What Are They Hiding?

Regular readers may recall the story of L. Tersigni Consulting, a Connecticut firm that offers advice to large corporate clients facing asbestos liability and lawsuits. The firm allegedly overcharged its clients to the tune of millions of dollars, and as of last summer, was under a Justice Department investigation. Strangely, the bankruptcy judge who approved payments to L. Tersigni Consulting was not informed of this investigation. The reason given by federal prosecutors was that the investigators on the case had given instructions not to discuss the case.
The story has had many bizarre twists over the past year. One was the death of the firm’s founder and CEO, Loreto Tersigni, in May, only after which client W.R. Grace (the company responsible for the asbestos issues in Libby, Montana) discovered via its own defense attorneys that Tersigni had been padding its bills by as much as 15 percent. Another was whistleblower and former employee Bradley Rapp starting his own consulting firm after Tersigni’s demise–his first client was none other than W.R. Grace, Inc.

Last November, L. Tersigni Consulting filed for bankruptcy and closed its doors.

The case of L. Tersigni Consulting took yet another strange turn recently when representatives for the company insisted that a report germane to the case be kept secret.

The strange part is the fact that this “secret report” allegedly contains information that could clear the firm of any wrongdoing. Representatives for L. Tersigni stated that they would share the report with other parties to the case, but insisted that its contents be kept secret from the general public.

This type of secrecy is inappropriate for an open democracy and bad for justice, according to the U.S. Trustee Program, an agency of the U.S. Department of Justice. According to papers filed in a bankruptcy court in Bridgeport, “…the strong presumption of openness does not permit the routine closing of judicial records to the public.”

Attorneys for L. Tersigni insist that the media–i.e., the public–”has no intrinsic interest in the report.” Nonetheless, the Office of the U.S. Trustee insists that it is “unfair” for the defendants to insist that the documents not be made public. “In fact, [L. Tersigni] does not even attempt to explain its reasoning for the extraordinary remedy of hiding the document from public view or the ’serious injury’ that would ensue from public disclosure of the documents,” stated a representative of the Trustee’s office.

Because of the American tradition and legal precedentlawyers for L. Tersigni could find it difficult to convince the judge that the documents in question should be kept out of the public record.