I agree, not only with the aspect relative to the insurance, but also with the aspect relative to operational maintenance. So, the City needs a percentage or at certain points all of the money. But in order for us to get to that higher level quality, an investment that still needs to 378 Whole - Bills 040255, et al - 5/18/04 be made back into an A or B facility which we should get to, I'm a hundred percent with what you're saying. You're exactly correct. We have Risk Management in the room 7 with us as well. And I won't call them up unless you'd like me to. They've been diligently working since I testified the first time, of trying to put together this, I guess for a better term -- and I don't have a background in insurance -- a type of umbrella because I want to say there's approximately 13 to 16 projects that we are negotiating right now, where parties really want to command if they can save the program or either they're just saying, we've been having our eye on this for a long time, but we didn't know we could do it. And one of the biggest sticklers right now is working through, you know, the back -- the going back and forth of the insurance, the liability piece. Some of them already have it worked 379 Whole - Bills 040255, et al - 5/18/04 out; some of them don't; and some of them have the utilities part worked out as well. So, I appreciate it. We're not taking it lightly. And it's a big team that's really come together since I came here the first time with Risk Management, the Law Department, especially Capital -- the Planning Commission being out front, you know, doing what they do and doing it right. COUNCILMAN DiCICCO: The only other comment I have is, what is the -- question I have is, the lights, field lights at rec centers on timers. Generally is it 11:00 p.m. or does it vary from center to center.
It's... And I laugh about it because it's a problem or it's a challenge, not a problem. It's a challenge, not only here in Philadelphia but throughout. Some neighborhoods want it off at 10:00; some want them off at 11:00. Some want them on all night to deter... COUNCILMAN DiCICCO: Crime. 380 Whole - Bills 040255, et al - 5/18/04
Right. Prostitution, drug sales, or whatever. Rule of thumb, 10:00, 11:00. And we do our best to accommodate the individual neighborhood. COUNCILMAN DiCICCO: All right. I just was curious because I know -- I think it was last year we had the conversation about Capitola, the lights used to be on 2:00, 3:00 in the morning. Now, they think they go off at around 11:00. And I see them because they're literally in my face. But the reason I brought it up is not because it's disturbing to me, is that on Sundays the lights are on. They go on whatever time they're set, they go on; and they go off 11:00, 11:30 p.m. And I don't know of anyone who's using the field on a Sunday at that late hour. During the week sometime the games run longer, so you try to give the benefit of the doubt that the lights will still be on while the games are in play. And I don't know if that happens -- 381 Whole - Bills 040255, et al - 5/18/04 The reason I'm bringing this up is not because it's Capitola, but I don't know if that's going on in other centers as well, because it's got to be significant, in terms of the cost of those lights staying on. But I would recommend, for those -- all the neighborhoods, that if there's a way of keeping on a minimal number of lights or a security light to have some light on the field, to address those issues of vandalism, prostitution, and other things, I think that's something we can do. So if we shut them off a little bit earlier, there's a huge savings. Rather than have all the field lights on, but having something left on might be beneficial. Thank you. I have no further questions. Thank you for your cooperation.
Thank you. Are there any other questions from members of the Committee? 382 Whole - Bills 040255, et al - 5/18/04
Thank you. Thank you, gentlemen. Thank you very much. I appreciate it.
I believe the Law Department is coming back. Councilman Nutter.
Thank you, Madam Chair. Solicitor Ramos, thank you for coming back. Sorry for the delay.
Good evening. When you were last in, I asked a series of questions with regard to legal costs and other matters surrounding what you have characterized and I took down in my notes as the F.B.I. probe. 383 Whole - Bills 040255, et al - 5/18/04 I wanted to ask you some additional questions. First and foremost, you made reference to either a document or a legal opinion in that matter, and I believe you had committed to forwarding it --
You have not received -- I was -- We're... I thought we forwarded to you, through President Verna, on May 6th, a copy of the opinion that we... the response to the lawyers for the Philadelphia Inquirer, specifically Emily Lounsbury, which I believe was responsive --
Okay. Well, we will... I have a copy we can get for you. We did provide it to... And we'll...
Just so we're clear, you said you sent it over. And maybe it's working its way through the 384 Whole - Bills 040255, et al - 5/18/04 process. Is that the situation?
