Iowa paying more for outside legal counsel

The Iowa Executive Council has authorized nearly $1.49 million in payments to outside legal counsel to defend Gov. Terry Branstad and state agencies against litigation and to help recoup money owed to Iowans or state government this fiscal year.

The cost of legal representation provided by private attorneys with special expertise so far in fiscal 2012 – which has six weeks remaining – is the highest in at least a decade and already has exceeded the previous two years when the Executive Council authorized $680,271 for outside counsel in fiscal 2010 and $1.21 million last fiscal year, according to council records.

“The bulk of these cases deal with legal matters where our office simply does not have the expertise or the resources to handle,” said Eric Tabor, chief of staff within the Iowa Attorney General's Office. “We have a lot of very talented lawyers, a lot of expertise, we just don't have expertise in everything, and it wouldn't be efficient for an AG's office to have experts in copyright and immigration and those types of things.”

Roughly half of the outside legal fees paid this fiscal year went to two firms representing Iowa in ongoing litigation stemming from the 1998 tobacco settlement agreement, Tabor said. The latest arbitration case deals with a 2003 issue whether states did enough to make sure the smaller tobacco companies were paying into an escrow account as required – an issue where $40 million to $50 million is at stake for Iowa, he said.

About 27 percent of the $1.49 million in outside legal costs have come from the state's general fund, Tabor noted. The rest come from special accounts or sources related to the legal action.

“It's a lot of money,” said State Treasurer Michael Fitzgerald, a council member.

“The unfortunate thing about it is these things can't be predicted. It's clear there's a pattern this is tending to get larger,” he said. “The higher expense is probably going to continue for awhile.”

Three of the largest outlays in fiscal 2012 were paid for private attorneys hired to represent Branstad against litigation brought against him as governor.

However, Branstad spokesman Tim Albrecht noted the governor's office was responsible for 11 percent of the total legal bills for the current fiscal year.

“The state of Iowa is a large, $6.2 billion enterprise tasked with dutifully watching over taxpayer dollars,” Albrecht said. “Unfortunately, at times, as with any large enterprise, outside legal counsel is needed. Outside counsel is retained in order to defend taxpayers and their dollars. It is important to note that the state of Iowa did not choose this legal action and instead was forced to defend itself and defend taxpayer dollars.”

The Iowa Executive Council -- a five-member panel made up of the governor, secretary of state, state treasurer, state auditor and secretary of agriculture – voted in January to hire Des Moines attorney George LaMarca as outside counsel for $325 an hour to represent Branstad and members of his administration for alleged discrimination, extortion, harassment and defamation in a lawsuit brought by Iowa Workers' Compensation Commissioner Chris Godfrey.

At the time, Albrecht said the Attorney General's Office typically would represent the state but, because someone in that office may be called as a witness, the use of outside counsel is the appropriate response in this situation. To date, the council has authorized nearly $89,300 to LaMarca's law firm.

The council also voted last September to hire Des Moines attorney Richard Sapp at up to $275 an hour to defend the governor against a lawsuit brought by five Democratic state legislators and the president of the largest state employees' union challenging his item veto of legislation designed to help keep Iowa Workforce Development offices open. The Iowa Supreme Court eventually ruled against Branstad in that case that tallied $84,330 in legal fees.

The council also authorized $60,354 in legal fees for a lawsuit brought against the governor by the Central Iowa Construction Trades Council over a project labor agreement. The state also has paid former Iowa Attorney General Lawrence Scalise and another lawyer more than $99,000 to probe allegations of improper contributions to former Gov. Chet Culver's re-election campaign from Fort Dodge casino interests.

The two attorneys were assigned to look into allegations that casino backers passed money through a third party to the Culver campaign. The council hired Scalise last year at a negotiated rate of $80 an hour as a special prosecutor to look into the allegations after Iowa Attorney General Tom Miller concluded his office had an appearance of a conflict of interest because a former division head managed the Culver-Judge re-election campaign.

Other funds paid for outside counsel involved mortgage industry practices as part of a national settlement, litigation related to bonding and Iowa's Fund of Funds program, federal gaming issues, court collections, second injury fund claims, telecommunications law, Medicaid funding issues and an employment termination case involving the state Board of Regents, according to council records.

Comments: (515) 243-7220; rod.boshart@sourcemedia.net

Fiscal year Total outside legal counsel cost

2012 (to date) $1,483,209

2011 $1,210,485

2010 $ 680,217

2009 $1,428,146

2008 $1,014,682

2007 $1,338,787

2006 $1,169,878

2005 $ 223,349

2004 $ 510,504

2003 $ 97,404

Source: Iowa Executive Council