Tolbert: Internal Highway Dept. Memo Indicates AG Representation Could Be Broader Issue

As reported earlier, Pulaski County Circuit Judge Tim Fox ruled on Monday that Secretary of State Mark Martin was in violation of Arkansas Statue 25-16-702 in his use of outside legal counsel.

The case centered around whether proper request and approval from the Attorney General and Governor was made in a case in which blogger Matt Campbell brought suit to compel the Secretary of State to comply with a Freedom of Information Act (FOIA) request.

Gov. Mike Beebe took Martin to task on Tuesday telling the Arkansas News Bureau that Martin’s actions weakened public trust and even compared the behavior to disgraced State Treasurer Martha Shoffner.

But today a memo obtain by The Tolbert Report under a FOIA request to the Arkansas Highway and Transportation Department (AHTD) indicates this could potentially be a bigger issue than merely for Secretary of State Mark Martin.

The statue that tripped up Martin – 25-16-702  – applies not only to the Secretary of State.  It states:

“The Attorney General shall be the attorney for all state officials, departments, institutions, and agencies. Whenever any officer or department, institution, or agency of the state needs the services of an attorney, the matter shall be certified to the Attorney General for attention.”

However, an internal memo from AHTD details a meeting on October 24, 2011 at the Attorney General’s office in downtown Little Rock with AHTD Assistant to the Director Ralph Hall, AHTD Human Resources Division Head Crystal Woods, AHTD Deputy Chief Counsel Maria Schenetzke, AG Office Attorney Dennis Hansen, and AG Office Attorney Lori Freno.  The memo details discussion of the AHTD use of outside counsel seems to indicate confusion if this is actually required. According to the memo, the AG attorneys advise AHTD that that laws requiring them to use the AG as their attorney is “very old and do not reflect the current environment.” From the memo….

Authority to hire outside counsel

There are two statutes on the books: one says the Attorney General is the attorney for the entire State of Arkansas unless there’s a conflict, and another says the Attorney General can retain “special counsel.” Both of these statutes are very old and do not reflect the current environment. They reflect a time when the AG’s office actually did handle all cases for state government. Over the last 40 years, lawyers hired by state agencies have proliferated. Many state agencies hire outside counsel, usually through the professional services contract system which is outlined in state procurement laws. These laws do not relate or refer to either statute, so there is some ambiguity. We suggest that you contact DFA’s Procurement Lawyer Ray Pearce, or someone at State Procurement.

Many state agencies will contact the AG Office and say, “We went through a procedure, and chose a law firm based on their expertise or our relationship with them, and we’ve entered into a contract. Will you review it and say it’s okay?” Then they will send it to DF&A and the legislative committee for approval. Usually they do it because there is special language in their appropriations act which says none of the funds appropriated shall be used for legal services without the prior approval of the AG’s office. However, there is no consistency with this either. Some appropriations bills have that language and some don’t. (AHTD’s does not.) If that language is not included, there is no real restriction. Nonetheless, some agencies still ask for AG approval. On the other hand, some agencies which do have that language in their bill will enter into contracts without AG approval. The AG office has no authority to enforce it. The legislature could enforce it if they chose to do so, but they haven’t.

Use of AG’s Office for Legal Services

We’ve been with the AG’s office 14 years and AHTD Chief Counsel Robert Wilson almost never contacted us for anything. We never knew he was hiring outside lawyers. Of course, he didn’t have to contact us to do so. However, the AG’s office has a civil department with a full staff of employment lawyers. Each is assigned a list of state agencies and each has a lot of employment law experience. You are welcome to call on us anytime for free legal advice on employment matters.

The AHTD has employed outside counsel for various legal services.  According to the attached detail provided by the AHTD, they spent $120,423.51 in 2011, $135,867.30 in 2012, and $78,043.09 so far in 2013.  This does not include $119,203 for legal work related to highway bonds. Relying on the advice in the memo above, the AHTD did not ask the AG to perform this services or for permission to use outside counsel.

The Attorney General’s Office declined to comment for this story.

The memo raises questions if this newly found statute will cause a much bigger issue for all state officials, departments, institutions, and agencies.  Do the rules that apply to Martin apply to everyone?