Yes. That's my understanding, that we sent it to President on May 6th.
Okay. I have some other questions in that regard. You referred me last time to Section 20-702 of the Philadelphia Code as the reason for the representation of the City employees. Is that the correct section?
Okay. And there was also apparently an e-mail sent back in November -- obviously, this is prior to your time -- regarding what's referred to as the Federal Government investigation. Are you familiar with that memo?
I am not familiar. You said an e-mail or a memo? I'm not familiar with either.
I think it's an e-mail. It's apparently an e-mail transmittal to all City employees from your 385 Whole - Bills 040255, et al - 5/18/04 predecessor Solicitor, dated November 6, 2003, Federal Government investigation. Are you familiar with that?
I am... I have seen... I -- I don't remember whether it was an e-mail or a memo, sent by my predecessor, providing instructions to employees in the City about what to do and how to go about contacting the Law Department, if they were approached in connection with the Federal investigation.
Somebody just handed it to me. I don't know whether it's the one that I've seen before.
Yeah. It starts out by saying, as you are aware, the Federal Government has initiated a grand jury investigation that involves the City of Philadelphia. The City has cooperated fully with 386 Whole - Bills 040255, et al - 5/18/04 the investigation, and will continue to do so. Federal investigators have sought to interview City of Philadelphia personnel, and are expected to seek other interviews in the days ahead. It is, therefore, important that you understand your rights and obligations, should you be contacted by the Federal authorities for an interview. Is that the memo that you have?
Okay. All right. Now, with regard to this investigation -- And I think we had determined last time we were together that the budgeted cost for this is somewhere in the neighborhood of about $2.7 million?
We -- We projected 1.5 for this fiscal year, and for next year as a contingency set-aside 1.2. And I hope not to have to spend it all. 387 Whole - Bills 040255, et al - 5/18/04
Okay. Now, how many... The other requests, I believe I made at that time was a listing of the outside legal counsel involved. Has that list been provided? Is that a part of the document?
I don't know where it is in process, but I thought we -- we had prepared a response with the firms and 11 the -- the -- the year-to-date 12 expenditures, so... 13
No. It -- I had separate -- I believe I immediately sent the prior, because I had -- as I had said, I -- it was something I already had a copy of. It wasn't something I needed to do, but --
-- but this here... No; I'm just talking about the previous document we discussed, the May -- the May 388 Whole - Bills 040255, et al - 5/18/04 6th transmittal of -- of the opinion. This I don't know. I'll have to check where it is in the pipeline.
Yeah. And I can... I can probably dig out the -- the list here, in addition to providing it to you and to the --
All right. Well, if you have it, just give it to the sergeant-at-arms.
And they can deal with that. Now, how many employees are present --
Well, I -- I don't have -- What I have are -- are notes on this, so I can send to it you by writing tomorrow or read it into the record, whichever you prefer.
Well, why don't you read it into the record, and then why 389 Whole - Bills 040255, et al - 5/18/04 don't you send me something in hard copy tomorrow.
The law firms engaged, Councilman, are Ballard Spahr. I'll read -- I'll read the whole names of the firm names. Ballard Spahr Andrews & Ingersoll. Christie, Pabarue, Mortensen and Young which is the second firm. The third is Clark and Mc Gill. Fourth is Cozen O'Connor. Fifth is Drinker Biddle & Reath. Anna M. Durbin. Sixth [sic], Duane Morris. Seventh [sic], Grant & Lebowitz Eighth [sic], Grimes & Grimes. Ninth [sic], McElhatton & Associates. Tenth [sic], Law Offices of Gregory T. McGarrity. Eleventh [sic], Miller Alfano & Raspanti. Twelfth [sic], Montgomery, McCracken, Walker & Rhoads. 390 Whole - Bills 040255, et al - 5/18/04 Thirteenth [sic], Nasuti & Miller. Fourteenth [sic], Patrick Eagan. And they're... I may have miscounted, but... Is that 14?
But we'll get -- But we'll get you the full list in writing. I'm -- I'm not sure why you haven't gotten it.
How was it determined which firms would provide this representation?
The... In almost every instant the selections were made before I was here. Certainly...
