From the Office of State Senator Troy Fraser

For Immediate Release
April 15, 1999
Contact: William A. Scott - (512) 463-0124

Fraser Bill Provides Full Public Disclosure on State Hiring of Outside Lawyers
Legislation Seeks to Protect Taxpayers, Makes Attorney Records Public Information

AUSTIN -- State government agencies and elected officials would be required to provide full public disclosure and accountability of taxpayers' dollars when considering whether to hire private attorneys to represent the state, under a bill approved today by the Senate Finance Committee.

The legislation's author, Senator Troy Fraser, R-Horseshoe Bay, said the measure is intended to prevent future abuses similar to those that occurred in Texas' lawsuit against the tobacco industry. In that lawsuit, former Attorney General Dan Morales struck secret deals with past political contributors and a former law partner to represent the state without seeking the consent of the Texas Legislature. The questionable contracts provided the attorneys with more than $3 billion in fees and millions of dollars more in unverified expenses.

"This bill is about open government and providing accountability to the taxpayers when state agencies are deciding whether to seek outside counsel to represent the state in a lawsuit," Fraser said. "Decisions involving hundreds of millions of dollars of taxpayers' money must be made in the sunshine, not in a backroom."

"No elected or appointed official should have the authority to reward political cronies with lucrative contracts," Fraser said. "We need to ensure full public disclosure of the hiring process and have a clear audit trail to follow the money after the contract is awarded."

The legislation, Senate Bill 113, is co-authored by Senator Bill Ratliff, R-Mount Pleasant.

Under the bill, state agencies, boards and commissions would first have to demonstrate the need to retain outside counsel on a contingency fee basis. The agreement must also be approved by the agency's governing body and signed by the presiding officer, and then would require the approval of the Lieutenant Governor and Governor.

The bill also requires the outside attorneys to furnish their time and expenses records to the State Auditor's Office, and to make those records available under the Texas Public Information Act.

"In the tobacco lawsuit, the former Attorney General waived the reporting requirements for the outside lawyers and as a result, they walked away with $40 million in unverified expenses," Fraser said. "This bill ensures complete and accurate record keeping and prevents outside lawyers from being paid huge sums for expenses without providing written documentation that is available for public inspection."

Fraser also pointed out that the bill does not prohibit state agencies, boards or commissions from entering into contingency fee contracts with outside lawyers, but instead simply provides a system of checks and balances.

Fraser noted, for example, that a former law firm colleague of Morales', Marc Murr of Houston, was hired by the former attorney general seven months after the original lawsuit against the tobacco industry. Murr subsequently was awarded $260 million in fees although it appears he did little or no work, according to other attorneys in the case. A federal judge has ordered Murr to prove the validity of his claim.

"This is exactly the kind of shenanigans this legislation is intended to prevent," Fraser said.

The bill also provides a formula by which contingency fees must be computed and places a cap on the amount of money to be paid by the state, and specifies that all funds recovered by the state are to be deposited into the state treasury for subsequent appropriation by the Legislature.