AG Labrador accused of misconduct, subject to Idaho State Bar probe. He calls it meritless

BOISE (Idaho Statesman) — The Idaho State Bar has opened an investigation into Attorney General Raúl Labrador over allegations of misconduct after a state official accused him of disregarding his obligations to his client, the Department of Health and Welfare.

The investigation stems from a complaint filed last year by Dave Jeppesen, former director of Health and Welfare, who accused the state elected official of several ethics violations, including failing to properly represent the health agency and trying to use information obtained confidentially from the department while acting as its attorney to pursue his own investigations. The Idaho Statesman obtained a copy of the complaint from Jeppesen, who supplied records of the investigation at a reporter’s request.

“Recent actions taken by AG Labrador … demonstrate that (he) does not view DHW as his client, is placing his own policy priorities over DHW’s needs for legal advice and representation, has created an unworkable conflict in representing the department, and has taken an adversarial position against DHW,” Jeppesen wrote in his complaint filed in June 2023.

Jeppesen also lists other instances when he said Labrador has acted on his own in legal battles without consulting with his client. Jeppesen has since retired from the department and declined to comment further to the Statesman.

The state bar sent a letter to Labrador last month that laid out seven potential violations of the Idaho Rules of Professional Conduct, a handbook that all attorneys in the state must comply with, and asked Labrador to respond to the allegations. The letter, which the Statesman also reviewed, said the bar is in the middle of a preliminary review. The bar said it sent Labrador a copy of the complaint as well as materials gathered during its preliminary investigation.

Labrador has long maintained that he is obligated to enforce certain laws while also representing state agencies, and his office told the Statesman that the complaint was “meritless” and would eventually be dismissed.

“The leaking of this frivolous and baseless complaint to the media is an attempt to thwart a fair and objective process, and is proof that it was intended as a political hit,” Dan Estes, Labrador’s spokesperson, told the Statesman by email.

Jeppesen’s complaint also referenced Lincoln Davis Wilson, a former civil litigator in Labrador’s office who worked on the child care grants case, and who is now a senior counsel at the Alliance Defending Freedom. Labrador and Wilson were given until Aug. 12 to respond to the bar. Labrador’s office declined to share further details about his response.

Investigations by the bar, a self-governing state agency, are generally kept private unless the bar pursues a public sanction. The bar’s rules state that it conducts investigations when grievances allege facts that “if true” would be a violation. The bar’s lead attorney declined to confirm the existence of or comment on the Labrador case.

If the bar finds Labrador violated the code of conduct, he could face sanctions ranging from private discipline — a letter declaring improper conduct without limiting the lawyer’s ability to practice law — to public charges. Sanctions for more serious charges must be ordered by the Idaho Supreme Court, and can result in published notices, license suspension or disbarment, according to the agency’s rules.

Jeppesen’s allegations are similar to other accusations that have been made against Labrador in the year and a half he’s been in office. Some current and former state officials have said the attorney general has taken an adversarial approach to state bureaucracies and, in doing so, failed to properly be their attorney.

The grievances center on the delicate position of the state’s top attorney: one in which his office is tasked primarily with representing the state and its agencies while also enforcing certain violations of law.

In one instance, a judge found the circumstances put one of the state’s attorneys in an “unenviable” position that was “deeply problematic.” In another, a judge found an attorney general investigation was “directly adversarial” to a state agency’s interests and ordered his office to refer it elsewhere. In a third, one of the state’s attorneys — who has filed a lawsuit — said she was caught in a position she struggled to ethically deal with.

In the mold of other outspoken conservatives, Labrador has portrayed himself as an outsider devoted to battling liberal and left-wing ideas from the courtroom, and as a people’s lawyer committed to standing up to sprawling government agencies. He campaigned on restoring people’s “trust in the rule of law” and belief that their government would protect them over “the bureaucracy,” he wrote after winning his election.

Estes said Jeppesen misunderstood “two basic principles”: that the attorney general doesn’t represent state officials personally, and that the rules of professional conduct allow government lawyers to represent multiple parties in a case.

