News: CJ Exclusives

Law Firm Racked Up Hotel, Airline Fees

Reimbursed for unused hotel stays, airline flights

RALEIGH — Attorney General Roy Cooper used North Carolina gas-tax revenue to reimburse Washington lawyers thousands of dollars in unnecessary hotel and airline fees, according to receipts and travel records obtained by Carolina Journal.

The documents suggest that Cooper’s office has been less than thorough in reviewing expense reports submitted by Resolution Law Group, a firm assisting Cooper in his pollution control suit against the Tennessee Valley Authority.

Invoices show that a Resolution paralegal was reimbursed almost $7,000 last year for a month-long stay at an upscale Washington, D.C., hotel. But airline receipts indicate that she was present at the hotel only 12 out of 29 nights, incurring more than $4,000 in unused room fees.

Other 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.

As reported by CJ in March, Cooper also repaid Resolution lawyers for alcohol, candy, airline flight upgrades, and valet parking, in addition to paying the Ayres Law Group, a second firm assisting with the TVA case, up to $515 per hour in legal fees.

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

Resolution lawyers declined to be interviewed. Noelle Talley, public information officer for the Justice Department, has defended the costs as “appropriate and necessary.”

Hotel expenses

Last summer, Resolution paralegal Barbi Sloan booked a king suite for 29 nights at the Embassy Suites Hotel at the Chevy Chase Pavilion in Washington, D.C. The total cost, including room tax, was $6,939.99.

Sloan “usually works in Indiana and needed to travel to Washington, [D.C.], to work with attorneys to make sure more than 400 lengthy exhibits were ready for trial,” wrote Talley in response to e-mailed questions.

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

Sloan also spent $1,881 on roundtrip airfare between Indianapolis and Washington during the month-long period, plus $1,218 more for a trip to Asheville.

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.

Even at that rate, however, 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 by press time.

A king suite can be booked for $259 per night with one week’s notice, or $209 per night with one month’s notice, according to Embassy Suites’ online rate calculator. An extended stay discount of 14 or more nights is also available at a rate of $229 per night and $189 per night, respectively.

Unused flight

Shortly after Sloan’s trip to Washington, Resolution attorney Michael Goodstein took a three-week trip to Asheville for the TVA trial.

He brought a roundtrip ticket for $802, but opted to return to Washington early, incurring an additional $799 one-way ticket. That left a portion of his roundtrip ticket unused.

The Justice Department “will be refunded $481 by Michael Goodstein for the unused portion” of the ticket, Talley said.

Receipts also show that Goodstein paid $1,205.50 for a rental car, which he drove 110 miles. Talley said the car “was used for daily travel between the hotel and the courthouse, including transportation of exhibits, work papers, witnesses, and members of the trial team.”

DAQ budget cuts

State lawmakers included provisions in the last two budgets allowing for the transfer of gas tax and inspection and maintenance fees from DAQ to the Justice Department for the TVA case. The transfers in part have forced the agency to cut 25 staff positions.

An internal e-mail memo by DAQ Director Keith Overcash dated May 4 reported that “the most recent loss of funds, combined with an additional loss of $1.75 million over the last two years to help pay for the TVA lawsuit” has forced the agency to “move up the timetable to reduce the number of positions funded by DAQ.”

Overcash wrote in a memo last year that the gas tax transfer was “a dramatic blow” and would “cut some critical funding for the state’s air quality program.”

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