Even if Holden Wins Suits, City Will Pay a Hefty Bill : Trial: L.A. has already had to spend $500,000 to defend the councilman. Bill is mounting at up to $8,000 a day.

By JODI WILGOREN

Oct. 31, 1995 12 AM PT

TIMES STAFF WRITER

Regardless of which side wins the sexual harassment case against City Councilman Nate Holden, the taxpayers of Los Angeles are going to pay for it.

The city has already spent at least half a million dollars--and has run up about $250,000 more in unpaid fees--defending allegations of unwanted touching and offensive comments by Holden and his staff, records and interviews show. As the trial enters its third week, the bill is estimated to be climbing by as much as $8,000 a day.

If Holden loses the case, the price tag could double because the city might also be forced to pick up the $500,000 legal tab of plaintiff Marlee M. Beyda, a former receptionist in Holden’s office.

And this is just the first of two cases pending against Holden. Another lawsuit is scheduled for trial in Orange County in January.

“It’s politics at its worst,” said Tammy Bruce, president of the Los Angeles chapter of the National Organization for Women. “You hear the complaint all the time that there is no money--that there is no money to hire new cops, that there is no money to train cops and judges about domestic violence, that there is no money for beds in shelters. But of course they have enough money to defend a man who is being accused by multiple women of sexual harassment. There’s something wrong with this picture.”

In fact, the city has to foot the bill.

State law requires public agencies to pay legal fees of employees unless the allegations deal with matters outside the scope of their jobs, or if the employee’s behavior was “actual fraud, corruption or actual malice.” No fraud is alleged here and sexual harassment is, by definition, a work-related problem.

“This is part of our jurisdiction, part of our responsibility, part of our authority,” city attorney’s spokesman Ted Goldstein said.

Beyda’s lawyer, Jack O’Donnell, noted that the costs would have been far lower if Holden had agreed to settle the dispute out of court, something O’Donnell offered in 1992 before a claim was ever filed, and again in August. “It’s always seemed ridiculous to me that some personal crusade by Councilman Holden is being financed by the city,” he said.

But Holden, an eight-year council veteran, said the lengthy, expensive fight will be worth it in the end for taxpayers. The 66-year-old lawmaker has denied Beyda’s claims, and suggested that the two women’s lawsuits are part of a “broad political conspiracy” against him.

“It’s cost-effective, because it will keep other so-called complaints down,” he said.

“Why do we put up traffic signals? Why do we put up safety devices? One life is worth it. This case is worth it. You’ve got to take it to the mat,” the former boxer added. “The city has thrown in the towel on too many cases where they should have whupped ‘em.”

At City Hall, though, some council members and staffers are whispering about how many police officers, or police cars, the money being spent on Holden’s lawyers could pay for. Some insiders joked that the council should comb the budget and kill enough of Holden’s pet projects to compensate for the expense. Others pointed out that the likely tab of $1 million could fund a long-planned unit to investigate employee complaints of harassment and discrimination.

“I wish we were spending it on kids instead of law cases,” Councilman Mike Hernandez said. “There’s no question in my mind it’s a lot of money. [But] it’s not a situation where we had a choice.”

The offices of the city attorney and the city controller were unable to provide a complete summary of expenses connected with the litigation, but Tim Agajanian, who represented Holden for about two years, has already been paid $487,000.

An attorney who used to work for Agajanian, Kimberlee Konjoyan, now has a personal services contract with Holden’s office. The city has paid her $28,217 since May.

The contract for Holden’s current law firm of Christensen, White, Miller, Fink & Jacobs--which was hired about two months ago--has yet to be finalized. The new lawyers have submitted only one bill, $3,000 for 14 hours work, and have yet to be paid by the city.

All four Christensen, White attorneys who are working on the case refused to disclose their hourly billing rates, but Goldstein said their contract will allow for $250 an hour for a partner, $175 an hour for an associate and $70 an hour for a paralegal.

