Wednesday, January 11, 2006

Law firm with links to Doyle runs up the tab


Law firm with links to Doyle runs up the tab
Last Updated: Nov. 4, 2003
Cary Spivak & Dan Bice

Not so long ago, rookie Gov. Jim Doyle's cronies were crowing about how little they had spent on private attorneys compared with the two previous Republican administrations. But Team Doyle is catching up fast. Records show the Wisconsin Housing and Economic Development Authority has been billed $349,402 by Foley & Lardner and a second firm, both of which are representing it in a dispute with a spinoff group over control of $94 million in housing dollars. The lead Foley lawyer on the case is charging WHEDA $350 an hour - about what a top-flight Milwaukee corporate lawyer would charge. Both firms have been running up the legal tab since they were hired five months ago to prepare a lawsuit against the Wisconsin Housing Preservation Corp. The two sides have been battling in court for most of the summer and into the fall. As has been well-documented, Foley has strong ties to Doyle and some of his top aides, including Administration Secretary Marc Marotta, an ex-Foley partner. Also, one of Doyle's best friends, David Walsh, has been with the firm's Madison office for years. Foley also recently won the lucrative contract from the state EdVest board to audit the various investigations of the beleaguered Strong Mutual Funds and to make recommendations to board members on how to protect investors in the popular program. EdVest allows families to invest money, tax free, for their children's education. Strong has been the only firm to oversee EdVest investments for several years. The contract is still being finalized, but a memo from Doyle legal counsel indicates that Foley expects its lead attorney, Doug Hagerman of the firm's Chicago office, to be paid $440 an hour in his work for EdVest. Two other Foley lawyers would get $320 an hour, and a fourth one would collect an hourly rate of $205. Pretty fat fees, but they could go higher. "They have been represented as a slight discount on their market rates," Eric Callisto, a staff lawyer for Doyle, wrote to EdVest officials on Oct. 15 when recommending Foley. "They also would like to raise these fees on Feb. 1, with the same discount, consistent with their annual fee increase." State Treasurer Jack Voight said he expects that the contract will lay out specific sums that EdVest will pay for specific tasks. He said he soon will be asking the Legislature's budget-writing committee to OK spending $200,000 out of its contingency fund for lawyers. Voight, one of those leading the charge against Strong, said the board simply did as told when it tapped Foley to handle the matter. The board voted last month to retain special counsel. The attorney general declined the offer, and the request was kicked to Doyle. "We were being steered by the governor's office," Voight said. Doyle officials denied giving Foley the royal blessing, though e-mails supplied by their office showed that it was the only firm recommended to EdVest. A spokesman said Doyle's folks briefly considered two other Milwaukee firms. Marotta, the top Doyle aide who left Foley last year, said his old pals back at the firm are the best choice for the job - though he might be just a tad biased. "Those other (big Milwaukee) firms don't have the same presence, and I don't think they have same type of depth as Foley," Marotta said. As for the fees being charged by his former colleagues, well, Marotta explained big-time lawyers cost big-time dollars. He should know; back in his day at the silk-stocking firm, he said he billed out in the $400 neighborhood, as well. Sounding like the corporate attorney pitching a potential client, Marotta said now is not the time to pinch pennies. "There is an awful lot at stake," he said. "You don't put in jeopardy millions and millions of dollars because you want to screw around with a real small amount of money compared with what is at stake." That's why, he said, sometimes you have to ante up the big bucks to the guys in the Italian suits. But even Marotta conceded that the world looks different now that he's signing the checks, not cashing them. "I'm on the other side of this now - these fees seem awfully high," he said. Still, the company line in the East Wing of the Capitol is that this administration is very frugal when it comes to outside lawyers. And Doyle flack Dan Leistikow is sticking to that line - no matter the facts. "On the whole," he said, "this administration has been very conservative about the use of outside counsel and the rates." Foley must simply be the exception to the rule.

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