...we're picking from the... that part of the local bar that has been -- that has investigation and dealing with... has experience in dealing with Federal investigations for... Let me ask -- Let me ask Don Marino, my litigation chair, to come up and expound. 391 Whole - Bills 040255, et al - 5/18/04
Good evening. Councilman, I came aboard in June. Don Marino, Chair of the Litigation Group in the Law Department. I came aboard in June. And as you know, I guess the probe started... There was a probe going on at that time, but it really picked up in October. And the Solicitor's predecessor wanted qualified firms, people experienced in Federal investigations; and, in fact, many of whom were former U.S. Attorneys involved in this, if at all possible. In addition, we were very sensitive to selecting or at least recommending people of minorities. That was very important in our --
We were very sensitive, the Law Department was very sensitive in including minority representation if at all possible, with regard to the lawyers that would represent the individuals we felt 392 Whole - Bills 040255, et al - 5/18/04 needed representation. We thought that was important.
Councilman, I can supplement that. I mean, as you saw from our testimony last time, and from the data that you've looked at and discussed in Council, I mean, we've... The Law Department just has a pretty good record in exercising its discretion in selection of counsel, to always have a diverse talented pool of counsel. And that's the extent of what Mr. Marino is referring to. The other point, I guess, that we should make in -- in -- what really goes to how we end up with this many lawyers is that the -- the -- the volume of lawyers and law firms has been driven by the insistence of the U.S. Attorney's Office, in an effort to avoid potential conflicts down the road in the investigations, and the investigation, to insist on separate counsel for individuals. 393 Whole - Bills 040255, et al - 5/18/04
You mentioned that a couple weeks ago, and I wanted to ask you about that. But I needed to go back to Mr. Marino's issue. I understand... And I think you were probably here for the Airport, and even Procurement and MBEC. I'm trying to understand if there's a legal matter involved, certainly you'd want to have a diverse team of people, but you seemed to emphasize that there was great emphasis on the minority lawyers. And I mean, I guess I'm just trying to figure out in this kind of matter why that... How does that factor into just, you know, picking firms and trying to get the best representation?
Very straightforward answer, Councilman. And it's that at my experience, and I believe in the experience of my predecessors, these are not mutually 394 Whole - Bills 040255, et al - 5/18/04 concepts. We have submitted --
If I may finish my answer, we've been able to secure qualified, experienced counsel with this expertise, and in the process, as a normal part of doing business, trying to attract --
I don't think I have actually much of a big issue about it. I didn't really understand why Mr. Marino felt compelled to emphasize it or overemphasize it as a particular issue. I had --
I think you'll find in the Law Department that you have several 395 Whole - Bills 040255, et al - 5/18/04 City Solicitors, myself included, that care a lot about diversity, and incorporated into our normal day-to-day practices in how we communicate with our managers about selection. So I'm actually kind of happy that Mr. Marino in articulating what he thinks about list diversity.
I understand. And I'm glad it's on his mind. You mentioned today and you mentioned before about the U.S. Attorney insisting on outside counsel. What exactly did the U.S. Attorney say or direct you to do? And although communicated that message?
As much as I think it's appropriate to say, is that the U.S. Attorney's office clearly communicated as it approached certain individuals in the course of the investigation, that not knowing what -- where those interviews or -- would -- would go, that -- that they would not have the individuals represented by those lawyers representing the... that 396 Whole - Bills 040255, et al - 5/18/04 they would -- representing other individuals or the -- or the City corporation, if you will, proper; that they would have separate counsel, to avoid the potential for conflict down the road. And that came from the U.S. -- from the -- the -- attorneys in the U.S. Attorney's Office.
So ultimately the -- the -- the -- the U.S. Attorney for the -- for...
I'm asking a slightly different question. What I'm asking you is, who in the U.S. Attorney's Office made the communication, and what exactly did they say?
It was more on -- on behalf of the U.S. Attorney for this District. And what -- And what they said, my understanding -- I'll ask Mr. Marino to correct me if I'm wrong -- in the course of the investigation they would say, we want 397 Whole - Bills 040255, et al - 5/18/04 this person to have separate counsel to avoid any -- the potential for any conflict down the road. That's my understanding. Mr. Marino.
