$110 million! City’s Legal Bills Pile Up
With Chicago deeply in debt and straining to pay its bills, Mayor Rahm Emanuel took office in 2011 vowing to slash spending. Among his primary targets: Annual multi-million dollar payouts to outside legal firms tagged to handle selected city business including defending police misconduct cases.
But Emanuel, now in his second term, has yet to fulfill that promise, according to a BGA Rescuing Illinois analysis of city records.
Since taking office, the Emanuel Administration has paid $110 million to outside counsel, roughly the same amount his predecessor Mayor Richard M. Daley spent on freestanding legal firms in his last term, according to a BGA Rescuing Illinois review.
As a result, it’s doubtful City Hall will significantly reduce those expenses anytime soon despite its ongoing efforts to roll back legal costs and an in-house legal department of 240 attorneys and a personnel budget of $32 million.
"It’s an outstanding amount of money," Ald. John Arena (45th) said when informed by the BGA of how much City Hall has spent on attorneys. "I’m sure some of it is unavoidable… but we should be looking for every opportunity to keep these costs in-house."
The data dive
The BGA’s review of Chicago’s legal spending, based on city documents obtained under the Illinois Freedom of Information Act, reveals:
- Fourteen law firms have been paid a total of at least $3 million since 2010. Top earners include Hale Law ($14.5 million); Dykema Gossett ($12.0 million); Rock Fusco & Connelly ($7.4 million); The Sotos Law Firm ($7.0 million); and Borkan & Scahill ($5.4 million). All five firms handle police misconduct claims.
- Another top grossing firm, Neal & Leroy, has been paid $7 million for work on land acquisition deals relating to O’Hare International Airport expansion. Langdon Neal, the firm’s owner, is chairman of the Chicago Board of Elections.
- Barnes & Thornburg has been paid $3.3 million since 2012 to represent the city in its efforts to break a long-term lease with the politically connected owners of the Park Grill in Millennium Park. A Cook County judge recently sided with the owners but City Hall may appeal that ruling.
- Mayer Brown was paid $487,805 in 2013 for work on the proposed privatization of Midway Airport. Emanuel had discussed outsourcing management of the city’s second largest airport – the 40-year deal was to have been valued at about $2 billion—but those plans were grounded after one of two bidders withdrew late in the process.
- Taft Stettinius & Hollister was paid $391,000 this year to help the Emanuel Administration land a city-owned casino. The law firm, which merged with Shefsky & Froelich in early 2014, specializes in gaming concerns and drafted legislation that calls for a Chicago casino and state lawmakers are considering the proposal. Since 2010, the firms (now one since the merger) have been paid a total of $17.9 million - tops among all outside legal firms.
Daley’s police misconduct woes
City officials defended legal spending under Emanuel, noting the mayor inherited nearly 600 pending police cases, many of them high-stakes legal claims that warranted the use of private attorneys.
That backlog included wrongful conviction claims relating to Jon Burge, the ex-Chicago police commander who has been accused of torturing confessions out of dozens of male black suspects.
Other notable lawsuits were brought by a female bartender who was pummeled by an off-duty cop, in a disturbing 2007 altercation that was caught on video, and a California woman who was raped and severely injured in 2006 after Chicago police ignored signs she had mental issues and released her from custody in a violent city neighborhood.
Those claims and dozens of others have been resolved, at the expense of taxpayers, but police misconduct continues to be the main driver of the city’s legal costs.
Last year, the city spent $28.1 million on private attorneys, the most of any year in the last decade. Of that amount, 42 percent, or $11.9 million, was related to police cases, according to interviews and records.
In all, the city has paid $61.5 million since 2011 to defend claims against its officers.
Last year, the BGA reported that Chicago taxpayers had spent more than $500 million over the last decade on police misconduct-related legal claims, a figure that includes settlements, judgments and outside attorney fees.
And while Emanuel’s legal team has chipped away at the pile of pending police claims, there are now about 470 open cases, there remain numerous high profile and potentially costly lawsuits winding through the courts, such as:
- James Kluppelberg spent 25 years in prison on charges he set a fire that killed a woman and her five children in the Back of the Yards. His conviction was reversed in 2012 and he’s now suing the city claiming detectives working under Burge tortured him until he falsely confessed. The city’s handpicked defense attorneys have billed taxpayers more than $2.2 million for that case since 2014.
- Jacques Rivera spent 20 years behind bars for the 1988 killing of a Humboldt Park teenager. He was later released after the sole eyewitness recanted. He sued the city in 2012 claiming ex-Chicago police Det. Reynaldo Guevara and other officers forced the witness to finger him. The city has paid outside attorneys more than $2 million.
- Carl Chatman spent 11 years in prison on charges he raped a female Daley Center clerk in 2002. The charges were later dropped and in his lawsuit Chatman claims Chicago police withheld evidence and forced him to confess. Taxpayers have paid Dykema Gossett $253,996 this year to represent the city.
"So many people profit off [alleged police] corruption," says civil rights attorney Jared Kosoglad. "It’s not just the lawyers who represent victims. It’s lawyers who represent the police. These firms get wealthy, at the expense of taxpayers."
All of the law firms mentioned in this story were contacted. Most declined to comment.
Take the Park Grill lease fight, for example.
The city tapped Barnes & Thornburg to litigate the case because of "their expertise and experience in handling complex contract and other commercial disputes," a Department of Law spokeswoman says.
(Full disclosure: The managing partner of Barnes & Thornburg Chicago is also the BGA’s board chairman.)
The Law Department’s commercial ligation group has only 11 attorneys and "simply does not have the resources to litigate a case (and trial) of this magnitude, which involved more than 40 depositions and more than 70 days (14 weeks) of trial," the department spokeswoman said.
Not every case rises to that level, of course, the reason why Emanuel as part of his plan to cut legal spending has referred fewer police misconduct cases to outside counsel – about 40 a year versus 205 in 2010, Daley’s last full year in office, according to interviews and records.
Another cost-cutting step: City Hall’s legal team hired 10 full-time staff attorneys to handle police-related cases. Those attorneys cost about $46 an hour, versus up to $295 for private attorneys. The city also launched a pro-bono initiative, or a partnership with top-tier firms that agreed to work for free or at a greatly reduced cost, saving taxpayers $22 million since 2011, according to city estimates.
The initiatives haven’t immediately pushed legal spending lower in part because of the glut of pending cases Emanuel inherited but "the changes are starting to pay off," says Steve Patton, the city’s top attorney. "We will see a reduction."
When that day will come is unknown.
The city paid $14.1 million to outside attorneys in the first eight months of the year, putting it on pace to finish at $21.5 million, the lowest total since $20.5 million in 2007 during the Daley regime, according to interviews and records.
But some observers wonder if that can be sustained.
"It’s been a frustration for quite a while," says Ald. Scott Waguespack (32nd). "The mayor said he was going to come in and clean that up…[but] you don’t hear that number drop."
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