Docket No. 357

In the Matter of Donald P. Zerendow

May 27, 1988

Disposition Agreement



This Disposition Agreement (Agreement) is entered into between
the State Ethics Commission (Commission) and Donald P. Zerendow
(Mr. Zerendow) pursuant to section 11 of the Commission's
Enforcement Procedure's. This Agreement constitutes a consented to
final Commission order enforceable in the Superior Court pursuant
to G.L. c. 268B, s.4(j).

On July 27, 1987, the Commission initiated a preliminary
inquiry, pursuant to G.L. c. 268B, s.4(a), into poisible violations
of the conflict of interest law, G.L. c. 268A, involving Mr.
Zerendow, the former Chief of the Medicaid Fraud Control Unit
(MFCU) in the Department of the Attorney Ceneral. The Commission
concluded its inquiry on December 9, 1987, finding reasonable cause
to believe that Mr. Zerendow violated G.L. c. 268A, s.5(b).

The parties now agree to the following findings of fact and
conclusions of law:

1. Mr. Zerendow was an Assistant Attorney General from January,
1975 until January, 1987. Mr. Zerendow was MFCU Chief from 1978
until January 29, 1987. On November 7, 1986, Mr. Zerendow informed
the Attorney General of his intent to resign on or about January
20, 1987. On January 29, 1987, Mr. Zerendow did resign. Thereafter,
he practiced law privately. While MFCU Chief, he was a state
employee as that term is defined in G.L. c. 268A, s.1 (q).

2. As MFCU Chief, Mr. Zerendow had direct and intermediate
administrative authority to approve, disapprove or otherwise direct
all MFCU activities, including decisions such as whether and how
to investigate a complaint, whether formally to open a case based
on the initial information received and developed, and to whom such
tasks should be assigned. In practice, with respect to some of
these decisions, Mr. Zerendow delegated his authority to
subordinates such as his Chief of Investigations, among others.

3. In early November, 1986, an investigator at MFCU received
a telephone complaint that a certain podiatrist

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(Podiatrist) had requested an allegedly unlawful supplemental
payment from one of his patients (i.e., a payment beyond what
Medicaid would cover). The initial complaint was reduced to writing
in a memo dated November 3, 1986, and forwarded to the Chief
Investigator. In a memo dated November 10, 1986, the Chief
Investigator directed a second investigator to do a preliminary
screening of the complaint The Chief Investigator was concerned
about the Podiatrist requesting supplemental payments from his
patients as well as so-called upgrades in services (i.e., charging
Medicaid for a more costly procedure than the one that was actually
performed). On November 28, 1986, after the Chief Investigator and
the aforementioned second investigator discussed the results of the
additional investigative steps that had been taken, the Chief
Investigator formally opened and signed the case to that
investigator. The Commission knows of no evidence which would
indicate that Mr. Zerendow was ever made aware of the Podiatrist
case while he was MFCU Chief. He was not personally involved in the
decision to open the case, nor did he participate in any
discussions or reviews regarding the case during his remaining two
months as Chief (MFCU employment records reflect that Mr. Zerendow
was on vacation between November 19 and December 2, 1986). At no
time did any confidential information regarding the case come into
his possession.

4. Little additional investigation was done on the Podiatrist's
case until in or about February-March, 1987, when allegedly
substantial billing abuses were discovered. After Mr. Zerendow's
departure on January 29, 1987, the Podiatrist's case was assigned
to an MFCU attorney (the MFCU attorney).

5. In mid-April, 1987, the MFCU attorney notified the
Podiatrist's attorny of the foregoing allegations and disclosed to
him the salient facts of the MFCU investigation. On April 21, 1987,
the Podiatrist's attorney contacted Mr. Zerendow requesting that
Mr. Zerendow act as co-counsel regarding the MFCU investigation of
the Podiatrist. Mr. Zerendow informed the Podiatrist's attorney
that before agreeing to act as co-counsel, he had to inquire of
MFCU regarding any potential conflict of interest problem.

