The Housing Authority of Baltimore City's strategy to spend millions on outside lawyers to avoid liability for lead paint poisoning its tenants suffered, and then to refuse to pay judgments in the cases it loses, is an utter disgrace. The fact that a government agency is so brazenly defying the courts, and that it has made no effort for years to find a way to fairly compensate the victims of its past negligence, represents a long-term failure of leadership at the authority, one that has been abetted by indifference from City Hall. Baltimore needs a new housing commissioner, it needs to pay the $12 million in judgments it owes, and it needs to work with the state and federal governments to devise a new legal mechanism to handle the additional claims that have been brought against it.
Paul Graziano, who serves in a dual role as head of the housing authority and director of the city's Department of Housing and Community Development, needs to go. He has been in his job for 11 years, and during that time the authority has neither purchased insurance to pay lead paint judgments nor set aside money to compensate victims. What it has done is to spend some $4 million on outside lawyers since 2006 in an effort to avoid paying lead paint claims. Many of the cases brought against the authority are unfounded, but some aren't, and in those instances it has engaged in a wide range of legal strategies to duck liability — none of them successful, much less just.
As The Sun's Scott Calvert reported Sunday, the authority paid $5,000 a day in May and June alone for its attorneys, far more than it likely would have paid to have in-house lawyers provide representation. At the least, in-house counsel would have allowed the city to save the thousands of dollars some of the private lawyers billed for driving back and forth from their offices in Towson.
The reason Mr. Calvert could only detail with specificity the amounts the lawyers billed in May and June was that the authority demanded $7,292 to provide more than two months' worth of records. The fact that the public can't even get a thorough accounting of how its money is being spent only makes matters worse.
In an interview this week, Mr. Graziano defended his refusal to pay the judgments by saying the authority faces an avalanche of potential claims from other lawsuits, enough to bankrupt the agency. He said the authority can't pay the $12 million it already owes not so much because it can't afford that amount but because it would set a precedent for its responsibility in the $800 million (by his reckoning) the authority is being sued for now, and the unknown amount it could still be sued for in the coming years.
He also said the $4 million for lawyers was money well spent because the attorneys have been successful in getting the vast majority of claims thrown out, saving some $100 million in potential judgments in 2009 alone.
That doesn't add up. For him to claim $800 million in potential liability is to assume that the authority will lose every case and will face average judgments four times greater than what it has been assessed in the past. Either he's overstating the value of the private attorneys or grossly exaggerating the scope of the problem the authority faces.
Mr. Graziano also defended his agency's conduct by arguing that every dollar spent on judgments is a dollar less the authority has to be able to provide adequate, safe housing for its current clients. That's true, as far as it goes. But it's also true that every dollar spent on lawyers to fight lead paint claims is a dollar that doesn't go toward providing better public housing. And it can't be true that the broader mission of the agency makes it immune to liability. Our legal system doesn't give a free pass to those who claim poverty or nobility of purpose.
This is not to say that the housing authority should pay anyone who claims exposure to lead paint in public housing whatever they want. But it should become obvious that fighting the cases one by one with outside attorneys is serving neither the cause of justice for those who were legitimately harmed nor the authority's mission to provide quality housing for its 25,000 clients. The only ones who are winning are the lawyers.
As soon as the scope of the possible claims against the authority became clear, Mr. Graziano needed to work with lawmakers to find a means to determine and pay fair compensation for those who have been injured by the authority's past negligence. The authority cannot, of course, stop anyone from suing, but it could have established an alternative process — akin, perhaps, to the funds for victims of the Sept. 11 attacks and the BP oil spill — that offered the plaintiffs the benefits of speed and greater certainty that they will actually be compensated for the harm they suffered. That would have required the authority to own up to its responsibility and put a substantial amount of money on the table. That wouldn't have been easy, but it would have made more sense than spending millions to fight the cases one at a time, seemingly without end.
Mr. Graziano said he is now working every day with the federal government to find a solution to the authority's predicament and that it is "our goal that people who have legitimate injuries receive some compensation," though he could not say what kind of compensation, how much, or when it might be provided. He also said he could not, for legal reasons, discuss the nature of his negotiations with the federal government — which to this point has been a party to the authority's legal strategy — nor could he provide any timeline for when they will be resolved.
That's not good enough. Mr. Graziano did not create this problem, nor was he the one who allowed the authority's insurance against such claims to lapse. But he has had 11 years to come up with a viable solution. Instead, his supposed recent efforts notwithstanding, he has seemed intent on ignoring the authority's responsibility and hoping it goes away. That is reason enough for him to be replaced. The fact that he has wasted millions on legal fees in the process is all the more reason that he needs to go.
Unfortunately, Mayor Stephanie Rawlings-Blake has, up to this point, sided with Mr. Graziano, even going so far at one point as to try to make the issue about greedy trial lawyers, not about people who suffered permanent brain damage or about the city following the law. When the state Senate this spring tried to pressure the city to pay the judgments against it, the mayor remained passive, saying she "is more than willing to work with legislators on thoughtful and constructive solutions." Perhaps, instead, she could suggest some. More recently, she has said she is "determined" to fix the situation, but she has given no indication of how or when.
She needs to act now, and getting a new housing commissioner would be a good first step.