(February 13, 2014 – Hagåtña) Private attorneys at the Port Authority of Guam and the Guam International Airport Authority, as well those in other autonomous agencies, can expect continued prosperity at the taxpayer’s expense, as Governor Calvo runs over legislative efforts to put the breaks on legal spending. Vice Speaker Benjamin J.F. Cruz’s In-house Counsel bill cleared the Legislature on Feb. 1 but was vetoed late this afternoon.
“In vetoing Bill 180, Governor Calvo has chosen to protect million-dollar lawyers at the Port over the 170,000 men and women who suffer higher grocery bills because the Port’s management continues to spend money like it grows on trees,” said Cruz, who introduced Bill 180 following news in September of legal fees for 2011 to 2013 amounting to approximately $1.2 million paid by the Port to private law firm Phillips & Bordallo, PC. “When the price of food rises, know, at least in part, that the extra money is going to some lawyer the Governor cares about more than you.”
To put government spending on legal services within autonomous agencies in perspective, the Port is spending almost as much it does on its annual $1.5-million debt service for a loan to purchase gantry cranes as it does on legal services from Phillips & Bordallo.
“The fact that the Port would spend about as much money on lawyers as it does on debt service for the POLA Cranes, isn’t only wrong—it’s morally corrupt,” stated Cruz.
Cruz’s Freedom of Information Act request to autonomous agencies last year was able to collect expenditure data aggregated to total $9 million in legal expenses incurred over the last six years. Data from the Airport indicate approximately $4.4 million in legal fees at from 2008 to 2013, with approximately $1.3 million in FY 2013 alone paid to private firm Calvo Fisher & Jacob LLP.
Data submitted by other agencies show an alarming trend of excessive legal billing in the last several years—such as Guam Memorial Hospital legal expenditure of approximately $1.7 million from 2008 to 2013; and Guam Economic Development Authority, $1 million from 2008 to 2012.
The correlation between expenditures over certain cost levels and increased rates and charges at the Port is fully supported by the Public Utilities Commission’s establishment of approval protocols for Port contracts in excess of one million dollars.
The PUC’s Administrative Law Judge Report (PAG Docket 14-02, Jan. 24, 2014) in review and approval of the existing contract between PAG and Phillips & Bordallo states, “Under 12 G.C.A. §12004, the PUC must expressly approve any contractual agreements or obligations which could increase PAG’s rates and charges. In addition, under PAG’s Contract Review Protocol, ‘[a]ll professional service contracts in excess of $1,000,000’ ‘shall require prior PUC approval…’.”
PUC approved the continuation of the Port’s legal contract with Phillips & Bordallo, whose billing for the last three years has totaled approximately $1.2 million to date.
For more information, please call the Office of the Vice Speaker at 477-2520 or 687-7567.