Office of Lawyer Regulation v. John J. Balistrieri

2014 WI 104
SUPREME COURT OF WISCONSIN
CASE NO.: 1984AP970-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against John J. Balistrieri, Attorney at Law:
Office of Lawyer Regulation,
Complainant,
v.
John J. Balistrieri,
Respondent.
DISCIPLINARY PROCEEDINGS AGAINST BALISTRIERI
OPINION FILED: August 12, 2014
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED:
DISSENTED: BRADLEY, J., dissent. (Opinion filed.)
NOT PARTICIPATING: ROGGENSACK, J., withdrew from participation.
ATTORNEYS:
2014 WI 104
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 1984AP970-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against John J. Balistrieri, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant,
AUG 12, 2014
v.
Diane M. Fremgen
Clerk of Supreme Court
John J. Balistrieri,
Respondent.
ATTORNEY reinstatement proceeding. Reinstatement denied.
¶1 PER CURIAM. We review the report and recommendation
of the referee, Attorney Richard C. Ninneman, that the license
of Attorney John J. Balistrieri to practice law in Wisconsin
should be reinstated. Although the Office of Lawyer Regulation
(OLR) strenuously opposed Attorney Balistrieri's reinstatement
petition before the referee, it did not appeal the referee's
recommendation. We therefore review the referee's report and
No. 1984AP970-D
recommendation pursuant to Supreme Court Rule (SCR) 22.33(3).1
After fully reviewing this matter, we conclude that Attorney
Balistrieri has not satisfied the criteria required to resume
the practice of law in this state, and we therefore deny his
petition for reinstatement. We also determine that Attorney
Balistrieri should be required to pay the costs of this
reinstatement proceeding, which were $41,459.40 as of
February 4, 2013.
¶2 The standards that apply to all petitions for
reinstatement after a disciplinary suspension or revocation are
set forth in SCR 22.31(1).2 In particular, the petitioning
1
SCR 22.33(3) provides that "[i]f no appeal is timely
filed, the supreme court shall review the referee's report,
order reinstatement, with or without conditions, deny
reinstatement, or order the parties to file briefs in the
matter."
2
SCR 22.31(1) states:
The petitioner has the burden of demonstrating,
by clear, satisfactory, and convincing evidence, all
of the following:
(a) That he or she has the moral character to
practice law in Wisconsin.
(b) That his or her resumption of the practice of
law will not be detrimental to the administration of
justice or subversive of the public interest.
(c) That his or her representations in the
petition, including the representations required by
SCR 22.29(4)(a) to [(4m)] and 22.29(5), are
substantiated.
(continued)
2
No. 1984AP970-D
attorney must demonstrate by clear, satisfactory, and convincing
evidence that he or she has the moral character necessary to
practice law in this state, that his or her resumption of the
practice of law will not be detrimental to the administration of
justice or subversive of the public interest, and that the
attorney has complied fully with the terms of the suspension or
revocation order and the requirements of SCR 22.26. In
addition, SCR 22.31(1)(c) incorporates the statements that a
petition for reinstatement must contain pursuant to
SCR 22.29(4)(a)-[(4m)].3 Thus, the petitioning attorney must
(d) That he or she has complied fully with the
terms of the order of suspension or revocation and
with the requirements of SCR 22.26.
3
SCR 22.29(4)(a) through (4m) provides that a petition for
reinstatement shall show all of the following:
(a) The petitioner desires to have the
petitioner's license reinstated.
(b) The petitioner has not practiced law during
the period of suspension or revocation.
(c) The petitioner has complied fully with the
terms of the order of suspension or revocation and
will continue to comply with them until the
petitioner's license is reinstated.
(d) The petitioner has maintained competence and
learning in the law by attendance at identified
educational activities.
(e) The petitioner's conduct since the suspension
or revocation has been exemplary and above reproach.
(f) The petitioner has a proper understanding of
and attitude toward the standards that are imposed
(continued)
3
No. 1984AP970-D
demonstrate that the required representations in the
reinstatement petition are substantiated.
¶3 When reviewing referee reports in reinstatement
proceedings, we utilize standards of review similar to those we
use for reviewing referee reports in disciplinary proceedings.
We do not overturn a referee's findings of fact unless they are
clearly erroneous. On the other hand, we review a referee's
legal conclusions, including whether the attorney has satisfied
the criteria for reinstatement, on a de novo basis. In re
upon members of the bar and will act in conformity
with the standards.
(g) The petitioner can safely be recommended to
the legal profession, the courts and the public as a
person fit to be consulted by others and to represent
them and otherwise act in matters of trust and
confidence and in general to aid in the administration
of justice as a member of the bar and as an officer of
the courts.
(h) The petitioner has fully complied with the
requirements set forth in SCR 22.26.
(j) The petitioner's proposed use of the license
if reinstated.
(k) A full description of all of the petitioner's
business activities during the period of suspension or
revocation.
(4m) The petitioner has made restitution to or
settled all claims of persons injured or harmed by
petitioner's misconduct, including reimbursement to
the Wisconsin lawyers' fund for client protection for
all payments made from that fund, or, if not, the
petitioner's explanation of the failure or inability
to do so.
4
No. 1984AP970-D
Disciplinary Proceedings Against Jennings, 2011 WI 45, ¶39,
334 Wis. 2d 335, 801 N.W.2d 304; In re Disciplinary Proceedings
Against Gral, 2010 WI 14, ¶22, 323 Wis. 2d 280, 779 N.W.2d 168.
¶4 Attorney Balistrieri was admitted to practice law in
Wisconsin in August 1973, following his graduation from
Valparaiso University Law School. He and his brother, Joseph
Balistrieri (Joseph), subsequently engaged in a private law
practice in Milwaukee.
¶5 In 1981 a federal grand jury indicted Attorney
Balistrieri, along with his brother Joseph and his father Frank.4
Following a six-week trial in 1984, a jury found Attorney
Balistrieri guilty of conspiracy to obstruct commerce by
extortion. The conviction was affirmed by the United States
Court of Appeals for the Seventh Circuit. United States v.
Balistrieri, 778 F.2d 1226, 1228, 1232 (7th Cir. 1985). The
referee downplays Attorney Balistrieri's role in the crime,
laying most of the blame at the feet of his father Frank. He
describes the facts underlying the convictions as Frank
threatening an undercover FBI agent with physical violence for
starting a vending machine business in Milwaukee without his
permission and then forcing the undercover agent to give him a
hidden ownership interest in the new business. The referee
4
The referee describes Frank Balistrieri as "the reputed
head of the Mafia in Milwaukee" at that time. According to the
referee, the Shorecrest Hotel in Milwaukee, which was held in
ownership under Joseph Balistrieri's name, "allegedly was the
headquarters of the 'mob' in Wisconsin."
5
No. 1984AP970-D
states that the role of Attorney Balistrieri and his brother
Joseph was limited to drafting the legal documents that gave
their father a legally enforceable interest in the vending
business.
