By Hillel Aron
By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
By Dennis Romero
As chief financial watchdog, City Controller Laura Chick has turned up the temperature on high-profile targets in the city’s pay-to-play drama, but in the lawsuit brought against her by fired former investigator Dan Carvin, she is the one feeling the heat.
Chick is fending off charges that her swift firing of Carvin in 2002, three months after he started, was unlawful. She hired him as a special investigator to identify fraud, waste and abuse, then canned him for pursuing that goal without her express approval. Attorneys at the firm of Jackson & Lewis have billed the city close to half a million dollars for defending the case. They say Carvin was an “at-will” employee, to be fired for good cause or no cause at all. They accuse him of “quibbling” and have asked the Court of Appeal to prevent his case from going forward. Their clenched-teeth defense is not that surprising, however, considering Chick’s visible discomfort during a videotaped deposition recently.
The increasingly contentious wrongful-termination lawsuit offers a look into the controller’s failure to get a handle on law firms running up the tab on the city dime. It also is a virtual case study of the legal tactics that keep the clock running for high-dollar firms, and an embarrassing reminder of how Chick’s political rise is not without conflicting relationships. City Attorney Rocky Delgadillo claims that outside firms have saved the city money in terms of results, but no one has taken a look at how they are doing it. Carvin came onboard in the Controller’s Office having seen enough ultralawyering in his time to know right where he wanted to look to see if the city is getting its money’s worth. He just didn’t get very far.
E-mails from Assistant City Attorney Christine McCall soliciting written feedback on Carvin from the attorneys he was interested in investigating are merely the first hurdle for Chick to clear in convincing a jury that Carvin deserved the boot. A closer look at Brown, Winfield & Canzoneri and Wickwire & Gavin, two firms mired in a seven-year false-claims lawsuit alleging bloated construction bills related to the Hyperion Wastewater Treatment System, is the last thing Chick needs. Brown Winfield is a politically connected land-use firm, taking in $2 million from the county in 2002, and the 14th largest campaign contributor among law firms in city elections. The City Attorney’s Office is processing a California Public Records Act request to disclose legal fees paid to the firms handling the Hyperion lawsuit. The totals, if scrutinized, could possibly make the most seasoned bean counter blush.
Chick remained calm when confronted recently by state Senator Richard Alarcon, who has promised a state audit of the city’s legal providers if Chick does not complete one by January. But during her deposition last month, her nerves were frayed as she shuffled through documents that demonstrate a thinly veiled effort by McCall to invite disparagement of Carvin from attorneys who could be subjects of such an audit. While ducking questions about why she has not replaced Carvin and denying knowledge of events leading to his firing, Chick makes it clear that she relied on events that she neither witnessed nor investigated. When asked about a contribution to her officeholder account in 2002 from Donna Black, a former lobbyist and former partner at Brown Winfield, Chick offers a vague recollection of Black, who is engaged to Chick’s former campaign consultant Harvey Englander — neither of whom are strangers to Chick.
Carvin, 62, is a veteran investigator for the IRS, the U.S. Department of Health and Human Services’ Office of Inspector General, and the MTA’s Inspector General. Before coming to the Controller’s Office, he worked on a false-claims lawsuit related to the Metro Red Line and was aware of documents that supported the city’s false-claims lawsuit against a party involved in the Hyperion Project, a construction company called Dillingham–Ray Wilson. County accounting experts estimated that the documents could help the city prove up to $2 million in false claims by Dillingham–Ray Wilson. Carvin wanted to know why Michael Simon, an attorney at Brown Winfield, had not reviewed the documents, despite billing the city for gaining access to them. Carvin had authority from his supervisor, former Director of Auditing James Armstrong, to offer his investigative services to the City Attorney’s Office. But when he attended a meeting on May 8, 2002, with Assistant City Attorneys McCall, Robert Cramer and Michael Claessens, he met with resistance. Three weeks later he was fired.
Just before the May 8 meeting, McCall solicited letters from Simon and an attorney at Wickwire & Gavin, which suggested that Carvin lacked judgment. In a letter to McCall on May 6, 2002, Wickwire attorney Jodi Lewis recommends consulting with yet another outside attorney “if Carvin’s retention is to be further considered.” Following the May 8 meeting, memos by McCall and Claessens describing Carvin as being off the range and a follow-up call by McCall to former Deputy Controller Patricia Canfield sealed his fate.
Chick says Carvin did not have permission to pursue an investigation of Brown Winfield’s billings. Carvin claims he was simply pursuing authorized investigative leads. A key issue is identifying the magic words used to commence an investigation and determining whether Carvin uttered those words. Whereas once they might have been able to settle with Carvin for less than they are billing the city, attorneys at Jackson & Lewis are fighting facts with exhaustive legal arguments in a way that illustrates the problems of containing legal costs. Not to mention the difficulty of Chick’s auditing City Attorney Rocky Delgadillo, her legal adviser and political ally, and his office’s oversight of outside attorneys. An e-mail from McCall to her supervisor confirms that “the Controller’s Office is terminating special investigator Daniel Carvin,” and that “Laura would call Rocky” if the controller were to look into the defense or handling of any case.
In the course of her one-hour videotaped deposition, reviewed by the Weekly, Chick said that her office has never audited outside attorney billings. She refused to say whether she has received complaints that firms are feasting at the city trough. She denied knowledge of critical facts leading up to Carvin’s firing, leaving the impression that she was less interested in what Carvin had to say or the issue of attorney overbilling than in what the City Attorney’s Office and its outside firms think. Chick denies any knowledge of: written statements by Armstrong that he authorized Carvin to look into Brown Winfield’s billings as a subject for potential investigation; letters to McCall from Simon and Lewis regarding their less-than-favorable impressions of Carvin; the origin of a letter to Carvin, which contains her signature, chastising him for “exercising poor judgment in pursuing [potential overbilling by outside counsel] without approval of Controller management”; and Carvin’s similar inquiries into other overbilling matters that did not result in his firing.
