas was involved in the personal financial dealings described above with an attorney to whom he made numerous official probate appointments.
In view of the foregoing violations of G. L. c. 268B, s.7, the Commission has determined that the public interest would be served by the disposition of this matter without further enforcement proceedings on the basis of the following terms and conditions agreed to by Judge Highgas:
1. that Judge Highgas pay to the Commission the sum one thousand five hundred dollars ($1500) of which seven hundred and fifty dollars ($750) shall be a civil penalty for filing a false SFI for calendar year 1983 and seven hundred and fifty dollars ($750) shall be a civil penalty for filing a false SFI for calendar year 1984;
2. that Judge Highgas amend his 1983 and 1984 SFIs to reflect the facts as set forth herein. above within twenty days of signing this Agreement;and
3. that Judge Highgas waive all rights to contest the findings of fact, conclusion of laws and terms and conditions contained in this Agreement in any related administrative or judicial proceedings to which the Commission is or may be a party.