Attorney fees add up as external review of University of Michigan child porn reporting delay continues
The University of Michigan is paying lawyers up to $725 per hour to work on an external review of a six-month lapse in the reporting of child pornography found in an employee area at University Hospital and allegedly tracked back to a pediatric medical resident.
The tab for the external investigation of the reporting lapse and a separate review of hospital security procedures could exceed a half-million dollars, according to documents obtained by AnnArbor.com through the Freedom of Information Act.
Stephen Jenson
"Everything is taking a lot longer than we thought it would," Fitzgerald said this week.
The reviews were prompted by the discovery that eight Health System officials —including university lawyers and hospital security— were confronted with evidence that pediatric resident Stephen Jenson, 37, was allegedly viewing suspected child pornography while working at the Pediatric Emergency Department in May 2011 but didn't report it. U-M Department of Public Safety officers did not learn that another medical resident had discovered a computer thumb drive with documents containing Jenson's name and a pornographic image of a child until six months later, in November 2011.
The school launched an internal review of the lapse in December and publicly released a report of that review on Feb. 10. That review concluded the lapse was primarily caused by a poor decision by a university attorney, who has since left the university, and by inadequate communication between hospital security and police. The next week, the Board of Regents unanimously called for an external probe of the lapse, the first review of its kind since athletic department booster Ed Martin was accused of bribing Wolverine basketball players in the 1990s.
“It’s a terrible situation. It's one that is unacceptable to the regents," Regent S. Martin Taylor said of the lapse in February. "We must do everything in our power to make sure it's not repeated."
The school is paying international law firm Latham & Watkins a maximum of $395,000 to complete the review.
According to a contract of the agreement obtained by AnnArbor.com through the Freedom of Information Act, Chicago-based trial lawyer Zachary Fardon, an experienced internal investigator, is being billed at $725 per hour to lead the review. Other firm associates, who were not named in the FOIA, are being billed at between $595 and $540 an hour, according to the contract, and an unnamed partner is also being billed at $725 an hour. Firm paralegals are being billed at between $180 and $280 an hour.
If the university administration wants to exceed the $395,000 cap, it must first seek permission from the Board of Regents.
University of Michigan Health System photo
University of Michigan Health System photo
The separate assessment of hospital security is being conducted by Margolis Healy & Associates, a consulting firm specializing in higher education and hospital security. The firm is also conducting a study comparing U-M’s campus security operations to those of peer institutions. U-M originally predicted the review, which is in its 10th week, would take roughly six weeks.
Although Cunningham originally told AnnArbor.com in April that the review would cost $105,000, the contract with Margolis Healy & Associates, obtained through FOIA, shows an invoice of $111,312. According to the contract, the review of hospital security practices will cost $71,136 in billable hours and the benchmark study will cost $17,877 in billable hours. The firm has also billed U-M $22,299 under the category "travel and expense."
According to the contract, Margolis Healy and Associates will work to understand "current operational cultures", "assess leadership alignment to operating practices," "conduct a gap analysis between current and ideal practices," and "develop actionable recommendations."
In March, the university tapped retired auditor Fred White Jr. to serve as liaison between U-M and the outside firms. At a rate of $53 per hour, White has been paid $31,305 since March 1, 2012.
Meanwhile, Fitzgerald said U-M has not had any further contact with the U.S. Department of Education since sending the agency material in February related to the reporting lapse. DOE is investigating whether the university violated the Clery Act, a federal statute that requires universities to accurately disclose campus crime statistics and, when warranted, warn the campus community if a crime poses a threat.
Jenson is awaiting a June 26 hearing before the U.S. District Court in Detroit. He is facing federal child pornography charges after police discovered 97 images and four videos of suspected child pornography stored in his belongings.
This story has been updated with information about Fred White's pay. Kellie Woodhouse covers higher education for AnnArbor.com. Reach her at kelliewoodhouse@annarbor.com or 734-623-4602 and follow her on twitter.
Comments
MARK
Fri, Jun 15, 2012 : 2:38 a.m.
That much money for this investigation is just a crime and beyond comprehension. UM has lots of staff attorneys that they are already paying. Why get an outside person for such a high price. This is how our tax dollars are spent, benefiting no one except to cover the back side of the UM staff lawyers and administrators that screwed it up . The UM should not dare to raise tuition. I understand this is small change in their budget but what a travesty.
Arborcomment
Thu, Jun 14, 2012 : 10:07 p.m.
"review of hospital security practices should take about six weeks - putting it in Mid-May" So, they either found a whole lot more to investigate, or it's taking longer to dig the hole to bury this thing. Should have been part of a larger independent counsel effort to start with.
mczacharias
Thu, Jun 14, 2012 : 7:22 p.m.
gawd, how I hate attorneys
Goober
Thu, Jun 14, 2012 : 7:47 p.m.
Society has caused this problem of using attorneys for almost everything we do.
treetowncartel
Thu, Jun 14, 2012 : 7:26 p.m.
Until you need one
John of Saline
Thu, Jun 14, 2012 : 5:32 p.m.
Investigating cover-ups, the lawyer's dream job. Could have all been avoided with proper reporting.
xmo
Thu, Jun 14, 2012 : 2 p.m.
U of M Legal department screws up and this is what happens. "the lapse was primarily caused by a poor decision by a university attorney" Now the university attorney will teach at the University Law school after her Golden Boot out of her job! Is this because she is a women? or just a good liberal where Failure is a resume enhancement!
ordmad
Fri, Jun 15, 2012 : 4:53 a.m.
