Karen Heller: In Philly, government agencies spread the legal love around

File Photograph
File Photograph
Posted: September 12, 2010

How many lawyers does it take to screw the PHA?

Consider the multi-firm pileup of outside legal work performed for the Philadelphia Housing Authority, $33 million in the last three years.

With legal bills like these, you might ask whom the agency best served: the city's poorest residents or its highest-paid, politically connected attorneys?

Small wonder everyone thought suspended Executive Director Carl R. Greene was doing such an exceptional job. He spread the legal love around.

Duane Morris. Cozen O'Connor. Fox Rothschild. Schnader Harrison. Wolf Block, which disbanded last year. And Ballard Spahr, toujours Ballard, more than $9 million since 2007.

Someone should pen a ballad to Ballard, the firm with the political juice. Wherever you look - the Family Court debacle, the Delaware River Port Authority (though this year counsel was switched to Duane Morris) - there's Ballard being consulted.

Ballard was once the temporary, though supremely remunerative, roost of one Edward G. Rendell during his respite between mayor and governor. Firm chairman Arthur Makadon was lawyer to then-Mayor John F. Street during the pay-to-play investigation after a bug was discovered in his City Hall office - not a bedbug, but a fed bug.

Street is the PHA's board chair. He's now engaged in a scorched-earth holy war with Greene that makes his hate toward Mayor Nutter look like beer pong. As with most fights in Philadelphia, this one appears to be petty and expensive.

Again, high-priced lawyers are involved. There's the matter of James Eisenhower, chair of Schnader's government and regulatory affairs practice. Greene hired Eisenhower, a 2004 candidate for state attorney general. His firm then hired a private investigator to look into whether Street's personal PHA aide, lawyer Kafi Lindsay, was showing up to work.

This series of events is curious on many fronts, beginning with a scenario ripped from the pages of Mad magazine's "Spy vs. Spy."

It's unusual for a board chairman to retain his own aide at $55,000 a year. There's the question of who, precisely, was Schnader's client, the Housing Authority or its executive director?

And perhaps I've watched too many movies, but is it necessary to hire a private investigator through a tony firm like Schnader, whose billing rates per hour can match PHA rents each month?

Of course, the way the investigation was structured, Street might never have learned that a private eye had been hired to tail his assistant.

Eisenhower is the man politicians turn to when they're having sticky ethical issues. His clients have included Democratic boss Bob Brady and former City Controller Jonathan Saidel. Debra Brady - a former Eagles cheerleader and the congressman's wife - sits on the PHA board, a position once occupied by Saidel's onetime girlfriend, Diana Roca. Any fool can send flowers. Show real affection by securing a board seat on a public authority.

It's understandable that government entities want to hire top law firms and not necessarily accept the lowest offers. But what is the cumulative cost to taxpayers? And if so many top firms receive government contracts, who's left to sue those agencies when malfeasance is suspected? Who remains to serve as a watchdog?

In 2002, a HUD attorney questioned the PHA's continuing use of costly outside counsel to settle minor disputes at expenses far higher than the settlements themselves. (For that matter, how does the cost of the Kafi Lindsay investigation compare to her $55,000 salary?)

A 2003 HUD inspector general's report criticized procurement rules that amended legal contracts rather than putting them out for bid. That year, two PHA staff attorneys sued the authority, alleging irregularities in legal billing; one suit was dismissed, the other settled.

And the PHA's legal bills continued to grow, doubling in the last three years.

"I always tell people one of the things you hire lawyers for is to maintain your secrets," says former federal and state prosecutor L. George Parry. "You can't be shocked by the stuff city or state agencies spend money on, nor shocked by lawyers accepting the work. It's a pot of money spread to solidify political position and curry favor."

And yet Pennsylvania State Treasurer Robert McCord was shocked, shocked, to find out how much the politically wired firms and the consultants who give campaign contributions had profited from lucrative Delaware River Port Authority contracts.

Last month, McCord expressed his concern to Port Authority Board Chairman John Estey, Rendell's former chief of staff and now cochair of Ballard's government relations, regulatory affairs, and consulting practice. There's "a general sense that the Authority is a political patronage operation," McCord wrote, "unconcerned with the rising toll charges levied on the public to pay for all this political largesse."

True that. There's a rising toll for us all, at the DRPA, at Philadelphia's Family Court, and now at the PHA. The bills mount while officials don't seem to care. Let taxpayers pick up the tab. As always, reform seems improbable. It's Philadelphia, and this is the cost of doing business.

Contact columnist Karen Heller at 215-854-2586 or kheller@phillynews.com.

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