As chief financial watchdog, City Controller Laura Chick has turned up the temperature on high-profile targets in the citys 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 Chicks visible discomfort during a videotaped deposition recently.
The increasingly contentious wrongful-termination lawsuit offers a look into the controllers 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 Chicks 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 Controllers Office having seen enough ultralawyering in his time to know right where he wanted to look to see if the city is getting its moneys worth. He just didnt 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 Attorneys 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 citys 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 Chicks 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 MTAs Inspector General. Before coming to the Controllers Office, he worked on a false-claims lawsuit related to the Metro Red Line and was aware of documents that supported the citys false-claims lawsuit against a party involved in the Hyperion Project, a construction company called DillinghamRay Wilson. County accounting experts estimated that the documents could help the city prove up to $2 million in false claims by DillinghamRay 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 Attorneys 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 Carvins 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 Winfields 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 Chicks auditing City Attorney Rocky Delgadillo, her legal adviser and political ally, and his offices oversight of outside attorneys. An e-mail from McCall to her supervisor confirms that the Controllers 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 Carvins 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 Attorneys Office and its outside firms think. Chick denies any knowledge of: written statements by Armstrong that he authorized Carvin to look into Brown Winfields 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 Carvins similar inquiries into other overbilling matters that did not result in his firing.
Chicks seeming indifference to Carvins 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 Carvins firing, in May 2002. The controller starts blinking rapidly. No, she says. Who is Donna Black? asks Carvins 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 Im correct. And if thats not the right Donna Black, then I dont 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 Chicks officeholder account. Records further show that Black, also a former partner at Manatt, Phelps & Phillips, contributed $250 to Delgadillos campaign for city attorney. Ethics records indicate that Black also was affiliated with the MWW Group, a political-consulting firm run by her fiancé, Harvey Englander, Chicks campaign manager in two successful bids for City Council. Black insists that the MWW listing is a mistake, that she has never worked for Englanders 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 [DillinghamRay 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 arent 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 doesnt want an audit of her lawyers bills in that case either.
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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 Attorneys 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 Carvins 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 Weekly obtained, containing a block-billed entry for research and drafting.
Meantime, Edward Zappia, an attorney with Jackson & Lewis, is playing hardball with Carvin on the citys dime. Clogging the courts 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 Carvins 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 Carvins 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, OMelveny & Myers wants is to see what 12 jurors think about Carvins fundamental charge: that his efforts to discover and report on wastefulness and inefficiency in the citys use of outside attorneys were Chicks 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 Attorneys 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 Carvins firing and the citys win-at-all-costs legal tactics embody the free ride given to outside law firms, and Chicks hesitance to bear down on them.