L.A.'s Outside Legal Bills Surge
Most of the law firms give to Hahn, Delgadillo campaigns
The city of Los Angeles paid $18.9 million last year to 71
law firms for outside legal assistance, twice the amount
spent five years ago, city records show.
At the same time, 50 of those firms and their attorneys
have poured hundreds of thousands of dollars into the
campaign coffers of Mayor James K. Hahn and City Atty.
Rocky Delgadillo, who have had key roles in deciding how
much legal work to farm out and who should get the
The law firms and their attorneys have contributed $1.12
million since 1998 to candidates for city office and
political committees they control. Those donations include
$244,875 to Hahn, $154,500 to Delgadillo and $77,500 to
Hahn's anti-secession campaign committee, according to
campaign finance data analyzed by The Times.
In many cases, the records show, contracts were approved or
expanded by the city within weeks of a political fundraiser
held by the benefiting law firm.
With the city's in-house legal staff being significantly
larger than it was five years ago, the sharp rise in
attorney contracts going to political donors
â€" and the timing of fundraisers
â€" has some ethics reform advocates asking
whether some of the contracts were necessary only to keep
politicians in office.
"It's on its face a conflict of interest," said Benjamin
Bycel, former executive director of the city Ethics
Commission. "It's, in effect, buying government contracts,
and it erodes the public trust in those doing the public's
Asked if the contracts were rewards for political
contributions, Hahn said in an interview last week,
Delgadillo also denied that political supporters had
received favorable treatment.
The mayor has said in recent months that he believes a
troubling appearance is created when city contractors raise
money for the politicians who have a say in hiring
In February, he proposed banning city contractors,
including law firms, from contributing to, or raising funds
for, city politicians, including while bidders are
competing for contracts. At the time, he said he was
concerned that the practice created "the potential
perception that fundraising influences the contracting
â€¦ process and creates an unlevel
In the interview, the mayor said he also had concerns about
the big increase in spending on outside law firms,
especially when there has been an expansion of the city
attorney's staff. That staff has grown from 781 to 820 in
the past five years, with lawyers accounting for most of
the hires. The office's budget rose 42% during the same
period, to $86.4 million.
A review of records since 1998 found that seven of the 15
law firms paid the most by the city were also among the top
firms contributing to city candidates. Four of the five law
firms that contributed the most were registered as
lobbyists for clients seeking favors at City Hall.
O'Melveny and Myers was the city's biggest legal contractor
last year, with a city paycheck of $2.26 million. It is
also the law firm that is the biggest source of campaign
contributions to Hahn and Delgadillo. The firm's political
action committee and O'Melveny attorneys provided $49,300
to Hahn and $42,100 to Delgadillo during the last five
The firm received an $850,000 contract approved by
Delgadillo in March 2002 to help defend the city against a
class-action lawsuit brought by female LAPD officers who
alleged that they were victims of sexual harassment. The
contract was bumped up to $1.2 million two months later,
increased to $2.5 million seven months after that, raised
to $4 million in June 2003 and increased again to $6.3
million this January as the class action was split into
several individual lawsuits.
The City Charter gives Delgadillo the power to sign off on
requests for outside legal help. He hired an executive to
review his department's legal billings after two law firms
charged the city $1.5 million to defend then- Councilman
Nate Holden against sexual harassment charges. A separate
city audit questioned $560,000 of the billings, saying the
firms double-staffed meetings, billed for 23.75-hour days
and overcharged for clerical work, photocopies and
Contracts of more than three years' duration, including
those awarded by the quasi-independent harbor, airport and
water and power departments, go to the mayor for review and
the City Council for approval. Although the mayor has no
direct control over shorter contracts let by the three
so-called proprietary departments, he appoints members of
the commissions that approve the contracts.
The proprietary departments have been responsible for
almost all of the increase in spending on outside legal
contracts in the last five years. Their contracting
practices are the focus of federal and local grand jury
investigations. Dist. Atty. Steve Cooley has said he is
looking into whether the awarding of contracts has been
tied to campaign contributions, a practice referred to as
"pay to play."
The Department of Water and Power's bill for outside
attorneys went from $1.1 million five years ago to $5.4
million last year. Frank Salas, the DWP's acting general
manager, said much of the increase was due to the energy
crisis. The agency hired the law firm Van Ness Feldman,
which billed the city $2.5 million last year to help the
DWP defend itself against allegations by the state that it
had engaged in price gouging during the electricity
Federal regulators investigated the state's complaint and
concluded their inquiry without bringing charges against
"We have been exonerated," Salas said. "It was money well
At the harbor, where outside legal bills have gone up the
most, from $684,000 in 1998 to $5.6 million in fiscal
2002-03, the city has been hit in the last few years with a
flurry of lawsuits and challenges alleging that the port is
violating environmental rules.
One of the biggest lawsuits, brought by the National
Resources Defense Council and San Pedro homeowner groups,
cited environmental issues in challenging a 30-year lease
with China Shipping at the port. The resulting settlement
required the city to spend $60 million on improvements.
