Commentary: Supreme Court scandal

Jan 30, 2013

Well, it’s now official: A person who ten days ago was a Michigan Supreme Court justice is now a convicted felon.

Diane Hathaway pleaded guilty yesterday in federal court to a single count of bank fraud. While on the bench of Michigan’s highest court,she temporarily transferred three of four expensive houses she and her husband owned to her stepchildren.

She did this, the federal prosecutor and the FBI said, as part of an elaborate scheme to hide assets from the bank. This was done in order to make it look like she and her husband, attorney Michael Kingsley, were suffering financial hardship.

They wanted to look worse off than they were because they wanted to convince her bank to allow her to sell yet another home they owned in Grosse Pointe Park in what’s called a short sale.

That means they were able to sell it for far less than they owed on it, and got the bank to write off six hundred thousand dollars of the mortgage. Good luck trying to do that if you are an average citizen living in Flint. Hathaway, by the way, is a realtor as well as a lawyer.

She had to know how illegal this was. What isn’t clear is what penalty she will face. She won’t be sentenced till late May. There will certainly be a fine, and possibly up to eighteen months in a federal prison. In my opinion, this isn’t nearly harsh enough.

She was a judge on our state’s highest court, a court charged with supervising and maintaining integrity in the state’s lower courts. I can think of no other occupation in which basic honesty, integrity and willingness to follow the law is more important.

Yet she, essentially, stole from a bank. Barbara McQuade, the U.S. District Attorney, argued yesterday that the courts needed to make an example of Hathaway. She said “For the person out there who plays by the rules … it’s very important to see that those who don’t play by the rules are held accountable, no matter who you are.”

Isn’t that the very meaning of justice? Hathaway pled guilty, by the way, apparently as part of a deal to get the government to drop attempts to seize a home she owns in Florida.

Michigan Attorney General Bill Schuette wants Hathaway to lose her law license as well. Schuette is a Republican; Hathaway a Democrat, and I’ve thought this attorney general often has been too partisan. But in this case, he is exactly right. As Schuette said, “public corruption scandals have damaged the public’s trust in government and tarnished our state’s reputation.” The attorney general added, “We’re talking about bank fraud. Not a late fee from the video store.”

Hathaway’s lawyer argued that his client shouldn’t go to jail because she had done something “dumb.” He said, “she feels terrible.” Well, Al Capone did too when he was convicted of income tax fraud. They sent him to Alcatraz anyway,

If democracy and equal justice under law are to mean anything, we need to have confidence in the integrity of our courts.

Especially, our highest court. Restoring that should be the top priority of the governor, who needs to name a replacement justice, and the judge who will determines what punishment fits this crime.

Jack Lessenberry is Michigan Radio’s political analyst. Views expressed in the essays by Lessenberry are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.