Audit takes issue with Mo. AG's contracts with private firms

By Jessica M. Karmasek | Jun 28, 2012



JEFFERSON CITY, Mo. (Legal Newsline) - Missouri State Auditor Thomas Schweich found the overall performance of Attorney General Chris Koster's office to be "fair" in an audit of the office released Wednesday.

"Fair," as defined by the Auditor's Office, means the agency "needs to improve operations in several areas."

In particular, it also means that the report contains several findings, or one or more findings, that require management's "immediate attention," and/or the agency has indicated several recommendations will not be implemented.

In addition, it means -- if applicable -- that several prior recommendations have not been implemented, according to the Auditor's Office.

The main issue in the attorney general's case, according to Schweich's 35-page report, is the awarding of the office's contingency fee contracts to outside, private firms.

According to the audit, Koster's office retained the right to reject proposals for contingency fee contracts even though state law does not include any provision for doing so once the Office of Administration, or OA, has taken over the bid process.

As of April, bids or responses to three different request for proposals, or RFPs, were being evaluated related to lawsuits regarding the drug Avandia, the Petroleum Storage Tank Insurance Fund and the pharmaceutical industry's use of average wholesale pricing, or AWP, violations, the audit stated.

Schweich's office said the State may recover a substantial amount of monies from the three lawsuits, and the chosen law firms may receive significant fees.

The audit found that the Attorney General's Office should not retain the power to reject responses or solicit new responses for contingency fee contracts after it requests the OA to handle the procurement process.

Schweich said after his office discussed its concerns related to the procurement of the contracts, Koster's office withdrew the three RFPs.

In addition, Koster has agreed to stop participating in the hiring of private firms altogether, Schweich told the St. Louis Beacon.

"The good news is, he agreed to fix all the problems," the auditor told the Beacon Wednesday.

According to Schweich's audit, Koster also accepted campaign contributions from a number of law firms that submitted proposals.

During 2011, 13 of 28 law firms -- or 46 percent -- and/or members of the firms that submitted proposals on one or more of the RFPs made campaign contributions to the attorney general, totaling more than $170,000.

In addition, the audit found that for three years ending June 30, 2011, the Attorney General's Office spent about $4.6 million for legal and expert witness services.

However, it noted that Koster's office does not always prepare and retain documentation to show how and why it selected those particular attorneys and experts.

From Legal Newsline: Reach Jessica Karmasek by email at

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