Yeah. Pretty much it worked that way, Councilman Nutter. What would happen would be they would contact our office and indicate a desire to perhaps to speak to someone. And on a lot of occasions I would ask the individual U.S. Attorney who called could we represent that individual? Is there any problem if our lawyers represented them. And then our answer would be, no. 17 We feel there might be a potential conflict, and we would recommend that outside counsel be considered for that individual.
Mm-hmm. I understand that. Mr. Marino, who communicated that to you?
Well, Councilman, one thing I thought of -- I've expressed is 398 Whole - Bills 040255, et al - 5/18/04 that from my perspective, we're -- we're -- communications are happening on behalf of the U.S. Attorney for the Eastern District. If you'd like to know who within the Eastern District is conducting various parts of the investigation, I think it's a question better directed at the U.S. Attorney.
No; I understand that. I'm not asking about the investigation. I'm simply asking you, you indicated you had a communication directing you or suggesting that you take certain actions which are now resulting in significant costs to the City of Philadelphia.
On behalf of the U.S. Attorney. And if you want us to say which Assistant U.S. attorney or who in the U.S. Attorney's Office, I would at least ask that be deferred until we consult with the U.S. Attorney's Office or until you ask him.
Because you want 399 Whole - Bills 040255, et al - 5/18/04 to be able to ask them is it okay to answer the question?
Because I think it's his prerogative to disclose, if he wishes, who's involved in his investigation.
Okay. How many employees are presently receiving representation?
Councilman, with the number of employees -- I'll answer generally, but I think your question is more specific. There have been dozens of employees represented by outside counsel, and that every informational witness, every custodian of record, everybody that's had anything to do with the investigation has had representation from the Law Department or from outside counsel, but mostly outside counsel. If the question is how many individuals fall into the category about what you were asking, if -- that where -- where the U.S. Attorney asked that they 400 Whole - Bills 040255, et al - 5/18/04 have separate counsel?
Not being held to the exact, I would say it would be somewhere around a dozen.
The exact number we could provide you, though. But it would be about or people. 12
Are there employees who have received outside counsel who were not specifically designated by the U.S. Attorney's Office to have outside counsel?
Councilman, I'll answer this question. I'm not sure how far down the slope I will go. It's my understanding that in all but one of the -- in all but one case the -- the -- the request came expressly 401 Whole - Bills 040255, et al - 5/18/04 from the U.S. Attorney's Office. In one case it sort of arose from discussion. I -- and kind of a judgment call, my judgment call. And that case -- In consultation with the U.S. Attorney. So, the U.S. Attorney never got to the point where they would have had to insist. I won't speculate whether they would have.
But I've been left with the impression that there are, based on your previous statement, there are a variety of individuals within the government who have received outside counsel legal services, either in preparation for testimony or as a informational witness.
Two firms that have been providing counsel to the -- you know, the -- to the City itself as an entity -- that -- that -- for the -- to the City 402 Whole - Bills 040255, et al - 5/18/04 generally, and the balance have been represented -- been providing representation to those City employees individually, at the insistence of the U.S. Attorney, except in that one case where it was my judgment made before or absent any request by the U.S. Attorney. And that's as far as that goes.
With the President's indulgence, I don't like doing... taking up matters this serious very lightly or off the cuff. And I'd respectfully request to 403 Whole - Bills 040255, et al - 5/18/04 be able to respond in writing tomorrow morning because I want to make sure that -- that -- that we haven't -- we haven't breached any of the commitments or concerns that we expressed in the opinion that we just submitted to you. But we'd be happy to respond dispositively tomorrow morning either way, Councilman. I think it would be fine to respond. I just don't want to step on something.
So you're saying you're going to submit an answer in writing tomorrow?
What are the positions of the 12 or 13 who are receiving representation?
What are the positions, the job positions, within the 404 Whole - Bills 040255, et al - 5/18/04 government of the or people receiving representation?
Okay. For the 7 12 or 13 who are receiving specific 8 representation, did they request the 9 representation in writing? 10
As I said, the request 11 has been by the U.S. Attorney. We would do 12 it in consultation with an individual. We 13 won't make somebody be represented by somebody that -- that -- that they don't want. In some cases --
No. They... It... We haven't had a situation where, to my knowledge, where -- where -- where... We have had -- It would have to be mutually agreed on. If we didn't agree, then, on the propriety or the terms of a representation, we... I assume we would -- we would resist 405 Whole - Bills 040255, et al - 5/18/04 paying, but it's not a situation that I know has arisen.
