American Bar Association objects to HUD demand that lawyers detail PHA fees

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The American Bar Association wants federal housing officials to back off from a demand that private lawyers retained by the Philadelphia Housing Authority divulge detailed information on $33 million worth of billings.

Bar association president Stephen N. Zack said in a letter to the secretary of the U.S. Department of Housing and Urban Development and the HUD inspector general that the demand would violate the right of clients to speak confidentially with their attorneys.

Zack's letter, sent Tuesday, was a response to HUD's Jan. 31 cutoff of federal funding for PHA's outside lawyers. HUD has called for the local agency to waive attorney-client privilege and answer questions about payments to outside counsel between 2007 and mid-2010.

HUD spokesman Jereon M. Brown said the fund cutoff had been ordered because PHA's legal spending was far out of line with other major housing authorities. He noted that HUD and the HUD inspector general had been publicly expressing concern about Philadelphia's big legal bills for nearly a decade.

"We're only trying to find out if the taxpayers are getting what they paid for. Period," Brown said. "It's not a carte blanche when you have federal dollars."

Without mentioning Philadelphia by name, Zack, a Miami lawyer, said changes in federal regulations were needed because "HUD has recently suspended its approval of contracts with legal counsel, including litigation contracts," when housing authorities declined to waive the privilege.

Bar association spokeswoman Stephanie Ortbals-Tibbs said Wednesday that Zack's letter - sent to HUD Secretary Shaun Donovan and acting Inspector General Michael P. Stephen - had been prompted by the HUD action in Philadelphia.

Another bar association official said Zack had written the letter after "attorneys for the Philadelphia Housing Authority" alerted the organization. The official, who asked that his name not be used, did not identify the Philadelphia attorneys.

Last year alone, PHA spent $10.3 million on outside counsel. The Philadelphia law firm Ballard Spahr was paid about a third of that amount.

According to HUD, PHA has plans to spend $40 million on outside counsel in the next five years just for labor and employment work.

By contrast, New York City's housing authority, which is about nine times the size of PHA, spent $8.6 million on outside counsel last year.

Last week, PHA's interim executive director, Michael P. Kelly, appointed a new general counsel at the agency and said PHA intended to do more of its legal work in-house.

Brown said PHA's legal spending had come under intense scrutiny after revelations that the agency's former executive director, Carl R. Greene, secretly settled three harassment complaints from female PHA employees for $648,000. Other sexual- and employee-harassment cases are pending.

"You've got these cases of sexual harassment that have been settled without anyone knowing," he said. "Because of the history, we have to look back and say what did we receive for that money."

Greene gutted PHA's legal staff, farming the work out to firms, some of which had strong political ties. Ballard Spahr employed former Gov. Ed Rendell before and after his eight-year tenure in Harrisburg, which ended last month.

Zack's letter said the bar association had been complaining about HUD's tactics since December 2006, when it wrote to then-Secretary Alfonso Jackson.

"Although we recognize that HUD and the [Inspector General's Office] may seek access to a wide range of information pertaining to compliance with HUD grants and funding, this information can almost always be obtained in ways that do not require waiver of these protections," Zack said.