Judicial discipline commission wants former Supreme Court Chief Justice Coats censured for role in contract scandal

In an unprecedented flexing of its authority, the Colorado Commission on Judicial Discipline late Tuesday requested a public censure of former state Supreme Court Chief Justice Nathan “Ben” Coats for his role in a multi-million dollar contract that was awarded to a former employee who faced firing.

It is the first discipline ever requested by the commission to anyone who sat on the state’s highest court, much less its chief.

The censure is for Coats’ failure to “perform judicial and administrative duties competently and diligently,” one of the cornerstones of the state’s code of judicial conduct, according to a copy of the 13-page document obtained by The Denver Gazette.

Coats allowed the contract to be awarded to former Chief of Staff Mindy Masias, despite a number of warning signs that indicated it could be problematic, the commission concluded, as well as a variety of lapses in judgment.

Coats admits to the violations as part of a settlement agreement with the commission and waived his right to a formal hearing, according to the filing.

The censure is largely ceremonial and carries no other penalty. Coats retired in December 2020 and his law license is inactive.

Coats’ attorney, John Gleason, told The Denver Gazette that he had no comment.

The censure is not yet public because it is merely a recommendation by the discipline commission and must be reviewed and approved by the Supreme Court. The justices all recused themselves early Wednesday from that process, and, under new rules the court adopted earlier this year, a panel of seven judges from the Court of Appeals is to be named to take their place.

It’s unclear when that appointment will occur. The court declined to comment through a Judicial Department spokesman.

The commission’s recommendation somewhat falls in line with an earlier investigation by the Office of Attorney Regulation Counsel, which oversees attorney licenses, that noted Coats was wrong in allowing a “dysfunctional and toxic” atmosphere to pervade the State Court Administrator’s Office that he presided over. But OARC said it could not find any convincing evidence that Coats knowingly approved the alleged quid pro quo contract to silence Masias.

Masias threatened a tell-all sex-discrimination lawsuit that would reveal decades of judicial misconduct that were either dismissed or handled leniently, a sharp contrast to the harsh discipline she faced. Former State Court Administrator Christopher Ryan, the highest civilian position in the Judicial Department, alleged Coats approved the contract to prevent the lawsuit.

OARC’s legal regulation committee chose to close the case and not issue any punishment.

The discipline commission, however, said its investigation found that Coats was far more involved in awarding the multi-million dollar judicial training contract to Masias, particularly in that he allowed it to be awarded despite Coats’ earlier willingness to fire her and other allegations of misconduct that were being looked into.

Coats had explained to investigators that he would allow the contract only if it went through normal procurement procedures that included a public bid and, more importantly, that no other allegations of misconduct surfaced against Masias.

Coats said his decision to award Masias the contract barring any other wrongdoing was in “consultation with the full Supreme Court,” the commission wrote.

The commission’s investigation uncovered a number of instances where Coats became aware of additional concerns about Masias’ conduct, including an anonymous whistleblower letter that laid out a number of problems in the judicial department. One allegation was that a security employee within the department was asked to surreptitiously track the movements of others, including Masias and her former Human Resources director, Eric Brown.

Masias negotiated a separation agreement with that employee, Jane Hood, which contained a non-disclosure clause that Coats said was one of the “stupidest things he had ever heard of and was outraged that the Supreme Court had not been informed,” according to the commission’s filing. The commission’s censure recommendation said there were assertions Masias used public funds to keep Hood quiet about what Hood had learned from that surveillance.

The commission said Coats — and the rest of the Supreme Court — failed to back away from the Masias contract even after investigations were launched into the whistleblower letter’s allegations.

“Even though there existed allegations of serious misconduct by Masias, the veracity of which were subject to a barely begun formal investigation (by the state auditor), neither Justice Coats nor the Supreme Court ordered a halt to the consideration of Masias for a contract,” the commission censure says.

Moreover, the commission said it was “particularly concerning” that Coats didn’t wait for the auditor’s investigation to conclude before approving the deal and hadn’t bothered to tell the Attorney General’s office about the pending contract despite its request to investigate the contents of the whistleblower letter.

The commission noted that department inquiries into Masias’ conduct over falsified expenses — the root of why she was being fired — showed Coats was told about its findings, although Coats said he wasn’t.