¶6 In its decision on the direct appeal filed by the
Balistrieris, the United States Court of Appeals for the Seventh
Circuit did not so limit the role of the Balistrieri sons in its
description of the facts underlying the charges:
The essential facts in this extortion scheme are
that between May 1978 and February 1979 the
Balistrieris, Ruggiero, and allegedly SaBella
conspired to extort sums of money and a one-half
partnership interest in the Best Vending Company. FBI
Agent Gail Cobb, using the alias Tony Conte, operated
the Best Vending Company. Between 1976 and 1981, FBI
Special Agent Joseph Pistone was operating under the
alias Donnie Brasco as an undercover agent
investigating organized crime activities in New York
City. During this time he developed a close working
relationship with Ruggiero, who described himself as a
member of the Bonanno crime family of New York.
Pistone mentioned to Ruggiero that Cobb had moved to
Milwaukee and was trying to open a vending machine
business there.
Subsequently Ruggiero told Cobb that the vending
business in Milwaukee was controlled by "the mob" and
that Cobb could not enter that business without
"protection" from the mob figures who controlled that
business. After inducing Cobb to pay money to him,
Ruggiero arranged for Cobb to meet with Frank
Balistrieri, so that Cobb could obtain permission from
Balistrieri to do business in Milwaukee.
On July 29, 1978, Cobb had a meeting with Frank
Balistrieri and others in Milwaukee during which Frank
Balistrieri made threats against Cobb because Cobb had
attempted to start a vending machine business in
Milwaukee without his permission. Later, in the
presence of John and Joseph Balistrieri, Frank
6
No. 1984AP970-D
Balistrieri told Cobb that he was to share his vending
business with the Balistrieris. Cobb agreed to permit
the Balistrieris to become secret partners in his
business, and the Balistrieris began directing Cobb in
his conduct of the business.
Balistrieri, 778 F.2d at 1228.
¶7 The federal district court initially sentenced
Attorney Balistrieri to eight years of imprisonment and imposed
a $20,000 fine.5 The prison term was subsequently reduced to
five years. Attorney Balistrieri ultimately served
approximately 39 months in a federal prison. He was released in
April 1989.
¶8 As a result of Attorney Balistrieri's conviction, this
court summarily suspended his license to practice law on June 6,
1984. As shown by documents in this court's public files in the
original disciplinary proceeding, Attorney Balistrieri reached
an agreement with the Board of Attorneys Professional
Responsibility (BAPR), the predecessor to the OLR, that he would
not challenge the summary suspension and that the summary
suspension would remain in effect while any direct appeal of his
conviction was still pending. The agreement further provided
that if Attorney Balistrieri's conviction were affirmed, his law
license would be revoked at that time. Following the issuance
of the Seventh Circuit's decision affirming his conviction, this
court revoked Attorney Balistrieri's license to practice law in
5
Frank Balistrieri was sentenced to 13 years of
imprisonment and fined $5,000. Joseph Balistrieri received the
same sentence as his brother.
7
No. 1984AP970-D
this state on January 21, 1987, pursuant to his agreement with
BAPR.
¶9 Following his 1989 release from prison, Attorney
Balistrieri returned to Milwaukee to live and work at the
Shorecrest Hotel (Shorecrest),6 where he served as the on-site
operations manager7 until his brother Joseph’s death in 2010,
when Attorney Balistrieri inherited ownership of the property
and took over sole control of the property and business. Within
a relatively short time after inheriting the hotel, Attorney
Balistrieri sold the property in 2011 for approximately
$8 million.8 In addition, during the time that he worked for or
owned the property, Attorney Balistrieri owned and operated a
separate small business that offered laundry services at the
Shorecrest.
6
Attorney Balistrieri described the Shorecrest as primarily
a high-rise apartment complex that contained a few overnight
hotel rooms so that the hotel license could be maintained.
7
At the reinstatement evidentiary hearing, Attorney
Balistrieri likened his brother's role in the Shorecrest to
being the chairman of the board, overseeing policy decisions,
while he fulfilled the role of chief operating officer. More
specifically, Attorney Balistrieri testified that he oversaw the
daily operation of the property/business. He supervised the
maintenance department, the housekeeping department, the
administrative department, and the front desk. He also was
responsible for maintaining the books and records of the
business. He stated that he was on call seven days a week and
365 days a year to handle issues that arose with the operation
of the property.
8
The referee notes that the sale of the Shorecrest was
designated as the 2011 outstanding business transaction of the
greater Milwaukee area by the Milwaukee edition of The Business
Journal.
8
No. 1984AP970-D
¶10 In 1995 Attorney Balistrieri filed a petition for the
reinstatement of his license to practice law. In the course of
that reinstatement proceeding, the then United States Attorney
for the Eastern District of Wisconsin, Thomas P. Schneider, the
then Wisconsin Attorney General, James E. Doyle, and the then
Milwaukee County District Attorney, E. Michael McCann, all
submitted letters opposing Attorney Balistrieri's reinstatement
petition. Ultimately, after an evidentiary reinstatement
hearing, BAPR recommended to this court that the petition be
denied, finding that Attorney Balistrieri had not met his burden
to prove that he had a proper understanding of and attitude
toward the standards imposed on lawyers and that he could not be
recommended as a person fit to act as an officer of the court.
¶11 Shortly after BAPR's recommendation, Attorney
Balistrieri attempted to withdraw his petition. In an affidavit
supporting his withdrawal request, he alleged that BAPR's report
and recommendation "clearly demonstrate[d] a hostile bias
against [Attorney Balistrieri] which affiant believes to be the
product of political expedience and ethnic prejudice against
Italian-Americans in general and affiant in particular." The
court denied the request to withdraw, and after a period of
inactivity in the matter, dismissed the petition in March 2001.
¶12 In 2012 Attorney Balistrieri filed a second petition
for the reinstatement of his license to practice law in this
state. The referee conducted a three-day reinstatement hearing,
at which 14 witnesses testified. In addition, the referee
received a substantial number of letters in support of Attorney
9
No. 1984AP970-D
Balistrieri's reinstatement. He also received two letters from
Attorney Balistrieri's sister, who did not explicitly express a
desire that the petition for reinstatement be denied but clearly
criticized her brother's character and alleged improper actions
by him.
¶13 The referee ultimately recommended reinstatement. He
concluded that Attorney Balistrieri had proven by clear and
convincing evidence that he sincerely desires to have his
license reinstated, that he has not practiced law during the
period of his suspension and revocation, that he has complied
with the terms of the suspension and revocation orders, and that
he has maintained competence and learning in the law. We accept
the referee's findings and conclusions on these requirements for
reinstatement.
¶14 The issues in this reinstatement proceeding, however,
relate to other requirements for reinstatement, namely whether
the petitioning attorney has demonstrated that he has the moral
character to practice law in this state, that his conduct since
the suspension and revocation of his license has been exemplary
and above reproach, that he has a proper understanding of and
attitude toward the standards that are imposed upon members of
the bar and will act in conformity with them, and that he can be
safely recommended as a person fit to represent clients and to
aid in the administration of justice in this state.
SCRs 22.29(e)-(g) and 22.31(a).
¶15 The referee's report addresses a number of issues that
relate to these requirements, which admittedly are interrelated
10
No. 1984AP970-D
and overlapping. The referee concludes that despite these
issues, Attorney Balistrieri has met his burden on all of these
requirements by clear and convincing evidence. We are not
persuaded.
