Jessica M. Karmasek Apr. 3, 2015, 12:00pm



RICHMOND, Va. (Legal Newsline) - Virginia Gov. Terry McAuliffe this week vetoed a bill that would have brought greater transparency to the process of hiring outside counsel.




McCauliffe, a Democrat, assumed office last year after beating out former state Attorney General Ken Cuccinelli.




 




McAuliffe, who has been pushing to strengthen state ethics laws since taking office, said Monday that Senate Bill 1059 would end up limiting the attorney general’s authority to appoint outside counsel and could present “challenges” to attorney-client privilege.




The governor, who vetoed 17 bills this year, said the bill did not comply with his standard of “growing and diversifying” the state’s economy.




 




“The bills that I vetoed this year sought changes in law that I viewed to be counterproductive to the economic and social progress we need to better serve Virginia families,” he said in a statement Monday.




 




SB 1059 would have required the attorney general to make a public written determination as to the need for special counsel, and would have placed special reporting requirements on the use of outside counsel.




 




The bill was introduced in January by Republican Sen. Mark Obenshain, who ran for attorney general but lost to current Attorney General Mark Herring, a Democrat, in 2013.




 




Obenshain said the legislation was necessary to make sure such agreements are “cost effective and in the public interest.”




 




“The legislation would have enhanced transparency for the procurement of outside counsel through the office of the governor or the attorney general,” he said Wednesday, adding that the bill also would have limited contingency fees paid by the state, which can be “very costly” for taxpayers.




 




Contingency fees, he noted, are acceptable as a fee structure for clients who may not have access to the court system through other means.




 




“If a client can’t afford to pay legal fees up front, they can agree to pay a fee if a favorable result is reached in court,” Obenshain said. “The Commonwealth of Virginia is not one of those clients.”




 




He continued, “Gulf Coast trial lawyers use contingency fees to go on Elliot Spitzer-style corporate witch hunts, significantly padding their already deep pockets in the process. This bill simply says if contingency fees are needed, the attorney general must explain why it’s in the best interest of the Commonwealth and its taxpayers, while also setting a cap on contingency fees at $50 million -- hardly an amount that will limit our capability to secure outside counsel when needed.”




 




By vetoing the bill and removing such a cap, Obenshain argues McAuliffe has preserved the ability of the attorney general to “enrich Gulf Coast trial lawyers” at the expense of the state’s teachers, law enforcement and retirees.




 




“I want to keep this money within the borders of Virginia, and it’s a shame that the governor doesn’t agree,” he said. “The citizens of the Commonwealth deserve better.”




 




Attorneys donated thousands to McAuliffe’s 2013 campaign, according to a search of FollowTheMoney.org.




 




Some of his largest donors were Richard R. Swann, Ronald D. Abramson, Daniel M. Berger and Eric M. Kamerath.




 




Swann, a Florida-based attorney, donated $125,000 to McAuliffe’s campaign; Abramson, who works for D.C.-based Buchanan Ingersoll & Rooney PC, donated $53,000; Berger, managing shareholder of plaintiffs firm Berger & Montague PC, donated $55,000; and Kamerath, a Utah-based attorney, donated $90,000.




 




While the practice of attorneys general hiring outside counsel has become commonplace, more states have passed bills similar to Obenshain’s that would make the process more transparent.




 




This year, lawmakers in West Virginia tried to pass legislation that essentially would have codified much of what current Attorney General Patrick Morrisey’s office has done regarding the use of outside counsel since he took office in 2013.




 




The legislation, Senate Bill 291, passed the state Senate on a 27-7 vote but died in a House committee.




 




From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.


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