Gregoire's staff shaped 'independent' investigation of her office

By Ralph Thomas and Mike Carter
Seattle Times staff reporters

	Christine Gregoire
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Internal documents show the investigation — begun after Gregoire's staff missed a deadline to appeal a record $17.8 million verdict against the state — was redirected to focus more blame on one attorney who later was forced to resign.

E-mails, a legal invoice and notes from phone conversations show Gregoire's aides were in almost daily contact with investigator Susan Barnes, a private attorney who had earlier worked as a federal prosecutor. The aides, reviewing Barnes' drafts, suggested making her recommendations "more positive" and asked with respect to one criticism: "Can you give us any leeway here?"

Documents also reveal how concerned Gregoire's senior aides were about media coverage and political fallout. "Insane to write something before the election," say notes from a conversation in September 2000, when Barnes was helping craft a follow-up report for the state. That report, indeed, was not published until January 2001.

The Beckman case In 2000: A jury ordered the state to pay $17.8 million to three developmentally disabled men — Damon Beckman, Eric Busch and William Coalter — who were sexually and physically abused in a state-licensed Bremerton adult family home. The state missed a deadline to appeal the verdict. An investigator blamed assistant attorney general Janet Capps for missing the deadline. Ongoing: Capps, who was forced to resign, has sued the state for wrongful discharge, defamation and other claims. As part of her lawsuit, she is claiming the report that blamed her was inappropriately shaped by Gregoire aides. What's next: Mediation in Capps' lawsuit is set for next week. The case is scheduled to go to trial in July if it isn't settled by then.

Other notes indicate that Gregoire's deputies and Barnes discussed "disposing of our drafts."

Gregoire on Friday denied her office interfered with the investigation or destroyed records. "I find these allegations ridiculous," she said.

Barnes declined to be interviewed. But in a written statement on Friday, her attorney, Pete Vial, acknowledged Barnes conferred with the state attorneys on both the "form and substance of her report" and called it a typical lawyer-client relationship.

Vial said Barnes did not draw any conclusions that weren't supported by the evidence or remove anything "she believed was needed for it to present a fair assessment."

The state's botched appeal in the lawsuit known as the Beckman case became the biggest political embarrassment of Gregoire's career.

The case was, at the time, the largest personal-injury verdict ever against the state: $17.8 million to three developmentally disabled men — Damon Beckman, Eric Busch and William Coalter — who were sexually and physically abused in a state-licensed adult family home in Bremerton.

The Attorney General's Office was stunned by the verdict and vowed to appeal — but then lost track of the case and missed a critical deadline to file the appeal.

At the time of the blunder, in the spring of 2000, Gregoire was heading into her campaign for a third term as attorney general. Now, four years later, she is a leading Democratic candidate for governor.

The internal documents — more than 2,700 pages in all — surfaced recently in a lawsuit filed last year by Janet Capps, the former assistant attorney general who bore the brunt of the blame in the investigator's report. Capps, one of four attorneys who defended the state in the Beckman case, contends in her lawsuit that she was scapegoated and wrongfully forced from her job in June 2000, days after Barnes' report came out, and that her reputation has been shattered.

Key players Christine Gregoire: Attorney general. Susan Barnes: Private attorney, previously a federal prosecutor, who was hired to conduct the investigation. She also helped with a follow-up report and was paid nearly $50,000 for both jobs. Kathy Mix: Chief deputy attorney general, hired Barnes and discussed report with Barnes by phone and e-mail. Gary Ikeda: Former deputy attorney general in charge of the torts division, talked by phone with Barnes about the content of her report. Lori Lamb: Former assistant attorney general and lead trial lawyer in the Beckman case. Janet Capps: Former assistant attorney general, helped defend the state in the Beckman case and was forced to resign after being accused of intentionally missing the appeal deadline. She is suing Gregoire, Mix, Ikeda and others. David Moody: The plaintiffs' attorney in the Beckman case. Anne Bremner: A private attorney representing the state, Gregoire and her deputies in the Capps lawsuit. Suzanne Thomas: A private attorney representing Capps.

The case is set for mediation next week and is scheduled to go to trial in U.S. District Court in July, less than three months before Gregoire faces two other prominent Democrats in the primary election.

In a sworn deposition April 9, Gregoire was asked if, by hiring Barnes as an independent investigator, she was trying to make sure the findings would have more credibility with the public.

"Yeah, I don't know that I ever had that thought process," Gregoire told Suzanne Thomas, Capps' attorney. "But one would have to assume that I'm saying to the public it's not biased, it's objective."

Thomas argued in a court filing Thursday that the new documents "confirm that the Barnes report was neither independent nor objective."

But Gregoire's attorneys accused Thomas of playing politics with the case and making "scurrilous" allegations about what the new documents reveal.

"It's our belief that she tried this to put pressure on the attorney general to settle," said Anne Bremner, who is representing the state, Gregoire and her deputies in the Capps lawsuit. Bremner accused Thomas of "trying to get more taxpayer money for someone who blew a deadline."

Missed appeal

The review by Barnes was intended to get to the bottom of the missed appeal.

The attorney general's staff didn't learn of its mistake until 10 days after the filing deadline had passed, when David Moody, attorney for the three men, sent a letter asking when the $17.8 million would be paid.

	David Moody

Within days, in late May, Gregoire's chief deputy, Kathy Mix, hired Barnes to investigate. Gregoire, her staff and lawyers for the state have alternately described the work — in press releases, public statements and staff memos — as an "independent" and "outside" investigation.

