OPD’s Outside Legal Costs Are Down in FY 2011-2012; But is It Progress?

Today Oakland’s City Attorney announced that the cost of outside legal counsel was down by 40% in 2011-2012 compared to the previous year, and that the cost of legal settlements for the whole city has fallen by 50%. It’s a welcome bit of news for the cash-strapped government. With respect to settlements paid out, a press release issued by the City Attorney’s office explains that:

“Payouts for claims and lawsuits fell from a high of $12.8 million in FY 2010-11 to $6.05 million in FY 2011-12. Payouts spiked in FY 2010-11 mainly due to settlements in about ten high liability cases involving police matters – use of force, wrongful death, police vehicle accidents and police labor complaints. Payouts in police cases were dramatically lower this year – from $7.65 million in FY 2010-11 to $2.89 million in the most recent fiscal year [bold in original].”

My own scan of the city’s legal settlement payouts related to police misconduct show a different, higher figure. Police misconduct leading to legal settlements forced Oakland to forfeit $4.668 million last year. The difference in accounting between the City Attorney’s and my own estimate is probably due to the fact that they’re not counting two $1.2 million payouts last year into trust accounts managed by lawyers James Chanin and John Burris, money related to the Riders settlement from almost a decade ago. It’s a fair exclusion since these are not settlements from the current year, but it doesn’t give a full accounting of how much OPD officer misconduct cost Oakland last year.

If one adds other costs associated with federal oversight of OPD by the court appointed monitor Police Performance Solutions, legal defense of OPD officers by outside firms such as Rains Lucia Stern and Burnham Brown, investigations into officer misconduct by independent law firms such as Renne Sloan Holtzman Sakai, and special investigations such as that carried out by the Frazier Group, as well as smaller numerous legal expenses related to employment law, arbitration, and court reporting, the total for outside legal costs paid by OPD last year was $7,161,598.

Last year OPD’s total expenditures on all goods and services, including everything from dog food and gasoline, to legal defense and arbitration, was $17.6 million, according to an expenditure report provided by OPD. That means that last year 40% of OPD’s expenditures went toward employing outside law firms, paying out settlements, and paying independent teams of lawyers to investigate officer misconduct due to OPD’s poorly staffed and managed Internal Affairs and Criminal Investigations Divisions. The Frazier Group singled out OPD’s faulty system of internal investigations of officer misconduct in their report earlier this year, quoting officers who admitted they “had little faith” in the department’s ability to police itself, and that such investigations are often a “wast of time.”

Among other notable things about OPD’s legal expenses last year was that the Frazier Group came in about $9,000 under budget in producing their comprehensive report detailing OPD’s numerous institutional problems. The report will only prove to be a valuable bargain if city leaders implement its many recommendations, however.

While OPD’s legal expenses may be down this year after having spiked in FY 2010-2011, it is very likely that costs will spike again in future years due to numerous recent cases of alleged police violence, false arrests, and clear violations of the department’s own policies and procedures, with many of these violations having been recorded and broadcasts over the Internet during the Occupy Oakland street demonstrations of late 2011 and early 2012.

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Workers and Community Members Picket the Port of Oakland

Workers and community members at the gate of Terminal 59, Port of Oakland, leased by SSA (a subsidiary of Carrix, Inc.).

A coalition of port workers, including members of the unions SEIU 1021 and Unite HERE, and Oakland residents with the Coalition to Stop Goldman Sachs, plus organizers with Occupy Oakland, picketed the Port of Oakland yesterday.

The picket line was “informational” only. Union leaders did not intend to ask other workers, including ILWU longshoremen to not cross the line, a move that would have disrupted a shift and brought operations to a halt. ILWU’s rank and file pride themselves on their solidarity with other unions and routinely do not cross picket lines. Instead, the workers and Oakland residents marching at the port, wanted to make a show of strength, demonstrating their ability to effectively shut a maritime terminal down if they feel the need to do so. They passed out information about their struggle against the Port’s management, and against the financial corporations they say profit from the Port’s current positions in labor negotiations.

SEIU 1021’s port chapter is currently negotiating (along with three other unions) for a new contract that would include a 5 percent cost of living increase. The port’s management has countered that they will give no such increase, and furthermore that they seek increased employee contributions into their pensions. Port management hope to free up more revenue for increased capital investments that will benefit marine terminal operators, shipping companies, and real estate investors.

The Coalition to Stop Goldman Sachs enacting a skit that explains how the interest rate swap has harmed the city’s finances, one of several reasons why city services have been cut in recent years.

Also present at the informational picket were members of the Coalition to Stop Goldman Sachs, a community group that is pressuring city leaders and the bank to terminate a costly interest rate swap that has cost Oakland upwards of $20 million due to the divergence of interest rates following the financial crisis in 2008.

Labor and the community have united around the port because both share an analysis of the major financial corporations that profit from the port’s debt, capital investments, and the trade that flows through the busy maritime and air terminals. Goldman Sachs was specifically singled out because the company owns a stake in the marine terminal operator SSA. SSA’s terminal at the port, Berths 57-59 were the site of the picket.

Private Equity is Lavishing Cash on the Presidential Candidates, Mostly Romney and Affiliated Super PACs

Steven Barnes, a Bain Capital executive who has donated the federal maximum to Romney’s campaign. Like many donors to the Romney campaign, Barnes has given much larger amounts to Super PACs affiliated with Romney. Barnes gave $125,000 to the Restore Our Future PAC, and also $30,800 to the Republican National Committee.

Mitt Romney has an overwhelming advantage in raising money among his former colleagues in the realm of private equity. Employees of the top 10 private equity groups have given Romney’s campaign $548,050 during the current election cycle, compared to only $170,056 for president Obama.

Among these elite private equity groups, Bain Capital is the largest source of cash for both candidates. The Blackstone Group has also showered money on both campaigns.

However, many private equity groups where Romney has found eager support are bereft of employees who also support Obama. For example, two of the top ten PE groups, CVC Capital and First Reserve Corporation, have no employees who have donated to Obama.

Employees of the Goldman Sachs Capital Partners private equity subsidiary of the investment bank have donated to neither Romney, nor Obama. (Goldman Sachs employees and the bank have, however, been major donors to both campaigns and parties.)

Among the executives and employees of top ten largest private equity groups Romney far exceeds Obama in raising cash for his official campaign.

Private equity groups favor Romney by leaps and bounds. For every dollar Obama was given by employees of Bain, Romney was given four. Romney bested Obama by $4.5 to $1 among employees of KKR, and a very large margin of $7.8 to $1 among Apollo Management’s employees.

Keep in mind these dollars are donated directly to the Romney and Obama campaigns, and thus are limited to $2,500 per donor, and strict reporting requirements apply.

Romney has benefitted much more from private equity donations to the Super PACs that are technically unaffiliated with his campaign. I covered this ground in some detail back in June with a story about California Super PAC funders, an elite group that included more than a few private equity executives – http://www.newsreview.com/sacramento/money-wins/content?oid=6480953.

Certainly the Super PACs supporting Romney and preparing to attack Obama have received many millions more from PE executives since then.

In the 2012 election cycle Romney has taken in hundreds of thousands more than Obama from executive and employees of private equity groups.