Chick’s seeming indifference to Carvin’s firing is on display when she says, “If the evidence shows that [Armstrong] specifically authorized the exact line of questioning that Carvin did, then I would lean toward saying he had supervisor approval.” Then she concedes she never asked Armstrong what instructions he gave Carvin. Chick waffles between hiring Carvin because “we wanted an investigator who could move quickly in terms of the time it takes to do a full-blown audit” and firing him because of her desire to “begin the investigator position slowly.” She declines to explain her understanding of the difference between an investigation and an audit, saying, “I would just be conjecturing.” (Armstrong defines an investigation as going wherever the facts lead; an audit is conducted within pre-defined parameters, he says.)
an awkward moment comes when Chick is asked if she received any money from attorneys at Brown Winfield within 60 days of Carvin’s firing, in May 2002. The controller starts blinking rapidly. “No,” she says. “Who is Donna Black?” asks Carvin’s attorney Louis Cohen. Chick closes her eyes for a moment and barely whispers the name. “I think she is a land-use attorney, and I also know her in her relationship with her significant other, Harvey Englander,” Chick says. Then, after her eyes have spun around in a complete circle, she stammers, “If I’m correct. And if that’s not the right Donna Black, then I don’t know who Donna Black is.”
Black is a former lobbyist, well-known land-use attorney, frequent campaign contributor and a former partner at Brown Winfield. Currently she is a partner at Morrison & Foerster. City Ethics Commission records indicate that on March 29, 2002, while a partner at Brown Winfield, Black contributed $250 to Chick’s officeholder account. Records further show that Black, also a former partner at Manatt, Phelps & Phillips, contributed $250 to Delgadillo’s campaign for city attorney. Ethics records indicate that Black also was affiliated with the MWW Group, a political-consulting firm run by her fianc√©, Harvey Englander, Chick’s campaign manager in two successful bids for City Council. Black insists that the MWW listing is a mistake, that she has never worked for Englander’s firm, and that she “hardly knows” Chick, to whom she was introduced several years ago by Manatt partner Lisa Specht, a major lobbyist and campaign contributor. “I have no idea why anyone would be asking about me,” Black says. “I knew the [Dillingham–Ray Wilson] case came into [Brown Winfield] when I was there, but I never worked on it.” Of her former firm she says, “They give money to campaigns, but they aren’t in the same league as Manatt.” (Brown Winfield has contributed $19,000 to city candidates since 1998. Manatt has given $139,000.)
Englander has criticized Chick for targeting former supporters such as Ted Stein, the power lawyer and former airport commissioner under investigation in the so-called pay-to-play scandal, and Doug Dowie, a public-relations executive with scandalized PR giants Fleishman Hillard. “I know Laura pretty well,” Englander says. “Her new zealousness has become very personal and directed at people who supported her.” Englander declined to comment on how Chick would react to investigations of allies she still values, such as Delgadillo, or probes of firms he has hired. But of the Carvin case he says, “Laura Chick does not want her reputation sullied in a wrongful-termination suit. It detracts from her image. But I bet she doesn’t want an audit of her lawyers’ bills in that case either.”
Since 2001, Delgadillo has had billing guidelines in place for outside law firms. But Chick said she does not know what they are. One billing practice the City Attorney’s Office prohibits is known as “block billing,” the grouping of two or more tasks on a single invoice entry without specifying how much time was spent on either. Block billing can be a method of burying costs and inflating legal bills. And while it seems odd that Brown Winfield provided a written opinion on Dan Carvin’s usefulness in investigating billing practices in a matter the firm was litigating, it is even more odd that the firm billed the city $1,000 for its time — with an invoice, a copy of which the Weeklyobtained, containing a block-billed entry for research and drafting.
Meantime, Edward Zappia, an attorney with Jackson & Lewis, is playing hardball with Carvin on the city’s dime. Clogging the court’s docket, Zappia has threatened to hold Carvin personally liable for fees incurred as a result of what he characterizes as a frivolous lawsuit; he has put Carvin’s lawyer on notice that he could be coming after him for fees too; he has taken private medical information about Carvin and placed it in the public domain by attaching it to unrelated motions filed in court; and he has tried to disparage Carvin’s character by introducing unproven claims and allegations.
The Court of Appeal should decide by November if the Carvin case may go to trial. The appeal filed by the city is further running up costs and is based on legal arguments that seem unlikely to succeed. But then, the last thing Chick — or Delgadillo, an alumnus of the granddaddy of Los Angeles law firms, O’Melveny & Myers — wants is to see what 12 jurors think about Carvin’s fundamental charge: that his efforts to discover and report on wastefulness and inefficiency in the city’s use of outside attorneys were Chick’s motive for terminating him.
Courts have looked unfavorably on firing employees who are engaged in a public-policy endeavor — such as saving money for a city on the brink of fiscal crisis. Which means Chick and the City Attorney’s Office could have to rely on a jury to assess their methods in sacking Carvin, who was offering his services in a seven-year land-use quagmire that the city attorney also would rather not see scrutinized. That could be a hard sell, given that Carvin’s firing and the city’s win-at-all-costs legal tactics embody the free ride given to outside law firms, and Chick’s hesitance to bear down on them.