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
"The contingency fee was drafted in the best financial interests of outside counsel," the judge wrote. "If the county finds that it is unable or unwilling to devote sufficient resources to enforce the alleged violations of law to protect the county's drinking water without relying on private contingency fee attorneys, in the end, that is a political decision."
The contingency fee debacle had three obvious results: it delayed the case against ARCO for more than half a year—six months during which MTBE further contaminated the groundwater. And it cost taxpayers as much as $167,000 per month in additional attorney's fees to fight the issue. And when the smoke cleared, the Robinson firm was working on the same hourly terms that had been offered by the Liner firm nine months earlier.
"If Spitzer had given his Clancy advice as a private attorney, he could be sued for malpractice," one deputy DA said.
But the most important result of the switch to Robinson was the least obvious: Spitzer and Rackauckas had successfully channeled at least $2 million over each of the next three years into the hands of a law firm that generously funds the campaigns of Bill Lockyer, the man in charge of investigating Rackauckas.
Lockyer never opened a full-scale investigation of Tony Rackauckas.
Having lost $2 billion in stock market schemes and sparked the world's largest municipal bankruptcy in 1994, members of Orange County's Board of Supervisors are sensitive to questions about their management skills. But you might have two questions for them:
• Why was the county debating if and how to fund the critical ARCO lawsuit 23 months after the case was filed? Answer: Rackauckas never bothered to ask for the resources needed to handle the case until his troublesome summer of 2001.
• With a solid case that would likely bring the county tens of millions of dollars in a settlement, why would supervisors want to share the potential award with a private firm—especially after the DA's own staff had been handling the case for nearly two years? Answer: Spitzer and each of his board colleagues claimed they didn't have funds to spare for the case.
"We just couldn't afford to spend the money for it," board chairwoman Cynthia Coad told the Weeklybefore referring the rest of our questions to Rackauckas.
Is that true? The board that distributes $4 billion annually couldn't find $2 million to fund what it acknowledges is the most important environmental case in county history? Answer: Of course they could have. The board had $22 million in a contingency fund account. But even more incredibly, in the same Nov. 6, 2001, meeting when they posed destitute on the ARCO litigation, the board spent $3.9 million on projects such as the renovation of a county football field ($920,413) and the design of a new animal care center ($831,000).
If you think that was an anomaly, consider the importance of $12 million in projects the board funded in its 2002-2003 budget:
• replacement of a fence at a sheriff's department parking lot: $300,000
• renovation of the laundry room at Joplin Youth Center: $93,400
• replacement of 15 doors at Juvenile Hall: $450,000
• refurbishment of bathrooms at Los Pinos Conservation Camp: $582,000
• refurbishment of kitchen cabinets at Joplin Youth Center: $163,984
• refurbishment of tiles and lighting fixtures in sheriff's headquarters and remodeling of the employee lounge and locker room: $6,100,000
• purchase of new drainage control at Joplin Youth Center pond: $156,000
• replacement of carpets in Youth Guidance Center: $400,000
• consultant fees for a seismic study of a parking garage for the Board of Supervisors: $120,000
• construction of a new vehicle-repair facility at Fruit Street Transportation Yard: $349,000
• renovation of the Social Services Agency's West Regional office: $382,000
• remodeling of the lobby of Social Services Agency's Laguna Hills office: $286,000
• rebuilding the intercom system at Orangewood Children's Home: $380,000
• remodeling of bathrooms at Orangewood Children's Home: $177,900
• remodeling reception area of Social Services Agency's Santa Ana Regional office: $600,000
• remodeling reception area of Social Services Agency's Anaheim Regional office: $350,000
• repaving courthouse parking lot: $125,000
• renovating a football field for the probation department as well as retiling bathrooms: $324,825
• remodeling court clerk work stations: $100,000
• resealing courthouse art panels: $541,000
You might be wondering at this point about the county's commitment to hold ARCO and others responsible for the MTBE disaster. That's a reasonable concern, given what BP Amoco—the oil giant that purchased ARCO in 2000—recently told its shareholders, who have taken $30 billion in profits since the Orange County DA's office filed its suit.
"Proceedings instituted by governmental authorities are pending," they wrote earlier this year. "But no individual proceeding is—nor are the proceedings as a group—expected to have a material adverse effect" on BP Amoco's profits.
We'll have to wait and see if they're right. Last month, DA sources told an oil industry publication that the case is close to an out-of-court settlement even though it's scheduled for trial next month. In the meantime, we can ponder the fact that Tony Rackauckas is still struggling with his ethics. On Oct. 26, 2001, our DA accepted a $1,000 contribution from Los Angeles attorney Rafael Bernardino Jr. Bernardino's firm, Hornblower, Manning & Ward, represents BP Amoco.