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RTC Begins Process to Fire Lawyer : Dispute: William Elsbury, of the Newport Beach office, has been accused of unethical behavior. He has indicated he will contest the effort to oust him.

July 22, 1993|GREG JOHNSON | TIMES STAFF WRITER

NEWPORT BEACH — Resolution Trust Corp. officials on Wednesday took the first step toward firing William Elsbury, a top attorney in the agency's Newport Beach office and the subject of a long-running RTC investigation into allegations of unethical behavior.

On Wednesday afternoon, RTC officials delivered a "notice of proposed removal" to Elsbury, along with a list of alleged wrongdoings, said Jeffrey Benice, Elsbury's Newport Beach-based attorney.

The RTC action came one day after press accounts in Washington suggested that Elsbury had been told to resign or be fired. "They gave him the William Sessions options--quit or be fired," Benice said. "But Bill has no intention of quitting."

RTC officials were not available late Tuesday to comment on the removal notice. However, an RTC spokesman had said earlier in the week that Elsbury's case would be decided "very soon."

In the notice delivered Wednesday, RTC alleges that Elsbury falsified an RTC form when he was hired in July, 1990, by failing to list two alcohol-related driving arrests. Elsbury has maintained that his immediate RTC supervisor in Newport Beach, Neil Van Winkle, told him that the arrests need not be reported on the RTC form.

Benice disputed a second RTC allegation that Elsbury failed to disclose a supposed drinking problem. "There was no problem," Benice said. "The RTC failed to look at the evidence, which supports Elsbury's claim that there wasn't a problem."

The RTC had also investigated Elsbury's request that the government reimburse him for $41,000 in legal fees incurred during a California disbarment proceeding. Elsbury maintained that the unsuccessful disbarment attempt was prompted by unfounded allegations made by a former RTC lawyer whom Elsbury fired in 1991.

The agency had also reviewed Elsbury's decision to bolster his defense by hiring Brubeck, Phleger & Harrison, a San Francisco law firm that has been awarded a number of RTC contracts. Benice, who is with Brubeck, Phleger & Harrison's Newport Beach office, dismissed those allegations as "ridiculous. . . . Bill's superiors knew that he was going to hire us."

Elsbury is considering legal action against RTC's Office of the Inspector General, which investigated the senior RTC attorney, Benice said. "He is in the process" of determining the "most expedient way to handle the IG's invasion of his privacy," Benice said.

All of Elsbury's problems "are traceable to a false IG report," Benice said. "And the IG has failed to act as a proper guardian of a document that, while not public, has continued to be leaked to the public."

Elsbury is concerned that his case will now be "politicized . . . as an example of fraud and waste" in the much-maligned RTC, Benice said. "For three years he had an impeccable record of saving taxpayers millions of dollars."

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