Beer, Snacks for AG’s Hired Lawyers Challenged

Beer and snacks were on the agenda at a recent meeting of the North Carolina Council of State — and they had one executive-branch officer fuming.

The council, comprised of 10 elected officials including the lieutenant governor, meets periodically to vote on resource allocation and to streamline information between executive agencies.

At the council’s Oct. 6 meeting, Attorney General Roy Cooper requested $103,771 in additional taxpayer funds to finance the state’s ongoing pollution control lawsuit against the Tennessee Valley Authority, currently on appeal to the Fourth U.S. Circuit Court of Appeals.

Labor Commissioner Cherie Berry, one of two Republicans on the council, wanted no part of it. She objected to past reimbursements for two private law firms assisting Cooper with the suit, expenses first reported by Carolina Journal earlier this year.

“Information is out there that in the past we have paid for things like snack food, beer, valet parking, hotel rooms that haven’t been used, [and] upgrades to airline tickets on some of these invoices from these law firms,” Berry said at the meeting. “I just want to feel comfortable going forward paying these that we’re not doing that kind of thing anymore, and I’m not comfortable right now.”

Invoices obtained by CJ in March show that Cooper’s office used taxpayer funds to reimburse Resolution Law Group, now renamed Hunsucker Goodstein & Nelson PC, thousands of dollars in travel expenses.

Those included stays at such ritzy hotels as the Sheraton Needham Hotel in Needham, Mass., and the Marriot Bethesda in Bethesda, Md. The receipts included pricey airline tickets, including $1,245.60 for a “special class” roundtrip flight between Washington, D.C., and Knoxville, Tenn., for two Resolution lawyers.

Records also show that Cooper paid a second firm, the Ayres Law Group, as much as $515 per hour to assist in the case.

The reimbursements in part came from $1.7 million in gas-tax revenue and inspection and maintenance fees that the legislature transferred to Cooper’s office from the N.C. Division of Air Quality to help meet TVA litigation expenses. DAQ is planning to cut 25 staff positions in the current fiscal year; budget constraints caused by the transfers are cited as one reason for the agency’s reduction in personnel.

Cooper defended the expenses at the council’s October meeting. “When you look at the extensive amount of time that it took to research and try this case,” he said, “and when you look at the result, which will result in the savings of hundreds of millions of dollars in health care costs and in saving lives in North Carolina, this has been a significant victory for the state of North Carolina.”

Beer bungle?

Berry particularly criticized $60 in snack food (PDF download) and $5.50 for a beer, the latter of which ran afoul of state law, which prohibits taxpayer-funded reimbursements for alcohol.

“That’s embarrassing to me — that we’re buying snack food for attorneys that are being paid $515 an hour. They can buy their own snack food,” Berry said.

Cooper responded that the expenses had been “scrubbed.” If a disallowed expense comes in, “then it is deducted from a future bill or it is requested that it be paid back,” he said.

Contacted by e-mail, Justice Department spokeswoman Noelle Talley said that Resolution never charged the state for the beer. “The State had never paid for the beer and thus did not have to seek reimbursement for it,” Talley said.

But an expense report (PDF download) submitted by Resolution includes the beer as a reimbursement, and Talley indicated earlier in the year that the beer was a disallowed expense and would be paid back to the Justice Department.

“Alcoholic beverages are not reimbursable by the State and the State will be reimbursed by the law firm for this purchase,” Talley wrote in an e-mail March 17.

Berry and Cooper had a brief exchange over the alcoholic beverage during the Council of State meeting in October.

“I think that in that particular bill that that was disallowed and supposed to be paid back,” Cooper said.

“But it was paid. That’s my concern,” Berry responded.

The council ended up approving the new funds for the TVA suit, with Berry casting the lone dissenting vote.

‘Under my skin’

In a telephone interview, Berry said she wasn’t comfortable voting to approve the funds without knowing whether past expenses were appropriate.

“That’s the only chance we get to vote on it,” she said. “I don’t want to vote to pay for something, and then learn later that it’s something we shouldn’t have paid for … I guess sometimes it’s those little tiny things that really start to get under my skin.”

Berry pointed to one expense (PDF download), reported by CJ in July, of nearly $7,000 for a Resolution paralegal, Barbi Sloan, to stay one month at the Embassy Suites Hotel at the Chevy Chase Pavilion in Washington.

Airline receipts show that Sloan flew back to her home in Indianapolis for long weekends, leaving the room vacant for 17 nights. The cost for the unused nights was $4,068.27.

Asked why Sloan booked the room for unused nights, Talley said that Resolution negotiated a discounted rate of $209 per night for a one-month stay, which was cheaper than paying the standard price of $299 per night.

But even at that rate, Resolution would have saved several thousand dollars if it had reserved the room at the nightly rate for the 12 nights Sloan was present in Washington.

Follow-up questions to Talley seeking clarification were not returned, other than to repeat that Resolution negotiated a discount rate.

In another instance, records show that Cooper’s office reimbursed Resolution’s lead counsel in the TVA case nearly $500 for a flight between Asheville and Washington that he never took. Asked about the expense by CJ, Talley said the Justice Department would be refunded for the unused portion of the ticket.

Resolution lawyers have declined repeated interview requests about the reimbursements.

David N. Bass is an associate editor of Carolina Journal.