Coats said he only learned of the internal inquiry by the audit staff after Ryan had resigned when news of the contract went public. Coats told commission investigators that had he seen the internal audit memo, “he likely would have decided that Masias would be unfit to work for the Judicial Department in any capacity.”

The commission said Coats actually received an email about the audit more than six months earlier and Coats made no inquiries about it.

The commission hired law firm Rathod Mohamedbhai in Denver a special counsel to conduct the investigation.

The OARC’s investigation left open the possibility that other lawyers involved in the contract-for-silence scandal could face scrutiny and admonished Coats for having an obligation to report their misconduct but didn’t. The OARC’s legal committee did not say whether the lawyers implicated by the investigation, who were not identified in the statement, have been separately disciplined by OARC or the Supreme Court.

Reached Wednesday, Ryan said he’s not surprised by the outcome of the commission’s inquiry.

“This is a stipulated resolution where any factual findings have been heavily negotiated by Coats and his counsel,” Ryan said. “Regardless, this stipulation to public censure is an admission, and from my prior life inside the system, I know quite well how the plea bargains work.”

Over the summer, he testified to legislators that he stood by his assertions that Coats approved giving Masias the contract in order to prevent her threatened lawsuit, and that findings of any subsequent investigations “were designed to protect the robes.”

Masias and Brown have never spoken publicly about the contract since the first stories appeared nearly four years ago. It’s unclear whether either testified to the commission’s investigators.

The commission’s recommendation comes more than two years after newspaper accounts revealed the quid pro quo allegations. Newspaper stories about the initial contract in 2019 ultimately forced its cancellation, especially after it revealed that Masias had surreptitiously recorded a conversation with then-Chief Justice Nancy Rice.

A company Masias had newly formed was awarded a multi-million-dollar contract to conduct judicial training just months after she faced firing over financial irregularities. The contract was awarded following a public bid process that yielded no submissions, not even from Masias.

In a January 2019 meeting described by Ryan, Brown read from a two-page memo in which he outlined the litany of misdeeds Masias was prepared to reveal in a lawsuit if she were fired. The meeting was also attended by Coats and Rottman, according to Ryan.

Ryan said Coats was disturbed by what was being read from the document and wanted to know how to prevent the lawsuit. Coats and Rottman told investigators who looked into a different aspect of the deal that they brushed off what Brown was reading and were more concerned for Masias’ well-being because she had taken personal leave for a medical condition.

Ryan and Brown would resign from their jobs in 2019 following initial newspaper accounts about the contract, which was quickly cancelled. Word of the memo and its contents, however, wasn’t publicly disclosed until February 2021, following a state audit that put much of the SCAO’s financial problems at Ryan’s feet. The Supreme Court at first refused to release the memo but made it public following the newspaper stories.

The revelation created an uproar. Six separate investigations including the OARC’s were launched and a special legislative committee was created to explore reforming the judicial discipline process.

Two investigations by companies separately paid for by the Judicial Department have determined Coats never personally approved the contract in exchange for Masias’ silence and that the allegations of judicial misconduct were not precisely as claimed. Those investigations also determined that Coats had allowed the deteriorating conduct within his department to get away from him.

A number of critics have challenged the investigations’ findings, noting that neither inquiry had interviewed its key players: Ryan, Brown and Masias.

All three were referred to the Denver District Attorney’s office for criminal investigation, but that went nowhere when prosecutors said Judicial Department delays in getting the material to them were so protracted that it prevented any meaningful effort to pursue it.

District Attorney Beth McCann announced her office had closed the matter without doing any inquiry of its own.

The FBI was conducting its own inquiry, according to people interviewed by the agents. It’s unclear the status of that investigation and the agency does not comment on pending matters.

The commission has battled with the Supreme Court throughout the investigation, claiming it’s been stalled in its request for evidence — the commission was forced at one point to issue a subpoena — and being pressed to fall in line with the high court’s mandates on how to proceed.

That ultimately led to legislative reforms that are about to become law, including a complete change to the judicial discipline process and state constitutional amendment which voters are likely to be asked to approve in 2024.

Said Ryan: “I am looking forward to the changes to the judicial discipline process that have resulted from all of this.”

To view the article in its entirety, visit denvergazette.com.