¶16 The referee begins with the impact of Attorney
Balistrieri's conduct while previously licensed and of his 1984
conviction on his current petition for reinstatement. Although
the referee acknowledged the conviction and even described it at
one point in his report as "clearly serious," he did not think
that the misconduct committed by Attorney Balistrieri in the
1970s and 1980s showed a moral character that should prevent
Attorney Balistrieri from returning to the practice of law at
this time.
¶17 The OLR has offered into evidence in this
reinstatement proceeding the letter that then U.S. Attorney
Thomas Schneider filed in response to Attorney Balistrieri's
1995 reinstatement petition. The lengthy letter provides a
fairly detailed description of the events that underlay the
criminal convictions of the Balistrieris. Attached to that
letter are a sizeable number of documents, including newspaper
articles from the time and a copy of a transcript of a
conversation among Frank, Joseph, and John Balistrieri that was
secretly recorded by federal authorities.
¶18 Although the referee acknowledged Attorney
Balistrieri's 1984 conviction, he essentially disregarded the
letter submitted by then U.S. Attorney Schneider. The referee's
stated reasons for giving "no great weight" to Attorney
11
No. 1984AP970-D
Schneider's letter were that there was no evidence that Attorney
Schneider was in the U.S. Attorney's office at the time of the
prosecution of the Balistrieris in the 1980s and that the
letter's references to the "mob," "La Cosa Nostra," and the
"Mafia" were inflammatory and really directed at Frank
Balistrieri, not Attorney Balistrieri.
¶19 On the other hand, the referee gave "great weight" to
the fact that Attorney Balistrieri apparently had not been
present at the time that his father had threatened the FBI
undercover agent with physical harm if the agent did not give
him a secret interest in the vending machine business. He also
was apparently moved by the fact that Frank Balistrieri had
rejected a plea agreement in which the federal government would
have dismissed the charges against the Balistrieri sons in
exchange for Frank Balistrieri's guilty plea. The referee
commented that "[a]pparently loyalty in the Balistrieri family
was a one-way street."
¶20 This court recognizes that the events of the 1980s and
the crime of which Attorney Balistrieri was convicted are now
several decades old. We are not averse to providing a second
chance to hold a law license to individuals who clearly accept
responsibility for their wrongdoing and demonstrate that they
have a different attitude toward complying with both our
society's general laws and the ethical rules that apply to
attorneys who are licensed to practice law in this state.
¶21 The record in this instance, however, does not
demonstrate that Attorney Balistrieri has clearly and
12
No. 1984AP970-D
convincingly proven that he has the required moral character to
practice law, that he has a proper attitude toward society's
laws and the standards imposed on members of bar, and that he is
fit to represent clients and to aid in the administration of
justice as a member of this state's bar. See SCR 22.29(4)(f)
and (g).
¶22 The record reveals a pattern of a lack of acceptance
of responsibility over the years that have passed since Attorney
Balistrieri's conviction. When BAPR recommended against the
reinstatement of his license in 1995, in large part based on its
conclusion that he had not accepted responsibility for his
criminal conduct, Attorney Balistrieri ultimately responded by
claiming that BAPR was biased against him because of his Italian
heritage. He attacked the integrity of the reinstatement
process with a completely unsupported charge of ethnic bias
rather than demonstrate how his words and actions showed that he
now understood that he needed to obey both the letter and the
spirit of the law and the ethical rules governing attorneys.
¶23 In 2002 Attorney Balistrieri was deposed as part of a
lawsuit that he and his brother filed against a distant
relative, Jennie Alioto, the substance of which will be
discussed in more detail below. A portion of the deposition
transcript, however, demonstrates how Attorney Balistrieri's
attitude toward his convictions and government agencies that
enforce the law had not changed. When opposing counsel asked
for his work history, Attorney Balistrieri described the period
from 1984 to 1989 as a time when he had been "employed by the
13
No. 1984AP970-D
United States government." The opposing counsel subsequently
asked for some clarification, and the following exchange ensued:
Q Now, from '84 to '89 when you were working for
the government, could you be more specific?
A I was in charge of the Recreation Department at
the FCI9 Latuna Penitentiary.
Q What were you convicted of?
A I was convicted of a conspiracy to attempt to
commit an extortion. Pretty esoteric stuff.
. . . .
Q Is that the only conviction on your record?
A Let's see. These indictments were brought by a
homosexual child molester with a cocaine habit who
admitted having bad decision-making processes during
the time. So two indictments were dismissed. Then I
went to trial after six weeks. I was acquitted, then
we went to Kansas City for six months and the judge
threw that out on a Rule 29 motion. So, yes, that's
the only time I was convicted.
¶24 Even assuming that Attorney Balistrieri was being
sarcastic, his answer demonstrates either a refusal to take his
conviction seriously or a contempt for the federal law
enforcement officials who investigated and prosecuted the case
against him. His response also indicates that he did not view
the deposition that was being taken of him as a matter worthy of
being treated with the seriousness that a legal proceeding
warrants.
9
"FCI" is an abbreviation for "Federal Correctional
Institution."
14
No. 1984AP970-D
¶25 In the present reinstatement proceeding, Attorney
Balistrieri has asserted that he has now come to accept the
judgment of the federal court that convicted him. He is very
clear, however, to specify only that he is accepting the fact
that the federal court convicted him and that he should no
longer be angry or resentful about his conviction. He even goes
so far as to say that he "made a mistake," although he does not
explain what that mistake was, and that he broke the criminal
law. While he is now willing to say that his attitude has
changed and he accepts that there was a conviction, he also
explicitly testified yet in this proceeding that he did nothing
wrong, which means that the conviction must still be
illegitimate to some degree in his view:
Q So I have read the indictment, and you submitted
a response to questionnaire in terms of an
explanation. Can you -- this is what I want you to
explain. I don't want to lead you. This is your
chance to explain, if you can. Can you explain what
you did that caused you to be charged with the
conspiracy to extort in Count 1?
The Witness: According to the indictment now, not
according to my perspective -- from my perspective, I
really didn't do anything -- but according to the
indictment, there was allegedly a threat made by my
father to an undercover FBI agent who was sent here to
initiate a sting operation on the theory that we
controlled the vending and amusement game business in
the City of Milwaukee.
(Emphasis added.)
¶26 We are not making a full and unconditional confession
of one's crime a prerequisite to the reinstatement of a law
license for everyone who has committed a crime. What Attorney
15
No. 1984AP970-D
Balistrieri was obligated to prove by clear and convincing
evidence, however, was that he has a good moral character, that
he possesses a proper attitude toward the standards that are
imposed upon members of the bar of this state, which includes
both the general law and the Rules of Professional Conduct for
Attorneys, and that he will act in conformity with them. His
grudging acceptance of the fact of his conviction after decades
of besmirching the individuals who did their job in
investigating and prosecuting him or who acted within their
proper role in the lawyer regulation system is not enough to
meet that standard.
¶27 We are also troubled by Attorney Balistrieri's failure
to report as income for tax purposes significant amounts of
money he received from his brother or the Shorecrest operations
and his failure to provide an adequate explanation for those
monies when responding to the OLR's inquiries.10 In the 2002
deposition described above, Attorney Balistrieri said that from
1989 to the time of that deposition he had "been in partnership
with my brother Joseph." When asked what that meant, Attorney
Balistrieri responded, "That means what we do we do together."
