Special Report: No-Bid Deal, Part 2 - WRBL

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Special Report: No-Bid Deal, Part 2

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We've reported on the Muscogee County's no-bid deal with the law firm Hatcher, Stubbs for about a year. We now have a better idea of how much money the school district spends on their legal counsel. Through open record requests, we've discovered the school district spent about $500,000 in legal fees in 2013, that's down from the $700,000 spent in 2012, there's still some uncertainty about where these tax dollars are going.

Not much has changed the past year - there are the same critics, same board vote and we're going through the same battle with Hatcher, Stubbs over their billing records. We're still being given documents with black boxes, hiding what's in the "general" category; but with all the similarities, there was a crucial difference -- the new superintendent and his recommendation to retain the law firm despite criticism.

On January 21, the Muscogee County school board voted 6-3 to keep their no bid relationship with Hatcher, Stubbs. The board members who voted for retaining the no-bid relationship say legal counsel is a professional service that can't be compared to bidding for a product. They say the law firm's institutional knowledge is invaluable because they've guided the school district through decades of counseling.

All the board members voted the same as they did last year; the difference was a new superintendent and a report that raised a lot of questions.

In October, the board approved a 3-year deal for $30,000 dollars a year with a private research firm called Hanover Research. The goal was to use them for research and analysis instead of forming an internal department. They conducted their first study to help Superintendent Lewis with his recommendation for the district's legal counsel. When the report was made public, some had concerns about the thoroughness of the study.

“You could take that report and you can interpret it in a bunch of different ways but it doesn't take into account a lot of things you need to be taking into account,” said local political consultant Frank Myers.

Myers, along with others, was concerned with the low response rate. 200 surveys were sent out to school districts across the nation, asking how they used legal counsel, but only 26 responded -- a 13% response rate. Lewis says the low response rate didn’t concern him.

“I think the fact that we see that we have a general consensus moving forward and the fact that the sampling of the districts came from throughout the country, but again, I want to make sure we understand that we looked at responses not only from Georgia and from Alabama to ensure that we have the regional perspective, but also the national perspective that complimented that as well,” said Lewis.

During a board meeting, board member Cathy Williams also expressed her concern with how the study was conducted. Three experts were interviewed over the phone, an Alabama attorney, a Georgia attorney and a Georgia risk management expert. All three have experience with school district's legal counsel, but their identities were withheld.

“If I want to know who these sources are, as a tax payer shouldn’t I be entitled to know?” asks Williams.

Williams said the names should be made public for full transparency, but Lewis said not disclosing their identity is common research practice.

“If you are a research firm, if you're using independent respondents, typically that's very common to have them guaranteed anonymity,” says Lewis. “They're more candor, more forthcoming with their responses, and of course there is a possibility of fear of retaliation or retribution.”

Lewis says the law firm representing his previous school district had been with them for over 50 years. He also worked with Hanover Research at that school district in Polk County. He says he believes their work is comprehensive and would be content with similar results in future studies they provide.

State senator Josh McKoon has also been critical of the report. McKoon and Myers have been at the forefront of questioning the board's relationship with the law firm. The board called for a GBI investigation saying Myers and McKoon over-stepped legal boundaries in their efforts to influence the board to replace Hatcher, Stubbs. Both were cleared of any wrong-doing in late September, but this seemed to only fuel their ambition to open the process up. McKoon is drafting legislation to end sole-source contracts with school districts in Georgia. He planned on introducing the bill this week, but weather suspended the sessions, so he plans to introduce the legislation during next week’s session.

“We are getting a horrible return on our investment, says McKoon. “The reason for that is that these dollars are being wasted, we're having misplaced priorities. That is why it requires the state, in my view, to step in to make sure funds are spent appropriately.”

McKoon says he is concerned about all the money the school district spends on legal fees -- black boxes cover where nearly $200,000 dollars was spent in 2013 in the “general” category. The legal firm claims they can't disclose these expenditures because of client-attorney privilege. McKoon thinks it's a lack of transparency.

“It's a question of how those dollars are being spent, and every dollar that's wasted on any law firm, and it doesn't matter who it is, any vendor that has a sole-source no bid contract, that's a dollar that's not going in to the classroom,” says McKoon.

McKoon and Myers say in the mean time, they will continue to bring attention to the board's wasteful spending. Myers says he doesn't think Superintendent Lewis realizes the implications of this issue.

“Mr. Lewis answers to the board, he doesn't answer to me,” says Myers. “He's in a really tough spot, and I get that, but still, he's come in and done some great things that everybody's been happy about and he's made a good impression on the public, but there's some things going on in the background that you just can't ignore.”

Myers says there's a potential investigation into the school board after Cathy Williams asked the state Attorney General's office to probe a called executive session and claims of school board members giving false information to the GBI in a prior investigation. McKoon and Myers say the vote may be done for another year, but the fight is far from over.

Follow this link for Part 1 of No-Bid Deal, which aired on WRBL News 3 in November.

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David Hurst

David Hurst, a graduate of the Univ. of Georgia, is News 3's nightside reporter.

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