Does the employee get to choose who their representation is?
Do they get to put forward someone and then you approve it? Is that the way it works?
What we did, we would suggest someone we felt was competent to represent that employee, and the employee would meet with the attorney. And of course, there had to be a connection between the employee and the attorney. And if there was not, the employee -- the employee could so advise us.
Yeah; you got the people talking to you. Let me make sure I better understand 406 Whole - Bills 040255, et al - 5/18/04 20-702, representation by the City, in the Philadelphia Code. Says the City Solicitor shall defend and the City of Philadelphia shall indemnify and hold harmless the officers and employees of the City, whether currently employed by the City or not, against and from any and all personal liabilities, actions, causes of action, and any and all claims made against them whatever, for acts performed within the scope of their employment. The individuals who have specific representation, is the claim that --
I haven't asked a question yet. Why did they need representation? What is being alleged?
At the point at which the U.S. Attorney's may be assert -- has 407 Whole - Bills 040255, et al - 5/18/04 insisted, it's been to avoid the -- for the -- for the purpose of serving, you know, the... for the sake of their investigation and preserving or promoting its efficacy, they want to avoid any potential for conflict down the road. And...
Maybe that's the part that I don't completely understand. The conflict would be what, that if the Law Department's representing all these people, you could have --
The potential for -- for -- for conflict, determined with very little information, that -- that -- or based on limited information, when the U.S. Attorney makes that, is they don't want you -- you know, presumably they don't want two people whose interest may be adverse down the road represented by the same 408 Whole - Bills 040255, et al - 5/18/04 person or firm or entity in the case of a law firm.
But are you indicating that you're not sure at the moment what those interests are?
Precisely. That's why it's an investigation. That's... And I'm -- I'm -- I'm saying that the U.S. Attorney doesn't necessarily know what they -- what they are. That's why they take the precaution of insisting on -- on separate counsel. It's a judgment call made by the U.S. Attorney.
No; I understand. But if we don't know the answers to those questions, and if the standard is --
I can -- I can tell you -- I mean, if you want to go down the road here, the point at which -- if there's a point at which our department, I believe that we have information that -- that -- that -- that to substantiate that somebody -- that what -- the representation 409 Whole - Bills 040255, et al - 5/18/04 that we're providing relates to activities that went beyond the scope of someone's employment, we would discontinue representation. And if that's a case where somebody has an individual lawyer, then they would have to either find a new lawyer or continue to pay the cost of those lawyers -- of that lawyer on their own.
On the City's behalf, have you conducted your own investigation to make that determination?
To see if there was any conduct outside the scope of employment?
Well, because of the nature of the Federal investigation, we... what -- We don't necessarily know what the substance of the Federal investigation is. We know what questions in many cases are asked of certain folks, but -- but it is a -- a -- a confidential process. We also -- If something -- 410 Whole - Bills 040255, et al - 5/18/04
We're also careful to -- to not do anything that compromises or accidentally obstructs the Federal investigation. However, if in the course of all this, information arises that -- that -- that -- that gives -- that creates -- creates concern, then we would pursue it to the extent we can find out, and at any -- at any time along the way, make a determination about whether to provide representation going forward.
But isn't part of the standard here the whole issue of acts performed within the scope of employment? And you're saying... I think you're saying at the moment you're not sure whether any of these individuals have performed acts that might be outside the scope of their employment. Yet, you're providing legal services. 411 Whole - Bills 040255, et al - 5/18/04
And you don't know if the... for whatever the investigation is or for whatever they're being asked about, whether the acts are within the scope of the employment. Why wouldn't you seek to ascertain --
-- are the actions within the scope of the employment?
