With more than 130 lawyers on staff, since July 2006, San Diego spent $34 million on private lawyers."

Morning Report
by Randy Dotinga
Voice of San Diego
Dec. 9, 2010

In other city finance news, 10News and the Watchdog Institute report that "despite having more than 130 lawyers on staff, since July 2006, the city of San Diego has spent more than $34 million on private lawyers."

And the U-T says about 2,200 current and retired city workers "may be forced to accept significantly reduced pensions or pay a lump sum of as much as $50,000 to keep their current pension."



December 10, 2010
Calculating the Cost of a City's Litigation
by Brian Baxter
The AM Law Daily

San Diego, no stranger to large legal bills, is grappling with $130 million in litigation costs accumulated over the past eight years, according to an analysis conducted by the Watchdog Institute, a nonprofit investigative reporting center at San Diego State University.

KPBS, a media arm of the university, has the details on the Watchdog Institute's findings. One of the more interesting tidbits: although San Diego has 137 in-house city attorneys, including 27 in its civil litigation unit, since 2006 the city has spent more than $34 million on outside lawyers.

Some of those who spoke to Watchdog said that former San Diego City Attorney Michael Aguirre bears the responsibility for some of those bills. In the spring of 2006, Aguirre threatened to sue two law firms--Vinson & Elkins and Willkie Farr & Gallagher--for malpractice.

Eventually, Aguirre hired his own lawyers--on contingency--for litigation in which he claimed both firms charged excessive fees and failed to meet deadlines on work the firms did related to the city's pension crisis. (A voicemail message left for Aguirre at his office--he now is in private practice after losing a reelection bid in November 2008--was not returned by the time of this post.)

But wasn't Aguirre the one who was fighting to reign in the billing rates of Am Law 100 firms doing work for San Diego, as The American Lawyer reported in November 2008?

In that story, reporter Ross Todd detailed Aguirre's suits against three firms--Vinson, Willkie Farr, and bond counsel Orrick, Herrington & Sutcliffe--for work they did related to San Diego's financial disclosure practices. Vinson paid $4.35 million to settle its role in the case in June 2008. Orrick paid $2.8 million in a similar settlement a month later. A case against Willkie Farr is pending. (Bryan Vess, a San Diego plaintiff's lawyer trying the case against Willkie Farr, did not respond to a request for comment. Nor did Patrick Swann, Jr., a partner at Luce, Forward, Hamilton & Scripps defending the firm.)

Since then Aguirre's successor, former local judge Jan Goldsmith, has told Watchdog that Aguirre's litigiousness contributed to a spike in San Diego's legal expenses and insurance rates. Goldsmith claims that Aguirre lacked confidence in his own lawyers, hired expensive outside lawyers, and made insurers nervous with his "sue happy" mentality.

One firm singled out by the Watchdog Institute for its billing rates is Latham & Watkins. Watchdog reports the firm has received $18 million for work it has done for San Diego over the past eight years, charging up to $750 an hour for its services.

Goldsmith also told Watchdog that when he took office in 2008 he was shocked by the amount of money being spent on outside counsel at firms like Latham.

"It was huge, and it was obvious that we had to rebuild the law firm...and make it to a point where we have confidence to handle these cases in-house," Goldsmith said. "It was a terrible waste of taxpayer dollars to use Latham & Watkins essentially as a division of the city attorney's office."

After Aguirre was voted out of office in November 2008, The Am Law Daily reported that Latham's role as "most-favored-firm status could be jeopardy." Goldsmith described the hourly rates charged by Latham lawyers as "outrageous," and noted that attorneys from his own office made only $49 an hour. Goldsmith told Watchdog he negotiated Latham down to $550 an hour on cases the firm already was handling, ones in which it would have been more costly to start over with new counsel.

A Latham spokesman disputed the hourly rates stated by Goldsmith, telling Watchdog that the firm's discounted hourly rates were closer to $400 per hour, with the current city attorney likely citing figures billed by senior lawyers at the firm. Latham noted its success in recovering legal fees from insurance companies for the city.

"A primary reason why municipal clients engage a firm of the caliber of Latham & Watkins is that we often save them money in the long run," the firm told Watchdog. "The total collections from insurance companies equal or exceed the amounts billed by Latham to the city for work since January 1, 2005--with approximately $18.5 million collected to date." (Latham stood by its statement to Watchdog when contacted by The Am Law Daily.)

Despite the firm's successes, Latham's yearly billings for San Diego have decreased from $11.9 million in 2009 to $2.7 million through October of this year, according to the Watchdog Institute report. Aguirre told Watchdog that the city council--not the city attorney--is responsible for hiring outside counsel. Latham, he told Watchdog, was first hired under his predecessor, Casey Gwinn.

"Isn't it funny how two years later it's still my fault," Aguirre said. "The idea of trying to blame me even two years later is so ludicrous. That just shows you how desperate they are."