After initially refusing to explain what he did in that
10
Because the referee downplayed the significance of the
tax issue, he did not make detailed findings of fact on this
subject. The facts set forth in the following paragraphs of
this opinion, however, were not in dispute. We are not
therefore usurping the role of the referee as the fact-finder.
The undisputed facts regarding this issue are sufficient to
demonstrate our point below.
16
No. 1984AP970-D
partnership, Attorney Balistrieri stated, "My business is right
now we operate the Shorecrest Hotel. You know that. We're in
partnership together."
¶28 In the present reinstatement proceeding, Attorney
Balistrieri asserted that during his brother's lifetime he had
no ownership interest in the Shorecrest Hotel, that the hotel
was owned solely by his brother, and that his brother made all
of the final decisions regarding business policy and
disbursements. He described himself as the "operations manager"
or "chief operating officer." This meant that he handled the
daily operations of the building, including, inter alia, dealing
with rent collections, bank deposits, personnel issues, tenant
issues, license applications, city inspections, and maintenance
of the property (both major and minor repairs). He asserted
that he had to be available at all hours of the day and night to
take care of whatever problems arose.
¶29 In exchange for his work overseeing the daily
operations of the Shorecrest, Attorney Balistrieri received a
substantial number of benefits. For example, he acknowledged
that he received the ability to live rent-free in one of the
Shorecrest's apartments, and the Shorecrest or his brother paid
for his telephone, electricity, heat, health insurance, laundry,
cable television, and certain other living expenses. At some
point, the hotel or his brother also provided him with a car.
¶30 Attorney Balistrieri did not receive a regular salary
or wage in exchange for his work at the Shorecrest. He did,
however, receive a significant number of what both he and the
17
No. 1984AP970-D
referee referred to as "draws" or "owner's draws" that Joseph
Balistrieri took from the Shorecrest's revenues or accumulated
assets and shared with Attorney Balistrieri in equal amounts.
The yearly amount of these draws, according to documents
provided by Attorney Balistrieri, varied from year to year and
ranged during the period of 1997 to 2007 from $5,000 to $31,000.
The total amount for that eleven-year period was approximately
$200,000.
¶31 Attorney Balistrieri described at the evidentiary
hearing the process for determining when these "draws" were
taken and in what amounts as follows:
Well, Joe would call me in and he'd say, "What's our
cash situation? Can we take a draw?" And I'd run it
down for him what our cash position was, and then he
would decide whether or not we should take a draw and
if we took a draw, how much we should take.
¶32 In his response to the OLR's reinstatement
questionnaire, Attorney Balistrieri similarly stated that his
brother and he would draw money from the business and share that
on a 50/50 basis, just as they shared "other income [Attorney
Balistrieri] brought in from the non-hotel business projects
that [he] worked on." Thus, he acknowledges that, while his
brother may have signed the checks to him that were his portion
of the "draws", the money he received, like the money his
brother received, came from drawing money out of the business.
Further, he acknowledges that the draws he received out of the
revenue or assets of the business were in exchange for the work
that he performed at the hotel: "For my work at the hotel, my
18
No. 1984AP970-D
brother and I would draw money to the business account as an
owner's draw."
¶33 In a letter submitted by Attorney Balistrieri's
counsel on his behalf prior to the evidentiary hearing, Attorney
Balistrieri asserted that the benefits he received from the
hotel business and his brother were frequently treated as
"loans" or "loan repayments." Although Attorney Balistrieri
provided copies of the checks for these "draws" and those copies
were admitted as an exhibit, he did not submit into evidence any
exhibit that substantiated the loans or the fact that the money
he received as "draws" was really the repayment of loans he had
previously made to the Shorecrest or his brother.
¶34 At the reinstatement evidentiary hearing, Attorney
Balistrieri's accountant stated that none of the money Attorney
Balistrieri received from the draws on the Shorecrest accounts
was recognized or reported as income to Attorney Balistrieri.
He did not say that the money was not income because it was
considered the repayment of loans. Instead, he essentially gave
an expert opinion that the money was not income to Attorney
Balistrieri because Joseph Balistrieri, as the owner of the
Shorecrest, had been under no legal obligation to give the money
to Attorney Balistrieri, thereby making the thousands of dollars
mere gifts to Attorney Balistrieri. When Attorney Balistrieri
subsequently resumed his testimony at the hearing and was
questioned about these payments, he now claimed that he had made
a mistake about the nature of those payments and that they had
really just been gifts from his brother to him.
19
No. 1984AP970-D
¶35 The OLR presented the testimony of an expert witness
on the tax issue, an attorney and tax practitioner with a large
accounting firm, who had previously worked for the Chief Counsel
of the Internal Revenue Service (IRS). The OLR's witness opined
that he did not see how the "draws" paid to Attorney Balistrieri
could be considered "gifts" for income tax purposes. He stated
that the determination of whether money paid to an employee was
a gift would require an analysis of all the facts and
circumstances surrounding the payment, not merely an assertion
that someone intended to characterize the payment as a gift. He
further stated that, other than the accountant's assertion that
Joseph Balistrieri had been under no legal obligation to make
payments to Attorney Balistrieri, there was no evidence to
support characterizing those payments as gifts. Indeed, he
stated his view on this quite emphatically: "I can't imagine
that anyone in this room honestly thinks those were gifts."
Further, to the extent that Attorney Balistrieri claimed that
the characterization of the payments as gifts was the
accountant's determination on which he had relied, the OLR's
expert witness stated that Attorney Balistrieri would need to
demonstrate that he had relied on his accountant's advice in
good faith. The OLR's expert opined that given the lack of
evidence to support a gift, there was no possibility to have
relied in good faith on any determination by the accountant that
the payments were gifts.
¶36 During the evidentiary hearing, the referee expressed
concern with the OLR's pursuit of questioning about the tax
20
No. 1984AP970-D
implications of the payments and benefits provided to Attorney
Balistrieri and whether pursuing the line of questioning would
make this a tax case as opposed to a reinstatement proceeding.
In response to the referee's request for clarification as to
what the OLR was attempting to demonstrate, the OLR's counsel
responded that the OLR was primarily concerned with whether
Attorney Balistrieri's disclosures about the benefits and
payments he received were accurate and sufficient and not really
concerned with the issue of whether the payments had been
treated properly for income tax purposes.
¶37 In his report, the referee spent little time
addressing these issues. Although he acknowledged the
difference between the testimony of Attorney Balistrieri's
accountant and the OLR's witness, he did not attempt to resolve
the dispute. Essentially, he concluded that the tax issues
should not be the focus of this proceeding, and that since the
IRS had never challenged Attorney Balistrieri's income tax
returns, the issue of the payments to Attorney Balistrieri and
the tax ramifications of those payments should be disregarded.