Well, a -- a -- an employee is provided counsel. Counsel interviews or sits with an employee in -- while they are -- while -- while information is sought from them. If in -- If in that process something comes to the attention of a lawyer on behalf of the City that -- that raises a question about whether there's been activity beyond the scope of their employment, we would seek to investigate it 412 Whole - Bills 040255, et al - 5/18/04 further, mindful of -- of the Justice Department's interest that we not do anything that gets in the way, and make continuing judgment calls. These are continuing judgment calls not easily to formulate --
I understand that. And I understand you don't want to get in the way of the Justice Department's investigation. But if you determined, as you've already indicated that you may determine at a later point in time, but if you determined up front --
Councilman, if somebody shows up right now, if an F.B.I. agent comes right now, as we're speaking, comes up to you, I'm going to walk over there and provide you representation. And I am going to do so until I... all the way through, unless at some point, including my discussion with you, I have a reason to believe that you've done something that -- that -- that would cause 413 Whole - Bills 040255, et al - 5/18/04 me not to be able to represent you. That's how it works --
And I assume at some point you're going to ask me, based on whatever the person --
-- said they wanted to talk to me about, are the actions that they're asking you about within the scope of your employment.
And then if I say yes, I guess you'll continue to provide the representation, but you'll probably ask me a few more questions.
No, I won't say what -- Yeah. And after I'm -- we -- I'd be listening very carefully to what -- what the questions are, what answers are, and -- and I would want -- you know, I would want to know, for the sake of representing the City, and you as its employee, as much as I can in my duties to the city.
And everybody with such representation knows and is -- and is told who -- who the client is here.
And so my question again is, has the City either asked the question or been able to ascertain whether the actions by any of the individuals fall within the scope of their employment?
In every case we believe we are determining on an ongoing basis that it is something within the scope -- whether it's within the scope of employment, and cease when we believe or would cease when we believe that it isn't.
If I didn't think it was within the scope of your representation --
If I didn't think it was within the scope of your representation, I'd say, you're on your own. 415 Whole - Bills 040255, et al - 5/18/04
So at the moment, your statement is that all of the individuals have indicated affirmatively that none of their actions have been outside the scope of their employment.
There is a -- There is a question that -- If you come to me and say, you know -- You go out on DROP tomorrow and you say, you know, in a couple weeks from now you come to me and say, the F.B.I. showed up on my doorstep. They want to talk to me about something. I'm not sure -- You know, I think it relates to my employment or it seems to be related to everything else that's going on, we would at least want -- want... and you're seeking that representation, we would have to make a determination about whether it's -- whether it's related to your employment or not. 416 Whole - Bills 040255, et al - 5/18/04 It may be that we initially thought it was and it's not or that we initially thought that it wasn't and it is.
Right. No; I understand that. But the earlier question was, as we sit here now, is it your testimony or statement that all of the individuals being represented that have their own separate legal counsel have affirmatively stated that whatever the investigation is about and whatever they're being asked about, all of their actions fall within the scope of their employment?
If somebody told us or our counsel that -- that -- that they did something that constituted a crime, which would certainly be beyond the scope of their employment or that the whole thing is really about something that has nothing to do with their job, then we wouldn't be representing them.
Okay. Has the City made any assessment of its own legal 417 Whole - Bills 040255, et al - 5/18/04 exposure, based on any of whatever these actions might be?
The City has apparently hired its own legal counsel for itself.
To represent -- And what that means is to -- to -- to -- to cooperate with the investigation by providing responses to document requests, informational witnesses, custodians of record, dozens of interviews. I mean, it's...
Is the City itself being investigated or is it just individuals?
Not -- We wouldn't -- We wouldn't get into the substance of what's being investigated, but I don't -- I don't know that -- that -- that -- that -- that 418 Whole - Bills 040255, et al - 5/18/04 the nature of what we've heard about this probe has to do with -- with an entity as such.
Okay. So you're saying that so far you have not conducted any investigation.
So you're saying so far you have not conducted any investigation on your own on behalf of the City --
I didn't say that, Councilman. I didn't say that. I said that -- that -- that -- that on a -- that continuously we are fact finding and always making a judgment about 419 Whole - Bills 040255, et al - 5/18/04 whether it's a scope of investigation. It's the opposite of your answer. It's not never; it's always.
Gotcha. Okay. I don't think I said never. Now, are we paying the full normal rate for the outside counsel?
Is there a negotiated rate or a blended rate? Is there one rate for all of the lawyers involved?