Awaiting the Expense Report

By James R. Brickamn
Before debating the payment of $2.3 billion the private lawyers are demanding out of the Texas tobacco settlement, we should first require them to document their $40 million in expenses.

Five plaintiff’s attorneys and Texas Attorney General Dan Morales agreed that about $40 million would be paid for “costs and expenses incurred” in the tobacco litigation. No expense records have been provided or made public in spite of the fact that these expenses were estimated to be $10 million only 22 months ago. Until these expense records are produced, audited and justified, no payments should be considered.

Comprehensive documents with supporting records is required by Morales for anyone else in Texas. In fact, Morales’ Open Record Decision No. 657 of July 24, 1997, sets forth that even a $1.50 telephone expense record for any judge or court be disclosed upon request. By his ruling, “records regarding the expenditure of public employees or otherwise pertain to the day-to-day administration of a court, are subject to open records.” Morales has also stated that the Open Records Act “...requires the public disclosure of information maintained by a governmental body.” Despite this, he has not required disclosure of any records supporting the $40 million in expenses by his hand-picked attorneys.

Surely, the attorney general would not authorize repayment of $40 million to a highway contractor without extensive expense documentation. Why should his attorneys be given an exemption? As a member of a state board that oversees the administration of our courts, I cannot be reimbursed for a $6.50 cab fare without completing an expense report, signing an affidavit and providing a receipt. As a fiduciary, and consistent with previous rulings, the attorney general must request detailed, documented expense records of each attorney and law firm requesting reimbursement, and then make them available to the public.

It is curious that the five Texas plaintiff firms seek $40 million in expenses. Fifteen Florida firms incurred expenses of $12 million for litigation that lasted a year longer than the Texas case. The public deserves to know why the Texas litigation was nearly three-and-a-half times more expensive.

The Fort Worth Star Telegram has reported that in 1996, the lawyers spent $1.75 million on expenses, including a $952 business lunch, $725 for a Texas State Bar exam and $3,100 for a charter aircraft. This means the lawyers would have had to have spent $38.3 million in the next 12 months. There may be an explanation, but we have yet to hear it. Instead, we are asked to accept the lawyers’ word on blind faith.

Morales may mean well. But that does not mean he should or can abdicate his responsibilities as attorney general. And, as an elected official, he should also be sensitive to even the appearance of impropriety. Without documentation, it could appear that the payments are in return for contributions paid to the Morales campaign by these same five law firms.

It is troubling that some of these campaign contributions came just three months before the tobacco litigation contract was awarded. Because of these lingering concerns, the attorney general should “go the extra mile” to assuage any doubts about the propriety of his deal with these attorneys.

If the expenses are reasonable, the attorneys should be paid every penny they can document. But until such documentation is provided, the public and our elected officials have every right to look upon this deal with skepticism.

Brickman is a real estate investor and developer in Dallas.
He is also chairman of the Metrolplex Citizens Against Lawsuit Abuse

Citizens Against Lawsuit Abuse

2500 City West Boulevard, Suite 300 • Houston, Texas 77042
E-mail: sosueme@ • Administrative: (713) 267-2302 • Fax: (713) 267-2267