¶38 We do not share the view that these matters are
unimportant to the question of whether Attorney Balistrieri's
license to practice law should be reinstated. As the
petitioning attorney, he is obligated under the rule to prove,
by clear and convincing evidence, that his conduct since the
revocation of his license has been "exemplary and above
reproach." SCR 22.29(4)(e). Whether an attorney has properly
reported income on the attorney's income tax returns and whether
21
No. 1984AP970-D
the attorney has properly disclosed the nature and sources of
income to the OLR in the reinstatement process are both matters
that clearly bear on the attorney's post-suspension or post-
revocation conduct and whether he or she has a good moral
character and is fit to regain the privilege of acting as an
attorney and officer of the court in this state.11 Indeed, the
failure to report income on one's tax returns has been a basis
for the imposition of a range of public discipline by this
court. See, e.g., In re Disciplinary Proceedings Against
Washington, 2007 WI 65, 301 Wis. 2d 47, 732 N.W.2d 24 (18-month
suspension imposed on attorney convicted of attempting to evade
payment of federal income taxes for underreporting her income);
In re Disciplinary Proceedings Against Elverman, 2008 WI 28,
308 Wis. 2d 524, 746 N.W.2d 793 (nine-month suspension imposed;
distinction drawn between forgetting to report income over three
years, which would have made the court more inclined to impose
11
Attorney Balistrieri's accountant also expressed the view
that the federal and state governments were not really harmed
because Joseph Balistrieri had not claimed these payments to his
brother as an expense of the business and therefore had paid
income taxes on the money he shared with Attorney Balistrieri.
Whether or not the federal and state governments ultimately
received the same amount of tax revenues, which has not been
proven, is not the issue. The issue for purposes of this
reinstatement proceeding is whether Attorney Balistrieri, the
person petitioning for reinstatement, was obligated under the
law to report those payments as income on his tax returns and
followed the law. Whether Joseph Balistrieri may also have been
able to reduce his reportable income if the payments had been
characterized as income to Attorney Balistrieri is not at issue
in this proceeding.
22
No. 1984AP970-D
public reprimand, and deliberately choosing not to report income
for two years, which supported the nine-month suspension); In re
Disciplinary Proceedings Against McKinley, 2014 WI 48,
___ Wis. 2d ___, 848 N.W.2d 295 (accepting stipulation and
imposing 60-day suspension on attorney convicted of filing tax
returns she believed to be not true or accurate because of
underreporting of income). Thus, the presence of questions
about an attorney's proper reporting of income is a relevant
part of the reinstatement calculus.
¶39 Although we acknowledge that there is a difference of
opinion between the OLR's expert and Attorney Balistrieri's
accountant/expert, that acknowledgement does not mean that we
are obligated to resolve the dispute and render a definitive
ruling on whether Attorney Balistrieri's tax returns were
improper. We conclude, however, that there is, at a minimum, a
real question about the propriety of Attorney Balistrieri
failing to report as income the hundreds of thousands of dollars
that he received out of draws from the Shorecrest's accounts.
Simply stating the conclusion that the payments should be
treated as gifts because Joseph Balistrieri had no legal
obligation to make the payments to Attorney Balistrieri begs the
question. Had these payments been made simply because Attorney
Balistrieri was a family member, that would be one thing. By
Attorney Balistrieri's own admission, however, these payments
were made to him "[f]or my work at the hotel." Generally,
payments made to an employee as a result of the employee's work
are income to the employee subject to the payment of all
23
No. 1984AP970-D
applicable taxes, including income taxes. Attorney
Balistrieri's accountant, however, clearly stated that these
payments were not reported as income. If these periodic
payments over two decades did not need to be reported as income
because they were mere gifts from his brother, Attorney
Balistrieri needed to prove that fact by clear and convincing
evidence. In the absence of such proof, it appears that he
received income due to his employment that he did not report as
income.
¶40 The fact that the IRS has not challenged Attorney
Balistrieri's tax returns does not prove that these payments
were actually gifts or that this issue should be disregarded in
this reinstatement proceeding. Who knows why the IRS has not
audited or challenged the tax returns? Perhaps it is not aware
of these payments. Perhaps it has chosen to focus its limited
resources on other matters. In any event, it is this court, not
the IRS, that ultimately determines whether a petitioning
attorney has met the standards required for the reinstatement of
the attorney's license.
¶41 As noted above, we need not decide whether or not the
"draws" paid to Attorney Balistrieri or the other benefits
provided to him were income that needed to be reported on his
tax returns. The evidence in the record raises a serious
question regarding whether Attorney Balistrieri's conduct since
the revocation of his license has been "exemplary and above
reproach." He bore the burden to demonstrate that he has met
that standard. He has failed to meet his burden on this issue.
24
No. 1984AP970-D
¶42 There are two other issues, which are related to each
other, that were greatly downplayed by the referee. These
issues relate to an answer that Attorney Balistrieri gave to
questions from the OLR about lawsuits to which he had been a
party and to his conduct in connection with a specific lawsuit
against his maternal relative, Jennie Alioto.
¶43 The OLR's reinstatement questionnaire asked Attorney
Balistrieri to "[s]ubmit a statement showing the dates, general
nature, current status, or final disposition of every civil
action, commenced or pending in any jurisdiction during the
period of your revocation or suspension, wherein you were either
a party, plaintiff or defendant, or in which you had or claimed
an interest."12 The question further required Attorney
Balistrieri to provide case names and numbers, as well as the
court in which the case was pending. Attorney Balistrieri's
response did not identify any civil action. Although the
question asked for an identification of any civil action in
which he had been or was a party, regardless of the disposition,
Attorney Balistrieri responded only that "I have no present
recollection of any judgment ever being taken against me for any
purpose." When asked about this response in multiple questions
at his deposition, he again failed to identify any civil action.
After taking a break and conferring with his counsel, he stated
12
This question is a standard part of the reinstatement
questionnaire that the OLR sends to attorneys who petition for
reinstatement following a disciplinary revocation or suspension.
25
No. 1984AP970-D
for the first time that he had been involved in a lawsuit with
Alioto and in two pieces of litigation involving his sisters,
although Attorney Balistrieri claimed that these matters were
really his brother's actions and not his and that his brother
Joseph had merely added his name to the actions. At the
subsequent evidentiary hearing, Attorney Balistrieri claimed
that he had no independent recollection of the Alioto litigation
until the questions at the deposition had "jogged" his memory.
¶44 At the evidentiary hearing, Attorney Balistrieri
admitted that he had been involved in six lawsuits since the
time of his first reinstatement petition. There were actually
two lawsuits in which Attorney Balistrieri was a plaintiff suing
Jennie Alioto. In the first, which will be discussed in more
detail below, both Attorney Balistrieri and his brother Joseph
were the plaintiffs. After Attorney Balistrieri and his brother
lost that lawsuit, a second lawsuit was filed. This time
Attorney Balistrieri was the sole plaintiff. In another action,
one of his sisters sued both Attorney Balistrieri and his
brother Joseph, as well as their other sister.
¶45 The OLR argued that Attorney Balistrieri's failure to
identify any of these actions in his response to the
reinstatement questionnaire or in his initial deposition answers
showed that his conduct in the reinstatement proceeding had not
been exemplary and above reproach. After acknowledging that he
had been initially troubled by the failure to provide accurate
information in response to the OLR's questions, the referee
found, based on Attorney Balistrieri's testimony at the
26
No. 1984AP970-D
evidentiary hearing, that he had really forgotten about these
various lawsuits in which he had been a party, thereby
concluding that his responses, while inaccurate, had not been
deliberately false.
