Fort Smith Board not likely to audit Daily and Woods’ legal billings

story by Ryan Saylor

Any chances of an auditing firm reviewing billing by the Daily and Woods Law Firm to the city of Fort Smith appear dimmer after a Tuesday (June 10) study session of the Fort Smith Board of Directors.

When the issue was brought up for discussion, City Director Philip Merry again made his motion to request an independent audit of billings from the law firm to the city, as well as appointing a committee to review whether the contracted arrangement with Daily and Woods was the best for the city, or whether hiring counsel onto the city's staff was the best route. He had previously made a motion at the conclusion of the June 3 regular meeting of the Board, but Mayor Sandy Sanders said the motion was not proper since Merry had not added it during the beginning of the meeting, when the mayor had asked for additional items.

Merry had made clear that he was not accusing the firm of wrongdoing, but instead wanted a neutral group to review allegations brought to light by a series of posts by attorney Matt Campbell on his Blue Hog Report blog. Campbell, it was pointed out several times during the study session, represents clients in three different lawsuits either against the city or involving the city.

"We are stewards of other people's money. It is not our money. The challenge for a Board member is when to just go and when to pursue the transparency. I feel quite certain there's nothing wrong. More importantly, it doesn't matter what I think or what this Board thinks. I'm recommending and what I've had many a citizen to recommend is a neutral, transparent approach to the dialogue."

He also said the Board was "too close to the rhetoric" to make any judgments on the questions of whether the firm was over-billing the city or billing for work not completed, as Campbell accused the firm of charging the city for phone calls he said were never made in the first place. City Attorney Jerry Canfield and City Administrator Ray Gosack have said there was nothing to Campbell's allegations following an internal investigation by Daily and Woods into its billings of the city.

In challenging the need for an independent audit, City Director Keith Lau said directors must look at the "bigger picture."

"We've got a city attorney who's been with us for 40 years of service, impeccable service. There's no tarnish on his firm's record or his record. We've got a city administrator who has given view of the situation and said there's no improprieties. On the other side I see Matt Campbell. …The one thing that comes to mind is no matter where you stand on those reports, Matt Campbell is not an unbiased participant. He represents an interest which is counter to what we're trying to do, which is be good stewards of our taxpayers' money."

Lau continued, saying Campbell was "wagging our tail" by making the allegations, with the Board possibly acting based upon said allegations.

"Do I want Matt Campbell to wag my tail and make me go into an analysis of whether or not we're going to have a third party or an in-house attorney? I don't want him to wag my tail. And to be quite honest, with all the information, I can't make a decision. I'm not qualified to review those phone records or to say (what the city should pay for an attorney). And all I know is I feel like my tail is being wagged and I don't like it."

City Director Mike Lorenz said conducting an audit based on Campbell's allegations would set a bad precedent for the Board.

"If we were to go ahead with a three year audit, we as a board would be taking something that is being claimed on a blog by some by definitely non-partial third party that has everything to gain by distracting the real issues of his lawsuits, we're taking that and spending taxpayer money for a very expensive audit over an accusation of a couple of phone calls. We're not talking (about) an accusation of millions of dollars in ill-conceived bills. We're talking about a couple of phone calls. … I think it sets a huge, hugely bad precedent if we were to say we're going to react to that comment and that accusation by this attorney by auditing Daily and Woods. I just think it sets the wrong precedent because you've got people and attorneys that would take advantage of that in the future because you can distract attention from what our attention needs to be on. Now from a purely budget standpoint on whether or not we're better off with a contracted service or an in-house service, that's a whole different conversation. To me, that's a budget conversation."

Vice Mayor Kevin Settle, who officiated the study session in the absence of Sanders, conducted an impromptu poll of the Board and found only Merry and City Director Pam Weber in favor of moving forward with an audit. But with Tuesday's meeting only being a study session, the vote does not stand and a motion by Merry and a second by Weber placed a vote on the agenda for the June 17 Board meeting.

City Director George Catsavis, who said he had complete trust in Daily and Woods and specifically City Attorney Jerry Canfield, said he would have questions if the allegations were proven to be true and it was a repeated occurrence, but he said at this point, he is skeptical and against an independent audit.

"I know Jerry personally and I just feel this is just being blown out of proportion. This could be an honest mistake, you know? But in 40 years, for the first time for something like this to come up, I'm questioning this."

Speaking after the meeting, Gosack said he was pleased that the Board largely expressed confidence in the city administration and the billings of Daily and Woods.

Campbell’s past investigations have resulted in the resignation of former Lt. Gov. Mark Darr for misspending official funds and the withdrawal of Circuit Judge Mike Maggio from a Court of Appeals race this year after some questionable online activities were outed. Gosack said neither of the previous instances should matter with this situation with the city and Daily and Woods in terms of credibility for Campbell.