San Diego County uses worn-out excuse of attorney-client privilege to keep investigation report secret

Did gifts cause CCS therapists to favor certain vendors of wheelchairs and other medical devices?

The Investigation the County Doesn't Want You to See
By WILL CARLESS
Jan. 4, 2009

At some point in 2007, a whistleblower at California Children's Services, a program run by the county of San Diego that provides wheelchairs and other medical devices to children with physical disabilities, filed a complaint with the county alleging improprieties within the program.

The county launched a widespread investigation into the allegations that continued for at least 13 months in 2007 and 2008, records show. The investigation led to disciplinary action against county employees and changes to the county's ethics policies, but the report the investigators produced, and all the information it contains, is being kept a secret.

... Minutes from meetings show staff discussed allegations that therapists at the CCS program received gifts from vendors in violation of county ethics rules and may have favored certain vendors over others because of those gifts.

But exactly what was alleged, who was investigated and how deep any problems at the program went, are all things the county's top officials have decided shouldn't be released to the public...

One public records expert said attorney-client privilege is consistently used by public agencies to avoid releasing embarrassing documents, and pointed out that the county could chose to waive its privilege and make the document public.

The county has also refused to provide a copy of the report to the state of California, which provides the bulk of the $20 million budget for the CCS program. A spokesman for the California Department of Health Care Services, which oversees the CCS program, said county officials told the state that the investigation only concerned "personnel issues" and that they had not found any evidence that the program had been negatively impacted by the individuals investigated.

...A county spokeswoman said in an e-mail that the medical therapists work with the family's physician to provide the best piece of equipment available to the child from a list of possible vendors.

The selection of vendors, and the possible undue influence placed on county therapists by vendors who gave gifts to county staff, appear from documents to have been the subject of the internal investigation sparked by the whistleblower...

...In San Diego, public bodies regularly hand over such reports and documents.

But, in response to a request from voiceofsandiego.org media partner NBC 7/39 for the investigative report, County Counsel John Sansone claimed that the document fell within one of the law's exemptions and therefore did not have to be provided...

Does San Diego need two city attorneys? Aguirre to represent the people, and Goldsmith to represent officials?

I suggest that cities need two city attorneys--one to give honest, accurate legal advice, and the other to defend officials.

Voters want the city attorney to look out for them, and not just for elected officials. Shamefully, most elected officials want to keep the system in which the city attorney's job has been to help officials do whatever they want, and get away with it. Alternatively, the attorney tells the council what to do, and acts as a de facto city council without being elected.

Apparently San Diego needs both Mike Aguirre and Jan Goldsmith.

How many lawyers does it take to do an ethics training? Three--Leslie Devaney, Priscilla Dugard and Christina Cameron

In the case below, three lawyers from Stutz, Artiano Shinoff & Holtz were apparently needed to give a two-hour ethics training to Murrieta officials.

But Stutz partner Daniel Shinoff has found easier methods of training public employees.

MURRIETA: Ethics training opens eyes
Attorneys from the San Diego firm Stutz, Artiano, Shinoff and Holtz held an ethics training
October 28, 2008
By NELSY RODRIGUEZ

...Attorneys from the San Diego firm Stutz, Artiano, Shinoff and Holtz held an ethics training session for elected and appointed city officials dealing in public business. Members of the City Council and six commissions reviewed issues of transparency in government, reporting personal financial interests, handling public contracts and the misuse of public funds...

"The public's expectations of you are even higher than the law," Devaney told those in attendance. "And avoiding conflicts of interest is your responsibility."

[Blogger's note: This is actually not true. The public would be delighted if officials would simply obey the law. Devaney's problem is that she and her firm have spent so many years helping public entities get away with violating the law, that she has a distorted view of what the law is. The same is true for conflicts of interest, which Ms. Devaney apparently defines as anything that conflicts with her own interests.]

With regard to public meetings, Devaney said new restrictions on serial meetings limit how much discussion of public business can be done outside of a public meeting. If one commissioner e-mails another ... with the intent of getting a consensus, those commissioners will have violated a law that prevents city business from being conducted without the public's knowledge.

[Leslie Devaney's law firm orchestrated the PALMGATE scandal at MiraCosta College.]

..."It would look wrong," said attorney Christina Cameron, regarding financial favors for public officials. "If the public read about it in the paper, they would be sure that (you were) getting a better deal."

Regarding campaign contributions, current officials and even City Council candidates were warned of accepting contributions that might later be suspected of a quid pro quo exchange.

"During the campaign season, promises are going to be problematic, (even) when there is no smoking gun," said attorney Priscilla Dugard.

Murrieta officials have not always been on the right side of conflict of interest allegations. A former city councilman who had also been mayor pleaded guilty in 2007 to criminal counts of submitting a false document and conflict of interest. Jack van Haaster, who was ousted from the City Council in a 2005 recall election, admitted to failing to declare his financial interest in a road paving project when he voted on it.

