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PANEL OKS FUNDS FOR LAWYERS

May 7, 1999

Chattanooga Times / Chattanooga Free Press



Panel OKs Funds for Lawyers

The Associated Press

MONTGOMERY, Ala. -- A legislative panel, acting at Gov. Don Siegelman's request, approved a state legal contract Thursday that could pay millions of dollars to lawyers in Mobile who contributed to his election campaign.

The Legislature's Contract Review Committee approved the deal that would pay the Cunningham, Bounds, Yance, Crowder and Brown law firm 14 percent of money recovered from a state legal dispute against three oil companies.

Rep. Alvin Holmes, D-Montgomery, said the governor's legal office told him the state is looking to recover a total of about $90 million. That would allow the firm to get $12.6 million.

Siegelman is hiring the firm to pursue the claim that Exxon, Amoco and Hunt oil companies owe the state from offshore leases dating as far back as 1986.

The contract calls for the firm to get a 14 percent "contingency."

If the firm recovers no money, it would get nothing.

The lawyers in the firm include Greg Breedlove, president of the Alabama Trial Lawyers Association, and Richard Dorman, a longtime friend of Siegelman who is chairman of the board of the Alabama Education Lottery Foundation.

Like many other plaintiffs' lawyers, some of the Cunningham, Bounds attorneys contributed to Siegelman's campaign last year. Siegelman press secretary Kristin Carvell said those contributions are not related to the contract.

Cunningham, Bounds has expertise in complex litigation, is extremely aggressive and will guarantee the state full recovery, she said.

"The oil companies have refused to negotiate with the state seriously," she said. "With Cunningham, Bounds, we feel like the companies will take the state and all it's entitled to very seriously."

The dispute stems from an initiative started several years ago by then-Gov. Fob James' administration. Former Conservation Commissioner Jim Martin hired an auditor to scrutinize oil companies' past payments to determine whether they had shortchanged the state.

Carvell said the administration has "no idea" how much might be owed.

Conservation Commissioner Riley Boykin Smith of Mobile said the first meeting with the attorneys is set for next week.

When the state hires lawyers, it normally pays them hourly fees. The unusual contingency agreement is similar to an arrangement James used in 1997 to hire several attorneys to sue oil companies for back franchise taxes and royalties.

In that case, James also offered a 14 percent cut to a consortium made up of the Mobile firm of Helmsing, Sims and Leach, oil lawyer Michael Fincher and James' cousin, Braxton Counts III.

State officials have estimated the possible recovery to be in the seven-figure range, but the litigation is tied up in court.

In both cases, the 14 percent rate is well below the one-third that contingency lawyers normally take off the top of any award.

Republican Lt. Gov. Steve Windom said the firm chosen by Siegelman "has some of the best lawyers anywhere. They are as good as it gets. The governor made an excellent choice to deal with recovering money of that nature."

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