Fort Smith Board not likely to audit Daily and Woods’ legal billings

story by Ryan Saylor

Any chances of an auditing firm reviewing billing by the Daily and Woods Law Firm to the city of Fort Smith appear dimmer after a Tuesday (June 10) study session of the Fort Smith Board of Directors.

When the issue was brought up for discussion, City Director Philip Merry again made his motion to request an independent audit of billings from the law firm to the city, as well as appointing a committee to review whether the contracted arrangement with Daily and Woods was the best for the city, or whether hiring counsel onto the city's staff was the best route. He had previously made a motion at the conclusion of the June 3 regular meeting of the Board, but Mayor Sandy Sanders said the motion was not proper since Merry had not added it during the beginning of the meeting, when the mayor had asked for additional items.

Merry had made clear that he was not accusing the firm of wrongdoing, but instead wanted a neutral group to review allegations brought to light by a series of posts by attorney Matt Campbell on his Blue Hog Report blog. Campbell, it was pointed out several times during the study session, represents clients in three different lawsuits either against the city or involving the city.

"We are stewards of other people's money. It is not our money. The challenge for a Board member is when to just go and when to pursue the transparency. I feel quite certain there's nothing wrong. More importantly, it doesn't matter what I think or what this Board thinks. I'm recommending and what I've had many a citizen to recommend is a neutral, transparent approach to the dialogue."

He also said the Board was "too close to the rhetoric" to make any judgments on the questions of whether the firm was over-billing the city or billing for work not completed, as Campbell accused the firm of charging the city for phone calls he said were never made in the first place. City Attorney Jerry Canfield and City Administrator Ray Gosack have said there was nothing to Campbell's allegations following an internal investigation by Daily and Woods into its billings of the city.

In challenging the need for an independent audit, City Director Keith Lau said directors must look at the "bigger picture."

"We've got a city attorney who's been with us for 40 years of service, impeccable service. There's no tarnish on his firm's record or his record. We've got a city administrator who has given view of the situation and said there's no improprieties. On the other side I see Matt Campbell. …The one thing that comes to mind is no matter where you stand on those reports, Matt Campbell is not an unbiased participant. He represents an interest which is counter to what we're trying to do, which is be good stewards of our taxpayers' money."

Lau continued, saying Campbell was "wagging our tail" by making the allegations, with the Board possibly acting based upon said allegations.

"Do I want Matt Campbell to wag my tail and make me go into an analysis of whether or not we're going to have a third party or an in-house attorney? I don't want him to wag my tail. And to be quite honest, with all the information, I can't make a decision. I'm not qualified to review those phone records or to say (what the city should pay for an attorney). And all I know is I feel like my tail is being wagged and I don't like it."

City Director Mike Lorenz said conducting an audit based on Campbell's allegations would set a bad precedent for the Board.

"If we were to go ahead with a three year audit, we as a board would be taking something that is being claimed on a blog by some by definitely non-partial third party that has everything to gain by distracting the real issues of his lawsuits, we're taking that and spending taxpayer money for a very expensive audit over an accusation of a couple of phone calls. We're not talking (about) an accusation of millions of dollars in ill-conceived bills. We're talking about a couple of phone calls. … I think it sets a huge, hugely bad precedent if we were to say we're going to react to that comment and that accusation by this attorney by auditing Daily and Woods. I just think it sets the wrong precedent because you've got people and attorneys that would take advantage of that in the future because you can distract attention from what our attention needs to be on. Now from a purely budget standpoint on whether or not we're better off with a contracted service or an in-house service, that's a whole different conversation. To me, that's a budget conversation."

Vice Mayor Kevin Settle, who officiated the study session in the absence of Sanders, conducted an impromptu poll of the Board and found only Merry and City Director Pam Weber in favor of moving forward with an audit. But with Tuesday's meeting only being a study session, the vote does not stand and a motion by Merry and a second by Weber placed a vote on the agenda for the June 17 Board meeting.

City Director George Catsavis, who said he had complete trust in Daily and Woods and specifically City Attorney Jerry Canfield, said he would have questions if the allegations were proven to be true and it was a repeated occurrence, but he said at this point, he is skeptical and against an independent audit.

"I know Jerry personally and I just feel this is just being blown out of proportion. This could be an honest mistake, you know? But in 40 years, for the first time for something like this to come up, I'm questioning this."

Speaking after the meeting, Gosack said he was pleased that the Board largely expressed confidence in the city administration and the billings of Daily and Woods.

Campbell’s past investigations have resulted in the resignation of former Lt. Gov. Mark Darr for misspending official funds and the withdrawal of Circuit Judge Mike Maggio from a Court of Appeals race this year after some questionable online activities were outed. Gosack said neither of the previous instances should matter with this situation with the city and Daily and Woods in terms of credibility for Campbell.

"I think each case stands on its own. Just because you were successful on a previous case does not automatically make you successful on the next one," he said. "Each case lives or dies on its own merits."

Gosack said if the Board ultimately decides to appoint a review committee to look into the hiring of in-house counsel for the city or keep current contracted representation, he said it would likely take the Board about two months to advertise for appointments and form the committee, with an additional few months of work. He said the city administration would offer staff assistance as requested. Such a review, he said, could be completed by the time the city begins review of the Fiscal Year 2015 budget later this year.

In other business, the Board approved an Aug. 12 special election on a millage increase for the Fort Smith Public Library. Library Executive Director Jennifer Goodson said private funds were secured to fund the $30,000 election.