Law Firms Ties To City of Bell Scandal Appear Linked To Only One Attorney Who is Now Gone –
Law Firms Ties To City of Bell Scandal Appear Linked To Only One Attorney Who is Now Gone – From the start, Ms. Steiner has said the move will not impact the city of Davis, and she moves with her a number of her associates and others that have worked for the City of Davis.
In the nebulous world of politics, it was also determined that the law firm had given Jerry Brown’s Governor Campaign $5000, in addition to a few thousand from individual lawyers.
Edward Lee had been the City of Bell’s city attorney since the 1990s. He had been a partner at Best, Best & Krieger since 2006. Mr. Lee left the firm in early August and the firm itself announced that it would be ending its contract with the City of Bell. Bell has voted to fire both Lee and the firm.
“Given the current situation in Bell, I cannot allow the lives of the great attorneys and support people who work at Best, Best & Krieger to be affected by it, not to mention the many great clients of the firm,” Lee said in a statement. “I am confident that my reputation will be restored in time, as events unfold.”
Also recently, the Downey City Council voted 3-2 to terminate the city’s contract with Mr. Lee and Best, Best & Krieger, stating publicly they no longer felt comfortable being associated with the attorney.
As City Attorney in Bell, Mr. Lee signed off on the contracts that paid the city manager nearly $800,000, the Police Chief $457,000, and the Assistant City Manager $376,000.
While a number of people have contacted the Vanguard expressing concern about the ties between Bell and Ms. Steiner’s new law firm, I think in this case, these concerns are misplaced.
First of all, it appears that the involvement of the law firm is very limited. It was specifically Edward Lee who had been the City of Bell’s attorney, prior to moving over to Best, Best & Krieger. He signed off on these contracts before he arrived. By 2006 when he arrived at the firm, the contracts had already long been in place.
As Sterling Clifford, spokesperson for Jerry Brown’s campaign noted, the firm itself is not being accused of wrongdoing or unlawful activity.
Bell is a huge law firm, it has over 200 attorneys and eight different offices, only one of these attorneys has been implicated in the scandal and, again, his dealings occurred prior to even becoming a member of the law firm.
Second, Ms. Steiner has been Davis’ city attorney for 24 years now, and it does not seem likely that she is going to change the way she operates because she is with a different law firm.
I would have liked to have seen the city more publicly evaluate the cost and level of service provided by Ms. Steiner, given this move. However, that has little to do with the new firm and its ties to the City of Bell.
Bottom line is that there does not appear to be any particular cause for concern here, but because the Vanguard has received a number of emails and other notes, it was important to at least explore the matter.
—David M. Greenwald reporting
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Where was Harriet when the Zipcar contract was signed? It surely needed more review than it apparently got.
“Ms. Steiner has been Davis’ city attorney for 24 years now, and it does not seem likely that she is going to change the way she operates because she is with a different law firm.”
So here is one great reason to use the change in lawfirms as a pretext to make some changes. She was there for the ridiculous union agreements the city has signed, zipcar is another. Going to a firm who not only provided the legal justification for Bell, but gives money to the grand unionista Jerry Brown is just madness.
Get an attorney who will look out for the public’s interest instead of the unions. They are the problem.
Mayor Don Saylor assigned a himself and one of the new councilmembers to constitute a subcommittee to create a contract. Not one closed or open session meeting has been held to discuss the city attorney contract, to evaluate the situation, etc. The new contract was put on the consent calendar. I explain why this was inappropriate, but did not have the support to override the mayor.
The mayor’s action is highly irregular. In our form of government, all councilmembers are supposed to have equal input. Hiring the city attorney and the city manager are two of the most important things we do.