"I think each case stands on its own. Just because you were successful on a previous case does not automatically make you successful on the next one," he said. "Each case lives or dies on its own merits."

Gosack said if the Board ultimately decides to appoint a review committee to look into the hiring of in-house counsel for the city or keep current contracted representation, he said it would likely take the Board about two months to advertise for appointments and form the committee, with an additional few months of work. He said the city administration would offer staff assistance as requested. Such a review, he said, could be completed by the time the city begins review of the Fiscal Year 2015 budget later this year.

In other business, the Board approved an Aug. 12 special election on a millage increase for the Fort Smith Public Library. Library Executive Director Jennifer Goodson said private funds were secured to fund the $30,000 election.

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Nothing out of the ordinary.

Water dept begins to justify more money. Directors like/Canfield..dislike/Campbell to the degree nothing likely to happen there. Library gets unnecessary special election.

Well who does wag the board

Well of course they came up with some excuse not to actually do anything about the good old boy system in place. Pretty disappointed in Lau. They should have at a minimum addressed the fact that they should require daily woods to cease using block billing. Instead they decided to allow the bilking to continue. The audit of the bills would have been a ridiculous waste of time because nothing can be proven either way with the vague shoddy billing practices. Regardless of their thoughts of where the accusations are coming from, they need to get serious. Order that block billing stop, and take a very serious look at eliminating the wasteful outside counsel system. However the first thing that needs to be done is woodshed Gossack and remind him that the citizens pay his hefty salary and that's who he needs to represent, not his friends at the firm. Remind him they won't be his friend if he can't keep throwing a half million a year to them, then prove it and fire him. Seriously it's time he was replaced. He has been allowed to run amuck. As someone who is supposed to essentially be the CEO of a large multimillion dollar operation and is paid as one, he has proven time and again he can't manage actually doing the job nor represent his actual bosses. The shareholders are ready for change.

Wag The Dog

The system of Government in Fort Smith allows for nobody to be responsible or accountable to the people because the BOD is loaded with people that feed off the system. It just easier for the majority of the BOD to go along to get along and the City Administrator is free to deal every hand. We need ONE person who is accountable to the people and can be voted in or out of office.

Way To Go Ray

Stand your ground Ray because we all know that nobody would ever overbill the taxpayers for anything in Fort Smith, not even Flintco of Tulsa who seems to be 2 million dollars over priced on the Water Park.

Rob me please sir

In hindsight I guess someone should've audited Bernie Madoff, Rita Crundwell, Peregrine Financial, Tenens Corp., dba Essex Street Associates and countless other criminals who got greedy and comfortable stealing money. Saying we shouldn't audit the contracted city law firm after allegations and proof of over-billing because we have used them for over forty years is just silly. We will get exactly what we deserve.

Tip Of The Iceberg

The law firm overbilling charges are nothing compared to all the other overbilling schemes that seem to happen flow from you know who.

The Trust Me BOD

The people that are demanding a full accounting of City Hall legal expenses can over ride the captured BOD with class action litigation against the city. It certainly would be interesting to see the entire BOD dragged into a court to explain why they don't see the need for transparency in government.

No sense?

Whats wrong with atleast discussing the possiblity of hiring a city attorney? They didnt have to hire a firm to audit the billing. It was just a suggestion. The topic should atleast have been discussed. Disappointed it was swept under the rug.

Under The Rug

The rug is starting to show a few visual lumps because of all the dirt that has been swept under the rug.

Poor Old George

is caught in the WEB because he works at the pleasure of Mayor Sanders who heads up the Board at the Fair Grounds where George has a full time job to support him and his family. When one works in realm of the kingdom, its wise to keep the king and queen happy!

Incorrect Information

Your information is incorrect. Mayor Sanders is not the head of the Board at the Fair Grounds" (Arkansas Oklahoma Regional Educational and Promotional Association) and "Poor George" is single with no dependent children, "to support". Check your fact it makes you look stupid.

Blunders Or Excuses

Maybe that's just an excuse that poor old George uses when his feet are held to the fire because he has repeatedly used those words to justify his votes to his supporters.

Its Only Money

Oh well, over 1 million dollars for a fire tower and no money for an audit of legal bills while paying an overcharge of 2 million dollars on a water park. Who is kidding who here?

Can someone send this to

Can someone send this to Keith Lau so he stops sounding like a fool?

All about the Lau

Maybe its better to sound like a fool than to always look like a fool? Was it our great newspaper that endorsed Lau for City Director and wasn't he the choice of some of the City Hall cronies who just love to raise taxes, build water parks that are 2 million dollars overpriced, pump money into a loser convention center, raise water rates, not collect water bills from Van Buren, and spend other peoples money on inflated legal fees?

Lau mower

We get it. You don't like him. The rest of us see him coming to the meetings well-informed, asking tough questions and voting his conscious.