DETROIT (Legal Newsline) - The independent state agency tasked with investigating judicial misconduct and recommending discipline will not say if it is looking into allegations that a sitting Michigan Supreme Court justice engaged in suspicious real estate transactions.

Last week, WXYZ-TV in Detroit aired a story about Justice Diane Hathaway, questioning how ethical she was in convincing her bank to let her out of her mortgage on her Lake St. Clair, Mich., home.

According to the television station's report, which aired on its 11 p.m. newscast May 9, the justice convinced her bank last November that she couldn't afford to keep making payments on the home, even though her other lakefront home in Florida was paid for.

Hathaway's bank apparently allowed her to do a short sale.

A short sale is often used as an alternative to foreclosure because it reduces additional fees and costs to both the creditor and borrower.

WXYZ reported that the transaction was just part of a "strange real-estate shuffle."

The state's Judicial Tenure Commission, which is responsible for investigating complaints of judicial misconduct by state judges, would neither confirm nor deny whether it was looking into the matter.

"The commission does not comment on whether it is investigating or not," Paul J. Fischer, executive director and general counsel, said in an email late Wednesday.

The commission has no jurisdiction over federal judges or administrative law judges such as workers' compensation magistrates, department of corrections hearing officers, and the like.

Its authority is limited to investigating alleged judicial misconduct and, if warranted, recommending discipline.

According to its website, judicial misconduct usually involves conduct in conflict with the standards set forth in the Code of Judicial Conduct. Such examples include intemperate courtroom conduct (such as yelling, rudeness or profanity), improper communication with only one of the parties in a case, failure to disqualify in cases in which the judge has or appears to have a financial or personal interest in the outcome, delay in performing judicial duties, and public comment about the pending case.

However, judicial misconduct also may involve improper off-the-bench conduct, the commission noted.

Meanwhile, Supreme Court Chief Justice Robert Young Jr. has asked Hathaway -- who has refused to comment on WXYZ's allegations -- to respond publicly.

In a May 10 statement, Young, himself, said he was concerned about the allegations.

"Ordinarily, the financial transactions of any person, including a justice, are personal matters. However, the WXYZ story raises very serious allegations about Justice Diane Hathaway's financial transactions. I am naturally very concerned about these allegations," he said.

"Because media allegations are just that and may fail to include a complete picture of a complex set of financial transactions, this morning I advised Justice Hathaway to respond publicly to these allegations to clear the air."

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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