On January 20th The Philadelphia Inquirer published a profile on Judge Gene D. Cohen (Ret.). Joe DiStefano conducted an extensive and wide-ranging interview with Judge Cohen and compiled and reviewed hundreds of pages of source documents to write “Cohen’s Law” for his Philly Deals column. The column covers highlights of Judge Cohen’s storied career as well as some of his most difficult decisions:
“The pay was bad, the hours weren’t terrific, the computers broke down,” he said, so at 77 he gave (up his position on the bench) again, after delivering last year’s Duffield House ruling, ordering the city to repay landlords $50 million to reverse an unconstitutional tax increase. (The city has appealed.)
It wasn’t the first Cohen decision that turned on explosive and expensive issues of city governance. Back in private practice at the Horn Williamson firm — under Jennifer Horn, who worked for him at his previous firm, Cohen Seglias — Cohen sat for an interview to review key cases and issues.
Public pension funds
In 2004, Cohen rejected a settlement between Pennsylvania and a venture capital firm that had sent state pension funds to an investor who blew them on a lobster company and other unapproved investments. The state and other clients lost nearly $100 million.
Cohen refused to approve a city malpractice settlement with the city’s own law firms, which, as he saw it, had aided and abetted the unlawful and unsuccessful investment, and settled in the dark — “lacking transparency.”
That got my attention. How often does a judge take the public’s side in stopping a cozy deal among government officials and the contractors who ripped them off?
Public pensions, Cohen notes, invest billions under processes hidden from public review: “I don’t understand the necessity for almost total confidentiality in the selection of the fund managers,” or for hiding fat profits private managers collect from state investments. “I’m surprised there has not been more serious investigations.”
“I like what you’ve written about the public pension funds in Pennsylvania. But I don’t think you hit them nearly hard enough,” Cohen told me.
That suspect settlement was born in the dark, through confidential mediation. The process didn’t even try to pin responsibility for the losses, Cohen said: “It was all about getting to ‘Yes’ from a dollar point of view.” He refused to “sign a blank check.”
Cohen’s justice was overturned on appeal in 2005, but you could say he has been vindicated by events: The unauthorized investor, Michael Liberty, went on to raise hundreds of millions more, much of it from Philadelphia-area sources, for Mozido, a telecom start-up that failed to thrive as promised. In 2017 Liberty was jailed for campaign finance fraud. Last year he was indicted on fraud charges related to Mozido, which he is contesting.
If the Mozido investors didn’t know Liberty’s past, it’s no wonder: Not even Judge Cohen was told his name, given the secrecy around the mediation. “I don’t think there should be much secrecy,” Cohen concluded. “If the public has an interest in the outcome of a matter, the idea of using the courts as a cover-up — I hate to use that word — is certainly not something I favor.”
Read the entire article at Philadelphia Inquirer Philly Deals.