¶46 Given the clearly erroneous standard for reviewing the
referee's finding of fact on this subject, especially where the
factual issue involves a determination of what was in someone's
mind, we accept the referee's finding that Attorney Balistrieri
could not recall any of the lawsuits in which he had been
involved until the middle of his deposition. We therefore
conclude that the inaccurate answers are not a basis to conclude
that Attorney Balistrieri has failed to show that his post-
revocation conduct has been exemplary and above reproach.
¶47 The failure to recall the Alioto litigation, however,
is not the only issue raised by that litigation. The first
action in which Attorney Balistrieri and his brother sued Jennie
Alioto presents a troubling situation.
¶48 The facts of that litigation are set forth in the
decision of the court of appeals, which affirmed the circuit
court's judgment dismissing the Balistrieris' claim to enforce a
purchase option and awarding costs in favor of Alioto.
Balistrieri v. Alioto, No. 2004AP929 (December 1, 2005
unpublished opinion). Alioto worked for Attorney Balistrieri's
father as a bookkeeper for many years. Both Attorney
Balistrieri and his brother had a long personal relationship
with her. Indeed, both brothers performed legal work for her
without charge, and Attorney Balistrieri often helped her with
27
No. 1984AP970-D
her business affairs. In 1978, Attorney Balistrieri helped
Alioto purchase a building on North Jackson Street in Milwaukee,
and he thereafter quite often assisted her in maintaining or
managing the property. The trial court found that Alioto relied
on Attorney Balistrieri's assistance and his advice in her
business affairs.
¶49 In 1991 Attorney Balistrieri discussed the future of
the Jackson Street property with Alioto. She told Attorney
Balistrieri that she did not wish to sell the property because
she needed the rental income from the property for her
retirement, but that she would be willing to give him and his
brother a right of first refusal to purchase the property before
anyone else if she ever sold it. In 1992, Alioto and the two
Balistrieri brothers signed an agreement regarding the property.
The agreement, however, did not provide a right of first
refusal, but rather gave the brothers an option to purchase the
property for a set price ($125,000) within the next ten years.
Alioto testified in the subsequent lawsuit that she did not read
the agreement before signing it.
¶50 Three months later, Alioto read the agreement and came
to understand that it provided for a straight option to purchase
at a set price. She then called Attorney Balistrieri and
expressed concern that the contract was not what they had
previously talked about. In particular, she expressed surprise
that the agreement contained a specific purchase price and a
specific date by which the option could be exercised by the
28
No. 1984AP970-D
brothers. Attorney Balistrieri told her not to worry about what
was in the agreement and that he would do right by her.
¶51 In 2002, as the 10-year period came to a close, the
Balistrieri brothers both served letters on Alioto that stated
that they were exercising their option to purchase the Jackson
Street property. When Alioto refused to sell the property to
them at the price set forth in the contract, Attorney
Balistrieri and his brother sued her for specific performance of
the option agreement.
¶52 The case was tried to the bench. The circuit court
found that there had been a fiduciary relationship between
Attorney Balistrieri and Alioto, that Attorney Balistrieri had
engaged in intentional misrepresentation in connection with
obtaining the option agreement, that Alioto was justified in
relying on Attorney Balistrieri's statement that she had nothing
to worry about, and that Attorney Balistrieri and his brother
were joint venturers such that Attorney Balistrieri's
misrepresentations could be imputed to his brother. The circuit
court therefore ruled that the option contract was
unenforceable. It dismissed the Balistrieris' claims and
awarded costs to Alioto.
¶53 Attorney Balistrieri and his brother appealed. The
court of appeals affirmed the trial court's rulings. This court
denied the Balistrieris' petition for review.
¶54 The referee also did not view this matter as anything
that should prevent the reinstatement of Attorney Balistrieri's
license. While the referee said it was not his role to second
29
No. 1984AP970-D
guess the circuit court's findings or legal conclusions or to
re-try the civil action, he specifically said that he questioned
the credibility of Alioto's testimony, which the circuit court
in the civil action had accepted as credible. He also
questioned the circuit court's admission of the recording that
Alioto made of her telephone conversation with Attorney
Balistrieri, in which he told her not to worry about the fact
that the agreement was different than she had initially
discussed with him.13 In the end, the referee found it
significant that the attorney who had represented Alioto in the
civil action had testified at the reinstatement hearing that the
Alioto litigation should not affect this reinstatement
proceeding. The referee agreed that the circuit court's
findings in the Alioto civil litigation should not "be a
barrier" to the reinstatement of Attorney Balistrieri's license.
¶55 We do not think this matter should be disregarded so
lightly. The circuit court specifically found, and the court of
13
The Balistrieris challenged the admission of the
recording on appeal and argued that the recording provided the
sole evidentiary basis for the trial court's ruling. The court
of appeals did not rule on whether the recording had been
properly admitted. It did conclude that, even if the recording
had been improperly admitted, its admission had not prejudiced
the outcome of the trial because Alioto had testified at trial
based on her independent recollection of her conversations with
Attorney Balistrieri. Thus, the admission or exclusion of the
tape recording cannot undermine the circuit court's and the
court of appeals' conclusions or affect the relevance of those
conclusions to the present reinstatement proceeding. Moreover,
even the referee acknowledges that Attorney Balistrieri denied
having any conversation until the tape recording was produced.
30
No. 1984AP970-D
appeals affirmed, that Attorney Balistrieri and his brother had
a fiduciary duty to Alioto because of the inequality of
sophistication in business matters, the fact that Alioto had
been a client of both Balistrieri brothers when they had been
practicing lawyers, and the fact that she had continued to rely
on Attorney Balistrieri's business advice and support after he
was no longer practicing law. The circuit court further found
that Attorney Balistrieri had violated this fiduciary duty and
had obtained the option contract by intentional
misrepresentation. The court of appeals agreed that, in light
of Alioto's statements to Attorney Balistrieri that she would be
willing to give him and his brother a right of first refusal,
his failure to disclose to Alioto that the agreement actually
gave them an option to purchase the Jackson Street property for
a specific price to be exercised at their sole discretion
constituted an actionable failure to speak when disclosure was
required and "fulfill[ed] the elements of misrepresentation."
In essence, the courts in the Alioto litigation concluded that
Attorney Balistrieri took advantage of his superior knowledge of
business and the law to obtain an agreement from an older
relative that would have benefitted him and his brother
financially and then sued her to enforce that agreement. There
is no basis to attack and relitigate those conclusions in this
proceeding.
¶56 We conclude that engaging in misrepresentation in
order to take advantage of a less sophisticated person,
especially one with whom there is a fiduciary relationship, does
31
No. 1984AP970-D
not show a moral character of the type needed to practice law in
this state, SCR 22.31(1)(a), does not constitute conduct that is
exemplary and above reproach, SCR 22.29(4)(e), and does not
demonstrate that Attorney Balistrieri has a proper attitude
toward the standards that are imposed upon members of the bar
and will act in conformity with those standards,
SCR 22.29(4)(f). Such conduct also does not befit a person who
"can safely be recommended to the legal profession, the courts
and the public as a person fit to be consulted by others and to
represent them and otherwise act in matters of trust and
confidence." SCR 22.29(4)(g).