“The attorney general is accustomed to meritless attacks in the media,” Estes said. “But it is unfortunate that anyone is now attempting to also sully the character of the excellent attorneys who work or have worked for the office.”

READ THE JEPPESEN COMPLAINT TO THE IDAHO STATE BAR

Jeppesen: ‘A hostile situation’

In early 2023, lawmakers said they started to suspect that millions of dollars in COVID-19 relief funds were sent out to child care organizations that were ineligible to receive them under state law. Lawmakers notified the attorney general, who responded to those concerns quickly by serving Health and Welfare officials with demands that Jeppesen and two of his deputies turn over documents about the grants in March.

Jeppesen’s complaint alleged that attorneys tasked with representing the health agency were told not to provide health officials with legal counsel. Labrador also declined to provide Health and Welfare with outside attorneys, he wrote.

Shortly after Labrador’s order, Jeppesen and the two deputies sued his office with outside attorneys to stop the investigation. Fourth Judicial District Judge Lynn Norton in Ada County ruled that Labrador had a conflict of interest in the case, prompting Labrador to appoint a special prosecutor for the investigation. Norton eventually dismissed the case after the special prosecutor withdrew the demands.

Jeppesen said in his letter that the situation created “a severe lack of confidence and trust” in the Attorney General’s Office among Health and Welfare employees, as well as “concerns that attorney-client privileged information will not be kept confidential, or worse, will be used against DHW and its employees.”

Labrador’s tenure had a “severe impact” on Health and Welfare, he added, “creating a hostile situation where trust and confidence has been destroyed.” Six lawyers in the Attorney General’s Office tasked with representing Health and Welfare resigned or were forced out over the controversy, Jeppesen wrote.

Daphne Huang, a lawyer in the Attorney General’s Office who represented the state health agency, was one of those employees. She advised health officials that their distribution of the grants was legal in two separate opinions, the first of which was issued while she was still working under the former attorney general and the second of which was issued shortly after Labrador took office. Labrador’s spokesperson said he wasn’t aware of the opinion issued under his tenure and “would never knowingly have put his name on a legal opinion like that,” according to previous Statesman reporting.

Huang became further enmeshed in the dispute when the chief attorney assigned to Health and Welfare and her supervisor, Chelsea Kidney, was told to resign or be fired on the same day the Attorney General’s Office began investigating Huang’s legal opinions; Kidney resigned, according to court documents.

Huang was tasked with retrieving Kidney’s work phone. She said senior officials in the Attorney General’s Office pressured her to violate her ethical responsibilities to Health and Welfare by trying to see the contents of Kidney’s phone when state health officials believed they contained private communications between them and their lawyer, according to court records. Kidney and an attorney for Huang did not respond to requests for comment.

When Huang wrote up her concerns and submitted them to her supervisor, she was notified that she, too, had to resign or be fired, she said in court filings. She has since sued the Attorney General’s Office, alleging retaliation.

The Attorney General’s Office denied Huang’s allegations in court filings and argued that health officials’ decision to “scrub” the former employee’s phone raised “more questions” about the grant program. She “was never asked, instructed or directed to take actions that would compromise her or the attorney general’s ethical obligations to his client,” attorneys under Labrador wrote.

Norton in an August 2023 decision determined that the phone incident discredited Labrador’s arguments that his office had created a “firewall” between investigators and lawyers for the health department, and forbade his office from pursuing the investigation without an outside prosecutor.

READ DAVE JEPPESEN V. RAUL R. LABRADOR

Labrador has record of conflicts with state agencies

Jeppesen’s allegations echoed other complaints made when Labrador has butted heads with officials he’s supposed to represent as attorney general: the State Board of Education over its wish to purchase the University of Phoenix and the secretary of state over an approved ballot initiative. In the Phoenix case, which involved a controversial $550 million purchase that has been scrutinized by a range of state officials, a judge disqualified Labrador and some of his top officials from prosecuting the case. That judge also required them to hire outside attorneys.

