Joliet Investigating Nearly $660K in Unauthorized Legal Bill Payments: Mayor

Joliet is investigating possible overbilling after old bills revealed nearly an additional $660,000 in payments that were not authorized by the city council.

Mayor Robert O’Dekirk and the city’s new Inspector General Chris Regis shared the information during a press conference held Thursday morning.

In 2005, Joliet hired Chicago law firm Figliulo and Silverman to provide legal services for the city for an eminent domain suit to condemn and take ownership of Evergreen Terrace.

Figliulo and Silverman was hired at an agreed upon rate, but over the years that rate rose and the city was never notified of it, according to Regis.

“In a 10-year litigation, it’s not altogether shocking that sometimes the prices would go up,” Regis said. “But in some instances, the increases were quite significant.”

A city ordinance says a city cost over $20,000 needs to be submitted for approval by the council, but a Sept. 19, 2012, voucher request authorizing the payment of $230,936.69 was not sent for approval, Regis said.

O'Dekirk said there are other instances of that occurring.

At the beginning of litigation, some forms were submitted even though they were under the $20,000 threshold.

“So, the city council was seeing, for about a year, those costs,” Regis.

When the rates for the law firm did go up, a contract approving the new rates was not sent to the city council, according to the press conference. The original contract for $210 to $250 an hour allegedly went up to around $400 an hour.

“The city council was never told of the increased rates of the law firm for the litigation,” Regis said.

A total of $5.4 million dollars was paid to Figliulo and Silverman. The difference between between the legal fees that were paid under the increased rates and the fees which would have paid at the originally agreed upon rates is approximately $656,669.69, according to the report.

Jim Figliluo, a partner at the law firm, said in an email that the services the firm provided were excellent and successful, citing the case won against the United States Department of Justice and the owners of Evergreen Terrace.

"The fees charged were reasonable and the rates were less than market. Joliet received detailed bills from us each month which disclosed the fees charged, the services rendered, the lawyer who performed the service, the hours spent and the hourly rates. Joliet paid those bills as due. The city even paid a bill for our services at these same rates as recently as last month," Figliluo said. "If the mayor or his long time friend, the new Inspector General, think those rates are improper and still had the city pay them less than one month ago, maybe they ought to investigate themselves. Any suggestion, by anyone, that there was any wrongdoing in connection with our billing or with our handling of this matter is false and is being said with actual malice. "

Former Joliet City Attorney Jeff Plyman allegedly signed off on the bills without notifying the council, according to O’Dekirk. Regis said there was an attempt to reach him, but he did not respond.

O’Dekirk said he didn’t want to speculate on what the overbilling means, but said there’s a civil aspect to it, where Joliet will go after those involved to gets its money back, and possibly a criminal aspect.

The council may hand the case over to the Attorney General’s office or the U.S. Attorney’s Office.

Possible charges include theft and fraud.

O’Dekirk said there are also instances of billing for document storage, “which is something lawyers are not allowed to bill for,” adding that legal fees need to be increased in writing.

“The Chicago law firm knew that to submit a bill for $400 an hour, they needed to have a contract saying they were allowed to,” O’Dekirk said. “Conversely, people in city hall knew that they weren’t authorized to pay $400 an hour. These are issues that need to be sorted out.”

Figliluo said that the only cost relating to document storage that he is aware of is from an electronic discovery company that charged the city for the cost of hosting the electronic documents on its website.

"Those costs are paid by the client in almost any case where there are voluminous electronic documents produced in discovery. The city knows that fact, the mayor knows that fact, and his friend Chris Regis knows that fact," Figliluo said. "If the mayor or his friend, both of whom are lawyers, have said that those costs or the city’s payment of those costs is illegal, they are making false and defamatory statements."

O’Dekirk said three different inquiries were sent via email to the law firm as to why the rate had been increased and received back three different answers.

In addition to overbilling, O’Dekirk said there were payments to the law firm for private vendors and separate payments made from the city to private vendors.

“We’re not sure if there’s an overlap,” O’Dekirk said.