Mounting legal woes spurred Democratic leader’s resignation

Read Friday’s AJC for a deeper look at who Democrats may tap as their next leader, and why Atlanta Mayor Kasim Reed will likely play a prominent role.

The head of Georgia's Democratic Party said Wednesday that he would resign amid mounting legal problems and growing pushback from fellow Democrats who feared his leadership could complicate the party's comeback bid.

Mike Berlon had vowed to serve out the remaining two years of his four-year term after a trying month in which he was suspended by the State Bar of Georgia, reprimanded by Georgia's top court and sued by a former client.  

Then, in reviewing Berlon’s legal record, The Atlanta Journal-Constitution found that he was accused in recent years of missing key deadlines, ignoring clients and, in a suit still pending, defrauding a firm that he once represented of more than $400,000. Berlon has disputed the allegations in court filings.

And after Atlanta Mayor Kasim Reed added his voice Wednesday to the chorus of intraparty criticism, Berlon announced he would step down within the next few weeks to avoid becoming a distraction ahead of the 2014 election.

“My goal is, and always has been, to unify Georgia Democrats,” Berlon said in a statement. “We have an important U.S. Senate race in 2014, and our focus should be on winning that seat and others.”

It’s not immediately clear who will now lead the party, although Berlon said he would work out the details as he recovers from chest pain and exhaustion.

Nikema Williams, the organization's first-vice chair and the director of public policy at Planned Parenthood's southeast regional office, is next in line for the leadership post. But Reed and Michelle Nunn, the nonprofit executive considering a Senate run, would presumably have a say over who fills the job on a permanent basis.

Berlon had long said that his private practice had nothing to do with his political role, and that his legal record was vetted during his bid for party chairmanship. But he reversed course amid scrutiny of his past cases and criticism from Reed, who questioned Berlon's ability to raise funds, push the party's message and recruit candidates ahead of next year's election.

“I wish him very well and don’t have anything negative to say about his service,” Reed said before Berlon’s announcement. “But I do know what it takes to run a complex organization. And in an organization you need leadership. It is time to close this chapter and move forward.”

The resignation spares Berlon of a potentially damaging vote at a June 6 executive meeting of the state Democratic Party. David Worley, a former party chairman, said he would recommend Berlon’s ouster because he had “become a gross embarrassment.”

Berlon has led the party since 2011 and weathered calls for his resignation before. But angst over his leadership boiled over at an Atlanta Press Club event in April when fellow Democrats criticized his failure to recruit more candidates and his fundraising ability. On Wednesday, Reed said one of the reasons he was calling for Berlon to step down was because the organization was "bordering on insolvency" with $30,000 in cash on hand last month. The Georgia GOP had about 20 times as much money.

But Berlon should be credited with building a solid foundation for Democrats, said former House Minority Leader DuBose Porter, an influential party leader. Porter added that Berlon had helped the party rebound in Gwinnett County, one of the state’s fastest-growing areas.

“It’s difficult for a lot of people to juggle their private and public lives,” said Porter, a newspaper publisher. “I hate that this happened. But Mike has made the right call. And we’ll all move on.”

Berlon’s critics gained momentum as his recent legal concerns came to light.

Records show that the State Bar of Georgia handed him an automatic suspension in late April when he failed to respond to a complaint from a potential client. Many of his supporters were further unsettled when the Georgia Supreme Court last week accepted Berlon's request to be reprimanded for violating legal ethics rules involving another client.

Then came word that Raymond Hines, a former friend who had hired Berlon to create a trust in his wife’s name, filed a lawsuit last week claiming that Berlon never answered his requests seeking details about the roughly $960,000 he and his son had pumped into the trust. Berlon has called it a “misunderstanding” and said he was trying to reach a settlement.

The AJC review pointed to other lingering legal concerns. Berlon didn’t comment on them when contacted Tuesday, but he has disputed each of the challenges in court and, in some cases, filed a counterlawsuit.

  • A September 2010 lawsuit claimed that Berlon, while serving as legal counsel of a flooring company called Integrity Sports Group, took at least $400,000 from the company. Firm President David Wengryn also said in the complaint that Berlon failed to disclose how the money was used even after company executives "repeatedly requested or demanded an accounting of the use of such funds." The suit is still pending.
  • Robin Phillips hired Berlon to represent him in a medical malpractice complaint after his father died of a mysterious illness at a Sandy Springs hospital. He said in a May 2010 lawsuit that Berlon failed to respond to court filings by the doctor's attorney, didn't preserve key evidence and dismissed an appeal without consulting his client. A deal for a $30,000 settlement fell through, and Berlon, who disputed the complaint, has asked for a jury trial.
  • David Zelby, an Atlanta dentist, hired Berlon to represent him in a fight over more than $150,000 in disputed legal fees with the law firm that handled Zelby's divorce. He said in a September 2011 lawsuit that Berlon didn't notify him about the firm's settlement offer, failed to respond to the firm's legal complaint on time and never showed up at a May 2009 hearing. A judge ultimately ordered Zelby to pay the law firm $194,000 in damages and $15,000 in legal fees. Zelby's suit against Berlon is still pending.

High-profile Democrats expressed relief that Berlon decided to step aside rather than risk a public battle. Now their focus will turn to finding a successor who can guide the party through what they believe to be a crucial moment in Georgia politics.

“Whoever is next,” said state Sen. Jason Carter, D-Decatur, “is going to inherit a lot of energy to improve the party, a lot of commitment among elected officials and an understanding that we’ve got places to go and we need to get moving.”