6. On April 22, 1987, Mr. Zerendow contacted the Acting Chief
of the MFCU. Mr. Zerendow testified: that he told the Acting Chief
that he had been contacted to represent the Podiatrist and was
calling to determine if the Acting Chief saw any conflict problem
in such representation; that the Acting Chief told Zerendow he did
not see a problem and referred Mr. Zerendow's call to the MFCU
attorney. The MFCU attorney told Mr. Zerendow that if the
Podiatrist matter was there while Zerendow was Chief then it took
a new direction after he left state employ, that he knew nothing
about the case, and that the MFCU attorney saw no conflict problem.
Alter these conversations, Mr. Zerendow and the MFCU attorney
discussed the salient facts of the MFCU's investigation.

7. The acting MFCU Chief testified that he could recall Mr.
Zerendow checking with him on one occasion regarding whether he
might have a conflict problem regarding a case where Mr. Zerendow
was going to be private counsel in an MFCU matter, but the Acting
Chief could not recall whether Mr. Zerendow checked regarding the
Podiatrist case or another case.

8. The MFCU attorney testified that Mr. Zerendow did raise the
conflict issue early in his contacts concerning the Podiatrist case
but could not recall the precise date. He did recall it came up
some time early in his contacts with Mr. Zerendow. When it did
arise, according to the MFCU attorney, he told Mr. Zerendow that
the case had been opened while Mr. Zerendow was Chief, that Mr.
Zerendow had not participated in the case as Chief, and that the
investigation had been relatively inactive until after Mr. Zerendow
resigned. (Neither the MFCU attorney nor the Acting Chief testified
that they told Mr. Zerendow that there was a conflict problem.)

9. On or about April 22, 1987, Mr. Zerendow informed the
Podiatrist's attorney that he had contacted MFCU, was told he did
not have a conflict problem, and then had discussed the
Podiatrist's case with the MFCU attorney. Mr. Zerendow then agreed
to act as co-counsel for the Podiatrist,

10. On April 29, 1987, Mr. Zerendow met with the MFCU attorney
and investigator for approximately one hour. The MFCU attorney
disclosed in more detail the fficts, nature and scope of the
investigation.

11. On May 1, Mr. Zerendow called the MFCU attorney and
requested copies of all of the Podiatrist's records that the
Podiatrist had submitted to MFCU investigators.

12. May 8, 1987, Mr. Zerendow and the MFCU attorney had a
telephone conversation regarding the Podiatrist and other podiatry
providers' billing practices.

13. On May 29, 1987, Mr. Zerendow hadatelephone conversation
with the MFCU attorney regarding involvement of federal
investigators in the Podiatrist case. Mr. Zerendow also requested
that the MFCU attorney join with him in asking the Department of
Public Welfare (DPW) to clarify certain Medicaid procedures. The
MFCU attorney orally declined that request. On the same day, Mr.
Zerendow wrote the MFCU attorney to offer further medical records
of the Podiatrist and to request a second meeting. No additional
meetings occurred between Mr. Zerendow and the MFCU attorney from
that day to the present.

14. On June 4, 1987, the MFCU attorney wrote Mr. Zerendow
confirming that he would not join in Mr. Zerendow's request to the
DPW.

15. On June 5, 1987, Mr. Zerendow voluntarily did closed his
representation of the Podiatrist to the Commission and has had no
further contact with MFCU personnel regarding the Podiatrist's
case. Although Mr.Zerendow has to the present continued to act as
counsel
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for the Podiatrist except as described above, he has never appeared
before a court, grandjury or any other state or federal
administrative or investigative agency with respect to the
Podiatrist's case.

16. Section 5(b) of G.L. c. 268A prohibits a former state
employee, within one year after his last employment has ceased,
from appearing personally before any agency of the commonwealth as
attorney for anyone other than the commonwealth in connection with
any particular matter in which the commonwealth or a state agency
is a party or has a direct and substantial interest and which was
under his official responsibility as a state employee at any time
within a period of two years prior to the termination of his
employment.

17. Based on the evidence discussed above, as of April 22, 1987,
Mr. Zerendow was a former state employee.

18. The conduct which is the subject of this Agreement occurred
between April 22, 1987 and May 29, 1987, i.e., within one year
after Mr. Zerendow's last employment with the commonwealth ceased.

