Wednesday, Sept. 13, 2006 | City Attorney Mike Aguirre announced plans last week to persuade the public to support a possible lawsuit against Kroll Inc., the high-priced consultants who told city residents a lot of what was already known and charged more than $20 million for the service.
While we understand Aguirre’s frustration, we can’t support his determination to file a legal action against Kroll at this time. The city and Aguirre’s office are entangled in a series of lawsuits of such overwhelming complexity that their simple resolution is a long-term civic dream. Most of the complaints are valid and pose questions to which residents deserve answers.
But challenging Kroll right now in this sort of setting poses risks that are hard to justify. If Kroll willfully breached its contract with the city or if it was found to have committed an illegal act, the city could demand recompense. If the city were to lose such a legal challenge, however, – and Kroll is not known to hire cheap lawyers – taxpayers would find themselves looking at an ugly and potentially enormous new invoice from the firm. We cannot risk paying this firm another dime.
The city has already sued consultants who investigated it. Aguirre and a united city leadership have challenged the law firm of Vinson & Elkins to defend its whitewash of the city’s past delinquency. Despite the consensus that V&E did not act independently – or even competently – it is not clear that the case against the law firm is a guaranteed success. After all, city officials hired V&E to produce the type of report they did. Overcoming that fact may just be the key to winning the case.
Kroll would be an even more difficult challenge. As much as Aguirre now laments the firm’s exploitation of the city, it was Aguirre who approved the firm’s contract, which provides Kroll vast protections. In that contract, the city agreed to cover Kroll if anyone sued the firm. The indemnification wouldn’t be valid if Kroll is found to have committed an illegal act, as Aguirre alleges it did. However, that appears to be an even tougher case. If that burden is not met to the satisfaction of a judge or jury, taxpayers will then be on the hook to pay for Kroll’s high-priced legal counsel. The city faces enough legal bills as it is.
The city attorney’s most persistent complaint is a valid political one: that Kroll failed to submit detailed billings so that taxpayers could understand how $20.3 million of their money was being spent. This oversight was vital considering the consultants raked in up to $900 an hour for their work – and spent considerable time lobbying the editorial board of the local newspaper. Yet former City Manager Lamont Ewell and a quiet council majority acquiesced, allowing the billing to continue. While we find this to be bad public policy, we doubt the efficacy of such an argument in the courtroom.
Aguirre is still the only city official to try to do anything substantial about the massive shortfall in the city’s employee pension system. But the city attorney has a lot on his plate – so much that it seems sometimes to be too much. Before he launches into yet another legal adventure against a considerable opponent, Aguirre would do better to focus on succeeding in the cases he has already filed.