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Nakamoto: Out-of-state law firm has lucrative La. DOTD contract
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BATON ROUGE- Despite the Louisiana Department of Transportation and Development having nearly 50 staffers assigned to its legal division, the agency relies heavily on out-of-state attorneys for legal work related to highway projects.
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The WBRZ Investigative Unit reviewed contracts and bills and found DOTD spent millions in outside legal work. The lucrative contract is assigned to a law firm from California and is not required to go through the bid process because it's considered a professional service.
For years, DOTD has paid lawyers from out of state to do work on Louisiana road projects. Sometimes, taxpayers are covering the cost of travel to and from Louisiana. In one trip, taxpayers paid $500 per hour to have an attorney travel to and from a groundbreaking. The attorney billed even more time when she attended the event.
The WBRZ Investigative Unit has spent months combing through piles of records and marking the documents showing the agency’s millions in spending. A lot of it tied to travel.
WBRZ showed the findings to State Treasurer John Schroder who suggested if outside legal work was needed, it should have at least been performed by Louisiana attorneys.
"I'm getting really tired, especially in the last couple of years, that we can't find talent in Louisiana," Schroder said. "That's bothersome. We have billions coming to Louisiana from pandemic money while we are sending millions right out the door across state lines to law firms, contractors and engineers."
Schroder said what's compounding the irritation is that many drivers like himself are not pleased with our roads.
"The public has already lost faith in this whole process," Schroder said. "The whole government process, the public has lost faith in. We ought to be scrutinized and spend every penny like it's a dollar."
BIG LEGAL BILL
Records obtained by WBRZ show DOTD has nearly 52 employees in its legal division. We requested all salaries and job titles for those employees. In 2021, DOTD had 37 employees with the word "attorney" in their title. Another 15 employees work in the legal division as paralegals, assistants or other clerical roles. Their salaries cost about $4 million per year.
The state is spending more money - one year, nearly $1 million - to hire the out-of-town attorneys.
2020- $579,805.52
2019- $709,451.51
2018- $945,636.27
The state treasurer thinks each state agency should scrutinize budgets.
"You can always improve and you have to improve," Schroder said. "We don't do a good job spending dollars frugally. When you look at how much our state spends per capita it's got to be the highest in the country. You always have to improve how we spend our money."
DOTD DEFENDS ITS SPENDING
DOTD Secretary Shawn Wilson believes the outside spending is critical, and a small fraction of the overall budget for the agency.
"We've bid out $300 million in work. We've paid law firms one percent of that to get it right and to build the system and build standards and practices to be able to pursue those agreements," Wilson said.
Wilson told us during a sit down interview that none of the in-state law firms bid on the legal work, which is why it's outsourced. But, the firm from California used by DOTD, Nossaman LLP, has a no-bid contract that lasts three years. Because the contract is for legal services, it's considered a professional services contract that does not need to follow the public bid law.
"It's the cost of doing business," Wilson said. "It's $300 plus million, and we are talking one percent. That's a very small number in the big scale of things in the projects we are doing."
Wilson added that the money that his agency is spending is yielding results. He said two additional lawyers have been hired in the legal division specializing in the type of work that Nossaman has performed for DOTD.
"We recognize that we are getting new revenue sources," Wilson said. "We have to deliver more quickly and are doing projects we've been talking about for the last 20 plus years."
But, Wilson said, he doesn't expect to change the agency's business relationship with the out-of-state firm.
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