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Back Local News Governor vetoes GovGuam in-house counsel legislation

Governor vetoes GovGuam in-house counsel legislation

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GOV. Eddie Calvo yesterday vetoed Bill 180, the measure which requires agencies permitted to retain counsel other than the Office of the Attorney General to hire classified in-house counsel.

In his veto message, the governor said that by disallowing the retention of outside counsel, except only on a case-by-case basis to address a “sole and specific” legal matter, Bill 180 intrudes upon the governor’s Organic Act authority to administer the executive branch.

Calvo said the bill also further places the attorney general in the position of possibly engaging in an unethical conflict of interest. Particularly in cases where the attorney general is the plaintiff and the agency is a defendant, Calvo said the AG should not be permitted to confirm and thereby approve the outside counsel the agency has chosen to defend itself.

“Throughout our country’s centuries-long experiment with democracy, we have always sought to make governance more perfect, and we have never sought to make it less so. Yet Bill 180 does just this. Its effect is insidious, and though it comes in the guise of a cost-saving measure, its economy is false,” the governor said.

Taxpayer’s expense

Reacting to the veto, Vice Speaker Benjamin Cruz, Bill 180’s principal author, said private attorneys at the Port Authority of Guam and the Guam International Airport Authority, as well those in other autonomous agencies, can expect continued prosperity at the taxpayer’s expense.

“In vetoing Bill 180, Gov. Calvo has chosen to protect million-dollar lawyers at the port over the 170,000 men and women who suffer higher grocery bills because the port’s management continues to spend money like it grows on trees,” said Cruz, who in September introduced Bill 180 following news of legal fees for 2011 to 2013 amounting to approximately $1.2 million paid by the port authority to private law firm Phillips & Bordallo.

“When the price of food rises, know, at least in part, that the extra money is going to some lawyer the governor cares about more than you,” Cruz said.

To put government spending on legal services within autonomous agencies in perspective, Cruz said the port authority is spending almost as much it does on its annual $1.5 million debt service for a loan to purchase gantry cranes as it does on legal services from Phillips & Bordallo.

“The fact that the port would spend about as much money on lawyers as it does on debt service for the POLA cranes, isn't only wrong – it’s morally corrupt,” Cruz stated.

According to Cruz, his Freedom of Information Act request to autonomous agencies last year was able to collect expenditure data aggregated to total $9 million in legal expenses incurred over the last six years. Data from the airport indicate approximately $4.4 million in legal fees from 2008 to 2013, with approximately $1.3 million in fiscal 2013 alone paid to private law firm Calvo Fisher & Jacob LLP.

Cruz said data submitted by other agencies also show an alarming trend of excessive legal billing in the last several years such as Guam Memorial Hospital’s legal expenditure of approximately $1.7 million from 2008 to 2013 and the Guam Economic Development Authority’s $1 million expenditure from 2008 to 2012.

PUC

He added that the correlation between expenditures over certain cost levels and increased rates and charges at the port is fully supported by the Public Utilities Commission’s establishment of approval protocols for port contracts in excess of $1 million.

The PUC’s Administrative Law Judge Report (PAG Docket 14-02, Jan. 24, 2014) in review and approval of the existing contract between PAG and Phillips & Bordallo states: “Under 12 G.C.A. §12004, the PUC must expressly approve any contractual agreements or obligations which could increase PAG’s rates and charges.  In addition, under PAG’s Contract Review Protocol, ‘[a]ll professional service contracts in excess of $1,000,000’ ‘shall require prior PUC approval.’”

PUC approved the continuation of the port’s legal contract with Phillips & Bordallo, whose billing for the last three years has totaled approximately $1.2 million to date.

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