Outside lawyers paid $15,000 in one month in Substance case!

By George N. Schmidt

For the past two years, the Chicago Board of Education paid one of its outside lawyers at the rate of up to $310 per hour in the Substance case.

Other outside lawyers billed the Board and were paid at rates as high as $270 per hour. Clerical staff were paid $80 per hour.

In total, the Board paid more than a quarter of a million dollars for outside legal work on the Substance case between January 1999 and January 2003, according to Board Reports, confirmed in part by recently released Board documentation on the case. But the documentation is incomplete, and the cost of the outside attorneys hired by the Board during its Vallas-era vendetta against Substance might be as much as a half million dollars. The bookkeeping is so poor that an Enron-style cover up might be in the works.

In one day, one of the outside lawyers used by the Board was paid more than a beginning teacher earns in one month in the classroom. On December 27, 2001, Laura J. DeMoor supposedly worked 8.5 hours on the Substance case. For that day’s work, DeMoor was paid a total of $2,295, according to Board documents. The total billed for the two months ending January 31, 2002 was $25,276.

In three years, between 1999 and 2002, the hourly rate billed by Patricia Felch (who has led the outside lawyers assigned to the case) went from $210 per hour to $310 per hour — an increase of more than 45 percent.

During that time, average teacher pay in Chicago increased by less than eight percent.

August 2000 was the month that the Board of Education voted to fire this reporter from his teaching job. The firing came after five days of hearings between January and June 200. The hearings were all conducted by employees of the board who worked for the Board’s Law Department.

Patricia Felch at the time was with the law firm of Banner and Witcoff. During August 2000, Felch billed the board for nearly $5,000, even though she was not directly involved in any of the major activities in the termination hearings that had taken place during the previous eight months. Between January and June, 2000, six of the board’s own lawyers had handled the termination hearings against this reporter.

In many other months, the amount was much greater than the billing for August 2000.

• In September 1999, the outside lawyers billed the Board for $14,175.88. Unlike many of the Board of Education’s suppliers, their bills were acted upon promptly. The September 1999 bill was approved for payment by Marilyn Johnson on October 20, 1999. They were paid by the middle of the following month.

• Two years later, in October 2001, the case was still grinding on — and the bill was even greater. For October 2001, the Board paid its outside lawyers a total of $16,035.60.

More than four years after the Chicago Board of Education (then called “Chicago School Reform Board of Trustees”) sued Substance and its editor (this reporter) for $1.4 million in a highly publicized case that made national news, the board is slowly detailing the enormous cost of outside lawyers in response to requests under the Freedom of Information Act (FOIA). The first responses to the Substance requests (some made as long as three years ago) began arriving at the Substance offices in mid-March.

The documentation is still incomplete.

Indications from a close examination of the bills submitted raise questions about the veracity of Board Reports submitted to the Board of Education for payment by Marilyn Johnson. In some periods, Johnson was authorizing payment to outside attorneys while not reporting anything to the school board. The first materials were provided to Substance on March 17, 2003 and cover parts of the record between January 1999 and January 2003.

One law firm which represented the Board at the beginning of the case (Peterson and Ross) is not covered at all by billing materials recently provided to Substance. Johnson served as General Counsel to the Board during most of the years the case moved through the courts. Substance has asked the Board to complete the record so that the amounts authorized at the monthly meeting of the Chicago Board of Education can be compared to the amounts paid to the outside lawyers who represented the Board since the case began in January 1999.

The litigation began in January 1999 when the Board of Education sued Substance for “copyright infringement” in federal court after Substance published six of the 22 pilot CASE (Chicago Academic Standards Examinations) in its January - February 1999 issue. Amid much fanfare, Mayor Daley, then CEO Paul Vallas, and Board President Gery Chico claimed that Substance had cost the school system more than $1 million by the publiication of the now-defunct tests. The case dragged on, in a large part because the school board was willing to spend unlimited taxpayer dollars on highly paid outside lawyers and to also use more than a half dozen of its own attorneys.

In December 2002, the Board announced it was abolishing the CASE tests.

In January 2003, the Board reduced its damages claim from $1,400,000 to $500.

Substance refused to accept any deal and is preparing an appeal to the Seventh U.S. Circuit Court of Appeals. Even if Substance loses all appeals, the maximum amount it can now owe will be the $500 which has been stipulated to by both sides.

The appeal will be filed in early June at the Seventh U.S. Circuit Court of Appeals.

What began as a vicious legal attack on a newspaper and its editor will end as a First Amendment case against America’s third largest city and its school board, both of which tried to bully their critics into silence.

Ultimately, Substance will be seeking to be reimbursed for all of its costs, and its editor reinstated to his teaching job, from which he was fired during the hysteria whipped up as a result of the now-defunct claim of a “million dollars damages” for the now flimsy “copyright infringement” allegation.