Most recently, after Labrador sued the secretary of state and Idahoans for Open Primaries in July over the approved ballot initiative to end closed primaries in Idaho, the Idaho Supreme Court ordered Labrador to explain how he could ethically represent the Secretary of State’s Office while suing it.

Labrador told the court that he could do so by “screening” attorneys, which was “all the professional rules require and all they can possibly require,” his office wrote in a brief.

“He appointed deputies, insulated them from his supervision, and imposed a screen to keep himself and undersigned counsel from learning the Secretary’s confidential information,” his office wrote. “This decision rested on careful analysis of the statutes and rules that govern the attorney general’s conduct.”

Idaho Supreme Court justices never said whether they would accept his rationale, since they dismissed the case shortly thereafter.

Jeppesen wrote in his complaint that the cellphone incident led him to believe the attorney general wanted to use information on the phone in his grants investigation. Jeppesen also told the bar that Wilson, the high-ranking attorney in Labrador’s office, defended Health and Welfare and Jeppesen against a lawsuit in one courtroom, signed on to Labrador’s demands for his records in another, and argued against Jeppesen in court when the director sued to stop the demands — all in the same month.

The situation made it “impossible” for Jeppesen to imagine how the same attorneys could competently defend Health and Welfare in some matters while fighting them in court in others, he wrote. Wilson did not respond to a request for comment.

The prosecutor appointed by Labrador has since suggested that crimes may have been committed by health officials over the child care grants, and Labrador has said that some recipients had close personal ties to health employees. A legislative audit determined that health officials failed to ensure grant recipients spent the money only on qualified age groups, and auditors thought its findings were serious enough to refer them to the attorney general. The Legislature’s budget committee later withheld funding from Health and Welfare while it waited for the agency to correct issues found in the audit, according to the Idaho Capital Sun. Jeppesen denied the audit’s findings. Labrador’s office declined to share the status of the special prosecutor’s investigation.

In his statement, Estes said Jeppesen’s complaint came after the former director was “embroiled in multiple scandals before resigning from DHW.”

“The Office of the Attorney General was unwilling to legally justify any of the alleged misconduct, and his complaint to the bar followed,” Estes said, noting that Labrador has since had a “positive working relationship” with the current director, Alex Adams.

Ethics complaint includes high-profile child welfare case

Part of Jeppesen’s complaint concerns a high-profile child protection case in 2022, when health officials seized a baby they feared would die of malnourishment after his parents missed multiple appointments.

Before he took office, Labrador told Jeppesen that he was “close personal friends” with Diego Rodriguez, the baby’s grandfather who is also a former pastor and Ammon Bundy associate. Labrador said he felt Health and Welfare and others “mishandled” the case, according to Jeppesen’s complaint.

The government’s actions prompted Bundy and the family to instigate numerous protests outside of St. Luke’s Health System in Boise. Protestors posted the names, photos and addresses of police officers and others involved in the custody case online and went to their homes.

The child was returned to his parents after several days, but the hospital said Rodriguez and Bundy posted far-fetched lies about its connections to child abuse online. St. Luke’s later won a defamation lawsuit for more than $50 million in damages after the two men did not appear in court for their trial. The baby’s family sued St. Luke’s, police and the health agency earlier this year.

After Labrador took office, he asked for all of the Health and Welfare files on the case, according to Jeppesen’s letter. Jeppesen took his concerns about the conflict to the Governor’s Office and to Kidney, the lead attorney for Health and Welfare at the time.

The health director never turned over the baby’s records to Labrador “due to the conflict,” Jeppesen wrote, though he noted in an email that he could provide them if the conflict was addressed.

Labrador and his team “determined that a conflict does not exist,” Kidney wrote back to Jeppesen, after explaining that she had raised his concern and related state ethics rules that describe personal relationships.

“The attorney general is cooperating with the bar and is confident the complaint will be dismissed in due time,” Estes said.