Councilman Warnie Enochs was admonished by fellow council members in 2006 for helping his son on a contracting job on which Enochs had voted in favor. While Enochs said he did not benefit financially, his colleagues said his action was inappropriate for a public official...

To Regina Petty, SEDC lawyer: Don't let the door hit you on the way out

Voice of San Diego
by WILL CARLESS
September 25, 2008

Regina Petty, corporate counsel of the Southeastern Economic Development Corp., will not seek to continue as the agency's lawyer, Petty told SEDC's board at last night's meeting.

Petty will stay at the agency while SEDC searches for new legal representation, said SEDC board Chairman Cruz Gonzalez. The board voted last night to issue a request for proposals to find a new attorney for the troubled agency, but Petty said she would not apply to be the agency's lawyer.

"It has been a privilege for me to be SEDC's attorney, and, although I continue to be well qualified to serve -- better qualified actually than when I started as counsel -- in order to have a proper attorney-client relationship, you have to have board members that are willing to reasonably listen to your advice, and care about complying with the law. It's not clear to me that that is currently the case with this board." Petty said.

Petty has been criticized by at least one member of the board. In July, Derryl Williams sent a letter to Mayor Jerry Sanders criticizing the culture of SEDC and the way board meetings have been run.

Williams wrote:


Using corporate counsel and Special Agency Counsel, the President of SEDC controlled questions and the flow of information so that board members could not obtain sufficient answers to assist in making good judgments.


Petty was also criticized by City Attorney Mike Aguirre at an SEDC Executive Committee meeting last week.

"I want to look Carolyn in the face and I want to say 'Regina, it's time for both of you to go,' in my opinion," Aguirre said. "I've listened to several of the meetings, I've listened to the legal advice and I have to say the legal advice is skewed in favor of the existing management."

And the author of a damning audit of the agency, released two weeks ago, also mentioned Petty's legal advice. The lead auditor said some board members her team interviewed felt that Petty "would convey info they didn't believe was quite accurate." ...

CCDC Attorney Resigns

CCDC Attorney Resigns
Voice of San Diego
By Rob Davis
Aug. 29, 2008

Helen Holmes Peak, the corporate counsel for the Centre City Development Corp., has resigned, citing concerns about a potential conflict of interest.

Peak, who is a partner with Lounsbery Ferguson Altona & Peak LLP, an Escondido law firm, participated in discussions about the proposed Ballpark Village from 2005 to 2007, while one of her partners represented Lennar Corp., one of the project's developers.

She did not disclose the relationship on her statements of economic interest until 2007. Even when she did report it, she did not recuse herself from meetings and discussions about Ballpark Village, a massive mixed-use project proposed by JMI Realty and Lennar.

Peak disclosed receiving more than $10,000 from Lennar in 2007, according to her annual conflict-of-interest disclosure forms. But she didn't subsequently recuse herself from discussions about Ballpark Village, saying that she didn't know Lennar was involved.

Lennar is essentially a silent partner in the project; it is part owner of the underlying land but is not listed documentation submitted about the project...

Public Entities fleecing taxpayers to avoid responsibility for wrongdoing

From Voice of San Diego
Letters
All Those Legal Bills
By Tom Adler, San Diego
Tuesday, June 24, 2008

I was delighted to read that the city council has finally come to their senses and has begun to balk about paying for outside consultants.

It does seem a bit ironic however.

During their pension dustup the council members couldn't get enough of them. Council member Jim Madaffer, for instance, had no trouble at all in March 2006 requesting that the taxpayers of this city pay his personal attorney a sum of $327,231. These attorney fees were supposedly incurred to enable Mr. Madaffer to get advice from an attorney as to whether he had violated any laws in regard to the pension debacle. In more than 30 years as a lawyer, I never knew anyone who paid this amount to get advice from an attorney as to whether they had broken the law. He wasn't the only city councilperson to request these outrageous fees. Councilman Brian Maienschein requested $345,000. Councilwoman Toni Atkins requested $365,696.

The other councilpersons were close behind with their requests with the exception of Councilwoman Donna Frye, who not only refused to take taxpayer money but also paid her own attorney fees which amounted to $5,000.

I wonder if a private citizen could have paid these fees, which to this date have been unaccounted for due to the refusal of the city council and mayor to release the records necessary for a full accounting. In any event, the council approved these fees and also fees for the representation of any other city employee who was to be interviewed or deposed. It didn't matter whether or not any of them had been sued or even suspected of wrongdoing. They all received counsel from private attorneys at the taxpayers' expense. At last count, the fees paid for these counseling attorneys was in excess of $3 million.

Maybe if the city had competent council members and skilled employees there would be less need for this continual army of experts who troop through City Hall with their main strength being how to bill.