DES MOINES — The Iowa Executive Council authorized nearly $1.47 million in payments to outside legal counsel last fiscal year, and there is disagreement whether it was all well spent.
Eric Tabor, chief of staff in Iowa Attorney General Tom Miller’s Office, said more than half of the fiscal 2013 costs were related to issues stemming from the 1998 tobacco settlement case. That case resulted in a court victory, preserving about $45 million at stake in action brought by tobacco companies that wanted to reduce payments to Iowa.
Earlier this month, a three-member arbitration panel ruled that Iowa diligently enforced state laws against tobacco companies that did not sign the $206 billion, 25-year master settlement agreement in 1998 between tobacco companies and 46 states, including Iowa. Tabor called the outcome a spectacular success and worth the money the state invested in outside legal expertise.
Not everyone agrees, however, that all the money spent was a good use of state money. Most notably, a $347,377 cost has drawn the ire of Sen. Rob Hogg, D-Cedar Rapids. The money was paid to a private law firm, defending Gov. Terry Branstad in an employment discrimination suit brought by state’s worker compensation Commissioner Christopher Godfrey.
In 2011, Branstad cut Godfrey’s yearly salary by $36,000 after he refused the governor’s request to resign. Godfrey in turn filed a lawsuit against Branstad and members of his administration for alleged discrimination, extortion, harassment and defamation.
The Iowa Executive Council — a five-member panel made up of the governor, secretary of state, state treasurer, state auditor and secretary of agriculture — decided last year to hire Des Moines attorney George LaMarca as outside counsel for $325 an hour. LaMarca, rather than the attorney general, represented the governor because it was possible someone in the AG’s office might be called as a witness in the case.
Council records indicate that overall $477,777 has been paid since February 2012 for legal services related to the Godfrey case.
“Once again, Terry Branstad is demonstrating that he can be a big spender when he wants to be a big spender,” said Hogg, chairman of the Senate Judiciary Committee. “That’s a lot of money.”
Hogg said he was concerned the private attorneys were operating under a blank check rather than a prescribed litigation budget.
Tim Albrecht, Branstad’s spokesman, declined to comment on the cost of the Godfrey litigation or Hogg’s statements.
The state’s overall cost of legal representation provided by private attorneys with special expertise was actually down from the nearly $1.69 million spent in fiscal 2012. It exceeded the previous two years when the Executive Council authorized $680,271 for outside counsel in fiscal 2010 and $1.21 million in fiscal 2011, according to council records.
With state government being a large and varied enterprise, Tabor said special counsel was used to handle a wide-range of issues dealing with bankruptcies, trademarks, immigration, federal communications, unclaimed properties, Indian gaming, bonding, collections, and banking and finance cases.
“It’s really not efficient for the Attorney General’s Office to hire people with those kinds of expertise. It’s really not cost-effective for us to do that. So it makes a lot more sense to hire outside counsel,” he said. “I think it’s down about 13 percent from last year and not out of line with where it’s been the last few years.”
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