¶57 We recognize that, unlike the 1995 reinstatement
proceeding, Attorney Balistrieri did present testimony and
letters from a significant number of individuals in support of
this reinstatement petition. We also acknowledge that the
record contains evidence that Attorney Balistrieri has engaged
in some charitable activities, including serving as a director
and president of a golf tournament that raises money for high
school scholarships to private schools.
¶58 In the end, however, this reinstatement proceeding is
governed by the rules and standards contained in this court's
rules. Those rules require Attorney Balistrieri to prove that
he has satisfied all of the requisite standards by clear and
convincing evidence. For the reasons described above, we
conclude that he has failed to meet his burden to prove that he
possesses the requisite moral character to practice law in this
state, that his conduct since the revocation of his license has
32
No. 1984AP970-D
been exemplary and above reproach, that he has a proper
understanding of and attitude toward the standards imposed upon
members of the bar, that he will act in conformity with those
standards, and that he can be safely recommended as a person fit
to be consulted by others, to represent them, and to otherwise
act in matters of trust and confidence.
¶59 The final issue to be addressed is the matter of the
costs of this proceeding. The OLR submitted a statement of
costs indicating that the total costs of the proceeding, as of
February 4, 2013, were $41,459.40. It recommended that Attorney
Balistrieri be required to pay the full costs of the proceeding,
consistent with the court's general policy of imposing the costs
of reinstatement proceedings on the petitioning attorney. It
noted that this proceeding involved a large amount of discovery
and a highly contentious evidentiary hearing.
¶60 Attorney Balistrieri objected to the imposition of
costs. He first argued that he should not be required to pay
any of the costs of this reinstatement proceeding because the
referee had recommended that his license should be reinstated.
Attorney Balistrieri analogized this reinstatement proceeding to
a disciplinary proceeding where no misconduct is found. Since
SCR 22.24(1m) states that this court's general policy is to
impose costs "upon a finding of misconduct," costs are not
imposed where no misconduct is found and a disciplinary
complaint is dismissed. Attorney Balistrieri reasoned that
receiving a recommendation for the reinstatement of his license
was similar to a finding of no misconduct, and therefore he
33
No. 1984AP970-D
should not be required to pay any costs. Moreover, he noted
that while the OLR had opposed his petition before the referee,
it did not appeal the referee's recommendation for
reinstatement, making it inequitable to impose costs on him.
¶61 The referee does not agree with Attorney Balistrieri's
argument that no costs should be imposed, noting that this court
has imposed costs in cases where referees had recommended denial
and this court has nonetheless ultimately granted reinstatement.
¶62 This argument by Attorney Balistrieri is easily
dispatched. It is this court that makes the final determination
on a reinstatement petition, and we have determined that
Attorney Balistrieri's petition must be denied. Thus, his
argument is no longer supported by the facts. Moreover, this
court's general policy has been to impose full costs on the
attorney petitioning for reinstatement even where the referee
recommends reinstatement and this court grants reinstatement.
See SCR 22.24(1m); see, e.g., In re Disciplinary Proceedings
Against Ouchakof, 2013 WI 48, ¶16, 347 Wis. 2d 604,
830 N.W.2d 677; In re Disciplinary Proceedings Against Woodard,
2012 WI 41, ¶37, 340 Wis. 2d 248, 812 N.W.2d 511. The
reinstatement proceeding is a result of the attorney's
misconduct that required the imposition of a suspension or
revocation in the first place. It is therefore generally proper
to impose the costs of a formal reinstatement proceeding upon
the attorney seeking reinstatement.
¶63 Alternatively, Attorney Balistrieri argues that the
OLR's requested cost amount that is assessed against him should
34
No. 1984AP970-D
be "significantly less than the full costs claimed" because the
OLR's costs are excessive. Again, Attorney Balistrieri bases
his argument for a reduction in costs on the fact that a
significant portion of the OLR's time was spent in investigating
and litigating issues that the referee found to be of minimal
significance or found unpersuasive.
¶64 The referee agrees with this part of Attorney
Balistrieri's argument. The referee notes that the applicable
rule now in effect envisions a procedure whereby the referee
considers the parties' submissions on costs and makes a
recommendation. He therefore concludes that under the
appropriate circumstances, it is proper to reduce the amount of
costs requested by the OLR. He believes that the OLR "treated
this matter as some sort of tax court hearing rather than a
reinstatement proceeding," which resulted in substantial amounts
of time and money being spent on document requests, expert
witness preparation, depositions of expert witnesses, and
hearing testimony regarding the tax issues. Since the referee
concluded that the tax issues were not of any real importance
because the IRS had not challenged Attorney Balistrieri's tax
returns, he recommends that the OLR's fees and costs related to
tax issues should be eliminated from any cost assessment.
Specifically, he recommends that the court not impose any of the
fees paid to the OLR's expert witness or any of the court-
reporting fees for discovery depositions. To avoid going
through the invoices of the OLR's counsel, he recommends that
35
No. 1984AP970-D
OLR's counsel fees simply be reduced by one-half. This results
in a recommended cost total of $19,215.51.
¶65 As demonstrated above, however, we have disagreed with
the referee's view that certain issues, including the tax
issues, were of little significance in determining whether
Attorney Balistrieri met his burden of satisfying the standards
for reinstatement. We therefore will not reduce the cost amount
for this reason.
¶66 With respect to whether the OLR's costs were simply
excessive, Attorney Balistrieri does make reference to a few
specific numbers in his objection, both hours expended by the
OLR's counsel and its expert witness as well as the
corresponding cost amounts. He does not, however, provide any
specific reasons why those amounts are too high, except to
assert that they related to issues that the referee found to
have little significance, which we have already rejected as a
reason to reduce the costs. SCR 22.24(2) ("A respondent [or an
attorney petitioning for reinstatement] who objects to a
statement of costs must explain, with specificity, the reasons
for the objection . . . ."). He also does not state what he
would consider a reasonable amount of time or fees spent on
those issues or tasks. Id. (a respondent attorney in a
disciplinary proceeding or an attorney petitioning for
reinstatement who objects to costs "must state what he or she
considers to be a reasonable amount of costs"). Consequently,
we will not reduce the cost assessment on this ground.
36
No. 1984AP970-D
¶67 Finally, Attorney Balistrieri asks for a reduction in
the costs because of the financial burden it will impose on him
and his family. He contends that the testimony received at the
evidentiary hearing shows that he is not a wealthy man. Plus,
he notes that he has already incurred a substantial amount of
attorney fees for his own counsel in this reinstatement
proceeding. In situations where an attorney has limited
financial resources to pay the costs associated with a
disciplinary or reinstatement proceeding, this court has
generally not reduced the cost award simply for that reason.
Doing so shifts the burden for those costs to all of the other
lawyers in the state who must pay an annual cost assessment for
the lawyer regulatory system in order to maintain their law
licenses. The court's general policy in such situations is to
direct the attorney to provide financial information to the OLR
and to try to negotiate a payment plan for the payment of the
costs over time. We follow that policy here.