If each lawyer and one paralegal work 10 hours a day on the case, it would cost about $8,500 a day. Including evening and weekend work preparing for court, it is probably even higher. Skip Miller, the lead attorney, refused to say how many hours he has worked on the taxpayer-funded cases, offering only the clue: “A lot.”

Four lawyers on the city’s payroll have also been assigned, though not exclusively, to the Holden case since the claims against him were filed three years ago. Assistant city attorneys earn $99,000 to $112,000 a year.

When told of the skyrocketing costs, one City Council member simply threw up his hands in disgust, and another exclaimed, “You’re kidding!” Few council members would speak on the record about the expenses, because they involve litigation and a sensitive topic involving a colleague.

In 1993, the council ceded authority over whether to pay Holden’s bills to the city attorney’s office. Sources said that was because most council members were loath to pay for the defense of a sexual harassment case, but they could not refuse to under the law.

Not paying the fees could have opened the city to litigation by Holden, several sources said, and also sent the message that Holden’s council colleagues thought he was guilty. That could boost the case for a judgment against the city, which is also named as a defendant.

“The council was pretty much opposed to paying for this,” said one top city official who spoke on the condition of anonymity, adding that the council tried unsuccessfully to work out a deal in which Holden would pay his own bills and then be reimbursed by the city if he was exonerated.

“It was not just the four women [council members], but the four women were vehement about this. The people bringing the suit have to pay it out of their pockets, and so should [he],” said the official, who was familiar with the negotiations. “It’s frustrating, and it’ll be even more frustrating if he’s held accountable.”

But while delegating the matter got council members out of a political bind, it left them unable to control the total cost. For example, Agajanian’s contract has been amended by the city attorney’s office five times: It originally had a cap of $25,000, but now can go as high as $550,000.

“I had no idea it was running up to that figure,” Councilman Joel Wachs said. “It just seems like a huge amount. . . . The city attorney should be bringing this to our attention.”

Alyson Mead of the Women’s Action Coalition, which has been monitoring the trial, called the legal bill “ludicrous.”

“It’s disgusting and deplorable in light of the fact that so many services to women are being cut,” Mead said. “I’d have to say it’s kind of a slap in the face.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Cost of Defending City Officials

The city of Los Angeles has shelled out more than $500,000 defending City Councilman Nate Holden and his staff against allegations of sexual harassment. The figure could double before the case is over. Here’s a look at the law, and the city’s record in defending some of its officials:

THE LAW

State law requires a public agency to provide for the defense of an employee unless:

* “The act or omission was not within the scope of his or her employment.”

* “He or she acted or failed to act because of actual fraud, corruption, or actual malice,” or

* The defense creates a conflict of interest.

When a public agency brings an action against an employee not in his or her official capacity, or attempts to discipline or remove an employee, the agency may, but is not required to, provide a defense.

THE CITY DOESN’T ALWAYS PAY

The city has a mixed record on payment of private attorneys’ fees:

* Lee Martinez, city clerk: Fired after being accused of sexual harassment and then reinstated, Martinez received $90,682 to pay his legal bills as part of a $215,000 settlement with the city.

* Willie L. Williams, police chief: As part of a deal in which the City Council overturned a reprimand of Williams by the Police Commission, Williams agreed not to pursue payment of his $60,000 lawyers’ bill.

* LAPD officers involved in Rodney King beating: The City Council refused to pay attorneys’ fees for officers Theodore J. Briseno, Timothy E. Wind and Laurence M. Powell and Sgt. Stacey C. Koon because “it was deemed they operated outside the scope of their employment,” said city attorney’s office spokesman Ted Goldstein. The city did provide lawyers for other officers who were at the scene of the beating, but Goldstein said he was unable to say how much that cost.

* Tom Bradley, former mayor: The city did not pay legal bills when Bradley was investigated for ethics violations near the end of his tenure, Goldstein said.

Sources: City attorney’s office, city controller’s office, state government code; researched by: JODI WILGOREN / Los Angeles Times