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Corbett's use of outside legal counsel tops $100 million

| Saturday, June 7, 2014, 10:10 p.m.
James Knox | Tribune-Review
Auditor General Eugene DePasquale

HARRISBURG — Pennsylvania employs 498 attorneys at $46 million, but taxpayers spent $32.7 million last year on outside lawyers — and recently ponied up $2 million for private firms to handle three high-profile cases the state lost, records show.

Over three years, the tab for outside counsel was $100.3 million.

Gov. Tom Corbett won't appeal rulings against the voter ID law or the state's same-sex marriage ban. And last June, U.S. District Judge Yvette Kane tossed Corbett's lawsuit to end NCAA sanctions imposed on Penn State University as a result of the Jerry Sandusky sex abuse scandal, calling it a “Hail Mary pass.”

Auditor General Eugene DePasquale, a Democrat, is among critics of the Republican governor's spending on outside counsel.

“The governor has a right to defend his positions, but that's money literally flushed down the toilet,” DePasquale said.

Pennsylvania is not alone in spending millions on outside legal counsel.

New Jersey Gov. Chris Christie hired a firm to produce a report that exonerated him in the so-called Bridgegate scandal. Ohio's attorney general hires and oversees firms that state agencies use for civil and criminal cases. West Virginia Attorney General Patrick Morrisey established competitive bidding for legal contracts, said spokeswoman Beth Ryan.

“It appears to be working fairly well,” Ryan said.

The West Virginia Record, a legal journal, in 2008 referred to former Attorney General Darrell McGraw's regularly teaming with “lawyers who are also his faithful campaign contributors.”

The National Conference of State Legislatures tracked legislation from 2011 to 2013 in states on topics such as prohibiting contingency fees by outside firms, transparency in private attorney contracting and requiring bids for legal contracts exceeding $1 million.

Corbett's Office of General Counsel paid $943,124 to defend voter ID and $387,493 to defend the 1996 gay marriage law, records show.

General Counsel Jim Schultz hired Cozen O'Connor, a Philadelphia firm where he worked, at $720,194 for the derailed NCAA lawsuit.

Schultz said Cozen O'Connor has expertise in antitrust matters and did $60,000 in upfront legal work at no cost.

Critics point to an appearance of favoritism.

“You have to go overboard to avoid favoritism where big bucks are concerned,” said Gerald Shuster, a University of Pittsburgh professor of political communications.

Using politically connected law firms is not new. Critics of former Republican Gov. Dick Thornburgh called it “pinstripe patronage,” and the state Supreme Court in 1982 ordered Thornburgh to release records of payments.

Governors with both parties have hired top-rated but politically potent firms of their choosing.

“It's an issue that's been alive for decades,” said Barry Kauffman, lobbyist for Common Cause of Pennsylvania.

“It's less nefarious than it appears,” said Chuck Ardo, former press secretary for ex-Gov. Ed Rendell, a Democrat. Ardo had to defend Rendell's paying his former Philadelphia law firm, Ballard Spahr, seven-figure fees for state work, including $1.7 million in 2009.

Schultz, who is paid $148,812, said he demanded 20 percent fee reductions from outside counsel and has relied more on state lawyers, or teams them with private attorneys to reduce fees.

“This idea of political patronage, I think, is quite frankly nonsense,” Schultz said. Many firms worked under governors of both parties for years, he said.

With Corbett's failed attempt to privatize the state lottery — for which the state paid DLA Piper in Philadelphia $2.1 million — and a separate gay marriage case, the state has spent $4.5 million on outside counsel for losing causes.

The state paid Lamb McErlane, a West Chester firm, $387,493 for the gay marriage case and $200,506 for a case requiring Pennsylvania to respect gay marriages from other states.

Schultz said Attorney General Kathleen Kane's office “was more than capable of handling that in-house,” but she referred the gay marriage case to his office, saying she could not defend a law she believed was unconstitutional.

“Why do we have to go outside so often?” asked DePasquale. “If we need to beef up our legal team, then we should” — even if that means paying higher salaries for litigation experience.

DePasquale said the state should compare the cost of hiring staff litigators with outside lawyers. Firms should submit competitive bids for jobs, he said.

Benefits and pensions add to the cost of staff lawyers, said Vince Carocci, former press secretary to the late Gov. Robert Casey. An outside law firm can be paid for a few months or years, and “then there's no further obligation,” he said.

“There's always going to be the perception that someone is getting a good deal,” Carocci said. “... I'd bet 90 percent of the contracts awarded have extremely good value to them.”

Still, said Kauffman with Common Cause, “these venerable law firms play the game as well or better than anyone else. ... The governor needs to go to great lengths to make sure contracts are awarded based on merit and need.”

Among law firms and lobbyists donating $4.3 million to Corbett's attorney general and gubernatorial campaigns, Duane Morris LLP, with offices in Pittsburgh and Philadelphia, gave the most at $174,000, according to followthemoney.org. The firm ranked 10th in fees earned for state jobs last year with slightly more than $1 million, records show.

Pepper Hamilton of Philadelphia, whose executive committee is chaired by former FBI Director Louis Freeh, contributed $25,500 and received the most in fees last year: $2.4 million. Freeh authored the 2012 Penn State-commissioned report on an alleged cover-up of Sandusky's child molestations.

Corbett, as a Penn State trustee, helped choose an investigator. Sandusky, a former assistant football coach, is serving a 30- to 60-year prison term.

Pepper Hamilton's work for the state precedes the Corbett administration, Schultz said.

Lamb McErlane, chaired by former Supreme Court Justice William H. Lamb, donated $29,500 to Corbett's campaigns.

Brad Bumsted is Trib Total Media's state Capitol reporter. He can be reached at 717-787-1405 or bbumsted@tribweb.com.

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