¶68 IT IS ORDERED that the petition for reinstatement of
the license of John J. Balistrieri to practice law in Wisconsin
is denied.
¶69 IT IS FURTHER ORDERED that within 120 days of the date
of this order, John J. Balistrieri shall pay to the Office of
Lawyer Regulation the full costs of this reinstatement
proceeding.
PATIENCE DRAKE ROGGENSACK, J., withdrew from participation.
37
No. 1984AP970-D.awb
¶70 ANN WALSH BRADLEY, J. (dissenting). In an attorney
reinstatement proceeding, the referee is the finder of fact. It
is the responsibility of the referee to scrutinize and to weigh
the testimony of the witnesses and to determine the effect of
the evidence as a whole. We are to defer to the referee's
assessment of the credibility of witnesses. In re Disciplinary
Proceedings Against David V. Jennings, III, 2011 WI 45, ¶39,
334 Wis. 2d 335, 801 N.W.2d 304.
¶71 The majority correctly sets forth the standard of
review in reinstatement proceedings: we do not overturn a
referee's findings of fact unless they are clearly erroneous.
Per curiam, ¶3. Nevertheless, the majority seems to ignore it.
In rejecting the referee's "strong" recommendation that
Balistrieri's license be reinstated, the majority fails to
adequately explain why the referee's findings are clearly
erroneous. Instead, it retries the case and reassesses
credibility.
¶72 In giving the requisite deference to the role of the
referee as the trier of fact and in correctly applying the
standard of review, I conclude that the referee's findings are
not clearly erroneous. I would accept the referee's findings
and grant Balistrieri's reinstatement petition.
¶73 During the three days of the evidentiary hearing, the
referee listened to live testimony from 13 "distinguished
lawyer[] and non-lawyer[]" witnesses who supported Attorney
Balistrieri's reinstatement. Referee Report, ¶27. The OLR
examined Balistrieri adversely and called just one witness. In
1
No. 1984AP970-D.awb
addition to the live testimony, the referee received seven
letters in support of reinstatement from people who did not
testify at the hearing. Balistrieri's sister wrote two letters
opposing reinstatement. After hearing all of the testimony and
reading all of the letters, the referee "strongly" recommended
that Balistrieri's petition for reinstatement be granted.
Referee report, ¶47. The OLR did not appeal the referee's
recommendation.
¶74 The referee found that Balistrieri had proven by
clear, satisfactory, and convincing evidence that he had met the
criteria for reinstatement set forth in SCRs 22.29(4)(a)-(g) and
22.31(1)(a). The referee found that (1) he sincerely desires to
have his license reinstated, (2) he has not practiced law during
the period of his suspension and revocation, (3) he has complied
with the terms of the suspension and revocation orders, (4) he
has maintained competence and learning in the law, (5) he has
demonstrated that he has the moral character to practice law in
this state, (6) his conduct since the revocation of his license
has been exemplary and above reproach, (7) he has a proper
understanding of and attitude toward the standards that are
imposed upon members of the bar and will act in conformity with
them, and (8) he can be safely recommended as a person fit to
represent clients and to aid in the administration of justice in
this state.
¶75 The majority, however, states that it is "not
persuaded." In reassessing credibility, the majority asserts
that the "record reveals a pattern of a lack of acceptance of
2
No. 1984AP970-D.awb
responsibility over the years that have passed since Attorney
Balistrieri's conviction." Per curiam, ¶22. It cites
Balistrieri's response to BAPR's recommendation against
reinstatement in 1995 and his answer to a question in a 2002
deposition. Id., ¶¶22-23. The majority grudgingly notes that
Balistrieri testified he "made a mistake," but then quotes
Balistrieri's testimony that "from my perspective, I really
didn't do anything." Id., ¶25.
¶76 The referee wrote that in the 1996 reinstatement
proceeding, "one sees a man who by his own admission 'was angry
and felt cheated and felt [he] had been handed a raw deal.'"
The referee quoted Balistrieri's testimony to show that
"[t]oday, Balistrieri sees things differently:
You know, the judgment of the court was the judgment
of the court, which I accept, you know. I was
sentenced to a prison term which I served. I don't
have that hostility or that feeling of being cheated
or of being treated unfairly. I accept all that. And
I made a promise to myself two years ago to drop all
the anger, to drop all the resentment, and to accept
things as they are, to recognize that if the court
found that, then that was a justified determination,
and I must bear the penalty for it. You know, it was
nobody's fault but my own. I made a mistake – people
are not perfect – and I paid for it. And now I hope
to rehabilitate in the last years of my life my
career, and my reputation.
Referee report, ¶26, quoting Tr. p. 476.
¶77 The referee further explained that the record in this
reinstatement proceeding was profoundly different than the
record in a prior reinstatement proceeding. Thirteen
"distinguished lawyers and non-lawyers" testified in support of
Balistrieri's reinstatement and seven more wrote letters
3
No. 1984AP970-D.awb
supporting reinstatement. They all believed he had the moral
character necessary to practice law and that he met the criteria
for reinstatement. The referee wrote:
"[T]he record in this 2012 proceeding stands in stark
contrast to the record in the 1996 reinstatement
proceeding. In 1996, Balistrieri and his brother were
the only live witnesses. In 2012, thirteen
distinguished lawyers and non-lawyers testified live
in support of Balistrieri's petition. In 1996, the
U.S. Attorney, the Wisconsin Attorney General and the
Milwaukee District Attorney all wrote letters opposing
reinstatement. In 2012, only Balistrieri's estranged
sister wrote two letters in opposition. Besides the
thirteen attorneys who testified, seven more wrote
letters in support of Balistrieri's current petition.
In short, the record in 2012 is most impressive and
overwhelmingly supports reinstatement."
Referee Report, ¶27.
¶78 In finding that Balistrieri had demonstrated by clear,
satisfactory, and convincing evidence that he met the criteria
for reinstatement set forth in SCR 22.31, the referee summarized
the oral and written statements made in support of Balistrieri's
reinstatement. Below is a mere sampling of some of those
statements. They represent statements from some of the most
distinguished attorneys in this state.
 Attorney 1: "Since [Balistrieri's] criminal
conviction, he has led an exemplary life without any
further involvement or any negative influence. . . .
Without reservation, I completely and fully endorse
and recommend his reinstatement of his law license."
 Attorney 2: "I strongly recommend that [Balistrieri]
be admitted to the State Bar of Wisconsin. He is
intelligent, trustworthy and honest. He works hard at
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No. 1984AP970-D.awb
every task he assumes and, even though not practicing
law, continues to recognize lawyers' duties to clients
and to the profession."
 Attorney 3: "I highly recommend that you allow for
[Balistrieri's] reinstatement. I am 100% confident
that he will practice law in an utmost ethical manner
. . . ."
 Attorney 4: "I sincerely believe that it was a
privilege for me to meet and work with Mr. Balistrieri
and I highly recommend that he be reinstated. He is
truly an asset to the legal profession."
¶79 Based upon the referee's credibility determinations
and the weight he gave the witnesses' testimony, together with
his findings of fact, I conclude there is only one proper result
here: granting Balistrieri's petition for reinstatement.
Accordingly, I respectfully dissent.
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No. 1984AP970-D.awb
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