But the documents recently filed in court indicate that Mix and Gary Ikeda, then deputy attorney general in charge of the Torts Division — and, indirectly, Gregoire — had a lot of input into the report's findings and conclusions.

An invoice shows Barnes billing the state for almost daily phone calls and e-mail exchanges with Mix and Ikeda.

Barnes' notes that appear to be records of the phone conversations, though cryptic and sometimes hard to follow, indicate Mix and Ikeda were giving Barnes feedback on drafts of the report.

Notes dated June 8, 2000, for instance, begin "pc Kathy" — apparently referring to a phone call with Mix — and are sprinkled with the phrases "talked with Chris," "sense is what she would like," "it would be helpful the work focused on the specific incident, people" and "in doing that focus on jan capps."

During the same conversation, it's suggested that on "bigger systemic issues" Barnes should give an oral report in Olympia.

One line, which appears to be from Mix, states, "I frankly think Chris wants give and take on what you see ... "

The lawyers discuss putting more blame on Moody for not giving the state better notice when he filed the judgments. And they suggest making recommendations about the management of the office "more positive."

Barnes' notes also include the following passage:

"On remember, draft exposure

disposing of our drafts

have them on emails,

need to get rid of them

we can do faxes from here on out."

Vial, Barnes' attorney, said Barnes did not get rid of any drafts or work notes. Bremner said there is no evidence records were destroyed by state lawyers, either, but, she added, "This is being looked into."

	Anne Bremner

On June 12, 2000, Barnes sent an e-mail to Mix — under the subject line "our project" — asking Mix to let her know when she could complete the report.

Mix replied less than an hour later.

"I am headed into a meeting with Chris, but wanted to give you the issues that we all saw over the weekend," Mix wrote.

She suggested softening criticism of lead trial lawyer Lori Lamb and said "Chris" wanted Barnes to change her "recommendations" section to a "conclusions" section and to include commentary on Moody's role. "If you feel you can," Mix wrote.

Barnes appears to have heeded the suggestions in her final report.

Mix also asked Barnes if she could "give us any leeway" for not having an automated system alerting attorneys about important court dates. Mix told Barnes the office was instituting such a system.

"Are you able to say we are within the bounds of the standard of practice for most gov't practices?" Mix asked.

Barnes apparently wasn't willing to go that far. But in her final report, she added a footnote saying she "had been advised" that the Attorney General's Office was instituting a new case-management system.

Barnes' final report downplayed systemic problems.

In early drafts, she cited six factors in the state's missing the appeal deadline. The first five addressed systemic problems at length, including poor communication with support staff who routed incoming mail and the lack of a system for tracking important deadlines. "... there was no real overall management of the case," Barnes wrote.

The sixth factor was Janet Capps, whom Barnes said was "ultimately responsible" for failing to act on the judgment documents, calling it "unacceptable professional conduct."

Barnes' final report, by contrast, omitted the "overall management" line and did not include systemic problems among "primary" and "secondary" factors for the missed appeal. It did include some examples of management shortfalls but aimed most of the blame at Capps. Without offering concrete evidence, Barnes said she could reach "no other conclusion but that Jan intentionally chose not" to respond to the Beckman documents.

While Barnes was still working on her Beckman investigation, Gregoire hired her to stay on to help with a second report — a broader management review of the Torts Division. Gregoire assigned Lucy Isaki, an assistant attorney general, to oversee the review.

Barnes' notes from conversations that summer and fall with Gregoire aides show she and Isaki discussed concerns about the timing of the report.

"Everything winding up on the front page of paper," the notes read. And later: "Insane to write something before the election."

Changing story?

Bremner, Gregoire's attorney, said Barnes concluded that Capps was to blame for the missed deadline only after Capps kept changing her story during the investigation. Bremner said the documents do not suggest Gregoire's deputies did much to shape the final report.

Vial, Barnes' attorney, said there was nothing unusual about her consultations with Gregoire's deputies.

"Lawyers and clients commonly confer about such things," Vial said in his written statement. "This case — one in which the (Attorney General's Office) was simultaneously trying to protect millions of taxpayer dollars and learn what went wrong in the Seattle office — was no exception."

Capps' attorneys claim those two goals drove the shift in focus away from institutional problems and onto Capps. The state thought it could win an extension to file its appeal if it could prove the deadline was missed because of some extraordinary circumstance — such as Capps sabotaging the case.

The Court of Appeals, in a blistering denial of the state's motion, found in August 2000 there could be no "reasonable inference from the evidence" that Capps acted intentionally.

Over the past four years, Capps and her lawyer, Thomas, have been relentless in their attacks on Gregoire and just about everyone else associated with the Beckman case. Before filing her current lawsuit, Thomas tried suing in state court, launched ethics complaints against Gregoire and Mix, and filed complaints against Bremner with the state Bar Association. All have been dismissed.

In January, the judge scolded Thomas for filing claims intended to "harass" the defendants.

The deluge of new documents has ignited a new round of legal bickering.

Thomas filed a series of motions this month alleging, among other things, that Gregoire's deputies ordered the destruction of public records.

Barnes was scheduled for a deposition Friday. But Capps' attorney canceled the deposition, saying she needed more time to review the new documents and prepare for next week's mediation.

Gregoire's attorneys said the cancellation was a ploy by Thomas to make sure Barnes would have no chance to explain the e-mails and phone calls.

"Plaintiff's counsel apparently believes that she would attract more media attention based on self-serving speculation than she would with the sworn testimony of the person who drafted the notes," they said in a motion Friday.

Ralph Thomas: 360-943-9882 or rthomas@seattletimes.com

Mike Carter: 206-464-3706 or mcarter@seattletimes.com

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