@tresspass: thanks for continuing the tradition of not reading things carefully and not thinking before responding. There is absolutely nothing that connects this nationally well respected educator/ lawyer/ administrator's departure with the topic of this story. That could change of course but, at this point, you're speculating without basis. Thanks for the brilliant addition to the discourse.
trespass
Thu, Jun 14, 2012 : 8:51 p.m.
@ordmad- if you believe the General Counsel left because she wanted to return to the law school, I have a bridge in Brooklyn to sell you. Why did the not choose one of her deputies to be interim General Counsel?
ordmad
Thu, Jun 14, 2012 : 5:34 p.m.
You have your facts wrong. The attorney who made the mistake is gone. The General Counsel who, thus far, there's no evidence that she did anything wrong has left her job and is returning to the law school.
Ron Granger
Thu, Jun 14, 2012 : 1:04 p.m.
This isn't an independent investigation. As Tresspass indicates, this firm mainly defends executives acused of wrong-doing. They conduct investigations to clear and defend those who hire them, and charge princely sums to do it. They are all lawyers, so the communication will all be secret. A real investigation would have hired an independent former judge or prosecutor, with power of subpoena. Or even allowed the governor to select the team. Speaking of which, where is the governor on this? Probably playing with his bridge models.
CincoDeMayo
Thu, Jun 14, 2012 : 12:47 p.m.
That's more than some people make in a COUPLE of weeks. That $395,000 limit will be reached in 13 and a half weeks at that rate, and that is if only 40 hours a week are worked. I'm glad that an investigation is being conducted, but what is the reason for such expense unless as @trespass suggests above, that the cost is really to defend the wrong doers.
trespass
Thu, Jun 14, 2012 : 8:48 p.m.
Wait for the other shoe to drop. It's coming!
Silly Sally
Thu, Jun 14, 2012 : 12:34 p.m.
With this much spending, $725 an hour, more than many make in a week, even $280 an hour for a paralegal! But hey, it ain't their money, its taxpayer money. Just raise tuition. Why is the university president making so much? For her experience? If so, then why was this allowed to happen and then be covered up? Hey, HEY!, Ho HO! Mary Sue Coleman has got to GO! Some regents, too?
Goober
Thu, Jun 14, 2012 : 7:45 p.m.
This will never happen, unfortunately. The same holds true for our mayor, most of city council and city leaders.
craigjjs
Thu, Jun 14, 2012 : 12:19 p.m.
$725 an hour. I guess it is still true, "it's not what you know, it's who you know".
Billy
Thu, Jun 14, 2012 : 12:16 p.m.
Seems like a GREAT use of funds......also seems like a great way to hurry up and spend founder money and keep their budget high. And people wonder why getting ANYTHING done in the medical industry has to be done at an exorbitant price...
bruno_uno
Thu, Jun 14, 2012 : 11:45 a.m.
so wrong but nothing surprising when you get u of m, a pedophile, and lawyers together.
CincoDeMayo
Thu, Jun 14, 2012 : 12:44 p.m.
Sounds like a bad joke...
The Black Stallion3
Thu, Jun 14, 2012 : 11:18 a.m.
Amazing how this University spends tax payer money.....Liberals think the pot will never go dry....but it will one day.
Goober
Thu, Jun 14, 2012 : 7:43 p.m.
To Elijah Balogna!
Elijah Shalis
Thu, Jun 14, 2012 : 2:02 p.m.
Yeah just like how Bush MR. Conservative spent $6 Trillion in debt and causes the recession thus causing Obama to go more in debt.
trespass
Thu, Jun 14, 2012 : 10:58 a.m.
The Board deliberated and selected this law firm without having a public meeting, in violation of the open meetings act. If you look at the website he primarily defends corporate executives accused of fraud, corruption and bribery. "He is a trial lawyer who has tried numerous cases, both as a federal prosecutor and a defense lawyer, including cases involving charges of financial fraud, tax crimes, money laundering, corruption, racketeering and conspiracy" "Mr. Fardon has conducted numerous internal investigations for private and public companies and has defended companies and individuals in connection with Justice Department and regulatory investigations. Recent matters include representing the University of Illinois in connection with investigations of student admissions practices, conducting an internal investigation for a publicly-held company related to internal financial fraud allegations, defending a healthcare services provider in connection with a government investigation and representing a key witness in connection with a major public corruption scandal in Illinois." Thus, he was the lawyer for former UM President Joe White who was fired for trading admissions to UI for favors and donations. You have to ask yourself, why the UM needs this type of lawyer to conduct an internal investigation. Is it because there are as yet undisclosed federal investigations going on? Is it because the University administration may yet face criminal charges for attempting to thwart justice? This case is sounding more and more like the scandal involving the basketball team and Ed Martin. That lasted 6 years and involved the FBI and the Dept. of Justice.
average joe
Thu, Jun 14, 2012 : 11:32 p.m.
It certainly appears that with this firm's background, they have been hired to lay the ground work for a defense of individuals that work for the u/m against federal charges, than to 'conduct an internal investigation'.
Carole
Thu, Jun 14, 2012 : 10:39 a.m.
$725 per hour. Nice salary but quite outrageous to my way of thinking. The attorney will be the only one coming out on the plus side in this case.
trespass
Thu, Jun 14, 2012 : 10:32 a.m.
The fault lies with the inadequate internal investigation that was a whitewash ordered by President Coleman, refusing to name names or fire anyone. That forced the Board to take it out of her hands. The next time the Board sings the praises of Mary Sue Coleman they should remember this.
Goober
Thu, Jun 14, 2012 : 7:42 p.m.
It is more basic than this. Mary Sue and the other managers did a poor job of handling a critical issue.
Titus
Thu, Jun 14, 2012 : 12:10 p.m.
Congratulations on knowing what was in Ms. Coleman's mind, including her intentions. Can you also bend spoons with your mind?