There are a lot of things to discuss, and we have not had that discussion.
sue greenwald: “Mayor Don Saylor assigned a himself and one of the new councilmembers to constitute a subcommittee to create a contract. Not one closed or open session meeting has been held to discuss the city attorney contract, to evaluate the situation, etc. The new contract was put on the consent calendar. I explain why this was inappropriate, but did not have the support to override the mayor. The mayor’s action is highly irregular. In our form of government, all councilmembers are supposed to have equal input. Hiring the city attorney and the city manager are two of the most important things we do. There are a lot of things to discuss, and we have not had that discussion.”
I agree with you completely, this was an end run around proper process – no surprise. And unfortunately the two new council members were not well versed enough to recognize this for what it was.
dmg: “First of all, it appears that the involvement of the law firm is very limited. It was specifically Edward Lee who had been the city of Bell’s attorney, prior to moving over to Best, Best & Krieger. He signed off on these contracts before he arrived. By 2006 when he arrived at the firm, the contracts had already long been in place.”
That does not absolve the law firm of doing its due diligence…if they hired a new attorney, they had a responsibility to vet him properly and look into any contracts with which the law firm would be involved with. It is not clear to me that the law firm had nothing to do with overseeing these contracts. The question is were the city contracts with Mr. Lee only and did not involve the law firm in any way, or did the law firm have any oversight duties at all with respect to these contracts for which they collected some kind of fee?
And on a further note, why did Steiner choose this law firm, of all the ones she could have chose, to affiliate with? Doesn’t show very good judgment IMHO…
[i]”And on a further note, why did Steiner choose this law firm?”[/i]
They were better than Worst, Worst & Krieger.
Ms. Steiner’s problem, of course, is one of association and only can be fixed by moving to another firm. It doesn’t mean she’s guilty of anything–except poor judgment in choosing to affiliate with a firm after it had been discredited in municipal legal work.
The move might been in the works since well before the Bell/Lee scandal. But she and her cohorts should have called it off. Or, at least, postponed starting to evaluate the wisdom of joining the outfit.
I think it’ll be problematic for her and her municipal clients if she decides to stay with a firm that now has such a reputation and that may itself end up with civil or criminal legal problems. Why would she (or a City) associate with an outfit that’s in full damage control and under AG subpoena?
If the best you can come up with is that “involvement of the law firm is very limited,” that’s not very reassuring. If Lee’s partners [u]knew[/u] of his involvement in this lengthy fraud, that’s bad. If they [u]didn’t know[/u], isn’t that just as bad? Or is it worse?
As Ms. Steiner signs off on the next goofy city action or insider give-away, some will question whether she, her associates and her firm really are doing due diligence for Davis. Too bad, but true.
[quote]”The new contract was put on the consent calendar. I explain(ed) why this was inappropriate, but did not have the support to override the mayor.”[/quote] I was under the impression that consent calendars are for items the Council considers to be [u]routine matters[/u] that are passed on one motion without discussion. If true, how could a new contract for the City Attorney qualify? Did our Mayor get legal advice on this action?
On the under hand, I thought that any single member of the Council–or of the public, for that matter–can have items “pulled” from the consent calendar for separate discussions and votes. Sue, wouldn’t this be a way to bring the issue into the open?[quote] “..councils… exist to aid in the conduct of the people’s business…. The people insist on remaining informed to retain control over the legislative bodies they have created.” From the Brown Act.[/quote]
Next week the Council will likely act on changing its banking business.
I hope that the City will decide to bank more locally than the recommended proposal. We are in an era when “local” means more and has more value.
But on that note, the suggestion is that after 15 years we need to look at other options. I think the same arguement should go towards the choice of firm for City Attorney.
The City of Davis has conducted its banking business with the local branch of a major banking institution for over sixteen years. It has been a very positive relationship for the City, and we have been satisfied with level of services provided. However, due to the length of our
association, and consistent with the City’s fiduciary responsibility to ensure cost-effective services, a Request for Proposals (RFP) for banking services was issued to all of the banking institutions with branches located within the city limits.
[i]”I hope that the City will decide to bank more locally than the recommended proposal. We are in an era when “local” means more and has more value.”[/i]
What extra value comes from a locally owned bank that “the local branch of a major banking institution” which has provided “a very positive relationship for the City” does not provide?
