From the Office of State Senator Troy Fraser

For Immediate Release
February 4, 1998
Contact: William A. Scott - (512) 463-0124

State Senator Calls $2.3 Billion Fee Obscene, Vows Opposition

State Senator Troy Fraser today denounced as "obscene" Texas Attorney General Dan Morales' proposal to pay five, hand-picked outside lawyers nearly $2.3 billion as part of the state's settlement with the tobacco industry.

Fraser, R-Marble Falls, outlined numerous concerns about Morales' plan to pay the private lawyers, which Fraser and six other lawmakers last week challenged in court.

"The $2.3 billion in question -- which could go to five lawyers who never even had to try the case in court -- is enough to pay the yearly salary of 7,500 teachers or police officers for the next 10 years," Fraser said. "That, to me, is simply obscene."

Fraser noted that if each of the outside lawyers worked eight hours a day, seven days a week on the tobacco suit for 18 months, the $2.3 billion fee to be paid to each of the five lawyers would amount to $105,022 an hour.

Fraser also said Morales clearly overstepped his legal authority when he entered into the contingency agreement with the five lawyers, under which they would be paid 15 percent of the state's award in the tobacco case.

The senator further questioned why Morales hired outside lawyers in the first place, when taxpayers already pay thousands of lawyers to work for the state.

"Attorney General Morales felt compelled to subcontract the legal work to outside attorneys, despite the fact that the Office of the Attorney General employs more than 600 lawyers and has an annual budget of $271 million," Fraser said. "That's the first thing that troubles me about all this."

Fraser also noted that Morales' decision to enter into the contingency fee arrangement with the private lawyers was done without the Texas Legislature's approval and without having authority under the Texas Constitution.

"As a taxpayer, and as a state Senator, I am concerned -- no, I'm downright angry -- because the bulk of that $2.3 billion belongs to the people of Texas, not to a handful of outside lawyers," Fraser said.

Fraser, along with Senators Kenneth Armbrister of Victoria and Jane Nelson of Flower Mound and state Representatives Tom Craddick of Midland, Dianne White Delisi of Temple, Dan Kubiak of Rockdale and Kyle Janek of Houston last week petitioned the Texas Supreme Court to rule on the issue of outside attorneys fees.

"We do not believe that the Attorney General had the constitutional or the statutory authority to enter into the contingency fee agreement with the outside lawyers," Fraser said.

The state lawmakers also say say that even if the Attorney General had authority to enter into a contingency fee agreement, he has no authority to bind the state to actually pay the outside lawyers such an "unconscionable" fee.

"Under the circumstances of this case, a $2.3 billion fee is unconscionable, and certainly unreasonable," the petition states. "An unconscionable fee is prohibited by the Texas Disciplinary Rules and an unreasonable fee should not be charged or collected by a lawyer in good conscience."

Fraser also noted that just days before the settlement agreement between the state and the tobacco industry was announced, Morales said the idea of paying more than $2 billion was "laughable," but then joined with the lawyers in seeking a federal judge's approval of the payment.

"Clearly, the tobacco companies were willing to pay the state more than $17 billion, but instead we are getting $15.3 billion and the lawyers may get the rest," Fraser said. "The taxpayers of this state should be absolutely outraged."