Maryland taxpayers are paying a high-powered private law firm to defend Gov. Larry Hogan’s decision to cut off certain federal unemployment aid. How much they’re paying is unclear.
Governors are typically represented in court by lawyers from the state Office of the Attorney General. But in this case, the Republican governor and Democratic Attorney General Brian Frosh have had a public disagreement about the end to the benefits.
“Because of the public comments that Attorney General Frosh made in support of the continued federal unemployment benefits and to avoid the appearance of any conflict of interest, outside counsel was hired,” Frosh’s spokeswoman, Raquel Coombs, said in a statement Thursday.
Enter the Venable law firm.
Venable is a prominent firm with more than 800 attorneys across 10 offices. Frosh hired Venable to represent the governor on June 30, according to a contract provided in response to a request from The Baltimore Sun.
It’s not clear at this point how much taxpayers are paying for Venable’s services. The contract lists five Venable attorneys working on the cases, but their hourly rates are blocked out.
State law requires “trade secrets” and “confidential commercial information” to be redacted, or blocked out, from documents such as the Venable contract when they are released to the public. Coombs said that the total amount spent on the contract will be made public once Venable sends invoices to the state. The invoices are required on a monthly basis, under the contract.
The contract allows Venable to bill for “a reasonable number of actual hours of services performed,” though there’s no limit on the amount of hours and no cap on the total payment.
The attorney general’s office reached out to five firms about representing the state in the case, and three offered proposals. “Venable was selected because the combination of its financial proposal and technical expertise represented the best value for the state,” Coombs said.
A representative from Venable also did not respond to an interview request.
Hogan announced on June 1 that he would end the state’s participation in certain enhanced unemployment benefit programs funded by the federal government. The programs were due to expire in early September, but Hogan wanted to withdraw Maryland starting the first full week of July, prompting two lawsuits from out-of-work residents.
The programs include an extra $300 in payments each week to all unemployment recipients, as well as expanded eligibility for gig and contract workers and those who’ve exhausted regular unemployment benefits. The majority of Maryland residents on unemployment receive benefits through the programs that Hogan is seeking to end.
Hogan has repeatedly said that he thinks cutting off the more generous benefits will help push people back into the workforce, alleviating problems that some employers have reported with hiring and retaining workers. Economic researchers have found that the enhanced benefits did not affect the number of people seeking work, and other states that have ended the additional federal benefits, such as Missouri, have not seen a surge in job-seekers.
Asked on Wednesday about the necessity to spend state taxpayer dollars in court to try and prevent residents from getting federal benefits, Hogan did not answer the question and instead reiterated why he sought to end the programs.
Mike Ricci, a spokesman for Hogan, said the governor had no say in the terms of the contract with Venable.
“We absolutely would have preferred that the Attorney General fulfill his duty to defend the state,” Ricci said in a statement Thursday. “It was his decision to hire outside counsel with taxpayer dollars, and it was his office that drafted and executed the contract.”
On Friday afternoon, lawyers will meet in court for arguments as to whether a judge should issue a preliminary injunction in the case, which would prevent Hogan from withdrawing from the programs while the lawsuits play out.
A Baltimore City Circuit Court judge already granted a temporary restraining order last weekend that keeps Maryland in the programs through Tuesday. Hogan’s team from Venable unsuccessfully challenged the temporary restraining order multiple times over the July 4th holiday weekend, including going to the state’s highest court.
Hogan has already signaled he intends to withdraw from the federal unemployment programs on Wednesday, once the temporary restraining order is scheduled to expire.
Members of the public and elected officials have questioned the necessity and expense of private lawyers in the case.
“It’s not a smart use of taxpayer dollars,” said Del. Eric Luedtke, the Democratic majority leader in the Maryland House of Delegates. “These unemployment benefits are entirely federally funded. The only Maryland taxpayer dollars that are being spent are spent on lawyers in an attempt to take money away from Marylanders who need it to get by.”
Luedtke, who represents Montgomery County, suggested the governor rethink his decision to defend his decision in court.
“The easiest way to save taxpayer money at this point would be to drop the case today,” he said. “Let people get their benefits through September. We won’t have this argument and we won’t spend taxpayers’ money.”
Comptroller Peter Franchot, the state’s chief tax collector, said it’s a “great tragedy” that the state is likely spending hundreds of dollars an hour to prevent out-of-work Marylanders from receiving $300 more a week.
“We should be generous in our compassion, not indifferent to their suffering,” said Franchot, a Democrat who is running for governor in 2022.