19. The investigation of the Podiatrist which began in November
of 1986 and was still continuing as of May 29, 1987, involved a
controversy, proceeding and/or charge(s) and was therefore a
particular matter.[1]

20. Because Mr. Zerendow's subordinates received the complaint
regarding the Podiatrist, did initial screening of the complaint,
and decided to open formally an investigation into the Podiatrist's
billing practices and assign an investigator to the case, all in
November of 1986, the investigation of the Podiatrist was a
particular matter which was under Mr. Zerendow's official
responsibility as a state employee within a period of two years
prior to his resigning on January 29, 1987.

21. By his telephone conversations and meeting, as described
above between April 22, 1987 and May 29, 1987, and by his May 29,
1987 letter, Mr. Zerendow appeared personally before the MFCU in
connection with the Podiatrist's criminal investigation, thereby
violating G.L. c. 268A, s.5(b).

22. The Commission acknowledges Mr. Zerendow's contention that
he did not "appear personally" in the sense lawyers use that term,
i.e., submitting oneself to the jurisdiction of a court or
administrative tribunal. As the Commission has previously held,
however, "appears personally" should not be equated with the term
"appearance" as used in the law of jurisdiction, and involves more
than one's physical presence before the agency. It can also involve
telephone or written communications. EC-COI-87-27 (issued July 27,
1987).

23. The Commission also acknowledges Mr. Zerendow's contention
that the Podiatrist matter in the spring of 1987 involved different
allegations than those made while Mr. Zerendow was Chief. As
indicated in s.19-20, however, the matter on which Mr. Zerendow
appeared personally in the spring of 1987 arose out of and was a
continuing part of the original investigation begun in November of
1986. Therefore, it did involve the same particular matter.

24. The Commission is unaware of any evidence to indicate that
Mr. Zerendow knew he was violating s.5(b) when he acted as
described above.[2] In addition, the Commission considers as a
mitigating factor Mr. Zerendow's efforts to determine whether he
had a conflict problem. Those efforts, however, do not provide a
defense to this violation. The Commission will insist on careful
and complete compliance with the law from former state employees.
To accept anything less is to invite situations where, for example,
former managers will be able to take advantage of their prior
position when subsequently dealing in their private capacity with
former colleagues and subordinates. Questions of preferential
treatment inevitably will arise and result in a diminishing of
public confidence that such matters are being handled strictly on
their merits.

Mr. Zerendow should have known that since the Podiatrist case
was opened within the two years preceding his resignation as chief
of MFCU, he could not appear personally before any court or state
agency, including MFCU, as counsel for the Podiatrist for one year
after his resignation. Even if MFCU personnel told him he would
have no problem, he cannot shift responsibility to others for his
failure to comply with the law.[3] In order to protect himself from
the risk that his own or others' analysis of the situation was
incorrect, Mr. Zerendow was entilled to seek a written opinion from
the Commission. Such an opinion, sought in advance and based on an
accurate representation of the material facts, provides a complete
defense against an alleged violation of the conflict of interest
law.

In view of the foregoing course of conduct in violation of G.L.
c. 268A, s.5(b), 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 Mr. Zerendow:

(1) that he pay to the Commission the sum of one thousand
dollars ($1,000.00)[4] as a civil penalty for violating G.L.
c. 268A, s.5(b); and

(2) that he waive all rights to contest the findings of fact,
conclusions of law and terms and conditions contained in this
agreement in any related adminitrative or judicial proceeding
to which the Commission is or may be a party.

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[1] "Particular matter," any judicial or other proceeding.
application, submission, request for a ruling or other
determination, contract, claim, controversy, charge, accusation,
arrest, decision, determination, finding, but excluding enactment
of general legislation by the general legislation by the general
courtand petitions of cities and towns, counties and districts for
special laws related to their governmental organizations, powers.
duties, finances and property G.L c. 268A, s.1(k).

[2] Ignorance of the law is no defense to a violation of G.L c.268A
In


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the Matter of Joseph Doyle. 1980 SEC 11, 13 see also, Scola v.
Scola, 318 Mass. 1,7(1945).

[3] See In the Matter of John J. HanIln, 1986 SEC 253,255.

[4] But for the mitigating factors described above, the Commission
would have insisted upon a higher fine. The Commisaion may impose
a fine of up to $2,000 for each violation.