By Matt Coker
By R. Scott Moxley
By Charles Lam
By Nick Schou
By Gustavo Arellano
By Gustavo Arellano
By Steve Lowery
By R. Scott Moxley
Several sources said they believe Spitzer was one of the few Rackauckas confidants who knew of the unprecedented grand jury probe and the potential threat that could pose to the DA's upcoming re-election campaign. Whether true or not, this much is certain: Spitzer—perhaps one of the smartest tactical politicians in the county and a rising star in the state GOP—nixed the Liner firm as outside counsel in the ARCO case. His nominee was Robinson, Calcagnie, Robinson, a Newport Beach firm with no known environmental litigation experience.
Mark Robinson, the main partner, is a successful consumer attorney and a leader of the state trail-lawyer association, which has lavished politicians with $6 million to $10 million in contributions over the most-recent election cycles. But Robinson has one other noteworthy attribute that likely caught the notice of Spitzer and Rackauckas. Robinson is a longtime political supporter of Attorney General Lockyer, who began his investigations of the Orange County DA shortly before the DA sought outside counsel for the ARCO case. Robinson is a Democratic political insider, a man who Democrats say can pick up the phone and get the governor. Or the attorney general. And no wonder: in the last election, Robinson and his partners gave large contributions to the Democratic National Committee, the California Democratic Party, the Orange County Democratic Party, state Senate majority leader John Burton, Assembly speaker Herb Wesson, Nativo Lopez and $135,000 to Gray Davis. Most significantly, the Robinson firm gave Bill Lockyer—a man second only to Davis as a fund-raiser in California—a whopping $115,000 in a lopsided race against Orange County state Senator Dick Ackerman (R-Fullerton). Partner Jeff Robinson introduced the AG at a cocktail party at the home of state Senator Joe Dunn (D-Santa Ana).
Republicans Spitzer and Rackauckas were suddenly singing Democratic power broker Robinson's praises—even if the DA's staff was outraged. Liner—a firm with outstanding lawyers and a record of successful environmental litigation but no connections to the attorney general's office—was out.
Spitzer has called suspicions about hiring Robinson "ridiculous and frivolous" and "a ridiculous fabricated piece of trash." But the suspicions are natural. Spitzer began his life on the Board of Supervisors in 1997 berating his colleagues for their habitual secrecy. But in the fall of 2001, Spitzer himself had become secretive. The supervisor asked county counsel Benjamin de Mayo to provide a legal justification for making the switch to Robinson behind closed doors. De Mayo rebuffed Spitzer, saying such a move would violate open-meeting laws. "That's unfortunate," the supervisor responded.
Spitzer needn't have worried. Even in public, the switch from Liner to Robinson raised few questions. The dailies reported the story as a bloodless bureaucratic decision between competing law firms. Rackauckas was relieved.
"I feel very happy with a very, very good Orange County team of Robinson, Calcagnie, Robinson," the DA told supervisors when they selected the Democratic firm. "This is a very positive development."
"The Liner firm was screwed," said one prosecutor. "They were so unfortunate as to not know what else was going on behind the scenes."
Publicly, Spitzer had an explanation. The supervisor claimed Liner didn't want the case after the Board of Supervisors decided the outside counsel should be paid on a contingency fee—that is, on a percentage of the settlement with the oil companies—rather than on an hourly basis.
But that wasn't exactly true. Sources say Liner itself had first insisted on a contingency fee. And why not? A legal victory against ARCO seemed likely, and the resulting settlement would net Liner as much as 30 percent of the multimillion-dollar penalty.
But Rackauckas and county officials flip-flopped between a contingency deal and an hourly arrangement. While that was going on, the Liner firm researched the legality of a contingency fee in this case. Liner determined that a California Supreme Court decision called Clancy prohibited prosecutors—like the DA—or their agents—like outside counsel—from having personal financial stakes in the outcome of a case.
"We believe the Clancy issue is not just a significant problem, but it's a huge problem," the Liner firm's Sunshine told the board. "We believe it's likely that a judge will disqualify our firm from the case if we work on a contingency-fee basis."
Sunshine had an hourly fee basis contract in hand, but Spitzer wasn't interested. Even though he has no experience in practicing environmental law or in contracts, the supervisor insisted that the board ignore Sunshine's advice and find a firm that would serve as outside counsel on a contingency basis. Spitzer told his colleagues that he "had fashioned contract terms that would bolster the argument that Clancy will not apply" to the ARCO case. After discussion among his colleagues that battling Clancy in court with the oil companies would probably delay the case for an extended time, Spitzer grew noticeably impatient.
"My idea would remove the Clancy issue, or maybe not remove but make our position at least more [sic] stronger," he said.
Spitzer won that day. At the Nov. 6, 2001, board meeting, the contingency fee deal was given to the Robinson firm.
On July 19, 2002—two weeks after the grand jury issued a stinging, 100-page audit of the DA—Judge Raymond Ikola struck down the contingency fee and ridiculed Spitzer's attempt to bypass the Clancy decision. Nothing in the law, he said, "lends much support" to the supervisor's position. Then Ikola turned his attention to the Board of Supervisors and blasted them for their reckless disregard of public safety.