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In re Abrams

Decided: June 4, 1974.

IN THE MATTER OF ARTHUR LAWRENCE ABRAMS, AN ATTORNEY AT LAW


For suspension -- Justices Jacobs, Hall, Mountain, Sullivan, Pashman and Clifford. Opposed -- None.

Per Curiam

[65 NJ Page 172] The Essex County Ethics Committee charged the respondent with ethical violations in a presentment dated

May 16, 1973, later modified in a supplemental report dated December 13, 1973.

In 1967 the respondent became aware, through C. B. Snyder, a business associate and real estate broker, of the impending sale of Jersey City waterfront property which was suitable for transformation into a port facility. He communicated with his client Ezra Sensibar, President of Construction Aggregates Corporation, which specializes in the building and operation of port facilities. Thereafter the ESCA Corporation was formed to bid on the Jersey City property. The respective ownership interests in ESCA were Construction Aggregates Corporation 60%, Snyder 20% and respondent 20%. An auction of the property was held in Jersey City on August 1, 1967 and ESCA was the successful bidder for the sum of $2,040,000. The property was isolated from city services and it was necessary that water and sewer facilities as well as access roads be provided. A meeting was arranged with John V. Kenny, the then Hudson County political leader, who assured Sensibar that there would be wholehearted official cooperation in the development of the port facility proposed by ESCA.

Towards the close of 1968 Jersey City adopted resolutions letting contracts for the construction of roads and the laying of sewer and water pipes to the property acquired by ESCA. At about the same time, a resolution was adopted authorizing payment of a 5% brokerage commission to C.B. Snyder Realty, Inc. The commission amounted to $102,000 and half, namely, $51,000, was paid to the respondent pursuant to an earlier arrangement between Snyder and the respondent. The respondent testified that although the $51,000 was his to do with as he pleased, he considered that he should ethically turn it over to ESCA. He did that by placing it in an "Arthur Lawrence Abrams Trust Account" in the National Newark and Essex Bank; at one point he described the $51,000 in the trust account as "an emergency fund."

As time went on and as the financial commitments of ESCA (renamed Port Jersey Corporation) and those associated

with it became deeper and deeper, the lack of cooperation by the Jersey City officials became evident. Despite the resolutions letting contracts for the construction of roads and the laying of sewer and water pipes, work had not been commenced and permits had not been issued when the respondent and Snyder were advised that a so-called "political contribution" was expected by the Jersey City officials. It was suggested that Sensibar should see Flaherty, then President of the Jersey City Council. The respondent testified that he called Sensibar who said "leave it to me." Sensibar testified that when he met with Flaherty on April 19, 1969 he knew that the money that had already been invested "would all go down the drain if we didn't somehow make peace and get quick cooperation from City Hall." He was disposed to make "a campaign contribution" of $20,000 in cash "to get that peace." He testified further that after his April 19 meeting with Flaherty he conferred with Snyder and the respondent and "they both said that it was unrealistic to expect that we could do as much construction work, as much business as we were doing in Hudson County without acceding to a shakedown of some kind. They thought that $20,000 in the circumstances might be nominal and they urged that I should arrange for us to pay it." Under date of April 22, 1969 the respondent issued a check in the sum of $20,000 on his trust account. The check was made payable to Construction Aggregates Corporation and was stated on its face to be "For Engineering Services." The respondent sent the check to Sensibar who cashed it and who arranged to have the $20,000 in cash delivered to Flaherty.

The presentment embodied the following findings with respect to the $20,000 payment: "Respondent characterizes such payment as extortion and the city officials as extortioners and what has transpired would so indicate, however, respondent was a participant and it was through the trust funds in his possession that such payment was made. Respondent was well aware of the reasons underlying the making of such payments. Though respondent owed a duty to his client

to act zealously in its behalf and for its best interests, and to make disbursements from the trust fund as it directed, nevertheless respondent was under an obligation to act within the bounds of the law, and obey his own conscience. Direct participation is denied by respondent, however, he was the conduit through whom such payments were made, and to that extent he did participate in the transaction."

In October 1970 Mr. MacMillan, Vice President of Port Jersey, told the respondent that several months earlier he "had a problem with a building permit" and had paid out the sum of $1200. He requested a check for the $1200 from the respondent's trust account but by that time the funds in the trust account had apparently been transferred to a certificate of deposit in the National Newark and Essex Bank in the name of Port Jersey. In response to MacMillan's request the respondent arranged in effect for the bank to issue its check dated October 7, 1970 in the sum of $1200 payable to Port Jersey. The respondent testified that he did not learn until much later that the $1200 represented "a payoff to the building department of Jersey City." In the presentment the Committee made no specific factual finding in this regard although in its supplemental report, after referring to both the $20,000 payment and the $1200 payment, it said: "The total testimony reflects respondent's knowledge that the enterprise of which he was one of the principals, as well as its legal counsel, was compelled to pay $21,200 to certain public officials in aid of the furtherance of the development of the project."

In the presentment the Committee found that $3,860 had been paid from the respondent's trust funds to Frank Murray, President of the Jersey City Local of the International Longshoremen's Association, in violation of N.J.S.A. 2A:93-7. However, in the supplemental report this finding has been withdrawn. The Committee was satisfied on the basis of further testimony submitted to it, "that there was no impropriety on the ...


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