Re: Payola

["'A. Joseph Ross'" <lawyer@world.std.com>]

On Mon, 21 Apr 1997 Dib9@aol.com wrote:

> Preferential treatment for the big guys is not payola, illegal or even
> unethical.  It goes on in every business.  You are going to try to help
> people who can most help you.  It's only illegal if the station is required
> to do something in exchange for the treatment.  

I think it's a little more complicated than that.  Here are some examples
from my experience.

An owner of a local restaurant called me about her daughter's problems
with a tenant.  I spent some time on the phone answering general questions
and refused to send a bill (as is my usual practice for short telephone
advice).  The restaurant owner sent me a gift certificate for dinner for
two at her restaurant.  Seems OK.

But how about this one.  A client told me that she wanted to look for a
home to buy, and I referred her to a local real estate broker that I know.
I did so because I know that broker and have confidence that she will be
able to help my client.  My client goes to that broker, finds something to
buy, and I handle the closing.  The broker then sends me a letter thanking
me for the referral and enclosing a gift certificate for a local
restaurant.

After consultation with Bar Counsel's office, I returned the gift
certificate.  I felt that it was my obligation, when advising clients, to
refer them to someone who will best serve their needs, and not even have
it appear that I might be swayed by such a gift.  But if that broker were
to refer a client to me, that would be fine.

And, just to round out the discussion, Sherman Adams, who was chief
assistant to President Eisenhower, had to resign because he had accepted
some expensive gifts from a Boston industrialist.  There was no evidence
whatsoever of any favors being done in return for said industrialist.


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  A. Joseph Ross, J.D.                                          617/367-0468
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