And why was “the local branch” providing value before but now that value only comes from the locally owned bank?
I am confused by your post.
Rich, I am confused also. Are you suggesting that RFP for city attorney services should have been distributed? Seems like a good idea to me, even more than a bank change. Especially in the cost-effective area.
David: What I’m confused about is your new Facebook connection. Given the placement of the Facebook button and your shameless promotion comment, it appears we are voting on individual articles as opposed to “liking” The Vanguard. I’m an enthusiastic supporter of your blog efforts and the Vanguard. But, some of your articles…..well…..
I understand, it is what it is, facebook works by “liking” individual links or articles, occasionally when you agree with me, hit the like, otherwise I understand.
Dear All:
Allow me to more clearly separate the issues by doing two separate posts.
In the September 21 online Council packet is a report to the City Council from the Assistant City Manager with the following language.
“The City of Davis has conducted its banking business with the local branch of a major banking institution for over sixteen years. It has been a very positive relationship for the City, and we have been satisfied with level of services provided. However, due to the length of our association, and consistent with the City’s fiduciary responsibility to ensure cost-effective services, a Request for Proposals (RFP) for banking services was issued to all of the banking institutions with branches located within the city limits.”
So my first topic is as follows:
Shouldn’t the same logical premise be used when it comes to a review of the City Attorney contract with McDonough which of course has now expired? Just as with putting out an RFP for Banking Services the City Council can establish parameters it wants to meet in the contract, minimal requirements of the applicants and costs for the services so that services and savings can be looked at.
Has the City decided not to issue an RFP? I am confused because I see nothing about the City Attorney contract in the September 21 Council package.
David Thompson
Second topic.
On the City Council Agenda for September 21 is a recommendation that the City of Davis transfer its city banking relationship to Wells Fargo.
And on September 23rd (see below) there is an important workshop “to improve our business climate and create a sustainable economy.”
I think we should put on hold transferring the City’s banking relationship to Wells Fargo until the City decides what role it wants to play in creating a sustainable economy. Let’s first take a longer look at how we measure the creation of a sustainable economy.
In a number of regions in the world which have become known for economic sustainability one of the differentiating components has been the retention of local banking transactions within local or regional banks. The regions of Emilia Romagna in Italy and the Mondragon/Basque region in Spain are enriched by locally owned and controlled banks. Not only that, but they are regions of measurable lower unemployment, higher savings rates, more investment in local jobs, higher paid jobs, better health and more culture. Money that stays locally achieves more and works harder for our city. Economic “reciprocity” is a watchword in Emilia Romagna.
Wells Fargo is now the largest bank in Davis with over 30% market share. Wells Fargo and Bank of America now control over 50% of all deposits in Davis. Davis now has 25% fewer financial institutions than Woodland. Can we achieve sustainability if two banks ship over half of our savings out of Davis every night!
I think we need to know more about what Wells Fargo and other banks do in our community before we turn over our banking to them. The Council should look at requiring an annual “Community Investment Report” from each of the entities who would like to win the City’s contract. Let’s judge the applicants across a number of specifics and ask them the following questions broken down by annual activity.
How many home loans have they made in the City over the past five years?
How many small business loans have they made in the City in the past five years?
How many loans have they made to minority and women run businesses in the City during the past five years?
How many WISH and IDEA loans have they made for home ownership opportunities in the city?
What is the level of donations they have made to Davis organizations in the past five years?
What Community Reinvestment Act (CRA) activities have they had in Davis?
How much have they contributed to affordable housing in Davis in the past five years?
What % of local deposits has been lent out to Davis community members over the past five years? How much stays in our community and how much leaves our community?
I am sure the Council and community members will have other valid questions to add to this list?
Allow me to show an example of the value of looking at all the banking economic relationships to measure what we get.
For example, I do not think that Wells Fargo has ever made a major grant for affordable housing in Davis.
