Chick Requests State Audit of City Spending on Law Firms

Stymied in her bid to audit the city attorney’s skyrocketing spending on outside law firms, Los Angeles City Controller Laura Chick called Thursday for the state auditor to step in and conduct the review.

Chick said City Atty. Rocky Delgadillo reversed himself on a promise to allow her to conduct a performance audit of the contracts with outside legal firms, which The Times recently reported had increased in cost from $14 million to $29 million a year in five years.

After trying to get Delgadillo’s final approval for five months, Chick said the city attorney concluded that an audit that looked at how outside attorneys and the city handled cases could violate attorney-client privilege.

“I’m very disappointed in the city attorney doing this kind of disingenuous turnaround,” Chick told reporters at City Hall. “To me, it seems that the city attorney doesn’t want the kind of scrutiny, the kind of open, transparent look that the people of this city deserve.”

Delgadillo said he was willing to have Chick’s auditors examine the bills, but within certain limitations.

“I’m ready, willing and able to have the controller audit our office pursuant to the charter,” Delgadillo said.

In a letter to Chick on Wednesday, Assistant City Atty. David Michaelson said the city charter does not permit the controller to conduct “performance” audits on the offices of other elected officials.

He wrote that the drafters of the charter “understood that a performance audit, as opposed to a financial audit, examines management decisions and performance.”

The voters are the “appropriate evaluators of elected officials’ management decisions and performance,” Michaelson wrote.

Allowing auditors to examine legal case files could jeopardize attorney-client privilege, giving opponents in legal cases access to sensitive information, officials said.

“Attorney-client privilege is an issue,” Delgadillo said. “It is something we have to consider.”

Chick said she was unwilling to limit her review to a financial audit.

She also wants to know how outside law firms are hired, how their performances are monitored and how well they do for the money they are paid.

The controller announced plans for her audit after The Times reported last year that attorneys with 50 of the 71 law firms hired by the city had contributed $1.1 million since 1998 to candidates for city office and their political committees.

The donations included $244,875 to Mayor James K. Hahn and $154,500 to Delgadillo, the two officials who have the most control over hiring outside attorneys.

“When a process is invisible to the public, that leaves the situation completely open to favoritism and unfair preferences,” Chick said.

A state legislative audit committee had already authorized an audit of city legal billings in the event that the controller did not conduct the review.

At that hearing in August, a representative of Delgadillo promised full cooperation with the controller.

On Thursday, Chick wrote to Assemblywoman Nicole Parra (D-Hanford), chairwoman of the Joint Legislative Audit Committee, and asked her panel to authorize a state audit of the legal billings.

“Given the city attorney’s unwillingness to allow me to audit the city’s use of outside counsel, I now encourage the state auditor to conduct the audit,” Chick wrote.

State Sen. Richard Alarcon (D-Sun Valley), a member of the audit committee and candidate for mayor, said he would talk to Parra about proceeding with a state audit.

However, a representative of Delgadillo said the office would have the same concerns about attorney-client privilege if state auditors were to attempt to examine the use of outside law firms.