This article first appeared in the St. Louis Beacon, June 27, 2012 - In response to concerns raised by Missouri state Auditor Tom Schweich's latest audit, Schweich says that state Attorney General Chris Koster has agreed to stop participating in the awarding of his office’s contingency-fee contracts.
The issue, said Schweich in an interview, is that Koster's office had veto power over which firms got the contracts, and “46 percent of the firms’’ applying for the contracts in 2011 also had donated to Koster’s campaigns. The total contributions were significant, amounting to $170,000 or more, Schweich said.
Like many Democrats, Koster is a favorite among trial lawyers. So is Gov. Jay Nixon, Koster’s predecessor as attorney general.
Under the system set in place in 2011, the state's Office of Administration handled the awarding of such contracts for Koster's office. But the attorney general's office retained the right to reject whoever was selected or to ask the Office of Administration to set up an independent panel to choose a replacement.
Koster's office has agreed to drop such powers, Schweich said.
The contingency-fee issue – and Koster’s role in it -- was a key reason Schweich’s auditing staff gave Koster’s office only a “fair’’ rating in overall performance. (Click here to read the full audit.)
Schweich said his office’s message to Koster had been direct. “‘You have two choices,’“ Schweich recalled. “Not be part of the procurement process, or don’t take the contributions.”
But Schweich said he was impressed that Koster has been responsive to the criticisms. “The good news is, he agreed to fix all the problems,” Schweich said.
Among the other problems raised in the audit: “For the three years ended June 30, 2011, the AGO (attorney general’s office) spent approximately $4.6 million for legal and expert witness services, but the AGO does not always prepare and retain documentation to show how and why it selected those particular attorneys and experts. “
The conflict-of-interest issues regarding contracts and contributions has been a problem for Missouri attorneys general for decades, Republican or Democrat. Nixon periodically came under fire during his 16 years holding the office.
And his Republican predecessor, William L. Webster, was the subject of a federal probe in the early 1990s over alleged links between his office's contracts to law firms, and their donations to his campaigns. The controversy destroyed Webster's 1992 bid for governor, and contributed to a federal conviction over unrelated misdeeds that sent Webster to prison.
Koster spokeswoman Nanci Gonder said, "We appreciate the auditor’s efforts on this project, and will certainly take his thoughts into consideration.”
(Start of update) Later, Gonder elaborated on the contract issue by saying that the "so-called 'right-to-reject' provision is a standard, or boilerplate, clause contained in many RFPs (requests for proposals) issued throughout state government. "
"The Auditor’s recommendation to forego this boilerplate provision corresponds with the Attorney General’s goal of removing the Attorney General’s Office from the contract selection process," she added.
"No contingency fee contracts have been awarded under Attorney General Koster’s tenure. All three RFPs (cited in Schweich's audit) were withdrawn in May so that any RFPs issued may include Auditor Schweich’s recommendations." (End of update)
St. Louis lawyer Ed Martin, one of Koster's Republican rivals, pounced on the audit findings. "The audit shows that Koster broke the law by controlling contingency fee contracts, which the law specifically forbids," Martin alleged. "Tens of thousands of dollars in campaign contributions are tied directly to those contingency fee contracts in what appears to be a 'pay-to-play' scheme. This sort of mismanagement and 'pay-to-play' scheming is unacceptable from the Attorney General’s office.”
The Missouri Republican Party also jabbed at Koster, who was a Republican until he switched parties in 2007.
“Most elected officials try to avoid even the appearance of impropriety—but not Chris Koster. Instead, Koster has accepted nearly $200,000 in campaign contributions from law firms that are seeking lucrative state contracts,” said Lloyd Smith, executive director of the Missouri Republican Party. “Chris Koster wanted to have it both ways: making it look like the bidding process was independent while in reality retaining ultimate control over the result. And he might have gotten away with it if it weren’t for Auditor Schweich.”