On the other hand First Northern Bank has made a number of grants through their role in the Federal Home Loan Bank. Let’s look at the outcome of First Northern’s grants.
First Northern awarded Eleanor Roosevelt Circle a $327,000 grant. That was $327,000 less that the City did not have to come up with. The $327,000 equity investment was used as leverage with other investors and lenders and that allowed ERC to borrow in total about $11 million dollars. By using OPM (other people’s money) we have been able to do more projects and more projects earlier because we are not reliant just on our own City money. Of course this action helped Davis meet its regional share for affordable housing. The biggest feature is that we leveraged First Northern’s grant into affordable housing for 60 units of senior housing.
This is all important because First Northern Bank has done four of these grants in Davis. Their actions so far have amounted to $973,000 dollars which has been the yeast for 168 units of affordable housing (about $30 million dollars of value). As a result, about 450 people have an affordable place to live in Davis.
Let’s measure all the relevant economic factors before we make a decision about where the City banks?
WORKSHOP OBJECTIVES
The September 23 event will be an action-oriented workshop to build on these discussions and expand the effort to improve our business climate and create a sustainable economy. The objectives for this workshop are:
– Articulate a community vision for Davis’ future economy.
– Assess our strengths and weaknesses and identify the opportunities and threats facing our community’s economic future.
– Identify strategic issues that we need to address to support and sustain our economic future while retaining and celebrating our community values.
-Create a timeline for specific actions to be taken by the City, the business community, and other partners.
–
PS: I am using First Northern Bank only because they were the first (and continue to be the most active) to see the value of getting grants for affordable housing in Davis and using their resources to strengthen our community.
It would be interesting to see the criteria for evaluating the RFP responding banks, and to see the scoring for each applicant. The questions David poses are excellent ones. At least some of these items should be considerations. Others should evaluate banks’ performance during and since the financial collapse and bailouts. Did the banks applying for our business take bailout money? What records do they have since with respect to business and home loans in Davis?
It’s nice to see the Davis Council and staff pursuing their “fiduciary responsibility,” but one has to wonder what’s driving this and its timing. There must be some reason we’re “fixing” something that supposedly isn’t broken.
But, switching our business from one hoodlum bank to another hoodlum bank seems like an odd move for our politically correct leadership. Since there’s a national movement to switch our business from giant banks to local banks, why doesn’t the City take this opportunity to support this important effort?
[quote]On the under hand, I thought that any single member of the Council–or of the public, for that matter–can have items “pulled” from the consent calendar for separate discussions and votes. Sue, wouldn’t this be a way to bring the issue into the open? –justsaying[/quote]I tried on a number of occasions to convince the council to hold a closed session meeting on the city attorney contract, but didn’t have support. The other councilmembers deferred to Saylor’s plan to delegate the decision to himself and a new councilmember who had no experience with the city attorney’s previous work.
Anything other than rubber-stamping the consent calendar item would have involved extensive discussion and analysis leading up to that date. If the council wouldn’t agree to override Saylor’s decision not to meet on the item, they would certainly not override his recommendation.
[quote]”Anything other than rubber-stamping the consent calendar item would have involved extensive discussion and analysis leading up to that date.”[/quote] Thank you, Sue, for getting back on this issue. I can understand that a member of the public might have a discouraging process to navigate (filing out request forms, etc.). Is it possible that a council member has to do more than simply announce her desire to get anything pulled from the consent calendar?
Isn’t “extensive discussion and analysis” is what you’d want for items of major significance and controversy (which shouldn’t be placed on the calendar, by definition)? [quote]”If the council wouldn’t agree to override Saylor’s decision not to meet on the item, they would certainly not override his recommendation.”[/quote] If you had the item pulled from the calendar, would’t you have the opportunity to convince your colleagues about the wisdom of your “closed session discussion” to consider critical city positions?
Since it just seems like routine to handle the city attorney and city manager positions in this manner, you shouldn’t have to struggle too much to get them to agree with you.