Six months in, AG’s probe of Flint crisis tops $2M

Chad Livengood
Detroit News Lansing Bureau

Lansing — Attorney General Bill Schuette spent more than $2 million in the first six months of his Flint water crisis investigation on a team of attorneys, investigators and support personnel that totaled 42 people in June, according to records obtained by The Detroit News.

About $1.86 million of the expenses went to paying lawyers, retired police officers investigating the widespread contamination of Flint’s water, law clerks and an unnamed expert witness, according to invoices The News obtained through a Freedom of Information Act request.

The records show Schuette spent another $178,000 on computers, printers, copiers and cellphones for 23 attorneys, investigators and aides to keep communication about the investigation separated from the day-to-day work at the Attorney General’s Office, which is separately representing state agencies subject to the wide-ranging criminal probe.

Thirteen attorneys who have worked on the case racked up more than $987,000 in charges through mid-June, including $226,500 billed by Royal Oak attorney Todd Flood as the lead special prosecutor in the case through his firm, Flood Law PLLC. In July, the State Administrative Board approved a $3.4 million increase in the Flood law firm’s original $1.5 million contract that can be spent through September 2017 investigating and prosecuting individuals responsible for Flint’s lead-tainted water.

“We’re going to spend whatever it takes to get the truth and not one penny more,” Schuette spokeswoman Andrea Bitely told The News. “The $2 million is a pretty reasonable cost for the number of people and the IT infrastructure we’ve set up here.”

The attorney general’s probe so far has resulted in criminal charges against eight current and former state employees and one city of Flint utility worker.

Schuette also has sued two engineering firms that worked at the Flint water treatment plant, claiming the companies “botched” treatment of corrosive Flint River water blamed for leaching lead into the city’s drinking water supply.

Three other attorneys working on the investigation as special assistant attorneys general have billed more than $100,000 for their work through June 15.

Flood and 10 other attorneys were initially working on the investigation at $400 per hour. But a May 31 amendment to the contract eliminated the hourly pay scale in an attempt to contain monthly expenses to $198,000. The contract allows for monthly billings to exceed the $198,000 soft cap as long as the total cost doesn’t exceed $1,511,087 from April through September.

The monthly cost containment clause came after billings topped $703,000 for February, March, April and May topped $1 million combined.

The amended contract requires a minimum 640 attorney hours, 640 investigators and 100 hours from support personnel each month.

“This is a way for the budget to remain on budget and ensure we’re accomplishing what we need to,” Bitely said.

Nearly all expenses for attorneys, investigators, clerks and other support personnel are being run through Flood’s law firm, with the exception of Special Agent Jeff Seipenko, an employee of the Attorney General’s Office assigned to the case.

The investigators, led by former Detroit FBI chief Andrew Arena and Flint native Ellis Stafford, had billed about $307,000 through mid-June. Stafford is a retired Michigan State Police inspector.

The remaining costs of a legal services bill totaling $1.75 million were for law clerks, a records analyst and an expert witness, whose name is redacted from records but was paid $69,750.

Schuette also hired retired appellate judge William Whitbeck to serve as his top legal adviser in the investigation. Whitbeck, who served on the Court of Appeals with Schuette, has billed nearly $114,000 through the end of June for his services, records show.

Whitbeck is working under a contract separate from Flood’s at a “discounted hourly rate” of $400 per hour. In June, Whitbeck’s contract was increased from $50,000 to $178,000, with monthly compensation capped at $17,000. Records show Whitbeck initially billed $27,800 for work in June, but was paid $17,000 under the amended contract’s “discount.”

Schuette hired Whitbeck because his top chief legal counsel, Matthew Schneider, and Chief Deputy Attorney General Carol Isaacs are walled off from the investigation because of the Attorney General’s Office’s representation of state department and officers, Bitely said.

“Bill Whitbeck is Bill Schuette’s sounding board on a lot of things,” Bitely said. “He’s sort of filling the role of chief deputy or chief legal counsel.”

Whitbeck’s contract contains a provision disclosing that he will recuse himself from an appellate court training program run by the Warner, Norcross & Judd law firm if the practice proceedings for attorneys “in any way relate to the Flint water situation.” Attorneys at Warner, Norcross & Judd have a $800,000 contract with Gov. Rick Snyder’s office to provide the governor and his staff representation in Schuette’s criminal investigation.

The Attorney General’s Office is providing Snyder and numerous state employees with legal representation in criminal investigations conducted by Schuette, U.S. Attorney Barbara McQuade and Genesee County Prosecutor David Leyton, as well as numerous civil lawsuits filed against the Snyder administration over Flint’s water contamination while the city was under state control.

To keep a firewall between attorneys and investigators all working under Schuette, Flood’s team has been operating in an office in Detroit with a computer system that is “completely separate and walled off from the state of Michigan,” Bitely said.

“When you’re looking at the state of Michigan, you want to make sure you’re completely walled off,” she said.

Records show the number of people working on the investigation grew from 31 in March to 42 in June.

Flood he has not sought reimbursement for the cost of renting the office space and also isn’t billing the state for his own travel and meals, Bitely said.

Bitely said Flood paid for his own plane ticket, hotel and meals to take a March trip to Washington, D.C., where he sat through two days of Flint hearings conducted by the U.S. House Oversight Committee, including Snyder’s congressional testimony.

The Verizon cellphones all contain Flint’s 810 area code, though the specific numbers were redacted from the records. Schuette has one of the phones and a separate iPad for the investigation, according to the records. Schuette’s top advisers Rusty Hills and John Sellek were also given phones for the investigation, according to the records.

The $178,000 in equipment purchases includes a bullet-proof vest among the invoices for computers, printers, copiers and cellphones. An April 26 invoice billed the Flint water investigation $650 for a Armor Express Halo Threat Level II concealable vest with a shock plate for added protection, records show.

The vest was purchased for Special Agent Jeff Seipenko when he joined the Attorney General’s Office in April, Bitely said.

Initially, Seipenko was hired to work in the health care fraud division. But before he started that job, he was immediately reassigned to work on Flood’s investigation, according to Bitely.

Special agents in the Attorney General’s office, who are typically police officers, are routinely issued a gun, badge and bullet-proof vest, Bitely said.

The Flint team equipped all of its investigators with identification badges for conducting interviews of witnesses, which Schuette has said now exceeds 200 different people.

Records show an extra badge costing $18.95 was bought in late March as a “replacement for stolen ID belonging to Ellis Stafford,” according to a hand-written note on the invoice.

The badge went missing after someone rummaged through Stafford’s vehicle, Bitely said.

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Twitter: @ChadLivengood

Staff Writer Jonathan Oosting contributed.