The firm hired by the Harbor Commission for the case,
Morrison & Foerster, has billed the harbor department
$2.2 million so far. Attorneys for the resources council
and other plaintiffs incurred expenses of $1.1 million
â€" half as much â€" and won the
China Shipping case on appeal.
Julie Masters, lawyer for the resources council, said the
city attorney's staff assigned to the port could have
settled the case sooner at a lower cost. "They could have
decided not to litigate against the community and instead
spend that money on mitigating the environmental problems,"
Masters said. "It was a bad use of public funds."
Delgadillo acknowledged that better risk management and
improved community relations with the port could have
headed off that suit and saved the city millions.
Many contracts are awarded to political donors around the
same time as their fundraising activity occurs. City
contracting records showed that in several cases, major
contracts were awarded to law firms within weeks of the
firms having hosted fundraisers for city officials.
Seven contracts were recommended for approval by Hahn's
staff in the city attorney's office immediately before he
became mayor in July 2001. Five of the firms receiving
those contracts were sources of contributions for Hahn's
mayoral election in the months before the approvals.
One of the five was Manatt, Phelps & Phillips. In
addition to its work for city agencies, Manatt was hired to
provide legal service by Hahn's 2001 mayoral campaign
committee, and by a committee he created in 2002 to oppose
the San Fernando Valley's attempted secession from Los
Angeles. Manatt partner Lisa Specht was co-chair of Hahn's
2001 mayoral campaign, and Manatt partner George Kieffer
was policy chairman of the campaign.
Manatt has been paid $1.66 million by city departments in
the last three years.
In March 2001, a month before the mayoral primary, Kieffer
was co-host of a Hahn fundraiser at the City Club on
downtown's Bunker Hill. Three days later, Specht was host
of a cocktail reception and fundraiser for Hahn at her
Beverly Hills home. She raised $9,000 for Hahn from 10
In April, the same month as the primary, Hahn's office
requested and evaluated competitive proposals from law
firms to advise the DWP in a water-related case.
In June, four days before a runoff election for mayor
between Hahn and Antonio Villaraigosa, Specht
â€" whom Hahn later appointed to the city
Recreation and Parks Commission â€" delivered
$5,000 more in political contributions to the Hahn
campaign, most of it from Manatt attorneys. (Manatt lawyers
also gave Villaraigosa nearly $12,000 in the mayoral race,
and the firm gave him $500 for his successful City Council
campaign last year.)
After Hahn won the runoff, a top Hahn deputy recommended
Manatt for the DWP legal services contract, worth up to
$2.25 million. The DWP board approved the pact July 3,
three days after Hahn became mayor.
Kieffer said last week in an interview that there was no
connection between the contributions from Manatt attorneys
and the contracts from the city.
"It's hard to speak for all law firms or lawyers where we
would simply have no knowledge, but I don't see it,"
Kieffer said of whether contributions made a difference in
who got contracts.
Hahn denied any connection between his office's
recommendation that Manatt receive a DWP contract and the
money the firm's attorneys donated to his campaign.
"If they were selected as a law firm for a particular
case," the mayor said, "it was because the [city] attorneys
thought they would do the best job."
In December 2002, the DWP board, whose members are
appointed by Hahn, approved a $180,000 contract with
Manatt, without any competitive process, to provide
training on employment discrimination issues.
Manatt, which is also a lobbyist firm seeking to influence
the DWP and other agencies for clients, received two
additional DWP contracts more recently. In November 2003,
the DWP board awarded Manatt and another firm a contract
worth up to $2.25 million over three years to provide
"legislative consulting services" in Sacramento.
Three weeks later, 10 Manatt attorneys, including Specht,
contributed $5,350 to Hahn's reelection campaign.
Kieffer said that the contract was awarded only after a
competitive process and that Hahn was not involved in the
Delgadillo has also benefited from fundraising within weeks
of his office signing off on contracts, most recently
involving Lewis Brisbois Bisgaard & Smith.
The law firm was given a $100,000 contract by the city
airport department in 2000 to help fight a
wrongful-eviction suit by a tenant at Van Nuys Airport.
The contract was amended in 2002 to pay $350,000 and
include work on development at Ontario International
On Oct. 20, 2003, the law firm held a fundraiser for
Delgadillo at the Palos Verdes Peninsula estate of Robert
Lewis, a partner in the firm. Attorneys for the firm
provided $3,900 worth of catered food, flowers and valet
services for the fundraiser. Twenty other attorneys with
the firm contributed $10,000 to Delgadillo's reelection
effort, all with the law firm serving as an
Less than two months later, on Dec. 9, 2003, Deputy City
Atty. Tom Gutierrez signed off on an amendment, approved by
the Airport Commission without new competitive bidding,
that increased the amount to be paid to Lewis, Brisbois, to
$1.1 million. Lewis said additional work required on the
Ontario project justified the contract extension.
"There is no causal connection between the fundraising we
do and the business we get," Lewis said. He said he and
other attorneys at his law firm had a natural interest in
"I was born and raised in Los Angeles," Lewis said. "We
want to be involved."
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