Seattle taxpayers spending hundreds of thousands to defend city officials, actions in court

by: Linzi Sheldon Updated:

The city of Seattle is spending hundreds of thousands of dollars to defend city officials, their decisions, and their initiatives, and could be preparing to spend more—to defend former Mayor Ed Murray in the newest filing against him.

When KIRO 7 learned the city's Judgment and Claims Fund (JCF) was $12 million over budget this year, we decided to find out where that money has been going—and where taxpayer dollars will be going in the future.

One of the ways the city will be spending money is defending Seattle City Councilmember Kshama Sawant in two defamation lawsuits.

“I was blown away,” Seattle resident Petros Koumantaros said. Koumantaros created a petition asking the City Council not to defend Sawant. “I didn’t think this was the best way for us to be deploying our public tax dollars.”
 

Document: 2017 Outside Counsel Expenditures -- Most Expensive

In one, a landlord claims Sawant and the city called him a “slumlord.” In the other, two police officers who were not charged in Che Taylor’s shooting death are suing Sawant for calling them murderers. The city is defending Sawant in both.

“I think public dollars would be much better spent on other issues affecting our community,” Koumantaros said.

KIRO 7 asked about the total cost, which assistant city attorney Joe Groshong said could be anywhere from “under $100,000 for both or significantly higher than $300,000 for both cases.”

We also discovered that the city, through the city attorney’s office, made a pricey decision to decline releasing the revenues from the gun tax that took effect in 2016.

Journalist Dave Workman, senior editor with The Gun Mag, filed a public records request asking for how much the city had made in the first quarter of 2016, since it has estimated it would pull in up to half a million dollars for the year.

But the city would not release the information, Workman said, “claiming that it would violate the privacy of taxpayers, the gun dealers who were paying the tax.”

The city attorney’s office confirmed its reasoning, saying that the city’s Financial and Administrative Services Department “believed it would be violating privacy laws if it released that information because there was a very small number of gun dealers and sharing that information could help identify who was paying what.”

KIRO 7 pulled the records on the city’s settlements over the past year and discovered the city lost that fight in court, paying out more than $36,000 in legal fees and for delays in releasing the revenue information, which was lower than expected.

It's not the only new tax costing the city.

“Before you knew it, in a blink of an eye, they passed it,” Dena Levine said of the city’s new income tax on people who make more than $250,000 a year.

She is a plaintiff in one of four lawsuits against the tax.

“You feel so strongly about this income tax that you're suing even though it doesn't apply to you,” KIRO 7 Reporter Linzi Sheldon said to her.

“That's correct,” she said, “but the flip side is it may at some point apply to me. I have a business. My business has a value.”

Levine owns an insurance company and employs five people.

We found out the city has hired an outside law firm, Pacifica, to fight Levine's lawsuit and others' for a fee of $250,000. The city attorney’s spokesperson said according to the contract, that fee will not exceed $250,000 but could be less.

“When the city passed this income tax, they had to know that a lawsuit or more would be coming,” Levine said.

We took her concerns back to assistant city attorney Joe Groshong and asked about the $12 million more the city needs for what it calls its judgment and claims fund.

“How much of these expenses are because the City Council is pushing the envelope -- you might say -- with some of their decisions?” KIRO 7 reporter Linzi Sheldon asked.

“We can say that there are a few cases this year that appear to be tied to either mayoral or council action and that those cases total around a million dollars in outside counsel expenses year to date,” Groshong said. “So of the supplemental that was requested this year, $12 million, that’s only a small fraction of the overall amount. Significant, but a small portion.”

KIRO 7 asked for a list of the city’s most expenses current cases involving outside counsel.

The ACLU's lawsuit over the city cleaning up homeless encampments has cost taxpayers $653,574.

Fighting three lawsuits over the city’s new rules allowing ride-share drivers to unionize has cost $456,628.

But there are many other costs that have nothing to do with council action, like a lawsuit over a broken water main the city alleges was caused by settling of the Highway 99 tunnel. That has cost taxpayers $385,704 so far.

“Taxpayers may look at these numbers and say -- the city should have budgeted better,” KIRO 7 Reporter Linzi Sheldon said.

“So taxpayers might say that because the word budget is used,” Groshong said, “and they would assume that, you know, budget means somebody thought through what the projected expenditures were going to be for calendar year 2017.

But that’s not how the fund works.

According to a City Council resolution, the budget is based on an average of the previous five years. This, Groshong said, is not an average year, and if people want changes, they have to change who's in charge.

“The city has to defend itself when it gets sued and the only funds available to the city are taxpayer dollars,” Groshong said.
As for the costs for the lawsuit against the city of Seattle and former Mayor Murray, the plaintiff’s attorney, Lincoln Beauregard, believes that the same municipal code and state laws cited as reason for the city to defend Sawant may require the city to also defend Murray.

Both Murray and the city are being sued for defamation, claiming that Murray used his position as a public official to defame the plaintiff, Delvonn Heckard.

City attorney Pete Holmes will decide how the city will proceed.
 

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